Orbitz 2008 Annual Report Download - page 29

tax positions will be adjusted when the related income tax liabilities are paid, the income tax positions are settled with the relevant taxing authorities, the related
statutes of limitations expire or under other circumstances as provided in FIN 48. Our assessment of uncertain tax positions requires that we make estimates and
judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are
resolved for amounts different than our estimates, or the related statutes of limitations expire without our being assessed additional income taxes, we will be
required to adjust the amounts of the related liabilities in the period in which such events occur. These adjustments may have a material impact on our provision
for income taxes and our results of operations.
We depend on the airline industry and may be adversely affected by changes in the airline industry or in the financial condition of one or more of the major
airlines.
We depend on a relatively small number of airlines for a significant portion of our net revenue. As a result of this dependence, our business and results of
operations could be adversely affected if the financial condition of one or more of the major airlines were to deteriorate. For example, in the past several years,
several major U.S. airlines have either filed for bankruptcy protection under the United States Bankruptcy Code, recently exited bankruptcy or discussed publicly
the risks of bankruptcy. In addition, there have been widespread reports about merger discussions among the certain of the major U.S airlines, in which case one
or more of our charter associate agreements with the airlines could be affected by such a merger. In the event of a merger of an airline that is party to a charter
associate agreement with us, there can be no assurance that we would be able to continue to operate under the terms of that agreement, as the surviving airline
could elect to operate under the terms of its charter associate agreement (if one exists) if it had more favorable terms or otherwise could attempt to renegotiate the
terms of that agreement.
Government regulation could impose taxes or other burdens on us, which could increase our costs or decrease demand for our products.
We rely upon generally available interpretations of tax laws and regulations in the states, countries and locales in which we operate and for which we
provide travel inventory. We cannot be sure that these interpretations are accurate or that the responsible taxing authority is in agreement with our views. The
imposition of additional taxes could cause us to have to pay taxes that we currently do not collect or pay or increase the costs of our products or services to track
and collect such taxes, which would increase our costs of operations.
Our businesses are highly regulated, and any failure to comply with such regulations or any changes in such regulations could adversely affect us.
We operate in a highly regulated industry both in the U.S. and internationally. Our business, financial condition and results of operations could be adversely
affected by unfavorable changes in or the enactment of new laws, rules and regulations applicable to us, which could decrease demand for our products and
services, increase costs or subject us to additional liabilities. Moreover, regulatory authorities have relatively broad discretion to grant, renew and revoke licenses
and approvals and to implement regulations. Accordingly, these regulatory authorities could prevent or temporarily suspend us from carrying on some or all of
our activities or otherwise penalize us if our practices were found not to comply with the then current regulatory or licensing requirements or any interpretation of
such requirements by the regulatory authority. Our failure to comply with any of these requirements or interpretations could have a material adverse effect on our
operations. In addition, the various regulatory regimes to which we are subject may conflict so that compliance with the regulatory requirements in one
jurisdiction may create regulatory issues in another.
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Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008