Orbitz 2008 Annual Report Download - page 120

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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Related Party Transactions (Continued)
management companies that are affiliates of Blackstone and that provide us with access to their inventory. We also purchase services from certain Blackstone
and TCV affiliates such as telecommunications and advertising. In addition, various Blackstone and TCV affiliates utilize our partner marketing programs and
corporate travel services.
Related Party Transactions with Former Cendant Affiliates
The following table summarizes the related party transactions with Cendant affiliates for the period from January 1, 2006 to August 22, 2006 and for the
year ended December 31, 2005, reflected in our consolidated statements of operations:
Period from
January 1, 2006
to
August 22, 2006
Predecessor
Year Ended
December 31, 2005
Predecessor
(in millions)
Net revenues $ 10 $ 22
Selling, general and administrative 6 11
Interest expense 5 8
Corporate Related Functions
The statement of operations reflects an allocation of both general and corporate overhead expenses and directly billed expenses incurred on our behalf from
Cendant. General corporate overhead expenses have been allocated based on a percentage of the forecasted revenue. Direct billed expenses were based upon
actual utilization of the services. Cost subject to the overhead allocations and direct billings include executive management, tax, insurance, accounting, legal,
treasury, information technology, telecommunications, call center support and real estate expenses.
Marketing Services Division Agreements
In October 2005, Cendant sold the companies that made up its Marketing Services Division ("MSD"). We are a party to a number of agreements with the
MSD companies, pursuant to which we provide each other with a combination of technical support, marketing services and travel fulfillment services. The initial
terms of these agreements generally extend for five to six years, unless terminated by either party in accordance with the terms of those agreements. With respect
to the technical support, we pay MSD an inducement payment for each net booking made by MSD through our GDS, and MSD pays us management fees for
access to our GDS and the equipment, software and services provided. With respect to the marketing arrangements, MSD typically pays us commissions, either
based on customers referred or products and services sold. With respect to the fulfillment services agreement, MSD pays us fees based on services used plus a
share of revenue from reservations of select hotels.
Media Services
Avis Budget Group provided us with media planning and advertising buying services until December 31, 2006. We paid advertising costs directly to the
third-party vendors.
113
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008