Orbitz 2009 Annual Report Download - page 38

2008
Successor
2007
Successor
2006
Successor
2005
Predecessor
2004
Predecessor
As of December 31, As of December 31,
(unaudited)
Balance sheet data:
Cash and cash equivalents.................. $ 31 $ 25 $ 18 $ 28 $ 24
Working capital (deficit)(b) ................. (258) (301) (283) (259) (204)
Total assets............................. 1,590 1,925 2,061 2,060 1,878
Total long-term liabilities .................. 766 765 407 269 295
Total shareholders’ equity/invested equity ...... 438 738 1,267 1,424 1,303
(a) The combined results of the Successor and the Predecessor for the periods in 2006 are not necessarily com-
parable due to the change in basis of accounting resulting from the Blackstone Acquisition and the associ-
ated change in capital structure. The presentation of the results for the year ended December 31, 2006 on
this combined basis does not comply with generally accepted accounting principles in the U.S. (“GAAP”);
however, we believe that this provides useful information to assess the relative performance of our busi-
nesses in the periods presented in the financial statements on an ongoing basis. The captions included within
our consolidated statements of operations that are materially impacted by the change in basis of accounting
primarily include net revenue, depreciation and amortization and impairment of goodwill and intangible
assets. We have disclosed the impact of the change in basis of accounting for each of these captions in
Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
(b) Defined as current assets less current liabilities.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
EXECUTIVE OVERVIEW
General
We are a leading global online travel company that uses innovative technology to enable leisure and
business travelers to search for and book a broad range of travel products. Our brand portfolio includes Orbitz,
CheapTickets, the Away Network, and Orbitz for Business in the Americas; ebookers in Europe; and
HotelClub and RatesToGo based in Sydney, Australia, which have operations globally. We provide customers
with the ability to book a comprehensive set of travel products, from over 85,000 suppliers worldwide,
including air travel, hotels, vacation packages, car rentals, cruises, travel insurance and destination services
such as ground transportation, event tickets and tours.
We generate revenue through multiple sources, including our retail model, merchant model, incentive
payments, advertising, and white label and hosting business. Through our retail model, we earn commissions
from suppliers for airline tickets, hotel rooms, car rentals and other travel products and services booked on our
websites. Through our merchant model, we generate revenue for our services based on the difference between
the total amount the customer pays for the travel product and the negotiated net rate plus estimated taxes that
the supplier charges us for that product. Under both the retail and merchant models, we also earn revenue by
charging customers a service fee for booking airline tickets, hotel rooms and certain other travel products. In
addition, we receive incentive payments for each segment of travel that is processed through a GDS.
We generate advertising revenue through our partner marketing programs. These programs provide direct
access to our customer base through a combination of display advertising, performance-based advertising and
other marketing programs. Our white label and hosting businesses enable us to earn revenue by licensing our
technology platform to, or hosting websites on behalf of, third-party partners.
We are a leader in air travel, the largest online travel segment. This leadership position has enabled us to
drive growth in non-air travel categories, such as hotels and dynamic vacation packages, which are vacation
packages that include different combinations of travel products. Our non-air travel categories generally
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