Orbitz 2009 Annual Report Download - page 56

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This decrease in cash flow used in investing activities is partially offset by a $5 million increase in capital
expenditures as well as the absence of the receipt of proceeds from asset sales during 2008. We received
$4 million of cash proceeds from asset sales during 2007.
Financing Activities
Cash flow used in financing activities for the year ended December 31, 2008 was $8 million compared to
$13 million of cash flow provided by financing activities for the year ended December 31, 2007. The decrease in
cash flow provided by financing activities of $21 million is partially due to the absence of net proceeds received
from the IPO and the $600 million term loan facility entered into concurrent with the IPO, offset in part by
repayments of the intercompany notes to Travelport, a dividend paid to Travelport in connection with the IPO
and net cash distributed to and received from Travelport in 2007 prior to the IPO. Following our IPO, we are no
longer required to distribute available cash to Travelport. Cash flow used in financing activities increased largely
due to $20 million of payments made under the tax sharing agreement with the Founding Airlines, a $5 million
increase in principal payments made on the $600 million term loan facility and $1 million of payments made to
satisfy employee minimum tax withholding obligations upon vesting of equity-based awards during the year
ended December 31, 2008. The decrease in cash flow provided by financing activities is offset in part by a
$19 million increase in borrowings made under our revolving credit facility during the year ended December 31,
2008 and a $1 million decrease in capital lease payments.
Comparison of the year ended December 31, 2007 to the year ended December 31, 2006
Operating Activities
Cash provided by operating activities consists of net loss, adjusted for non-cash items such as deprecia-
tion, amortization, impairment of goodwill and intangible assets, and stock based compensation and changes in
various working capital items, principally accrued merchant payables, deferred income and accounts payable.
We generated cash flow from operations of $69 million for the year ended December 31, 2007 compared
to $160 million for the year ended December 31, 2006. The decrease in operating cash flow during 2007 is
largely due to $74 million of cash interest payments made during 2007 primarily related to intercompany notes
payable to Travelport that were outstanding prior to the IPO and the $600 million term loan facility and
$85 million revolving credit facility that we entered into concurrent with the IPO. We did not have any third-
party debt outstanding during 2006. The decrease in cash flow from operations was also attributed to changes
in accrued merchant payable and deferred income balances.
Investing Activities
Cash flow used in investing activities decreased $3 million, to $80 million for the year ended
December 31, 2007 from $83 million for the year ended December 31, 2006. The decrease in cash used in
investing activities is due in part to a $30 million decrease in capital expenditures as well as the receipt of
$4 million of cash proceeds from asset sales during 2007. This decrease was offset in part by the impact of
the sale of an offline U.K. travel subsidiary in July 2007. The sale of this subsidiary resulted in a $31 million
reduction in cash primarily due to the buyer’s assumption of this subsidiary’s cash balance at the time of sale,
partially offset by the cash proceeds we received for the sale.
Financing Activities
Cash flow provided by financing activities for the year ended December 31, 2007 was $13 million
compared to cash flow used in financing activities of $77 million for the year ended December 31, 2006. The
increase in cash flow provided by financing activities was primarily due to the net proceeds received from the
IPO and the $600 million term loan facility entered into concurrent with the IPO, offset in part by repayments
of the intercompany notes to Travelport, a dividend paid to Travelport in connection with the IPO and an
increase in cash distributed to Travelport in 2007 prior to the IPO.
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