Orbitz 2011 Annual Report Download - page 85

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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
85
currency contracts outstanding with a total net notional amount of $256.1 million, almost all of which matured in January 2012.
The foreign currency contracts do not qualify for hedge accounting treatment; accordingly, changes in the fair value of the
foreign currency contracts are recorded in net income as a component of selling, general and administrative expense in our
consolidated statements of operations.
The following table shows the fair value of our foreign currency hedges:
Fair Value Measurements as of
Balance Sheet Location December 31, 2011 December 31, 2010
(in thousands)
Asset Derivatives:
Foreign currency hedges . . . . . . Other current assets $ 991 $ —
Liability Derivatives:
Foreign currency hedges . . . . . . Other current liabilities $ 495 $ 2,227
The following table shows the changes in the fair value of our foreign currency contracts recorded during the years
ended December 31, 2011, 2010 and 2009:
(Loss) in Selling, General & Administrative Expense
Years Ended December 31,
2011 2010 2009
(in thousands)
Foreign currency hedges (a) . . . . . . . . $ (2,420) $ (1,353)$ (6,782)
(a) We recorded transaction gains/(losses) associated with the re-measurement and settlement of our foreign
denominated assets and liabilities of $(3.0) million, $(3.7) million and $3.3 million for the years ended
December 31, 2011, 2010 and 2009, respectively. These transaction gains/(losses) were included in selling,
general and administrative expense in our consolidated statements of operations. The net impact of these
transaction gains/(losses) together with the gains/(losses) incurred on our foreign currency hedges was $(5.4)
million, $(5.1) million and $(3.5) million for the years ended December 31, 2011, 2010 and 2009, respectively.
13. Severance
On January 6, 2009, our former President and Chief Executive Officer resigned. In connection with his resignation and
pursuant to the terms of his employment agreement with the Company, we incurred total expenses of $2.1 million in the year
ended December 31, 2009 relating to severance benefits and other termination-related costs, which were included in selling,
general and administrative expense in our consolidated statement of operations. The majority of these cash payments were
made in equal amounts over a twenty-four month period from his resignation date, with the final payment made in December
2010. In addition, we recorded $1.8 million of additional equity-based compensation expense in the year ended December 31,
2009 related to the accelerated vesting of certain equity-based awards held by him, which is net of any related forfeitures.
We also reduced our workforce by approximately 130 domestic and international employees during the year ended
December 31, 2009, and as a result we incurred $4.6 million of expenses related to severance benefits and other termination-
related costs, which were included in selling, general and administrative expense in our consolidated statement of operations.
Of the total employees severed, approximately 50 were severed in the first quarter of 2009 and an additional 50 employees
were severed in the second quarter of 2009 in response to weakening demand in the travel industry and deteriorating economic
conditions. The remaining 30 employees were severed in the fourth quarter of 2009 in an effort to better align the staffing
levels of ebookers with its business objectives. As of December 31, 2010, all of these costs had been paid.
14. Employee Benefit Plans
We sponsor a defined contribution savings plan for employees in the United States that provides certain of our eligible
employees an opportunity to accumulate funds for retirement. HotelClub and ebookers sponsor similar defined contribution
savings plans. After employees have attained one year of service, we match the contributions of participating employees on the