Orbitz 2011 Annual Report Download - page 71

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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In May 2010, we used a portion of the cash proceeds received from Travelport's purchase of shares of our common
stock in January 2010 to purchase $14.0 million in principal amount of the Term Loan. We immediately retired this
portion of the Term Loan in accordance with the Term Loan, as amended. The principal amount of the Term Loan
purchased (net of associated unamortized debt issuance costs of $0.1 million) exceeded the amount we paid to
purchase this portion of the Term Loan by $0.4 million. Accordingly, we recorded a $0.4 million gain on
extinguishment of a portion of the Term Loan, which was included in other income in our consolidated statement
of operations for the year ended December 31, 2010.
At December 31, 2011, $300.0 million of the Term Loan had a fixed interest rate as a result of interest rate swaps and
$172.2 million had a variable interest rate based on LIBOR, resulting in a blended weighted-average interest rate of 3.81% (see
Note 12 - Derivative Financial Instruments). At December 31, 2010, $300.0 million of the Term Loan had a fixed interest rate
as a result of interest rate swaps and $192.0 million had a variable interest rate based on LIBOR, resulting in a blended
weighted-average interest rate of 4.27%.
Revolver
The Revolver provides for borrowings and letters of credit of up to $72.5 million ($42.6 million in U.S. dollars and the
equivalent of $29.9 million denominated in Euros and Pounds sterling) and at December 31, 2011 bears interest at a variable
rate, at our option, of LIBOR plus a margin of 225 basis points or the Alternative Base Rate plus a margin of 125 basis points.
The margin is subject to change based on our total leverage ratio, as defined in the Credit Agreement, with a maximum margin
of 250 basis points on LIBOR-based loans and 150 basis points on Alternative Base Rate loans. We incur a commitment fee of
50 basis points on any unused amounts on the Revolver. The Revolver matures in July 2013.
At December 31, 2011 and 2010, there were no outstanding borrowings under the Revolver and 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
for borrowings. Due to the letters of credit issued under the Revolver, we had $61.7 million and $60.1 million of availability at
December 31, 2011 and 2010, respectively. Commitment fees on unused amounts under the Revolver were $0.3 million, $0.3
million and $0.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.
We incurred an aggregate of $5.0 million of debt issuance costs in connection with the Term Loan and Revolver. These
costs are being amortized to interest expense over the contractual terms of the Term Loan and Revolver based on the effective-
yield method. Amortization of debt issuance costs was $0.6 million, $0.7 million and $0.7 million for the years ended
December 31, 2011, 2010 and 2009, respectively.
The Term Loan and Revolver are both secured by substantially all of our and our domestic subsidiaries' tangible and
intangible assets, including a pledge of 100% of the outstanding capital stock or other equity interests of substantially all of our
direct and indirect domestic subsidiaries and 65% of the capital stock or other equity interests of certain of our foreign
subsidiaries, subject to certain exceptions. The Term Loan and Revolver are also guaranteed by substantially all of our domestic
subsidiaries.
The Credit Agreement contains various customary restrictive covenants that limit our ability to, among other things:
incur additional indebtedness or enter into guarantees; enter into sale and leaseback transactions; make investments, loans or
acquisitions; grant or incur liens on our assets; sell our assets; engage in mergers, consolidations, liquidations or dissolutions;
engage in transactions with affiliates; and make restricted payments.
The Credit Agreement requires us to maintain a minimum fixed charge coverage ratio and not to exceed a maximum
total leverage ratio, each as defined in the Credit Agreement. The minimum fixed charge coverage ratio that we are required to
maintain for the remainder of the Credit Agreement is 1 to 1. The maximum total leverage ratio that we were required not to
exceed was 3.5 to 1 at December 31, 2010 and declined to 3.0 to 1 effective March 31, 2011. As of December 31, 2011, we
were in compliance with all covenants and conditions of the Credit Agreement.