Orbitz 2008 Annual Report Download - page 58

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Cash Flows
Our net cash flows from operating, investing and financing activities for the periods indicated in the tables below were as follows:
As Restated (Note 19)
Year Ended
December 31, 2007
Successor
Period from
August 23, 2006 to
December 31, 2006
Successor
Period from
January 1, 2006 to
August 22, 2006
Predecessor
Year Ended
December 31, 2005
Predecessor
(in millions)
Beginning cash and cash
equivalents $ 18 $ 26 $ 28 $ 24
Cash provided by (used in):
Operating activities 69 39 121 59
Investing activities (80) (29) (54) (479)
Financing activities 13 (7) (70) 433
Effect of changes in exchange
rates on cash and cash equivalents 5 (11) 1 (9)
Net increase (decrease) in cash
and cash equivalents 7 (8) (2) 4
Ending cash and cash
equivalents $ 25 $ 18 $ 26 $ 28
Comparison of the year ended December 31, 2007 to the year ended December 31, 2006
Operating Activities
Cash provided by operating activities consists of net loss, adjusted for non-cash items such as depreciation, amortization, impairment of goodwill and
intangible assets, and stock based compensation and changes in various working capital items, principally accrued merchant payables, deferred income and
accounts payable.
We generated cash flow from operations of $69 million for the year ended December 31, 2007 compared to $160 million for the year ended December 31,
2006. The decrease in operating cash flow during 2007 is largely due to $74 million of cash interest payments made during 2007 primarily related to
intercompany notes payable to Travelport that were outstanding prior to the IPO and the $600 million term loan facility and $85 million revolving credit facility
that we entered into concurrent with the IPO. We did not have any third-party debt outstanding during 2006. The decrease in cash flow from operations was also
attributed to changes in accrued merchant payable and deferred income balances.
Investing Activities
Cash flow used in investing activities decreased $3 million, to $80 million for the year ended December 31, 2007 from $83 million for the year ended
December 31, 2006. The decrease in cash used in investing activities is due in part to a $30 million decrease in capital expenditures as well as the receipt of
$4 million of cash proceeds from asset sales during 2007. This decrease was offset in part by the impact of the sale of our offline U.K. travel business in July
2007. The sale of this business resulted in a net decrease in cash of $31 million primarily due to the buyer's assumption of this business' cash balance at the time
of sale, partially offset by the cash proceeds we received for the sale.
51
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008