Orbitz 2014 Annual Report Download - page 43

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under our 2007 Credit Agreement (see Note 7 - Term Loans and Revolving Credit Facility of the Notes to Consolidated
Financial Statements) and scheduled principal payments pursuant to the senior secured credit agreement compared with $19.1
million in 2013. In addition, we had a $6.9 million decrease in proceeds received from the exercise of stock options 2014, as
compared with the prior year.
Cash flow used in financing activities decreased to $35.0 million for the year ended December 31, 2013, from $50.0
million for the year ended December 31, 2012. This decrease was due primarily to lower net repayments on our term loans in
the year ended December 31, 2013 compared with the previous year. Specifically, during the year ended December 31, 2013,
we had a net cash outflow of $19.1 million for net principal reductions in connection with the refinancing of the term loan
borrowings under our 2007 Credit Agreement, excess cash flow payment and scheduled maturity payments of the senior
secured credit agreement, while during the year ended December 31, 2012, we had a $32.2 million excess cash flow payment
on our term loan. In addition, we had a $3.0 million increase in net proceeds related to the exercise of employee stock options
and employee tax withholdings for equity based awards in the year ended December 31, 2013, as compared with the prior year.
Financing Arrangements
On April 15, 2014, we entered into an amendment (the “Second Amendment”) to the $515.0 million senior secured
credit agreement entered into on March 25, 2013, as refinanced and amended on May 24, 2013 (the “Credit Agreement”),
composed of a 7-year, $450.0 million term loan maturing April 15, 2021 (the “Term Loan”) and a 5-year $80.0 million
revolving credit facility maturing April 15, 2019 (the “Revolver”). The proceeds of the Term Loan were used to repay
approximately $439.9 million of term loans outstanding under the Credit Agreement, pay certain fees and expenses incurred
with the Second Amendment and for general corporate purposes. The term loans under the Credit Agreement, which were
repaid, had original principal amounts of $100.0 million maturing September 25, 2017 and $350.0 million maturing March 25,
2019.
Following the Second Amendment, the $530.0 million senior secured credit facility (the “Amended Credit Agreement”)
consists of the Term Loan and the Revolver. Among other things, the Second Amendment reduced the financial maintenance
covenants, increased certain baskets, and added certain exceptions under certain negative covenants in the Credit Agreement.
The Term Loans and the Revolver bear interest at a variable rate, at our option, of the Eurocurrency Rate or the Base
Rate, plus a margin. The Amended Credit Agreement requires us not to exceed a maximum first lien leverage ratio of 5.00 to 1,
as defined in the Amended Credit Agreement. As of December 31, 2014, we were in compliance with the financial covenant
and other conditions of the Amended Credit Agreement and expect to be in compliance for the foreseeable future.
The Term Loan and Revolver are both secured by substantially all of our and 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.
The Credit Agreement contains various customary restrictive covenants that limit our ability to, among other things:
• incur additional indebtedness or enter into guarantees;
• enter into sale or leaseback transactions;
• make investments, loans or acquisitions;
• grant or incur liens on our assets;
• sell our assets;
• engage in mergers, consolidations, liquidations or dissolutions;
• engage in transactions with affiliates; and
• make any distribution or dividend payment, or redeem or repurchase our capital stock.
The Term Loan is payable in quarterly installments of $1.125 million, beginning September 30, 2014, with the final
installment of the remaining outstanding balance due at the applicable maturity date with respect to such Term Loan. In
addition, we are required, subject to certain exceptions, to make payments on the Term Loan: (a) annually in the first quarter of
each fiscal year in an amount of 50% (which percentage will be reduced to 25% and 0% subject to achieving certain leverage
ratios) of the prior year’s excess cash flow, as defined in the Credit Agreement; (b) in an amount of 100% of net cash proceeds
from asset sales subject to certain reinvestment rights; and (c) in an amount of 100% of net cash proceeds of any issuance of