Orbitz 2014 Annual Report Download - page 42

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42
Cash Flows
Our net cash flows from operating, investing and financing activities were as follows:
Years Ended December 31,
2014 2013 2012
(in thousands)
Beginning cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 117,385 $ 130,262 $ 136,171
Cash provided by/(used in):
Operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,499 153,243 107,059
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,787)(133,267)(63,838)
Financing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,369)(34,959)(50,001)
Effect of changes in exchange rates on cash and cash equivalents. . . . . . . . . . (11,246) 2,106 871
Net increase/ (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . 71,097 (12,877)(5,909)
Ending cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 188,482 $ 117,385 $ 130,262
Operating Activities
Cash provided by operating activities consists of our net income or loss, adjusted for non-cash items such as
depreciation, amortization, changes in unrealized gains and losses, impairment of intangible assets and stock-based
compensation, and changes in various working capital accounts, principally accounts receivable, deferred income, accrued
merchant payables, accounts payable and accrued expenses.
We generated cash flow from operations of $149.5 million for the year ended December 31, 2014, compared with $153.2
million for the year ended December 31, 2013. Cash flow from operations for the year ended December 31, 2014 was affected
by higher pretax income of $44.5 million, which was more than offset by the effects of changes in working capital accounts, the
effect of foreign exchange contracts and exchange rates on other assets and liabilities.
We generated cash flow from operations of $153.2 million for the year ended December 31, 2013, compared with $107.1
million for the year ended December 31, 2012. The increase in cash flow from operations was largely due to increased
merchant payables of $38.7 million as a result of the growth in global merchant hotel transactions and an increase in accounts
payable, accrued expenses and other current liabilities of $25.8 million, partially offset by the majority of the $18.1 million
deferred financing fees paid and expensed in 2013 related to the refinancing of the term loan.
Investing Activities
Cash flow used in investing activities was $43.8 million for the year ended December 31, 2014, a decrease of $89.5
million from $133.3 million for the year ended December 31, 2013. This change from the prior year was due primarily to a
lower use related to restricted cash of $111.3 million in the year ended December 31, 2014, as compared with the prior year
period, partially offset by the acquisition of certain assets of TPN for $10.0 million and higher capital spending of $11.8
million. The impact related to restricted cash was due largely to the one-time impact in 2013 of increases in restricted cash to
replace letters of credit previously issued by Travelport.
Cash flow used in investing activities increased to $133.3 million for the year ended December 31, 2013 from $63.8
million for the year ended December 31, 2012. This increase from the prior year was due to an increase in restricted cash
balances of $94.0 million in the year ended December 31, 2013, partially offset by lower capital spending of $7.7 million, as
compared with the prior year. The increase in restricted cash was due largely to increases in restricted cash to collateralize
letters of credit 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, fulfill lease obligations and
comply with non-U.S. regulatory and governmental regulations.
Financing Activities
Cash flow used in financing activities decreased to $23.4 million for the year ended December 31, 2014 from $35.0
million for the year ended December 31, 2013. This decrease was due primarily to lower tax sharing liability payments of $2.4
million and lower net repayments on our term loans of $16.9 million in the year ended December 31, 2014 compared with the
prior year. Specifically, in 2014, we had a net cash outflow of $2.2 million in connection with the refinancing of the term loan