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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
83
Europe and other markets as defined in the New Travelport GDS Service Agreement. The Company was required to pay a fee
for each segment not booked through Travelport GDSs in 2014 subject to exclusivity obligations discussed above. However,
beginning January 1, 2015, the Company is no longer subject to exclusivity obligations. Under the New Travelport GDS
Service Agreement, beginning in 2015, we are obligated to provide certain levels of volume over the contract period and may
be subject to pay shortfall payments in certain cases if we fail to meet volume commitments. The agreement terminates on
December 31, 2018.
No payments were required to be made to Travelport related to the minimum segment requirements for our domestic and
European brands for the years ended December 31, 2014, 2013 and 2012.
Corporate Travel Agreement
We provide corporate travel management services to Travelport and its subsidiaries.
16. Fair Value Measurements
The following table shows the fair value of our assets and liabilities that are required to be measured at fair value on a
recurring basis as of December 31, 2014 and 2013, which are classified as Other current assets, Other current liabilities and
Other non-current liabilities in our Consolidated Balance Sheets.
Fair Value Measurements as of
December 31, 2014 December 31, 2013
Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3) Total
Quoted
prices in
active
markets
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
(in thousands) (in thousands)
Assets:
Foreign currency derivative
assets . . . . . . . . . . . . . . . . . . . . . . $ 4,275 $ 4,275 $ — $ — $ — $ — $ — $ —
Liabilities:
Foreign currency derivative
liabilities . . . . . . . . . . . . . . . . . . . $ — $ — $ — $ — $ 1,412 $ 1,412 $ — $ —
Interest rate swap liabilities. . . . . $ 1,723 $ — $ 1,723 $ — $ 1,205 $ — $ 1,205 $ —
We value our foreign currency hedges based on the difference between the foreign currency contract rate and widely
available foreign currency rates as of the measurement date. Our foreign currency hedges are short-term in nature, generally
maturing within 30 days. We value our interest rate swaps using valuations that are calibrated to the initial trade prices. Using a
market-based approach, subsequent valuations are based on observable inputs to the valuation model including interest rates,
credit spreads and volatilities.
Fair Value of Financial Instruments
For certain of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable,
accrued merchant payable and accrued expenses, the carrying value approximates or equals fair value due to their short-term
nature.
The carrying value of the Term Loan was $447.8 million at December 31, 2014, compared with a fair value of $442.2
million. At December 31, 2013, the carrying value of the Term Loan was $443.3 million, compared with a fair value of $446.8
million. The fair values were determined based on quoted market ask prices, which is classified as a Level 2 measurement.