Orbitz 2010 Annual Report Download - page 100

The total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was
$1 million, $1 million and $2 million as of December 31, 2009, December 31, 2008 and December 31, 2007,
respectively. We do not expect to make any cash tax payments nor do we expect any statutes of limitations to
lapse related to our liability for unrecognized tax benefits within the next twelve months.
We recognize interest and penalties related to unrecognized tax benefits in income tax expense. We
recognized interest and penalties of almost nil during each of the years ended December 31, 2009,
December 31, 2008 and December 31, 2007, respectively. Accrued interest and penalties were $1 million and
almost nil as of December 31, 2009 and December 31, 2008, respectively.
We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. A
number of years may elapse before an uncertain tax position, for which we have unrecognized tax benefits, is
audited and finally resolved. We adjust these unrecognized tax benefits, as well as the related interest and
penalties, in light of changing facts and circumstances. Settlement of any particular position could require the
use of cash. Favorable resolution could be recognized as a reduction to our effective income tax rate in the
period of resolution.
The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing
jurisdictions include the U.S. (federal and state), the U.K. and Australia. With limited exceptions, we are no
longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before
2005. We are no longer subject to U.K. federal income tax examinations for years before 2008. We are no
longer subject to Australian federal income tax examinations for the years before 2005.
With respect to periods prior to the Blackstone Acquisition, we are only required to take into account
income tax returns for which we or one of our subsidiaries is the primary taxpaying entity, namely separate
state returns and non-U.S. returns. Uncertain tax positions related to U.S. federal and state combined and
unitary income tax returns filed are only applicable in the post-acquisition accounting period. We and our
domestic subsidiaries currently file a consolidated income tax return for U.S. federal income tax purposes.
In connection with the IPO, on July 25, 2007, the Company entered into a tax sharing agreement with
Travelport, pursuant to which the Company and Travelport agreed to split, on a 29%/71% basis, all:
• taxes attributable to certain restructuring transactions undertaken in contemplation of the IPO;
• certain taxes imposed as a result of prior membership in a consolidated group, including (i) the
consolidated group for U.S. federal income tax purposes of which the Company was the common
parent and (ii) the consolidated group of which Cendant Corporation was the common parent; and
• any tax-related liabilities under the agreement by which Travelport (which, at the time, included the
Company) was acquired from Cendant Corporation.
13. Equity-Based Compensation
Our employees have participated in the Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan, as
amended (the “Plan”) since the IPO. Prior to the IPO, our employees had participated in the Travelport
Equity-Based Long-Term Incentive Plan (the “Travelport Plan”). The awards granted under each plan are
described below.
Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan
The Plan provides for the grant of equity-based awards, including restricted stock, restricted stock units,
stock options, stock appreciation rights and other equity-based awards to our directors, officers and other
employees, advisors and consultants who are selected by the Compensation Committee of the Board of
Directors (the “Compensation Committee”) for participation in the Plan. The number of shares of our common
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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)