<Page>
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-Q

<Table>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934

             FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001.

   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934

                   For the Transition Period From to

                   Commission file number 000-30634.
</Table>

                            ------------------------

                              TRAVELOCITY.COM INC.

             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
               DELAWARE                                     75-2855109
     (State or other jurisdiction              (I.R.S. Employer Identification No.)
   of incorporation or organization)

        15100 TRINITY BOULEVARD                               76155
           FORT WORTH, TEXAS                                (Zip Code)
    (Address of principal executive
               offices)
</Table>

       Registrant's telephone number, including area code (817) 785-8000

                                 NOT APPLICABLE

   (Former name, former address and former fiscal year, if changed since last
                                    report)

                            ------------------------

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $.001 par value--16,917,865 as of August 10, 2001

Class A Common Stock, $.001 par value--33,000,000 as of August 10, 2001

--------------------------------------------------------------------------------
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<Page>
                                     INDEX
                              TRAVELOCITY.COM INC.

<Table>
<S>                     <C>                                                           <C>
PART I: FINANCIAL INFORMATION

Item 1.                 Financial Statements (unaudited)

                        Consolidated Balance Sheets--June 30, 2001 and December 31,
                          2000......................................................      3

                        Consolidated Statements of Operations--Three and six months
                          ended June 30, 2001 and 2000..............................      4

                        Consolidated Statement of Stockholders' Equity--Six months
                          ended June 30, 2001.......................................      5

                        Consolidated Statements of Cash Flows--Six months ended
                          June 30, 2001 and 2000....................................      6

                        Notes to Consolidated Financial Statements..................      7

Item 2.                 Management's Discussion and Analysis of Financial Condition
                          and Results of Operations.................................     13

Item 3.                 Quantitative and Qualitative Disclosures About Market
                          Risk......................................................     31

PART II: OTHER INFORMATION

Item 4.                 Submission of Matters to a Vote of Security Holders.........     32

Item 6.                 Exhibits and Reports on Form 8-K............................     32

SIGNATURE...........................................................................     33
</Table>

                                       2
<Page>
PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

                              TRAVELOCITY.COM INC.

                          CONSOLIDATED BALANCE SHEETS

                           (UNAUDITED) (IN THOUSANDS)

<Table>
<Caption>
                                                              JUNE 30,    DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
<S>                                                           <C>         <C>
ASSETS
CURRENT ASSETS
  Cash......................................................  $     932    $     859
  Marketable securities.....................................    108,616       70,696
  Accounts receivable, net of allowance for doubtful
    accounts of $2,514 and $649 at June 30, 2001 and
    December 31, 2000, respectively.........................     26,607       19,196
  Prepaid expenses and other current assets.................     23,975       18,755
  Receivable from affiliate.................................      1,815           --
                                                              ---------    ---------
    Total current assets....................................    161,945      109,506
PROPERTY AND EQUIPMENT
  Buildings and leasehold improvements......................      4,668        3,692
  Furniture, fixtures and equipment.........................      4,482        3,608
  Computer equipment........................................     32,541       22,828
                                                              ---------    ---------
                                                                 41,691       30,128
  Less accumulated depreciation and amortization............    (16,976)     (12,347)
                                                              ---------    ---------
    Total property and equipment............................     24,715       17,781
Intangible assets, net of accumulated amortization of
  $120,619 and $75,464 at June 30, 2001 and December 31,
  2000, respectively........................................    152,944      198,113
Other assets................................................      2,580        2,568
                                                              ---------    ---------
    TOTAL ASSETS............................................  $ 342,184    $ 327,968
                                                              =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable..........................................  $  10,239    $   6,242
  Accrued compensation and related benefits.................      5,398        3,910
  Payable to affiliates.....................................         --          191
  Deferred revenue..........................................      6,920           12
  Other accrued liabilities.................................     14,230        7,298
                                                              ---------    ---------
    Total current liabilities...............................     36,787       17,653
Deferred revenue............................................     21,971        2,918
Other liabilities...........................................      2,543        1,109
STOCKHOLDERS' EQUITY
  Series A Preferred Stock, $.001 par value; 7,000 shares
    authorized at June 30, 2001 and December 31, 2000; no
    shares issued...........................................         --           --
  Common Stock, $.001 par value; 135,000 shares authorized;
    16,756 and 16,199 shares issued and outstanding at
    June 30, 2001 and December 31, 2000, respectively.......         17           16
  Class A Common Stock, $.001 par value; 33,000 shares
    authorized, issued and outstanding at June 30, 2001 and
    December 31, 2000.......................................         33           33
  Class B Common Stock, $.001 par value; 75,000 shares
    authorized at June 30, 2001 and December 31, 2000,
    respectively; no shares issued..........................         --           --
  Additional paid-in capital................................    434,778      424,903
  Equity options outstanding................................     15,128        4,225
  Accumulated other comprehensive income....................        466          416
  Accumulated deficit.......................................   (169,539)    (123,305)
                                                              ---------    ---------
    Total stockholders' equity..............................    280,883      306,288
                                                              ---------    ---------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..............  $ 342,184    $ 327,968
                                                              =========    =========
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       3
<Page>
                              TRAVELOCITY.COM INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

              (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                              THREE MONTHS ENDED     SIX MONTHS ENDED
                                                                   JUNE 30,              JUNE 30,
                                                              -------------------   -------------------
                                                                2001       2000       2001       2000
                                                              --------   --------   --------   --------
<S>                                                           <C>        <C>        <C>        <C>
REVENUES
  Transaction services revenue
    Air.....................................................  $ 40,643   $ 27,642   $ 80,345   $ 46,732
    Non-air.................................................    16,451      6,945     27,607     10,779
  Advertising...............................................    17,288     11,587     34,045     14,990
  Other.....................................................     7,962        624     13,198      1,320
                                                              --------   --------   --------   --------
      Total revenues........................................    82,344     46,798    155,195     73,821
  Cost of revenues..........................................    26,807     19,108     51,927     31,252
                                                              --------   --------   --------   --------
  Gross profit..............................................    55,537     27,690    103,268     42,569
OPERATING EXPENSES
  Selling and marketing.....................................    41,522     30,343     77,362     47,017
  Technology and development................................     6,061      5,186     11,184      9,174
  General and administrative................................     4,831      4,497     11,180      7,991
  Expenses related to integration of Preview Travel.........        --      1,011         --      1,537
  Stock compensation(1).....................................     8,756        689     11,398      2,235
  Amortization of intangible assets and goodwill............    22,417     22,140     44,814     27,854
                                                              --------   --------   --------   --------
      Total operating expenses..............................    83,587     63,866    155,938     95,808
                                                              --------   --------   --------   --------
OPERATING LOSS..............................................   (28,050)   (36,176)   (52,670)   (53,239)
OTHER INCOME (EXPENSE)
  Interest income, net......................................     1,177      1,083      2,327      1,417
  Other income and expense..................................     2,681        375     (3,069)       369
                                                              --------   --------   --------   --------
Loss before Sabre's interest in Partnership.................   (24,192)   (34,718)   (53,412)   (51,453)
Sabre's interest in Partnership.............................        --     21,210         --     28,874
Benefit for income taxes....................................       138         --      1,036         --
                                                              --------   --------   --------   --------
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  METHOD....................................................   (24,054)   (13,508)   (52,376)   (22,579)
Cumulative effect of change in accounting method, net of
  Sabre's interest in Partnership and income taxes..........        --         --      6,142         --
                                                              --------   --------   --------   --------
NET LOSS....................................................  $(24,054)  $(13,508)  $(46,234)  $(22,579)
                                                              ========   ========   ========   ========
Loss per common share, basic and diluted:
  Loss before cumulative effect of change in accounting
    method..................................................  $  (1.22)  $   (.71)  $  (2.68)  $   (.94)
  Cumulative effect of change in accounting method..........        --         --        .31         --
                                                              --------   --------   --------   --------
NET LOSS....................................................  $  (1.22)  $   (.71)  $  (2.37)  $   (.94)
                                                              ========   ========   ========   ========
Weighted average common shares used in loss per common share
  computation:
  Basic and diluted.........................................    19,652     19,008     19,537     24,126
                                                              ========   ========   ========   ========
--------------------------
(1) Stock compensation relates to the following:
<Caption>
                                                              THREE MONTHS ENDED     SIX MONTHS ENDED
                                                                   JUNE 30,              JUNE 30,
                                                              -------------------   -------------------
                                                                2001       2000       2001       2000
                                                              --------   --------   --------   --------
<S>                                                           <C>        <C>        <C>        <C>
Cost of revenues............................................  $      2   $     20   $      4   $     21
Selling and marketing.......................................     1,543         80      1,924      1,412
Technology and development..................................       629         19        783         19
General and administrative..................................     6,582        570      8,687        783
                                                              --------   --------   --------   --------
      Total stock compensation..............................  $  8,756   $    689   $ 11,398   $  2,235
                                                              ========   ========   ========   ========
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       4
<Page>
                              TRAVELOCITY.COM INC.
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                         SIX MONTHS ENDED JUNE 30, 2001
                           (UNAUDITED) (IN THOUSANDS)
<Table>
<Caption>
                                      SERIES A               CLASS A     CLASS B    ADDITIONAL      EQUITY         ACCUMULATED
                                     PREFERRED     COMMON     COMMON     COMMON      PAID-IN       OPTIONS      OTHER COMPREHEN-
                                       STOCK       STOCK      STOCK       STOCK      CAPITAL     OUTSTANDING        SIVE LOSS
                                     ----------   --------   --------   ---------   ----------   ------------   -----------------
<S>                                  <C>          <C>        <C>        <C>         <C>          <C>            <C>
Balance at December 31, 2000.......  $     --       $16        $33      $    --      $424,903      $ 4,225            $416
Issuance of 557 common shares
  pursuant to stock option,
  restricted stock incentive and
  stock purchase plans.............        --         1         --           --         9,733           --              --
Stock based compensation for
  consultants and employees of the
  Company and Travelocity
  Holdings.........................        --        --         --           --           142       10,903              --

Comprehensive loss:
  Net loss.........................        --        --         --           --            --           --              --
  Unrealized gain on investments,
    net of income tax..............        --        --         --           --            --           --              50
  Comprehensive loss...............
                                     ----------     ---        ---      ---------    --------      -------            ----
Balance at June 30, 2001...........  $     --       $17        $33      $    --      $434,778      $15,128            $466
                                     ==========     ===        ===      =========    ========      =======            ====

<Caption>
                                      ACCUMU-
                                       LATED
                                      DEFICIT     TOTAL
                                     ---------   --------
<S>                                  <C>         <C>
Balance at December 31, 2000.......  $(123,305)  $306,288
Issuance of 557 common shares
  pursuant to stock option,
  restricted stock incentive and
  stock purchase plans.............         --      9,734
Stock based compensation for
  consultants and employees of the
  Company and Travelocity
  Holdings.........................         --     11,045
Comprehensive loss:
  Net loss.........................    (46,234)   (46,234)
  Unrealized gain on investments,
    net of income tax..............         --         50
                                                 --------
  Comprehensive loss...............               (46,184)
                                     ---------   --------
Balance at June 30, 2001...........  $(169,539)  $280,883
                                     =========   ========
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       5
<Page>
                              TRAVELOCITY.COM INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                           (UNAUDITED) (IN THOUSANDS)

<Table>
<Caption>
                                                               SIX MONTHS ENDED
                                                                   JUNE 30,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
OPERATING ACTIVITIES
Net loss....................................................  $(46,234)  $(22,579)
Adjustments to reconcile net loss to cash used for operating
  activities
  Cumulative effect of change in accounting method..........    (6,142)        --
  Depreciation and amortization.............................    65,504     39,622
  Unrealized loss on HRN warrants...........................     3,314         --
  Stock compensation........................................    11,390      2,334
  Sabre's interest in Partnership...........................        --    (28,874)
  Other, net................................................    (1,655)      (369)
  Changes in operating assets and liabilities:
    Accounts receivable and other assets....................    (8,784)    (8,036)
    Accounts payable, accrued and other liabilities.........     9,470      1,735
    Prepayments to strategic distribution partners..........   (22,050)   (40,000)
    Deferred revenue........................................      (884)      (429)
    Receivable from affiliates..............................    (2,006)    (4,028)
                                                              --------   --------
  Cash provided by (used for) operating activities..........     1,923    (60,624)

INVESTING ACTIVITIES
Cash acquired from Preview Travel, net of direct acquisition
  costs.....................................................        --        866
Additions to property and equipment.........................    (7,822)    (5,584)
Purchases of marketable securities..........................  (219,188)  (165,726)
Sales of marketable securities..............................   181,111    117,026
Sale of securities acquired upon exercise of HRN warrants...    36,604         --
Other investing activities..................................        --     (1,648)
                                                              --------   --------
  Cash used for investing activities........................    (9,295)   (55,066)

FINANCING ACTIVITIES
Cash advances from Sabre affiliates.........................        --      6,818
Contribution of cash by Sabre in connection with the
  Merger....................................................        --     52,680
Proceeds from issuance of common stock......................        --     54,000
Proceeds from exercise of stock options.....................     7,841      2,863
Other financing activities..................................      (396)      (268)
                                                              --------   --------
  Cash provided by financing activities.....................     7,445    116,093
                                                              --------   --------
Net increase in cash and cash equivalents...................        73        403
Cash at beginning of the period.............................       859         --
                                                              --------   --------
Cash at end of the period...................................  $    932   $    403
                                                              ========   ========
Supplemental cash flow information:
Cash payments for interest..................................  $     30   $     35
                                                              ========   ========
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       6
<Page>
                              TRAVELOCITY.COM INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (UNAUDITED)

1.  GENERAL INFORMATION

    Travelocity.com Inc. ("Travelocity" or the "Company") is, after giving
effect for the merger with Preview Travel, Inc. ("Preview Travel") on March 7,
2000 (the "Merger"), the largest online travel agency in terms of gross travel
bookings. The Company was incorporated in Delaware on September 30, 1999 as a
wholly-owned subsidiary of Sabre Holdings Corporation ("Sabre").

    Travelocity is a holding company whose sole assets are units of
Travelocity.com LP (the "Partnership"), a limited partnership, formed on
September 30, 1999. Effective upon the Merger, the Partnership became the owner
and operator of the combined assets and liabilities of the former Travelocity
business unit of Sabre (the "Travelocity Division") and Preview Travel.

    The Company, through the Partnership, is engaged in consumer-direct travel
distribution over the Internet. Through its online travel Web sites, which are
accessible free of charge through the Internet and online services, leisure and
business travelers can compare prices, make travel reservations and obtain
destination information. The Company features booking and purchase capability
for airlines, car rental and hotel companies, cruises and vacation packages, and
offers access to a database of information regarding specific destinations and
other information of interest to travelers. The Internet address for the
Company's main Web site is WWW.TRAVELOCITY.COM.

    The Company and Sabre are the partners in the Partnership. The Company
currently holds an approximate 40% equity interest in the Partnership, with the
remaining approximate 60% equity interest held by Sabre. Sabre, through
ownership of shares of the Company's common stock and Class A Common Stock, also
holds an approximate 25% equity interest in the Company. Sabre currently
beneficially holds an approximate 70% economic interest in the Partnership--that
is:

    - an approximate 60% equity interest held directly and indirectly through
      wholly-owned subsidiaries, plus

    - an approximate 10% equity interest held through the Company--that is, 25%
      (Sabre's equity interest in the Company) of 40% (the Company's equity
      interest in the Partnership).

    Sabre and its affiliates hold 33.0 million shares of the Company's Class A
Common Stock, which together with 30.0 million units of the Partnership held
directly by Sabre and its affiliates, are convertible into 33.0 million shares
of the Company's common stock. As of June 30, 2001 Sabre also held 2,033,970
shares of the Company's common stock.

    If Sabre exercised its right to convert its partnership units into common
stock, the Company would have approximately 49.8 million shares of common stock
outstanding, of which Sabre would own approximately 70% and non-Sabre
stockholders would own approximately 30%.

    Sabre's common stock and Class A Common Stock holdings represent an
approximate 70% voting interest in the Company. Through this voting interest,
Sabre is able to significantly influence the management and affairs of the
Company and all matters requiring stockholder approval.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION.  The accompanying consolidated financial statements
include the accounts of the Company after elimination of all significant
intercompany balances and transactions. For periods prior to the Merger, the
financial statements have been prepared using Sabre's historical basis in the
assets and liabilities of the Travelocity Division, a division of Sabre which
conducted the business of the

                                       7
<Page>
                              TRAVELOCITY.COM INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

Company prior to the Merger. The results of operations of Preview Travel have
been included in the accompanying financial statements beginning with the date
of the Merger. The financial statements include the results of operations,
financial condition and cash flows of the Company as a division of Sabre for
periods prior to the Merger, and may not be indicative of actual results of
operations and financial position of the Company under other ownership.
Management believes the income statements include a reasonable allocation of
administrative costs incurred by Sabre on behalf of the Company.

    The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Rule 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
these financial statements contain all adjustments, consisting of normal
recurring accruals, necessary to present fairly the financial position, results
of operations and cash flows for the periods indicated. The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may
differ from these estimates. The Company's quarterly financial data should be
read in conjunction with the consolidated financial statements and notes of the
Company for the year ended December 31, 2000 included in the Company's Annual
Report on Form 10-K, as amended.

    Sabre has a majority equity interest in the Partnership and the general
presumption would be for Sabre to consolidate the Partnership into its financial
statements. Although the Company does not have a majority equity interest in the
Partnership, it controls the Partnership through the Partnership's board of
directors since it has the right to appoint a majority of the directors.
Furthermore, although employees of Travelocity Holdings, Inc. ("Travelocity
Holdings"), a wholly-owned subsidiary of Sabre, manage the day to day operations
of the Partnership pursuant to a management services agreement, these employees
are subject to the direction and oversight of the Partnership's board of
directors. As such, the Partnership's board of directors has the unilateral
ability to control the management of the Partnership, thereby enabling the
Company to consolidate the Partnership in its separate financial statements.

    The Company's consolidated financial statements include the financial
statements of the Company and the Partnership, with Sabre's interest in the
Partnership's results of operations presented as a single line item, "Sabre's
interest in Partnership," in the Company's statement of operations. The amount
of loss attributable to Sabre's interest is limited to the carrying amount of
Sabre's basis in the Partnership as recorded on the date of the Merger,
approximately $62.1 million. Losses attributable to Sabre's interest in the
Partnership exceeding $62.1 million are recognized in the net loss attributable
to the Company's common stockholders. During the six months ended June 30, 2001
the Company recognized net losses totaling approximately $27.9 million related
to losses attributable to Sabre in excess of Sabre's basis in the Partnership.
If and when the results of operations of the Partnership become profitable, net
income attributable to the Company's stockholders will be increased by the
amount of losses attributable to Sabre in excess of Sabre's basis in the
Partnership previously recognized by the Company. The Company's consolidated
results of operations and financial position consists of the total of the
Company's share of the Partnership's results and 100% of the Company's results.

    RECLASSIFICATIONS.  Certain amounts for the prior year have been
reclassified to conform to the current year presentation.

                                       8
<Page>
                              TRAVELOCITY.COM INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

    CHANGE IN METHOD OF ACCOUNTING.  The Company adopted Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities ("FAS 133") effective January 1, 2001. FAS 133 requires the Company
to recognize all derivatives on the balance sheet at fair value. Derivatives
that are not hedges must be adjusted to fair value through income. If the
derivative is a hedge, depending on the nature of the hedge, changes in the fair
value of derivatives will either be offset against the change in fair value of
the hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. At January 1, 2001, the Company held
warrants received by the Partnership from Hotel Reservations Network, Inc.
("HRN") in connection with an affiliation agreement. As a result of the
cumulative effect of the adoption of FAS 133, the Company reported a gain of
$6.1 million, net of Sabre's interest in the Partnership of zero and income
taxes of approximately $1 million. The gain was calculated based on the
Black-Scholes value of the warrants at January 1, 2001. Any actual gains or
losses realized by the Company will be dependent upon HRN's stock price at the
time HRN stock acquired upon exercise of the warrants is sold (Note 6).

    RECENT ACCOUNTING PRONOUNCEMENTS.  In June 2001, the Financial Accounting
Standards Board issued Statements of Financial Accounting Standards No. 141
("FAS 141"), Business Combinations, and No. 142 ("FAS 142"), Goodwill and Other
Intangible Assets, effective for fiscal years beginning after December 15, 2001.
Under the new rules, goodwill and intangible assets deemed to have indefinite
lives will no longer be amortized but will be subject to annual impairment tests
in accordance with these two Statements. Other intangible assets will continue
to be amortized over their useful lives.

    The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of FAS 142 is expected to result in an increase in
net income of approximately $87 million in 2002, as a result of the cessation of
amortization of existing goodwill. During 2002, the Company will perform the
first of the required impairment tests of goodwill and indefinite lived
intangible assets as of January 1, 2002. The Company has not yet determined what
the effect of these tests will be on its earnings and financial position.

3. MARKETABLE SECURITIES

    Effective with the Merger, the Company began to administer its own
investment portfolio. The Company maintains an investment policy intended to
ensure the safety and preservation of invested funds by limiting default risk,
market risk and reinvestment risk. The Company does not currently use derivative
financial instruments to manage or reduce market risk. The Company's investment
policy is to invest in high credit quality securities such as debt instruments
of the United States government and its agencies and high quality corporate
issuers, as well as money market funds. Investments include only marketable
securities with active secondary or resale markets to ensure portfolio
liquidity.

    Marketable securities are classified as available-for-sale securities and
are carried at fair value, based on quoted market prices, with the unrealized
gains or losses, net of tax, reported in stockholders' equity. The amortized
cost of debt securities is adjusted for amortization of premiums and accretion
of discounts to maturity, both of which are included in interest income.

    Marketable securities represent the investment by the Company of cash
available for current operations. The Company expects that the majority of
marketable securities will be sold within one year, regardless of maturity date.
The Company primarily invests in high credit quality debt instruments

                                       9
<Page>
                              TRAVELOCITY.COM INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

with an active resale market and money market funds to ensure liquidity and the
ability to readily convert its investments into cash to fund current operations,
or satisfy other cash requirements as needed. Accordingly, the Company has
classified all marketable securities as current assets in the accompanying
balance sheets.

4. LOSS PER COMMON SHARE

    Net loss per common share is calculated based on the weighted average number
of common shares outstanding during the period. Diluted earnings per share is
calculated based on the weighted average common shares outstanding during the
period plus any dilutive common equivalent shares outstanding.

    The weighted average shares used in the calculation of basic earnings per
share for the six months ended June 30, 2000 have been calculated as if the
33.0 million shares of Class A Common Stock held by Sabre were outstanding as
common shares from January 1, 2000 through the Merger with Preview Travel on
March 7, 2000. Subsequent to the Merger, basic earnings per share has been
computed as if Sabre's 33.0 million shares of Class A Common Stock had been
converted into 3.0 million shares of common stock. The common shares issued to
stockholders in connection with the Merger are also included in the weighted
average share calculation effective from the date of issuance.

    Outstanding employee stock options at June 30, 2001 and 2000 to purchase
approximately 6.1 and 4.2 million shares, respectively, of the Company's common
stock and 30.0 million shares of Class A Common Stock held by Sabre were
excluded from the computation of diluted earnings per share as their effect
would have been antidilutive.

5. STOCK COMPENSATION

    At July 1, 2000, the Company prospectively adopted Interpretation No. 44,
ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK COMPENSATION ("FIN 44"). FIN
44 required significant changes to previous practice regarding the accounting
for certain stock compensation arrangements. FIN 44 does not change APB 25's
intrinsic value method, under which compensation expense is generally not
recognized for grants of stock options to employees with an exercise price equal
to the market price of the stock at the date of grant, but it has narrowed its
application.

    FIN 44 contains provisions whereby employees are defined as they are under
common law for purposes of applying APB 25. As a result, APB 25 does not apply
in the separate financial statements of a subsidiary for equity awards made by
the subsidiary to employees of the parent company, as these employees are not
considered to be employees of the grantor. Grants of equity awards made to such
employees are required to be recorded at fair value and recognized as expense
over the vesting period in the separate financial statements of the subsidiary.
Such grants are required to be revalued to fair value at each periodic reporting
date until vesting is complete, with a cumulative catch up adjustment recognized
for any changes in fair value.

    The adoption of FIN 44 required that the Company recognize expense at fair
value for grants of equity awards to employees of Travelocity Holdings
performing services for the Partnership under a management services agreement.
At June 30, 2001, unrecognized stock compensation expense relating to these
options totaled approximately $33.7 million. During the three and six months
ended June 30, 2001 the Company recognized $8.7 and $11.3 million, respectively,
in stock compensation expense for options granted to employees of Travelocity
Holdings.

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                              TRAVELOCITY.COM INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

    Additionally, certain stock compensation is recognized by the Company, based
on the intrinsic value of the awards, for options held by employees of the
Partnership relating to options which were converted at the date of the Merger
from existing unvested Sabre options into options to purchase shares of the
Company's common stock, and for options held by former officers of Preview
Travel which vest over the twelve month period following the Merger. Stock
compensation expense recognized during the three and six months ended June 30,
2000 related to these options was approximately $644,000 and $2.2 million,
respectively. Stock compensation recognized during the three and six months
ended June 30, 2001 related to these options was not significant.

6. SIGNIFICANT TRANSACTIONS AND RELATIONSHIPS

    HOTEL RESERVATIONS NETWORK.  At January 1, 2001, the Company held warrants
for the purchase of shares of common stock of HRN, received in connection with
an affiliation agreement entered into during 2000. The warrants were recorded at
their estimated fair value at the date of receipt of approximately
$2.5 million. The Company is recognizing this amount as revenue over the
three-year term of the original agreement. During March 2001, the Company
extended its affiliation agreement with HRN through July 31, 2005 and expanded
the scope of the HRN relationship. In connection with the expanded and extended
agreement the Company received additional vested warrants to purchase shares of
HRN Class A Common Stock with a fair value of approximately $29.9 million on the
date of receipt. The Company will recognize this amount as revenue over
approximately four years. The Company may also vest in additional warrants in
the future based upon the achievement of certain performance metrics. The
Company will recognize revenue, at fair value, as the additional warrants are
earned. For the three and six months ended June 30, 2001, the Company earned
additional warrants with a fair value of approximately $1.5 million and
$1.8 million, respectively.

    During the six months ended June 30, 2001, the Company completed three
cashless exercises of the HRN warrants receiving approximately 1.1 million
shares of HRN stock. Upon exercise of the warrants, the Company recorded in
other income and expense a gain of approximately $2.5 million during the three
months ended June 30, 2001 and losses totaling approximately $427,000 during the
six months ended June 30, 2001. The gain and losses were determined by the
aggregate differences in the fair value of the warrants exercised, as measured
using the Black-Scholes option valuation model, compared with the fair value of
the HRN common stock received. In May 2001, the Company sold all of its HRN
common stock for approximately $36.6 million. No significant gain or loss was
realized on the sale.

    Effective upon the adoption of FAS 133 on January 1, 2001 (Note 2), the
Company began recording the HRN warrants at fair value each reporting date. At
June 30, 2001, the fair value of the HRN warrants held by the Company totaled
approximately $1.5 million, which is classified as other assets in the
accompanying balance sheet. The Company recorded in other income and expense a
gain of approximately $2.5 million during the three months ended June 30, 2001
and losses totaling approximately $3.3 million during the six months ended
June 30, 2001, relating to the changes in the fair value of the warrants,
including gains and losses recorded as a result of the cashless exercises
discussed above.

    At June 30, 2001 and December 31, 2000 the balance of deferred revenue
related to the HRN warrant was approximately $28.6 million and $1.8 million,
respectively. Approximately $20.0 million and $918,000 of deferred revenue
related to this agreement was classified as long-term deferred revenue at
June 30, 2001 and December 31, 2000, respectively.

                                       11
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                              TRAVELOCITY.COM INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

    AMERICA ONLINE.  On October 2, 1999, Travelocity Holdings entered into an
Interactive Services and Exclusive Channel Agreement (the "AOL Agreement") with
America Online, Inc. ("AOL"), which became effective upon consummation of the
Merger and was assigned to the Partnership. The AOL Agreement provides, among
other things, that the Travelocity.com site will be the exclusive reservations
engine for AOL's Internet properties and that payments of up to $200 million
will be made to AOL and advertising revenue and commissions will be shared over
the five year term of the agreement. In connection with this agreement, the
Company paid $40.0 million to AOL upon the closing of the Merger on March 7,
2000.

    The Company made payments of $20.0 million to AOL during the six months
ending June 30, 2001. The Company is amortizing the payments under the AOL
Agreement as a selling and marketing expense in accordance with the terms of the
contract. Payments are recorded as prepaid assets, which are reduced by
amortization.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS

OVERVIEW

    The information provided in this Management's Discussion and Analysis of
Financial Condition and Results of Operations includes the results of the
Company from the date of the merger ("Merger") with Preview Travel, Inc.
("Preview Travel") on March 7, 2000 and beyond and the historical results of the
former Travelocity business unit (the "Travelocity Division") of Sabre Holdings
Corporation ("Sabre"), as an operating unit of Sabre for all periods prior to
the Merger. Results for the six months ended June 30, 2001 and 2000 include the
impacts of the contribution agreements and the intercompany agreements entered
into between the Partnership and Sabre for the period prior to the Merger.
Results prior to the Merger do not include financial effects of the Merger with
Preview Travel. Historical results prior to the Merger are not indicative of
what our future financial position or results of operations subsequent to the
Merger will be. Pro forma results for the six months ended June 30, 2001 and
2000 are also included herein to illustrate the effect of these agreements and
the Merger transaction on our historical operations and financial position.

    We receive transaction service revenue including, for 2001 and 2000, access
fees under the new access agreement with Sabre. For both 2001 and 2000,
transaction service revenue also includes commissions from travel suppliers for
processing of online purchases of their products and services by customers.

    Gross bookings of travel services online increased from approximately
$610.2 million in the second quarter of 2000 to $879.0 million in the second
quarter of 2001, which resulted in an increase in transaction service revenues
from $34.6 million to $57.1 million for the corresponding periods. For the six
months ended June 30, 2000 and 2001, gross bookings increased from approximately
$1.0 billion to $1.7 billion, which resulted in an increase in transaction
service revenues from $57.5 million to $108.0 million for the corresponding
periods. Gross bookings represent the total purchase price of all travel
services booked through our Web site. Gross bookings are not a financial
measurement in accordance with generally accepted accounting principals ("GAAP")
and should not be considered in isolation or as a substitute for other
information prepared in accordance with GAAP. Period-to-period comparisons of
gross bookings are not necessarily meaningful as a measure of our revenues due
to, among other things, changes in commission rates. As with operating results,
they should not be relied upon as an indication of future performance.

    Prior to the Merger, advertising revenue was generated primarily through an
agreement with DoubleClick Inc. ("DoubleClick") for the placement of advertising
on our Web site and through the direct selling of advertisements on our site.
Under the agreement, DoubleClick obtained advertisers for our site, collected
the revenue paid by the advertisers, and paid us an amount that was net of fees
due to DoubleClick for its service. We recorded advertising revenue generated
through the agreement with DoubleClick on a net of fee basis in the period the
advertisements were delivered. Effective with the Merger, the majority of our
advertising revenue is generated through sales by our direct sales force.
Beginning in the second quarter of 2000, advertising revenue includes our share
of travel related advertising revenue on the America Online, Inc. ("AOL") sites
under the terms of our revenue sharing agreement with AOL.

    Costs of revenues include costs of operating our customer service centers,
data processing charges and costs associated with operating our Internet
infrastructure.

GROSS MARGINS

    Our gross margins for the three months ended June 30, 2001 and 2000 were
67.4% and 59.2%, respectively. This increase was due primarily to a change in
revenue mix, specifically an increase in non-air revenues during the second
quarter of 2001 compared with the same period in 2000. We expect

                                       13
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higher gross margins on advertising revenues than transaction service revenues,
higher commission rates on vacation packages and cruises than hotel rooms and
car rentals and higher commission rates on hotel rooms and car rentals than
airline tickets.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
  2000

REVENUES

    TRANSACTION SERVICE REVENUES.  Transaction service revenues increased from
$34.6 million to $57.1 million for the three months ended June 30, 2000 compared
to the three months ended June 30, 2001, an increase of approximately
$22.5 million, 65%. This was due to an increase in air revenues of
$13.0 million, 47%, and non-air revenues of $9.5 million, 137%, for the
corresponding periods. Non-air revenues include services for hotel, car,
vacation packages, tours and cruise providers. Gross bookings increased from
$610.2 million to $879.0 million for the three months ended June 30, 2000
compared to the three months ended June 30, 2001.

    ADVERTISING REVENUES.  Advertising revenues increased from $11.6 million
(net of fees paid to DoubleClick of $193,000) to $17.3 million for the three
months ended June 30, 2000 compared to the three months ended June 30, 2001, an
increase of $5.7 million, 49%. This increase was due primarily to an increase in
net revenue from our advertising revenue sharing agreement with AOL and
increased revenue from the direct sale of advertising by our internal sales
force.

    OTHER REVENUES.  Other revenues increased from $624,000 to $8.0 million for
the three months ended June 30, 2000 compared to the three months ended
June 30, 2001, an increase of $7.3 million, 1,176%. This increase was due
primarily to service charges for the handling and express delivery of certain
paper tickets. The increase was also due to the recognition of additional
revenue related to warrants received from Hotel Reservations Network, Inc.
("HRN") during the first and second quarters of 2001. This was in connection
with an extended affiliation agreement that was entered into by the Company with
HRN in March 2001.

COSTS OF REVENUES

    Costs of revenues increased from $19.1 million to $26.8 million for the
three months ended June 30, 2000 compared to the three months ended June 30,
2001, an increase of approximately $7.7 million, 40%. This was due to increased
headcount costs associated with the customer service centers, including the
opening of a third customer service center during the second quarter 2001, and
data processing charges. Costs of revenues declined as a percentage of total
revenue from 40.8% for the three months ended June 30, 2000 to 32.6% for the
three months ended June 30, 2001 due primarily to a change in revenue mix and
increased efficiencies in the customer service centers.

OPERATING EXPENSES

    SELLING AND MARKETING.  Selling and marketing expenses consist of
advertising costs to promote the Company's Web site, the amortization of
payments made to strategic distribution partnerships with companies such as AOL,
Yahoo! Inc. ("Yahoo!"), Excite, Inc. ("Excite"), and At Home Corporation,
amortization of trademarks and salaries and benefits. Selling and marketing
expenses increased from $30.3 million to $41.5 million for the three months
ended June 30, 2000 compared to the three months ended June 30, 2001, an
increase of $11.2 million, 37%. This was due primarily to an increase in
administrative costs to support our direct selling efforts and internal sales
force, an increase in salaries and an increase in payments made to strategic
distribution partners during the second quarter of 2001 compared with the same
period in 2000.

                                       14
<Page>
    TECHNOLOGY AND DEVELOPMENT.  Technology and development expenses consist of
salaries and related costs and charges from Sabre for development and
maintenance of our Web site, including enhancements to and maintenance of our
Web site. Technology and development expenses increased from $5.2 million to
$6.1 million for the three months ended June 30, 2000 compared to the three
months ended June 30, 2001, an increase of $875,000, 17%. This was due primarily
to costs related to salaries and benefits associated with an increase in
development labor headcount.

    GENERAL AND ADMINISTRATIVE.  General and administrative expenses consist of
fees paid to Travelocity Holdings and Sabre for salaries and benefits for
Travelocity Holdings management devoted to the Company, corporate facility
services, legal services, accounting and other services. General and
administrative expense also includes salaries and benefits of management and
administrative costs of the Company. General and administrative expenses
increased from $4.5 million to $4.8 million for the three months ended June 30,
2000 compared to the three months ended June 30, 2001, an increase of $334,000,
7%. This was due primarily to an increase in various professional services and
employee related costs.

    INTEGRATION RELATED EXPENSES.  Integration related expenses represent costs
specifically associated with the integration of the Company and Preview Travel.
Integration related expenses were $1.0 million for the three months ended
June 30, 2000. No comparable amounts were recorded for the three months ended
June 30, 2001.

    STOCK COMPENSATION.  Stock compensation expenses represent the expenses,
measured at fair value, associated with stock options held by employees of
Travelocity Holdings. Stock compensation is recorded in accordance with
Interpretation No. 44, ACCOUNTING FOR CERTAIN TRANSACTIONS INVOLVING STOCK
COMPENSATION ("FIN 44"), which was adopted by the Company on July 1, 2000.
FIN 44 required the Company to recognize stock compensation expense at fair
value for options held by employees of Travelocity Holdings. FIN 44 accounting
treatment will result in variations to stock compensation expense largely as a
result of fluctuations in market prices of the Company's common stock. In
addition, stock compensation expense includes expense associated with the
acceleration of vesting of stock options held by certain key former employees of
Preview Travel. This expense is being recognized over the shorter of the
estimated remaining service period or the twelve-month period following the
close of the Merger. Stock compensation expense also includes expense for
unvested stock options held by former employees of Sabre that were converted
into the Company's stock options on the date of the Merger and expense for
options granted to a consultant by Preview Travel which were assumed in the
Merger. Stock compensation expense was $689,000 and $8.8 million for the three
months ended June 30, 2000 compared to the three months ended June 30, 2001.

    AMORTIZATION OF INTANGIBLE ASSETS AND GOODWILL.  Amortization of intangible
assets and goodwill represents the amortization of intangible assets and
goodwill recorded in conjunction with the Merger. Total amortization expense for
the three months ended June 30, 2000 and June 30, 2001 was $22.1 million and
$22.4 million, respectively. The goodwill is being amortized over a three-year
period. In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 142 ("FAS 142"), Goodwill and Other
Intangible Assets, effective for fiscal years beginning after December 15, 2001.
Under the new rules, goodwill and intangible assets deemed to have indefinite
lives will no longer be amortized but will be subject to annual impairment tests
in accordance with the Statement. Other intangible assets will continue to be
amortized over their useful lives. The Company will apply the new rules on
accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. Application of the nonamortization provisions of FAS 142 is
expected to result in an increase in net income of approximately $87 million in
2002, as a result of the cessation of amortization of existing goodwill. During
2002, the Company will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets as of January 1, 2002. The

                                       15
<Page>
Company and has not yet determined what the effect of these tests will be on its
earnings and financial position.

    INTEREST INCOME, NET.  Interest income represents interest income on
marketable securities held by the Company. Interest income, net of interest
expense related to capital lease obligations acquired effective with the Merger,
for the three months ended June 30, 2000 and June 30, 2001 was $1.1 million and
$1.2 million, respectively.

    OTHER INCOME AND EXPENSE.  Other income and expense primarily represents
unrealized gains and losses incurred on the Company's investments that are
subject to the provisions of Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities
("FAS 133") following the initial adoption January 1, 2001. It also includes
unrealized gains and losses on the exercise of the HRN warrants. See Notes 2 and
6 to the consolidated financial statements. Other income and expense for the
three months ended June 30, 2001 was $2.7 million. For the three months ended
June 30, 2000 other income and expense was $375,000 related to gains on the sale
of Company investments and assets.

    SABRE'S INTEREST IN PARTNERSHIP.  Sabre's interest in the Partnership
represents the allocation of the Partnership's losses which consolidates with
the Company for financial reporting purposes to Sabre, based on Sabre's direct
ownership interest in the Partnership during 2000. The amount of losses which
may be allocated to Sabre are, under generally accepted accounting principles,
limited to the amount of Sabre's investment in the Partnership. Because losses
attributable to Sabre's interest exceeded Sabre's interest in the Partnership in
2000, no losses have been allocated to Sabre for the three months ended
June 30, 2001.

    PROVISION FOR INCOME TAXES.  Net operating losses acquired from Preview
Travel will not offset the Company's tax provision. Goodwill and non-current
intangible assets recorded in connection with the acquisition will be reduced as
net operating losses are utilized in the Company's tax return. If goodwill and
non-current intangible assets have been fully amortized or reduced to zero,
income tax expense will be reduced.

    The amortization of the goodwill associated with the Preview Travel
acquisition is not deductible for tax purposes.

    The $138,000 tax benefit recognized during the three months ended June 30,
2001 relates to the reversal of income tax expense recorded during the first
quarter of 2001. The Company recorded a net taxable loss under generally
accepted accounting principles during the three months ended June 30, 2001,
primarily due to the increase in stock compensation expense.

    NET LOSS.  Net loss increased $10.5 million, 78%, from $13.5 million to
$24.1 million, primarily due to the increase in operating expenses offset by the
increase in gross profit, net of Sabre's interest in the results of operations
of the Partnership.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2000

REVENUES

    TRANSACTION SERVICE REVENUES.  Transaction service revenues increased from
$57.5 million to $108.0 million for the six months ended June 30, 2000 compared
to the six months ended June 30, 2001, an increase of approximately
$50.4 million, 88%. This was due to an increase in air revenues of
$33.6 million, 72%, and non-air revenues of $16.8 million, 156%, for the
corresponding periods. Gross bookings increased from $1.0 billion to
$1.7 billion for the six months ended June 30, 2000 compared to the six months
ended June 30, 2001.

                                       16
<Page>
    ADVERTISING REVENUES.  Advertising revenues increased from $15.0 million
(net of fees paid to DoubleClick of $884,000) to $34.0 million for the six
months ended June 30, 2000 compared to the six months ended June 30, 2001, an
increase of $19.1 million, 127%. This increase was due primarily to an increase
in net revenue from our advertising revenue sharing agreement with AOL and
increased revenue from the direct sale of advertising by our internal sales
force. The move from using DoubleClick for advertising sales to a direct sales
force reduced fees paid for advertising services.

    OTHER REVENUES.  Other revenues increased from $1.3 million to
$13.2 million for the six months ended June 30, 2000 compared to the six months
ended June 30, 2001, an increase of $11.9 million, 900%. This increase was due
primarily to service charges for the handling and express delivery of certain
paper tickets. The increase was also due to the recognition of additional
revenue related to warrants received from HRN during the first and second
quarters of 2001. This was in connection with an extended affiliation agreement
that was entered into by the Company with HRN in March 2001.

COSTS OF REVENUES

    Costs of revenues increased from $31.3 million to $51.9 million for the six
months ended June 30, 2000 compared to the six months ended June 30, 2001, an
increase of approximately $20.7 million, 66%. This was due to increased
headcount costs associated with the customer service centers, including the
opening of a third customer service center during the second quarter 2001, and
data processing charges. Costs of revenues declined as a percentage of total
revenue from 42.3% for the six months ended June 30, 2000 to 33.5% for the six
months ended June 30, 2001 due primarily to a change in revenue mix and
increased efficiencies in the customer service centers.

OPERATING EXPENSES

    SELLING AND MARKETING.  Selling and marketing expenses increased from
$47.0 million to $77.4 million for the six months ended June 30, 2000 compared
to the six months ended June 30, 2001, an increase of approximately
$30.3 million, 65%. This was due primarily to an increase in administrative
costs to support our direct selling efforts and internal sales force, an
increase in salaries and an increase in payments made to strategic distribution
partners during the first and second quarters of 2001 compared with the same
periods in 2000.

    TECHNOLOGY AND DEVELOPMENT.  Technology and development expenses increased
from $9.2 million to $11.2 million for the six months ended June 30, 2000
compared to the six months ended June 30, 2001, an increase of approximately
$2.0 million, 22%. This was due primarily to costs related to salaries and
benefits associated with an increase in development labor headcount and costs
incurred to enhance and maintain our Web site.

    GENERAL AND ADMINISTRATIVE.  General and administrative expenses increased
from $8.0 million to $11.2 million for the six months ended June 30, 2000
compared to the six months ended June 30, 2001, an increase of approximately
$3.2 million, 40%. This was due primarily to an increase in various professional
services and salaries and employee related costs.

    INTEGRATION RELATED EXPENSES.  Integration related expenses represent costs
specifically associated with the integration of the Company and Preview Travel.
Integration related expenses were $1.5 million for the six months ended
June 30, 2000. No comparable amounts were recorded for the six months ended
June 30, 2001.

    STOCK COMPENSATION.  Stock compensation expense increased from $2.2 million
to $11.4 million for the six months ended June 30, 2000 compared to the six
months ended June 30, 2001. The increase was due to FIN 44 that was adopted by
the Company on July 1, 2000. FIN 44 required the Company to recognize stock
compensation expense at fair value for options held by employees of Travelocity

                                       17
<Page>
Holdings. FIN 44 accounting treatment will result in variations to stock
compensation expense largely as a result of fluctuations in market prices of the
Company's common stock.

    AMORTIZATION OF INTANGIBLE ASSETS AND GOODWILL.  Total amortization expense
of intangible assets and goodwill, recorded in conjunction with the Merger for
the six months ended June 30, 2000 and June 30, 2001 was $27.9 million and
$44.8 million, respectively. The goodwill is being amortized over a three-year
period. In June 2001, the Financial Accounting Standards Board issued FAS 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill and intangible assets deemed to
have indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the Statement. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
rules on accounting for goodwill and other intangible assets beginning in the
first quarter of 2002. Application of the nonamortization provisions FAS 142 is
expected to result in an increase in net income of approximately $87 million in
2002, as a result of the cessation of amortization of existing goodwill. During
2002, the Company will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets as of January 1, 2002. The
Company has not yet determined what the effect of these tests will be on its
earnings and financial position.

    INTEREST INCOME, NET.  Interest income, net of interest expense related to
capital lease obligations acquired effective with the Merger, for the six months
ended June 30, 2000 and June 30, 2001 was $1.4 million and $2.3 million,
respectively.

    OTHER INCOME AND EXPENSE.  Other income and expense primarily represents
unrealized gains and losses incurred on the Company's investments that are
subject to the provisions of FAS 133 following the initial adoption January 1,
2001. It also includes unrealized gains and losses on the exercise of HRN
warrants. See Notes 2 and 6 to the consolidated financial statements. Other
income and expense for the six months ended June 30, 2001 was ($3.1) million.
For the six months ended June 30, 2000 other income and expense was $369,000
related to gains on the sale of Company investments and assets.

    SABRE'S INTEREST IN PARTNERSHIP.  Sabre's interest in the Partnership
represents the allocation of the Partnership's losses which consolidates with
the Company for financial reporting purposes to Sabre, based on Sabre's direct
ownership interest in the Partnership during 2000. The amount of losses which
may be allocated to Sabre are, under generally accepted accounting principles,
limited to the amount of Sabre's investment in the Partnership. Because losses
attributable to Sabre's interest exceeded Sabre's interest in the Partnership in
2000, no losses have been allocated to Sabre for the six months ended June 30,
2001.

    PROVISION FOR INCOME TAXES.  Net operating losses acquired from Preview
Travel will not offset the Company's tax provision. Goodwill and non-current
intangible assets recorded in connection with the acquisition will be reduced as
net operating losses are utilized in the Company's tax return. If goodwill and
non-current intangible assets have been fully amortized or reduced to zero,
income tax expense will be reduced.

    The amortization of the goodwill associated with the Preview Travel
acquisition is not deductible for tax purposes.

    During the six months ended June 30, 2001, the Company recorded an income
tax benefit of $1,036,000. This benefit offsets the income tax expense
recognized by the Company in connection with the adoption of FAS 133 on
January 1, 2001. See Note 2 to the consolidated financial statements.

    CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING METHOD.  The Company adopted
FAS 133 effective January 1, 2001. FAS 133 requires the Company to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative

                                       18
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is a hedge, depending on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be immediately
recognized in earnings. At January 1, 2001, the Company held warrants received
by the Partnership from HRN in connection with an affiliation agreement. As a
result of the cumulative effect of the adoption of FAS 133, the Company reported
a gain of $6.1 million, net of Sabre's interest in the Partnership of zero and
income taxes of approximately $1 million. The gain was calculated based on the
Black-Scholes value of the warrants at January 1, 2001. Any actual gains or
losses realized by the Company will be dependent upon HRN's stock price at the
time HRN stock acquired upon exercise of the warrants is sold.

    NET LOSS.  Net loss increased $23.7 million, 105% from $22.6 million to
$46.2 million, due primarily to the increase in operating expenses offset by the
increase in gross profit, net of Sabre's interest in the results of operations
of the Partnership.

PRO FORMA STATEMENT OF OPERATIONS BEFORE SPECIAL ITEMS

    The unaudited pro forma statement of operations before special items data in
the table below outlines the results of operations before special items for the
Company for the three and six months ended June 30, 2001 and 2000 for the
combined Company (including Preview Travel). The information presented below
assumes the Merger of the Company and Preview Travel occurred on January 1,
2000. The unaudited statements of operations before special items are based upon
certain estimates and assumptions, and may not be indicative of the Company's
actual results of operations. The unaudited statements of operations before
special items exclude the recognition of certain expenses and give effect to the
use of net operating loss carryforwards acquired from Preview Travel. Special
items not recognized in the unaudited statements of operations include the
amortization of goodwill and intangible assets recorded in connection with the
acquisition of Preview Travel, certain non-recurring costs incurred during the
integration of Preview Travel, non-cash stock compensation expenses, the
cumulative effect of the adoption of FAS 133 on January 1, 2001 and unrealized
changes in the fair value of HRN warrants held by the Company. The unaudited pro
forma statement of operations data should be read in conjunction with the
Financial Statements and related notes thereto included elsewhere herein. Pro
forma adjustments include the impact of intercompany agreements and other

                                       19
<Page>
adjustments associated with the Merger. Amounts shown below are in thousands,
except per share amounts.

<Table>
<Caption>
                                                THREE MONTHS ENDED     SIX MONTHS ENDED
                                                     JUNE 30,              JUNE 30,
                                                -------------------   -------------------
                                                  2001       2000       2001       2000
                                                --------   --------   --------   --------
<S>                                             <C>        <C>        <C>        <C>
Revenues
  Transaction services revenue
    Air.......................................  $40,643    $ 27,642   $ 80,345   $ 50,923
    Non air...................................   16,451       6,945     27,607     13,438
  Advertising.................................   17,288      11,587     34,045     16,812
  Other.......................................    7,962         624     13,198      1,320
                                                -------    --------   --------   --------
      Total revenues..........................   82,344      46,798    155,195     82,493
Cost of revenues..............................   26,807      19,108     51,927     35,003
                                                -------    --------   --------   --------
Gross profit..................................   55,537      27,690    103,268     47,490
  Operating expenses selling and marketing....   41,522      30,343     77,362     54,700
  Technology and development..................    6,061       5,186     11,184     10,393
  General and administrative..................    4,831       4,497     11,180      9,897
                                                -------    --------   --------   --------
      Total operating expenses................   52,414      40,026     99,726     74,990
                                                -------    --------   --------   --------
Operating profit/(loss).......................    3,123     (12,336)     3,542    (27,500)
Interest income, net..........................    1,177       1,083      2,327      1,627
Other income, net.............................      157         369        157        369
                                                -------    --------   --------   --------
Profit/(loss) before Sabre's interest in
  Partnership.................................    4,457     (10,884)     6,026    (25,504)
Sabre's interest in Partnership...............   (2,692)      6,649     (3,643)    15,708
                                                -------    --------   --------   --------
Profit/(loss) after Sabre's interest in
  Partnership.................................    1,765      (4,235)     2,383     (9,796)
Provision for income taxes....................       --          --         --         --
                                                -------    --------   --------   --------
Net profit/(loss) after Sabre's interest in
  Partnership.................................  $ 1,765    $ (4,235)  $  2,383   $ (9,796)
                                                =======    ========   ========   ========
Net profit/(loss) per share after Sabre's
  interest in Partnership.....................  $  0.08    $  (0.22)  $   0.12   $  (0.54)
                                                =======    ========   ========   ========
Weighted average diluted shares outstanding...   21,318      19,008     20,662     18,295
                                                =======    ========   ========   ========
</Table>

GROSS MARGINS

    Pro forma gross margins for the three months ended June 30, 2001 and 2000
were 67.4% and 59.2%, respectively. For the six months ended June 30, 2001 and
2000, they were 66.5% and 57.6%, respectively.

RESULTS OF OPERATIONS

PRO FORMA THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO PRO FORMA THREE MONTHS
  ENDED JUNE 30, 2000

REVENUES

    TRANSACTION SERVICE REVENUES.  Pro forma transaction service revenues
increased from $34.6 million to $57.1 million for the three months ended
June 30, 2000 compared to the three months ended June 30, 2001, an increase of
approximately $22.5 million, 65%. This was due to an increase in air revenues of
$13.0 million, 47%, and non-air revenues of $9.5 million, 137%, for the
corresponding periods. Non-air revenues include services for hotel, car,
vacation packages, tours and cruise providers.

                                       20
<Page>
Gross bookings increased from $610.2 million to $879.0 million for the three
months ended June 30, 2000 compared to the three months ended June 30, 2001.

    ADVERTISING REVENUES.  Pro forma advertising revenues increased from
$11.6 million (net of fees paid to DoubleClick of $193,000) to $17.3 million for
the three months ended June 30, 2000 compared to the three months ended
June 30, 2001, an increase of $5.7 million, 49%. This increase was due primarily
to an increase in net revenue from our advertising revenue sharing agreement
with AOL and increased revenue from the direct sale of advertising by our
internal sales force.

    OTHER REVENUES.  Pro forma other revenues increased from $624,000 to
$8.0 million for the three months ended June 30, 2000 compared to the three
months ended June 30, 2001, an increase of $7.3 million, 1,176%. This increase
was due primarily to service charges for the handling and express delivery of
certain paper tickets. The increase was also due to the recognition of
additional revenue related to warrants received from HRN during the first and
second quarters of 2001. This was in connection with an extended affiliation
agreement that was entered into by the Company with HRN in March 2001.

COSTS OF REVENUES

    Pro forma costs of revenues increased from $19.1 million to $26.8 million
for the three months ended June 30, 2000 compared to the three months ended
June 30, 2001, an increase of approximately $7.7 million, 40%. This was due to
increased headcount costs associated with the customer service centers,
including the opening of a third customer service center during the second
quarter 2001, and data processing charges. Costs of revenues declined as a
percentage of total revenue from 40.8% for the three months ended June 30, 2000
to 32.6% for the three months ended June 30, 2001 due primarily to a change in
revenue mix and increased efficiencies in the customer service centers.

OPERATING EXPENSES

    SELLING AND MARKETING.  Pro forma selling and marketing expenses increased
from $30.3 million to $41.5 million for the three months ended June 30, 2000
compared to the three months ended June 30, 2001, an increase of $11.2 million,
37%. This was due primarily to an increase in administrative costs to support
our direct selling efforts and internal sales force, an increase in salaries and
an increase in payments made to strategic distribution partners during the
second quarter of 2001 compared with the same period in 2000.

    TECHNOLOGY AND DEVELOPMENT.  Pro forma technology and development expenses
increased from $5.2 million to $6.1 million for the three months ended June 30,
2000 compared to the three months ended June 30, 2001, an increase of $875,000,
17%. This was due primarily to costs related to salaries and benefits associated
with an increase in development labor headcount.

    GENERAL AND ADMINISTRATIVE.  Pro forma general and administrative expenses
increased from $4.5 million to $4.8 million for the three months ended June 30,
2000 compared to the three months ended June 30, 2001, an increase of $334,000,
7%. This was due primarily to an increase in various professional services and
employee related costs.

    SABRE'S INTEREST IN PARTNERSHIP.  Sabre's interest in the Partnership
represents the allocation of the Partnership's profits and losses which
consolidates with the Company for financial reporting purposes to Sabre, based
on Sabre's direct ownership interest in the Partnership during 2000 and 2001.
The allocation was approximately 61% and 60% for the three months ended
June 30, 2000 and June 30, 2001, respectively.

    PROVISION FOR INCOME TAXES.  The Company's net operating loss carryforwards
shield current income for the second quarter 2001 without need for a provision
for income taxes.

                                       21
<Page>
PRO FORMA SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO PRO FORMA SIX MONTHS ENDED
  JUNE 30, 2000

REVENUES

    TRANSACTION SERVICE REVENUES.  Pro forma transaction service revenues
increased from $64.4 million to $108.0 million for the six months ended
June 30, 2000 compared to the six months ended June 30, 2001, an increase of
approximately $43.6 million, 68%. This was due to an increase in air revenues of
$29.4 million, 58%, and non-air revenues of $14.1 million, 105%, for the
corresponding periods. Gross bookings increased from $1.1 billion to
$1.7 billion for the six months ended June 30, 2000 compared to the six months
ended June 30, 2001.

    ADVERTISING REVENUES.  Pro forma advertising revenues increased from
$16.8 million (net of fees paid to DoubleClick of $884,000) to $34.0 million for
the six months ended June 30, 2000 compared to the six months ended June 30,
2001, an increase of $17.2 million, 103%. This increase was due primarily to an
increase in net revenue from our advertising revenue sharing agreement with AOL
and increased revenue from the direct sale of advertising by our internal sales
force. The move from using DoubleClick for advertising sales to a direct sales
force reduced fees paid for advertising services.

    OTHER REVENUES.  Pro forma other revenues increased from $1.3 million to
$13.2 million for the six months ended June 30, 2000 compared to the six months
ended June 30, 2001, an increase of $11.9 million, 900%. This increase was due
primarily to service charges for the handling and express delivery of certain
paper tickets. The increase was also due to the recognition of additional
revenue related to warrants received from HRN during the first and second
quarters of 2001 compared with the same periods in 2000. This was in connection
with an extended affiliation agreement that was entered into by the Company with
HRN in March 2001.

COSTS OF REVENUES

    Pro forma costs of revenues increased from $35.0 million to $51.9 million
for the six months ended June 30, 2000 compared to the six months ended
June 30, 2001, an increase of approximately $16.9 million, 48%. This was due to
increased headcount costs associated with the customer service centers,
including the opening of a third customer service center during the second
quarter 2001, and data processing charges. Costs of revenues declined as a
percentage of total revenue from 42.4% for the six months ended June 30, 2000 to
33.5% for the six months ended June 30, 2001 due primarily to a change in
revenue mix and increased efficiencies in the customer service centers.

OPERATING EXPENSES

    SELLING AND MARKETING.  Pro forma selling and marketing expenses increased
from $54.7 million to $77.4 million for the six months ended June 30, 2000
compared to the six months ended June 30, 2001, an increase of approximately
$22.7 million, 41%. This was due primarily to an increase in administrative
costs to support our direct selling efforts and internal sales force, an
increase in salaries and an increase in payments made to strategic distribution
partners during the first and second quarters of 2001 compared with the same
periods in 2000.

    TECHNOLOGY AND DEVELOPMENT.  Technology and development expenses increased
from $10.4 million to $11.2 million for the six months ended June 30, 2000
compared to the six months ended June 30, 2001, an increase of approximately
$791,000, 8%. This was due primarily to costs related to salaries and benefits
associated with an increase in development labor headcount and costs incurred to
enhance and maintain our Web site.

    GENERAL AND ADMINISTRATIVE.  General and administrative expenses increased
from $9.9 million to $11.2 million for the six months ended June 30, 2000
compared to the six months ended June 30, 2001,

                                       22
<Page>
an increase of approximately $1.3 million, 13%. This was due primarily to an
increase in various professional services and salaries and employee related
costs.

    SABRE'S INTEREST IN PARTNERSHIP.  Sabre's interest in the Partnership
represents the allocation of the Partnership's profits and losses which
consolidates with the Company for financial reporting purposes to Sabre, based
on Sabre's direct ownership interest in the Partnership during 2000 and 2001.
The allocation was approximately 62% and 60% for the six months ended June 30,
2000 and June 30, 2001, respectively.

    PROVISION FOR INCOME TAXES.  The Company's net operating loss carryforwards
shield current income for the second quarter 2001 without need for a provision
for income taxes.

ANTICIPATED LOSSES

    The Company has incurred significant operating losses since its inception as
an operating unit of Sabre, and has continued to incur losses, as measured by
generally accepted accounting principles, since the Merger. For the future, our
success will depend to a large extent on our ability to greatly increase sales
volume so as to realize economies of scale and to increase revenue from
advertising and higher margin products like merchant-model air and hotel
bookings, vacation packages and cruises resulting in higher gross margins. As we
increase spending for product development, advertising, customer service,
facilities, international expansion and general and administrative expenses, we
had expected to continue to incur lower costs as a percent of revenue resulting
in declining operating losses until the second quarter of 2001, by the end of
which time we expected to be at or close to profitability, excluding the effects
of non-cash stock compensation expense, the amortization of goodwill and
intangible assets and other special non-cash items. The Company, however, was
able to accomplish this by the end of the first quarter 2001. The Company
projects modest growth with a net profit, excluding special items, during the
remaining two quarters of 2001.

VARIABILITY OF RESULTS

    We expect to experience seasonality in our business, reflecting seasonal
fluctuations in the travel industry, Internet and commercial online service
usage and advertising expenditures. Travel bookings typically increase during
the first and second quarter in anticipation of summer travel and typically slow
in the third and fourth quarter. Due to the significant quarterly growth of our
business, this effect has not been historically evident in our operations, but
may become so in the future. Internet and commercial online service usage and
the rate of growth of such usage are expected to decline during the summer.
Depending on the extent to which the Internet and commercial online services are
accepted as an advertising medium, seasonality in the level of advertising
expenditures could become more pronounced for Internet-based advertising.
Seasonality in the travel industry, Internet and commercial online service usage
and advertising expenditures are likely to cause fluctuations in our operating
results and could have a material adverse effect on our business.

    Other factors that may adversely affect our operating results include:

    - our ability to retain existing customers, attract new customers and
      encourage repeat purchases;

    - our ability to adequately maintain and upgrade our Web sites and technical
      infrastructure;

    - our ability to obtain travel inventory from travel suppliers on
      satisfactory terms, particularly in competition with alliances formed by
      travel suppliers;

    - fluctuating gross margins due to a changing mix of revenues;

    - the amount and timing of operating costs related to expanding our
      operations;

                                       23
<Page>
    - general economic conditions or economic conditions specific to the
      Internet, online commerce and the travel industry;

    - the seasonal nature of the travel industry, Internet and commercial online
      service usage and advertising expenditures;

    - our ability to attract and retain advertisers on our Web sites; and

    - advertising revenues from our agreement with AOL may fluctuate due to the
      effects of seasonality.

Due to the foregoing factors, quarterly revenues and operating results are
difficult to forecast, and period-to-period comparisons of operating results
will not necessarily be meaningful and should not be relied upon as an
indication of future performance.

LIQUIDITY AND CAPITAL RESOURCES

    Net cash provided by operating activities for the six months ended June 30,
2001 was $1.9 million, which was due primarily to net income before non-cash
charges offset by payments to strategic distribution partners. Net cash used for
operating activities for the six months ended June 30, 2000 was $60.6 million
which was due primarily to the prepayment to AOL of $40.0 million, the net loss
before non-cash charges and Sabre's interest in the Partnership, an increase in
accounts receivable and other assets and an increase in receivable from
affiliates.

    Net cash used for investing activities for the six months ended June 30,
2001 was $9.3 million. Investing activities included capital expenditures,
primarily for computer equipment, purchases and sales of marketable securities,
including the sale of HRN common stock. Net cash used for investing activities
for the six months ended June 30, 2000 was $55.1 million which included the
purchase of marketable securities with funds received from Sabre in the Merger,
as discussed below, and capital expenditures for furniture, and fixtures and
computer equipment.

    Net cash provided by financing activities for the six months ended June 30,
2001 was $7.4 million due to the exercise of stock options. Net cash provided by
financing activities for the six months ended June 30, 2000 was $116.1 million.
Immediately prior to the Merger, Sabre contributed $52.7 million in cash to the
Partnership and received partnership units in exchange. Additionally, the
Company exercised its option to cause Sabre to invest an additional
$50.0 million in the Company in exchange for 1.2 million shares of common stock
of the Company. The Company contributed these funds to the Partnership. Sabre is
under no further obligation to fund the Partnership's capital requirements.
Effective with the Merger, we began maintaining our own cash balances.

    As of June 30, 2001 we had $109.5 million in cash and marketable securities.
The Company expects to have positive cash earnings, excluding special items such
as amortization of goodwill, intangibles and stock compensation expense for the
remainder of 2001. As a result, we anticipate that cash requirements will be
funded by cash flows from operating activities. However, we cannot provide
assurance that cash flows from operations of the Partnership will exist or will
be sufficient to meet our cash requirements, such as contractual commitments to
our strategic distribution partners, including AOL and Yahoo!, or to make
capital expenditures or other expenditures necessary to support the anticipated
growth of the business or to respond to competition. In such event, we would be
required to obtain financing from the sale of equity securities or debt
financing. We cannot assure you that any such financing will be available or on
terms acceptable to us.

    At January 1, 2001, the Company held warrants for the purchase of shares of
common stock of HRN, received in connection with an affiliation agreement
entered into during 2000. During March 2001, the Company extended its
affiliation agreement with HRN through July 31, 2005 and expanded the scope of
the HRN relationship. In connection with the expanded and extended

                                       24
<Page>
agreement, the Company received additional vested warrants to purchase shares of
HRN Class A Common Stock. During the six months ended June 30, 2001, the Company
completed three cashless exercises of these warrants receiving approximately
1.1 million shares of HRN stock. In May 2001, the Company sold all of its
approximately 1.1 million shares of HRN common stock, realizing gross proceeds
of approximately $36.6 million. Proceeds from the sale of the HRN stock were
used to purchase additional marketable securities. At June 30, 2001, the fair
value of HRN warrants held by the Company, earned during the second quarter of
2001, totaled approximately $1.5 million.

    In 2001, the Company will use funds to enhance brand awareness and supplier
relationships, to perform product development and for working capital. Payments
due under our agreements with strategic distribution partners could also affect
our liquidity. Revenues under the AOL agreement are based on performance and are
difficult to predict. Accordingly, they may not occur in the same time periods
as payments we must make to AOL. Additionally, agreements with Yahoo!, Excite,
and other distribution partners include guaranteed payments.

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.

RISK FACTORS

    Risks associated with an investment in the Company, and with achievement of
the Company's forward-looking statements in this report, its news releases, Web
sites, public filings, investor and analyst conferences and elsewhere include,
but are not limited to, the risk factors described below. Any of the risk
factors described below could have a material adverse effect on the Company's
business, financial condition or results of operations. The Company may not
succeed in addressing these challenges and risks.

A DECLINE IN COMMISSION RATES OR THE ELIMINATION OF COMMISSIONS BY AIRLINES AND
  OTHER TRAVEL SUPPLIERS WOULD REDUCE OUR REVENUES.

    A substantial portion of our revenue comes from the commissions paid by
travel suppliers for bookings made through our online travel services. We do not
have written commission agreements with most travel suppliers and accordingly,
consistent with industry practices, these travel suppliers are not obligated to
pay any specified commission rates for bookings made through our Web sites or to
pay commissions at all. If airlines, hotel chains or other travel suppliers
reduce current industry commission rates or eliminate commissions entirely, our
revenues would be significantly reduced. We cannot provide assurances that
airlines, hotel chains or other travel suppliers will not reduce current
industry commission rates or eliminate commissions entirely, either of which
could reduce our revenues and margins, and adversely affect our business,
financial condition and results of operations.

    During the first quarter of 2001, Northwest Airlines and its alliance
partner KLM Royal Dutch Airlines ("KLM") announced the elimination of
commissions paid by them for tickets booked through the Internet. As a result of
such action, we are now charging a $10 fee for all tickets booked on our Web
sites for Northwest Airlines and KLM. The imposition of the $10 fee may
discourage our

                                       25
<Page>
consumers from purchasing such tickets from our Web sites. Some consumers may
choose to purchase tickets for Northwest Airlines and KLM through a different
vendor or from Northwest Airlines' and KLM's own Web sites. If other airlines or
other travel suppliers discontinue payment of commissions for tickets booked
through the Internet and, in turn, force us to charge a service fee, we could
lose a large portion of our customers and consequently experience a material
adverse effect on our business, financial condition and results of operations.

    Also during the first quarter of 2001, we discontinued offering reservation
booking capabilities for Southwest Airlines Co. on our Web sites. However, we do
not expect that such action will have a material adverse effect on our business,
financial condition and results of operations.

TRAVEL INDUSTRY CONSOLIDATION, INCLUDING THE FORMATION OF STRATEGIC ALLIANCES
  AND CONSORTIA TO REPLACE TRAVEL AGENCIES, MAY HARM OUR COMPETITIVE POSITION.

    We depend greatly on our relationships with airlines and other travel
suppliers, and adverse changes in these relationships could affect the inventory
of travel products available on our Web sites. Travel suppliers, including
travel content providers, may not make their services and products available to
us on satisfactory terms or at all, or may choose to provide their products and
services only to our competitors. In addition, we cannot assure you that our
travel suppliers will continue to sell products and services through global
distribution systems on terms satisfactory to us. It is possible that in
connection with industry consolidation, strategic alliances or other travel
supplier consortia, airlines and other travel suppliers may choose not to
distribute their travel products and services through online distribution sites
such as ours. Airlines and other travel suppliers could decide to sell their
travel products and services exclusively through other distribution channels or
to otherwise restrict our access to their travel products and inventory. Either
situation could significantly reduce the volume or breadth of travel products
and services available on our Web sites. If we are unable to maintain or expand
our relationships with airlines and other travel suppliers, our ability to offer
and expand our travel service offerings or offer the lowest-priced travel
inventory could be reduced and our sales and revenues could be materially
adversely affected.

    Several major airline carriers have formed a joint sales agency known as
"Orbitz," which operates as an online travel reservations service and which
began operations in June 2001. Pursuant to agreements among the carriers and
Orbitz, Orbitz will obtain favorable and in some cases exclusive access to
certain airline fares and inventory and will enjoy other rights and benefits,
including "most favored nations" privileges, not currently enjoyed by
independent travel agencies such as the Company. The U.S. Department of Justice
and the Attorneys General of twenty-one States and the Territory of Puerto Rico,
are currently investigating whether these agreements and arrangements violate
antitrust or aviation laws; however, we cannot assure you that these
investigations will be resolved on terms satisfactory to the Company. If Orbitz
is able to use its agreements with such carriers, and its other rights and
benefits from them, to create a more comprehensive product or service offering
than the Company, our sales and revenues could be materially adversely affected.

ADVERSE CHANGES OR INTERRUPTIONS IN OUR RELATIONSHIPS WITH DISTRIBUTION PARTNERS
  AND OTHER THIRD PARTY SERVICE PROVIDERS COULD REDUCE OUR REVENUES.

    We rely on Yahoo!, AOL, Excite and other distribution partners for a
significant amount of our customers. If we are unable to maintain satisfactory
relationships with Yahoo!, AOL or Excite, or if these companies are unable to
maintain their positive market presence and reputation and steer online traffic
to our Web sites, our sales and revenue could decline, and our business,
financial condition and results of operations could be adversely affected.

    Any discontinuance in the services provided to us by third parties, such as
global distribution systems providers, web hosting providers and others, or any
deterioration or interruption of their

                                       26
<Page>
services, would prevent consumers from accessing or purchasing particular travel
services through our Web sites, which would reduce our sales and revenues and
adversely impact our business, financial condition and results of operations.

THE REVENUES DERIVED FROM OUR RELATIONSHIPS WITH COMPANIES SUCH AS YAHOO! AND
  AOL MAY NOT BE SUFFICIENT TO OFFSET OUR SIGNIFICANT FINANCIAL COMMITMENTS TO
  THOSE COMPANIES.

    We may not be able to achieve sufficient online traffic, travel bookings or
commissions to justify our significant financial obligations to Yahoo! and AOL
under various agreements. Under these agreements, we expect to pay at least
$28 million to Yahoo! over a three year period and at least $200 million to AOL
over a five year period. In addition, our financial obligations under these
agreements may limit our operational flexibility in the future, which could
materially affect our business, financial conditions and results of operations.

CONFLICTS OF INTEREST WITH SABRE COULD IMPEDE OUR BUSINESS STRATEGY AND HURT OUR
  BUSINESS.

    Sabre Holdings Corporation and its affiliates currently own 12.1% of the
Company's issued and outstanding Common Stock and 33.0 million shares of the
Company's Class A Common Stock, which are convertible into shares of Common
Stock. If all of the Class A Common Stock were converted, Sabre Holdings
Corporation and its affiliates' ownership of the Company's issued and
outstanding Common Stock would increase from 12.1% to approximately 70%. There
is no limit on the ability of Sabre Holdings Corporation and its affiliates to
purchase shares of the Company's Common Stock in the open market.

    As a result of their stock ownership, Sabre Holdings Corporation and its
affiliates exercise control over the Company and have the power to influence the
election of a majority of the directors of the Company, the appointment of the
Company's management and the approval of actions requiring a vote of the
Company's stockholders. Currently, five of the Company's directors are either
directors or officers of Sabre Holdings Corporation.

    Sabre Holdings Corporation and its affiliates' interests may conflict with
the interests of the Company or the Company's other stockholders. Sabre Holdings
Corporation and its affiliates could use their voting power to delay or prevent
a change in control, even if it is in the best interest of the Company to effect
such change in control or if a majority of the Company's other stockholders were
in favor of such change. Furthermore, we cannot assure you that Sabre Holdings
Corporation and its affiliates and the Company will be able to fairly resolve
any potential conflicts of interest that may arise between them, whether in
connection with the intercompany agreements between the parties or otherwise, or
that any resolution will be as favorable to the Company as if it were dealing
with an unaffiliated party.

BECAUSE WE ARE AFFILIATED WITH SABRE HOLDINGS CORPORATION AND ITS AFFILIATES,
  POTENTIAL STRATEGIC PARTNERS OR VENDORS MAY NOT WISH TO ENTER INTO STRATEGIC
  RELATIONSHIPS WITH US.

    Because of our affiliation with Sabre Holdings Corporation and its
affiliates, potential strategic partners or vendors may not wish to enter, or
may be contractually prohibited from entering into or expanding strategic
relationships with us. If too many potential strategic partners were to decline
strategic relationships with us, or if vendors were to limit their dealings with
us because of our affiliation with Sabre, our business, operating results and
financial condition could be materially adversely effected.

                                       27
<Page>
IF WE ARE UNABLE TO INCREASE OUR BRAND RECOGNITION AMONG CONSUMERS, WE MAY NOT
  BE ABLE TO ATTRACT NEW MEMBERS AND INCREASE OUR REVENUES.

    We believe that establishing, maintaining and enhancing the Travelocity
brand is critical to our efforts to attract new members and increase our
revenues. The number of Web sites that offer competing services increases the
importance of establishing and maintaining brand recognition. Many of these Web
sites already have well-established brands in online services or the travel
industry generally. Promotion of the Travelocity brand will depend largely on
our success in providing a high-quality online experience supported by a high
level of customer service. In addition, we intend to increase our spending
substantially on marketing and advertising with the intention of expanding our
brand recognition to attract and retain online consumers and to respond to
competitive pressures. However, we cannot provide assurance that these
expenditures will be effective to promote our brand or that our marketing
efforts generally will achieve our goals. Our inability to effectively promote
our brand could have a material adverse affect on our business, financial
condition and results of operations. Even if the Company is successful in
promoting its brand, the increased brand recognition may not economically
justify the cost of brand promotion needed to achieve that recognition.

THE SUCCESS OF OUR BUSINESS IS DEPENDENT ON THE CONTINUED USE AND GROWTH OF THE
  INTERNET AND THE EXTENT OF ACCEPTANCE AND PROFITABILITY OF ONLINE COMMERCE.

    Our future revenues and profits depend upon the widespread acceptance and
use of the Internet and online services as a medium for commerce. Rapid growth
in the use of the Internet and online services is a recent phenomenon. This
growth may not continue. A sufficiently broad base of consumers may not accept,
or continue to use, the Internet as a medium of commerce. Demand for and market
acceptance of recently introduced products and services over the Internet
involve a high level of uncertainty. If the growth of the Internet does not
continue or if consumers cease to accept the Internet as a medium of commerce,
our business, financial condition and results of operations will be adversely
affected.

    The Internet has experienced, and is expected to continue to experience,
significant growth in the number of users and amount of traffic. Our success
will depend upon the development and maintenance of the Internet's
infrastructure to cope with this increased traffic. This will require a reliable
network backbone with the necessary speed, data capacity and security and the
timely development of complementary products for providing reliable Internet
access and services. Major online service providers and the Internet itself have
experienced outages and other delays as a result of software and hardware
failures and could face such outages and delays in the future. Outages and
delays are likely to adversely affect the level of Internet usage and the
processing of transactions on our Web sites. In addition, the Internet could
lose its viability because of delays in the development or adoption of new
standards to handle increased levels of activity or increased government
regulation. The adoption of new standards or government regulation may require
us to incur substantial compliance costs. Such costs may adversely affect our
business, financial condition and results of operations.

DECLINES OR DISRUPTIONS IN THE TRAVEL INDUSTRY COULD REDUCE OUR REVENUES.

    Our business and operations rely on the health and growth of the travel
industry. Travel is highly sensitive to business and personal discretionary
spending levels, and thus tends to decline during general economic downturns.
Our sales and revenues would be significantly reduced as a result of a decline
in travel by consumers. Events that tend to reduce travel would reduce our sales
and revenues, including:

    - price escalation in the airline industry or other travel-related
      industries;

    - airline or other travel related strikes;

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<Page>
    - political instability and hostilities;

    - regional hostilities and terrorism;

    - unusual periods of bad weather;

    - fuel price escalation;

    - increased occurrence of travel-related accidents; and

    - significant economic downturns and recessions.

RAPID TECHNOLOGICAL CHANGES MAY RENDER OUR TECHNOLOGY OBSOLETE OR DECREASE THE
  ATTRACTIVENESS OF OUR SERVICES TO CUSTOMERS.

    In order to remain competitive in the online travel industry, we must
continue to enhance and improve the functionality and features of our Web sites.
If we fail to continually improve our Web sites' speed, personalization and
customer service, we could lag behind competitors or our Web sites could become
obsolete. As a result, we could lose market share and our revenues would
decline, which could have a material adverse effect on our business, financial
condition and results of operations. In addition, our services depend on complex
search mechanisms to find the best available fares. If our competitors develop
technology to help consumers find the best fares more quickly or easily, or at a
cheaper cost, then we may also lose market share. In order to remain
competitive, we may have to incur substantial costs and expenses to respond to
the increasingly sophisticated requirements of online consumers and suppliers.
Such costs and expenses may have a material adverse effect on our business,
financial condition and results of operations.

SECURITY BREACHES IN OUR SYSTEMS OR CREDIT CARD FRAUD COULD DAMAGE OUR
  REPUTATION AND CAUSE US TO LOSE CUSTOMERS.

    Consumer concerns over the security of transactions conducted on the
Internet and over privacy issues may inhibit the growth of the Internet and
online commerce. The security of our customers confidential transaction data
could be jeopardized as a result of the accidental or intentional acts of
Internet users, our current and former employees or others, or computer viruses.
If we experience credit card fraud or if there is a breach in the security of
our systems, we could lose consumers' confidence and consequently, their
business. In addition, we may be liable for damages caused by security breaches.
Such liability could increase our expenses and exhaust our resources, which
could have a material adverse effect on our business, financial condition and
results of operations.

    Security breaches experienced by other electronic commerce companies could
reduce consumers' confidence in our Web sites. Although we plan to continue to
use encryption and authentication technology, these measures can be
circumvented. The costs required to continually upgrade our security measures
could be prohibitively expensive and could result in delays or interruption of
service that could result in a loss of consumers.

OUR COMPUTER SYSTEMS MAY SUFFER SYSTEM FAILURES, CAPACITY CONSTRAINTS AND
  BUSINESS INTERRUPTIONS WHICH COULD INCREASE OUR OPERATING COSTS AND CAUSE US
  TO LOSE CUSTOMERS.

    The interruption, impaired performance or insufficient capacity of our
systems could lead to interruptions or delays in our service, loss of data or
our inability to process reservations, which could cause us to lose customers.
Our systems and operations can be damaged or interrupted by fire, flood, power
loss, telecommunications failure, viruses, earthquake, tornado and similar
events and our redundant systems or disaster recovery plans may not be adequate.
If any of such events occur, it may have a material adverse effect on our
business, financial condition and results of operations. We must

                                       29
<Page>
continually devote substantial financial, technical and operational resources to
expand and upgrade our systems and infrastructure.

WE EXPECT TO CONTINUE TO INCUR NET LOSSES, AS MEASURED BY GENERALLY ACCEPTED
  ACCOUNTING PRINCIPLES.

    We anticipate that the Company will incur future losses, as measured by
generally accepted accounting principles. We expect our operating expenses to
increase significantly as we develop and expand our services, expand our
domestic and international operations, enhance the Travelocity brand, fund site
and content development and invest in operating infrastructure. We will need to
grow our revenues significantly in order to become and stay profitable, as
measured by generally accepted accounting principles. If our revenues do not
grow as expected to defray the estimated costs and expenses, there could be a
material adverse effect on our business, operating results and financial
condition.

OUR STOCK PRICE COULD FLUCTUATE SIGNIFICANTLY.

    We are an Internet-related company engaged in electronic commerce. Market
prices for stocks of this type have been volatile and as a result, the market
price of our common stock could experience extreme price fluctuations. If
revenues or earnings are less than expected for any quarter, the market price of
our common stock could significantly decline, even if the decline in our
revenues or earnings is not reflective of any long-term problems with our
business, financial condition and operating results. The market price of our
common stock could also fluctuate significantly as a result of sales or
distributions by our investors who own a substantial number of shares of our
common stock.

EVOLVING GOVERNMENT REGULATION COULD IMPOSE TAXES OR OTHER BURDENS ON OUR
  BUSINESS WHICH COULD INCREASE OUR COSTS OR DECREASE DEMAND FOR OUR PRODUCTS.

    Increased regulation of the Internet or different applications of existing
laws might slow the growth of the use of the Internet and commercial online
services, which could decrease demand for our services, increase the cost of
doing business or otherwise reduce our sales and revenues.

    Federal legislation imposing limitations on the ability of states to tax
Internet-based sales was enacted in 1998. The Internet Tax Freedom Act exempts
specific types of sales transactions conducted over the Internet from multiple
or discriminatory state and local taxation through October 21, 2001. If this
legislation is not renewed when it terminates, state and local governments could
impose taxes on Internet-based sales. These taxes could decrease the demand for
our products and services or increase our costs of operations, which would have
a material adverse effect on our business, financial condition and results of
operations.

    Data collection, protection and privacy issues are a growing concern in the
U.S, and many countries around the world in which the Company does business or
may do business in the future. Evolving government regulation in these areas
could limit or restrict the Company's ability to market its products and
services to consumers, increase the Company's costs of operation and lead to a
decrease in demand for our products and services, which would have a material
adverse effect on our business, financial condition and results of operation.

OUR CONTINUED SUCCESS DEPENDS ON THE CONTINUING EFFORTS OF KEY OFFICERS AND OUR
  ABILITY TO CONTINUE TO ATTRACT, RETAIN AND MOTIVATE HIGHLY SKILLED EMPLOYEES.

    The loss of the services of Terrell B. Jones, our President and Chief
Executive Officer, could harm our ability to execute our business strategy and
expand our operations. Mr. Jones may not be able to fulfill his responsibilities
adequately or he may choose to leave us. Our success also depends on our ability
to hire, train, retain and manage highly skilled employees. There is a
significant shortage of, and intense competition for, personnel who are
technically skilled. We cannot assure you that we will be

                                       30
<Page>
able to attract and retain a sufficient number of qualified employees or that we
will successfully train and manage the employees we hire.

OUR ABILITY TO PROMOTE OUR SERVICES IN SOUTHEAST ASIA, AUSTRALIA, NEW ZEALAND,
  JAPAN, INDIA AND OTHER NEARBY REGIONS IS RESTRICTED.

    An agreement between Sabre and Abacus International Pte Ltd. ("Abacus"), the
operator of a global distribution system, may restrict us from directing
promotions of our services specifically to consumers in Southeast Asia,
Australia, New Zealand, Japan, India and other nearby regions. The agreement
also provides Abacus the first opportunity to market our underlying technology
to Internet service providers in the restricted area. In addition, after we
become profitable, as measured by generally accepted accounting principles, we
will be required to transfer a proportional amount of revenues based upon the
percentage of bookings made in the restricted marketing area to a joint venture
between Sabre and Abacus. We will be able to deduct all direct and indirect
costs from bookings made from the restricted area. These restrictions may in the
future limit us from expanding our operations in Southeast Asia, Australia, New
Zealand, Japan, India and other nearby regions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Effective with the Merger on March 7, 2000, we began maintaining our own
cash balances. Our exposure to market risk for changes in interest rates relates
primarily to our investment portfolio. The Company maintains an investment
policy intended to ensure the safety and preservation of invested funds by
limiting default risk, market risk and reinvestment risk. We do not plan to use
derivative financial instruments to manage or reduce market risk. We mitigate
default risk by investing in high credit quality securities such as debt
instruments of the United States government and its agencies and high quality
corporate issuers, as well as money market funds. Investments include only
marketable securities with active secondary or resale markets to ensure
portfolio liquidity and maintain a prudent amount of diversification.

    At January 1, 2001, the Company held warrants for the purchase of shares of
Class A Common Stock of HRN, received in connection with an affiliation
agreement entered into during 2000. During March 2001, the Company extended its
affiliation agreement with HRN through July 31, 2005 and received additional
vested warrants to purchase shares of HRN stock in connection with this extended
agreement. As a result of completing three cashless exercises of these warrants
during the six months ended June 30, 2001, the company received approximately
1.1 million shares of HRN Class A Common Stock. The Company's shares of HRN
Class A Common Stock were subject to market risk. However, in May 2001, the
Company sold all of its HRN common stock. Proceeds from the sale of the HRN
stock were used to purchase additional marketable securities.

    At June 30, 2001, our investments in marketable securities were
$108.6 million. If interest rates were to decline an average of 10% during the
remainder of the year compared to the six months ended June 30, 2001, our total
return on these investments would decrease approximately $302,000. This amount
was determined by applying the hypothetical interest rate change to the
Company's marketable securities balance as of June 30, 2001.

                                       31
<Page>
PART II: OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    At the annual meeting of stockholders held on May 15, 2001, the Company's
shareholders voted to approve each of the following proposals:

(1) to elect the following directors: Jeffery M. Jackson, Glenn W. Marschel, Jr.
    and Michael S. Gilliland:

<Table>
<Caption>
                        VOTES CAST IN FAVOR   VOTES CAST AGAINST OR WITHHELD   ABSTENTION OR NON-VOTE
                        -------------------   ------------------------------   ----------------------
<S>                     <C>                   <C>                              <C>
Jeffery M. Jackson          46,210,999                    601,561                          0
Glenn W. Marschel, Jr.      46,266,357                    546,203                          0
Michael S. Gilliland        46,265,317                    547,243                          0

(Continuing Directors; William J. Hannigan, James J. Hornthal, Terrell B. Jones, F. William Conner,
Paul C. Ely, Jr. and Michael A. Buckman)
</Table>

(2) to amend the Travelocity.com LP 1999 Long-Term Incentive Plan:

<Table>
<Caption>
VOTES CAST IN FAVOR   VOTES CAST AGAINST OR WITHHELD   ABSTENTION OR NON-VOTE
-------------------   ------------------------------   ----------------------
<S>                   <C>                              <C>
45,746,749....                  1,055,949                      9,862
</Table>

(3) to ratify of selection of Ernst & Young LLP to serve as the Company's
    independent auditors for the fiscal year ending December 31, 2001:

<Table>
<Caption>
VOTES CAST IN FAVOR   VOTES CAST AGAINST OR WITHHELD   ABSTENTION OR NON-VOTE
-------------------   ------------------------------   ----------------------
<S>                   <C>                              <C>
46,805,043....                      3,441                      4,076
</Table>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits

        None.

    (b) Reports on Form 8-K

        None.

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<Page>
                                   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 thereunto duly authorized.

<Table>
<S>                                                    <C>  <C>
                                                       TRAVELOCITY.COM INC.

                                                       BY:             /s/ TERRELL B. JONES
                                                            -----------------------------------------
                                                                         Terrell B. Jones
                                                              PRESIDENT, CHIEF EXECUTIVE OFFICER AND
                                                                             DIRECTOR
Date: August 14, 2001                                             (PRINCIPAL EXECUTIVE OFFICER)

                                                                      /s/ RAMESH K. PUNWANI
                                                            -----------------------------------------
                                                                        Ramesh K. Punwani
                                                                     CHIEF FINANCIAL OFFICER
                                                               (PRINCIPAL FINANCIAL AND ACCOUNTING
                                                                             OFFICER)
</Table>

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