Orbitz 2009 Annual Report Download - page 44

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Net Revenue — See discussion of net revenue in the Results of Operations section below.
Results of Operations
Comparison of the year ended December 31, 2008 to the year ended December 31, 2007
2008
Successor
2007
Successor
$
Change
%
Change
Year Ended
December 31,
(in millions)
Net revenue
Air............................................... $ 339 $375 $ (36) (10)%
Non-air ............................................ 414 394 20 5%
Other ............................................. 117 90 27 30%
Total net revenue . ..................................... 870 859 11 1%
Cost and expenses
Cost of revenue . ..................................... 163 157 6 4%
Selling, general and administrative ........................ 272 301 (29) (10)%
Marketing .......................................... 310 302 8 3%
Depreciation and amortization ........................... 66 57 9 16%
Impairment of goodwill and intangible assets ................ 297 — 297 **
Total operating expenses ................................. 1,108 817 291 36 %
Operating (loss) income ................................ (238) 42 (280) (667)%
Other (expense)
Interest expense, net .................................. (63) (83) 20 (24)%
Total other (expense).................................... (63) (83) 20 (24)%
Loss before income taxes and minority interest .............. (301) (41) (260) 634 %
(Benefit) provision for income taxes ........................ (2) 43 (45) (105)%
Minority interest, net of tax ............................... — 1 (1) (100)%
Net loss ............................................. $ (299) $ (85) $(214) 252 %
As a percent of net revenue
Cost of revenue . ..................................... 19% 18%
Selling, general and administrative expense ................. 31% 35%
Marketing expense ................................... 36% 35%
** Not meaningful.
Net Revenue
Net revenue increased $11 million, or 1%, to $870 million for the year ended December 31, 2008 from
$859 million for the year ended December 31, 2007. As a result of the Blackstone Acquisition, our net
revenue during the year ended December 31, 2007 was reduced due to deferred revenue that was written off at
the time of the acquisition. Accordingly, we could not record revenue that was generated before the Blackstone
Acquisition but not yet recognized at the time of the acquisition. The following discussion and analysis
describes the impact on the comparability of net revenue year-over-year due to our inability to record this
revenue, and refers to these amounts as “purchase accounting adjustments.”
Air. Net revenue from air bookings decreased $36 million, or 10%, to $339 million for the year ended
December 31, 2008 from $375 million for the year ended December 31, 2007. Foreign currency fluctuations
44