Orbitz 2010 Annual Report Download - page 55

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additional funds through debt or equity offerings. We also may be required to raise additional capital if, in the
future, we require more liquidity than is available under our revolving credit facility.
Cash Flows
Our net cash flows from operating, investing and financing activities for the periods indicated in the
tables below were as follows:
2009 2008 2007
Years Ended
December 31,
(in millions)
Beginning cash and cash equivalents ............................. $ 31 $25 $18
Cash provided by (used in):
Operating activities .......................................... 105 76 69
Investing activities .......................................... (43) (58) (80)
Financing activities .......................................... (6) (8) 13
Effect of changes in exchange rates on cash and cash equivalents ......... 2 (4) 5
Net increase in cash and cash equivalents ........................... 58 6 7
Ending cash and cash equivalents ............................... $ 89 $31 $25
Comparison of the year ended December 31, 2009 to the year ended December 31, 2008
Operating Activities
Cash provided by operating activities consists of net loss, adjusted for non-cash items such as deprecia-
tion, amortization, impairment of goodwill and intangible assets, and stock based compensation and changes in
various working capital items, principally accounts receivable, accrued expenses, accrued merchant payables,
deferred income and accounts payable.
We generated cash flow from operations of $105 million for the year ended December 31, 2009 compared
with $76 million for the year ended December 31, 2008. The increase in operating cash flow was primarily
due to cost reductions taken by us in 2009, improvements in our overall marketing efficiency and a decrease
in cash interest payments. These operating cash flow increases were partially offset by a decrease in operating
cash flow due to lower merchant hotel gross bookings in the first three quarters of 2009 compared with the
first three quarters of 2008, as a result of lower global ADRs. The elimination of most air booking fees, the
reduction of hotel booking fees and the shortening of payment terms with a key vendor during 2009 also
negatively impacted our operating cash flow.
The changes in our working capital accounts, which are partially due to the factors mentioned above and
to the general timing of payments, also contributed to the increase in our operating cash flow. During the
fourth quarter of 2009, there was a significant increase in merchant bookings compared with the fourth quarter
of 2008, which also drove the increase in operating cash flow for the year ended December 31, 2009.
Investing Activities
Cash flow used in investing activities decreased $15 million, to $43 million for the year ended
December 31, 2009 from $58 million for the year ended December 31, 2008 due to lower capital spending
during the year ended December 31, 2009 resulting from cost reduction efforts taken in late 2008 and 2009.
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