Orbitz 2010 Annual Report Download - page 52

Assets of the Notes to Consolidated Financial Statements). There was no impairment during the year ended
December 31, 2007.
Net Interest Expense
Net interest expense decreased by $20 million, or 25%, to $63 million for the year ended December 31,
2008 from $83 million for the year ended December 31, 2007. The decrease in net interest expense was
primarily due to the repayment of $860 million of intercompany notes payable to Travelport and, to a lesser
extent, the assignment of certain notes payable between subsidiaries of Travelport and our subsidiaries to us,
both of which occurred in connection with the IPO. This decrease was offset in part by interest expense
incurred on the $600 million term loan facility entered into concurrent with the IPO and the corresponding
interest rate swaps entered into to hedge a portion of the variable interest payments on the term loan. An
increase in interest expense accreted on the tax sharing liability and a decrease in capitalized interest on
internal software development projects also partially offset the decrease in interest expense. During the years
ended December 31, 2008 and December 31, 2007, $18 million and $15 million of the total net interest
expense recorded was non-cash, respectively.
(Benefit) Provision for Income Taxes
We recorded a tax benefit of $2 million for the year ended December 31, 2008 and a tax provision of
$43 million for the year ended December 31, 2007. The tax benefit recorded during 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 the year primarily because we were not able to realize any tax benefit on the goodwill impairment
charge and only a limited amount of tax benefit on the trademarks and trade names impairment charge
recorded during the year ended December 31, 2008.
The tax provision recorded during the year ended December 31, 2007 was primarily due to a valuation
allowance established in the third quarter of 2007 against $30 million of foreign net operating loss
carryforwards, net of tax, related to portions of our U.K.-based business. This item was unique to 2007 and
did not recur in 2008.
Related Party Transactions
For a discussion of certain relationships and related party transactions, see Note 18 — Related Party
Transactions of the Notes to Consolidated Financial Statements.
Seasonality
For a discussion of seasonal fluctuations in the demand for the products and services we offer, see Item 1,
“Business — Seasonality.”
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Our principal sources of liquidity are our cash flows from operations, cash and cash equivalents, and
borrowings under our $85 million revolving credit facility. At December 31, 2009 and December 31, 2008,
our cash and cash equivalents balances were $89 million and $31 million, respectively. We had $26 million
and $52 million of availability under our revolving credit facility at December 31, 2009 and December 31,
2008, respectively. This availability reflects the effective reduction in total availability under our revolving
credit facility in 2008 following the bankruptcy of Lehman Commercial Paper Inc. (“LCPI”) as described in
“Financing Arrangements” below. Total available liquidity from cash and cash equivalents and our revolving
credit facility was $115 million and $83 million at December 31, 2009 and December 31, 2008, respectively.
We require letters of credit to support certain commercial agreements, leases and certain regulatory
agreements. The majority of these letters of credit have been issued by Travelport on our behalf. At
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