Orbitz 2009 Annual Report Download - page 93

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or cash flows in any given reporting period. We do not believe that the impact of this unresolved litigation
would result in a material liability to us in relation to our financial position or liquidity.
We are currently seeking to recover insurance reimbursement for costs incurred to defend the hotel
occupancy tax cases. We recorded a reduction to selling, general and administrative expense in our
consolidated statements of operations for reimbursements received of $8 million and $3 million for the years
ended December 31, 2008 and December 31, 2007, respectively. The recovery of additional amounts, if any,
by us and the timing of receipt of these recoveries is unclear. As such, in accordance with SFAS No. 5,
“Accounting for Contingencies,” as of December 31, 2008, we have not recognized a reduction to selling,
general and administrative expense in our consolidated statements of operations for the outstanding contingent
claims for which we have not yet received reimbursement.
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.
Financing Arrangements
We are required to issue letters of credit to certain suppliers and non-U.S. government agencies.
Substantially all of these letters of credit were issued by Travelport on our behalf under the terms of the
Separation Agreement entered into in connection with the IPO. The letter of credit fees were $3 million,
$2 million, almost nil and almost nil for the years ended December 31, 2008 and December 31, 2007 and for
the periods from August 23, 2006 to December 31, 2006 and January 1, 2006 to August 22, 2006, respectively.
At December 31, 2008 and December 31, 2007, there were $67 million and $74 million of outstanding letters
of credit issued by Travelport on our behalf, respectively (see Note 18 — Related Party Transactions).
12. Income Taxes
Pre-tax (loss) income for U.S. and non-U.S. operations consisted of the following:
Year Ended
December 31, 2008
Successor
Year Ended
December 31, 2007
Successor
Period from
August 23, 2006 to
December 31, 2006
Successor
Period from
January 1, 2006 to
August 22, 2006
Predecessor
(in millions)
U.S. ..................... $(124) $ (6) $ (1) $ 31
Non-U.S. .................. (177) (35) (23) (151)
Loss before income taxes ...... $(301) $(41) $(24) $(120)
93
ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)