Orbitz 2014 Annual Report Download - page 79

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ORBITZ WORLDWIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
79
The weighted-average grant date fair value for deferred stock units granted during the years ended December 31, 2014,
2013 and 2012 was $7.94, $7.79 and $3.47, respectively.
Compensation Expense
We recognized total equity-based compensation expense of $12.2 million, $12.9 million and $7.6 million for the years
ended December 31, 2014, 2013 and 2012, respectively, none of which has provided us with a tax benefit due to existence of
net operating losses. As of December 31, 2014, a total of $20.1 million of unrecognized compensation costs related to unvested
restricted stock units, unvested stock options and unvested PSUs are expected to be recognized over the remaining weighted-
average period of 2.8 years.
12. Derivative Financial Instruments
Interest Rate Hedges
At December 31, 2014, we had the following interest rate swaps outstanding that effectively converts $200.0 million of
the term loan from a variable to a fixed interest rate. We pay a fixed interest rate on the notional amount and in exchange
receive a variable interest rate based on the one-month LIBOR rate. The Company does not use derivatives for speculative or
trading purposes.
Notional Amount Effective Date Maturity Date Fixed Interest
Rate Paid Variable Interest
Rate Received
$100.0 million August 29, 2014 August 31, 2016 1.11% One-month LIBOR
$100.0 million August 29, 2014 August 31, 2016 1.15% One-month LIBOR
We entered into interest rate derivative contracts to protect against volatility of future cash flows of the variable interest
payments related to our term loan. These derivative contracts are economic hedges and are not designated as cash flow hedges.
We mark-to-market instruments not designated as hedges and record the changes in the fair value of these items in Net interest
expense in the Company’s Consolidated Statements of Operations and recognize the unrealized gain or loss in Other non-
current assets or liabilities. Unrealized losses of $1.7 million and $1.2 million were recognized at December 31, 2014 and 2013,
respectively.
The following table summarizes the location and fair value of our interest rate derivative instruments on the Company’s
Consolidated Balance Sheets.
Fair Value Measurements as of
Balance Sheet Location December 31, 2014 December 31, 2013
(in thousands)
Interest rate swaps not designated as hedging
instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other non-current liabilities $ 1,723 $ 1,205
Interest rate swaps previously designated as hedging instruments were terminated in conjunction with the termination of
our credit agreement in March 2013. Interest rate swaps designated as hedging instruments were reflected in our Consolidated
Balance Sheets at market value. The corresponding market adjustment related to the hedging instrument was recorded to
Accumulated other comprehensive income (“AOCI”).
The following table shows the market adjustments recorded during the years ended December 31, 2014, 2013 and 2012:
Gain in Other Comprehensive
Income/(Loss)
(Loss) Reclassified from
Accumulated OCI into Interest
Expense (Effective Portion)
Gain/(Loss) Recognized in Income
(Ineffective Portion and the
Amount Excluded from
Effectiveness Testing)
2014 2013 2012 2014 2013 2012 2014 2013 2012
(in thousands)
Interest rate swaps. . . . . . . . $ — $ 276 $ 311 $ — $ (277) $ (561) $ — $ — $ —