Orbitz 2008 Annual Report Download - page 76

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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Basis of Presentation (Continued)
The accompanying consolidated financial statements present separately our financial position, results of operations, cash flows and changes in equity on a
"Successor" basis (reflecting Travelport's ownership of us) and "Predecessor" basis (reflecting Cendant's ownership of us). Our financial information has been
separated by a vertical line on the face of the consolidated financial statements to identify these different bases of accounting.
Our consolidated financial position, results of operations, and cash flows for the periods presented may not be indicative of our future performance and do
not necessarily reflect what our financial position, results of operations and cash flows would have been had we operated as a separate, standalone entity during
the periods presented.
Prior to the IPO, certain corporate general and administrative expenses, including those related to executive management, information technology, tax,
insurance, accounting, legal, treasury services and certain employee benefits, were allocated to us by Travelport and Cendant based on forecasted revenue or
directly billed based on actual usage. In addition, certain of our revenue streams were related to contractual arrangements entered into by Travelport and Cendant
on behalf of one or more of its subsidiaries. As a result, portions of the reported revenue have been determined through intercompany relationships with other
Travelport or Cendant companies. Management believes these allocations are reasonable. However, the associated revenues and expenses recorded by the
Predecessor and Successor in the accompanying consolidated statements of operations prior to the IPO may not be indicative of the actual revenues and expenses
that would have been reported had the Predecessor and Successor been operating as a standalone entity.
Prior to the Reorganization, our businesses were operated by Cendant and Travelport as a part of their broader corporate organizations, rather than as a
separate consolidated entity. The legal entity of Orbitz Worldwide, Inc. was formed in connection with the Reorganization, and prior to the Reorganization there
was no single capital structure upon which to calculate historical earnings (loss) per share information. Accordingly, earnings (loss) per share information has not
been presented for historical periods prior to the Reorganization.
On July 5, 2007, we sold Tecnovate, an Indian services organization, to Travelport. In accordance with Financial Accounting Standards Board ("FASB")
Interpretation No. 46(R), "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51," as revised ("FIN 46(R)"), we continued to consolidate
the results of operations of Tecnovate following this sale since we were the primary beneficiary of this variable interest entity ("VIE"). Our variable interest was
the result of the terms of a contractual relationship we had with Tecnovate.
On December 3, 2007, Travelport subsequently sold Tecnovate, at which time we were no longer considered the primary beneficiary of this VIE.
Accordingly, minority interest is reported in our consolidated financial statements for the period from July 5, 2007 to December 3, 2007 since although we were
the primary beneficiary of Tecnovate, we did not have an ownership interest in the VIE. We no longer consolidate the results of operations of Tecnovate
following the sale on December 3, 2007 (See Note 16—Related Party Transactions for further information).
69
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008