Orbitz 2011 Annual Report Download - page 77

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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consolidated statements of operations for any outstanding contingent claims reimbursement.
Surety Bonds and Bank Guarantees
In the ordinary course of business, we obtain surety bonds and bank guarantees, to secure performance of certain of our
obligations to third parties. At December 31, 2011 and 2010, there were $0.5 million and $0.7 million of surety bonds
outstanding, respectively. At December 31, 2011 and 2010, there were $1.6 million of bank guarantees outstanding.
Financing Arrangements
We are required to issue letters of credit to certain suppliers and non-U.S. regulatory and government agencies primarily
to satisfy consumer protection requirements. The majority of these letters of credit were issued by Travelport on our behalf
under the terms of the Separation Agreement, as amended (the “Separation Agreement”), entered into in connection with the
IPO. At December 31, 2011 and 2010, there were $74.2 million and $72.3 million of outstanding letters of credit issued by
Travelport on our behalf, respectively (see Note 16 - Related Party Transactions). 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. Total letter of credit fees were $5.8 million, $4.1
million and $3.8 million for the years ended December 31, 2011, 2010, and 2009, respectively.
10. Income Taxes
Pre-tax income/(loss) for U.S. and non-U.S. operations consisted of the following:
Years Ended December 31,
2011 2010 2009
(in thousands)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,129 $ 37,723 $ (274,674)
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,355)(93,579)(53,048)
Loss before income taxes . . . . . . . . . . . . . . . . . . . . $ (35,226)$ (55,856)$ (327,722)
The provision/(benefit) for income taxes consisted of the following:
Years Ended December 31,
2011 2010 2009
(in thousands)
Current
U.S. federal and state . . . . . . . . . . . . . . . . . . . . . . $ (13) $ 93 $ 1,404
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,334 794 909
1,321 887 2,313
Deferred
U.S. federal and state . . . . . . . . . . . . . . . . . . . . . . (347)— —
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,077 1,494 6,920
730 1,494 6,920
Provision for income taxes . . . . . . . . . . . . . . . . . . . $ 2,051 $ 2,381 $ 9,233
As of December 31, 2011 and 2010, our U.S. federal, state and foreign income taxes receivable was $0.4 million and
$0.3 million, respectively.
The provisions for income taxes for the years ended December 31, 2011 and 2010 were primarily due to taxes on the net
income of certain European-based subsidiaries that had not established a valuation allowance and U.S. state and local income
taxes. The provision for income taxes for the year ended December 31, 2009 was primarily due to a full valuation allowance
established against $10.9 million of foreign deferred tax assets related to our Australia-based business, as it was determined that
it was more likely than not that these deferred tax assets were no longer realizable. We are required to assess whether valuation
allowances should be established against our deferred tax assets based on the consideration of all available evidence using a