Orbitz 2012 Annual Report Download - page 17

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Our business is dependent on our liquidity and our ability to access funding.
If we are unable to refinance or extend our revolving credit facility or we are unable to refinance or repay our term loan
by its July 2014 maturity date, we cannot be certain that other debt financing would be available to us or be available on
attractive or acceptable terms. If such debt financing is not available to us or not available on attractive or acceptable terms, we
may need to dispose of assets or issue equity to obtain necessary funds. Such an issuance of equity could be materially dilutive
to existing stockholders. We do not know whether we will be able to take any of these actions, if necessary, on a timely basis or
on terms satisfactory to us or at all. In the event that funding for the term loan is not available when needed, or is available only
on unfavorable terms, or we are unable to refinance or extend our revolving credit facility by its July 2013 maturity, we may be
unable to take advantage of potential business opportunities, respond to competitive pressures, or to operate our business as it
currently exists, which in turn could have a material adverse impact on our results of operations and liquidity and the value of
our common stock.
In addition, our liquidity could be negatively impacted in the future if any of the following events occur:
• Travelport is no longer obligated or is unable to issue letters of credit on our behalf;
• termination of a major supplier's participation on our websites;
• decline in merchant gross bookings due to deteriorating economic conditions or other factors;
• decline in standalone hotel merchant gross bookings due to a shift from the merchant model to the retail 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 security or increases in such
requirements,
• lower than anticipated operating cash flows, or other unanticipated events, such as unfavorable outcomes in legal
proceedings, including in the case of hotel occupancy proceedings, certain jurisdictions' requirements that we provide
financial security or pay an assessment to the municipality in order to challenge the assessment in court.
We have a significant amount of indebtedness, which could limit the manner in which we operate our business.
As of December 31, 2012, we had approximately $440.0 million of outstanding borrowings under our senior secured
credit agreement. Our substantial level of indebtedness could:
• impair our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general
corporate purposes;
• reduce the funds available to us for purposes such as potential acquisitions and capital expenditures because we are
required to use a portion of our cash flows from operations to make debt service payments;
• put us at a competitive disadvantage because we have a higher level of indebtedness than some of our competitors
and reduce our flexibility in planning for, or responding to, changing conditions in the economy or our industry,
including increased competition; and
• make us more vulnerable to general economic downturns and adverse developments in our business.
The credit agreement requires us to maintain a minimum fixed charge coverage ratio and not to exceed a maximum total
leverage ratio. If we fail to comply with these covenants and we are unable to obtain a waiver or amendment, our lenders could
accelerate the maturity of all amounts outstanding under our term loan and revolving credit facility and could proceed against
the collateral securing this indebtedness. If this were to occur, there is no assurance that alternative financing would be
available to us or at favorable terms.
In addition, restrictive covenants in our credit agreement specifically limit our ability to, among other things:
• incur additional indebtedness or enter into guarantees;
• enter into sale and leaseback transactions;
• make new investments, loans or acquisitions;
• grant or incur liens on our assets;
• sell our assets;
• engage in mergers, consolidations, liquidations or dissolutions;
• engage in transactions with affiliates; and
• make restricted payments.