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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission File Number 001-33599
ORBITZ WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 20-5337455
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)
500 W. Madison Street, Suite 1000
Chicago, Illinois 60661
(Address of principal executive offices) (Zip Code)
(312) 894-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, $0.01 par value New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the registrant’s common stock held by non-affiliates as of June 30, 2011 was approximately
$114.4 million based on the closing price of the registrant’s common stock as reported on the New York Stock Exchange for such date.
As of February 21, 2012, 103,794,893 shares of Common Stock, par value $0.01 per share, of Orbitz Worldwide, Inc. were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates by reference certain information from the definitive proxy statement for
the registrant’s Annual Meeting of Shareholders to be held on or about June 12, 2012 (the “2012 Proxy Statement”). The registrant
intends to file the proxy statement with the Securities and Exchange Commission within 120 days of December 31, 2011.

Table of contents

  • Page 1
    ... non-affiliates as of June 30, 2011 was approximately $114.4 million based on the closing price of the registrant's common stock as reported on the New York Stock Exchange for such date. As of February 21, 2012, 103,794,893 shares of Common Stock, par value $0.01 per share, of Orbitz Worldwide, Inc...

  • Page 2
    ... and Director Independence ...Principal Accounting Fees and Services ...Business ...Executive Officers of the Registrant ...Risk Factors...Unresolved Staff Comments ...Properties ...Legal Proceedings ...Mine Safety Disclosure ... 3 4 12 14 24 24 24 31 Market for Registrant's Common Equity, Related...

  • Page 3
    ...; our ability to gain market share in international markets, including the global hotel marketplace; our ability to increase our brand awareness; our expectations of future air capacity and fares; our expectations for future average daily rates for hotel and car bookings; and our expectation for...

  • Page 4
    ...We provide customers with the ability to book a wide array of travel products and services from suppliers worldwide, including air travel, hotels, vacation packages, car rentals, cruises, travel insurance and destination services such as ground transportation, event tickets and tours. History Orbitz...

  • Page 5
    ... travel choices online as well as contact information for a number of leading tour operators. Orbitz for Business Orbitz for Business (www.orbitzforbusiness.com) offers a complete portfolio of travel products and services that help corporate customers plan, search and book business travel. Orbitz...

  • Page 6
    ...customer pays for the travel product and the negotiated net rate plus estimated taxes that the supplier charges us for that product. We may, depending upon the brand and the product, earn revenue by charging our customers a service fee for booking their travel reservation. Generally, our net revenue...

  • Page 7
    ... uses the travel reservation. We may, depending upon the brand and the product, earn revenue by charging customers a service fee for booking their travel reservation. Generally, our net revenue per transaction is lower under the retail model compared with the merchant model. However, airline tickets...

  • Page 8
    ... GDS partners for air flight searches and then reassemble these segments for cost-effective and flexible multi-leg itineraries. We also have the ability to connect to and book air travel directly on certain airlines' internal reservation systems through our supplier link technology. Our easy-to-use...

  • Page 9
    ... of our products and online booking tools for corporate travel; portions of our private label vacation packaging technology; and our extranet supplier connectivity functionality. The Master License Agreement granted us the right to use a corporate online booking product developed by Travelport. We...

  • Page 10
    ..., the online travel booking penetration rate in the United States was nearly 60% in 2011. We are one of the market leaders within the United States due to the strength of our air business, which we are leveraging to gain market share in the global hotel marketplace. Internationally, the European and...

  • Page 11
    ... air, car and dynamic package paths of Orbitz.com, we completed our global platform migration, a multi-year initiative to bring all of our consumer brands onto a common technology platform. During the second half of 2011, we migrated our CheapTickets and HotelClub brands to the global platform...

  • Page 12
    ... as Senior Vice President of Air, Car & Private Label and led Expedia's corporate development, strategic planning and investor relations functions. He joined Expedia in 1999 as a product planner. Mr. Harford currently serves on the board of directors of GlobalEnglish Corporation, LiquidPlanner, Inc...

  • Page 13
    ... company, from May 2008 to December 2008 and Chief Technology Officer of G2 Switchworks, a startup in the travel technology space, from May 2004 to April 2008, when it was acquired by Travelport. Prior to joining Orbitz, LLC, Mr. Liew worked as a lead developer for Neoglyphics Media Corporation...

  • Page 14
    ... may from time to time in the future acquire, interests in businesses that directly or indirectly compete with certain portions of our business or our suppliers or customers or businesses on which we are substantially dependent, such as the Travelport GDSs. In an effort to increase its revenues and...

  • Page 15
    ... We are dependent on Travelport for our GDS services. To varying extents, suppliers use GDSs to connect their products and services with travel companies, who in turn make these products and services available to travelers for booking. Under our GDS service agreement with Travelport, we are required...

  • Page 16
    ... products and online booking tools for corporate travel; portions of our private label vacation package technology; and our extranet supplier connectivity functionality. Travelport and its affiliates may use these technologies as part of, or in support of, their own products or services, including...

  • Page 17
    ... a direct connect relationship. In 2010, prior to the removal of AA content from our websites, the net revenue associated with AA tickets booked on our Orbitz.com and Orbitz for Business sites, including ancillary revenue from associated hotels, car rentals, travel insurance and destination services...

  • Page 18
    ... a result, our revenue is directly related to the overall level of travel activity, particularly air travel volume, and is therefore significantly impacted by declines in or disruptions to travel in the United States, Europe and the Asia Pacific region due to factors entirely outside of our control...

  • Page 19
    ...only fares, bonus miles or loyalty points, which could make their offerings more attractive to customers. Certain online travel companies, including us, reduced or eliminated domestic booking fees on retail airline tickets and hotel stays and removed certain change and cancellation fees. Our results...

  • Page 20
    ..., or at all. Google Flights is an air travel specific website that promotes air suppliers' sites and not those of OTCs. If large search engines gain popularity with their meta-search models, customers could visit search sites instead of ours and we may be required to pay for traffic that otherwise...

  • Page 21
    ... and software companies, including the electronic central reservation systems and GDSs of the airline, hotel and car rental industries. In particular, our businesses rely on third parties to conduct searches for airfares; process hotel room transactions; process credit card payments; and provide...

  • Page 22
    ... our products and services. New, changed, modified or newly interpreted or applied tax laws could also increase our compliance, operating and other costs, as well as the costs of our products or services. Further, these events could decrease the capital we have available to operate our business. Any...

  • Page 23
    ... effect on the demand for our products and services. Moreover, public perception concerning security and privacy on the Internet could adversely affect customers' willingness to use our websites. A publicized breach of security, even if it only affects other companies conducting business over...

  • Page 24
    ... to bring new products and services to market or impairing the success of our operations or prospects for future growth. Item 1B. Unresolved Staff Comments None. Item 2. Properties Our corporate headquarters are located in leased office space in Chicago, Illinois. We also lease office space for...

  • Page 25
    ... in substantial additional defense costs. City or County Filing Litigation Date Litigation Instituted Court Where Litigation is Pending City of Findlay, Ohio City of Chicago, Illinois City of Rome, Georgia** Orange County, Florida City of Atlanta, Georgia City of San Antonio, Texas** Cities of...

  • Page 26
    ... level. The following legal proceedings relating to hotel occupancy taxes previously reported by us were dismissed since October 1, 2011: On October 25, 2011, the Fourteenth Court of Appeals for the State of Texas affirmed the granting of the online travel companies' motion for summary judgment on...

  • Page 27
    ... does not impose a transient occupancy tax based on the retail price of hotel rooms rented by or through the defendants and setting aside the Hearing Officer's decision to the contrary. On April 7, 2010, the Superior Court for the County of Los Angeles, California denied plaintiff's motion for...

  • Page 28
    ... received as payment for its online travel related services. Los Angeles, CA On December 30, 2004, the City of Los Angeles, California filed an action in the Superior Court, Los Angeles County against a number of Internet travel companies, including Orbitz, Inc., Orbitz, LLC, Trip Network, Inc. and...

  • Page 29
    ...or pay the assessment to the municipality in order to challenge the tax assessment in court. Other Actions Filed by the Company New York City Litigation On December 22, 2009, Orbitz, LLC, Trip Network, and other online travel companies, brought an action in the Supreme Court of the State of New York...

  • Page 30
    ... similar cases that were previously filed against other online travel companies. On May 31, 2011, the U.S. District Court for the Southern District of New York granted the motion of Blackstone Group, L.P., Orbitz, LLC, Cendant Corpoartion, Travelport L.P. Orbitz Worldwide International, LLC, Orbitz...

  • Page 31
    ... and Orbitz Worldwide, LLC in the United States District Court for the Northern District of Texas. American Airlines alleged that Orbitz, through its Travelport GDS Service Agreement, violated the Sherman Antitrust Act. On June 9, 2011, American Airlines filed a First Amended Complaint, adding Sabre...

  • Page 32
    ... Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the New York Stock Exchange ("NYSE") under the symbol "OWW." The following table sets forth the high and low sales prices for our common stock for each of the periods presented: 2011...

  • Page 33
    ... companies. Historic stock performance is not necessarily indicative of future stock price performance. All values assume reinvestment of the full amount of all dividends and are calculated as of the last day of each month. COMPARISON OF 54 MONTH CUMULATIVE TOTAL RETURN Among Orbitz Worldwide...

  • Page 34
    ... in Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K. 2011 Years Ended December 31, 2010 2009 2008 (in millions, except share and per share data) 2007 Statements of Operations Data: Net revenue ...$ Cost and expenses: Cost of revenue (a) ...Selling, general...

  • Page 35
    ... globally. We provide customers with the ability to book a wide array of travel products and services from suppliers worldwide, including air travel, hotels, vacation packages, car rentals, cruises, travel insurance and destination services such as ground transportation, event tickets and tours...

  • Page 36
    ... we are seeing air volume return to growth as we anniversary the changes in policy regarding airlines' forward distribution to meta-search websites and the fare structure change that occurred in the first quarter of 2011. In addition, our domestic hotel room nights declined in 2011 against the prior...

  • Page 37
    ... launch of new private label partnerships, including American Express Consumer Travel Network. Internationally, ebookers experienced transaction and room night growth during 2011, primarily due to the benefits of the global platform, including user-interface improvements and mobile capabilities, as...

  • Page 38
    ... websites. Air gross bookings are comprised of stand-alone air gross bookings, while non-air gross bookings include gross bookings from hotels, car rentals, vacation packages, cruises, destination services and travel insurance. Years Ended December 31, 2011 Gross bookings: Domestic: Air (a) ...Non...

  • Page 39
    ... in air bookings towards markets where average booking values are lower and where we earn lower margins, partially offset by higher credit card fee revenue. Hotel. Net revenue from hotel bookings increased $5.8 million, or 3%, for the year ended December 31, 2011, compared with same period in 2010...

  • Page 40
    ... March 31, 2010. This decrease was offset in part by additional advertising and media revenue driven by our ongoing efforts to monetize our websites globally. Other. Other net revenue is comprised primarily of net revenue from car bookings, cruise bookings, destination services, travel insurance and...

  • Page 41
    ...of our airline hosting agreements in 2010. Costs and Expenses Cost of Revenue Our cost of revenue is comprised of costs to operate our customer service call centers, credit card processing fees and other costs, which include customer refunds and charge-backs, hosting costs and connectivity and other...

  • Page 42
    ... for certain office space leased by ebookers. Marketing Our marketing expense is primarily comprised of online marketing costs, such as search and banner advertising and affiliate commissions, and offline marketing costs, such as television, radio and print advertising. Our online marketing spending...

  • Page 43
    ... Financial Statements). During the year ended December 31, 2010, in connection with our annual impairment test for goodwill and intangible assets and as a result of lower than expected performance and future cash flows for HotelClub and CheapTickets, we recorded a non-cash impairment charge...

  • Page 44
    ... - Related Party Transactions of the Notes to Consolidated Financial Statements. Seasonality Our businesses experience seasonal fluctuations in the demand for the products and services we offer. The majority of our customers book leisure travel rather than business travel. Gross bookings for leisure...

  • Page 45
    ... strategy, a decline in merchant gross bookings resulting from changes in our merchant business model, changes to payment terms or other requirements imposed by vendors, suppliers or regulatory agencies, such as requiring us to provide letters of credit, cash reserves, or other forms of financial...

  • Page 46
    ... elimination of most air booking fees and the significant reduction of hotel booking fees in April 2009 as well as changes in the timing of payments received from GDSs. In addition, during the year ended December 31, 2010, we made payments related to employee incentive compensation costs accrued in...

  • Page 47
    ...75.0 million so long as Travelport and its affiliates (as defined in the Separation Agreement) own at least 50% of our voting stock. Travelport charges us fees for issuing, renewing or extending letters of credit on our behalf. In December 2011, we agreed to make a one-time payment to Travelport, on...

  • Page 48
    ...one-month LIBOR as of December 31, 2011 and fixed interest payments under interest rate swaps. (c) Represents costs due to the early termination of an agreement. (d) We have an agreement with Travelport to use GDS services provided by both Galileo and Worldspan (the "Travelport GDS Service Agreement...

  • Page 49
    ... 2010. If we meet the minimum number of segments, we are not required to make shortfall payments to Travelport (see Note 16 - Related Party Transactions of the Notes to Consolidated Financial Statements). (e) Represents payments in connection with the tax sharing agreement with the Founding Airlines...

  • Page 50
    ... ability to determine the price charged to the customer. We have agreements with suppliers that provide our customers the ability to book their supply through our sites (for example, air tickets or hotel rooms) that we sell. We present merchant revenues on a net basis in accordance with Accounting...

  • Page 51
    ... between the financial statement and income tax bases of assets and liabilities using the combined federal and state effective tax rates that are applicable to us in a given year. The deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, we...

  • Page 52
    ...and the applicable discount rate. A variation of the assumptions used could lead to a different conclusion regarding the carrying value of the tax sharing liability and could have a significant effect on our consolidated financial statements. Internal Use Software We capitalize the costs of software...

  • Page 53
    ... exchange rates and interest rates utilizing a sensitivity analysis that measures the potential impact on earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in foreign currency rates and interest rates. We used December 31, 2011 market rates to perform...

  • Page 54
    ...'s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan...

  • Page 55
    ORBITZ WORLDWIDE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) Years Ended December 31, 2011 2010 2009 Net revenue ...$ Cost and expenses: Cost of revenue ...Selling, general and administrative ...Marketing...Depreciation and amortization...Impairment ...

  • Page 56
    ORBITZ WORLDWIDE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Years Ended December 31, 2011 2010 2009 Net loss ...$ (37,277) $ (58,237) $ (336,955) Other comprehensive income/(loss), net of income taxes: (1,273) Currency translation adjustment (a) ...7,197 5,602 Unrealized ...

  • Page 57
    ... stock, at cost, 25,237 shares held ...Additional paid-in capital ...Accumulated deficit...Accumulated other comprehensive income (net of accumulated tax benefit of $2,558) Total Shareholders' Equity...Total Liabilities and Shareholders' Equity ...$ See Notes to Consolidated Financial Statements...

  • Page 58
    ... from exercise of employee stock options ...Payments on tax sharing liability ...Proceeds from line of credit ...Payments on line of credit ...Proceeds from note payable ...Payments on note payable ...Net cash used in financing activities ...Effects of changes in exchange rates on cash and cash...

  • Page 59
    ..., net of shares withheld to satisfy employee tax withholding obligations upon vesting ...Common shares issued pursuant to Exchange Agreement and Stock Purchase Agreement (see Note 6) ...Common shares issued upon vesting of restricted stock units...Common shares issued upon exercise of stock options...

  • Page 60
    ... globally. We provide customers with the ability to book a wide array of travel products and services from suppliers worldwide, including air travel, hotels, vacation packages, car rentals, cruises, travel insurance and destination services such as ground transportation, event tickets and tours...

  • Page 61
    ... to book air travel, hotels, car rentals and other travel products and services through our various websites. These travel products and services are made available to our customers for booking on a stand-alone basis or as part of a vacation package. Under the merchant model, we generate revenue for...

  • Page 62
    ... for travel insurance is at the time of booking. Cost of Revenue Cost of revenue is primarily comprised of direct costs incurred to generate revenue, including costs to operate our customer service call centers, credit card processing fees and other costs, which include customer refunds and charge...

  • Page 63
    ... differences between the financial statement and income tax bases of assets and liabilities using the combined federal and state or foreign effective tax rates that are applicable to us in a given year. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply...

  • Page 64
    ... date with our long-range planning cycle, which is a significant element in the testing process. In connection with this change, we first performed the test as of October 1, 2011 and then performed an additional annual impairment test as of December 31, 2011. This change in our annual testing date...

  • Page 65
    ... balance sheets that relates to a tax sharing agreement between Orbitz and the Founding Airlines. The agreement governs the allocation of tax benefits resulting from a taxable exchange that took place in connection with the Orbitz initial public offering in December 2003 ("Orbitz IPO"). As a result...

  • Page 66
    ORBITZ WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) equity-based compensation expense recorded each period is net of estimated forfeitures based on historical forfeiture rates. Hotel Occupancy Taxes Some states and localities impose a tax on the use or occupancy of hotel...

  • Page 67
    ... 31, 2011, we performed our annual impairment test of goodwill and trademark and trade names as of October 1, 2011 and December 31, 2011. We estimated the fair value of our reporting units to which goodwill is allocated using generally accepted valuation methodologies, including market and income...

  • Page 68
    ...year ended December 31, 2010, we performed our annual impairment test of goodwill and trademark and trade names as of October 1, 2010. We estimated the fair value of our reporting units to which goodwill is allocated using generally accepted valuation methodologies, including market and income based...

  • Page 69
    ...December 31, 2011 December 31, 2010 (in thousands) Advertising and marketing (a) ...$ Employee costs ...Tax sharing liability (see Note 7) ...Contract exit costs (b)...Customer service costs ...Professional fees ...Technology costs ...Customer refunds ...Airline rebates...Unfavorable contracts (see...

  • Page 70
    ORBITZ WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) ended December 31, 2011, 2010 and 2009. We made termination payments of $0, $1.1 million and $3.6 million during the years ended December 31, 2011, 2010 and 2009. At December 31, 2011, the net present value of the ...

  • Page 71
    ... and at December 31, 2011 bears interest at a variable rate, at our option, of LIBOR plus a margin of 225 basis points or the Alternative Base Rate plus a margin of 125 basis points. The margin is subject to change based on our total leverage ratio, as defined in the Credit Agreement, with a maximum...

  • Page 72
    ... net present value of our obligation to pay tax benefits to the Founding Airlines was $89.0 million and $121.4 million at December 31, 2011 and 2010, respectively. This estimate was based upon certain assumptions, including our future taxable income, the tax rate, the timing of tax payments, current...

  • Page 73
    ... and seat availability at no charge and with the same frequency and at the same time as this information is provided to the airline's own website or to a website branded and operated by the airline and any of its alliance partners or to the airline's internal reservation system. The agreements also...

  • Page 74
    ... with American Airlines ("AA") effective December 2010. These agreements were reinstated in June 2011. (b) During the year ended December 31, 2010, we recorded non-cash charges of $3.6 million to impair the portion of the asset related to the expected in-kind marketing and promotional support to...

  • Page 75
    ... year, we are unable to predict shortfall payments that may be required beyond 2012. However, we do not expect to make any shortfall payments for our domestic brands in the foreseeable future. The Travelport GDS Service Agreement also requires that ebookers use the Travelport GDSs exclusively in...

  • Page 76
    ... city of San Antonio, Texas hotel occupancy tax case, the United States District Court for the Western District of Texas issued its findings of fact and conclusions of law in which it held the defendant online travel companies, including Orbitz, liable for hotel occupancy taxes on markup, fees, and...

  • Page 77
    ... Agreement"), entered into in connection with the IPO. At December 31, 2011 and 2010, there were $74.2 million and $72.3 million of outstanding letters of credit issued by Travelport on our behalf, respectively (see Note 16 - Related Party Transactions). In addition, at December 31, 2011 and 2010...

  • Page 78
    ... and trademark and trade names impairment charges recorded during each of those years. Our effective income tax rate differs from the U.S. federal statutory rate as follows: Years Ended December 31, 2011 2010 2009 Federal statutory rate ...State and local income taxes, net of federal benefit...

  • Page 79
    ... tax benefits that management believes to be adequate. Once established, unrecognized tax benefits are adjusted if more accurate information becomes available, or a change in circumstance or an event occurs necessitating a change to the liability. Given the inherent complexities of the business...

  • Page 80
    ... of the Board of Directors (the "Compensation Committee") for participation in the Plan. At our Annual Meeting of Shareholders on June 1, 2011, our shareholders approved an amendment to the Plan, increasing the number of shares of our common stock available for issuance under the Plan from 18...

  • Page 81
    ORBITZ WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Stock Options The table below summarizes the stock option activity under the Plan during the year ended December 31, 2011: WeightedAverage Remaining Contractual Term (in years) Shares WeightedAverage Exercise Price (...

  • Page 82
    ORBITZ WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Restricted Stock Units The table below summarizes activity regarding unvested restricted stock units under the Plan during the year ended December 31, 2011: WeightedAverage Grant Date Fair Value (per share) Restricted ...

  • Page 83
    ... of service from the board of directors, or 200 days immediately following such date. The entire grant date fair value of deferred stock units is expensed on the date of grant. The table below summarizes the deferred stock unit activity under the Plan during the year ended December 31, 2011...

  • Page 84
    ... in exchange receive a variable interest rate based on either the three-month or the one-month LIBOR. Notional Amount Effective Date Maturity Date Fixed Interest Rate Paid Variable Interest Rate Received $100.0 million $100.0 million $100.0 million January 29, 2010 January 29, 2010 July 29, 2011...

  • Page 85
    ... ended December 31, 2011, 2010 and 2009, respectively. 13. Severance On January 6, 2009, our former President and Chief Executive Officer resigned. In connection with his resignation and pursuant to the terms of his employment agreement with the Company, we incurred total expenses of $2.1 million...

  • Page 86
    ... under our GDS services agreement and bookings sourced through Donvand Limited and OctopusTravel Group Limited (doing business as Gullivers Travel Associates, "GTA") through March 31, 2011; as of the end of the second quarter of 2011, GTA was no longer a related party. In addition, net revenue for...

  • Page 87
    ...of our products and online booking tools for corporate travel; portions of our private label vacation package technology; and our extranet supplier connectivity functionality. The Master License Agreement granted us the right to use a corporate online booking product developed by Travelport. We have...

  • Page 88
    ... the rates GTA makes such inventory available to its other customers. We are also subject to additional fees if we exceed certain specified booking levels. The initial term of the GTA Agreement expired on December 31, 2010. GTA was no longer a related party as of December 31, 2011. Corporate Travel...

  • Page 89
    ... Blackstone affiliates utilize our partner marketing programs and corporate travel services. We believe that these agreements have been executed on terms comparable to those available from unrelated third parties. The following table summarizes the related party balances with other affiliates of...

  • Page 90
    ... associated with our HotelClub reporting unit as well as the trademark associated with our CheapTickets brand, were required to be measured at fair value as of October 1, 2010 in connection with the annual impairment test we performed on our goodwill and trademarks and trade names in the fourth...

  • Page 91
    ... Fair Value Measurements Using Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) (in thousands) Significant unobservable inputs (Level 3) Balance at October 1, 2010 Total (Losses) Goodwill - HotelClub...$ Trademarks and trade names HotelClub ...$ CheapTickets...

  • Page 92
    ORBITZ WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The table below presents property and equipment, net, by geographic area. December 31, 2011 December 31, 2010 (in thousands) Long-lived assets United States ...$ All other countries...Total ...$ 134,703 6,999 141,702 ...

  • Page 93
    ... $12.0 million to the deferred tax asset in connection with a reduction of the tax sharing liability to the airlines. The remaining $3.3 million represents the combined effect of foreign currency translation adjustments, a reduction to the U.K. tax rate and other reclassification adjustments between...

  • Page 94
    ... the supervision of, our CEO and CFO, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted...

  • Page 95
    ... assessment, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2011, as a result of the material weakness discussed below. Ineffective Information Technology Controls: Our management identified a number of deficiencies related to the...

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    ... executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements...

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    ... for our chief executive officer and senior financial officers. The Code of Business Conduct and the Code of Ethics are available on the corporate governance page of our Investor Relations website at www.orbitz-ir.com. Amendments to, or waivers from, the Code of Business Conduct applicable to these...

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    ..."Fees Incurred for Services of Deloitte & Touche LLP" and "Approval of Services Provided by Independent Registered Public Accounting Firm" in the 2012 Proxy Statement, and that information is incorporated by reference herein. PART IV Item 15. (a)(1) Exhibits, Financial Statement Schedules Financial...

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    ... Chief Executive Officer and Director (Principal Executive Officer) Date: March 5, 2012 By: /s/ Russell Hammer Russell Hammer Senior Vice President and Chief Financial Officer (Principal Financial Officer) Date: March 5, 2012 By: /s/ Thomas L. Kram Thomas L. Kram Group Vice President and Chief...

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    ... L. Friedman Robert L. Friedman Director Date: March 5, 2012 By: /s/ Bradley T. Gerstner Bradley T. Gerstner Director Date: March 5, 2012 By: /s/ Jill A. Greenthal Jill A. Greenthal Director Date: March 5, 2012 By: /s/ Kristina M. Leslie Kristina M. Leslie Director Date: March 5, 2012 By...

  • Page 101
    ... Quarterly Report on Form 10-Q for the Quarterly Period ended September 30, 2009). Tax Agreement, dated as of November 25, 2003, between Orbitz, Inc. and American Airlines, Inc., Continental Airlines, Inc., Omicron Reservations Management, Inc., Northwest Airlines, Inc. and UAL Loyalty Services, Inc...

  • Page 102
    ... Limited, Donvand Limited, Travelport for Business, Inc., Orbitz Development, LLC and Neat Group Corporation (incorporated by reference to Exhibit 10.5 to the Orbitz Worldwide, Inc. Current Report on Form 8-K/A filed on February 27, 2008). Master Supply and Services Agreement, dated as of July 23...

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    ... dated as of October 22, 2010, to Subscriber Services Agreement, dated as of July 23, 2007, between Travelport, LP (f/k/a Travelport International, L.L.C.), Travelport Global Distribution System B.V. (f/k/a Galileo Nederland B.V.) and Orbitz Worldwide, LLC. Twelfth Amendment, dated as of May 5, 2011...

  • Page 104
    ...). Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan, as amended and restated, effective June 1, 2011 (incorporated by reference to Exhibit 10.1 to the Orbitz Worldwide, Inc. Current Report on Form 8-K filed on June 6, 2011). Employment Agreement (including Form of Option Award Agreement), dated...

  • Page 105
    ... 2010). Form of Stock Option Award Agreement (Executive Officers) - 2010 Stock Option Exchange (incorporated by reference to Exhibit (d)(3) to the Orbitz Worldwide, Inc. Schedule TO filed on May 3, 2010). Form of Stock Option Award Agreement (Converted Travelport Equity) - 2010 Stock Option Exchange...

  • Page 106
    ... Restricted Stock Unit Award Agreement (Executive Officers) - 2010 Equity Grants (incorporated by reference to Exhibit 10.3 to the Orbitz Worldwide, Inc. Current Report on Form 8-K filed on June 8, 2010). Amended and Restated Orbitz Worldwide, Inc. Performance-Based Annual Incentive Plan, effective...

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    BOARD OF DIRECTORS Martin J. Brand Managing Director in the Private Equity group of The Blackstone Group Mark S. Britton Chief Executive Officer and President of Avvo, Inc. Bradley T. Gerstner Chief Executive Officer of Altimeter Capital Management Jill A. Greenthal Senior Advisor in the Private ...

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