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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, 2013
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
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, 2013 was approximately $444.9 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 March 3, 2014, 109,062,384 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 10, 2014 (the “2014 Proxy Statement”). The registrant intends to file the proxy statement with the
Securities and Exchange Commission within 120 days of December 31, 2013.

Table of contents

  • Page 1
    ... by non-affiliates as of June 30, 2013 was approximately $444.9 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 March 3, 2014, 109,062,384 shares of Common Stock, par value $0.01 per share, of Orbitz Worldwide, Inc...

  • Page 2
    ... Accounting Fees and Services Business Executive Officers of the Registrant Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosure 3 4 13 14 22 23 23 30 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities...

  • Page 3
    ... the travel industry on our business; 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...

  • Page 4
    ..., which delivers private label travel solutions to a broad range of partners. 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, rail tickets, travel insurance and...

  • Page 5
    ... air travel, hotels, car rentals, cruises, travel insurance, destination services and event tickets from suppliers worldwide on a stand-alone basis or as part of a vacation package. Customers can also book travel products from their mobile devices through a mobile website (m.cheaptickets.com...

  • Page 6
    ... and Global Distribution Systems Supplier Relationships We work with suppliers to provide our customers with a broad and deep range of highly competitive travel products and services on our websites. We have teams that manage relationships and negotiate agreements with air, hotel, car rental, cruise...

  • Page 7
    ...provides customers the ability to book air travel, hotels, car rentals and cruises. Air transactions comprise the majority of our retail bookings. Under the retail model, we earn commissions from suppliers for airline tickets, hotel rooms, car rentals and other travel products and services booked on...

  • Page 8
    ... with corporate travel managers and potential private label partners. Our Orbitz for Business sales team includes experienced corporate travel managers who are qualified to assist organizations in choosing between the variety of corporate booking products that we offer. Intellectual Property We...

  • Page 9
    ... 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 have entered into a value...

  • Page 10
    ... the websites of suppliers and our direct competitors. Factors affecting our competitive success include price, availability of travel products, ability to package travel products across multiple suppliers, brand recognition, customer service and customer care, fees charged to customers, ease of use...

  • Page 11
    ... shared by all of the Company's consumer brands, the benefits of the Company's mobile investments are available to the ebookers, HotelClub and CheapTickets brands. We continue to build on our strengths in mobile to drive growth across all of our global brands and product offerings. International...

  • Page 12
    regarding issuers, including us, that file electronically with the SEC at www.sec.gov. We also use our Investor Relations website to make information available to our investors and the public. Investors and other interested persons can sign up to receive email alerts whenever we post new information...

  • Page 13
    ... Asia Pacific. Prior to 2004, Mr. Harford served 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...

  • Page 14
    ... value by preventing a change of control that our stockholders might consider favorable. To varying extents, travel suppliers use global distribution systems to connect their products and services with travel companies, who in turn make these products and services available to travelers for booking...

  • Page 15
    ...marketing, personnel and other resources than we have. Factors affecting our competitive success include price, availability of travel products, ability to package travel products across multiple suppliers, brand recognition, customer service and customer care, fees charged to customers, ease of use...

  • Page 16
    .... In addition, some meta-search sites, such as Kayak.com, offer users the ability to make reservations directly on their websites, which may reduce the amount of traffic and transactions available to us through referrals from these sites. Other competitors in the broader travel space: We also will...

  • Page 17
    merger of American Airlines and US Airways, could result in a reduction in the number of airline tickets available for booking on our websites and increased air fares, which may have a negative impact on demand for travel. Our business has significant liquidity requirements. Our business has ...

  • Page 18
    ... of traffic is directed to our websites through our participation in pay-per-click and display advertising campaigns on search engines, meta-search sites and content properties. Pricing and operating dynamics for these traffic sources can experience rapid change, both technically and competitively...

  • Page 19
    ... doing business in the United States, including foreign exchange risk. We expect that our exposure to these risks will increase as we expand our international operations. We generated 27% of our net revenue for the year ended December 31, 2013 from our international operations and had employees in...

  • Page 20
    ... to protect the privacy and security of personal information, including credit card information that is collected, processed and transmitted in or from the governing jurisdiction. If domestic or international legislation or regulations are expanded to require changes in our business practices...

  • Page 21
    ... personnel when skilled personnel depart the Company. Our inability to hire, train and retain a sufficient number of qualified employees could materially hinder our business by, for example, delaying our ability to bring new products and services to market or impairing the success of our operations...

  • Page 22
    ... 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 23
    ... Statements. Litigation Relating to Hotel Occupancy Taxes Orbitz Worldwide, Inc. and certain of its current and former subsidiaries and affiliates, including Orbitz, Inc., Orbitz, LLC, Trip Network, Inc. (d/b/a Cheaptickets.com), Travelport Inc. (f/k/a Cendant Travel Distribution Services Group, Inc...

  • Page 24
    ..., South Carolina Kentucky Department of Revenue Columbia, South Carolina* July 15, 2013 July 26, 2013 * ** Indicates purported class action filed on behalf of named City or County and other (unnamed) cities, counties, governments or other taxing authorities with similar tax ordinances. Indicates...

  • Page 25
    .... The following legal proceedings relating to hotel occupancy taxes we previously reported were concluded since October 1, 2013: Baltimore County, Maryland: On October 23, 2013, Orbitz and Baltimore County entered into a settlement agreement. On November 7, 2013, the parties filed a stipulation of...

  • Page 26
    ... the estimated assessments as its final administrative assessment. On March 3, 2009, Orbitz, LLC filed a petition with the Indiana Tax Court seeking to set aside the Department of Revenue's final determination. In August 2013, the parties filed cross motions for summary judgment. On January 17, 2014...

  • Page 27
    .... On December 18, 2012, the City of San Francisco issued supplemental final assessments of approximately $1.4 million against Orbitz LLC, Trip Network, Inc. and Internetwork Publishing Corp. On January 2, 2013, these entities paid this assessment pursuant to the City's "pay to play" requirement. On...

  • Page 28
    ... of San Francisco filed a Notice of Appeal. City of San Diego On February 9, 2006, the City of San Diego, California filed an action in Court for the County of San Diego, California against a number of current and former Internet travel companies, including Orbitz, Inc., Orbitz, LLC, Trip Network...

  • Page 29
    ... protection laws by entering into agreements in which OTCs agree not to facilitate the reservation of hotel rooms at prices that are less than what the hotel chain offers on its own website. Following the filing of the initial complaint, several dozen additional putative consumer class action...

  • Page 30
    ... suit in the United States District Court for the District of Delaware. The plaintiff alleges that Orbitz infringes U.S. patent No. 6,216,139. Other Litigation Trilegiant Corporation v. Orbitz, LLC v. and Trip Network, Inc.: On July 7, 2011, Trilegiant Corporation filed an action for breach of...

  • Page 31
    ... and Issuer Purchases of Equity Securities Market Information Our common stock trades on the New York Stock Exchange 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: 2013 High Low High 2012 Low Fourth...

  • Page 32
    ..., including Internet software and services companies and e-commerce 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. 32

  • Page 33
    ... Data," of this Annual Report on Form 10-K. 2013 Years Ended December 31, 2012 2011 2010 (in millions, except share and per share data) 2009 Statements of Operations Data: Net revenue Cost and expenses: Cost of revenue (a) Selling, general and administrative Marketing (a) Depreciation and...

  • Page 34
    ..., which delivers private label travel solutions to a broad range of partners. 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, rail tickets, travel insurance and...

  • Page 35
    ...2013. However, air volume declined reflecting lower U.S. OTC channel volume. Internationally, we continued to see growth in hotel and vacation package transaction volume at ebookers; however, overall growth was affected by declining air sales as a result of aggressive price competition in the market...

  • Page 36
    ... gross bookings from hotels, car rentals, vacation packages, cruises, destination services and travel insurance. Years Ended December 31, 2013 Gross bookings: Domestic International Total gross bookings Stand-alone air Non-air Total gross bookings Net revenue: Hotel Air Vacation package Advertising...

  • Page 37
    ... international air net revenue was due primarily to higher transaction volume. Vacation package. For the year ended December 31, 2013 net revenue from vacation package bookings increased $12.4 million or 10% as compared with the year ended December 31, 2012. Excluding the impact of foreign currency...

  • Page 38
    ... travel insurance options to be pre-selected. This regulatory change resulted in a reduced attachment rate for insurance products. Costs and Expenses Cost of Revenue Our cost of revenue is composed of costs to operate our customer service call centers, credit card processing fees and other costs...

  • Page 39
    ... global platform, and lower incentive compensation. The increase in professional fees was due primarily to higher legal costs, primarily related to hotel occupancy tax and patent infringement cases, partially offset by a $2.5 million increase ($5.0 million in 2012 compared with $2.5 million in 2011...

  • Page 40
    ... foreign currency fluctuations) for the year ended December 31, 2013 compared with the year ended December 31, 2012 due largely to the growth of our private label distribution channel which increased affiliate commissions by $23.5 million and increased due to search engine and other online marketing...

  • Page 41
    ...than business travel. Gross bookings for leisure travel are generally highest in the first half of the year as customers plan and book their spring and summer vacations. Cash is received upon booking for the majority of transactions booked on our websites, and net revenue for air transactions booked...

  • Page 42
    ... letter of credit availability to support our expected requirements for the foreseeable future. Under our merchant model, customers generally pay us for reservations at the time of booking, and we pay our suppliers at a later date, which is generally when the customer uses the reservation, except in...

  • Page 43
    ... and similar instruments primarily to replace letters of credit previously issued by Travelport and under the 2007 Revolver. These letters of credit are used to support certain supplier and commercial agreements, lease obligations and to comply with non-U.S. regulatory and governmental regulations...

  • Page 44
    ... and higher payments on the tax sharing liability of $6.6 million during the year ended December 31, 2012 as compared with the prior-year period. Financing Arrangements On March 25, 2013, we entered into a $515.0 million senior secured credit agreement composed of the Revolver maturing September...

  • Page 45
    ...to support letters of credit and similar instruments, if necessary. Financial Obligations Commitments and Contingencies We are party to various cases brought by consumers and municipalities and other U.S. governmental entities involving hotel occupancy taxes and our merchant hotel business model. We...

  • Page 46
    ... we are the merchant of record and have the ability to determine the price charged to the customer. We have agreements with suppliers that provide our customers the ability to book their supply (for example, air tickets or hotel rooms) that we sell through our sites. We present merchant revenues on...

  • Page 47
    ... the business risks, including the risk of unsold air tickets or hotel rooms. As such, we recognize revenues for merchant transactions at the net amount, which is the amount charged to the customer less the amount to be paid to the supplier. We accrue for the cost of merchant hotel and merchant car...

  • Page 48
    ... assets existed as of that date as the fair value of the reporting units exceeded the carrying value. Occupancy Taxes We are involved in a number of lawsuits brought by states, cities and counties over issues involving the payment of hotel occupancy or similar taxes. We do not believe that we are...

  • Page 49
    ... 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 developed for internal use. Capitalization commences when the preliminary project stage of the application has been completed...

  • Page 50
    ...changes in foreign currency 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, 2013...

  • Page 51
    ... REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Orbitz Worldwide, Inc. Chicago, Illinois We have audited the accompanying consolidated balance sheets of Orbitz Worldwide, Inc. and subsidiaries (the "Company") as of December 31, 2013 and 2012...

  • Page 52
    ... (in thousands, except share and per share data) Years Ended December 31, 2013 2012 2011 Net revenue Cost and expenses: Cost of revenue Selling, general and administrative Marketing Depreciation and amortization Impairment of goodwill and intangible assets Impairment of property and equipment and...

  • Page 53
    ... INCOME/(LOSS) (in thousands) Years Ended December 31, 2013 2012 2011 Net income/(loss) Other comprehensive income/(loss) (a): Currency translation adjustment Unrealized gain/(loss) on floating to fixed interest rate swaps (net of tax of $2,558, $0, and $0) Other comprehensive income/(loss...

  • Page 54
    ..., except share data) December 31, 2013 December 31, 2012 Assets Current assets: Cash and cash equivalents Accounts receivable (net of allowance for doubtful accounts of $1,186 and $903, respectively) Prepaid expenses Due from Travelport, net Other current assets Total current assets Property and...

  • Page 55
    ..., net of issuance costs Employee tax withholdings related to net share settlements of equity-based awards Proceeds from exercise of employee stock options Payments on tax sharing liability Payments on note payable Net cash used in financing activities Effects of changes in exchange rates on cash and...

  • Page 56
    CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) Years Ended December 31, 2013 2012 2011 Supplemental disclosure of cash flow information: Income tax payments, net Cash interest payments Non-cash investing activity: Capital expenditures incurred not yet paid $ 3,786 $ 2,309 $ 447 $ ...

  • Page 57
    ... 31, 2011 Net loss Amortization of equity-based compensation awards granted to employees, net of shares withheld to satisfy employee tax withholding obligations upon vesting Common shares issued upon vesting of restricted stock units Other comprehensive income/(loss) Balance at December 31, 2012 Net...

  • Page 58
    ..., which delivers private label travel solutions to a broad range of partners. 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, rail tickets, travel insurance and...

  • Page 59
    ... 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 60
    ... book a combination of travel products. For example, travel products booked in a vacation package may include a combination of air travel, hotel and car rental reservations. We recognize net revenue for the entire package when the customer uses the reservation, which generally occurs on the same day...

  • Page 61
    ... entered into foreign currency contracts to manage exposure to changes in foreign currencies associated with receivables, payables and intercompany transactions. These foreign currency contracts did not qualify for hedge accounting treatment. As a result, the changes in fair values of the foreign...

  • Page 62
    ... the excess of the purchase price over the estimated fair value of the underlying assets acquired and liabilities assumed in the acquisition of a business. We assign goodwill to reporting units that are expected to benefit from the business combination as of the acquisition date. Goodwill is not...

  • Page 63
    ...tax"). Generally, hotels collect hotel occupancy tax based on the amount of money they receive for renting their hotel rooms and remit the tax to the appropriate taxing authorities. Using the travel services our websites offer, customers are able to make hotel room reservations. While applicable tax...

  • Page 64
    ... December 31, 2013, 2012 and 2011, respectively. There were no assets subject to capital leases at December 31, 2013 or 2012. As a result of our decision during the first quarter of 2013 to exit the Away Network business, we recorded a $2.6 million non-cash charge to impair property and equipment...

  • Page 65
    ...year ended December 31, 2013, we performed our annual impairment test of goodwill, trademarks and trade names. In connection with our annual impairment test as of December 31, 2013, no impairment was identified as the fair value of the reporting units exceeded the carrying value. 2012 As of the year...

  • Page 66
    ... the estimated fair value of our reporting units were the terminal growth rates, forecasted cash flows and the discount rates. We used an income based valuation approach to separately estimate the fair values of all of our trademarks and trade names as of October 1, 2011 and compared those estimates...

  • Page 67
    ... 31, 2013 December 31, 2012 (in thousands) Advertising and marketing Tax sharing liability (see Note 7) Employee costs Contract exit costs (a) Professional fees Customer service costs Technology costs Customer refunds Customer incentive costs Unfavorable contracts (see Note 8) Airline rebates Other...

  • Page 68
    ... of December 31, 2013. The changes in the Term Loan during the years ended December 31, 2013 and 2012 were as follows: Amount (in thousands) Balance at January 1, 2012 (current and non-current) Payment from excess cash flow under the 2007 Credit Agreement Balance at December 31, 2012 (current and...

  • Page 69
    ... included in our consolidated 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 IPO in December 2003. As a result of...

  • Page 70
    ... 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 provided Orbitz with nondiscriminatory access to seat availability for published fares, as well as marketing and promotional support. Under each...

  • Page 71
    ... of GDS services ("New Travelport GDS Service Agreement"), replacing our prior Travelport GDS service agreement. Under the New Travelport GDS Service Agreement, Orbitz is obligated in 2014 to use only Travelport GDSs for all air and car segments booked on its domestic agencies and is subject...

  • Page 72
    ... hotel occupancy or related taxes and our merchant hotel business model. Certain of the cases are class actions (some of which have been confirmed on a state-wide basis and some which are purported), and most of the cases were brought simultaneously against other OTCs, including Expedia, Travelocity...

  • Page 73
    ... July 2011, related to the City of San Antonio 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 OTCs, including Orbitz, liable for hotel occupancy taxes on markup, fees, and...

  • Page 74
    ... into agreements in which OTCs agree not to facilitate the reservation of hotel rooms at prices that are less than those found on the hotel chain websites. Following the filing of the initial complaint on August 20, 2012, several dozen additional putative consumer class action complaints were filed...

  • Page 75
    ... 2013 Letters of Credit and Other Credit Support December 31, 2012 Letters of Credit and Other Credit Support (in thousands) Restricted Cash Restricted Cash Travelport facility Multi-currency letter of credit facility Uncommitted letter of credit facilities and surety bonds 2007 Credit Agreement...

  • Page 76
    ... Ended December 31, 2013 2012 2011 Federal statutory rate State and local income taxes, net of federal benefit Taxes on non-U.S. operations at differing rates Change in valuation allowance Goodwill impairment charges Reserve for uncertain tax positions Other Effective income tax rate 35.0% 197...

  • Page 77
    ... 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 78
    ... in the post-acquisition accounting period. We and our domestic subsidiaries currently file a consolidated income tax return for U.S. federal income tax purposes. 11. Equity-Based Compensation We issue share-based awards under the Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan, as amended...

  • Page 79
    ... December 31, 2013, which is net of the number of shares retained (but not issued) by us in satisfaction of minimum tax withholding obligations associated with the vesting. The fair value of restricted stock units that vested during the years ended December 31, 2013, 2012 and 2011 was $4.6 million...

  • Page 80
    ... DSUs entitle the non-employee director to receive one share of our common stock for each deferred stock unit following the director's retirement or termination of service from the Board of Directors. For all awards granted prior to 2011, the DSUs are distributed 200 days immediately following such...

  • Page 81
    ... (per share) Outstanding at January 1, 2013 Granted Distributed Outstanding at December 31, 2013 1,183,637 $ 170,816 $ (431,147) $ 923,306 $ 3.71 7.79 3.81 4.41 The weighted-average grant date fair value for deferred stock units granted during the years ended December 31, 2013, 2012 and 2011 was...

  • Page 82
    ...396 The following table shows the changes in the fair value of our foreign currency contracts which were recorded as a gain/ (loss) in selling, general and administrative expense: Years Ended December 31, 2013 2012 (in thousands) 2011 Foreign currency hedges (a) 82 $ 3,877 $ (11,385) $ (2,420...

  • Page 83
    ...following table presents the weighted-average shares outstanding used in the calculation of net income/(loss) per share: Years Ended December 31, Weighted-Average Shares Outstanding 2013 2012 2011 Basic Diluted effect of: Restricted stock units Performance-based restricted stock units Stock options...

  • Page 84
    ... summarizes the related party transactions with Travelport and its subsidiaries, reflected in our consolidated statements of operations: Years Ended December 31, 2013 2012 (in thousands) 2011 Net revenue (a) (b) Cost of revenue Selling, general and administrative expense Marketing expense Interest...

  • Page 85
    ... property and pays us fees for related maintenance and support services. The licenses include our supplier link technology; portions of ebookers' booking, search and vacation package technologies; certain of our products and online booking tools for corporate travel; portions of our private label...

  • Page 86
    ... were unable to agree to terms under which AA tickets would be marketed and distributed to our customers and thus the offering of AA tickets on the Orbitz.com and Orbitz for Business websites was discontinued. Pursuant to a court order in June 2011, AA restored its content to our sites. This ruling...

  • Page 87
    ...days. We value our interest rate swaps using valuations that are calibrated to the initial trade prices. Using a market-based approach, subsequent valuations are based on observable inputs to the valuation model including interest rates, credit spreads and volatilities. In connection with our annual...

  • Page 88
    ... and all other countries. Net revenue is based on the location of the legal entity through which the booking is processed. 2013 Years Ended December 31, 2012 (in thousands) 2011 Net revenue United States All other countries Total The table below presents property and equipment, net, by geographic...

  • Page 89
    ORBITZ WORLDWIDE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Three Months Ended December 31, 2012 (b) September 30, 2012 June 30, 2012 March 31, 2012 (in thousands, except per share data) Net revenue Cost and expenses Operating income/(loss) Net income/(loss) Basic net income/(...

  • Page 90
    ... its global distribution services. From January 1, 2015, we will no longer be subject to these exclusivity provisions. On February 28, 2014, the Company announced it acquired certain assets and contracts of the Travelocity Partner Network, which provides private label travel technology solutions for...

  • Page 91
    ... the effects of a U.K. tax rate change. (c) Includes a reduction of $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...

  • Page 92
    ... reporting (as defined in Rule under the Exchange Act) during the fiscal quarter ended December 31, 2013 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting other than as described below in Management's Annual Report on Internal...

  • Page 93
    ... in internal control over financial reporting related to ineffective information technology controls. We have been actively engaged in the implementation of a remediation effort to address the material weakness. During the fourth quarter of 2013, our management has taken the following actions that...

  • Page 94
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Orbitz Worldwide, Inc. Chicago, Illinois We have audited the internal control over financial reporting of Orbitz Worldwide, Inc. and subsidiaries (the "Company") as of December 31, 2013, based on criteria...

  • Page 95
    ... accounting officer. In addition, we have adopted a Code of Ethics 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...

  • Page 96
    ... and the information required by Item 14 will be included under the caption "Fees Incurred for Services of Deloitte & Touche LLP" and "Approval of Services Provided by Independent Registered Public Accounting Firm" in the 2014 Proxy Statement, and that information is incorporated by reference herein...

  • Page 97
    ... behalf by the undersigned, thereunto duly authorized. ORBITZ WORLDWIDE, INC Date: March 6, 2014 By: /s/ Barney Harford Barney Harford Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 98
    Date: March 6, 2014 By: /s/ Kenneth S. Esterow Kenneth S. Esterow Director Date: March 6, 2014 By: /s/ Scott Forbes Scott Forbes Director Date: March 6, 2014 By: /s/ Robert L. Friedman Robert L. Friedman Director Date: March 6, 2014 By: /s/ Bradley T. Gerstner Bradley T. Gerstner Director ...

  • Page 99
    ... 7, 2009, between Orbitz, LLC and United Air Lines, Inc. (incorporated by reference to Exhibit 10.3 to the Orbitz Worldwide, Inc. 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...

  • Page 100
    ... 31, 2009). Sixth Amendment, dated as of February 18, 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. (incorporated...

  • Page 101
    ...). Car and Hotel Database Addendum, dated January 23, 2013, to Subscriber Services Agreement, dated July 23, 2007, between Travelport, LP, Travelport Global Distribution System B.V. and Orbitz Worldwide, LLC (incorporated by reference to Exhibit 10.1 to the Orbitz Worldwide, Inc. Quarterly Report on...

  • Page 102
    ..., dated as of August 19, 2013, to Subscriber Services Agreement, dated July 23, 2007, between Travelport, LP, Travelport Global Distribution System B.V. and Orbitz Worldwide, LLC (incorporated by reference to Exhibit 10.6 to the Orbitz Worldwide, Inc. Quarterly Report on Form 10-Q for the Quarterly...

  • Page 103
    ... Equity) - 2010 Stock Option Exchange (incorporated by reference to Exhibit (d)(4) to the Orbitz Worldwide, Inc. Schedule TO filed on May 3, 2010). Form of Option Award Agreement (Senior Vice Presidents) (incorporated by reference to Exhibit 10.10 to the Orbitz Worldwide, Inc. Quarterly Report on...

  • Page 104
    ...-Based 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). Form of Performance-Based Restricted Stock Unit Award Agreement (Senior Vice Presidents...

  • Page 105
    .... Current Report on Form 8-K filed on December 18, 2007). List of Subsidiaries. Consent of Deloitte & Touche LLP, independent registered public accounting firm. Certification of Chief Executive Officer of Orbitz Worldwide, Inc. pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of...