Orbitz 2014 Annual Report Download - page 44

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debt other than debt permitted to be incurred under the Amended Credit Agreement. The first excess cash flow payment is due
in the first quarter of 2015 for the period from January 1, 2014 to December 31, 2014. Based on our financial results for the
year ended December 31, 2014, we will be required to make a $25.9 million prepayment. Prepayments from excess cash flow
are applied, in order of maturity, to the scheduled quarterly Term Loan principal payments. As a result, we will not be required
to make any scheduled principal payments on the Term Loan until 2020. The potential amount of prepayment from excess cash
flow that will be required beyond the first quarter of 2015 is not reasonably estimable as of December 31, 2014.
Financial Obligations
Commitments and Contingencies
We are involved in various claims, legal proceedings and governmental inquiries related to contract disputes, business
practices, antitrust, intellectual property and other commercial, employment and tax matters. We believe that we have
meritorious defenses, and we are vigorously defending against these claims, proceedings and inquiries (see Note 9 -
Commitments and Contingencies of the Notes to Consolidated Financial Statements).
Litigation is inherently unpredictable and, although we believe we have valid defenses in these matters, unfavorable
resolutions could occur. We generally cannot estimate our range of loss, except to the extent taxing authorities have issued
assessments against us. Although we believe it is unlikely that a materially adverse outcome will result from these proceedings,
an adverse outcome could be material to us with respect to earnings or cash flows in any given reporting period.
Contractual Obligations
The following table summarizes our future contractual obligations as of December 31, 2014:
2015 2016 2017 2018 2019 Thereafter Total
(in thousands)
Term Loan (a) . . . . . . . . . . . . . . . . . . . . . . $ 25,871 $ — $ — $ — $ — $ 421,879 $ 447,750
Interest (b) . . . . . . . . . . . . . . . . . . . . . . . . . 17,922 19,190 19,248 19,248 19,248 24,822 119,678
Operating leases. . . . . . . . . . . . . . . . . . . . . 5,787 5,071 4,958 4,804 4,033 9,395 34,048
GDS contracts (c). . . . . . . . . . . . . . . . . . . . 15,000 16,120 12,370 16,120 1,120 — 60,730
Tax sharing liability (d) . . . . . . . . . . . . . . . 18,224 27,355 39,873 10,719 — — 96,171
Other service and licensing contracts . . . . 7,141 5,134 — — — — 12,275
Total contractual obligations (e). . . . . . . $ 89,945 $ 72,870 $ 76,449 $ 50,891 $24,401 $ 456,096 $ 770,652
(a) The amounts shown in the table above represent future payments under the Term Loan (see Note 7 - Term Loan and
Revolving Credit Facility of the Notes to Consolidated Financial Statements). However, the timing of the future payments
shown in the table above could change as we are required to make an annual prepayment on the Term Loan in the first
quarter of each fiscal year in an amount up to 50% of the prior year’s excess cash flow, as defined in the Credit
Agreement. Based on our cash flow for the year ended December 31, 2014, we are required to make a prepayment on the
Term Loan of $25.9 million in the first quarter of 2015. The potential amount of prepayments from excess cash flow that
will be required beyond the first quarter of 2015 is not reasonably estimable as of December 31, 2014. As a result, the
table above excludes prepayments that could be required from excess cash flow beyond the first quarter of 2015.
(b) Represents estimated interest payments on the variable portion of the Term Loan based on the one-month LIBOR as of
December 31, 2014 and fixed interest payments under interest rate swaps.
(c) In February 2014, the Company entered into an agreement with Travelport for the provision of GDS services (“New
Travelport GDS Service Agreement”), replacing our prior Travelport GDS service agreement (“Travelport GDS Service
Agreement”). Under the New Travelport GDS Service Agreement, Orbitz was subject to certain exclusivity obligations
for segments booked during 2014 in certain markets as defined in the agreement. However, beginning January 1, 2015,
the Company is no longer subject to exclusivity obligations. Under the New Travelport GDS Service Agreement
beginning in 2015, we are obligated to provide certain levels of volume over the contract period and may be subject to
pay shortfall payments in certain cases if we fail to meet volume commitments. The agreement terminates on December
31, 2018.