Orbitz 2013 Annual Report Download - page 67

ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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5. Accrued Expenses
Accrued expenses consisted of the following:
December 31, 2013 December 31, 2012
(in thousands)
Advertising and marketing $ 37,612 $ 30,530
Tax sharing liability (see Note 7) 18,673 15,226
Employee costs 33,315 13,026
Contract exit costs (a) 11,371 10,939
Professional fees 10,294 10,425
Customer service costs 7,020 9,906
Technology costs 7,142 7,017
Customer refunds 5,669 5,383
Customer incentive costs 6,974 4,704
Unfavorable contracts (see Note 8) — 3,580
Airline rebates 3,323 3,428
Other 4,385 4,165
Total accrued expenses $ 145,778 $ 118,329
(a) In connection with the early termination of an agreement with Trilegiant Corporation (now Affinion Group) in 2007, we
accrued termination payments for the period from January 1, 2008 to December 31, 2016. At December 31, 2013 and
2012, the liability's carrying value of $11.7 million was included in our consolidated balance sheets, $11.4 million of
which was included in accrued expenses and $0.3 million of which was included in other non-current liabilities at
December 31, 2013, and $10.9 million of which was included in accrued expenses and $0.8 million of which was
included in other non-current liabilities at December 31, 2012.
6. Term Loan and Revolving Credit Facility
On March 25, 2013, we entered into a $515.0 million senior secured credit agreement composed of a $65.0 million
revolving credit facility maturing September 25, 2017 (the “Revolver”) and $450.0 million in term loans. We used $400.0
million of proceeds from the term loans, along with cash on hand, to repay the balance outstanding under the 2007 Credit
Agreement (described below) and to pay certain fees and expenses incurred in connection with the $515.0 million senior
secured credit agreement. In addition, $50.0 million of proceeds from the term loans were placed in restricted accounts to cash
collateralize certain letters of credit and similar instruments and are included in restricted cash on our Consolidated Balance
Sheet. Term loans included under the $515.0 million senior secured credit agreement were refinanced and amended on May 24,
2013 (“the Amendment”).
Following the Amendment, the $515.0 million senior secured credit facility (the “Credit Agreement”) consists of a
$100.0 million term loan (“Tranche B Term Loan”) maturing September 25, 2017, a $350.0 million term loan (“Tranche C
Term Loan”) maturing March 25, 2019 (collectively, the “Term Loans”) and the Revolver.
The Amendment provides for the Tranche B Term Loan in an aggregate principal amount of $100.0 million, reduced
from $150.0 million before the Amendment, and the Tranche C Term Loan in an aggregate principal amount of $350.0 million,
increased from $300.0 million before the Amendment. Net proceeds from the Amendment were used to refinance the term
loans previously issued on March 25, 2013 in their entirety. The Amendment reduced the interest rates on the Tranche B and
Tranche C Term Loans by 2.50% per annum and 2.00% per annum, respectively, or, to the extent that the Eurocurrency Rate
floor is applicable, 2.75% per annum and 2.25% per annum, respectively. The interest rate on both tranches may be reduced by
an additional 0.25% depending on the senior secured leverage ratio (as defined in the Amendment). In addition, the
Eurocurrency Rate floor has been reduced by 0.25%, from 1.25% per annum to 1.00% per annum.
Term Loan
The Tranche B Term Loan bears interest at a variable rate, at our option, of the Eurocurrency Rate plus a margin of