Orbitz 2008 Annual Report Download - page 33

results reflect allocations of corporate expenses from Travelport for these and similar functions. These allocations are less than the
comparable expenses we believe we would have incurred had we operated as an independent company during those periods.
•
When our businesses were integrated with the other businesses of Travelport, we shared economies of scope and scale in costs, employees,
vendor relationships and customer relationships, as well as pursued integrated strategies with Travelport and other businesses, including the
GDS and wholesale travel businesses. Although we entered into a transition services agreement and other agreements with Travelport in
connection with our initial public offering, these temporary arrangements may not capture the benefits our businesses previously enjoyed as
a result of being integrated with the other businesses of Travelport. The loss of these benefits could have an adverse effect on our business,
financial condition and results of operations.
•
Previously, our working capital requirements and capital for our general corporate purposes, including acquisitions and capital
expenditures, had been satisfied as part of the corporate-wide cash management policies of Travelport. Other than letters of credit issued by
Travelport on our behalf, Travelport no longer provides us with funds to finance our working capital or other cash requirements. Without
the opportunity to obtain financing from Travelport, we may need to obtain additional financing from banks, through public offerings or
private placements of debt or equity securities, strategic relationships or other arrangements.
We may be unable to make the changes necessary to operate as an independent company on a timely or cost-effective basis.
Travelport is contractually obligated to provide us with certain transition services under the transition services agreement or other agreements into which we
entered in connection with our initial public offering. These services are provided only for a specified period of time, generally until March 31, 2008, with some
exceptions. We may be unable to replace in a timely manner or on comparable terms the services or other benefits that Travelport previously provided to us that
are not specified in the transition services agreement or the other agreements, or the services or benefits that are so specified upon the expiration of the periods
for which they are to be provided under those agreements. Also, upon the expiration of the transition services agreement or such other agreements, many of the
services that are covered in such agreements will be provided internally or by unaffiliated third parties, and we expect that in some instances, we will incur higher
costs to obtain such services than we incurred under the terms of the agreements with Travelport.
As a newly independent public company, we will expend additional time and resources to comply with rules and regulations governing public and listed
companies, including rules related to internal controls over financial reporting, and our failure to comply with these rules may lead investors to lose
confidence in our financial information.
As a newly independent public company, under the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC, as well as the rules of the
New York Stock Exchange, we are required, and will be required, to implement additional corporate governance practices and adhere to a variety of reporting
requirements and complex accounting rules. Compliance with these public company obligations will increase our legal and financial compliance costs and place
significant additional demands on our finance and accounting staff and on our financial, accounting and information systems.
In particular, for the year ending December 31, 2008, our management will be required to conduct an annual evaluation of our internal controls over
financial reporting and include a report of management on our internal controls in our Annual Report on Form 10-K for that period. In addition, we will be
required to have our independent public accounting firm attest to and report on
26
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008