Orbitz 2010 Annual Report Download - page 48

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Comparison of the year ended December 31, 2008 to the year ended December 31, 2007
2008 2007
$
Change
%
Change(a)
Years Ended
December 31,
(in millions)
Net revenue
Air................................................. $ 339 $375 $ (36) (10)%
Hotel............................................... 239 235 4 2%
Dynamic packaging .................................... 114 105 9 9%
Advertising and media .................................. 60 43 17 40%
Other............................................... 118 101 17 16%
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) **
Other (expense)
Net interest expense .................................... (63) (83) 20 (25)%
Total other (expense) ..................................... (63) (83) 20 (25)%
Loss before income taxes ................................. (301) (41) (260) **
(Benefit) provision for income taxes .......................... (2) 43 (45) **
Net loss ............................................... (299) (84) (215) **
Less: Net income attributable to noncontrolling interest . . . ......... — (1) 1 **
Net loss attributable to Orbitz Worldwide, Inc. ................ $ (299) $ (85) $(214) **
As a percent of net revenue(a)
Cost of revenue ....................................... 19% 18%
Selling, general and administrative expense ................... 31% 35%
Marketing expense ..................................... 36% 35%
** Not meaningful.
(a) Percentages are calculated on unrounded numbers.
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
resulted in an increase of $2 million in air net revenue. The decrease in net revenue from air bookings,
excluding the impact of foreign currency fluctuations, was $38 million.
48