Orbitz 2010 Annual Report Download - page 47

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Net Interest Expense
Net interest expense decreased by $6 million, or 8%, to $57 million for the year ended December 31,
2009 from $63 million for the year ended December 31, 2008. The decrease in net interest expense was
primarily due to lower interest expense incurred on the Term Loan, which was primarily driven by lower
interest rates. A decrease in interest expense accreted on the tax sharing liability also contributed to the
decrease. These decreases were partially offset by a decline in interest income earned. During the years ended
December 31, 2009 and December 31, 2008, $15 million and $18 million of the total net interest expense
recorded was non-cash, respectively.
Gain on Extinguishment of Debt
During the year ended December 31, 2009, we purchased and retired $10 million in principal amount of
the Term Loan. The principal amount of the Term Loan purchased (net of associated unamortized debt
issuance costs of almost nil) exceeded the amount we paid to purchase the debt (inclusive of miscellaneous
fees incurred) by $2 million. Accordingly, we recorded a $2 million gain on extinguishment of a portion of the
Term Loan during the year ended December 31, 2009. There was no gain on extinguishment of debt recorded
during the year ended December 31, 2008 (see Note 7 — Term Loan and Revolving Credit Facility of the
Notes to Consolidated Financial Statements).
Provision (Benefit) for Income Taxes
We recorded a tax provision of $9 million for the year ended December 31, 2009 and a tax benefit of
$2 million for the year ended December 31, 2008. The provision for income taxes for the year ended
December 31, 2009 was primarily due to a full valuation allowance established against the deferred tax assets
of our Australia-based business (see Note 12 — Income Taxes of the Notes to Consolidated Financial
Statements).
The tax benefit recorded for the year ended December 31, 2008 related to certain of our international
subsidiaries. The amount of the tax benefit recorded during the year ended December 31, 2008 was
disproportionate to the amount of pre-tax net loss incurred during that period primarily because we were not
able to realize any tax benefits on the goodwill impairment charge and only a limited amount of tax benefit on
the trademarks and trade names impairment charge, which were recorded during the third quarter of 2008.
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