Orbitz 2011 Annual Report Download - page 46

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We generated cash flow from operations of $117.8 million for the year ended December 31, 2011 compared with $98.6
million for the year ended December 31, 2010. The increase in operating cash flow was due to changes in our working capital
accounts of $39.9 million, partially offset by a $20.7 million decrease in cash inflows from our net loss, adjusted for non-cash
items described above. The net change in working capital accounts was primarily driven by changes in our current liability
balances and the timing of payments from Travelport. Overall, the $20.7 million decrease in cash flows from our net loss
related to higher spending to support our strategic initiatives as well as increased legal expenses during 2011 as compared with
2010.
We generated cash flow from operations of $98.6 million for the year ended December 31, 2010 compared with
$105.1 million for the year ended December 31, 2009. The decrease in operating cash flow was mainly due to the elimination
of most air booking fees and the significant reduction of hotel booking fees in April 2009 as well as changes in the timing of
payments received from GDSs. In addition, during the year ended December 31, 2010, we made payments related to employee
incentive compensation costs accrued in 2009. There were no such payments made in the year ended December 31, 2009. The
changes in our other working capital accounts also decreased operating cash flow. These decreases were partially offset by
increases in operating cash flow due to higher merchant gross bookings in the year ended December 31, 2010 compared with
the year ended December 31, 2009, a decrease in cash interest payments and the timing of payments related to our marketing
spending.
Investing Activities
Cash flow used in investing activities increased to $47.5 million for the year ended December 31, 2011 from $40.1
million for the years ended December 31, 2010. This increase was due to higher capital spending of $4.0 million to support our
strategic initiatives, including investments in our global platform and private label distribution infrastructure, and an increase in
restricted cash balances. Cash flow used in investing activities decreased to $40.1 million for the year ended December 31,
2010 from $43.6 million for the year ended December 31, 2009 primarily due to lower capital spending.
Financing Activities
Cash flow used in financing activities decreased to $30.5 million for the year ended December 31, 2011 from $49.1
million for the year ended December 31, 2010. In 2010, we received cash proceeds, net of issuance costs, from the purchase of
shares of our common stock by Travelport, and we repaid borrowings made under the Revolver and repaid and also
extinguished amounts under the term loan. No similar proceeds were received nor were any debt extinguishments or
repayments made under the Revolver in 2011 other than the required payment on the term loan in an amount similar to that in
2010. The decrease in cash used in financing activities was also due to lower payments on the tax sharing liability in the current
year as compared with the prior year.
Cash flow used in financing activities increased to $49.1 million for the year ended December 31, 2010 from
$6.4 million for the year ended December 31, 2009. This change was primarily due to the repayment of borrowings made under
the Revolver, an increase in principal payments made on the Term Loan due to our requirement to make a prepayment from
excess cash flow in March 2010, an increase in cash used to repurchase portions of the Term Loan and an increase in payments
made under the tax sharing agreement with the Founding Airlines. The increase in cash flow used in financing activities was
partially offset by cash proceeds received, net of issuance costs, from the stock purchase by Travelport in January 2010.
Financing Arrangements
On July 25, 2007, we entered into a $685.0 million senior secured credit agreement (the “Credit Agreement”) consisting
of a seven-year $600.0 million term loan facility (the “Term Loan”) and a six-year $85.0 million revolving credit facility, which
was effectively reduced to the $72.5 million Revolver. The Term Loan and the Revolver bear interest at variable rates, at our
option, of LIBOR or an alternative base rate plus a margin. At December 31, 2011 and 2010, $472.2 million and $492.0 million
of borrowings were outstanding on the Term Loan, respectively. At December 31, 2011 and 2010, there were no outstanding
borrowings under the Revolver. In addition, at December 31, 2011 and 2010, there were the equivalent of $10.8 million and
$12.4 million of outstanding letters of credit issued under the Revolver, respectively, the majority of which were denominated
in Pounds Sterling. The amount of letters of credit issued under the Revolver reduces the amount available to us for
borrowings.
On June 2, 2009, we entered into an amendment (the “Amendment”) to our Credit Agreement, which permitted us to
purchase portions of the outstanding Term Loan on a non-pro rata basis using cash up to $10.0 million and future cash proceeds
from equity issuances and in exchange for equity interests on or prior to June 2, 2010. The portions of the Term Loan purchased