Orbitz 2012 Annual Report Download - page 68

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
68
The changes in the Term Loan during the years ended December 31, 2012 and 2011 were as follows:
Amount
(in thousands)
Balance at January 1, 2011 (current and non-current). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 492,021
Prepayment from excess cash flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,808)
Balance at December 31, 2011 (current and non-current). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472,213
Prepayment from excess cash flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,183)
Balance at December 31, 2012 (current and non-current). . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 440,030
At December 31, 2012, $100.0 million of the Term Loan had a fixed interest rate as a result of interest rate swaps and
$340.0 million had a variable interest rate based on LIBOR, resulting in a blended weighted-average interest rate of 3.32% (see
Note 12 - Derivative Financial Instruments). At December 31, 2011, $300.0 million of the Term Loan had a fixed interest rate
as a result of interest rate swaps and $172.2 million had a variable interest rate based on LIBOR, resulting in a blended
weighted-average interest rate of 3.81%.
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.
Revolver
The Revolver provides for borrowings and letters of credit of up to $72.5 million ($42.6 million in U.S. dollars and the
equivalent of $29.9 million denominated in Euros and Pounds sterling) and at December 31, 2012 bears interest at a variable
rate, at our option, of LIBOR plus a margin of 200 basis points or the alternative base rate plus a margin of 100 basis points.
The margin is subject to change based on our total leverage ratio, as defined in the Credit Agreement, with a maximum margin
of 250 basis points on LIBOR-based loans and 150 basis points on Alternative Base Rate loans. We incur a commitment fee of
50 basis points on any unused amounts on the Revolver. The Revolver matures in July 2013.
At December 31, 2012 and 2011, there were no outstanding borrowings under the Revolver and the equivalent of $11.2
million and $10.8 million of outstanding letters of credit issued under the Revolver, respectively (see Note 9 - Commitments
and Contingencies). The amount of letters of credit issued under the Revolver reduces the amount available for borrowings.
Due to the letters of credit issued under the Revolver, we had $61.3 million and $61.7 million of availability at December 31,
2012 and 2011, respectively. Commitment fees on unused amounts under the Revolver were $0.3 million for each of the years
ended December 31, 2012, 2011 and 2010.
Credit Agreement Terms
We incurred an aggregate of $5.0 million of debt issuance costs in connection with the Term Loan and Revolver. These
costs are being amortized to interest expense over the contractual terms of the Term Loan and Revolver based on the effective-
yield method. Amortization of debt issuance costs was $0.6 million, $0.6 million and $0.7 million for the years ended
December 31, 2012, 2011 and 2010, respectively.
The Term Loan and Revolver are both secured by substantially all of our domestic subsidiaries' tangible and intangible
assets, including a pledge of 100% of the outstanding capital stock or other equity interests of substantially all of our direct and
indirect domestic subsidiaries and 65% of the capital stock or other equity interests of certain of our foreign subsidiaries,
subject to certain exceptions. The Term Loan and Revolver are also guaranteed by substantially all of our domestic subsidiaries.