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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 [No Fee Required]

     For the fiscal year ended DECEMBER 31, 1999.

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [No Fee Required]

Commission file number 000-30634


                              TRAVELOCITY.COM INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                      75-2855109
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(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   4200 Buckingham MD 1400
      Fort Worth, Texas                                    76155
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(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code  (817) 963-2923

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, par value $.001 per share
                    ---------------------------------------
                                (Title of Class)

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 period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes / /  No /X/.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates as of
March 15, 2000 was approximately $566,601,718. As of March 15, 2000, 15,728,040
shares of the registrant's Common Stock and 33,000,000 shares of the
registrant's Series A Preferred Stock were outstanding.

                          DOCUMENTS INCORPORATED BY REFERENCE

Part IV of this Form 10-K incorporates by reference from (i) Registrant's
Registration Statement No. 333-95757 on Form S-4 filed on January 31, 2000
and (ii) Registrant's Amendment No. 1 to Registration Statement No. 333-95757
on Form S-4 filed on February 4, 2000.

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                                     PART I
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ITEM 1.  BUSINESS


GENERAL

    Travelocity.com Inc. ("Travelocity.com" or the "Company"), including the
Travelocity business unit of Sabre Inc. (the "Travelocity Division"), after
giving effect for the merger with Preview Travel, Inc. ("Preview Travel") on
March 7, 2000 (the "merger"), is the largest online travel agency. Our Web sites
had, on a combined basis, over 6.6 million unique visitors during the month of
January 2000, based on data provided by Media Metrix. This represents 50% more
unique visitors during that month than our nearest competitor, and it made us
the third most visited site in the electronic commerce category, following
Amazon.com and eBay.com. On a combined basis, visitors booked $1.19 billion in
travel services on our Web sites in 1999, making us one of the top ten travel
agents in the United States.

    Through the Travelocity.com 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. Our Web sites feature booking and purchase capability for airlines,
car rental and hotel companies, cruises and vacation packages, and offer access
to a database of information regarding specific destinations and other
information of interest to travelers. The Internet address for our main Web site
is www.travelocity.com. Information contained on the Company's Web site is not a
part of this Annual Report on Form 10-K.

    In addition to the Travelocity.com Web site (www.travelocity.com), we
operate Web sites tailored to customers in the United Kingdom
(www.travelocity.co.uk) and Canada (www.travelocity.ca). Travelocity.com is
the exclusive travel booking system for various America Online, Inc. ("AOL")
services, including AOL, AOL.com, Netscape, CompuServe and Digital City. We
are also an exclusive provider of certain travel booking services on Web sites
operated by Yahoo! Inc. ("Yahoo!"), Excite, Inc. ("Excite"), Lycos, Inc.
("Lycos") and @Home Corporation ("@Home"), and a provider on Web sites
operated by Infoseek Corporation under the brand GO Networks.

    Travelocity.com Inc. was incorporated on September 30, 1999 as a wholly
owned subsidiary of Sabre Holdings Corporation ("Sabre"), in order to combine
the online travel business conducted by Sabre (through its Travelocity Division)
with the business of Preview Travel. Sabre is the world leader in the electronic
distribution of travel services, with the largest worldwide market share of
global distribution systems, and a leader in travel technology services.

    On March 7, 2000 Sabre completed the closing of a merger and certain related
transactions which combined Travelocity.com Inc., the Travelocity Division, and
Preview Travel in a holding company/partnership structure. Travelocity.com Inc.
is a holding company whose sole asset is units of Travelocity.com LP (the
"Partnership"). Sabre also owns units of the Partnership. The Partnership owns
all of the combined assets and has all the combined liabilities of the former
Travelocity Division and Preview Travel.

    The Company, through the Partnership, continues to operate the combined
online travel business formerly conducted by the Travelocity Division and by
Preview Travel. Although Travelocity.com does not have a majority equity
interest in the Partnership, the Company controls the Partnership through its
right to appoint a majority of the Partnership's board of directors.
Accordingly, the Company will consolidate the Partnership into its financial
statements.

    Our principal corporate offices are located at 4200 Buckingham Boulevard,
Fort Worth, Texas 76155. Our telephone number is (817) 963-2923.

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INDUSTRY BACKGROUND

GROWTH OF THE INTERNET AND ONLINE COMMERCE

    The Internet and commercial online services have emerged as significant
global communications media enabling millions of people to share information
and conduct business electronically. A number of factors have contributed to
the growth of the Internet and commercial online services usage, including:

    --    the large and growing number of advanced personal computers in the
          home and workplace;

    --    improvements in network infrastructure, making access to the Internet
          and commercial online services easier, faster and cheaper;

    --    increased acceptance of the Internet and commercial online services by
          consumer and business users; and

    --    consumers' growing confidence in credit card transactions conducted
          online.

    Jupiter Communications estimates that the number of persons in the United
States who use the Internet or other online services will grow from
approximately 83 million in 1998 to approximately 157 million in 2003.

    The functionality and accessibility of the Internet and commercial online
services have made them increasingly attractive commercial media by providing
features that have not been available through traditional channels. For example,
the Internet and commercial online services provide users with convenient access
to large volumes of real-time data to support their investment, purchase and
other decisions. Online retailers are able to communicate effectively with
customers by providing frequent updates of featured selections, content, pricing
and visual presentations. Online retailers also provide tailored services
because they capture valuable data on customer tastes, preferences, and shopping
and buying patterns. Unlike most traditional distribution channels, online
retailers do not have the burden of managing and maintaining numerous local
facilities to provide their services on a global scale. In contrast, online
retailers benefit from the economies of scale in reaching and electronically
serving large numbers of customers worldwide from a central location. Because of
these advantages, an increasingly broad base of products and services is being
sold online, with travel services as the leading category. Forrester Research
estimates that the total value of online purchases by U.S. consumers will be
approximately $20 billion in 1999 and will increase to approximately $184
billion by 2004.

    As the number of online content, commerce and service providers has
expanded, strong brand recognition and strategic alliances have become critical
to the success of such companies. Brand development is especially important for
online retailers due to the need to establish trust and loyalty among consumers
in the absence of face-to-face interaction. In addition, some online retailers
have begun to establish long-term strategic partnerships and alliances with
content, commerce and service providers to rapidly build brand recognition and
trust, enhance their service offerings, stimulate traffic, build repeat
business, and take advantage of cross-marketing opportunities.

THE TRADITIONAL TRAVEL INDUSTRY

    The travel and tourism industry is one of the largest industries in the
world. Travelers in the United States spent over $515 billion on travel and
tourism in 1998 according to the Travel Industry Association of America.
Historically, airlines, hotels, rental car agencies, cruise lines, vacation
packages and other travel suppliers have relied on internal sales departments
and travel agencies as their primary distribution channels. Travel agencies
typically book travel reservations through electronic global distribution
systems such as the SABRE(R)(1) system ("the SABRE system") and the Galileo
system. Global distribution systems provide real-time access to voluminous
data on fares, availability and other travel information.

    Customers traditionally have relied on travel agents to access and interpret
the rapidly changing information on global distribution systems by using complex
and proprietary interfaces. The global distribution systems store over 20
million published fares that are updated five times daily. As a result, the
ability of customers to obtain the most favorable schedules and fares has been
subject to the skill and experience of individual travel agents, who may not be
available when the customer needs them.

    Travel agencies are compensated primarily through commissions paid by travel
suppliers, such as airlines, hotels

--------
(1) SABRE is a registered mark of Sabre Inc. All other names are trade names,
trademarks and/or service marks of their respective company.

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and car rental companies, on services booked. Some travel agencies also charge
service fees to their customers. In a move to lower distribution costs, in
September 1997, the major U.S. airlines reduced the commission rate payable to
traditional travel agencies from approximately 10% to approximately 8% and
imposed a cap of $50 on commissions for round-trip ticket sales. These
reductions were followed by similar reductions made by other airlines. In the
fourth quarter of 1999, several major airlines further reduced their commission
rates paid to traditional travel agencies from 8% to 5%.

    Paralleling these trends, the major U.S. airlines reduced the commission
rate payable to online travel services from approximately 8% to approximately 5%
in late 1997 and early 1998. And since the first half of 1998, major airlines
have capped their fixed rate commission for online round-trip ticket sales to
$10.

    Currently, typical standard base commission rates paid by travel suppliers
to traditional travel agents are approximately 5% for airline tickets (subject
to a maximum of $25 and $50 for one-way and round-trip tickets, respectively),
10% for hotel reservations, 5% to 10% for car rentals, and 10% to 15% for
cruises and vacation packages. In addition, travel agencies can earn performance
based incentive compensation (known as override commissions) from travel
suppliers, which can substantially impact financial performance. These
commission rates and override commissions are determined by travel suppliers.
Travel suppliers also pay booking fees to providers of global distribution
systems to compensate them for their services. The global distribution systems
may pay travel agents booking incentives based on negotiated terms.

    According to Travel Weekly, travel agency sales in the United States grew
from $86 billion in 1991 to $126 billion in 1997, with more than half of those
amounts spent on leisure travel. Although the commission reductions have
resulted in some consolidation, the traditional travel agency distribution
channel remains highly fragmented, with few nationally recognized brands.
According to Travel Weekly's 1998 U.S. Travel Agency Survey published in August
1999, there are more than 33,000 travel agency locations in the United States,
with the average travel agency location generating $3.8 million in annual gross
bookings, (I.E., the total purchase price of all travel services booked), per
location.

THE ONLINE TRAVEL MARKET

    The Internet is dramatically changing the way that consumers and businesses
communicate, share information and buy and sell goods and services. The Internet
reduces inefficiencies in markets characterized by the presence of large numbers
of geographically dispersed buyers and sellers and in purchase decisions
involving vast amounts of information from multiple sources. We believe that the
worldwide travel industry, which exemplifies these characteristics, is
especially well suited to benefit from increased Internet and electronic
commerce adoption by consumers and businesses. As a result, travel has already
become the largest online retail category with estimated online transactions of
$4.2 billion in 1999, projected to grow to $32 billion in 2004, according to
Forrester Research.

    Recent trends in the traditional travel industry have contributed to a need
for a more effective and efficient means of purchasing and distributing travel
services to address the changing needs of consumers and travel suppliers. For
example, travel agencies are reducing their level of service in response to
lowered commissions or in some cases charging customers for services. At the
same time, many customers are demanding greater convenience and flexibility in
how, where and when they shop for travel services. In addition, travel suppliers
cannot use traditional travel agents to quickly implement effective marketing
programs targeted to specific customer segments because of the large number of
small travel agents.

    As a result of these trends, the Internet and commercial online services
have emerged as an attractive means of purchasing travel. The Internet enables
online travel service providers to offer a marketplace that brings customers and
travel suppliers directly together. In this marketplace, customers may choose
from a diverse selection of travel options, suppliers may market and distribute
their products and services more efficiently, and online travel service
providers can obtain favorable pricing for their customers by aggregating
customer demand more effectively than traditional travel agents. This
marketplace also provides travel suppliers and other merchants with an effective
means of advertising to a targeted audience.

    Although the online travel service market presents attractive opportunities,
there are challenges that must be overcome to enter the online travel
marketplace. We believe that, in order to succeed in this market, online travel

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services providers must invest in technology and infrastructure, attract a large
number of customers to achieve economies of scale, establish strategic
relationships to drive online traffic, incur the costs of building a brand, and
obtain travel-related information and integrate it with booking capabilities.

THE TRAVELOCITY.COM SOLUTION

    We are the leading online travel agency with the most unique visitors to our
Web sites in a given month and the most online travel sales. To address the
market opportunity presented by changes in the travel industry, we plan to
continue to satisfy customers' need for a convenient, comprehensive and
personalized source of travel services and information. Key features of the
Travelocity.com solution include:

        CONVENIENCE. Our online travel services are accessible directly or
    through Yahoo!, GO Network, @Home, and several other co-branded Web sites
    and, effective with the merger with Preview Travel, AOL (including AOL,
    AOL.com, Netscape, CompuServe and Digital City with the close of the
    merger), Excite and Lycos. Both our Web site and our customer service
    operate 24 hours a day, seven days a week.

        EASE OF USE. Our online travel services include several features that
    allow users to easily search for information and book travel online. For
    example, customers may use BEST FARE FINDER, a feature that interprets
    complicated fare rules and takes customers directly from the fare to the
    flight by showing the customer which days to travel in order to get the
    lowest fare. Customers can then select their preferred travel dates from the
    graphical calendar display. If the customer has problems, help is available
    on our Web sites through the FREQUENTLY ASKED QUESTIONS feature and other
    help functions. Questions or comments can be submitted via e-mail, with
    responses usually coming within 18 hours.

        SPEED. The Web site's ease of use and efficient architecture provide the
    ability to book travel quickly and efficiently. In January 1999, we
    introduced EXPRESS BUY, which allows customers to make an airline
    reservation with three clicks of the mouse. At that time, the Travelocity
    Division also introduced an optional version of the Web site with reduced
    graphics, which shortens the amount of time required to make a reservation
    to less than two minutes.

        TRANSACTION SECURITY AND PRIVACY. We use the SABRE system that thousands
    of travel agents around the world also use to process over $70 billion in
    travel-related products and services annually. Travelocity.com uses Secure
    Socket Layer encryption technology, which is a proven coding system that
    lets a customer's browser automatically encrypt data before it is
    transmitted to the Travelocity.com Web site and that ensures the safe
    transmission of credit card information. We also offer the SHOP SAFE
    GUARANTEE feature. Under this feature, in the highly unlikely event that
    credit card fraud were to occur, we will reimburse the customer up to $50,
    the maximum amount for which the customer would generally be liable to a
    credit card company. For customers who are not comfortable providing their
    credit card number online, we will accept that information by telephone or
    fax, toll-free. To avoid the need for retransmittal of the information for
    future purchases, customers will have the option to keep the credit card
    information on file, where it would be kept in an encrypted format on
    servers protected by two levels of software designed to insulate them from
    misuse, known as firewalls, and located in a secure computer complex. We
    have taken steps to assure customers that Travelocity.com meets strict
    online security and business standards. We are a member of the Better
    Business Bureau's BBBOnline, which means that we have agreed to abide by the
    BBB code of ethical advertising. We also license the TRUSTe's Privacy
    Program which requires its licensees to adhere to established privacy
    principles and agree to comply with TRUSTe's oversight and consumer
    resolution procedures.

        BREADTH OF OFFERING. We offer one-stop travel shopping and reservation
    services, providing reliable, real-time access to schedule, pricing and
    availability information for over 95% of all airline seats sold worldwide,
    47,000 hotels, 50 car rental companies, and 70,000 vacation packages. In
    addition to our reservation and ticketing service, Travelocity.com offers
    discounted and promotional fares, travel news, destination information on
    hundreds of cities and countries worldwide, weather information, maps and
    travel tips.

         PERSONALIZATION. Each person who registers as a member on the Web
    sites operated by Travelocity.com has a profile in our customer database.
    Members can choose to provide us with travel preferences (for example,
    frequent travel programs and seating preferences), credit card billing
    information, ticket delivery address and other personal information. This
    information is primarily used to assist members in making reservations
    quickly

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    without having to provide the same information repeatedly. In addition,
    this information allows us to contact our customers for customer
    service, if necessary, and to inform them of incentives and promotional
    offers. Customers may choose to terminate further receipt of this
    information online. Travelocity.com can analyze the impact of each message
    or offer on booking behavior, providing us with real-time feedback on the
    attractiveness of the offer to customers. The Travelocity.com Web site
    provides FARE WATCHER E-MAIL, a feature that allows members to track fare
    changes in travel markets of their choice by receiving e-mail notification
    of those changes. Customers can also utilize FLIGHT PAGER, a service that
    allows travelers to register flight information at the Travelocity.com Web
    site, and to receive changes to the flight time or gate via alphanumeric
    pagers.

        GLOBAL REACH AND PRESENCE. Versions of our Web site tailored to
    particular countries (known as localized Web sites) accommodate differences
    in culture, travel purchase behavior, and supplier inventory preferences. We
    will continue to operate localized Web sites in Canada (www.travelocity.ca)
    and in the United Kingdom (www.travelocity.co.uk), two of the largest
    international travel markets outside the United States. Through our local
    customer service partners -- Rider/BTI Travel in Canada and Hillgate Travel
    in the United Kingdom -- we provide a full range of services to our
    customers. Additionally, through the AGENCY LOCATOR feature, customers
    worldwide can make reservations on the Travelocity.com Web site and pick up
    their tickets at participating Sabre travel agencies. Through this means, we
    have sold tickets in more than 90 countries around the world.

        APPEAL TO TRAVEL SUPPLIERS. Travelocity.com will help travel suppliers
    to pursue a range of innovative, targeted merchandising and advertising
    strategies designed to increase revenues, while reducing overall transaction
    costs and customer service costs. Without revealing individual customers'
    identities or jeopardizing their confidentiality, our customer database will
    allow travel suppliers to implement targeted promotions through
    Travelocity.com. Travel suppliers may take advantage of context-sensitive
    advertising to maximize the value of their promotional message. They may
    contribute content such as photos that enrich the customer experience while
    also making their product more visually compelling. Travel suppliers that
    offer Web-based fares that are lower than published fares may use
    Travelocity.com as an additional distribution outlet, as do American
    Airlines and British Airways.

THE TRAVELOCITY.COM BUSINESS STRATEGY

    Our business strategy is to implement the following strategic initiatives to
enhance our position as the leader in online travel services.

        CONTINUALLY IMPROVE THE CUSTOMER'S BUYING EXPERIENCE. We plan to
    introduce products and services that will better enable the customers of
    Travelocity.com to shop and buy travel products. Travelocity.com will use
    its significant travel industry expertise, combined with our nearly 15 years
    of experience in selling travel online, to continually work to bring our
    customer a unique travel shopping experience.

        INCREASE BRAND AWARENESS. We plan to invest in expanding awareness of
    the Travelocity.com brand through an advertising program that utilizes
    various channels including online media, television, print, radio, and the
    Internet. We believe that word-of-mouth is an effective means of attracting
    new customers. So, we strive to ensure that our customers have a positive
    experience with a convenient, user friendly Web site, which features many
    time-saving tools and responsive customer service. We also plan to continue
    joint promotions with travel service suppliers.

        EXPAND OUR BUSINESS TO BUSINESS FOCUS. We plan to expand our focus on
    the business to business sector through further targeting the unmanaged
    business traveler. Through the use of our online travel industry expertise
    we will continue to provide products and services to meet the unique needs
    of the unmanaged business traveler, a significant and growing sector of the
    online travel market.

        ENHANCE OUR TECHNOLOGY PLATFORM AND PRODUCT FUNCTIONALITY. We plan to
    continue to increase the efficiency and effectiveness of our Web sites
    through enhancement of the underlying infrastructure and investment in
    improved technology to anticipate increased transaction volume. We will also
    continue to develop the functionality, features, and content of our Web
    sites, and in particular to increase the level of personalization.
    Additionally, we will continually seek new distribution opportunities for
    our product as technology evolves. An example includes our relationship with
    3Com Corporation to serve as a charter content provider for the Palm VII

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    product. Our relationship with Sabre uniquely positions us to develop
    additional innovative functions and features in the SABRE system through the
    information technology agreement.

        ENHANCE SUPPLIER RELATIONSHIPS. We plan to further invest in and build
    upon strong supplier relationships. Drawing on our experience in technology
    development, we plan to create new tools to integrate suppliers' products
    and services into our Web sites. Additionally, we will continue to increase
    the value we provide to suppliers by developing new ways for them to
    effectively market and distribute their products to our customers.

        CONTINUE OUR INTERNATIONAL EXPANSION. We will expand our international
    presence after carefully evaluating the market for travel services and the
    popularity of online commerce in particular countries. We will draw upon our
    experience with our existing Web sites to tailor our international Web sites
    to the specific characteristics of each local market and operate the new Web
    sites more efficiently and effectively. Additionally, our existing
    relationship with Abacus, Asia's leading global distribution system, offers
    local product, distribution and marketing expertise in the potentially large
    travel market in the Asian region. Abacus is owned by the principal airlines
    of the region and Sabre owns a 35% interest. Together, Abacus and the
    Travelocity.com businesses are well-positioned to expand into key Asian and
    Southern Pacific markets.

        EXPAND OUR SERVICE OFFERINGS. We plan to continue to expand our travel
    service offerings. We plan to derive more revenue from higher margin product
    offerings such as hotel reservations, car rentals, cruises and vacation
    packages. We also plan to expand the scope of destination offerings to
    provide more travel options to our customers. We will also evaluate ways to
    further enhance customers' experiences by incorporating community aspects
    into our service offerings, such as bulletin boards and chat rooms. We will
    consider other means of purchasing travel services, such as purchasing
    through consolidators, purchasing wholesale inventory at special prices, or
    by using an auction model.

STRATEGIC RELATIONSHIPS

    We will continue to pursue strategic relationships to increase our access to
online customers, to build brand recognition and to expand our online presence.
We have alliances with strategic partners that are among the strongest and most
recognized brands associated with the Internet including:


YAHOO!

    We are the provider of air, car and hotel booking services for Yahoo!, one
of the most recognized brands associated with the Internet. Over the remaining
term of our agreement with Yahoo! we expect to pay Yahoo! at least $28 million.
Our agreement expires at the end of 2002. Yahoo! is a global Internet media
company that offers a branded network of media, commerce, and communication
services to users worldwide and is the leading Internet portal in terms of
traffic, advertising and household and business user reach.

    We provide a database containing schedule, availability and price
information that allows users of the Yahoo! Web site to book and pay for air,
car and hotel services. We will collaborate with Yahoo! to further develop,
promote and operate the Yahoo! Travel Web site and a Web site containing the
"Travelocity.com" and "Yahoo!" brands, known as a co-branded site. Users may
link to the Yahoo! Travel Web site from the Yahoo! home page, and to the
co-branded site from the "Air," "Car" and "Hotel" images in the "Make
Reservations" section of Yahoo! Travel.

AMERICA ONLINE

    Effective with the merger, Travelocity.com became the exclusive travel
booking system for AOL for the five years ending March 31, 2005, on the United
States versions of AOL, AOL.com, the CompuServe Service, Netscape Netcenter,
Digital City and, for a one-year term, AOL Plus. On each of these services,
Travelocity.com and AOL will work together to create a co-branded site which
will provide access to the Company's services. We will also be a primary
provider of travel information and other related services through co-branded
sites on these AOL services. We expect that after the co-branded sites are
launched, the AOL relationship will provide Travelocity.com with positive cash
flow under the agreement.

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    Key terms of the agreement include:

    --    subject to AOL meeting specified revenue targets, a percentage of
          which will be shared with us, we will be obligated to pay AOL a total
          of $200 million over the five-year term of the contract, including $40
          million paid on the date of the merger with Preview Travel, as well as
          a percentage of all commissions received by us from bookings made on
          the co-branded sites;

    --    AOL will pay us a percentage of cash advertising revenue collected by
          AOL from advertising on the co-branded sites, within AOL's travel
          channels, on Web pages throughout the AOL properties on which our
          travel booking system or our other travel-related information is
          located, or sold by AOL to a specified group of travel providers and
          providers of specified ancillary travel services;

    --    AOL will place promotions throughout the AOL properties that will
          permit AOL users to link to the co-branded sites;

    --    our travel booking capability on the travel channels of various AOL
          services must be integrated by April 1, 2000, otherwise our benefits
          will be reduced or the agreement will be extended;

    --    we must include references to "Travel" as an AOL keyword in almost all
          of our advertising; and

    --    AOL must meet cumulative advertising revenue and payment targets by
          the end of the second, third and fourth years of the agreement.

    If AOL does not meet the cumulative revenue targets, we may elect to operate
under alternative terms and conditions set forth in the agreement. If we elect
to do so, AOL may terminate the agreement. The alternate terms and conditions
would be as follows:

    --    Travelocity.com would no longer have any payment obligations to AOL,
          would keep commission revenues from travel services booked on the
          co-branded sites, and would receive a percentage of the advertising
          revenues only from advertisements placed on Web pages that contain
          only our travel-related information;

    --    we would continue to be required to maintain and operate the
          co-branded sites, the travel booking system and our travel-related
          services; and

    --    AOL would no longer be obligated to promote our travel booking system
          and travel-related information, and AOL could provide access to and
          promote another travel booking system.

    At the end of the agreement's term, AOL can, annually for four years, extend
the agreement for an additional one-year term but the agreement would contain
the changes described above. Either party may terminate the agreement if the
co-branded sites are not properly launched by September 1, 2000 as a result of
the other party's non-performance of its obligations under the agreement. In
addition, AOL may terminate the agreement at any time during the term of the
agreement if we are acquired by an Internet service provider or other specified
types of AOL competitors.

    Although the agreement provides that our travel booking system will be the
only travel booking system on the AOL properties, this exclusivity is subject to
some exceptions. Also, although the agreement prohibits us from promoting any
other Internet site as a preferred provider of travel reservations or other
travel-related services, we would not normally promote other Internet sites in
this way.

EXCITE

    Effective with the merger, we became the exclusive provider of travel
booking services for Excite's Travel Channel (City.Net) in the United States and
for the WebCrawler Travel Channel. Excite is a leading Internet search engine
provider.

    Under our agreement with Excite, we have a co-branded site that is included
on all travel channels within the Excite network. Also, we have travel-related
content, such as travel news articles and travel specials, for the Excite

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Travel Channel and other Excite services. In addition, Excite has agreed to
promote and advertise our services throughout the Excite network and to
display within the Excite network a minimum number of Internet links to our
travel site or to the co-branded site. We make additional payments to Excite
representing a share of advertising revenues received by the Company for
advertising appearing on the co-branded site. Additionally, we have agreed to
promote Excite's services on our Web sites.

    Over the remaining term of the agreement, we are obligated to pay $11
million to Excite, as well as to pay a percentage of commissions we earn in
excess of specified thresholds. In addition, we and Excite will cooperate in
selling and share revenues from advertising on the Excite Travel Channel. Our
arrangement with Excite expires in September 2002, or earlier in the event of a
material breach by either party.

    Our exclusive arrangement is subject to specified exceptions. If Excite
decides during the term of the agreement to offer travel booking services or
travel-related Internet functions that we do not then provide, we have a right
of first refusal to negotiate our provision of these new services to the Excite
Travel Channel and the WebCrawler Travel Channel. We also have a right of first
refusal if Excite wishes to enter into an agreement with a third party that will
provide travel services on a co-branded site on the Excite network. If we enter
into an agreement with a third party with substantially the same scope as our
agreement with Excite and on terms which, taken as a whole, are more favorable
for the third party than the terms of our agreement with Excite, then we are
required to offer these more favorable terms to Excite.

LYCOS

    Effective with the merger, we became the exclusive travel service provider
of travel booking services for Lycos' Travel Web Guide and Travel Network. Lycos
is a leading Internet search engine. Under this agreement, we have a co-branded
site that is promoted throughout the Lycos Web site, and Lycos has agreed to
display a minimum number of Internet links to promote our Web site and the
co-branded site. We provide a variety of travel-related services and information
for the co-branded site, including fare finding, travel news stories, travel
promotions and information regarding special travel fares. In addition, we
display links on the co-branded site to the Lycos Web site.

    We are eligible to receive payments from Lycos representing a share of
advertising revenues Lycos receives in connection with the co-branded site. Over
the two-year term of the agreement, we are obligated to make minimum payments to
Lycos, as well as pay a portion of commissions we earn through the co-branded
site in excess of specified thresholds, and fees for providing links to our
services above specified thresholds. The agreement with Lycos expires on
September 15, 2000. The agreement will expire earlier if Lycos delivers the
contractually required number of impressions prior to September 15,2000, or in
the event of a material breach by either party or the provisions of notice to
the other party that such party's services, viewed as a whole, are no longer
competitive with substantially similar services being offered by third parties.

INFOSEEK (GO NETWORK)

    We are a preferred provider of air, car and hotel booking services on the GO
Network Travel Center. GO Network is one of the top five properties on the
Internet, according to Media Metrix.

    We are a co-branded provider of air, hotel and car services accessible from
the GO Network Travel Center home page. Infoseek has agreed not to sell any
banner ads for placement on the GO Network Travel Center home page to three
competitors identified in the agreement, with exceptions specified in the
agreement. As a preferred provider, we will be entitled to purchase the right to
cause specified key words to result in the display of our content or advertising
on GO Network in response to a search.

    We have agreed to pay Infoseek a set percentage of all net revenues that we
receive for products and services sold to GO Network users or on GO Network
co-branded sites that we host. We must also purchase from Infoseek guaranteed
minimum advertising on GO Network during the term of the agreement. After March
2000, either party may terminate the agreement for convenience upon 90 days'
notice. The parties may renew the agreement for one year terms, subject to
mutual agreement of the parties.

                                     10
<PAGE>

@HOME NETWORK

    We are the exclusive air, car and hotel booking service provider for @Home
Network subscribers and the anchor tenant for the @Home Network's shopping
guide. Because @Home uses the broadband attributes of cable, we are able to
provide multimedia services and content through this channel. @Home has agreed
not to create a channel or sub-channel that provides travel information for any
of our direct competitors or to allow any competitor to place any promotional
material on @Home Network Web pages on which we are featured.

    We have agreed to make quarterly fixed payments to @Home, and to make
variable payments to @Home equal to a portion of our revenue from our
advertising on the @Home Network and from sales of air tickets and other goods
and services to @Home subscribers. The amount payable to @Home is the greater of
the variable payment or the fixed payment. However, our fixed payments to @Home
will be reduced if, in any year, the total amount of variable payments is less
than the fixed payments made by us in that year and the average number of @Home
subscribers falls below a threshold amount.

    Our agreement expires in 2001. If @Home ceases to offer access to online
travel services for a period of more than one year, the agreement will
terminate.

ROAD RUNNER

    We have a three-year alliance with Road Runner, a high-speed broadband
online service, which was launched in the first quarter of 2000. Road Runner
will provide our travel services with premier positioning and promotion in all
of its travel-related areas, enabling Road Runner subscribers to easily research
and book their travel arrangements through our service. In addition, Road Runner
has agreed to promote our service.

    We have agreed to pay Road Runner a fixed amount for each person who visits
our Web site directly from the Road Runner service and completes a new member
registration form, provided the person is not already a present or past member
of our travel service. We have also agreed to pay Road Runner a fixed fee for
each airline ticket that these new members purchase through us. If the number of
new members of our travel service who join in this way during any year of the
agreement is less than an agreed amount, then we may either terminate the
agreement on six months' written notice or continue the agreement on revised
terms and conditions. Our agreement expires on December 20, 2002 and may be
renewed upon mutual agreement of the parties.

TECHNOLOGY

    We expect that the Travelocity.com travel planning and reservation system
will continue to be a strong platform for industry innovation. We have
continually innovated and upgraded our systems to meet the expanding needs of
the online travel consumer. The Travelocity.com Web site is based on a carefully
chosen combination of commercial and proprietary tools.

    Our multi-tiered system gives us the scalability and reliability to expand
to meet our current and future growth. Netscape Enterprise Server, our web
server, Vignette Story Server, used for our destinations content, and Tool
Command Language, our primary user interface programming language, handle the
demands of serving Web pages. Our proprietary application server executes
business rules and directs messages among our content sources. A third level of
software accesses destinations, profile and reservations content sources. The
SABRE system is our primary source of reservations content.

    The software and hardware for air, car and hotel reservations for
Travelocity.com is located and maintained at Sabre's computer center.
Effective with the integration of Travelocity.com and Preview Travel, the
software and hardware for destinations, vacations and cruise reservations
will be located in Travelocity.com's San Francisco computer center. Sabre and
Travelocity.com have significant experience in developing, operating and
maintaining reliable, high volume online transaction processing systems.

CONSUMER MARKETING

    Our relationship with our customers is key to the success of our business.
We will measure our success by our ability to attract visitors to our Web sites,
convert those visitors into buyers and convert those buyers into repeat buyers.
To help us do so, we will consult with focus groups to refine and enhance our
advertising efforts, product

                                     11
<PAGE>

features and benefits, and promotional offers. We plan to attract visitors to
our Web sites and enhance our brands through customer marketing efforts
including advertising and public relations.

    Our strategy to convert visitors into buyers will use a combination of
incentives, including seasonal and purchase-related promotions that take
advantage of our customer database and Web site. As part of this effort, we plan
to negotiate special rates and benefits to obtain superior travel inventory for
our customers. We believe that our increasing scale will allow us to negotiate
on more favorable terms. Through our research with visitors and infrequent
purchasers, we are developing new programs and features (including
personalization and loyalty incentives) that will encourage purchases and repeat
use.

    Travelocity.com will maintain a proprietary database including demographic
profiles, customer preferences, shopping and buying patterns and other key
customer attributes. This data will enable us to track the effectiveness of
promotions and incentives and to understand seasonal and other trends in order
to create and quickly implement marketing programs targeted to specific customer
segments. In addition, we plan to regularly communicate with our customers
through targeted e-mail.

    Travelocity.com also plans to employ a variety of traditional media programs
and promotional activities to enhance the effectiveness of our marketing
initiatives:

    -- ADVERTISING. As part of our strategic alliances, we plan to invest in
       both online and traditional advertising to drive traffic to our Web
       sites. To generate traffic to Travelocity.com Web sites in a cost
       efficient manner, we plan to place advertisements on high volume
       Web sites and purchase targeted keywords on popular search engines
       including Yahoo!, Alta Vista, Infoseek and others. Travelocity.com
       will also advertise in traditional print and broadcast media to
       increase the awareness of its service, product enhancements and
       promotional offerings.

    -- PUBLIC RELATIONS. The core of our public relations effort will be media
       relations, industry analyst relations and speaking engagements. We
       will maintain relations with journalists and industry analysts to
       secure unbiased, third-party endorsements for Travelocity.com. We
       also plan to pursue coverage by online publications, search engines
       and directories. In addition to media and analyst relations, our
       employees will actively participate in industry events and
       conferences.

    -- CO-MARKETING, PROMOTIONS AND LOYALTY PROGRAMS. We plan to continue to
       establish significant co-marketing relationships to promote our
       service and to sponsor contests that offer travel-related prizes.
       These programs typically involve participation with airlines,
       hotels, car rental agencies and online service providers. We intend
       to enter into additional co-marketing relationships in support of
       our marketing strategy. From time to time, we will offer various
       incentives and awards to the Travelocity.com customer base. These
       incentives are designed to increase customer loyalty and awareness
       of our travel services and of the Travelocity.com brand. For
       example, we plan to continue to provide customers with bonus
       frequent flyer miles and special companion fares during targeted
       promotional periods. On March 28, 2000, the Partnership and priceline.com
       Incorporated ("priceline.com") executed a marketing and customer referral
       agreement. The agreement requires each party to pay the other a fee for
       specified referred customers.

SALES AND SUPPLIER RELATIONS

    We plan to continue to build long-term relationships with travel suppliers.
We have contractual relationships with travel suppliers in the air, car, and
hotel sectors. These relationships allow us to generate additional revenue
through upfront payments or through payments made on satisfying market share
goals. In some cases, the Travelocity.com Web site will be required to
prominently display a supplier's brand or marketing message. These contracts
typically vary in length from one year to three years.

COMPETITION

    The online travel services market is new, rapidly evolving and intensely
competitive. Travelocity.com competes with a variety of companies with respect
to each product or service that it offers, including:

                                           12
<PAGE>

    --    online travel agents such as Expedia, Inc. ("Expedia"), a
          majority-owned subsidiary of Microsoft;

    --    consolidators and wholesalers of airline tickets and other travel
          products, including shopping clubs and online consolidators such as
          Cheaptickets.com, and priceline.com;

    --    individual airlines, hotels, rental car companies, cruise operators
          and other travel service providers, some of which are suppliers to our
          Web sites and many of whom offer travel services directly through
          their own Web sites;

    --    alliances by travel suppliers, such as the recently announced
          multi-airline Web site for travel distribution; and

    --    local, regional, national and international traditional travel
          agencies.

    Internationally, Travelocity.com competes with a different set of
participants in each national market, ranging from traditional travel agents,
market-specific Web sites, and global competitors, including Expedia,
GetThere.com and Leisure Planet, which have expanded beyond the United States
market. In the United Kingdom, local online competitors include Deckchair.com,
e-bookers and A2bTravel.com.

    As the market for online travel services grows, we believe that the range of
companies involved in the online travel services industry, including travel
suppliers, traditional travel agencies, travel industry information providers,
online portals and e-commerce providers, will increase their efforts to develop
services that will compete with our Web sites. We will compete on the basis of
our comprehensive service offering, technological innovation, and customer
service.

GOVERNMENT REGULATION

    We must comply with laws and regulations relating to our sales activities,
including those prohibiting unfair and deceptive practices and those requiring
us to register as a seller of travel services, comply with disclosure
requirements and participate in state restitution funds. In addition, many of
our travel suppliers and global distribution systems are heavily regulated by
the United States and other governments and we are indirectly affected by such
regulation.

    The U.S. Department of Transportation is currently considering whether to
extend existing regulations to online travel services. The regulations
currently apply to global distribution systems that are owned by or
affiliated with airlines and that are marketed to travel agencies. We expect
the Department of Transportation to issue guidance on these regulations in
2001. If these regulations were extended to online travel services, they
could affect how we market, display and distribute our airline inventory,
increase our costs of doing business and reduce our sales and revenues.

    Currently, relatively few laws and regulations directly apply to the
Internet and commercial online services. Federal, state and local governmental
organizations, as well as foreign governments, are considering legislative and
regulatory proposals that would regulate the Internet, and will likely consider
additional proposals in the future. We do not know how courts will interpret
laws governing the Internet or the extent to which they will apply existing laws
regulating issues such as property ownership, sales and other taxes, libel and
personal privacy, to the Internet. The growth and development of the market for
online commerce has prompted calls for more stringent consumer protection laws
that may impose additional burdens on companies that conduct business online.

    Federal legislation imposing limits on the ability of states to tax
Internet-based sales was enacted in 1998 and will exempt some sales transactions
conducted over the Internet from multiple or discriminatory state and local
taxation through October 21, 2001. It is possible that this legislation will not
be renewed when it terminates. Failure to renew this legislation could allow
state and local governments to impose taxes on Internet-based sales, and these
taxes could hurt our business.

INTELLECTUAL PROPERTY

    We rely on trademark, patent, copyright, and trade secret laws and
confidentiality and licensing agreements with employees, customers, partners and
others to protect our proprietary rights. Effective trademark, patent, copyright

                                        13
<PAGE>

and trade secret protection may not be available in every country in which
our services are available and policing unauthorized use of our proprietary
information is difficult and expensive.

    We rely on licenses from third parties to use their technology and
information, which we incorporate and integrate into our Web sites. We cannot
assure you that these licenses will continue to be available to us on
commercially reasonable terms. The loss of these licenses could require us to
obtain alternative technology and information of lower quality or at greater
cost. In addition, third parties that develop new technology that would be
useful to us may decline to grant us a license to use that technology. Also,
third parties may assert patent or other intellectual property rights to
technology that would otherwise be in the public domain. In either case, we
would not be able to use the technology, which may prevent us from providing new
and useful services to our customers.

    We also may grant licenses under some of our proprietary rights, such as
trademarks, patents or copyrighted materials to third parties.

    We may become involved in litigation to enforce our intellectual property
rights, to protect our trade secrets or to determine the validity and scope of
the proprietary rights of others. We may be required to indemnify travel
suppliers and others with whom we do business for intellectual property claims
made against them in connection with the services we provide.

    The steps that we take to protect our proprietary rights may prove to be
inadequate and third parties may infringe or misappropriate our proprietary
rights. Licensees of our technology also could take actions that might decrease
the value of our proprietary rights or reputation. In addition, Sabre and
Travelocity.com have agreed to share some of their intellectual property rights.
Because this agreement permits more than one entity to use these intellectual
property rights, this agreement may increase the chance that our intellectual
property could be misappropriated by a third party. If we have to enforce our
intellectual property rights in court, we may incur substantial costs and divert
our management's resources and attention.

ITEM 2.  PROPERTIES

    We are headquartered in Fort Worth, Texas in approximately 11,527 square
feet of space in a building leased through a facilities agreement with Sabre.
This space houses our principal administrative and sales and marketing
facilities.

    Additionally, we lease approximately 37,790 square feet of space in San
Antonio, Texas from a third party. This space houses our customer service and
fulfillment operations.

    Effective with the merger, we lease three office buildings in San Francisco,
California, all of which are leased from a third party. The first building,
consisting of approximately 34,000 square feet, houses administrative,
marketing, customer service and computer and communications personnel. The
second building, consisting of approximately 8,000 square feet, houses our
principal media sales and finance personnel. The third building, consisting
of approximately 16,000 square feet, is subleased to NewsNet Central, a
related party.

    Also effective with the merger, we lease approximately 18,000 square feet in
Rancho Cordova, California from a third party. This space houses an additional
customer service facility.

ITEM 3.  LEGAL PROCEEDINGS

    We are not currently subject to any material legal proceedings. The Company
may from time to time become a party to various legal proceedings arising in the
ordinary course of our business.

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

None.

                                           14
<PAGE>




                                     PART II
--------------------------------------------------------------------------------


ITEM 5.  MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         Our Common Stock is traded on the Nasdaq National Market (symbol TVLY).
As of March 15, 2000 there were 172 holders of record of the Company's Common
Stock. Our Common Stock began trading on March 8, 2000 with the consummation of
the merger between Preview Travel and Travelocity.com Inc.

         The daily range of the high and low sales prices for our Common Stock
on the Nasdaq National Market since trading began on March 8, 2000 was:

<TABLE>
<CAPTION>
                                                     HIGH            LOW
                                                     ----            ---
                  <S>                                <C>             <C>
                  March 8, 2000                      51.875          39.125
                  March 9, 2000                      47.25           43.8125
                  March 10, 2000                     47.8125         44.9375
                  March 13, 2000                     45.00           42.00
                  March 14, 2000                     43.00           40.00
                  March 15, 2000                     41.25           38.625
                  March 16, 2000                     41.3125         37.125
                  March 17, 2000                     43.625          39.875
                  March 20, 2000                     43.875          39.875
                  March 21, 2000                     42.00           37.9375
                  March 22, 2000                     41.6875         37.50
                  March 23, 2000                     42.50           39.375
                  March 24, 2000                     40.5625         39.125
                  March 27, 2000                     39.75           37.9375
                  March 28, 2000                     38.28125        35.75
</TABLE>

                                        15
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

         The following selected historical financial data for each of the years
ended December 31, 1996 through 1999 have been derived from our audited
financial statements and the related notes. The selected historical financial
data for the year ended December 31, 1995 have been derived from our unaudited
financial statements. In the opinion of management, the unaudited financial
statements have been prepared on a basis consistent with our audited financial
statements and they include all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the selected historical
financial data. This information is only a summary and you should read it
together with the audited financial statements and related notes and with our
"Management Discussion and Analysis." These financial statements do not include
the impact of the contribution agreements and the intercompany agreements
that were entered into between the Partnership and Sabre on the merger
closing nor indicate the results of operations of our business after the
merger.

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                         ---------------------------------------------------------
                                            1999          1998        1997        1996      1995
                                         ----------   -----------  ----------  ----------  -------
                                                                (IN THOUSANDS)
<S>                                       <C>          <C>          <C>       <C>           <C>
STATEMENTS OF OPERATIONS DATA (1)

Revenues:
  Transaction revenue                     $  54,567    $  18,370    $   8,345  $  10,949    $ 7,333
  Advertising revenue                         8,591        2,821          577         94         --
  Licensing and royalty fees                  1,029           47          365        855      1,202
                                          ---------    ---------    ---------  ---------    -------
     Total revenues                          64,187       21,238        9,287     11,898      8,535
Cost of revenues                             40,255       19,067       11,878      9,709      5,315
                                          ---------    ---------    ---------  ---------    -------
Gross profit (loss)                          23,932        2,171       (2,591)     2,189      3,220
Operating expenses:
  Selling and marketing                      29,532       10,608        6,887      5,556      2,153
  Technology and development                  9,624        8,483        6,549      7,034      2,750
  General and administrative                  5,407        4,360        2,693      2,472      1,132
                                          ---------    ---------    ---------  ---------    -------
     Total operating expenses                44,563       23,451       16,129     15,062      6,035
                                          ---------    ---------    ---------  ---------    -------
Operating loss                              (20,631)     (21,280)     (18,720)   (12,873)    (2,815)
Other income (expense)                           --           --           --        (88)         3
                                          ---------    ---------    ---------  ---------    -------
          Net loss                        $ (20,631)   $ (21,280)   $ (18,720) $ (12,961)   $(2,812)
                                          ---------    ---------    ---------  ---------    -------
                                          ---------    ---------    ---------  ---------    -------
BALANCE SHEET DATA (AT THE END OF
   THE PERIOD) (1)
Working capital deficit                   $  (5,319)   $    (462)   $  (1,205) $  (1,873)   $  (222)
Total assets                                  9,639       11,169        9,126        927      1,002
Total stockholder's deficit                 (68,562)     (47,931)     (31,755)   (13,035)       (75)
SUPPLEMENTAL FINANCIAL DATA
Gross bookings(2)                          $808,466    $ 284,641    $ 121,000       N/A(3)      N/A(3)
Segments booked(4)                            7,718        2,704        1,148      1,999      1,781
</TABLE>

(1) Refer to Note 10 to the Financial Statements.

(2) Represents the total purchase price of all travel services booked through
    the Travelocity.com Web site. This presentation of gross bookings does not
    affect our operating results, and gross bookings are not included in
    revenues. Management believes that gross bookings provide a more consistent
    comparison of business activity between historical periods than do
    transaction fees because of changing commission rates over the periods.
    Gross bookings is not a financial measurement in accordance with generally
    accepted accounting principles and should not be considered in isolation or
    as a substitute for other information prepared in accordance with GAAP, and
    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, and, as with operating results, should not be relied
    upon as an indication of future performance. See "Management's Discussion
    and Analysis of Financial Position".

(3) Gross bookings for these periods are not available.

(4) Represents the number of bookings processed through the SABRE system for the
    Company.

                                        16
<PAGE>


SELECTED PRO FORMA COMBINED FINANCIAL DATA

    The following unaudited selected combined financial data presents the
effects of the merger, the contribution agreements and other agreements entered
into at the effective time of the merger with Preview Travel by the Partnership
and Sabre. These agreements are an access agreement, a technology services
agreement, an intellectual property agreement, a facilities agreement and an
administrative services agreement. For a description of these agreements,
which we refer to as the intercompany agreements, see Note 10 to the
Financial Statements.

    The unaudited pro forma combined statements of operations data gives effect
to the merger of the Company and Preview Travel and the contribution agreements
and the intercompany agreements as if such transactions had been entered into on
January 1, 1998. This pro forma data is based upon the historical results of
operations of the Travelocity Division and the historical results of operations
of Preview Travel for the years ended December 31, 1999 and 1998.

    The unaudited pro forma combined balance sheet data presents the combined
financial position of the Company and Preview Travel as of December 31, 1999
assuming the merger had occurred and the contribution agreements and the
intercompany agreements had been entered into as of December 31, 1999. This pro
forma information is based upon the historical balance sheet data of the Company
and the historical balance sheet data of Preview Travel, as of December 31,
1999.

<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                                            --------------------------
                                                                                1999          1998
                                                                             ---------      ---------
                                                                             (IN THOUSANDS, EXCEPT PER
       PRO FORMA COMBINED STATEMENTS OF OPERATIONS DATA:                           SHARE AMOUNTS)
<S>                                                                          <C>            <C>
       Revenue:
         Transaction revenue                                                 $  70,280      $  29,326
         Advertising revenue                                                    19,632          6,162
         Licensing and royalty fees                                              1,029             47
                                                                             ---------      ---------
            Total revenues                                                      90,941         35,535
       Gross profit                                                             50,211         10,635
       Operating expenses                                                       99,337         55,699
       Amortization of intangibles (1)                                          84,062         84,062
       Operating loss                                                         (133,188)      (129,126)
       Sabre interest in partnership (2)                                        81,208         78,455
       Net loss                                                                (49,774)       (48,086)
       Pro forma basic and diluted loss from continuing operations
          per share (3)                                                     $    (3.59)    $    (3.76)
                                                                            ----------     ----------
                                                                            ----------     ----------
       Weighted average shares used in basic and diluted per share
          calculations                                                          13,850         12,796
                                                                            ----------     ----------
                                                                            ----------     ----------
       PRO FORMA COMBINED BALANCE SHEET DATA (AT THE END OF THE
          PERIOD):
       Cash, cash equivalents and marketable securities (4)                 $ 128,905
       Working capital (4)                                                     112,644
       Intangible assets and goodwill                                          256,376
       Total assets                                                            415,815
       Sabre interest in partnership (5)                                        61,795
       Stockholders' equity                                                    334,738
</TABLE>

----------
(1) Represents an estimate of the amortization of goodwill and other intangible
    assets recorded in the merger.
(2) Represents Sabre's 62% share of the Partnership's losses, based on its
    direct ownership interest in the Partnership.
(3) The pro forma basic and diluted loss from continuing operations per share is
    calculated using the one-to-one exchange ratio of Preview Travel stock to
    the Company's stock in the merger. As pro forma losses exist for each period
    presented, the calculation of pro forma loss per share excludes the effects
    of stock options and the 33 million shares of convertible preferred stock
    the Company has issued to Sabre upon consummation of the merger.
(4) Includes the contribution of $52.7 million in cash by Sabre in conjunction
    with the contribution of the assets and liabilities of the Travelocity
    Division to the Partnership and an additional $50 million investment in the
    Company by Sabre.

                                          17
<PAGE>

(5) Represents Sabre's direct net investment in the Partnership at December 31,
    1999.









                                           18
<PAGE>

ITEM 7.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

    The information provided in this Management Discussion and Analysis
represents the historical results of the Travelocity Division, our predecessor
business, as an operating unit of Sabre and does not include the impacts of the
contribution agreements and the intercompany agreements entered into between
the Partnership and Sabre or other financial impacts of the merger with
Preview Travel. These historical results are not indicative of what our
future financial position or results of operations subsequent to the merger
will be. Pro forma results for 1999 and 1998 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 fees, including booking fees collected by Sabre and
transferred to us, and commissions from travel suppliers for purchases of their
travel products and services by customers who make reservations through our
online travel services. Our online travel services have experienced substantial
growth since the launch of our Web site in March 1996.

    Gross bookings of travel services online increased from approximately $32.5
million in the first quarter of 1997 to $280.7 million in the fourth quarter of
1999, which resulted in an increase in transaction revenues from approximately
$2.0 million to approximately $19.2 million for the corresponding periods. Gross
bookings represent the total purchase price of all travel services booked
through our Web site. Gross bookings do not affect our operating results, and
gross bookings are not included in revenues. Management believes that gross
bookings provide a more consistent comparison of business activity between
historical periods than do transaction fees because of changing commission rates
over the periods. Gross bookings are not a financial measurement in accordance
with 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.

    The commission rates paid by travel suppliers are determined by individual
travel suppliers and are subject to change. Currently, we earn an average
commission of approximately 4% on the sale of airline tickets.

    Advertising revenue was generated primarily through an agreement with
DoubleClick for the placement of advertising on our Web site and through the
direct selling of advertisements on the site. Under the agreement, DoubleClick
obtains advertisers for our site, collects the revenue paid by the advertisers,
and pays us an amount that is 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 are delivered. Revenue from
advertisements placed on our site has grown from 6.2% of total revenues for 1997
to 13.4% of total revenues for 1999.

    Cost of revenues includes costs of operating the customer service center,
data processing charges and employee costs associated with operating the
Internet infrastructure.

GROSS MARGINS

    Our gross margin for 1999 was 37.3%, and for 1998 was 10.2%. A number of
different factors may impact gross margins, including the mix of transaction
revenues versus online advertising revenues, the mix of travel services sold,
the level of commissions on travel products, and the amount of incentive
commissions. We expect higher gross margins on advertising revenues than
commission revenues, higher commission rates on vacation packages than hotel
rooms and car rentals and higher commission rates on hotel rooms and car
rentals than airline tickets.

                                    19
<PAGE>

RESULTS OF OPERATIONS

1999 COMPARED TO 1998

REVENUES

    TRANSACTION REVENUES. Transaction revenues increased from $18.4 million to
$54.6 million for the year ended December 31, 1998 compared to the year ended
December 31, 1999, an increase of approximately $36.2 million, 197.0%. This
increase was primarily attributable to increased sales through our Web site.
Gross bookings increased from $285 million for the year ended December 31, 1998
to $808 million for the year ended December 31, 1999.

    ADVERTISING REVENUES. Advertising revenue increased from $2.8 million (net
of fees paid to DoubleClick of $820,000) to $8.6 million (net of fees of $2.0
million) for the year ended December 31, 1998 compared to the year ended
December 31, 1999, an increase of $5.8 million, 204.5%. This increase was
primarily due to an increase in net revenue from DoubleClick of $4.2 million for
advertisements placed on our site, increasing advertising impressions and an
increase in direct selling of advertising by us of $1.6 million.

    LICENSING AND ROYALTY FEES. Revenue from licensing and royalty fees
increased from $47,000 to $1.0 million for the year ended December 31, 1998
compared to the year ended December 31, 1999, an increase of $982,000, 2,089.4%
due to new licensing and maintenance agreements primarily with US Airways
Airlines.

COST OF REVENUES

    Cost of revenues includes costs of operating the customer service center,
data processing charges and employee costs associated with operating our
Internet infrastructure. Cost of revenues increased from $19.1 million to $40.3
million for the year ended December 31, 1998 compared to the year ended December
31, 1999, an increase of approximately $21.2 million, 111.1%, primarily due to
increases in data processing charges, costs associated with the customer service
center and salaries and employee related costs. These increases are primarily
due to the increase in transactions on our Web site. Gross bookings increased
from $285 million for the year ended December 31, 1998 to $808 million for the
year ended December 31, 1999. The increases are partially offset by a $1.7
million payment made by an AMR affiliate to us in connection with the
termination of the use of a customer service center operated by the AMR
affiliate. Cost of revenues declined as a percentage of total revenue from 89.8%
for the year ended December 31, 1998 to 62.7% for the year ended December 31,
1999 primarily due to increased efficiencies in the customer service center and
the increase in advertising revenue in 1999.

OPERATING EXPENSES

    SELLING AND MARKETING. Selling and marketing expenses consist of advertising
costs to promote the Travelocity Division's Web site, costs relating to
strategic distribution partnerships with companies such as Yahoo!, Netscape and
@Home, amortization of trademarks and salaries and benefits. Selling and
marketing expenses increased from $10.6 million to $29.5 million for the year
ended December 31, 1998 compared to the year ended December 31, 1999, an
increase of approximately $18.9 million, 178.4%. This increase was due to
additional advertising spending of $12.4 million by us to gain market share, and
increased costs of $5.7 million relating to the amortization of payments made to
strategic distribution partners. The remaining increase of $0.8 million is due
to an increase in salaries and other employee related costs to support the
additional direct selling efforts.

    TECHNOLOGY AND DEVELOPMENT. Technology and development expense consists of
salaries and related costs and charges from Sabre for development and
maintenance of our Web site, including enhancements to and maintenance of the
site. Technology and development expenses increased from $8.5 million to $9.6
million for the year ended December 31, 1998 compared to the year ended December
31, 1999, an increase of approximately $1.1 million, 13.5%. This increase was
primarily due to costs associated with enhancing and maintaining our Web site
including enhancements such as BEST FARE FINDER.

    GENERAL AND ADMINISTRATIVE. General and administrative expense consists of
management fees paid to Sabre for the provision of various services, including
salaries and benefits for Sabre management devoted to the Travelocity Division,
corporate facility services, legal services, and accounting services. General
and administrative expense also includes salaries and benefits of our management
and administrative costs of the Travelocity Division. General and administrative
expenses increased from $4.4 million to $5.4 million for the year ended December
31, 1998 compared to the year ended December 31, 1999, an increase of
approximately $1.0 million, 24.0%. This increase was primarily due to an
increase in salaries and employee related costs and the management fee from
Sabre. These

                                        20
<PAGE>

costs increased as a result of increased administrative requirements to
support our growth.

     NET LOSS. Net loss decreased $649,000, 3.0% from $21.3 million to $20.6
million, primarily due to the increase in gross profit partially offset by the
increase in operating expenses.

1998 COMPARED TO 1997

REVENUES

    TRANSACTION REVENUES. Transaction revenues increased from $8.3 million to
$18.4 million for the year ended December 31, 1997 compared to the year ended
December 31, 1998, an increase of approximately $10.1 million, 120.1%, which was
primarily attributable to increased sales on our Web site. Gross bookings
increased from $121 million in 1997 to $285 million in 1998. This increase was
partially due to the agreement entered into with Yahoo! in June 1997 to be the
provider of air, car and hotel booking capabilities on the Yahoo! Web site,
growth in usage of our Web site and an agreement with Netscape entered into in
December 1997 to be the primary travel reservation provider for its network.
Revenues from transaction fees declined as a percentage of total revenues from
89.9% in 1997 to 86.5% in 1998 due to the increase in advertising revenue from
our Web site.

    ADVERTISING REVENUES. Advertising revenue increased from $577,000 (net of
fees paid to DoubleClick of $190,000) to $2.8 million (net of fees of $820,000)
for the year ended December 31, 1997 compared to the year ended December 31,
1998, an increase of $2.2 million, 388.9%. This increase was primarily due to an
increase in net revenue from DoubleClick of $1.3 million for advertisements
placed on our Web site and direct selling of advertising by us of $0.9 million.

    LICENSING AND ROYALTY FEES. Revenue from licensing and royalty fees
decreased from $365,000 to $47,000 for the year ended December 31, 1997 compared
to the year ended December 31, 1998, a decrease of $318,000, 87.1% due to the
discontinuance of license fees from certain agreements in 1998.

COST OF REVENUES

    Cost of revenues increased from $11.9 million to $19.1 million for the year
ended December 31, 1997 compared to the year ended December 31, 1998, an
increase of approximately $7.2 million, 60.5%. This increase was primarily
attributable to increases in the cost of operating the customer service center,
data processing charges, and communication expenses. These increases are
primarily due to the increase in transactions on our Web site. Gross bookings
increased from $121 million in 1997 to $285 million in 1998. Cost of revenues
declined as a percentage of total revenue from 127.9% in 1997 to 89.8% in 1998
primarily due to the increase in advertising revenue in 1998.

OPERATING EXPENSES

    SELLING AND MARKETING. Selling and marketing expenses increased from $6.9
million to $10.6 million for the year ended December 31, 1997 compared to the
year ended December 31, 1998, an increase of approximately $3.7 million, 54.0%.
This increase was due to an increase of $1.8 million in costs to distribute and
advertise our Web site through the distribution agreements with Yahoo!, Netscape
and @Home, amortization of $1.3 million on a license fee paid in January 1998 to
Netscape for certain use of the Netscape trademark and additional advertising of
$0.6 million on our site to gain market share.

    TECHNOLOGY AND DEVELOPMENT. Technology and development expenses increased
from $6.5 million to $8.5 million for the year ended December 31, 1997 compared
to the year ended December 31, 1998, an increase of approximately $2.0 million,
29.5%. This increase was primarily due to costs associated with enhancing and
maintaining our Web site.

    GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
from $2.7 million to $4.4 million for the year ended December 31, 1997 compared
to the year ended December 31, 1998, an increase of $1.7 million, 61.9%,
primarily due to an increase in the management fee paid to Sabre of $1.3 million
for legal costs and increased management focus on the Travelocity Division.
Additionally, salaries and benefits increased approximately $400,000 as a result
of increased administrative requirements to support our growth.

                                       21
<PAGE>

NET LOSS. Net loss increased $2.6 million, 13.7% from $18.7 million to $21.3
million, due to the increase in operating expenses offset by a smaller increase
in gross profit.

PRO FORMA BALANCE SHEET

    The unaudited pro forma balance sheet in the table below presents the
effects of the merger, the contribution agreements and other agreements entered
into at the effective time of the merger by the Partnership and Sabre as if
these transactions occurred on December 31, 1999. These agreements are an access
agreement, a technology services agreement, an intellectual property agreement,
a facilities agreement and an administrative services agreement. For a
description of these agreements, referred to as the intercompany agreements,
see Note 10 to the Financial Statements.

    The unaudited pro forma balance sheet 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, goodwill and
other intangibles recorded as a result of the merger as well as other
adjustments associated with the merger. See Note 10 to the Financial Statements.

    This pro forma information is based upon the historical balance sheet data
of the Company and the historical balance sheet data of Preview Travel as of
December 31, 1999. Amounts shown below are in thousands, except per share
amounts.

<TABLE>
<CAPTION>

                                                                DECEMBER 31,
                                                                     1999
                                                                ------------
<S>                                                              <C>
Assets
Current assets
  Cash and cash equivalents                                      $ 103,659
  Marketable securities                                             12,939
  Accounts receivable, net                                           9,957
  Other current assets                                               3,689
                                                                 ---------
     Total current assets                                          130,244

Property and equipment, net                                         16,008
Intangible assets and goodwill                                     256,376
Marketable securities - noncurrent                                  12,307
Other assets                                                           880
                                                                 ---------
          Total assets                                           $ 415,815
                                                                 ---------
                                                                 ---------

Liabilities and stockholders' equity (deficit)
Current liabilities
  Accounts payable                                               $   8,563
  Other accrued liabilities                                          9,009
  Payable to affiliates                                                 28
                                                                 ---------
          Total current liabilities                                 17,600
Other liabilities                                                    1,682
Sabre's interest in partnership                                     61,795
Commitments and contingencies                                           --
Stockholders' equity (deficit)
  Series A Preferred Stock, $.001 par value, 40,000 shares
     authorized, 33,000 issued and outstanding                          33
  Common Stock, $.001 par value, 135,000 shares
     authorized, 15,553 issued and outstanding                          15
  Additional paid-in capital                                       411,093
  Accumulated deficit                                              (76,403)
                                                                 ---------
          Total stockholders' equity                               334,738
                                                                 ---------
          Total liabilities and stockholders' equity (deficit)   $ 415,815
                                                                 ---------
                                                                 ---------
</TABLE>

                                          22
<PAGE>

PRO FORMA STATEMENT OF OPERATIONS DATA

    The unaudited pro forma statement of operations data in the table below
presents the effects of the merger, the contribution agreements and other
agreements entered into at the effective time of the merger by the Partnership
and Sabre as if these transactions occurred on January 1, 1998. The unaudited
pro forma information is presented for illustrative purposes only and is not
necessarily indicative of the operating results that would have occurred if such
transactions had been consummated on January 1, 1998, nor is it necessarily
indicative of future results of operations.

    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, the amortization of goodwill and other intangibles recorded as a
result of the merger as well as other adjustments associated with the merger.
See Note 10 to the Financial Statements. Amounts shown below are in thousands,
except per share amounts.

<TABLE>
<CAPTION>
                                                              YEAR ENDED
                                                             DECEMBER 31,
                                                       -----------------------
                                                          1999         1998
                                                       ---------     ---------
<S>                                                    <C>           <C>
         Revenues
           Transaction revenue                         $  70,280     $  29,326
           Advertising                                    19,632         6,162
           Licensing and royalty fees                      1,029            47
                                                       ---------     ---------
                   Total revenues                         90,941        35,535
         Cost of revenues                                 40,730        24,900
                                                       ---------     ---------
         Gross profit (loss)                              50,211        10,635
         Operating expenses
           Selling and marketing                          68,187        33,357
           Technology and development                     12,115        10,176
           General and administrative                     14,182        10,677
           Stock Compensation                              3,844         1,489
           Merger expense                                  1,009            --
           Amortization of intangibles                    84,062        84,062
                                                       ---------     ---------
                   Total operating expenses              183,399       139,761
                                                       ---------     ---------
         Operating loss                                 (133,188)     (129,126)
         Other income (expense)                            2,267         2,636
                                                       ---------     ---------
                   Loss before Sabre's interest and
                        income taxes                    (130,921)     (126,490)
         Sabre's interest in partnership                  81,208        78,455
                                                       ---------     ---------
                   Loss before income taxes              (49,713)      (48,035)

         Provision for income taxes                          (61)          (51)
                                                       ---------     ---------
         Net loss                                      $ (49,774)    $ (48,086)
                                                       ---------     ---------
                                                       ---------     ---------
         Basic and diluted earnings per share          $   (3.59)    $   (3.76)
                                                       ---------     ---------
                                                       ---------     ---------
         Weighted average shares                          13,850        12,796
                                                       ---------     ---------
                                                       ---------     ---------
</TABLE>

GROSS MARGINS

    Pro forma gross margin for 1999 was 55.2%, and for 1998 was 29.9%. Our
actual gross margins may exceed pro forma gross margins due to a higher mix of
advertising revenue, which has a higher gross margin, resulting from the AOL
agreement. As revenues under the AOL agreement are dependent upon performance,
the timing of the revenues from the agreement are uncertain and may be sporadic,
resulting in a fluctuating gross margin.

RESULTS OF OPERATIONS

PRO FORMA 1999 COMPARED TO PRO FORMA 1998

REVENUES

    TRANSACTION REVENUES. Pro forma transaction revenues increased from $29.3
million to $70.3 million for the year

                                      23
<PAGE>

ended December 31, 1998 compared to the year ended December 31, 1999, an
increase of approximately $41.0 million, 139.7%. This increase was primarily
attributable to increased sales on our Web sites. Gross bookings increased
from $485 million for the year ended December 31, 1998 to $1,190 million for
the year ended December 31, 1999. Pro forma revenues from transaction fees
declined as a percentage of total revenues from 82.5% in 1998 to 77.3% in
1999 due to the increase in advertising revenue from Preview Travel and the
Travelocity Division. Transaction revenues are expected to be impacted by
factors such as transaction growth and variability in commission rates.

    ADVERTISING REVENUES. Pro forma advertising revenue increased from $6.2
million (net of fees paid to DoubleClick of $820,000) to $19.6 million (net of
fees of $2.0 million) for the year ended December 31, 1998 compared to the year
ended December 31, 1999, an increase of $13.4 million, 218.6%. This increase was
primarily due to an increase in the direct selling of advertising by the Preview
Travel sales force of $5.8 million, an increase in marketing fees and shared
advertising revenues from partners of $1.9 million, an increase in net revenue
from DoubleClick of $4.2 million for advertisements placed on the Travelocity
Division's site and an increase in direct selling of advertising by the
Travelocity Division of $1.5 million.

    Advertising revenue for Travelocity.com Inc. is expected to be higher than
the combined advertising revenue of the Travelocity Division and Preview Travel,
because our new advertising revenue sharing agreement with AOL will give us a
significantly larger share of the advertising revenue AOL receives on its Travel
Channel. Additionally, we may experience more variability in advertising revenue
over the short-term due to having two sales channels, DoubleClick and an
internal sales force. Because of the structure of the agreement with
DoubleClick, the Travelocity Division records advertising revenue net of fees.
Preview Travel primarily utilizes an internal sales force so that revenues are
not net of any fees paid to an outside vendor.

    LICENSING AND ROYALTY FEES. Revenue from licensing and royalty fees
increased from $47,000 to $1.0 million for the year ended December 31, 1998
compared to the year ended December 31, 1999, an increase of $982,000, 2,089.4%
due to new licensing agreements primarily with US Airways Airlines.

COST OF REVENUES

    Pro forma cost of revenues increased from $24.9 million to $40.7 million
for the year ended December 31, 1998 compared to the year ended December 31,
1999, an increase of approximately $15.8 million, 63.6%, primarily due to
increases in data processing charges, costs associated with the customer
service centers and salaries and employee related costs. These increases are
primarily due to the increase in transactions on our Web sites. Gross
bookings increased from $485 million for the year ended December 31, 1998 to
$1,190 million for the year ended December 31, 1999. Additionally, Preview
Travel opened a second call center in August 1999 which increased costs by
approximately $940,000. The increases are partially offset by a $1.7 million
payment made by an AMR affiliate to us in connection with the termination of
the use of a customer service center operated by the AMR affiliate. Pro forma
cost of revenues declined as a percentage of total revenue from 70.1% for the
year ended December 31, 1998 to 44.8% for the year ended December 31, 1999
primarily due to increased efficiencies in the customer service center and
the increase in advertising revenue in 1999.

    Cost of revenues is expected to increase from current pro forma levels as
the number of transactions processed on the site increases. However, we
anticipate that, in the long-term, costs of revenues as a percentage of revenues
will decrease due to efficiencies gained in infrastructure costs and the ticket
fulfillment process due to economies of scale.

OPERATING EXPENSES

    SELLING AND MARKETING. Pro forma selling and marketing expenses increased
from $33.4 million to $68.2 million for the year ended December 31, 1998
compared to the year ended December 31, 1999, an increase of approximately $34.8
million, 104.4%. This increase was due to additional advertising spending of
$23.2 million to gain market share, increased costs of $7.4 million from
distribution agreements including Yahoo!, AOL, Excite, Lycos, Netscape and
@Home, an increase of $3.7 million due to an increase in salaries and other
employee related costs to support the additional direct selling and an increase
of $0.5 million related to other direct costs of advertising. Selling and
marketing expenses in the future will be higher for Travelocity.com Inc. We will
be investing a significant amount in advertising programs to build our brand.
Additionally, guaranteed payments under

                                        24
<PAGE>

the new AOL agreement will result in significantly higher distribution costs
for Travelocity.com Inc. than reported in the pro forma statement of
operations data.

    TECHNOLOGY AND DEVELOPMENT. Pro forma technology and development expenses
increased from $10.2 million to $12.1 million for the year ended December 31,
1998 compared to the year ended December 31, 1999, an increase of approximately
$1.9 million, 19.1%. This increase was primarily due to costs to refine and
improve our combined transaction processing systems. These costs consist
primarily of salaries and related costs, depreciation, repairs and maintenance
and software licensing.

    GENERAL AND ADMINISTRATIVE. Pro forma general and administrative expenses
increased from $10.7 million to $14.2 million for the year ended December 31,
1998 compared to the year ended December 31, 1999, an increase of approximately
$3.5 million, 32.8%. This increase was primarily due to an increase in salaries
and employee related costs, equipment related costs and the management fee from
Sabre. These costs increased as a result of increased administrative
requirements to support our combined growth. General and administrative expenses
are expected to increase from current levels to support our growth. However, we
expect cost savings from the combined operations to lower general and
administrative costs as a percentage of revenue.

    STOCK COMPENSATION. Pro forma stock compensation expense increased from $1.5
million to $3.8 million for the year ended December 31, 1998 compared to the
year ended December 31, 1999, an increase of approximately $2.3 million, 158.2%.
Preview Travel stock compensation expense increased approximately $2.3 million
primarily due to options granted to non-employee directors and consultants
during the year. Stock compensation expense is expected to be higher than the
pro forma expense due to compensation expense associated with the acceleration
of vesting on Preview Travel options held by certain employees over the 12 month
period following the close of the merger.

   AMORTIZATION OF INTANGIBLES. Pro forma amortization of intangibles remains
unchanged from the year ended December 31, 1998 compared to the year ended
December 31, 1999. Actual amortization of intangibles may be greater than the
pro forma expense as the estimated purchase price of Preview Travel is adjusted
to actual amounts following the merger.

ANTICIPATED LOSSES

     The Travelocity Division incurred significant operating losses since its
inception. For the future, our success will depend to a large part on our
ability to greatly increase sales volume to realize economies of scale and
increased revenue from advertising and vacation packages. As we increase
spending for product development, advertising, customer service, facilities,
international expansion and general and administrative expenses, we expect to
continue to incur significant operating losses on a quarterly and annual basis
for the foreseeable future. Our operating losses may be significantly different
than the pro forma losses presented due to the uncertain impact of the new AOL
agreement, the integration of the two businesses (including cost synergies and
recognition of non-recurring items), and the cost and uncertain success of
branding initiatives.

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
decline during the fourth quarter. Due to the significant quarterly growth of
the 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 is 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 quarterly operating results
include:

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

                                          25
<PAGE>

    --    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;

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

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

    --    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 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

    Cash flows used for operating activities in 1999 for the Travelocity
Division were $12.8 million which was primarily attributed to the net loss
before non-cash charges, an increase in accounts receivable, and a decrease in
the payable to AMR affiliates, partially offset by an increase in accounts
payable. Cash flows used for operating activities in 1998 were $19.4 million
which was primarily attributed to the net loss before non-cash charges and an
increase in accounts receivable, partially offset by increases in accrued
expenses, other liabilities and payable to AMR affiliates. Cash flows used for
operating activities in 1997 were $18.5 million, which was primarily attributed
to the net loss before non-cash charges and a decrease in payable to AMR
affiliates.

    Investing activities for the Travelocity Division for 1999, 1998 and 1997
were $0.5 million, $2.3 million and $9.1 million, respectively. For 1999,
investing activities include capital expenditures for furniture and fixtures and
computer equipment to support our growth during the year. For 1998, investing
activities include capital expenditures for leasehold improvements, furniture
and fixtures and computer equipment for a new facility for the customer service
center. For 1997, investing activities include a payment of $5 million to
Worldview Systems Corporation to obtain exclusive rights to the "Travelocity"
trademark as well as other rights and interests and a payment of $4 million to
Netscape to license the use of the Netscape trademark in specified
circumstances.

    Prior to the merger with Preview Travel, we did not maintain cash or cash
equivalents, but depended upon Sabre for the funding of our cash requirements.
Effective with the merger, we began maintaining our own cash balances. Sabre
maintained all cash balances, charging or crediting us through intercompany
accounts upon the recording of certain transactions, including the collection of
accounts receivable and purchase of goods and services. We incurred losses since
inception, which were funded by Sabre, as we were an operating unit of Sabre.
Cash advances for 1999, 1998 and 1997 were $13.3 million, $16.6 million and
$27.6 million, respectively. Additionally, in 1998 Sabre contributed $5.1
million to us, which was used to reduce payables to affiliates.

    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 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.

    We anticipate that Sabre's $52.7 million contribution and the additional
$50 million invested immediately prior to the merger, together with our
existing funds and ability to borrow, will be sufficient to meet anticipated
cash requirements for at least the next 24 months. Thereafter, we anticipate
cash requirements will be

                                     26
<PAGE>

funded by cash flows from operating activities. However, we cannot assure you
that cash flows from operations of the Partnership will be sufficient to meet
our cash requirements, such as contractual commitments to our strategic
distribution partners, including AOL, or to make capital expenditures
necessary to support the anticipated growth of the business. 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.

    Over the next two years, we will use funds to enhance brand awareness and
supplier relationships, perform product development and for working capital.
Payments due under our agreements with strategic distribution partners could
also impact 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, Lycos and other distribution partners include guaranteed payments. In
connection with these agreements, we expect that the Partnership will make
aggregate future payments in at least the following amounts (in thousands):

<TABLE>
<CAPTION>
           YEAR ENDING DECEMBER 31,
           ------------------------
<S>                                            <C>
           2000                                $  60,608
           2001                                   52,492
           2002                                   51,000
           2003                                   40,000
           2004                                   40,000
                                               ---------
                                               $ 244,100
                                               ---------
                                               ---------
</TABLE>

    As a result of our separation from Sabre, the Partnership will directly
incur capital expenditures that Sabre previously incurred and charged to us. We
expect this change to increase capital expenditures in 2000 by $10 to $12
million.


YEAR 2000 COMPLIANCE

    We depended upon Sabre to ensure proper operation of our information
technology systems after the Year 2000 date change. In late 1999, Sabre and the
Company completed remediation and testing of hardware and software systems. As a
result of those planning and implementation efforts, we experienced no
significant disruptions in mission critical information technology and
non-information technology systems and we believe those systems successfully
responded to the Year 2000 date change. We were charged approximately $300,000
by Sabre in connection with the Year 2000 project, which was expensed as
incurred. We are not aware of any material problems resulting from Year 2000
issues, either with our products, our internal systems, or the products and
services of third parties. We will continue to monitor mission critical computer
applications and those of our suppliers and vendors throughout the year 2000 to
ensure that any latent Year 2000 matters that may arise are addressed promptly.

INFLATION

    We believe that inflation has not had a material effect on our results of
operations.

NEW ACCOUNTING PRONOUNCEMENTS

    In June 1999, the Financial Accounting Standards Board issued Statement No.
137, DEFERRAL OF EFFECTIVE DATE OF FASB STATEMENT NO. 133. Statement No. 137
deferred the implementation date of Statement No. 133, ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES, which is now required to be adopted in years
beginning after June 15, 2000. Statement No. 133 requires the recognition of 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 fair value will either be
recognized in income, or in 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. We do not currently use
derivatives to a significant extent; however, as such instruments may be used in
the future, it is uncertain what, if any, impact the adoption of Statement 133
will have on our earnings or our financial position. We anticipate that we will
adopt the statement effective January 1, 2001.

                                     27
<PAGE>

   In March 1999, the Financial Accounting Standards Board (FASB) issued
an Exposure Draft of a proposed Interpretation of Accounting Principles Board
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25), that will
result in significant changes to current practice regarding the accounting for
stock compensation arrangements if adopted as proposed. The proposed
Interpretation would not change APB 25's intrinsic value method, under which
compensation expense is generally not recognized for grants of stock options to
employees, but would narrow its application.

   The Exposure Draft of the proposed Interpretation contains provisions whereby
employees would be defined as they are under common law for purposes of applying
APB 25. As a result, APB 25 would 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 would not be considered to be employees of
the grantor. Grants of equity awards made to such employees would be 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 may be 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.

   If issued in final form as proposed, the Interpretation would require that
the Company recognize expense at fair value for grants of equity awards to
employees of Travelocity Holdings performing services for the Partnership under
the management services agreement (See Note 10 to the Financial Statements).

CAUTIONARY STATEMENT

   Statements in this report which are not purely historical facts, including
statements regarding Travelocity.com's anticipations, beliefs, expectations,
hopes, intentions or strategies for the future, may be forward looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. All forward looking statements in this report are based upon
information available to the Company on the date of this report. The Company
undertakes no obligation to publicly update or revise any forward looking
statements, whether as a result of new information, future events or otherwise.
Any forward looking statements involve risks and uncertainties that could cause
actual events or results to differ materially from the events or results
described in the forward looking statements. Readers are cautioned not to place
undue reliance on these forward looking statements.

   Risks associated with Travelocity.com's forward looking statements both in
this report and in any and all oral statements include, but are not limited to:
risks related to the relationships of Travelocity.com with Sabre and its
affiliates, including risks that they may terminate any of the agreements with
Travelocity.com, or fail or otherwise become unable to fulfill their principal
obligations thereunder, or determine not to renew certain of the agreements;
risks associated with competition, and technological innovation by competitors,
which could require Travelocity.com to reduce prices, to change billing
practices, to increase spending or marketing or product development or otherwise
to take actions that might adversely affect its operations or earnings; risks
related to Travelocity.com's technology; risks associated with online commerce
and doing business through an Internet web site, such as security issues,
liability for site content, and uncertain protection of intellectual property;
risks relating to Travelocity.com's investment in technology, including the
ability of Travelocity.com to timely develop and achieve market acceptance of
new products; risks associated with industry consolidation, including strategic
alliances, in the travel industry; risks related to seasonality of the travel
industry and booking revenues; risks of Travelocity.com's sensitivity to general
economic conditions and events that affect airline travel and the airlines,
hotel operators and car rental companies, including the increased price of fuel;
risks of a natural disaster, computer terrorism or other calamity that may cause
significant damage to the data center facilities and enterprise information
systems upon which Travelocity.com relies; risks of interruption or
deterioration of third party services on which Travelocity.com relies to provide
its services; risks of deterioration or obsolescence of Travelocity.com's
current systems and infrastructures; risks associated with Travelocity.com's
international operations, such as currency fluctuations, governmental approvals,
tariffs and trade barriers, and political instability; risks of new or different
legal and regulatory requirements; the risk that we may not be able to
successfully integrate the business of the Travelocity Division and Preview
Travel; risks associated with the growth strategy of Travelocity.com, including
investments in emerging markets and the ability to successfully conclude
alliances; the risk that evaluation of the business and properties of
Travelocity.com is difficult because Preview Travel and the Travelocity Division
have short operating histories; the risks associated with our expectation of
continued net losses for the foreseeable future, and our inability to predict
when we will operate profitably; risks that a decline in commission rates or the
elimination of commissions by travel suppliers would reduce our revenues; the
risk that our revenues derived from

                                        28
<PAGE>

our relationships with Yahoo!, AOL and Excite may not be sufficient to
offset our significant financial commitments to them; the risk that our
financial performance could deteriorate if we lose market share to our
competitors; the risk that if we fail to increase our brand recognition among
consumers, we may not be able to expand our online traffic; the risk that
rapid technological changes may render our technology obsolete or decrease
the attractiveness of our services to consumers; the risk that security
breaches in our systems could damage our reputation and cause us to lose
customers; the risk that 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 risk that our inability
to increase our revenues depends on the continued use and growth of the
Internet and electronic commerce since that is the commercial medium through
which we provide our service; the risk that our stock price could fluctuate
significantly; the risk that evolving government regulation could impose
taxes or other burdens on our business which could increase our costs or
decrease demand for our products; the risk that the loss of our Chief
Executive Officer could harm our business, and that if we do not continue to
attract and retain qualified personnel, we will not be able to expand our
operations; the risk that if financing is not available to us when we need it
on favorable terms, we may not be able to compete and expand; the risk that
conflicts of interest between Sabre and the Company and the Partnership could
impede our business strategy and hurt our business; and the risk that our
ability to promote our services in Southeast Asia, Australia, New Zealand,
Japan, India and other regions is restricted by an existing agreement between
Sabre and another operator of a global distribution system.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

    As of December 31, 1999, we did not have any cash balances or investments.
We depended upon Sabre for the funding of our cash requirements until the merger
occurred on March 7, 2000. Effective with the merger, we began maintaining our
own cash balances.

    Because Sabre maintained all cash balances, our exposure to market risk for
interest rates was indirect and subject to Sabre's investment policies. Sabre
does not currently use financial derivative instruments to manage interest rate
risk. Sabre's investment portfolio consists primarily of high quality credit
certificates of deposit, banker's acceptances, commercial paper, and corporate
and government notes.

    Effective with the merger, we began maintaining our own cash balances. Our
exposure to market risk for changes in interest rates will relate primarily to
our investment portfolio. We will maintain an investment policy which is
intended to ensure the safety and preservation of our 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 will
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. The portfolio will
include only marketable securities with active secondary or resale markets to
ensure portfolio liquidity and will maintain a prudent amount of
diversification.

    We do not currently transact any significant portion of our business in
functional currencies other than the United States dollar. To the extent that we
continue to transact business using the United States dollar as our functional
currency, we do not believe that fluctuations in foreign currency exchange rates
will have a material adverse effect on our results of operations.

                                          29
<PAGE>



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                Page
                                                                               ------
<S>                                                                              <C>
                  Report of Ernst & Young LLP, Independent Auditors              31
                  Balance Sheets                                                 32
                  Statements of Operations                                       33
                  Statements of Cash Flows                                       34
                  Statements of Stockholder's Equity (Deficit)                   35
                  Notes to Financial Statements                                  36
</TABLE>



                                              30
<PAGE>




                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Travelocity.com Inc.

    We have audited the accompanying balance sheets of Travelocity.com Inc. as
of December 31, 1999 and 1998, and the related statements of income,
stockholder's equity (deficit) and cash flows for each of the three years in the
period ended December 31, 1999. Our audits also included the financial statement
schedule listed under Item 14(a). These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Travelocity.com Inc. at
December 31, 1999 and 1998, and the results of its operations and cash flows for
each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.


                                                     /s/ ERNST & YOUNG LLP

March 16, 2000
Dallas, Texas

                                           31
<PAGE>



TRAVELOCITY.COM INC.
BALANCE SHEETS
(In thousands)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                                       DECEMBER 31,
                                                                   ---------------------
                                                                     1999        1998
                                                                   ---------   ---------
<S>                                                                <C>         <C>
ASSETS
CURRENT ASSETS
  Accounts receivable                                              $   3,259   $   2,721
  Prepaid expenses and other current assets                              195          --
                                                                   ---------   ---------
     Total current assets                                              3,454       2,721
PROPERTY AND EQUIPMENT
  Leasehold improvements                                                 726         688
  Furniture, fixtures and equipment                                      995         897
  Computer equipment                                                   1,342       1,147
                                                                   ---------   ---------
                                                                       3,063       2,732
  Less accumulated depreciation                                       (1,118)       (524)
                                                                   ---------   ---------
     Total property and equipment                                      1,945       2,208
Intangible assets, net                                                 4,190       6,238
Other assets                                                              50           2
                                                                   ---------   ---------
          TOTAL ASSETS                                             $   9,639   $  11,169
                                                                   ---------   ---------
                                                                   ---------   ---------

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES
  Accounts payable                                                 $   7,114   $     662
  Accrued compensation and related benefits                              676         405
  Other accrued liabilities                                              955         693
  Payable to affiliates                                                   28       1,423
                                                                   ---------   ---------
          Total current liabilities                                    8,773       3,183
Payable to affiliates                                                 68,884      55,594
Other liabilities                                                        544         323
Commitments and contingencies


STOCKHOLDER'S EQUITY (DEFICIT)
  Class A Common Stock, $.001 par value, 3,000 shares
     authorized, issued and outstanding                                    3          --
  Class B Common Stock, $.001 par value, 1,500 shares
     authorized, no shares issued                                         --          --
  Contributions from affiliates                                        7,841       7,841
  Stock subscription receivable from affiliate                            (3)         --
  Accumulated deficit                                                (76,403)    (55,772)
                                                                   ---------   ---------
          TOTAL STOCKHOLDER'S DEFICIT                                (68,562)    (47,931)
                                                                   ---------   ---------
          TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
             (DEFICIT)                                             $   9,639   $  11,169
                                                                   ---------   ---------
                                                                   ---------   ---------
</TABLE>

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

                                         32
<PAGE>



TRAVELOCITY.COM INC.
STATEMENTS OF OPERATIONS
(In thousands)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                        YEAR ENDED DECEMBER 31,
                                                  ------------------------------------
                                                    1999          1998        1997
                                                  ---------     ---------    ---------
<S>                                               <C>           <C>          <C>
REVENUES
  Transaction revenue                             $  54,567     $  18,370    $   8,345
  Advertising                                         8,591         2,821          577
  Licensing and royalty fees                          1,029            47          365
                                                  ---------     ---------    ---------
          Total revenues                             64,187        21,238        9,287
Cost of revenues                                     40,255        19,067       11,878
                                                  ---------     ---------    ---------
GROSS PROFIT (LOSS)                                  23,932         2,171       (2,591)

OPERATING EXPENSES
  Selling and marketing                              29,532        10,608        6,887
  Technology and development.                         9,624         8,483        6,549
  General and administrative                          5,407         4,360        2,693
                                                  ---------     ---------    ---------
          Total operating expenses                   44,563        23,451       16,129
                                                  ---------     ---------    ---------
          NET LOSS                               $  (20,631)    $ (21,280)   $ (18,720)
                                                  ---------     ---------    ---------
                                                  ---------     ---------    ---------
</TABLE>

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

                                            33
<PAGE>



TRAVELOCITY.COM INC.
STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------


                                                                   YEAR ENDED DECEMBER 31,
                                                            ------------------------------------
                                                              1999          1998         1997
                                                            ---------     ---------    ---------
<S>                                                         <C>           <C>          <C>
OPERATING ACTIVITIES
  Net loss                                                  $ (20,631)    $ (21,280)   $ (18,720)
  Adjustments to reconcile net loss to
     cash used in operating activities
     Depreciation and amortization                              2,833         2,412          836
     Other                                                         (5)           --           --
     Changes in operating assets and liabilities
       Accounts receivable and other assets                      (776)       (2,109)          20
       Accounts payable, accrued expenses and
          other liabilities                                     7,206           628          158
       Payable to affiliates                                   (1,395)          973         (804)
                                                            ---------     ---------    ---------
     Cash used in operating activities                        (12,768)      (19,376)     (18,510)

INVESTING ACTIVITIES
  Additions to property and equipment                            (522)       (2,346)        (100)
  Purchase of Travelocity trademark                                --            --       (5,000)
  License of Netscape trademark                                    --            --       (4,000)
                                                            ---------     ---------    ---------
     Cash used in investing activities                           (522)       (2,346)      (9,100)

FINANCING ACTIVITIES
  Advances from affiliates                                     13,290        16,618       27,610
  Contributions from affiliates                                    --         5,104           --
                                                            ---------     ---------    ---------
     Cash provided by financing activities                     13,290        21,722       27,610
                                                            ---------     ---------    ---------
  Decrease in cash and cash equivalents                            --            --           --
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE
  PERIOD                                                           --            --           --
                                                            ---------     ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD              $      --     $      --    $      --
                                                            ---------     ---------    ---------
                                                            ---------     ---------    ---------
</TABLE>

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

                                           34
<PAGE>



TRAVELOCITY.COM INC.
STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
(In thousands)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------


                                       CLASS A           CLASS B           CONTRIBUTIONS     ACCUMULATED    TOTAL DIVISION
                                    COMMON STOCK       COMMON STOCK       FROM AFFILIATES      DEFICIT      EQUITY (DEFICIT)
                                    ------------       ------------       ---------------      -------      ----------------
<S>                                    <C>                <C>                <C>             <C>              <C>
Balance at January 1, 1997             $   --             $   --             $2,737          $(15,772)        $(13,035)
  Net loss                                 --                 --                 --           (18,720)         (18,720)
                                       ------             ------             ------          --------         --------
Balance at December 31, 1997               --                 --              2,737           (34,492)         (31,755)
  Net loss                                 --                 --                 --           (21,280)         (21,280)
  Contribution from Sabre                  --                 --              5,104                --            5,104
                                       ------             ------             ------          --------         --------
Balance at December 31, 1998               --                 --              7,841           (55,772)         (47,931)

   Issuance of common stock to
      affiliate                             3                 --                 --                --                3

   Stock subscription receivable
      from affiliate                       (3)                --                 --                --               (3)
  Net loss                                 --                 --                 --           (20,631)         (20,631)
                                       ------             ------             ------          --------         --------
Balance at December 31, 1999           $   --             $   --             $7,841          $(76,403)        $(68,562)
                                       ------             ------             ------          --------         --------
                                       ------             ------             ------          --------         --------
</TABLE>

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

                                           35
<PAGE>



TRAVELOCITY.COM INC.
NOTES TO FINANCIAL STATEMENTS

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

1. GENERAL INFORMATION

    Travelocity.com Inc. was incorporated on September 30, 1999 as a
wholly-owned subsidiary of Sabre Holdings Corporation ("Sabre"), a subsidiary
of AMR Corporation ("AMR"). In 1996, Sabre was incorporated as the successor
to the businesses of The Sabre Group which were previously operated as
subsidiaries or divisions of American Airlines, Inc. ("American") or AMR. The
Sabre Group was formed by AMR to capitalize on synergies of combining AMR's
information technology businesses under common management. Unless otherwise
indicated, references herein to "Sabre" include Sabre Holdings Corporation
and its consolidated subsidiaries.

    Travelocity.com Inc. had no operating activities as of December 31, 1999,
but was established to consummate the merger with Preview Travel, Inc. ("Preview
Travel") discussed in Note 10. The Travelocity Division was an operating
division of Sabre, which was engaged in electronic travel distribution services
using the SABRE -REGISTERED TRADEMARK-computer reservations system ("the SABRE
system"). The Travelocity Division conducted substantially all of the
consumer-direct Internet travel distribution business of Sabre.

    Immediately prior to the consummation of the merger on March 7, 2000, Sabre
and TSGL Holding, Inc., a wholly owned subsidiary of Sabre, contributed the
assets and liabilities of the Travelocity Division and $52.7 million in cash to
Travelocity.com LP ("the Partnership") and received partnership units in
exchange. Sabre then contributed partnership units to Travelocity Holdings, a
wholly-owned subsidiary of Sabre, and Travelocity Holdings contributed a portion
of those partnership units to Travelocity.com Inc., such that these entities
became partners in the Partnership. Additionally, Travelocity.com Inc. exercised
an option to cause Travelocity Holdings to invest an additional $50 million in
exchange for 1.2 million shares of its common stock. Travelocity.com Inc. then
contributed these funds to the Partnership.

    As a result, immediately prior to the merger, the Partnership owned all of
the assets and liabilities of the Travelocity Division and $102.7 million in
cash. Sabre owned the Partnership through a combination of its direct interest,
its interest held through Travelocity Holdings and TSGL Holding, and its
interest held through Travelocity.com Inc.

    Although the Company does not have a majority equity interest in the
Partnership, it controls the Partnership through the Partnership's board of
directors as it has the right to appoint a majority of the directors. As a
result, Travelocity.com Inc. will consolidate the Partnership in its separate
financial statements.

    The Company is engaged in consumer-direct travel distribution over the
Internet. Through its Travelocity.com online travel Web site, which is
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.

    FINANCIAL STATEMENT PRESENTATION. These transactions described above will be
accounted for as a reorganization of entities under common control in a manner
similar to a pooling of interests. Therefore, the accompanying financial
statements present the combined financial position and results of operations of
Travelocity.com Inc. and the Travelocity Division for the periods presented.
References to the "Company" in the Notes to the Financial Statements
collectively refer to Travelocity.com Inc. and the Travelocity Division.

    At December 31, 1999, the authorized capital of the Company was 3 million
shares of Class A Common Stock and 1.5 million shares of Class B Common Stock.
At December 31, 1999, 3 million shares of Class A Stock have been issued to a
Sabre affiliate in exchange for a stock subscription.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION. The accompanying financial statements have been
prepared using Sabre's historical basis

                                       36
<PAGE>

in the Company. The financial statements include the results of operations,
financial condition and cash flows of the Company as a component of Sabre 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, which are
described in Note 4, incurred by Sabre and/or AMR on behalf of the Company.

    CASH AND CASH EQUIVALENTS. The Company has not maintained cash or cash
equivalents. Sabre has maintained all cash balances, charging or crediting the
Company through intercompany accounts upon the recording of certain
transactions, including the collection of accounts receivable and the purchases
of goods and services.

    DEPRECIATION AND AMORTIZATION. The Company's depreciation and amortization
policies are as follows:

<TABLE>
<S>                                               <C>
    Property and Equipment
      Computer equipment                          3 to 5 years
      Furniture and fixtures                      5 to 15 years
      Leasehold improvements                      Lesser of lease term or useful
                                                  life
    Intangible assets, principally trademarks     3 to 7 years
</TABLE>

    Property and equipment are stated at cost less accumulated depreciation and
amortization, which is calculated on the straight-line basis. Depreciation of
property and equipment totaled approximately $786,000, $365,000 and $121,000 in
1999, 1998 and 1997, respectively. Intangible assets are amortized on the
straight-line basis, over the lesser of estimated useful life or contractual
right of use. Amortization of intangible assets totaled approximately $2,048,000
in 1999 and 1998, and $714,000 in 1997. Accumulated amortization of intangible
assets approximated $4,810,000 and $2,762,000 at December 31, 1999 and 1998,
respectively. See Note 3.

    REVENUE RECOGNITION. The Company provides online travel services through
Travelocity.com, its proprietary online travel site (the "Travelocity.com
site"), and historically through the easySabre-REGISTERED TRADEMARK-
reservations site (the "easySabre-REGISTERED TRADEMARK- site"), as well as
certain co-branded sites operated in conjunction with other internet sites.
The easySabre-REGISTERED TRADEMARK- site was retired in July 1999.
Reservations made through these sites are booked through the SABRE system. As
compensation for processing bookings, transaction fees are collected from
air, car rental and hotel vendors and other providers of travel related
products and services ("associates") by Sabre and transferred to the Company.
The fee per booking charged to associates is dependent upon the level of
functionality within the SABRE system at which the associate participates.
Transaction revenue for airline travel reservations is recognized at the time
of the booking of the reservation, net of estimated future cancellations. At
December 31, 1999 and 1998, the Company had recorded booking fee cancellation
reserves of approximately $237,000 and $141,000, respectively. Transaction
revenue for car rental and hotel bookings and other travel providers is
recognized at the time the reservation is used by the customer.

    Transaction revenue also includes commissions from travel suppliers for air
travel, hotel rooms, car rentals, vacation packages and cruises. Commissions
from air travel providers are recognized upon confirmation of pending payment of
the commission. Commissions from other travel providers are recognized upon
receipt.

    Advertising revenues are derived primarily from the delivery of advertising
impressions on the Company's Web sites. Advertising revenues are recognized in
the period that advertising impressions are delivered. Licensing and royalty
fees are derived from operating certain airline reservation sites and are
recognized in the period earned.

    ADVERTISING COSTS. The Company recognizes advertising expense in accordance
with Statement of Position 93-7, REPORTING ON ADVERTISING COSTS, generally as
incurred. Internet advertising expenses are recognized based on the terms of the
individual agreements, but generally over the greater of the ratio of the number
of impressions delivered over the total number of contracted impressions, or on
a straight-line basis over the term of the contract. Advertising expenses,
including certain amounts paid to American for marketing support of the
Travelocity.com site and easySabre-REGISTERED TRADEMARK- site (See Note 4),
totaled approximately $16,520,000, $4,072,000 and $3,275,000 during 1999,
1998 and 1997, respectively.

    SOFTWARE DEVELOPMENT COSTS. Through December 31, 1998, the Company accounted
for the costs of developing and testing new or significantly enhanced products
and Web site features in accordance with the provisions of Statement of
Financial Accounting Standards No. 86, ACCOUNTING FOR THE COSTS OF COMPUTER
SOFTWARE TO BE SOLD,

                                         37
<PAGE>

LEASED OR OTHERWISE MARKETED (FAS 86). Pursuant to FAS 86, costs are
capitalized when technological feasibility of the product is established,
which is achieved upon completion of a detailed program design or a working
model. Costs incurred prior to the establishment of technological feasibility
are expensed as incurred as research and development costs. No amounts have
been capitalized pursuant to FAS 86.

    Effective January 1, 1999, the Company adopted the provisions of SOP 98-1,
ACCOUNTING FOR COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE. SOP
98-1 requires the capitalization of certain costs incurred during an
internal-use software development project, including costs related to
applications, infrastructure and graphics developments for the Company's Web
sites. Capitalizable costs consist of (a) certain external direct costs of
materials and services incurred in developing or obtaining internal-use
computer software, (b) payroll and payroll-related costs for employees who
are directly associated with and who devote time to the project and (c)
interest costs incurred. Costs that are considered to be related to research
and development activities, data conversion activities, and training,
maintenance and general and administrative or overhead costs will continue to
be expensed as incurred. Costs that cannot be separated between maintenance
of, and relatively minor upgrades and enhancements to, the Company's Web
sites are also expensed as incurred. The effect of the adoption of SOP 98-1
was not significant.

    Research and development costs included in technology and development
approximated $300,000, $137,000 and $92,000 for 1999, 1998 and 1997
respectively.

    INCOME TAXES. As an operating unit of Sabre, the Company is included in the
consolidated federal income tax return of AMR. Sabre and AMR entered into a tax
sharing agreement effective July 1, 1996 (the "Tax Sharing Agreement"), which
provides for the allocation of tax liabilities during the tax periods Sabre and
its operating divisions and subsidiaries are included in the consolidated
federal, state and local income tax returns filed by AMR. The Tax Sharing
Agreement generally requires Sabre to pay to AMR the amount of federal, state
and local income taxes that Sabre would have paid had it ceased to be a member
of the AMR consolidated tax group for periods after incorporation. Sabre
and its operating divisions and subsidiaries are jointly and severally liable
for the federal income tax of AMR and the other companies included in the
consolidated return for all periods in which Sabre is included in the AMR
consolidated group. AMR has agreed, however, to indemnify Sabre and its
operating divisions and subsidiaries for any liability for taxes reported or
required to be reported on a consolidated return arising from operations of
subsidiaries of AMR other than Sabre.

    The Company has computed its provision for deferred income taxes using the
liability method as if it were a separate taxpayer. Under the liability method,
deferred income tax assets and liabilities are determined based on differences
between financial reporting and income tax bases of assets and liabilities and
are measured using the enacted tax rates and laws. A valuation allowance has
been recorded to reflect management's judgment about the realization of the net
deferred tax assets in future years.

    BUSINESS RISK AND CONCENTRATIONS OF CREDIT RISK. The Company operates in the
online travel services industry, which is new, rapidly evolving and intensely
competitive. The Company competes with traditional travel agency reservation
methods and other online travel reservation services. In the online travel
services market, the Company competes with other entities that maintain similar
commercial Web sites. Transaction revenue from air commissions represented
35.9%, 36.2% and 42.0% of total revenues for 1999, 1998 and 1997, respectively.
The Company relies on unrelated service entities to accumulate, process and
remit these revenues. Discontinuance of these services could result in
disruption to the Company's business and accordingly have a material adverse
effect on its results of operations, financial position and cash flow.

    The Company has incurred losses since its inception, which have been funded
by Sabre, as the Company was an operating unit of Sabre.

    The Company is subject to risks and uncertainties common to growing
technology based companies, including rapid technological change, growth and
commercial acceptance of the Internet, dependence on third-party and Sabre
technology, new service introductions, activities of competitors, dependence on
key personnel, international expansion, and limited operating history.

    A substantial portion of the Company's revenues comes from commissions paid
by travel suppliers for bookings made through its online sites. These travel
suppliers are not obligated to pay any specified commission rates for

                                         38
<PAGE>

bookings. The reduction, or elimination, of commissions could have a material
adverse effect on the financial condition and result of operations of the
Company.

    The Company's customers are primarily located in the United States and are
concentrated in the travel industry. Revenue from Delta Air Lines during 1999
were approximately $6.7 million which represented 10.5% of the Company's
revenues. During 1998, revenues from Delta Air Lines, US Airways, Inc. and AMR
were approximately $2.7 million, $2.6 million and $2.2 million, respectively,
which represented 12.3%, 11.6% and 10.0%, respectively, of the Company's
revenues. During 1997, revenues from Delta Air Lines and AMR were approximately
$1.4 million and $1.0 million respectively, which represented 14.6% and 10.3% of
the Company's revenues, respectively. The Company's receivables are generally
unsecured and, historically, bad debts have not been significant.

    As part of the Company's agreement with airlines, much like any travel
agency, the Company must pay face value to the air travel provider for any
fraudulent tickets it sells. If a significant amount of fraudulent purchases
were to be made through the Company's web sites, the Company could incur losses
relating to the payments due to air travel providers of a material amount.
Historically, the Company's losses relating to such fraudulent purchases have
not been material.

    IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS. The carrying amount of
long-lived and intangible assets are periodically reviewed by management to
determine if facts and circumstances suggest that such amount may be impaired.

    USE OF ESTIMATES. The preparation of these financial statements in
conformity with generally accepted accounting principles requires that certain
amounts be recorded based on estimates and assumptions made by management.
Actual results could differ from these estimates and assumptions.

    STOCK AWARDS AND OPTIONS. Stock awards and stock options granted to
employees of the Company, including awards of Sabre stock and stock options and
awards of AMR stock and stock options granted prior to the incorporation of
Sabre, have been accounted for in the accompanying financial statements in
accordance with Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK
ISSUED TO EMPLOYEES. No compensation expense is recognized for stock option
grants if the exercise price is at or above the fair market value of the
underlying stock on the date of grant. Compensation expense relating to other
stock awards is recognized over the period during which the employee renders
service necessary to earn the award.

    FINANCIAL INSTRUMENTS. The carrying value of the Company's financial
instruments, primarily accounts receivable, approximates their respective fair
values at December 31, 1999, 1998 and 1997.

    RECENT ACCOUNTING PRONOUNCEMENTS. In June 1999, the Financial Accounting
Standards Board issued Statement No. 137, DEFERRAL OF EFFECTIVE DATE OF FASB
STATEMENT NO. 133. Statement No. 137 deferred the implementation date of
Statement No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES,
which is now required to be adopted in years beginning after June 15, 2000.
Statement No. 133 requires the recognition of 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 fair value will either be recognized in income, or in
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. Because the Company does not currently use derivatives,
management does not anticipate that the adoption of Statement 133 will have a
significant effect on its earnings or financial position. The Company
anticipates that it will adopt the statement effective January 1, 2001.

    In March 1999, the Financial Accounting Standards Board (FASB) issued an
Exposure Draft of a proposed Interpretation of Accounting Principles Board
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25), that will
result in significant changes to current practice regarding the accounting
for stock compensation arrangements if adopted as proposed. The proposed
Interpretation would not change APB 25's intrinsic value method, under which
compensation expense is generally not recognized for grants of stock options
to employees, but would narrow its application.

    The Exposure Draft of the proposed Interpretation contains provisions
whereby employees would be defined as

                                       39
<PAGE>

they are under common law for purposes of applying APB 25. As a result, APB
25 would 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 would not be considered to be employees of the grantor.
Grants of equity awards made to such employees would be 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 may be
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.

    If issued in final form as proposed, the Interpretation would require that
the Company recognize expense at fair value for grants of equity awards to
employees of Travelocity Holdings performing services for the Partnership under
the management services agreement in periods beginning after July 1, 2000.
(See Note 10).

3. SIGNIFICANT TRANSACTIONS AND RELATIONSHIPS

    In January 1997, the Company entered into an agreement to obtain exclusive
rights to the trademark "Travelocity" as well as other associated rights and
interests from Worldview Systems Corporation for $5 million. The trademark is
classified as an intangible asset and is being amortized on a straight-line
basis over a period of seven years. Amortization expense of approximately
$714,000 was recorded in each of the years ended December 31, 1999, 1998 and
1997.

    In December 1997, the Company entered into an agreement with Netscape
Communication Corporation ("Netscape") to license the use of the Netscape
trademark in specified circumstances for $4 million. The license fee is
classified as an intangible asset and is being amortized over its estimated
useful life of 3 years. Amortization expense of approximately $1,333,000 was
recorded in both 1999 and 1998.

    The Company has entered into agreements with Yahoo! Inc. ("Yahoo!"),
Netscape, Infoseek/Go Network ("Go Network") and At Home Corporation ("@Home")
establishing the Travelocity.com site as the provider of air, car and hotel
booking capabilities on the Yahoo! Web site and as the primary travel
reservations provider for Netscape, Go Network and @Home. Under these
agreements, as amended, Yahoo!, Netscape, Go Network and @Home are obligated to
promote the Travelocity.com site and to deliver minimum numbers of annual page
views, or impressions, featuring the Company's travel services on their
respective Web sites. During the terms of these agreements, as amended, the
Company is obligated to make certain minimum payments as well as pay Yahoo!,
Netscape, Go Network and @Home a percentage of commissions revenue earned in
excess of certain thresholds.

    On October 2, 1999, the Company 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 with Preview
Travel (Note 10). 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 required 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 million to AOL upon the closing of the merger with Preview Travel on March
7, 2000.

     In connection with these agreements, the Company is committed to make
aggregate future minimum payments as follows (in thousands):

<TABLE>
<CAPTION>
                    YEAR ENDING DECEMBER 31,
                    ------------------------
                    <S>                              <C>
                           2000                      $ 55,883
                           2001                        48,492
                           2002                        48,000
                           2003                        40,000
                           2004                        40,000
                                                     --------
                                                     $232,375
                                                     --------
                                                     --------
</TABLE>

4. CERTAIN RELATED PARTY TRANSACTIONS

    CONTRIBUTIONS FROM AFFILIATES. During 1998, Sabre made a capital
contribution of approximately $5,100,000 to the Travelocity Division. Proceeds
from the contribution were used to reduce payables to affiliates.

                                      40
<PAGE>

    MANAGEMENT SERVICES AGREEMENT. The Company, as an affiliate of Sabre, and
American are parties to a Management Services Agreement dated July 1, 1996 (the
"American Management Services Agreement"), pursuant to which American performs
various management services for Sabre and the Company that American has
historically provided. Transactions with American are settled through monthly
billings, with payment due in 30 days. Amounts charged to the Company under this
agreement approximate American's cost of providing the services plus a margin.

    MARKETING COOPERATION AGREEMENT. The Company and American are parties to the
Marketing Cooperation Agreement dated July 1, 1996 (the "Marketing Cooperation
Agreement"), pursuant to which American provides marketing support for five
years for the Travelocity.com site. The Marketing Cooperation Agreement may be
terminated by either party prior to June 30, 2001 only if the other party fails
to perform its obligations thereunder. For the promotion of the Travelocity.com
site and the easySabre-REGISTERED TRADEMARK- site, American is paid a marketing
fee based upon booking volume. Approximately $100,000 in 1999, 1998 and 1997
was paid to American under the terms of the agreement.

    NON-COMPETITION AGREEMENT. The Company, as an affiliate of Sabre, AMR and
American are parties to a Non-Competition Agreement dated July 1, 1996 (the
"Non-Competition Agreement") and expiring December 31, 2001, pursuant to which
AMR and American, on behalf of themselves and certain of their subsidiaries,
have agreed to limit their competition with Sabre's business, including
consumer-direct internet travel distribution in certain circumstances.

    TRAVEL AGREEMENTS. The Company, as an affiliate of Sabre, and American are
parties to a Travel Privileges Agreement dated July 1, 1996 (the "Travel
Privileges Agreement"), pursuant to which the Company is entitled to purchase
personal travel for certain employees and retirees at reduced fares. At the time
of the merger with Preview Travel (Note 10), all existing employees and retirees
of the Company were allowed to maintain their existing travel privileges. The
cost for employee travel is charged to the Company based upon these employees'
travel activities and the cost for retirees' travel is allocated to the Company
based on the Company's headcount relative to Sabre's headcount.

    The Company, as an affiliate of Sabre, and American are also parties to a
Corporate Travel Agreement dated July 1, 1996 and ending June 30, 1998 (the
"Corporate Travel Agreement"), pursuant to which the Company received discounts
for certain flights purchased on American. In exchange, Sabre, including the
Company, must have flown a certain percentage of its travel on American as
compared to all other air carriers combined. If Sabre, including the Company,
fails to meet the applicable percentage on an average basis over any calendar
quarter, American may terminate the agreement upon 60 days' notice. In 1998,
Sabre and American entered into a new corporate travel agreement (the "Revised
Corporate Travel Agreement") commencing July 1, 1998 and ending June 30, 2001.
The terms and conditions of the Revised Corporate Travel Agreement are
substantially the same as the Corporate Travel Agreement.

    INDEMNIFICATION AGREEMENT. In connection with the incorporation of Sabre,
the Company, as a former operating unit of Sabre, and American are parties to an
intercompany agreement (the "Indemnification Agreement") pursuant to which each
party indemnified the other for certain obligations. Pursuant to the
Indemnification Agreement, Sabre indemnified American for liabilities assumed
against third party claims asserted against American as a result of American's
prior ownership of assets or operation of businesses contributed to Sabre and
for losses arising from or in connection with Sabre's lease of property from
American. In exchange, American indemnified Sabre for specified liabilities
retained by it against third party claims against Sabre relating to American's
businesses and asserted against Sabre as a result of the prior ownership or
possession by American of any asset contributed to Sabre and for losses arising
from or in connection with American's lease of property from Sabre.

    REVENUES FROM AFFILIATES. Revenues from American and other subsidiaries of
AMR were approximately $4,283,000, $2,239,000 and $1,326,000 in 1999, 1998 and
1997, respectively.

    COST OF REVENUES AND OPERATING EXPENSES. Expenses have been charged to the
Company by Sabre, American and other subsidiaries of AMR to cover certain data
processing, communication, labor, ticket fulfillment, employee benefits,
facilities rental, marketing services, management services, legal fees and
certain other administrative costs based on employee headcount or actual usage
of facilities and services. Amounts charged by Sabre approximate the

                                      41
<PAGE>

cost to Sabre for providing such services. The Company believes amounts
charged by American for these expenses approximate the cost of such services
provided by third parties. Travel service costs for travel by the Company's
employees for personal and business travel are charged to the Company based
on rates negotiated with American. The rates negotiated with American for
1999, 1998 and 1997 under the Corporate Travel Agreement approximate
corporate travel rates offered by American to similar companies.

    Expenses charged by affiliates are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31
                                                            ------------------------------
                                                              1999       1998      1997
                                                            --------   --------   --------
           <S>                                              <C>        <C>        <C>
           Data processing, communication and labor
             costs                                          $ 33,891   $ 15,225   $ 13,002
           Ticket fulfillment costs                            1,116      8,718      3,830
           Management services                                 3,065      2,744      1,461
           Employee benefits                                     578        407        374
           Travel services                                       486        327        410
           Facilities rental                                     372        287        351
           Marketing cooperation                                 100        100        100
           Other administrative costs                              2          4          4
                                                            --------   --------   --------
                     Total expenses                         $ 39,610   $ 27,812   $ 19,532
                                                            --------   --------   --------
                                                            --------   --------   --------
</TABLE>

    During 1999, the Company received a $1.7 million payment from an AMR
affiliate in connection with the termination of the use of a customer service
center operated by the AMR affiliate, which has been credited to cost of
revenues.

    PAYABLE TO AFFILIATES -- Amounts due to American and other subsidiaries of
AMR are due within 30 days of month end and are therefore considered to be
current liabilities. Amounts due to Sabre are classified as non-current
liabilities as historically Sabre has funded the Company's losses. Interest
expense has not been recorded on amounts due to Sabre. A summary of balances
outstanding and the weighted average balances outstanding for the periods
indicated are as follows (in thousands):

<TABLE>
<CAPTION>
                                                     YEAR ENDED DECEMBER 31
                                                 -------------------------------
                                                   1999       1998        1997
                                                 --------   --------    --------
<S>                                              <C>        <C>         <C>
Balance at beginning of period                   $ 55,594   $ 38,976    $ 11,411
Advances from affiliates                           13,290     21,722      27,565
Contributions by affiliates to division equity         --     (5,104)         --
                                                 --------   --------    --------
Balance at end of period                         $ 68,884   $ 55,594    $ 38,976
                                                 --------   --------    --------
                                                 --------   --------    --------
Weighted average balance of advances
  outstanding                                    $ 64,482   $ 44,683    $ 26,183
                                                 --------   --------    --------
                                                 --------   --------    --------
</TABLE>

5. EMPLOYEE BENEFIT PLANS

    Substantially all of the employees of the Company participate in The Sabre
Group Retirement Plan (the "SGRP"), a defined contribution plan qualified under
Section 401(k) of the Internal Revenue Code of 1986, and The Sabre Group Legacy
Pension Plan (the "LPP"), a tax-qualified defined benefit plan. Each of these
plans was established on January 1, 1997. Prior to 1997, substantially all of
the Company's employees participated in a tax qualified defined benefit plan
sponsored by American.

    Costs for participation in these plans have been allocated to the Company
based on the number of employees participating in the plans and are included in
employee benefits in the table included in Note 4. Costs allocated totaled
approximately $280,000, $191,000 and $165,000 in 1999, 1998 and 1997,
respectively.

    Substantially all employees of the Company may become eligible for certain
health care and life insurance

                                           42
<PAGE>

benefits provided by American to retired employees. The amount of health care
benefits is limited to lifetime maximums as outlined in the plan. Certain
employee groups make contributions towards funding a portion of their retiree
health care benefits during their working lives and the Company matches the
employee prefunding. Benefits provided to retired employees are funded as
incurred. The Company recorded expenses related to health care benefits of
approximately $247,000, $170,000 and $155,000 in 1999, 1998 and 1997,
respectively, which were allocated to the Company based on the number of
Company employees participating in the plans and are included in employee
benefits in the table in Note 4.

6. INCOME TAXES

    The provision (benefit) for income taxes differed from amounts computed at
the statutory federal income tax rate as follows (in thousands):

<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                                     -------------------------------------
                                                                       1999          1998          1997
                                                                     ---------     ---------     ---------
              <S>                                                    <C>           <C>           <C>
              Statutory income tax benefit                           $ (7,221)     $ (7,448)     $ (6,552)
              State income taxes, net of federal tax benefit             (671)         (692)         (608)
              Losses for which no benefit has been recognized           7,886         8,135         7,155
              Other                                                         6             5             5
                                                                     --------      --------      --------
                        Total provision for income taxes             $     --      $     --      $     --
                                                                     --------      --------      --------
                                                                     --------      --------      --------
</TABLE>

    The components of the Company's deferred tax assets and liabilities as of
December 31, 1999 and 1998 were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                              1999     1998
                                                                            -------   ------
                                <S>                                         <C>       <C>
                                Depreciation and amortization               $ 1,293   $  690
                                Accrued expenses                                574      294
                                                                            -------   ------
                                                                              1,867      984
                                Less valuation allowance                     (1,867)    (984)
                                                                            -------   ------
                                          Total provision for income taxes  $    --    $  --
                                                                            -------   ------
                                                                            -------   ------
</TABLE>

    The losses attributable to the Company's operations for the years ended
December 31, 1999, 1998 and 1997 have been included in the consolidated income
tax return of AMR. As the Company has computed its provision for income taxes as
if it was a separate taxpayer, no tax benefit for the losses has been recognized
in the accompanying financial statements. The Company has entered into a tax
sharing agreement with Sabre and certain Sabre affiliates which prohibits the
Company from utilizing net operating losses it has generated as an operating
unit of Sabre. Accordingly, no deferred tax asset has been recorded related to
these operating losses.

    The losses attributable to the Company's operations for the years ended
December 31, 1999, 1998 and 1997 have been included in the consolidated income
tax return of AMR; accordingly, no future tax benefits will be contributed by
Sabre to the Company or to the partnership. Since the provision for income taxes
was prepared as if the Company were a separate taxpayer, no tax benefit for the
losses has been recognized in the accompanying financial statements. The Company
and the Partnership will file separate tax returns after the merger; neither
will be included in the Sabre or AMR tax return for periods after the merger.
See Note 10.

7. COMMITMENTS AND CONTINGENCIES

    In September 1998, the Company entered into an operating lease agreement
with a third party for the lease of certain facilities in San Antonio. At
December 31, 1999, the future minimum lease payments required under this
operating lease agreement were as follows (in thousands):

<TABLE>
<CAPTION>
                         YEAR ENDING DECEMBER 31,
                        -------------------------
                        <S>                              <C>
                                2000                     $  587
                                2001                        391
</TABLE>

    Rental expense, excluding facilities rented from affiliates, was
approximately $585,000 and $200,000 for the years ended December 31, 1999 and
1998. All rental expense in 1997 was with affiliated companies (Note 4).

                                      43
<PAGE>

    The Company is involved in certain disputes arising in the normal course of
business. Although the ultimate resolution of these matters cannot be reasonably
estimated at this time, management does not believe that they will have a
material adverse effect on the financial condition or results of operations of
the Company.







                                         44
<PAGE>



8. STOCK AWARDS AND OPTIONS

    During 1996, certain officers and key employees of the Company were awarded
options to purchase 8,600 shares of Sabre Class A Common Stock and 8,600 shares
of deferred Sabre Class A Common Stock with a weighted-average grant date fair
value of $27.00 per share to be issued upon the individuals' retirement from
Sabre. The restricted shares generally vested over three years following the
date of grant. All of the shares were fully vested at December 31, 1999.

    In 1996, Sabre established the 1996 Long-Term Incentive Plan (the "1996
Plan") in which the employees of the Company participate. Under the 1996 Plan,
officers and other key employees of the Company may be granted restricted stock,
deferred stock, stock options, stock appreciation rights, stock purchase rights,
other stock based awards and/or performance related awards.

    The total charge for stock compensation expense related to grants of Sabre
stock made to employees of the Company included in wages, salaries and benefits
expense was approximately $656,000, $316,000 and $87,000 for 1999, 1998 and
1997, respectively. No compensation expense has been recognized for stock option
grants because the exercise price of stock options granted was equal to the fair
market value of the underlying stock on the date of grant.

    Sabre Class A Common Stock performance shares ("Sabre Performance Shares")
have also been awarded at no cost to officers and key employees of the Company
based on performance metrics of the Company and Sabre as defined in the 1996
Plan. The Sabre Performance Shares vest over a three-year performance period and
are settled in cash. Sabre Performance Share activity for the Company's
employees was as follows:

<TABLE>
<CAPTION>
                                                   YEAR ENDED DECEMBER 31,
                                               ------------------------------
                                                1999       1998        1997
                                               -------    -------     -------
                <S>                             <C>        <C>        <C>
                Outstanding at January 1        3,730      2,890       3,060
                Granted                         1,290      1,990       1,660
                Transfers                          --        430         340
                Awards settled in cash           (930)      (640)         --
                Canceled                         (610)      (940)     (2,170)
                                                -----      -----      ------
                Outstanding at December 31      3,480      3,730       2,890
                                                -----      -----      ------
                                                -----      -----      ------
</TABLE>

    The weighted-average grant date fair values of Sabre Performance Shares
granted during 1999, 1998 and 1997 were $40.56, $35.75 and $26.25, respectively.
The grant date fair values are based on the price of Sabre's common stock on
the date of grant.

    Options to purchase Sabre Class A Common Stock ("Sabre Options") granted to
employees of the Company have been granted at the market value of Sabre Class A
Common Stock on the date of grant, except as otherwise determined by a committee
appointed by the board of directors, generally vest over five years and are not
exercisable more than ten years after the date of grant. Activity for Sabre
Options follows:

<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------------------------------
                                                  1999                      1998                      1997
                                          ------------------------ ------------------------ --------------------------
                                                       WEIGHTED-                WEIGHTED-                 WEIGHTED-
                                                        AVERAGE                  AVERAGE                   AVERAGE
                                                       EXERCISE                 EXERCISE                  EXERCISE
                                            OPTIONS      PRICE       OPTIONS      PRICE       OPTIONS       PRICE
                                            -------      -----       -------      -----       -------       -----
<S>                                         <C>         <C>          <C>         <C>          <C>          <C>
     Outstanding at January 1               21,490      $ 29.44      20,650      $ 25.13      18,650       $ 25.11
     Granted                                17,450        43.72      10,650        35.75       5,500         26.26
     Transfers                               2,340        35.75       1,100        35.75         850         27.00
     Exercised                              (5,790)       26.80      (5,120)       23.04          --            --
     Canceled                               (2,790)       34.29      (5,790)       32.58      (4,350)        26.85
                                            ------                   ------                   ------
     Outstanding at December 31             32,700        37.33      21,490         29.44     20,650          25.13
                                            ------                   ------                   ------
                                            ------                   ------                   ------
     Exercisable options outstanding
        at December 31                       3,240      $ 25.64       4,020      $ 24.91       5,130       $ 23.01
                                            ------                   ------                   ------
                                            ------                   ------                   ------
</TABLE>

    The weighted-average grant date fair values of stock options granted during
1999, 1998 and 1997 were $17.64,

                                            45
<PAGE>

$12.86 and $9.45, respectively. The grant date fair values were estimated at
the date of grant using the Black-Scholes option-pricing model.

    The following table summarizes information about the Sabre Options granted
to employees of the Company outstanding at December 31, 1999:

<TABLE>
<CAPTION>
                                                WEIGHTED-
                               NUMBER OF         AVERAGE           WEIGHTED-        NUMBER OF      WEIGHTED-
            RANGE OF            OPTIONS       REMAINING LIFE        AVERAGE          OPTIONS        AVERAGE
        EXERCISE PRICES       OUTSTANDING        (YEARS)         EXERCISE PRICE    EXERCISABLE  EXERCISE PRICE
        ---------------       -----------        -------         --------------    -----------  --------------
<S>                              <C>               <C>              <C>              <C>
        $16.52-$19.49               320            4.82             $ 16.52            320          $ 16.52
        $19.50-$24.49               960            5.76               21.82            640            21.82
        $24.50-$35.49             7,200            6.85               26.88          2,020            27.00
        $35.50-$43.60            21,720            8.88               38.87            260            35.75
        $43.61-$62.63             2,500            9.59               62.63             --               --
                                 ------                                              -----
                  Total          32,700            8.36             $ 37.33          3,240          $ 25.64
                                 ------                                              -----
                                 ------                                              -----
</TABLE>

    For other stock-based awards, a committee established by the Sabre board of
directors determines the eligible persons to whom awards will be made, the times
at which the awards will be made, the number of shares to be awarded, the price,
if any, to be paid by the recipient and all other terms and conditions of the
award under the terms of the 1996 Plan at the time of grant.

    Stock appreciation rights may be granted in conjunction with all or part of
any stock option granted under the 1996 Plan. All appreciation rights will
terminate upon termination or exercise of the related option and will be
exercisable only during the time that the related option is exercisable. If an
appreciation right is exercised, the related stock option will be deemed to have
been exercised. To date, no stock appreciation rights have been granted to
employees of the Company.

    Effective January 1, 1997, Sabre Holdings Corporation established The Sabre
Group Holdings, Inc. Employee Stock Purchase Plan (the "ESPP") in which the
employees of the Company participate. The ESPP allows eligible employees the
right to purchase Sabre Class A Common Stock on a monthly basis at the lower of
85% of the market price at the beginning or the end of each monthly offering
period. The ESPP allows each employee to acquire Sabre Class A Common Stock with
an aggregate maximum purchase price equal to either 1% or 2% of that employee's
annual base pay, subject to limitations under the Internal Revenue Code of 1986.
Under the plan, 13,667, 1,574 and 1,001 shares were issued to the Company 's
employees during 1999, 1998 and 1997, respectively.

    In connection with the payment of the $675 million dividend on February 18,
2000 (Note 10), Sabre adjusted the terms of its outstanding employee stock
option plans such that the exercise price per share for each option was reduced
and the number of options held by each employee was increased to ensure that the
aggregate intrinsic value of each employee's option holdings was the same before
and after the effect of the payment of the dividend on the price of Sabre's
Class A common stock. Such adjustment to the option terms was done in accordance
with Emerging Issues Task Force Consensus No. 90-9, CHANGES TO FIXED EMPLOYEE
STOCK OPTION PLANS AS A RESULT OF EQUITY RESTRUCTURING. Accordingly, no
compensation expense will be recorded by the Company as a result of the
adjustment.

    On October 1, 1999, the Company adopted certain long-term incentive plans
and granted to employees 742,400 options to purchase shares of the Company's
stock, all of which were still outstanding at December 31, 1999. The options
vest 25% on the first anniversary of the date of grant and monthly thereafter
until fully vested on the fourth anniversary of the grant. The options granted
are not exercisable more than ten years after the date of grant and have an
exercise price of $23 per share, the estimated fair market value of the
Company's stock on the date of grant.

    As required by Statement of Financial Accounting Standards No. 123,
ACCOUNTING FOR STOCK-BASED COMPENSATION, pro forma information regarding net
income and earnings per share have been determined as if the Company had
accounted for Sabre employee stock options issued to its employees and
stock-based awards under the fair value method set forth in Statement No. 123.
The fair value for the stock options granted by Sabre to officers and key
employees of the Company after January 1, 1995 was estimated at the date of
grant using the Black-Scholes option pricing model with the following
weighted-average assumptions: risk-free interest rate of 5.24% to 6.09% for
1999, 5.45% to 5.67% for 1998 and 6.20% to 6.70% for 1997; a dividend yield of
0%; a

                                       46
<PAGE>

volatility factor of the expected market price of Sabre's Class A Common
Stock of .39 for 1999, .32 for 1998 and .29 for 1997; a volatility factor of the
expected market price of Travelocity.com's Class A Common Stock of 1.08; and a
weighted-average expected life of the options granted of 4.5 years.

    The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because employee stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of stock options issued to the Company's employees.

    For purposes of the pro forma disclosures, the estimated fair value of the
options and stock-based awards is amortized to expense over the vesting period.
The Company 's pro forma information is as follows (in thousands):

<TABLE>
<CAPTION>
                                          YEAR ENDED DECEMBER 31,
                                   -------------------------------------
                                      1999         1998          1997
                                   ----------   ----------    ----------
                <S>                <C>          <C>           <C>
                Net loss:
                  As reported      $ (20,631)   $ (21,280)    $ (18,720)
                                   ---------    ---------     ---------
                  Pro forma        $ (21,541)   $ (21,320)    $ (18,748)
                                   ---------    ---------     ---------
                                   ---------    ---------     ---------
</TABLE>

9. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

    The following is a summary of the unaudited quarterly financial information
for the years ended December 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                             FIRST     SECOND      THIRD     FOURTH
                            QUARTER    QUARTER    QUARTER    QUARTER
                            -------    -------    -------    -------
        <S>                <C>        <C>        <C>        <C>
        1999
        Revenues           $ 10,728   $ 13,103   $ 17,573   $ 22,783
        Operating loss       (6,120)    (5,630)    (3,307)    (5,574)
        Net loss             (6,120)    (5,630)    (3,307)    (5,574)

        1998
        Revenues           $  3,861   $  4,525   $  5,677   $  7,175
        Operating loss       (5,909)    (5,150)    (5,144)    (5,077)
        Net loss             (5,909)    (5,150)    (5,144)    (5,077)
</TABLE>

10. SUBSEQUENT EVENTS

    MERGER WITH PREVIEW TRAVEL, INC.

    On March 7, 2000, the merger with Preview Travel was closed. In the merger,
Preview Travel, which was also engaged in consumer direct Internet travel
distribution, was merged with and into the Company, with the Company being the
surviving corporation. Each share of Preview Travel common stock was converted
into one share of the Company's common stock. Approximately 14.4 million shares
of the Company's common stock were issued to former Preview Travel stockholders
in the merger. The shares of the Company's common stock beneficially held by
Travelocity Holdings, a wholly owned subsidiary of Sabre, at December 31, 1999
were converted in the merger into 33 million shares of Series A Preferred Stock.
The preferred stock is convertible into 3 million shares of the Company's common
stock, and the preferred stock receives dividends and distributions on a basis
as if it were converted into common stock. Travelocity Holdings also has the
right to exchange one partnership unit and one share of the Company's Series A
Preferred Stock for one share of the Company's common stock at any time. If
Travelocity Holdings exercised its right to convert its partnership units into
common stock, then the Company would have approximately 48.7 million common
stock equivalent shares outstanding, of which former Preview Travel
stockholders and Yahoo! would own 30% and Sabre would own 70%.

    Travelocity Holdings also owns 1.2 million shares of the Company's common
stock from the investment of $50 million prior to the merger. Additionally,
Yahoo! purchased approximately 175,000 shares of the Company's common stock on
the date of the merger.

    Economically, therefore, the Company has approximately 18.7 million common
stock equivalent shares outstanding after the merger, assuming conversion of the
preferred stock held by Travelocity Holdings. The shares of common stock issued
to former Preview Travel stockholders and Yahoo! represents an approximate 78%
(14.5

                                       47
<PAGE>

million out of 18.7 million) equity interest in the Company, and the
shares of preferred stock plus common stock issued to Travelocity Holdings
represents an approximate 22% (4.2 million out of 18.7 million) equity interest
in the Company.

    Immediately after the merger, the Company contributed all of the Preview
Travel assets and liabilities to the Partnership as well as the $50 million
received from Travelocity Holdings. In exchange, the Company received
partnership units representing in total an approximate 38% equity interest in
the Partnership. As a result, the Company became a holding company whose sole
asset is its interest in the Partnership.

    As a result of the merger and Partnership contributions, the Preview Travel
stockholders became the Company's public stockholders and received shares of
common stock in the merger that equates to approximately a 30% equity interest
in the combined assets and liabilities of the Travelocity Division and Preview
Travel held by the Partnership -- that is, 78% (their equity interest in the
Company) of the 38% equity interest in the Partnership held by the Company.

    Sabre beneficially holds an approximate 70% equity interest in the
Partnership -- that is:

    -- a 62% equity interest held directly or through its affiliates, plus

    -- an 8% equity interest held through the Company -- that is, 22% (its
       equity interest in the Company) of 38% (the Company's equity interest
       in the Partnership).

    ACCOUNTING FOR THE MERGER

    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.
Accordingly, the general presumption is overcome and the Company will
consolidate the Partnership into its financial statements. Furthermore, although
Travelocity Holdings will manage the day to day operations of the Partnership
pursuant to a management services agreement (described below), it is 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 will include the financial
statements of the Company and the Partnership, with Sabre's 62% 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
Company's consolidated results of operations and financial position will consist
of the total of 38% of the Partnership's results and 100% of the Company's
results.

    Goodwill and other intangible assets totaling approximately $252 million
will be recorded by the Partnership as a result of the merger. The goodwill and
other intangible assets will be amortized over a three year period.

    TRAVELOCITY.COM PARTNERSHIP

    Travelocity.com LP is a Delaware limited partnership. Applicable Delaware
law and the Partnership agreement govern its operations. Following the merger,
the Partnership owns the combined Travelocity Division and Preview Travel
business and has full power and authority to operate the Travelocity.com
business. The Partnership is governed by a nine member board of directors.
Sabre has the right to elect four directors, and the Company has the right to
elect the remaining five directors of the Partnership.

    The partners in the Partnership are:

    --    Travelocity.com Inc. and its wholly-owned subsidiary, Travelocity.com
          LP Sub, Inc., and

    --    Sabre and its wholly-owned subsidiaries Travelocity Holdings and TSGL
          Holding (the "Sabre Partners").

                                             48
<PAGE>

    The general partners are Travelocity.com Inc. and Travelocity Holdings. The
other partners are limited partners.

    PARTNERSHIP UNITS EQUIVALENT TO TRAVELOCITY.COM INC.'S COMMON STOCK. One
partnership unit is equivalent to one share of the Company's common stock. For
this reason, when the Company issues new common shares, the Partnership will
issue additional partnership units to the Company, and when the Company acquires
its own common shares, it will return the same number of partnership units to
the Partnership.

    To enable the Sabre Partners to maintain their proportionate interest in the
Partnership, Travelocity Holdings will have the right to contribute cash or
property to the Partnership in exchange for partnership units when the
Partnership issues additional partnership units to the Company because the
Company is issuing new shares of common stock. However, the Sabre Partners will
not have this right when the Company issues its common stock to employees upon
the exercise of stock options. The Sabre Partners' equity interest in the
Partnership, and the equity interest of the Company's public stockholders, will
be diluted in that case.

    SPECIAL MAJORITY APPROVAL RIGHTS. As long as the Sabre Partners own 30% or
more of the partnership units, a special majority of the Partnership's board,
including at least one director designated by the Company and one director
designated by Travelocity Holdings, must approve any action to admit a new
partner; to consolidate or merge the Partnership with another entity; to
liquidate or dissolve the Partnership, initiate bankruptcy proceedings, or
dispose of substantially all of the Partnership's assets; to enter into any line
of business other than providing consumer-direct travel content, travel
reservation services and related goods and services through Internet Web sites;
to issue, directly or indirectly, any partnership units other than as the
Partnership agreement expressly permits; or to make distributions of cash or
property to partners, or acquire partnership interests, except as the
Partnership agreement expressly permits.

    PARTNERS' ACCOUNTS AND DISTRIBUTIONS. The partnership agreement contains
customary provisions regarding the partners' capital accounts, the allocation of
profits and losses, and distributions to the partners. The Partnership will make
distributions to the partners so they may pay any taxes they incur in connection
with the Partnership. As the tax matters partner, Travelocity Holdings will make
tax elections for the Partnership and cause the Partnership to prepare tax
returns.

    As of December 31, 1999, Preview Travel had a net operating loss
carry-forward for federal income tax purposes of $91.6 million. The Partnership
agreement provides that the Company must contribute to the Partnership the tax
benefit that the Company realizes from net operating loss deductions inherited
from Preview Travel in the merger. As a result, the partners will share the
benefit associated with Preview Travel's losses in proportion to their ownership
of the Partnership. In addition, the partnership agreement provides that the
Company must make additional contributions to the Partnership if the Company
receives tax benefits attributable to its share of the Partnership's losses.

    Due to changes in the Company's ownership after 1997, the amount of net
operating losses available to offset future federal income tax liabilities may
be limited. The Company believes that the limitation, if any, would not
materially adversely effect the Company's ability to utilize its net operating
losses.

    AGREEMENTS WITH AFFILIATED PARTIES

    In connection with the merger, the Company, the Partnership, Sabre and
certain of Sabre's affiliates have entered into certain agreements governing the
operations of the Partnership, the management of the day to day affairs of the
Partnership by employees of Travelocity Holdings, the contributions of the
assets and liabilities of the Travelocity Division and Preview Travel to the
Partnership and other agreements related to the separation of the Travelocity
Division from Sabre. These agreements are described below.

    NONCOMPETITION AGREEMENT. Sabre entered into a noncompetition agreement with
the Company and the Partnership. The noncompetition agreement generally
prohibits Sabre, subject to certain exceptions, from competing with the Company
in the consumer-direct real-time travel reservations, service and content
business through the Internet for two years after the merger. In addition, Sabre
is prohibited from owning 20% or more of the stock of any company over which
Sabre has effective control if the company competes with Travelocity.com in the
consumer-direct real-time travel reservations, services and content business
through the Internet unless Sabre uses reasonable efforts to divest itself of
the competing portion of the business within one year. Despite the

                                      49
<PAGE>

noncompetition agreement, Sabre may continue to offer travel related
reservations, services and content through and to travel agencies, corporations
and travel suppliers through which such entities enable consumers to book
reservations through the Internet, and may continue to offer Sabre's
"Virtually There Online" product directly to consumers over the Internet as
long as such product does not enable air, car, hotel, tour and cruise
bookings other than through the Company.

    MANAGEMENT SERVICES AGREEMENT. In connection with the merger, Travelocity
Holdings and the Partnership entered into a management services agreement under
which Travelocity Holdings will supervise and manage the day-to-day operations
of the Partnership, subject to the direction and oversight of the board of
directors of the Partnership. As the Partnership's agent, Travelocity Holdings
will act for the Partnership with respect to the management of the Partnership's
operations, personnel, maintenance of accounting records, and execution and
performance of contracts and licenses, among other responsibilities. Travelocity
Holdings will not have the authority to act for the Partnership with respect to
any agreement or transaction between the Partnership and Travelocity Holdings or
any of its affiliates. In addition, Travelocity Holdings will not have the
authority to approve on behalf of the Partnership any decisions that would
require a special majority vote under the partnership agreement. Travelocity
Holdings will agree not to directly or indirectly conduct any business other
than in connection with the ownership, acquisition and disposition of interests
in the Partnership and the Company, and the management of the Partnership's
day-to-day operations. The Partnership will pay Travelocity Holdings a fee equal
to its costs in performing services under the management services agreement,
including executive salaries, increased by 5%. The Partnership will also grant
Travelocity Holdings options to acquire the Company's common stock so that
Travelocity Holdings may concurrently grant options to acquire the Company's
common stock to certain Travelocity Holdings employees. When these options are
exercised, the Company will issue shares of its common stock and receive
additional partnership units. This will dilute Sabre's and the Company's public
stockholders' interest in the Company.

    INTERCOMPANY AGREEMENTS. The Partnership entered into a number of other
agreements with Sabre and its subsidiaries in order to separate the Company from
Sabre and to facilitate the Partnership's operation of the combined business of
the Company and Preview Travel after the merger. The most significant of these
agreements are described below. Although the parties intend that the terms of
these agreements will be consistent with current market standards, because Sabre
controls the Company and the Partnership, the agreements have not been
negotiated on an arm's-length basis. In addition to the terms summarized below,
the agreements include provisions for early termination, confidentiality,
indemnification, limitation of liability and other terms and conditions.

    -- Access Agreement-The Partnership and Sabre entered into an access
       agreement for the provision of booking services and travel content
       to the Partnership. The agreement generally restricts the
       Partnership's use of specified booking services that compete with
       Sabre's services. The agreement requires the Partnership to use the
       SABRE system, in any particular year, for a number of bookings that
       is at least equal to a specified percentage of its total bookings
       during the prior year. If the Partnership fails to meet this
       minimum booking threshold it will have to pay Sabre liquidated
       damages. In addition, the Partnership must use its reasonable
       efforts to maintain a system on the Partnership's Web site that
       enables referrals of bookings for ticketing by travel agencies
       using the SABRE system. The parties will renegotiate the
       Partnership's obligation to maintain this referral system every
       four years. Sabre will pay fees to the Partnership based on the
       gross number of travel segments that are booked through the
       Travelocity Web site in the SABRE system and the gross number of
       passenger name records in the SABRE system which originate through
       the Travelocity Web site and are referred to a Sabre travel agency
       for ticketing. Sabre will also pay fees to the Partnership for
       additional marketing obligations undertaken by the Partnership. The
       Partnership will pay fees to Sabre based on the Partnership's use
       of messages and terminal addresses in the SABRE system. The pricing
       structure will be open for negotiation every four years, within
       parameters appropriate for Sabre customers of similar size,
       configuration and business activity to the Partnership and other
       relevant market comparisons. The term of the agreement will be 15
       years, although the Partnership may terminate the agreement earlier
       if Sabre fails to remain one of the four largest global
       distribution systems in the North American market, as determined by
       the number of air travel bookings in North America.

    -- Technology Services Agreement-The Partnership entered into a technology
       services agreement with Sabre for the provision of certain base
       services, including voice and data management services, Web hosting
       services, and Sabre development services relating to its global
       distribution system. The agreement also covers non-variable services
       which Sabre may provide at the Partnership's request. Sabre's charges
       for technology services may be reset annually, based on current market
       rates. Sabre has the exclusive right to provide the base services, and
       specified variable services. The Partnership may have Sabre provide

                                         50
<PAGE>

     technology services with respect to the current Preview Travel
     operations. The Partnership intends to do most of its own web
     development. This agreement is anticipated to cover the following
     areas on the terms discussed below.

          DATA AND VOICE MANAGEMENT. For three years, Sabre will provide
          standard data and voice management services including management of a
          domestic data network, custom data network, remote connectivity,
          inbound/outbound voice, voicemail and 800 services, among others. Data
          and voice management services generally are priced as a pass-through
          of charges assessed by third party network providers, together with a
          management fee payable to Sabre.

          WEB HOSTING. The Web hosting services are divided into standard and
          optional services. The standard Web hosting services include Internet
          access, data center and systems monitoring, and back-up services. The
          optional Web hosting services include premium capacity planning,
          hardware and software, asset management, technical consulting and
          change management. Sabre will provide these services for an initial
          term of six months, after which the Partnership may terminate the
          services or renew them for one six month term, during which either
          party may cancel the services with 90 days' notice. If the Partnership
          elects to use a third party for this service, the Partnership will
          have to relocate its hardware and infrastructure from Sabre's Tulsa
          facility. Web hosting services are priced based on several factors
          including data center floor space utilization, number of servers
          operated and monitored, number of network devices, service functions,
          and other variable service charges.

          DEVELOPMENT. The Partnership will purchase systems development
          resources relating to the SABRE system from Sabre and Sabre will
          provide related development services based on rolling annual
          development requirements and project plans. In addition, each party
          must allow the other party to bid for specified development projects
          of the other party which are subject to bids, requests for proposals
          or other competitive offer processes. The parties will establish
          guidelines to protect and, in some cases, license and sublicense the
          intellectual property developed through the provision of development
          services by Sabre or by the Partnership or through the joint
          development of a project by Sabre and the Partnership. The development
          services provision will last for a period of 15 years.

    --  Intellectual Property Agreement-Sabre and the Partnership executed an
        intellectual property agreement, in which the rights granted and
        restrictions imposed on both parties with respect to the pool of
        intellectual property subject to the agreement will continue in
        perpetuity. Each party has agreed, for a period of 15 years beginning
        on the close of the merger, to contribute any new intellectual property
        that has application in the other party's business, whether developed
        internally or acquired from a third party, to the pool of intellectual
        property that will be freely and irrevocably available for use by the
        other in its own business. The obligation of both parties to contribute
        newly acquired or developed intellectual property to the pool:

          will automatically terminate in the event that Sabre no longer
          possesses at least 20% of the Partnership units or otherwise no longer
          has control of the Partnership;

          may be terminated by the Partnership if, after expiration of the
          two-year non-competition agreement, described above, Sabre enters into
          a business that would have been subject to the non-competition
          restriction; and

          may be terminated by Sabre if the Company enters into the business of
          distributing travel inventory directly to travel agents or
          corporations or travel technology to any travel industry suppliers.

        The agreement imposes no restrictions on a party's ability to license
        its own intellectual property, except that certain intellectual property
        paid for by the other party at specified rates may not be licensed to
        the other party's competitors. Each party also may grant sublicenses
        under the other party's pool intellectual property, but only to third
        parties who are not competitors of the other party. Except under
        specific circumstances, neither party will be subject to any licensing
        fee or royalty payment in connection with its use or permitted
        sublicensing of the other party's intellectual property contributed
        to the pool.

    --  Facilities Agreement-Sabre leases two premises to the Partnership for an
        initial term of one year with automatic renewal. The Partnership may
        terminate the entire lease agreement on 60 days' notice and Sabre

                                        51
<PAGE>

        may terminate the agreement on one year's notice.

    --  Administrative Services Agreement-Sabre will offer and provide
        administrative services to the Partnership for a term of 15 years. The
        administrative services agreement categorizes the services as optional
        administrative services, such as human resources administration, legal,
        finance, accounting, facilities, corporate travel, and executive
        support, and required services, such as tax administration and human
        resources compliance service. Generally, any optional administrative
        service may be terminated by either party on six months' notice,
        effective as of June 1 or December 1 of the applicable calendar year.
        Most of the optional services are provided at Sabre's cost plus a 10%
        margin and the required services are provided at Sabre's cost.

    --  Cash and Short-term Investments Agreement-Sabre will act as, or
        outsource the function of, an investment adviser to manage and supervise
        assets, including cash and marketable securities, and employee benefit
        plan assets, which the Partnership wishes to invest. The agreement may
        be terminated by either party, with or without cause, upon sixty days'
        notice. The Partnership will pay market rates for the investment
        services as determined by Sabre, except for services passed through at
        Sabre's cost from AMR Investment Services, Inc., a wholly-owned
        subsidiary of AMR.

    STOCK OPTIONS AND AWARDS

    Employees of the Company and other Sabre employees who became employees of
the Partnership or Travelocity Holdings upon closing of the merger were given
the option to convert unvested Sabre options to options to acquire the Company's
stock. Approximately 256,000 unvested options were converted into 253,000
options to acquire the Company's Common Stock, based upon a price of the Sabre
Class A Common Stock of $42.43 per share and a price of the Company's Common
Stock of $42.90 per share. The conversion of the Sabre options to options to
acquire the Company's stock resulted in a new measurement date for the options.
As a result of the conversion, the Partnership will recognize stock compensation
expense of approximately $3.0 million which will be amortized over the average
remaining vesting period of 20 months.

    On March 7, 2000, employees of Travelocity Holdings and the Partnership were
granted 259,680 and 554,975 options respectively at an exercise price of $46.88
per share, the estimated fair market value of the Company's stock on the date of
grant. The options vest 25% on the first anniversary of the date of grant and
monthly thereafter until fully vested on the fourth anniversary of the grant.
The options are not exercisable more than ten years after the date of grant.

     SABRE CASH DIVIDEND AND SPIN-OFF FROM AMR

     On February 7, 2000, Sabre declared a one-time cash dividend on all
outstanding shares of Sabre's Class A and Class B Common Stock. The aggregate
amount of the dividend was $675 million or approximately $5.20 per share and was
paid to Sabre's shareholders on February 18, 2000. In connection with the
payment of the dividend, certain adjustments were made to the terms of
outstanding employee stock options (Note 8).

    On March 15, 2000 AMR exchanged all of its shares of Sabre's Class B
Common Stock for an equal number of shares of Sabre's Class A Common Stock
and distributed such shares to AMR shareholders as a stock dividend. The
distribution consisted of AMR's entire ownership interest in Sabre.

    INVESTMENT IN HOTEL RESERVATION NETWORK

    On January 29, 2000, the Company entered into an affiliation agreement with
Hotel Reservation Network ("HRN") whereby the Company agreed to market HRN's
services via the Internet. In connection with the agreement, the Company
received warrants from HRN to purchase shares of HRN common stock, which were
recorded at their estimated fair value of approximately $2.5 million. The
Company will recognize the fair value of these warrants as revenue over a
three-year period. The Company also received additional warrants from HRN which
are contingent upon the performance of the Company over a three-year period. The
Company will recognize revenue for these warrants if and when earned. On
February 25, 2000, the Company purchased 135,000 shares of HRN Class A Common
Stock for approximately $2.2 million.

                                           52
<PAGE>




ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          None.

                                    PART III
--------------------------------------------------------------------------------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


          EXECUTIVE OFFICERS OF THE REGISTRANT

          The executive officers of the Company, their positions and ages as of
December 31, 1999 are as follows:

Terrell B. Jones....... President and Chief Executive Officer of Travelocity.com
                        Inc. and the Partnership since September 1999.
                        Executive Vice President of the Travelocity Division
                        of Sabre and Chief Information Officer from July 1996
                        to September 1999. President of Sabre Computer
                        Services from 1993 to 1996; Division Vice President
                        of SCS Systems Planning & Development for American
                        from 1991 to 1993; Managing Director & Vice President
                        of STIN Product Development for American from 1987 to
                        1991. Age 51.

James D. Marsicano....  Executive Vice President of Sales and Service of
                        Travelocity.com Inc. and the Partnership since September
                        30, 1999. Senior Vice President and General Manager of
                        Sabre's Travelocity Division from July 1996 to September
                        1999. Managing Director of Commercial Sales at American
                        Airlines from 1992 to July 1996. Age 56.

Andrew B. Steinberg...  Executive Vice President Administration, General Counsel
                        and Corporate Secretary of Travelocity.com Inc. and
                        the Partnership since March 7, 2000. Executive Vice
                        President, General Counsel and Corporate Secretary of
                        Sabre since October 1996. Associate General Counsel
                        for American from 1994 to 1996; Senior Attorney for
                        American from 1991 to 1994. Age 41.

Ramesh K. Punwani.....  Chief Financial Officer of Travelocity.com Inc. and the
                        Partnership since February 2000. Director of Business
                        Development and Acting Vice President of Cruise and Tour
                        Relations for the Consumer Travel Executive Team of
                        American Express, a travel services company from
                        September 1999 to February 2000. Interim Chief Financial
                        Officer of KIWI International Holdings, an airline
                        company from April 1999 until September 1999. Consultant
                        for Cambridge Partners, an investment advisory and
                        management firm, from January 1998 through June 1999,
                        and North Atlantic Aviation, a travel services company,
                        from June 1998 through April 1999. Vice President and
                        Chief Financial Officer for Tower Air, an airline
                        company, from September 1996 through January 1998.
                        Senior Vice President and Chief Financial Officer for
                        Empire Blue Cross Blue Shield, a health insurance
                        provider, from September 1993 through September 1996.
                        Mr. Punwani served in a variety of roles at Pan
                        American, an airline company, since 1986, culminating in
                        his position as Senior Vice President and Chief
                        Financial Officer. Age 57.

         All officers serve at the discretion of the Board of Directors.

                                              53
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION


                     TRAVELOCITY.COM EXECUTIVE COMPENSATION

    The following table sets forth all compensation awarded to, earned by, or
paid to the Company's and the Partnership's Chief Executive Officer and the
other individuals who are the Company's and the Partnership's most highly
compensated executive officers, and whose total cash compensation is expected
to exceed $100,000. We refer to these individuals as the "Named Executive
Officers." The following information reflects compensation paid to such
individuals for the fiscal years ended December 31, 1999 and 1998. While this
compensation table indicates the compensation paid by Sabre to the Named
Executive Officers in 1999 and 1998, it does not necessarily indicate the
compensation that Travelocity Holdings, the Company, or the Partnership pays
to them. The Named Executive Officers are employed and paid by Travelocity
Holdings pursuant to the management services agreement between Travelocity
Holdings and the Partnership. In addition, under the management services
agreement Travelocity Holdings designates the executive officers of the
Partnership, subject to the approval of the Partnership board of directors.

                            SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                   LONG-TERM
                                                                                                  COMPENSATION
                                                                                            -----------------------
                                                                                              AWARDS       PAYOUTS
                                                                                            ----------    ---------
                                     ANNUAL COMPENSATION                                    SECURITIES
                             FISCAL  -------------------   OTHER ANNUAL   RESTRICTED STOCK  UNDERLYING      LTIP        ALL OTHER
NAME AND PRINCIPAL POSITION   YEAR   SALARY($)     BONUS   COMPENSATION        AWARDS       OPTIONS(#)   PAYOUTS(1)  COMPENSATION(2)
---------------------------   ----   ---------     -----   ------------        ------       ----------   ----------  ---------------
<S>                           <C>    <C>        <C>        <C>            <C>               <C>          <C>         <C>
Terrell B. Jones,             1999   $308,750   $160,000             --            --         317,600(3)   349,688        $ 9,574
  Chief Executive Officer     1998    293,708    140,000             --            --          17,600      326,398         10,011

James D. Marsicano,           1999    152,063     45,619             --            --          79,400(3)    37,172             --
  Executive Vice President    1998    129,558     53,030             --            --           4,400       27,681             --
  of Sales and Service

Andrew B. Steinberg,          1999    218,333    115,000             --            --          90,000      279,844         22,271
  Executive Vice President    1998    197,708     95,000             --            --          21,000      313,242         18,785
  Administration, General
  Counsel and Corporate
  Secretary
</TABLE>
----------

(1) The amount shown represents payments made in 1998 under the Sabre 1996-1998
    performance share program for Sabre performance shares that were granted in
    1996. The amount shown for payments made in 1999 are under the Sabre
    1997-1999 performance share program for Sabre performance shares that were
    granted in 1997. Performance shares for Messrs. Jones, Marsicano and
    Steinberg have not and will not convert to performance shares or other
    stock awards of the Company.

(2) The information shown for Mr. Jones includes: in 1999, $3,496, and in 1998,
    $3,933 representing the above-market portion of interest, defined as a rate
    of interest exceeding 120% of the applicable federal long-term rate, with
    compounding, on deferred compensation that was credited but not paid in 1999
    and 1998 respectively; and $6,078 in each of 1999 and 1998, representing the
    full amount of premiums paid under a split-dollar life insurance arrangement
    which provides for Sabre to recover part of the premiums paid. The
    information shown for Mr. Steinberg includes: employer contributions to a
    plan under Section 401(k) of the Internal Revenue Code that is sponsored by
    Sabre of $9,200 in each of 1999 and 1998; employer contributions to a
    supplemental executive retirement plan that provides pension benefits to
    officers who earned in excess of qualified plan limits (currently $160,000)
    of $8,817 in 1999 and $5,331 in 1998; and $4,254 in each of 1999 and 1998,
    representing the full amount of premiums paid under a split dollar life
    insurance arrangement which provides for Sabre to recover part of the
    premium's paid.

(3) The amounts shown represent for Mr. Jones options to purchase 300,000 shares
    of the Company's common stock and options to purchase 17,600 shares of Sabre
    Class A Common Stock, and for Mr. Marsicano options to purchase 75,000
    shares of the Company's common stock and options to purchase 4,400 shares of
    Sabre Class A Common Stock.

                                            54
<PAGE>

    Prior to the merger, Mr. Jones served as Executive Vice President,
Travelocity Division of Sabre Holdings Corporation and, since September 30,
1999, as President and Chief Executive Officer, Travelocity.com. Mr. Marsicano
previously served as Senior Vice President and General Manager of Sabre's
Travelocity Division. Mr. Steinberg served as Executive Vice President,
General Counsel and Corporate Secretary of Sabre.

    The "Salary" column includes amounts contributed on behalf of each Named
Executive Officer to a 401(k) plan of his former employer at the officer's
election.

    The "Securities Underlying Options" column reflects all options granted to
each Named Executive Officer by his employer. Sabre granted options to purchase
shares of its Class A Common Stock to the Named Executive Officers, and
Travelocity Holdings granted options to purchase shares of the Company's common
stock to Messrs. Jones and Marsicano. In connection with the merger, Messrs.
Jones, Marsicano and Steinberg elected to convert all of their unvested Sabre
options into options to purchase shares of the Company's common stock. The
vesting schedule for converted Sabre options will remain unchanged, as described
in the discussion accompanying the "Options Granted" table.

OPTION GRANTS DURING FISCAL 1999

    The following table sets forth information concerning stock options granted
during 1999 by Sabre and the Company to the listed individuals. Except as noted
below, the grants relate to options to purchase shares of Sabre's Class A Common
Stock. Neither Sabre nor the Company granted any stock appreciation rights to
any of these individuals during fiscal 1999.

                                                OPTIONS GRANTED
<TABLE>
<CAPTION>
                                                                                     POTENTIAL REALIZABLE
                                                                                       VALUE AT ASSUMED
                             NUMBER OF                                               ANNUAL RATES OF STOCK
                            SECURITIES     % OF TOTAL                                PRICE APPRECIATION FOR
                            UNDERLYING   OPTIONS GRANTED  EXERCISE                       OPTION TERM
                              OPTIONS    TO EMPLOYEES IN    PRICE     EXPIRATION  ---------------------------
    NAME                   GRANTED(#)(1)   FISCAL YEAR    ($/SHARE)      DATE         5%              10%
    ----                   -------------   -----------    ----------   ---------- ------------   ------------
<S>                          <C>              <C>        <C>           <C>        <C>            <C>
Terrell B. Jones.....         17,600            .72      $  60.3125    04/26/09   $  667,577     $  1,691,713
                             300,000(2)       40.41      $  23.00      10/01/09    4,339,410       10,996,530
James D. Marsicano...          4,400            .18      $  40.5625    03/22/09      112,243          284,436
                              75,000(2)       10.10      $  23.00      10/01/09    1,084,853(2)     2,749,133(2)
Andrew B. Steinberg..         15,000(3)         .61      $  46.6563    01/25/09      440,132        1,115,342
                              75,000(4)        3.05      $  50.1875    12/13/09    2,367,219(4)     5,998,786(4)
</TABLE>
----------

(1)   In connection with the merger, Messrs. Jones, Marsicano and Steinberg
      elected to convert all of their unvested options to purchase shares of
      Sabre Class A Common Stock to options to purchase shares of the Company's
      common stock. The number of options issued on conversion for Messrs.
      Jones, Marsicano and Steinberg were 92,360, 15,070 and 134,374,
      respectively. The converted options will keep their original vesting
      schedule, which provides for vesting in annual 20% increments over the
      original five year period. The converted options will have their original
      ten year term.

(2)   Represents options to purchase shares of the Company's common stock.
      Twenty five percent of the options will vest on the first anniversary of
      the date of grant, and the remainder will vest in equal increments over
      the following 36 months until fully vested on the fourth anniversary of
      grant. The options have a ten year term.

(3)   Represents normal 1999 grant of options to purchase Sabre Class A Common
      Stock.

(4)   Represents options to purchase Sabre Class A Common Stock consisting of
      the normal 2000 grant, recognition of contribution to strategic
      transactions and retention as a key executive.

    The SEC mandates the 5% and 10% assumed annual rates of compounded stock
price appreciation. We do not assure any executive officer or any other
stockholder that the stock price will appreciate at the 5% and 10% levels, or at
any other defined level. If the market price of the stock does not appreciate
over the option term, the Named

                                      55
<PAGE>

Executive Officers will not realize any value from these option grants.

OPTION EXERCISES DURING FISCAL 1999

    The following table sets forth information concerning options exercised by
Named Executive Officers in 1999. The table sets forth exercises of options to
purchase Sabre Class A Common Stock. The table also sets forth the number and
value of unexercised in-the-money options for Sabre Class A Common Stock and the
Company's common stock held by these individuals at December 31, 1999.

               AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTIONS/SAR VALUE

<TABLE>
<CAPTION>
                                                    NUMBER OF SECURITIES             VALUE OF UNEXERCISED
                                                   UNDERLYING UNEXERCISED                IN-THE-MONEY
                          SHARES                   OPTIONS/ SARS AT FY-END          OPTIONS/ SARS AT FY-END
                         ACQUIRED    VALUE     -------------------------------    ------------------------------
NAME                    ON EXERCISE REALIZED   EXERCISABLE       UNEXERCISABLE    EXERCISABLE   UNEXERCISABLE(1)
----                    ----------- --------   -----------       -------------    -----------   ----------------
<S>                      <C>        <C>           <C>              <C>            <C>              <C>
Terrell B. Jones......   15,210     $587,976      78,800           382,240(2)     $1,956,111       $9,993,716(2)
James D. Marsicano....    4,490      119,053       2,980            88,420(3)         57,978        2,271,238(3)
Andrew B. Steinberg...   14,150      522,443      32,310           126,850           815,313        1,122,368
</TABLE>
----------

(1) Based on an average market price of $51.8125 for Sabre's Class A Common
    Stock on the NYSE on December 31, 1999, minus the exercise price, multiplied
    by the number of shares underlying the option, and a fair market value of
    $51.375 for Preview Travel's common stock on December 31, 1999 minus the
    exercise price, multiplied by the number of shares underlying the option.

(2) Includes options to purchase 300,000 shares of the Company's common stock
    with a fiscal year-end value of $8,512,500.

(3) Includes options to purchase 75,000 shares of the Company's common stock
    with a fiscal year-end value of $2,128,125.

    The "Value Realized" column represents the difference between the fair
market value of the underlying securities on the date of exercise and the
exercise price of the option. The value of the unexercised in-the-money options
to purchase shares of Travelocity.com common stock was based on the closing
price of Preview Travel common stock on December 31, 1999.

LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR

    Under Sabre's 1996 Long-Term Incentive Plan, Sabre awarded deferred shares
of Sabre's Class A Common Stock to the Named Executive Officers. Under Sabre's
1998-2000 Performance Share Program, Sabre granted performance shares to the
Named Executive Officers, consisting of deferred shares of Sabre's Class A
Common Stock issued under the 1996 plan. Sabre granted these shares contingent
on the increase in the share price of Sabre Class A Common Stock plus dividends
over the measurement period expressed as a percentage of the beginning share
price performance relative to same performance standard for the S&P 500
companies over a three year performance period. Messrs. Jones, Marsicano and
Steinberg will not participate in future award cycles.

             LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                    NUMBER OF     PERFORMANCE OR     ESTIMATED FUTURE PAYOUTS UNDER
                                SHARES, UNITS OR   OTHER PERIOD        NON-STOCK PRICE BASED PLANS
                                      OTHER      UNTIL MATURATION   --------------------------------
NAME                                RIGHTS(1)        OR PAYOUT      THRESHOLD     TARGET     MAXIMUM
----                            ---------------  ----------------   ---------     ------     -------
<S>                                  <C>            <C>                <C>        <C>        <C>
Terrell B. Jones...........          6,960          12/31/01           0          6,960      13,920
James D. Marsicano.........            730          12/31/01           0            730       1,460
Andrew B. Steinberg........          2,300          12/31/01           0          2,300       4,600
</TABLE>

----------

(1) All awards were grants of Sabre performance shares.

                                        56
<PAGE>


EMPLOYMENT AGREEMENTS

    Travelocity Holdings and Mr. Jones are currently negotiating the final
terms and conditions of an employment agreement effective as of March 7,
2000, which was approved in substance by Sabre's Compensation/Nominating
Committee in January 2000. Under the new employment agreement, Travelocity
Holdings will provide to Mr. Jones termination benefits if Travelocity
Holdings were to involuntarily terminate him without cause (other than in
connection with a change in control or a change in the equity structure of
the Company, both as described below). These benefits include:

    -- a lump sum payment equal to one year's salary and target bonus in
       effect at the time of termination;

    -- acceleration of any vesting periods for Mr. Jones' options to purchase
       the Company's common stock by one year;

    -- continuation of his health and insurance benefits for one year; and

    -- a period of 90 days from the date of termination to exercise his
       vested options to purchase the Company's common stock.

    If Travelocity Holdings involuntarily terminates Mr. Jones without cause
within two years of a change in control, as defined in the Travelocity
Holdings, Inc. 1999 Long-Term Incentive Plan, Travelocity Holdings would
provide him with the following termination benefits:

    -- a lump sum payment equal to two years' salary and target bonus in
       effect at the time of termination;

    -- immediate acceleration of any vesting periods for Mr. Jones' options
       to purchase the Company's common stock;

    -- continuation of his health and insurance benefits for two years; and

    -- a period of 90 days from the date of termination to exercise his
       vested options to purchase the Company's common stock.

    If Travelocity Holdings involuntarily terminates Mr. Jones without cause
within two years of a change by Sabre in the Company's equity structure, as
defined below, Travelocity Holdings would provide him with the following
benefits:

    -- a lump sum payment equal to one year's salary and target bonus in
       effect at the time of termination;

    -- immediate acceleration of any vesting periods for Mr. Jones' options
       to purchase the Company's common stock;

    -- continuation of his health and insurance benefits for one year; and

    -- a period of 90 days from the date of termination to exercise his
       vested options to purchase the Company's common stock.

A change in equity structure means any transaction or series of transactions
by which Sabre or Travelocity Holdings (a) acquires all of the outstanding
common stock of Travelocity.com (except in connection with a transaction also
resulting in a change in control) or (b) converts into or exchanges the
common stock of Travelocity.com for any security of Sabre, including but not
limited to a "tracking stock."

    If Mr. Jones' employment with Travelocity Holdings were to terminate for
any reason other than an involuntary termination without cause or in
connection with a change of control or a change in the equity structure of
Travelocity.com, Inc., the agreement would not require Travelocity Holdings
to provide termination benefits.

    Under the new employment agreement, Mr. Jones may not become an employee
of, independent contractor of, consultant to, or perform any services for
certain competitors of the Company for a period of two years following
termination of his employment by the Company.

    Travelocity Holdings and Messrs. Marsicano, Punwani and Steinberg are
currently negotiating the final terms and conditions of employment agreements
effective as of March 7, 2000. Under each of the employment agreements,
Travelocity Holdings will provide to Messrs. Marsicano, Punwani, and
Steinberg termination benefits if Travelocity Holdings were to involuntarily
terminate any of them without cause in connection with a change in control or
change in the equity structure of the Company, as defined above. These
benefits include, in the event of change in control:

    -- a lump sum payment equal to one year's salary and target bonus in
       effect at the time of termination;

    -- immediate acceleration of any vesting periods for their options to
       purchase the Company's common stock;

    -- continuation of their health and insurance benefits for one year; and

    -- a period of 90 days from the date of termination to exercise their
       vested options to purchase the Company's common stock.

    These benefits include, in the event of change in equity structure:

    -- a lump sum payment equal to six months salary and target bonus in
       effect at the time of termination;

    -- immediate acceleration of any vesting periods for their options to
       purchase the Company's common stock;

    -- continuation of health and insurance benefits for six months; and

    -- a period of 90 days from the date of termination to exercise vested
       options to purchase the Company's common stock.

    If Messrs. Marsicano's, Punwani's or Steinberg's employment with
Travelocity Holdings were to terminate for any reason other than an
involuntary termination without cause in connection with a change of control
or change in equity structure, the agreements would not require Travelocity
Holdings to provide termination benefits.

    Under their employment agreements, Messrs. Marsicano, Punwani and
Steinberg may not become employees of, independent contractors of,
consultants to, or perform any services for certain direct competitors of the
Company for period of one year following employment by the Company.

COMPENSATION OF DIRECTORS

    All directors will be reimbursed for reasonable travel expenses related to
attendance at board and committee meetings. Those directors who are not
employees or officers of Sabre, the Company, the Partnership, or Travelocity
Holdings will receive the following stock option grants:

    -- upon election to the Company's board of directors, an option to purchase
       20,000 shares of the Company's common stock under the Travelocity.com LP
       1999 Long-Term Incentive Plan. The options will not be incentive stock
       options qualified under the Internal Revenue Code. The board of directors
       may increase any initial grant in its discretion on a case by case basis;
       and

    -- on the date of each annual stockholders meeting if, on the date of the
       meeting, the director has served on the Company's board of directors for
       at least six months, an option to purchase 5,000 shares of the Company's
       common stock.

    Options granted to nonemployee directors will have an exercise price equal
to the fair market value of the underlying common stock on the grant date, will
have a ten year term and will fully vest one year after the grant date.
Directors who retire from the Company's board after 5 years of service or
reaching age 65 may exercise their options for 12 months after retirement. Prior
service with Sabre, Preview Travel or any of their affiliates as a director or
employee will count towards the service requirement.

    Other than expense reimbursements, no other compensation will be paid to
directors for service on the board or on any board committee.

STOCK PLANS

    The Partnership and Travelocity Holdings have adopted long-term incentive
plans to attract, retain and motivate highly talented employees critical to
the long-term growth and success of the Company. The Company operates in an
extremely competitive Internet market. Travelocity Holdings and the
Partnership view the incentive plans as significant, critical elements of
employees' total compensation package. The Company has reserved 7 million
shares of its common stock, plus an additional 4% of the total outstanding
shares as of January 1 of each of 2001, 2002, and 2003, for issuance of stock
under both plans. Travelocity Holdings and the Partnership have similar
plans, but the plans have separate share limits. The number of shares set
forth below to be issued under each plan for converted options may vary
depending on which employees are ultimately employed by Travelocity Holdings,
and which employees are employed by the Partnership, but the total aggregate
number of shares issued under both plans upon conversion of the options will
not change.

    Fifty percent of the unvested options to purchase Preview Travel common
stock held by each optionee vested immediately before the merger of Preview
Travel with and into the Company. For employees who are former Preview Travel
officers or certain other key employees, the remaining unvested options will
vest at the rate of 8.33% per month, so that all of the converted Preview
Travel options will fully vest one year following the merger. In addition, if
Travelocity Holdings or the Partnership terminates any former Preview Travel
officer without cause within one year after the merger, his or her remaining
unvested options will immediately vest. For former Preview Travel employees
who are not former Preview Travel officers, 50% of all unvested Preview
Travel options vested immediately before the merger. Vesting of the remaining
unvested Preview Travel options will continue according to the original
vesting schedule.

    If any Preview Travel options are incentive stock options under the Internal
Revenue Code, then acceleration of vesting in the merger may cause such options
to lose their status as incentive stock options, to the extent accelerated
vesting causes any single person to become vested in options with a fair market
value as of the date of grant in excess of $100,000 in underlying shares in any
one year. All other incentive stock options shall cease to qualify for incentive
stock option status 90 days after their conversion to options to purchase the
Company's common stock.

                                            57
<PAGE>

    Employees of Travelocity Holdings and the Partnership who formerly were
Sabre employees had the right to elect whether to convert their unvested options
to purchase Sabre Class A Common Stock to options to purchase shares of the
Company's common stock. Vested Sabre options will not convert, and will vest
according to their original vesting schedule.

TRAVELOCITY HOLDINGS, INC. 1999 LONG-TERM INCENTIVE PLAN

    Travelocity Holdings has adopted the Travelocity Holdings, Inc. 1999
Long-Term Incentive Plan, which provides for awards of options to purchase, or
stock appreciation rights with respect to, shares of the Company's common stock,
to:

    -- the employees, officers, directors and consultants of Travelocity
       Holdings;

    -- employees, officers, directors and consultants of any other entity
       approved by the Travelocity Holdings board of directors in which
       Travelocity Holdings holds an interest of at least 20%;

    -- employees, officers, directors and consultants of any entity approved
       by the Travelocity Holdings board who holds an interest of at least 20%
       in Travelocity Holdings.

    NUMBER OF SHARES. Travelocity Holdings adopted the plan effective as of
October 1, 1999, and it will continue in effect for ten years. The plan allows
for grants of options or stock appreciation rights to purchase an aggregate of
4.5 million shares of the Company's common stock. However, the total awards
issued under the plan and the Travelocity.com LP 1999 Long-Term Incentive Plan
may not exceed 7 million shares of the Company's common stock. Currently,
456,400 option grants are outstanding under the plan. Twenty-five percent of
these options will vest on the first anniversary of the date of grant, and
the remainder will vest in equal increments over the following 36 months
until fully vested on the fourth anniversary of grant. The options have an
exercise price of $23 per share. Travelocity Holdings will also grant options
to purchase shares of the Company's common stock for converted Sabre and
Preview Travel options.

    Travelocity Holdings will award its non-employee directors up to 20,000
nonqualified options when first appointed to the board of directors, and up to
an additional 10,000 nonqualified options at each annual stockholders' meeting,
provided the director has served at least six months from the initial date of
grant.

    Beginning in 2001, the number of shares available for grant under the plan
will increase each year for three years by a number of shares equal to 3% of the
total number of shares of the Company's stock outstanding. However, the total
combined annual increase under the Travelocity Holdings plan and the
Partnership's Long-Term Incentive Plan may not exceed 4% of the Company's total
outstanding shares on the date of each increase. In addition, the number of
shares available under the plan will increase over the entire term of the plan
by the number of shares subject to any forfeited or expired awards, plus any
shares withheld to pay the exercise price or taxes that arise upon exercise of
an award.

    PLAN ADMINISTRATION. A committee consisting of at least two members of the
Travelocity Holdings board of directors will administer the plan. However, the
committee may need the approval of the full board of directors or compensation
committee of Sabre or the Company, in order to:

    -- qualify awards as performance based compensation under the Internal
       Revenue Code,

    -- authorize the issuance of the Company's shares, and

    -- exempt awards from the short-swing trading restrictions under the federal
       securities laws.

    Under the plan, the administration committee determines the employees
eligible to receive awards under the plan and the provisions of the agreements
governing the awards, including term, exercise price, and vesting schedule.

    The plan limits the number of shares that may be granted to any employee to
1 million per year. Although the plan permits the granting of incentive stock
options under the Internal Revenue Code, none of the options awarded

                                         58
<PAGE>

under the plan will qualify as incentive stock options. All awards granted
under the plan will have a term of 10 years or less. The options will have a
minimum exercise price of 100% of the fair market value of the underlying
shares on the grant date, except that Travelocity Holdings may grant options
with a discounted exercise price to employees hired as a result of
acquisitions or other business combinations, or as a result of a transfer
from an affiliate of Travelocity Holdings.

    Holders of awards under the plan may generally not transfer the awards other
than by will or the laws of descent and distribution, or pursuant to a domestic
relations order. However, the administration committee may approve gift
transfers to family members, family trusts, or other family controlled entities
to the extent permitted by federal securities laws.

    The exercise price for an option and the withholding tax due upon exercise
of an award may be paid:

    -- in cash;

    -- by delivery of previously owned shares held for at least six months
       (unless the administration committee permits otherwise);

    -- a broker-assisted sale on the open market; or

    -- any other method approved by the administration committee, including
       share withholding.

    A participant whose employment is terminated for cause would forfeit all
outstanding awards under the plan. Upon a participant's death, any portion of an
award that would have vested over the next 12 months shall immediately vest, and
the participant's estate may exercise vested awards for 18 months following the
participant's death. In the event of termination due to disability, any award
will continue to vest for 12 months and the participant may exercise vested
awards for 18 months from his termination of employment. Upon retirement, the
participant may exercise vested awards for 12 months following his termination
of employment. Upon termination for any other reason, a participant may exercise
vested awards for a period of three months. The administration committee can
determine that transferring employment to an affiliate of Travelocity Holdings
does not constitute termination.

    CHANGE IN CONTROL. If a change in control occurs, the Travelocity Holdings
board of directors, in its discretion, may:

    -- provide for continuation of awards granted under the plan by substituting
       on an equitable basis for the outstanding awards either the consideration
       payable for the outstanding shares of common stock in connection with the
       transaction, or securities of any successor or acquiring entity;

    -- upon written notice to the participants, provided that all awards will
       immediately vest and expire if not exercised within a reasonable period
       of time; or

    -- terminate all awards in exchange for a cash payment per option equal to
       the difference between the fair market value of the underlying shares and
       the exercise price.

    If the board of directors chooses the first alternative, and terminates an
employee for any reason other than cause within one year after a change in
control, the employee's unvested awards will immediately vest. If the board of
directors chooses the second or third alternatives, all unvested awards will
immediately vest, unless the vesting would prevent a desired pooling of interest
accounting treatment for the change in control transaction.

    CHANGE IN CONTROL DEFINITION. Under the plan, a change in control occurs if:

    -- without the prior approval of the Company's board of directors, and with
       specified exceptions, a person becomes the beneficial owner of the
       Company's voting securities representing both:

         -- 25% or more of the voting power of the Company's then outstanding
         voting securities and

         -- a percentage of the voting power of the Company's then outstanding
         voting securities which is equal to or greater than the percentage of
         such voting securities owned by Sabre;

                                             59
<PAGE>

    -- the sale of substantially all the assets of the Company;

    -- a complete liquidation or dissolution of the Company; or

    -- any other event which, in the opinion of the Company's board of
directors, is within the intent of the change in control definition, even if
not strictly within the definition.

    A change in control also occurs if the members of the Company's board of
directors at the time of the merger cease to constitute a majority of the
Company's board of directors. However, any new director who is approved by the
majority of the directors is considered as if he or she were a member of the
original board of directors, unless his or her election occurs as a result of a
board contest or proxy contest.

    A merger, consolidation, or similar reorganization of the Company is also a
change in control, unless:

    -- the Company's stockholders continue to own at least 50% of the voting
power in the surviving corporation, and

    -- the members of the Company's board of directors continue to constitute
at least a majority of the board of directors of the surviving corporation.

    However, a change in control does not include

    -- a distribution to Sabre's stockholders of any voting securities of the
Company or Travelocity Holdings;

    -- Sabre's public offering of any voting securities of the Company or
Travelocity Holdings; or

    -- the passing of a stock ownership threshold because the Company
acquires its own securities.

  TRAVELOCITY.COM LP 1999 LONG-TERM INCENTIVE PLAN

    The Partnership has adopted the Travelocity.com LP 1999 Long-Term Incentive
Plan, which provides for awards of options to purchase, or stock appreciation
rights with respect to, shares of the Company's common stock, to:

    -- the employees, officers, directors and consultants of the Partnership;

    -- employees, officers, directors and consultants of any other entity
       approved by the Partnership board of directors in which Travelocity
       Holdings holds an interest of at least 20%;

    -- employees, officers, directors and consultants of any entity approved
       by the Partnership board of directors who holds an interest of at least
       20% in the Partnership.

    The Partnership adopted the plan effective as of October 1, 1999, and it
will continue in effect for ten years. The plan allows for grants of awards to
purchase the lesser of:

    -- 4.5 million shares; or

    -- 7 million shares reduced by the number of awards issued under the
       Travelocity Holdings, Inc. 1999 Long-Term Incentive Plan.

    Currently, 286,000 option grants are outstanding under the plan. Twenty-five
percent of these options will vest on the first anniversary of the date of
grant, and the remainder will vest in equal increments over the following 36
months until fully vested on the fourth anniversary of grant. The options have
an exercise price of $23 per share. Upon closing of the merger, Sabre and
Preview Travel options were converted to options to purchase the Company's
stock.

    Beginning in 2001, the number of shares available for grant under the plan
will increase each year for three

                                            60
<PAGE>

years by a number of shares equal to the lesser of:

    -- 3% of the total number of shares of the Company's stock outstanding, or

    -- 4% of the total number of shares of the Company's stock outstanding on
the date of increase, minus

    -- the number of additional shares issued or subject to awards under the
Travelocity Holdings plan in connection with the additional annual award
authorization under the Travelocity Holdings plan.

    In addition, the number of shares available under the plan will increase
over the entire term of the plan by the number of shares subject to any
forfeited or expired awards, plus any shares withheld to pay the exercise price
or taxes that arise upon exercise of an award.

    The other material terms of the plan are substantially the same as the terms
of the Travelocity Holdings, Inc. 1999 Long-Term Incentive Plan. However, the
Travelocity Holdings plan permits Travelocity Holdings to issue options that
qualify as incentive stock options under the Internal Revenue Code, but the
Partnership plan does not permit the Partnership to do so.

OTHER BENEFIT PLANS OF TRAVELOCITY HOLDINGS

TRAVELOCITY HOLDINGS RETIREMENT SAVINGS PLAN

    Travelocity Holdings adopted a 401(k) retirement savings plan for its
employees, which will be a defined contribution plan qualified under the
Internal Revenue Code. Eligible employees may elect to defer up to 15% of
their compensation to the plan on a pre-tax basis. If the employee has not
elected or is not eligible to elect the Sabre Legacy Pension Plan as the
employee's primary retirement plan, Travelocity Holdings will match employee
contributions at the rate of 100% for the first 3% of compensation deferred to
the plan, and at the rate of 50% for the next 3% of compensation deferred to the
plan. All employer and employee contributions will be 100% vested and
nonforfeitable at all times. Employees who have elected the Sabre Legacy Pension
Plan as their primary retirement plan may make contributions to the Travelocity
Holdings Retirement Savings Plan, but will receive no matching funds or other
employer contributions. Employees of Travelocity Holdings who are former Preview
Travel or former Sabre employees will transfer funds from their respective
defined contribution retirement plans directly to the plan.

LEGACY PENSION PLAN

    Employees of Travelocity Holdings who previously participated in the Sabre
Legacy Pension Plan will continue to participate in the plan, which is a
tax-qualified defined benefit plan. The plan bases benefits on credited years of
service and the employee's base pay for the highest consecutive five years of
the ten years preceding retirement. For purposes of eligibility for the plan and
calculation of vesting and benefits, Sabre will credit all employees employed by
Sabre prior to the merger for any service previously credited under the plan.
Employees who previously participated in the Legacy Pension Plan but elected the
Sabre Group Retirement Plan as their primary retirement plan have had their
benefits frozen under the Legacy Pension Plan.

    Employees of Travelocity Holdings meeting specified criteria have elected to
remain in the tax-qualified defined benefit pension plan of American Airlines,
Inc. for service through December 31, 1996, and are in the Legacy Pension Plan
for service and increases in compensation levels after that date. The obligation
for benefits earned by these employees as of December 31, 1996 under the
American Airlines plan remains with that plan. Messrs. Jones and Marsicano
elected to remain in the American Airlines plan for service through December 31,
1996.

SABRE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

    Mr. Jones will be eligible for additional retirement benefits under Sabre's
Supplemental Executive Retirement Plan. Mr. Steinberg is currently participating
in Sabre's Supplemental Executive Retirement Plan. The plan determines benefits
calculated upon the basis of final average base salary, incentive compensation
payments and performance returns. The plan provides pension benefits to which
Mr. Jones would be entitled, but for the limit of $130,000 on the maximum
annual benefit payable and the $160,000 limit on the maximum amount of annual

                                          61
<PAGE>

compensation which may be taken into account under the Legacy Pension Plan
and the American Airlines plan. The Employee Retirement Income Security Act
of 1974 and the Internal Revenue Code impose these salary limits.

    The following table shows typical aggregate annual benefits payable under
the pension plan and the supplemental retirement plan, based upon retirement in
1999 at age 65, to persons in specified earnings and service classifications.
Annual retirement benefits set forth below are subject to reduction for Social
Security benefits and benefits received under other qualified and non-qualified
plans that Sabre, Travelocity Holdings or their affiliates provide.

                                               PENSION PLAN TABLE

<TABLE>
<CAPTION>
                                                                    ANNUAL RETIREMENT BENEFITS
                                                        -------------------------------------------------
                                                                     CREDITED YEARS OF SERVICE
                                                        -------------------------------------------------
                                FINAL AVERAGE EARNINGS     15       20         25        30         35
                               -----------------------  -------   -------    -------   -------    -------
                                      <S>                <C>       <C>        <C>       <C>
                                      $100,000           30,000    40,000     50,000    60,000     70,000
                                       150,000           45,000    60,000     75,000    90,000    105,000
                                       200,000           60,000    80,000    100,000   120,000    140,000
                                       250,000           75,000   100,000    125,000   150,000    175,000
                                       300,000           90,000   120,000    150,000   180,000    210,000
                                       400,000          120,000   160,000    200,000   240,000    280,000
                                       500,000          150,000   200,000    250,000   300,000    350,000
                                       600,000          180,000   240,000    300,000   360,000    420,000
</TABLE>

    As of December 31, 1999, Mr. Jones had 20.7 years of credited service, Mr.
Marsicano had 20.0 years of credited service and Mr. Steinberg had 8.5 years of
credited service. Benefits are shown in the table using a straight-life annuity
basis.

SABRE DEFERRED COMPENSATION PLAN

    Sabre has adopted a deferred compensation plan, which is an unfunded
deferred compensation plan for a select group of management or highly
compensated employees. The plan is not qualified under the Internal Revenue
Code. Messrs. Jones and Steinberg currently participate in the plan.

    Participants in the plan may elect to defer up to 100% of their annual
salary in excess of $160,000, 100% of their bonus, and 100% of their Sabre
performance shares to the plan.

TRAVELOCITY HOLDINGS, INC. EMPLOYEE STOCK PURCHASE PLAN

    The board of directors of Travelocity Holdings adopted a Travelocity
Holdings Employee Stock Purchase Plan. The plan will not qualify for special tax
treatment under the Internal Revenue Code.

    Only employees who work at least 20 hours per week are eligible to
participate in the plan. Participation in the plan ends upon an individual's
termination of employment. Additionally, an employee making salary deferrals
under the plan can cease his or her participation in the plan at any time during
the offering period.

    Under the plan, eligible employees can voluntarily defer up to 15% of their
compensation during each 6 month offering period, to be held for investment in
the Company's common stock at the end of the offering period. At the end of each
offering period, Travelocity Holdings will use base salary deferred during the
period to purchase the Company's common stock, at a price equal to 85% of the
lesser of

    -- the fair market value of the common stock on the last business day of
the offering period, or

    -- the fair market value of the common stock on the first business day of
the offering period.

    Travelocity Holdings will pay the remainder of the purchase price. The plan
limits an employee's deferral to $15,000 annually, and limits an employee's
purchase of the Company's common stock to an annual $25,000 in fair market value
of the shares on the purchase date. Shares issued under the plan will be either
shares transferred to Travelocity Holdings by the Partnership or shares
purchased on the open market. The Travelocity Holdings board of directors, or a
committee appointed by the board, will administer the plan.

                                             62
<PAGE>

    The Travelocity Holdings board of directors and the committee can amend or
terminate the plan at any time, provided that any amendment or termination would
not adversely affect any outstanding rights to purchase stock under the plan. If
not terminated earlier, the plan has a ten-year term.

OTHER BENEFIT PLANS OF THE TRAVELOCITY.COM PARTNERSHIP

TRAVELOCITY.COM LP RETIREMENT SAVINGS PLAN

    The Partnership adopted a safe harbor 401(k) retirement savings plan for its
employees, which will be a defined contribution plan qualified under the
Internal Revenue Code. Eligible employees can elect to defer up to 15% of their
compensation to the plan on a pre-tax basis. The Partnership will match employee
contributions at the rate of 100% for the first 3% of compensation deferred to
the plan, and at the rate of 50% for the next 3% of compensation deferred to the
plan. All employer and employee contributions will be 100% vested and
nonforfeitable at all times. Employees of the Partnership who are former Preview
Travel or former Sabre employees will transfer funds from their respective
defined contribution retirement plans directly to the plan.

TRAVELOCITY.COM LP EMPLOYEE STOCK PURCHASE PLAN

    The board of directors of the Partnership adopted a Travelocity.com LP
Employee Stock Purchase Plan. The plan does not qualify for special tax
treatment under the Internal Revenue Code.

    Only employees who work at least 20 hours per week are eligible to
participate in the plan. Participation in the plan ends upon an individual's
termination of employment. Additionally, an employee making salary deferrals
under the plan can cease his or her participation in the plan at any time during
the offering period.

    Under the plan, eligible employees can voluntarily defer up to 15% of their
compensation during each 6 month offering period, to be held for investment in
the Company's common stock at the end of the offering period. At the end of each
offering period, the Partnership will use all salary deferred during the period
to purchase the Company's common stock, at a price equal to 85% of the lesser of

    -- the fair market value of the common stock on the last business day of
the offering period, or

    -- the fair market value of the common stock on the first business day of
the offering period.

    The Partnership pays the remainder of the purchase price. The plan limits an
employee's deferral to $15,000 annually, and limits an employee's purchase of
the Company's common stock to an annual $25,000 in fair market value of the
shares on the purchase date. Shares issued under the plan will be either shares
owned by the Partnership or shares purchased on the open market. The Partnership
board of directors, or a committee appointed by the board, will administer the
plan.

    The Partnership board of directors and the committee can amend or terminate
the plan at any time, provided that any amendment or termination would not
adversely affect any outstanding rights to purchase stock under the plan. If not
terminated earlier, the plan has a ten-year term.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITIES OWNED BY DIRECTORS AND EXECUTIVE OFFICERS

   As of March 24, 2000, the directors and executive officers of the Company
owned, or had been granted, securities or rights equivalent to the shares of
Common Stock of the Company.

<TABLE>
<CAPTION>
        -----------------------------------------------------------------------------------------

                                                     Travelocity.com Inc.
                 Name of Beneficial Owner                Common Stock      Percentage of Total
        -----------------------------------------------------------------------------------------
        <S>                                               <C>                        <C>
        William F. Conner (Director)                       20,000(1)                 *
        -----------------------------------------------------------------------------------------
        Paul C. Ely, Jr. (Director)                        20,000(2)                 *
        -----------------------------------------------------------------------------------------

                                                       63
<PAGE>

        -----------------------------------------------------------------------------------------
        James J. Hornthal (Director)                      260,000(3)                 *
        -----------------------------------------------------------------------------------------
        Terrell B. Jones
        (Officer and Director)                            517,360(4)                 *
        -----------------------------------------------------------------------------------------
        Glenn W. Marschel, Jr. (Director)                  20,000(5)                 *
        -----------------------------------------------------------------------------------------
        James D. Marsicano
        (Officer)                                         123,070(6)                 *
        -----------------------------------------------------------------------------------------
        Ramesh K. Punwani (Officer)                        50,000(7)                 *
        -----------------------------------------------------------------------------------------
        Andrew B. Steinberg (Officer)                     164,374(8)                 *
        -----------------------------------------------------------------------------------------
        Directors and Officers as a group               1,052,523                    *
        -----------------------------------------------------------------------------------------
</TABLE>

*     Percentage of current beneficial ownership does not exceed 1% of the total
      outstanding shares.

--------------------------------------------------------------------------
(1)  Amount consists of 20,000 shares of common stock granted under the 1999
     Travelocity.com LP Long-Term Incentive Plan. The stock options will vest
     during the period from March 2001 through March 2004.
(2)  Amount consists of 20,000 shares of common stock granted under the 1999
     Travelocity.com LP Long-Term Incentive Plan . The stock options will vest
     during the period from March 2001 through March 2004.
(3)  Amount consists of options to purchase shares of common stock that were
     previously options to purchase shares of Preview Travel, Inc. common stock
     that were converted pursuant to the merger of Preview Travel, Inc. with and
     into the Company. Pursuant to the terms of the merger, 56,250 shares are
     vested and 97,500 are now exercisable. The stock options representing the
     remaining 97,500 shares will vest during the period from June 2000 through
     June 2003.
(4)  Amount consists of stock options for 92,360 shares of the Company's common
     stock, which were previously options to purchase shares of Sabre, Inc.
     Class A Common Stock that were converted in connection with the merger of
     Preview Travel, Inc. with and into the Company, and stock options for
     300,000 and 125,000 shares granted under the Travelocity Holdings, Inc.
     1999 Long-Term Incentive Plan. Stock options representing 11,859 shares
     will vest in the next sixty days. The remaining stock options will vest
     during the period from October 2000 through April 2004.
(5)  Amount consists of 20,000 shares of common stock granted under the 1999
     Travelocity.com LP Long-Term Incentive Plan . The stock options will vest
     during the period from March 2001 through March 2004.
(6)  Amount consists of stock options for 15,070 shares of the Company's common
     stock, which were previously options to purchase shares of Sabre, Inc.
     Class A Common Stock that were converted in connection with the merger of
     Preview Travel, Inc. with and into the Company, and stock options for
     75,000 and 33,000 shares of the Company's common stock granted under the
     Travelocity Holdings, Inc. 1999 Long-Term Incentive Plan . Stock options
     representing 2,403 shares are vested. The remaining stock options will vest
     during the period from October 2000 through March 2004.
(7)  Amount consists of 50,000 shares of common stock granted under the
     Travelocity Holdings, Inc. 1999 Long-Term Incentive Plan . The stock
     options will vest during the period from March 2001 through March 2004.
(8)  Amount consists of stock options for 134,374 shares of the Company's
     common stock, which were previously options to purchase shares of Sabre,
     Inc. Class A Common Stock that were converted in connection with the merger
     of Preview Travel, Inc. with and into the Company, and stock options for
     30,000 shares granted under the Travelocity Holdings, Inc. 1999 Long-Term
     Incentive Plan. The stock options will vest during the period from October
     2000 through March 2004.

SECURITIES OWNED BY CERTAIN BENEFICIAL OWNERS

         The following have informed the Company that they were the beneficial
owners of more than 5% of the Company's outstanding Common or Preferred Stock at
March 15, 2000.

                                              64
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
       Name and Address
      of Beneficial Owner                  Class of Stock                   Amount Held           Percentage of Total
-------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                            <C>                         <C>

Travelocity Holdings, Inc.                  Common Stock                   1,176,470(1)                  7.4%
4255 Amon Carter Boulevard,
MD4224
Fort Worth, Texas 76155                    Preferred Stock                33,000,000(2)                100.0%
-------------------------------------------------------------------------------------------------------------------------
Sabre, Inc.                                 Common Stock                   1,176,470(1)                  7.4%
4255 Amon Carter Blvd.
Fort Worth, Texas 76155                    Preferred Stock                33,000,000(2)                100.0%
-------------------------------------------------------------------------------------------------------------------------
Sabre Holdings Corporation                  Common Stock                   1,176,470(1)                  7.4%
4255 Amon Carter Blvd.
Fort Worth, Texas 76155                    Preferred Stock                33,000,000(2)                100.0%
-------------------------------------------------------------------------------------------------------------------------
FMR Corp.                                   Common Stock                   2,102,030(3)                 13.4%
82 Devonshire Street
Boston, Massachusetts 02109
-------------------------------------------------------------------------------------------------------------------------
Fidelity International Limited              Common Stock                   2,102,030 (3)                13.4%
Pembroke Hall
42 Crowlane
Hamilton, Bermuda
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Amounts consist of shares beneficially owned by Travelocity Holdings, Inc.
     Sabre, Inc. is a beneficial owner of these shares based on 100% ownership
     of Travelocity Holdings, Inc. Sabre Holdings, Inc. is a beneficial owner
     of these shares based on 100% ownership of Sabre Inc.

(2)  Travelocity Holdings, Inc. holds 33,000,000 shares of the Company's Series
     A Preferred Stock, which is convertible as a class into 3,000,000 shares
     of the Company's common stock. Travelocity Holdings, Inc. holds
     30,000,000 units of Travelocity.com LP. Travelocity Holdings, Inc. also
     has the right to exchange one unit of Travelocity.com LP and one share
     of the Company's Series A Preferred Stock for one share of the Company's
     common stock at any time. If Travelocity Holdings exercised its right to
     convert its partnership units into common stock, then the Company would
     have approximately 48.7 million common stock equivalent shares
     outstanding, of which former Preview Travel stockholders and Yahoo!
     would own 30% and Sabre would own 70%. Sabre, Inc. is a beneficial owner
     of these shares based on 100% ownership of Travelocity Holdings, Inc.
     Sabre Holdings, Inc. is a beneficial owner of these shares based on 100%
     ownership of Sabre Inc.

(3)  Based on Schedule 13G filed on March 14, 2000 by FMR Corp, Abigail P.
     Johnson and Edward C. Johnson 3d and the Schedule 13G filed on March 14,
     2000 by Fidelity International Limited, Abigail P. Johnson and Edward C.
     Johnson 3d: FMR Corp. had sole voting power over 106,840 shares, sole
     dispositive power over 1,928,310 shares and beneficial ownership of
     2,102,030 shares of Common Stock. Fidelity Management & Research Company, a
     wholly-owned subsidiary of FMR Corp. and an investment adviser registered
     under Section 203 of the Investment Advisers Act of 1940 ("Fidelity"), is
     the beneficial owner of 1,764,900 shares of the Common Stock as a result of
     acting as investment adviser to various investment companies registered
     under Section 8 of the Investment Company Act of 1940. Mr. Johnson, FMR
     Corp., through its control of Fidelity, and the Fidelity funds each has
     sole dispositive power over 1,764,900 shares owned by the Fidelity funds.
     Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp.
     and a bank as defined in Section 3(a)(6) of the Securities Exchange Act of
     1934 ("Fidelity Trust"), is the beneficial owner of 163,410 shares of the
     Common Stock as a result of its serving as investment manager of the
     institutional account(s). Mr. Johnson and FMR Corp., through its control of
     Fidelity Trust, each has sole dispositive power over 163,410 shares, and
     sole power to vote or direct the voting of 106,840 shares of Common Stock
     owned by the institutional accounts.

     Strategic Advisers, Inc., a wholly-owned subsidiary of FMR Corp. and an
     investment adviser registered under Section 203 of the Investment Advisers
     Act of 1940, provides investment advisory services to individuals. It does
     not have sole power to vote or direct the voting of shares of certain
     securities held for clients and has sole dispositive power over such
     securities. As such, FMR Corp.'s beneficial ownership may include shares
     beneficially owned through Strategic Advisers, Inc.

                                           65
<PAGE>

     Members of the Edward C. Johnson 3d family are the predominant owners of
     Class B shares of common stock of FMR Corp., representing approximately 49%
     of the voting power of FMR Corp. Mr. Johnson 3d owns 12.0% and Abigail
     Johnson owns 24.5% of the aggregate outstanding voting stock of FMR Corp.
     Mr. Johnson 3d is Chairman of FMR Corp. and Abigail P. Johnson is Director
     of FMR Corp. The Johnson family group and all other Class B shareholders
     have entered into a shareholders' voting agreement under which all Class B
     shares will be voted in accordance with the majority vote of Class B
     shares. Accordingly, through their ownership of voting common stock and the
     execution of the shareholders' voting agreement, members of the Johnson
     family may be deemed, under the Investment Company Act of 1940, to form a
     controlling group with respect to FMR Corp.

     Fidelity International Limited and various foreign-based subsidiaries
     provide investment advisory and management services to a number of non-U.S.
     investment companies and certain institutional investors. Fidelity
     International Limited is the beneficial owner of 173,720 shares of the
     Common Stock.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Certain information for this Item 13 is incorporated herein by
reference from the information set forth under Note 4 "Certain Related Party
Transactions" to the Financial Statements and Supplementary Data in Item 8 of
this report.

TRANSACTIONS WITH NEWSNET CENTRAL, INC.

    In December 1998, Preview Travel transferred substantially all of the assets
of its television business to NewsNet Central, Inc. In consideration of the
transfer of these assets to NewsNet Central, Preview Travel received a $250,000
convertible promissory note, which was converted to common stock in March 1999,
a $1 million subordinated promissory note that bears interest at the rate of 6%
per year, and a warrant to purchase up to 2,275,445 shares of NewsNet Central's
common stock at a price of $0.45 per share. As of December 31, 1999 and assuming
the conversion of all outstanding NewsNet Central convertible securities and
exercise of all outstanding NewsNet Central stock options, Preview Travel would
own approximately 38% of NewsNet Central's common stock. James J. Hornthal is a
director of NewsNet Central and holds 800,000 shares of NewsNet Central's common
stock, which he purchased on November 15, 1998 at a price of $0.015 per share.
In addition, Mr. Hornthal has options to acquire 80,000 shares of NewsNet
Central common stock.

TRANSACTIONS AND RELATIONSHIPS IN CONNECTION WITH THE MERGER

    On March 7, 2000, Sabre combined the Travelocity Division and Preview Travel
in a holding company/partnership structure. Travelocity.com Inc. is a holding
company whose sole asset is units of the Partnership. Sabre also owns units of
the Partnership. The Partnership owns all of the assets and has all of the
liabilities of the Travelocity Division and Preview Travel and conducts the
business of Travelocity.com.

    Travelocity.com Inc. was incorporated on September 30, 1999 and, at that
time, was beneficially owned by Sabre. Additionally, on September 30, 1999, the
Partnership was formed. The Travelocity Division was an operating division of
Sabre. Immediately prior to the merger, Sabre and TSGL Holding, Inc., a wholly
owned subsidiary of Sabre, contributed the Travelocity Division and $52.7
million in cash to the Partnership and received partnership units in exchange.
Then Sabre contributed partnership units to Travelocity Holdings, and
Travelocity Holdings contributed a portion of those partnership units to
Travelocity.com Inc., so that those entities became partners in the Partnership.
The Company exercised its right to cause Sabre to purchase approximately 1.2
million of the Company's common stock for an additional $50 million.

    As a result, the Partnership owned the Travelocity Division and $102.7
million in cash. Sabre owns the Partnership through a combination of its direct
interest, its interest held through TSGL Holding and through Travelocity
Holdings, and its interest held through the Company.

    In the merger, Preview Travel was merged with and into the Company. The
Company is the surviving corporation. Each share of Preview Travel common stock
was converted into one share of the Company's common

                                           66
<PAGE>

stock. The Company issued approximately 14.4 million shares of common stock
to former Preview Travel stockholders in the merger. The shares of the
Company's common stock beneficially held by Travelocity Holdings were
converted in the merger into 33 million shares of Series A Preferred Stock.

    The preferred stock is convertible into 3 million shares of the Company's
common stock, and the preferred stock receives dividends and distributions on a
basis as if it were converted into common stock. Travelocity Holdings also
has the right to exchange one Partnership unit and one share of the Company's
Series A Preferred Stock for one share of the Company's common stock at any
time. If Travelocity Holdings exercised its right to convert its partnership
units into common stock, then the Company would have approximately 48.7
million common stock equivalent shares outstanding, of which former Preview
Travel stockholders and Yahoo! would own 30% and Sabre would own 70%.

    The preferred stock owned by Travelocity Holdings generally has voting
rights identical to the Company's common stock. Each share of preferred stock
and each share of common stock is entitled to one vote per share and holders
of preferred stock and common stock will vote together as a single class on
all matters, including the election of directors. Additionally, Yahoo!
purchased approximately 175,000 shares of the Company's common stock on the
date of the merger.

    As a result, on an economic basis, the Company has approximately 18.7
million common stock equivalent shares outstanding. The shares of common stock
the Company issued to former Preview Travel stockholders and Yahoo! represent an
approximate 78% (14.5 million out of 18.7 million) equity interest in the
Company, and the shares of preferred stock and common stock of the Company held
by Sabre represent an approximate 22% (4.2 million out of 18.7 million) equity
interest in the Company.

    Immediately after the merger, the Company contributed all of the Preview
Travel assets and liabilities to the Partnership. In exchange, the Company
received additional units of the Partnership. In total, the Company holds an
approximate 38% equity interest in the Partnership.

    As a result, the current Preview Travel stockholders and Yahoo! are the
Company's public stockholders and received shares of common stock in the merger
that equate to approximately a 30% equity interest in the Partnership -- that
is, 78% (their equity interest in the Company) of the 38% equity interest the
Company holds in the Partnership.

    Sabre beneficially holds an approximate 70% equity interest in the
Partnership -- that is:

    --  a 62% equity interest held directly, plus

    --  an 8% equity interest held through the Company -- that is, 22% (its
        equity interest in the Company) of 38% (the Company's equity interest in
        the Partnership).

    The Partnership is governed by a nine member board of directors. Sabre has
the right to elect four directors, and the Company has the right to elect the
remaining five directors of the Partnership.

                                     PART IV
--------------------------------------------------------------------------------
ITEM 14.         EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) The financial statements listed in the accompanying index to financial
            statements and the schedules are filed as part of this report.

   (2)  The schedules listed in the accompanying index to financial statements
        and schedules are Filed as part of this report.

   (3)  Exhibits required to be filed by Item 601 of Regulation S-K.

<TABLE>
<CAPTION>
     EXHIBIT NO.                    DESCRIPTION
     <S>    <C>
      2.1   Agreement and Plan of Merger, dated as of October 3, 1999, as
            amended January 24, 2000, by and among Sabre, Inc., Travelocity
            Holdings, Inc., Travelocity.com Inc. and Preview Travel, Inc. (2)

      3.1   Certificate of Incorporation of Registrant (1)

      3.2   Form of Restated Certificate of Incorporation of Registrant (2)

      3.3   Bylaws of the Registrant (1)

      3.4   Form of Restated Bylaws of Registrant (2)

                                           67
<PAGE>

      4.1   Form of Registrant's Common Stock Certificate (1)

      4.2   Form of Registrant's Series A Preferred Stock Certificate (1)

      4.3   Form of Registrant's Class B Common Stock Certificate (1)


      10.1  Voting Agreement, dated as of October 3, 1999, by and between Sabre
            Inc. and James J. Hornthal (2)

      10.2  Voting Agreement, dated as of October 3, 1999, by and between Sabre
            Inc. and MediaOne Interactive Services, Inc. (2)

      10.3  Voting Agreement, dated as of October 3, 1999, by and between Sabre
            Inc. and America Online, Inc (2)

      10.4  Form of Amended and Restated Agreement of Limited Partnership of
            Travelocity.com LP (2)

      10.5  Form of Management Services Agreement between Travelocity.com LP and
            Travelocity Holdings, Inc. (1)

      10.6  Form of Contribution Agreement between Travelocity.com and Sabre
            Inc. (1)

      10.7  Form of Contribution Agreement between Travelocity.com and TSGL
            Holdings, Inc. (1)

      10.8  Form of Contribution Agreement between Travelocity.com and
            Travelocity.com Inc. (1)

      10.9  Form of Option Agreement between Sabre Inc. and Travelocity.com Inc.
            (1)

      10.10 Form of Registration Rights Agreement between Sabre Inc. and
            Travelocity.com Inc. (1)

      10.11 Interactive Services and Exclusive Channel Agreement by and between
            Travelocity Holdings, Inc. and America Online, Inc., effective as of
            October 3, 1999 (2)+

      10.12 Content Partner/Distribution Agreement by and between Infoseek
            Corporation and The Sabre Group, Inc. effective as of July 22, 1999
            (2)+

      10.13 Content Partner Agreement, by and between The Sabre Group, Inc. and
            At Home Corporation, effective as of March 13, 1999 (2)+

      10.14 Travel Services Advertising and Promotion Agreement by and between
            Sabre Interactive, a division of Sabre, Inc., and Yahoo! Inc.,
            effective as of June 29, 1997 (2)+

      10.15 First Amendment to Travel Services Advertising and Promotion
            Agreement by and between Sabre Interactive, a division of Sabre
            Inc., and Yahoo! Inc., effective as of November 23, 1998 (2)+

      10.16 Second Amendment to Travel Services Advertising and Promotion
            Agreement by and between Sabre Interactive, a division of Sabre
            Inc., and Yahoo! Inc., effective as of October 1, 1999 (2)+

      10.17 Travelocity Holdings, Inc. 1999 Long-Term Incentive Plan (1)

      10.18 Travelocity.com LP 1999 Long-Term Incentive Plan (1)

      10.19 The Sabre Group Deferred Compensation Plan (1)

      10.20 The Sabre Group Holdings, Inc. Supplemental Executive Retirement
            Plan (1)

      10.21 Executive Termination Benefits Agreement for Andrew B. Steinberg (1)

      21.1  Subsidiaries of Registrant

      23.1  Consent of Ernst & Young LLP, Independent Auditors

      27.1  Financial Data Schedule
</TABLE>

-----------------
(1)      Incorporated herein by reference to the Company's Registration
         Statement on Form S-4 filed on January 31, 2000 (Registration No.
         333-95757).

                                             68
<PAGE>

(2)      Incorporated herein by reference to Amendment No. 1 to the Company's
         Registration Statement on Form S-4 filed on February 4, 2000
         (Registration No. 333-95757).

+        Portions of this exhibit have been redacted and are subject to a
         confidential treatment order issued by the Securities and Exchange
         Commission.

(b)      Reports on Form 8-K:

         None.



                                               69
<PAGE>




                              TRAVELOCITY.COM INC.
                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                                   ITEM 14(A)

FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                         Page
<S>                                                                                      <C>
Report of Independent Auditors                                                            31

Balance Sheets at December 31, 1999 and 1998                                              32

Statements of Operations for the Years Ended December 31, 1999, 1998 and 1997             33

Statements of Cash Flows for the Years Ended December 31, 1999, 1998 and 1997             34

Statements of Stockholder's Equity for the Years
  Ended December 31, 1999, 1998 and 1997                                                  35

Notes to Financial Statements                                                             36

Schedule II - Valuation and Qualifying Accounts for the Years
Ended December 31, 1999, 1998, and 1997                                                   71
</TABLE>

All other schedules are omitted because the required information is included in
the financial statements or notes thereto, or because the required information
is either not present or not present in sufficient amounts.


                                           70
<PAGE>



CONSOLIDATED SCHEDULES FOR THE YEARS ENDED
DECEMBER 31, 1999, 1998 AND 1997

                                              TRAVELOCITY.COM INC.
                                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999


<TABLE>
<CAPTION>
               COLUMN A                       COLUMN B        COLUMN C       COLUMN D     COLUMN E       COLUMN F
---------------------------------------       --------        --------       --------     --------       --------
                                                                     ADDITIONS
                                                             -----------------------
                                             BALANCE AT      CHARGED TO    CHARGED TO
                                            BEGINNING OF      COSTS AND       OTHER                     BALANCE AT
             CLASSIFICATION                     YEAR          EXPENSES      ACCOUNTS    DEDUCTIONS      END OF YEAR
---------------------------------------     ------------     ----------    ----------   ----------      -----------
<S>                                           <C>                <C>
                                                                              (1)
YEAR ENDED DECEMBER 31, 1999
    Booking fee cancellation reserve          141,000            ---        96,000         ---           237,000
YEAR ENDED DECEMBER 31, 1998
    Booking fee cancellation reserve           46,000            ---        95,000         ---           141,000
YEAR ENDED DECEMBER 31, 1997
    Booking fee cancellation reserve           46,000            ---          ---          ---            46,000
</TABLE>

(1)      Amounts charged against revenue.


                                                  71
<PAGE>



                                     SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

                              TRAVELOCITY.COM INC.



                              /s/ Terrell B. Jones
                              -----------------------------------------------
                              Terrell B. Jones
                              President, Chief Executive Officer and Director
                              (Principal Executive Officer)



                              /s/ Ramesh K. Punwani
                              -----------------------------------------------
                              Ramesh K. Punwani
                              Chief Financial Officer
                              (Principal Financial and Accounting Officer)

                              Date: [March 30, 2000]

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates noted:

Directors:


/s/ William J. Hannigan       /s/ Jeffery M. Jackson
--------------------------    ------------------------------
William J. Hannigan           Jeffery M. Jackson


/s/ James J. Hornthal         /s/ Glenn W. Marschel, Jr.
--------------------------    ------------------------------
James J. Hornthal             Glenn W. Marschel, Jr.


/s/ Bradford J. Boston
--------------------------
Bradford J. Boston


/s/ F. William Conner
--------------------------
F. William Conner


/s/ Paul C. Ely, Jr.
--------------------------
Paul C. Ely, Jr.




Date:  March 30, 2000

                                                  72