Orbitz 2009 Annual Report Download - page 59

Credit Agreement. Mandatory prepayments are applied, in order of maturity, to the scheduled quarterly
term loan principal payments. Based on our cash flow for the year ended December 31, 2008, we are not
required to make a mandatory prepayment in the first quarter of 2009. The potential amount of mandatory
prepayments that will be required beyond the first quarter of 2009 is not reasonably estimable as of
December 31, 2008. As a result, the table above excludes mandatory prepayments that could be required
under the Term Loan beyond the first quarter of 2009.
(b) Represents estimated interest payments on the variable portion of the Term Loan based on the one-month
LIBOR as of December 31, 2008 and fixed interest payments under interest rate swaps.
(c) Represents costs due to the early termination of an agreement.
(d) The Travelport GDS service agreement is structured such that we earn incentive revenue for each segment
that is processed through Galileo or Worldspan. The agreement also required us to process 38 million seg-
ments during 2008, 16 million segments through Worldspan and 22 million segments through Galileo. The
required number of segments processed in future years for Worldspan remains fixed at 16 million seg-
ments, while the required number of segments for Galileo is subject to adjustment based upon the actual
segments processed in the preceding year. In 2009, we are required to process approximately 20 million
segments through Galileo. Our failure to process the required number of segments would result in a short-
fall payment of $1.25 per segment below the required minimum. The table above includes shortfall pay-
ments required by the agreement if we do not process any segments through Worldspan, as well as
shortfall payments required if we do not process any segments through Galileo during the year ended
December 31, 2009. Because the required number of segments for Galileo adjusts based on the actual seg-
ments processed in the preceding year, we are unable to predict shortfall payments that may be required
by the agreement beyond 2009. If we meet the minimum number of segments, we are not required to
make payments of any kind to Galileo or Worldspan (see Note 18 — Related Party Transactions of the
Notes to Consolidated Financial Statements). No payments were made to Travelport in 2008 related to the
required minimum segments.
(e) We expect to make approximately $226 million of payments in connection with the tax sharing agreement
with the Founding Airlines (see Note 9 — Tax Sharing Liability of the Notes to Consolidated Financial
Statements).
(f) Excluded from the above table are $6 million of liabilities for uncertain tax positions for which the period
of settlement is not currently determinable.
Other Commercial Commitments and Off-Balance Sheet Arrangements
Surety Bonds and Bank Guarantees
In the ordinary course of business, we obtain surety bonds and bank guarantees, issued for the benefit of
a third party, to secure performance of certain of our obligations to third parties. At December 31, 2008 and
December 31, 2007, there were $3 million and $3 million of surety bonds outstanding, respectively, and
$2 million and $6 million of bank guarantees outstanding, respectively.
CRITICAL ACCOUNTING POLICIES
The preparation of our consolidated financial statements and related notes in conformity with generally
accepted accounting principles requires us to make judgments, estimates and assumptions that affect the
amounts reported therein. An accounting policy is considered to be critical if it meets the following two
criteria:
• the policy requires an accounting estimate to be made based on assumptions about matters that are
highly uncertain at the time the estimate is made; and
• different estimates that reasonably could have been used or changes in the estimates that are reasonably
likely to occur from period to period would have a material impact on our consolidated financial
statements.
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