Orbitz 2009 Annual Report Download - page 114

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Corporate Travel Agreements
We provide Cendant, Wyndham Worldwide Corporation (“Wyndham”), Avis Budget Group and Realogy
with corporate travel management services. The agreements have an initial term of three years, unless
terminated earlier by either party in accordance with the terms of the agreement.
Vendor, Partner Marketing and White Label and Hosting Agreements
In the normal course of conducting business, we have entered into various agreements with Wyndham
and Avis Budget Group, both of which were affiliates of Cendant. We believe that these agreements have been
executed on terms comparable to those of unrelated third parties and include the following:
vendor agreements that provide us access to their products and services for distribution on our various
websites;
partner marketing agreements provide for the promotion of Wyndham and Avis Budget Group products
and services on our various websites; and
white label and hosting agreements pursuant to which we host various white label websites that
incorporate their design elements and allow for the booking of air, car and hotel packages.
19. Fair Value Measurements
We adopted SFAS No. 157 on January 1, 2008. Under this standard, fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a
fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the
related disclosures. In accordance with FSP 157-2, we deferred the adoption of SFAS No. 157 for our non-
financial assets and non-financial liabilities, except those items recognized or disclosed at fair value on an
annual or more frequently recurring basis, until January 1, 2009. Under SFAS No. 159, companies may choose
to measure many financial instruments and certain other items at fair value. We did not elect the fair value
measurement option under SFAS No. 159 for any of our financial assets or liabilities (see Note 2 — Summary
of Significant Accounting Policies).
We have derivative financial instruments that must be measured under the new fair value standard. We
currently do not have non-financial assets and non-financial liabilities that are required to be measured at fair
value on a recurring basis. SFAS No. 157 establishes a valuation hierarchy for disclosure of the inputs to
valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs
are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset
or liability, either directly or indirectly through market corroboration, for substantially the full term of the
financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure
assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is
determined based on the lowest level input that is significant to the fair value measurement.
114
ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)