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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
70
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 remaining
termination payments of $11.7 million was included in our consolidated balance sheet, $10.0 million of which was
included in accrued expenses and $1.7 million of which was included in other non-current liabilities. At December 31,
2010, the net present value of the remaining termination payments of $11.1 million was included in our consolidated
balance sheet, $7.7 million of which was included in accrued expenses and $3.4 million of which was included in other
non-current liabilities.
6. Term Loan and Revolving Credit Facility
On July 25, 2007, we entered into a $685.0 million senior secured credit agreement (the “Credit Agreement”) consisting
of a seven-year $600.0 million term loan facility (the “Term Loan”) and a six-year $85.0 million revolving credit facility, which
was effectively reduced to a $72.5 million revolving credit facility following the bankruptcy of Lehman Commercial Paper Inc.
in October 2008 (the “Revolver”).
Term Loan
The Term Loan bears interest at a variable rate, at our option, of LIBOR plus a margin of 300 basis points or an
alternative base rate plus a margin of 200 basis points. The alternative base rate is equal to the higher of the Federal Funds Rate
plus one half of 1% and the prime rate (the “Alternative Base Rate”). The principal amount of the Term Loan is payable in
quarterly installments of $1.3 million, with the final installment (equal to the remaining outstanding balance) due upon maturity
in July 2014. In addition, we are required to make an annual prepayment on the Term Loan in the first quarter of each fiscal
year in an amount up to 50% of the prior year’s excess cash flow, as defined in the Credit Agreement. Based on our excess cash
flow for the year ended December 31, 2010, we made a $19.8 million prepayment on the Term Loan in the first quarter of 2011.
Based on our excess cash flow for the year ended December 31, 2011, we are required to make a $32.2 million prepayment on
the Term Loan in the first quarter of 2012. Prepayments from excess cash flow are applied, in order of maturity, to the
scheduled quarterly Term Loan principal payments. Due to the cumulative excess cash flow payments that we have made, we
are not required to make any scheduled principal payments on the Term Loan for the remainder of its term.
The changes in the Term Loan for the years ended December 31, 2011 and 2010 were as follows:
Amount
(in thousands)
Balance at January 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 576,576
Prepayment from excess cash flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,994)
Repurchases (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63,561)
Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 492,021
Prepayment from excess cash flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,808)
Balance at December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 472,213
(a) On January 26, 2010, pursuant to an Exchange Agreement we entered into with PAR Investment Partners, L.P.
(“PAR”), as amended, PAR exchanged $49.6 million aggregate principal amount of the Term Loan for
8,141,402 shares of our common stock. We immediately retired the portion of the Term Loan purchased from PAR
in accordance with the Amendment. The fair value of our common shares issued in the exchange was
$49.4 million. After taking into account the write-off of unamortized debt issuance costs of $0.4 million and
$0.2 million of other miscellaneous fees incurred to purchase this portion of the Term Loan, we recorded a
$0.4 million loss on extinguishment of this portion of the Term Loan, which was included in other income in our
consolidated statement of operations for the year ended December 31, 2010. Concurrently, pursuant to a Stock
Purchase Agreement we entered into with Travelport, Travelport purchased 9,025,271 shares of our common stock
for $50.0 million in cash. We incurred $1.1 million of issuance costs associated with these equity investments by
PAR and Travelport, which were included in additional paid in capital in our consolidated balance sheet at
December 31, 2010.