Orbitz 2009 Annual Report Download - page 20

security or pay the assessment in order to challenge the tax assessment in court. The proliferation of new hotel
occupancy tax cases or audit proceedings could result in substantial additional defense costs. These events
could also adversely impact our business and financial performance (see Item 3, “Legal Proceedings”).
If our uncertain tax positions are resolved for amounts different than our estimates, we will be required to
adjust the related assets and liabilities which may have a material impact on our provision for income taxes
and results of operations.
As of December 31, 2008, we have recorded estimated liabilities of $6 million for uncertain income tax
positions under Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (“FIN 48”). Our assessment of uncertain tax positions requires that we make
estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions
and other matters. If our uncertain tax positions are resolved for amounts different than our estimates, we will
be required to adjust the amounts of the related assets and liabilities, which may have a material impact on
our provision for income taxes and our results of operations.
Our businesses are highly regulated, and any failure to comply with such regulations or any changes in
such regulations could adversely affect us.
We operate in a highly regulated industry both in the U.S. and internationally. Our business, financial
condition and results of operations could be adversely affected by unfavorable changes in or the enactment of
new laws, rules and regulations applicable to us, which could decrease demand for our products and services,
increase costs or subject us to additional liabilities. Moreover, regulatory authorities have relatively broad
discretion to grant, renew and revoke licenses and approvals and to implement regulations. Accordingly, these
regulatory authorities could prevent or temporarily suspend us from carrying on some or all of our activities or
otherwise penalize us if our practices were found not to comply with the then current regulatory or licensing
requirements or any interpretation of such requirements by the regulatory authority. Our failure to comply with
any of these requirements or interpretations could have a material adverse effect on our operations. In addition,
the various regulatory regimes to which we are subject may conflict so that compliance with the regulatory
requirements in one jurisdiction may create regulatory issues in another.
Our business is subject to laws and regulations relating to our revenue generating and marketing activities,
including those prohibiting unfair and deceptive advertising or practices. Our travel services are subject to
regulation and laws governing the offer of travel products and services, including laws requiring us to register
as a “seller of travel” in various jurisdictions and to comply with certain disclosure requirements. As an OTC
that offers customers the ability to book air travel in the U.S., we are also subject to regulation by the
Department of Transportation, which has authority to enforce economic regulations and may assess civil
penalties or challenge our operating authority.
Our failure to comply with these laws and regulations may subject us to fines, penalties and potential
criminal violations. Any changes to these laws or regulations or any new laws or regulations may make it
more difficult for us to operate our businesses and may have a material adverse effect on our operations.
Our processing, storage, use and disclosure of personal data could give rise to liabilities as a result of
governmental regulation, conflicting legal requirements, differing views of personal privacy rights or
security breaches.
In the processing of our traveler transactions, we receive and store a large volume of personally
identifiable information. This information is increasingly subject to legislation and regulations in numerous
jurisdictions around the world. This government action is typically intended to protect the privacy and security
of personal information, including credit card information, that is collected, processed and transmitted in or
from the governing jurisdiction.
We could be adversely affected if domestic or international legislation or regulations are expanded to
require changes in our business practices, or if governing jurisdictions interpret or implement their legislation
or regulations in ways that negatively affect our business.
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