Orbitz 2008 Annual Report Download - page 25

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insufficient review of account reconciliations to ensure that all unreconciled items are identified and resolved in a timely manner; and
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incomplete evaluation and documentation of the policies and procedures to be used for external financial reporting, accounting and income
tax purposes.
We are in the process of developing and implementing a remediation plan to address the deficiencies in the areas of personnel, tax, treasury, policies and
procedures and controls. However, additional measures may be necessary, and the measures we expect to take to improve our internal controls may not be
sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that such material weakness or other material weaknesses
would not result in a material misstatement of our annual or interim financial statements. In addition, other material weaknesses or significant deficiencies may
be identified in the future. If we are unable to correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report
financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively
affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and
criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.
Our business could be negatively affected by changes in search engine algorithms and search engine relationships.
We utilize Internet search engines, principally through the purchase of travel-related keywords and inclusion in metasearch results, to generate traffic to our
websites. Search engines frequently update and change the logic that determines the placement and display of results of a user's search, such that the placement
of links to our websites could be negatively affected. In a similar way, a significant amount of our business is directed to our own websites through our
relationships with search engines, including metasearch companies, and through our participation in pay-per-click advertising campaigns on Internet search
engines whose pricing and operating dynamics can experience rapid change commercially, technically and competitively. If a major search engine changes its
algorithms in a manner that negatively affects the search engine ranking of our brands or our third-party distribution partners or changes its pricing, operating or
competitive dynamics in a negative manner, it could have a material adverse effect on our business, financial condition or results of operations. Some of our
search engine relationships, including relationships with metasearch companies, include preferential terms. These relationships may not continue on favorable
terms, or at all.
We are exposed to risks associated with online commerce security and credit card fraud.
The secure transmission of confidential information over the Internet is essential in maintaining customer and supplier confidence in our services.
Substantial or ongoing security breaches, whether instigated internally or externally on our system or other Internet-based systems, could significantly harm our
business. We currently require customers to guarantee their transactions with their credit cards online. We rely on licensed encryption and authentication
technology to effect secure transmission of confidential customer information, including credit card numbers. It is possible that advances in computer
capabilities, new discoveries or other developments could result in a compromise or breach of the technology that we use to protect customer transaction data.
We incur substantial expense to protect against and remedy security breaches and their consequences. However, our security measures may not prevent
security breaches. We may be unsuccessful in implementing our remediation plan to address these potential exposures. A party (whether internal, external, an
affiliate or unrelated third party) that is able to circumvent our security systems could steal proprietary information or cause significant interruptions in our
operations. Security breaches also could damage our reputation and expose us to a risk of loss or litigation and possible
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Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008