Orbitz 2011 Annual Report Download - page 60

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60
ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Description of the Business
Orbitz, Inc. (“Orbitz”) was formed in early 2000 by American Airlines, Inc., Continental Airlines, Inc., Delta Air Lines,
Inc., Northwest Airlines, Inc. and United Air Lines, Inc. (the “Founding Airlines”). In November 2004, Orbitz was acquired by
Cendant Corporation (“Cendant”), whose online travel distribution businesses included the HotelClub and RatesToGo brands
(collectively referred to as “HotelClub”) and the CheapTickets brand. In February 2005, Cendant acquired ebookers Limited, an
international online travel brand which currently has operations in 12 countries throughout Europe (“ebookers”).
On August 23, 2006, Travelport Limited (“Travelport”), which consisted of Cendant's travel distribution services
businesses, including the businesses that currently comprise Orbitz Worldwide, Inc., was acquired by affiliates of The
Blackstone Group (“Blackstone”) and Technology Crossover Ventures (“TCV”). We refer to this acquisition as the “Blackstone
Acquisition.”
Orbitz Worldwide, Inc. was incorporated in Delaware on June 18, 2007 and was formed to be the parent company of the
business-to-consumer travel businesses of Travelport, including Orbitz, ebookers and HotelClub and the related subsidiaries
and affiliates of those businesses. We are the registrant as a result of the completion of the initial public offering (the “IPO”) of
34,000,000 shares of our common stock on July 25, 2007. At December 31, 2011 and 2010, Travelport and investment funds
that own and/or control Travelport's ultimate parent company beneficially owned approximately 55% and 56% of our
outstanding common stock, respectively.
We are a leading global online travel company that uses innovative technology to enable leisure and business travelers to
search for and book a broad range of travel products and services. Our brand portfolio includes Orbitz, CheapTickets, The Away
Network and Orbitz for Business in the United States; ebookers in Europe; and HotelClub based in Australia, which has
operations 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.
Basis of Presentation
The accompanying consolidated financial statements present the accounts of Orbitz, ebookers and HotelClub and the
related subsidiaries and affiliates of those businesses, collectively doing business as Orbitz Worldwide, Inc. These entities
became wholly-owned subsidiaries of ours as part of an intercompany restructuring that was completed on July 18, 2007 in
connection with the IPO. Prior to the IPO, these entities had operated as indirect, wholly-owned subsidiaries of Travelport.
During the first quarter of 2011, we changed the classification of expenses for commissions paid to private label partners
(“affiliate commissions”) from cost of revenue to marketing expense in our consolidated statements of operations. We believe
that the classification of affiliate commissions as marketing expense more closely aligns with general industry practice and
better reflects the nature of these costs. We have reclassified affiliate commissions of $15.2 million and $10.7 million from cost
of revenue to marketing expense for the years ended December 31, 2010 and 2009, respectively, to conform to the current year
presentation. The reclassification had no net impact on our consolidated results of operations, financial position or cash flows.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”). All intercompany balances and transactions have been eliminated in the
consolidated financial statements.