Orbitz 2013 Annual Report Download - page 35

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35
RESULTS OF OPERATIONS
Years Ended
December 31, Increase/
(Decrease) Years Ended
December 31, Increase/
(Decrease)
2013 2012 $ % 2012 2011 $ %
(in thousands) (in thousands)
Net revenue $ 847,003 $ 778,796 $ 68,207 9 % $ 778,796 $ 766,819 $ 11,977 2 %
Cost and expenses:
Cost of revenue 154,403 147,840 6,563 4 % 147,840 139,390 8,450 6 %
Selling, general and administrative 280,418 260,253 20,165 8 % 260,253 270,617 (10,364) (4)%
Marketing 292,470 252,993 39,477 16 % 252,993 241,670 11,323 5 %
Depreciation and amortization 55,110 57,046 (1,936) (3)% 57,046 60,540 (3,494) (6)%
Impairment of goodwill and intangible
assets — 321,172 (321,172) (100)% 321,172 49,891 271,281 **
Impairment of property and equipment
and other assets 2,636 1,417 1,219 86 % 1,417 — 1,417 **
Total operating expenses 785,037 1,040,721 (255,684) (25)% 1,040,721 762,108 278,613 37 %
Operating income/(loss) 61,966 (261,925) 323,891 ** (261,925) 4,711 (266,636) **
Other income/(expense):
Net interest expense (43,786) (36,599) (7,187) 20 % (36,599) (40,488) 3,889 (10)%
Other income/(expense) (18,100) (41) (18,059) ** (41) 551 (592) **
Total other expense (61,886) (36,640) (25,246) 69 % (36,640) (39,937) 3,297 (8)%
Net income/(loss) before income taxes 80 (298,565) 298,645 ** (298,565) (35,226) (263,339) **
Provision/(benefit) for income taxes (165,005) 3,173 (168,178) ** 3,173 2,051 1,122 55 %
Net income/(loss) $ 165,085 $ (301,738) $ 466,823 ** $ (301,738) $ (37,277) $(264,461) **
** Not meaningful.
Overall Financial Results
During the year ended December 31, 2013, we reported net income of $165.1 million, compared with a net loss of
$301.7 million in 2012. During the year ended December 31, 2013 we recorded a tax benefit of $165.0 million reflecting the
release of $174.4 million in valuation allowance related to our U.S. federal deferred tax assets and during the year ended
December 31, 2012 we recorded a $321.2 million charge for the impairment of goodwill and intangible assets.
Domestically, hotel and vacation package transaction volume grew in 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 reflecting the
ongoing challenging macroeconomic conditions in Europe. HotelClub experienced higher year-over year hotel transaction
volume and higher revenue per room night.