Orbitz 2011 Annual Report Download - page 80

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
80
The table below shows the changes in this liability during the years ended December 31, 2011, 2010 and 2009:
Years Ended December 31,
2011 2010 2009
(in thousands)
Balance at January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,796 $ 4,910 $ 5,765
Decrease in unrecognized tax benefits as a result of tax positions taken during
the prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (367)(1,140)(970)
Impact of foreign currency translation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 26 115
Balance at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,429 $ 3,796 $ 4,910
The total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was $0.7 million
and $1.0 million at December 31, 2011 and 2010, respectively. During the next twelve months, we anticipate a reduction to this
liability due to the lapsing of statutes of limitations of approximately $0.5 million, all of which would affect our effective tax
rate.
We recognize interest and penalties related to unrecognized tax benefits in income tax expense. We recognized interest
and penalties of $0.2 million, $0.1 million and $0.2 million during the years ended December 31, 2011, 2010 and 2009,
respectively. Accrued interest and penalties were $0.9 million and $0.7 million at December 31, 2011 and 2010, respectively.
We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. A number of years
may elapse before an uncertain tax position, for which we have unrecognized tax benefits, is audited and finally resolved. We
adjust these unrecognized tax benefits, as well as the related interest and penalties, in light of changing facts and circumstances.
Settlement of any particular position could require the use of cash. Favorable resolution could result in a reduction to our
effective income tax rate in the period of resolution.
The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdictions include
the United States (federal and state), the United Kingdom and Australia. With limited exceptions, we are no longer subject to
U.S. federal, state and local income tax examinations by tax authorities for years before 2007. We are no longer subject to U.K.
federal income tax examinations for years before 2005. We are no longer subject to Australian federal income tax examinations
for years before 2007.
With respect to periods prior to the Blackstone Acquisition, we are only required to take into account income tax returns
for which we or one of our subsidiaries is the primary taxpaying entity, namely separate state returns and non-U.S. returns.
Uncertain tax positions related to U.S. federal and state combined and unitary income tax returns filed are only applicable in
the post-acquisition accounting period. We and our domestic subsidiaries currently file a consolidated income tax return for
U.S. federal income tax purposes.
11. Equity-Based Compensation
We issue share-based awards under the Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan, as amended (the “Plan”).
The Plan provides for the grant of equity-based awards, including restricted stock, restricted stock units, stock options, stock
appreciation rights and other equity-based awards to our directors, officers and other employees, advisors and consultants who
are selected by the Compensation Committee of the Board of Directors (the “Compensation Committee”) for participation in
the Plan. At our Annual Meeting of Shareholders on June 1, 2011, our shareholders approved an amendment to the Plan,
increasing the number of shares of our common stock available for issuance under the Plan from 18,100,000 shares to
21,100,000 shares, subject to adjustment as provided by the Plan. As of December 31, 2011, 7,550,125 shares were available
for future issuance under the Plan.