Exhibit 99  Financial
Statements and Supplementary Data of Orbitz Worldwide, Inc.  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of
Directors and Shareholders of Orbitz Worldwide, Inc.  We have audited the accompanying consolidated balance sheets of Orbitz
Worldwide, Inc. and subsidiaries (for all periods the Company) (the Successor)
as of December 31, 2008 and 2007, and the related consolidated statements
of operations, cash flows, comprehensive loss, and shareholders equity for the
years ended December 31, 2008 and 2007, and the period from August 23,
2006 through December 31, 2006. We have also audited the combined
consolidated statements of operations, comprehensive loss, invested equity, and
cash flows of the Company reflecting its ownership by Cendant Corporation prior
to the acquisition by affiliates of The Blackstone Group and Technology
Crossover Ventures of Palo Alto, California on August 23, 2006 (the Predecessor)
for the period from January 1, 2006 through August 22, 2006. Our
audits also included the financial statement schedule listed at Item 15.
These financial statements and financial statement schedule are the
responsibility of the Companys management. Our responsibility is to express an
opinion on the financial statements and financial statement schedule based on
our audits.  We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.  In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Orbitz Worldwide, Inc.
and subsidiaries as of December 31, 2008 and 2007, and the results of
their operations and their cash flows for the years ended December 31,
2008 and 2007, and the period from August 23, 2006 through December 31,
2006, and such combined consolidated financial statements of the Predecessor
present fairly, in all material respects, the results of its operations and its
cash flows for the period from January 1, 2006 through August 22,
2006, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly in all material respects the information set
forth therein.  As discussed in Note 1 to the consolidated financial statements,
the financial statements presented for periods prior to August 23, 2006
include the results of operations and cash flows for the Company on a
predecessor basis reflecting the ownership by Cendant Corporation. The
Successor and Predecessor are comprised of the assets and liabilities of the
business-to-consumer travel businesses of Travelport Limited and Cendant
Corporation, respectively. As a result, the consolidated financial statements
include allocations which may not be indicative of the actual revenues and
expenses that would have been reported had the Company operated as a separate
entity apart from Travelport Limited or Cendant Corporation in the periods
prior to the Companys initial public offering on July 25, 2007.  We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the Companys internal
control over financial reporting as of December 31, 2008, based on the
criteria established in Internal
Control  Integrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission and our report dated March 9,
2009 expressed an unqualified opinion on the Companys internal control over
financial reporting.  /s/  DELOITTE &
TOUCHE LLP  Chicago, Illinois March 9, 2009


ORBITZ
WORLDWIDE, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (in
millions, except share and per share data)  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22, 2006
  PredecessorNet revenue
  
  $
  870
  
  $
  859
  
  $
  242
  
  $
  510Cost and expensesCost of revenue
  
  163
  
  157
  
  38
  
  75Selling, general and administrative
  
  272
  
  301
  
  112
  
  191Marketing
  
  310
  
  302
  
  89
  
  188Depreciation and amortization
  
  66
  
  57
  
  18
  
  37Impairment of goodwill and intangible assets
  
  297
  
  
  
  
  
  122Total operating expenses
  
  1,108
  
  817
  
  257
  
  613Operating (loss) income
  
  (238
  )
  42
  
  (15
  )
  (103
  )Other (expense) income Interest
  expense, net
  
  (63
  )
  (83
  )
  (9
  )
  (18
  )Other income, net
  
  
  
  
  
  
  
  1Total other (expense)
  
  (63
  )
  (83
  )
  (9
  )
  (17
  )Loss before income taxes and minority interest
  
  (301
  )
  (41
  )
  (24
  )
  (120
  )(Benefit) provision for income taxes
  
  (2
  )
  43
  
  1
  
  1Minority interest, net of tax
  
  
  
  1
  
  
  
  Net loss
  
  $
  (299
  )
  $
  (85
  )
  $
  (25
  )
  $
  (121
  )  Year Ended
  December 31, 2008
  
  Period from
  July 18, 2007 to
  December 31, 2007Net loss
  
  $
  (299
  )
  $
  (42
  )Net loss per share  basic and diluted:Net loss per share
  
  $
  (3.58
  )
  $
  (0.51
  )Weighted average shares outstanding
  
  83,342,333
  
  81,600,478  See Notes to
Consolidated Financial Statements.  2


ORBITZ
WORLDWIDE, INC. CONSOLIDATED
BALANCE SHEETS (in
millions, except share data)  SuccessorDecember 31,
  2008
  
  December 31,
  2007AssetsCurrent assets:Cash and cash equivalents
  
  $
  31
  
  $
  25Accounts receivable (net of allowance for doubtful
  accounts of $1 and $2, respectively)
  
  58
  
  60Prepaid expenses
  
  17
  
  16Security deposits
  
  
  
  8Deferred income taxes, current
  
  6
  
  3Due from Travelport, net
  
  10
  
  Other current assets
  
  6
  
  9Total current assets
  
  128
  
  121Property and equipment, net
  
  190
  
  184Goodwill
  
  949
  
  1,181Trademarks and trade names
  
  232
  
  313Other intangible assets, net
  
  34
  
  68Deferred income taxes, non-current
  
  9
  
  12Other non-current assets
  
  48
  
  46Total Assets
  
  $
  1,590
  
  $
  1,925Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
  
  $
  37
  
  $
  37Accrued merchant payable
  
  205
  
  218Accrued expenses
  
  106
  
  121Deferred income
  
  23
  
  28Due to Travelport, net
  
  
  
  8Term loan, current
  
  6
  
  6Other current liabilities
  
  9
  
  4Total current liabilities
  
  386
  
  422Term loan, non-current
  
  587
  
  593Line of credit
  
  21
  
  1Tax sharing liability
  
  109
  
  114Unfavorable contracts
  
  13
  
  17Other non-current liabilities
  
  36
  
  40Total Liabilities
  
  1,152
  
  1,187Commitments and contingencies (see Note 11)Shareholders Equity:Preferred stock, $0.01 par value,
  100 shares authorized, no shares issued or outstanding
  
  
  
  Common stock, $0.01 par value,
  140,000,000 shares authorized, 83,345,437 and 83,107,909 shares
  issued and outstanding, respectively
  
  1
  
  1Treasury stock, at cost, 18,055 and
  8,852 shares held, respectively
  
  
  
  Additional paid in capital
  
  908
  
  894Accumulated deficit
  
  (450
  )
  (151
  )Accumulated other comprehensive (loss) (net of
  accumulated tax benefit of $2 and $2, respectively)
  
  (21
  )
  (6
  )Total Shareholders Equity
  
  438
  
  738Total Liabilities and Shareholders Equity
  
  $
  1,590
  
  $
  1,925  See Notes to
Consolidated Financial Statements.  3


ORBITZ
WORLDWIDE, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (in
millions)  Year Ended
  December 31,
  2008
  Successor
  
  Year Ended
  December 31,
  2007
  Successor
  
  Period from
  August 23,
  2006 to
  December 31,
  2006
  Successor
  
  Period from
  January 1,
  2006 to
  August 22,
  2006
  PredecessorOperating activities:Net loss
  
  $
  (299
  )
  $
  (85
  )
  $
  (25
  )
  $
  (121
  )Adjustments to reconcile net loss to net cash
  provided by operating activities:Depreciation and amortization
  
  66
  
  57
  
  18
  
  37Impairment of goodwill and intangible assets
  
  297
  
  
  
  
  
  122Non-cash revenue
  
  (3
  )
  (7
  )
  (3
  )
  (8
  )Non-cash interest expense
  
  18
  
  15
  
  9
  
  18Deferred income taxes
  
  (4
  )
  38
  
  2
  
  (16
  )Stock compensation
  
  15
  
  8
  
  2
  
  4Provision for bad debts
  
  
  
  2
  
  
  
  1Income allocated to minority interests
  
  
  
  1
  
  
  
  Deconsolidation of minority interests
  
  
  
  (7
  )
  
  
  Changes in assets and liabilities, net of effects
  from acquisitions:Accounts receivable
  
  
  
  (2
  )
  8
  
  (12
  )Deferred income
  
  
  
  8
  
  11
  
  15Due to/from Travelport, net
  
  (5
  )
  2
  
  
  
  Accounts payable, accrued merchant payable, accrued
  expenses and other current liabilities
  
  
  
  38
  
  12
  
  119Other
  
  (9
  )
  1
  
  5
  
  (38
  )Net cash provided by operating activities
  
  76
  
  69
  
  39
  
  121Investing activities:Property and equipment additions
  
  (58
  )
  (53
  )
  (28
  )
  (55
  )Proceeds from sale of business, net of cash assumed
  by buyer
  
  
  
  (31
  )
  
  
  Investments
  
  
  
  
  
  (1
  )
  1Proceeds from asset sales
  
  
  
  4
  
  
  
  Net cash (used in) investing activities
  
  (58
  )
  (80
  )
  (29
  )
  (54
  )Financing activities:Proceeds from initial public offering, net of
  offering costs
  
  
  
  477
  
  
  
  Proceeds from issuance of debt, net of issuance costs
  
  
  
  595
  
  
  
  Repayment of note payable to Travelport
  
  
  
  (860
  )
  
  
  Dividend to Travelport
  
  
  
  (109
  )
  
  
  Capital contributions from Travelport
  
  
  
  25
  
  
  
  Capital lease and debt payments
  
  (7
  )
  (3
  )
  
  
  (3
  )Advances to Travelport
  
  
  
  (113
  )
  (7
  )
  (36
  )Payment to satisfy employee tax withholding
  obligations upon vesting of equity-based awards
  
  (1
  )
  
  
  
  
  Payments on tax sharing liability
  
  (20
  )
  
  
  
  
  (31
  )Proceeds from line of credit
  
  69
  
  152
  
  
  
  Payments on line of credit
  
  (49
  )
  (151
  )
  
  
  Net cash (used in) provided by financing
  activities
  
  (8
  )
  13
  
  (7
  )
  (70
  )Effects of changes in exchange rates on cash and
  cash equivalents
  
  (4
  )
  5
  
  (11
  )
  1Net increase (decrease) in cash and cash equivalents
  
  6
  
  7
  
  (8
  )
  (2
  )Cash and cash equivalents at beginning of period
  
  25
  
  18
  
  26
  
  28Cash and cash equivalents at end of period
  
  $
  31
  
  $
  25
  
  $
  18
  
  $
  26Supplemental disclosure of cash flow
  information:Income tax (refunds) payments, net
  
  $
  (2
  )
  $
  11
  
  $
  3
  
  $
  6Cash interest payments, net of capitalized interest
  of $1, $3, $0, and $0, respectively
  
  $
  47
  
  $
  74
  
  
  
  $
  4Non-cash investing activity:Capital expenditures incurred not yet paid
  
  $
  2
  
  $
  4
  
  
  
  Non-cash allocation of purchase price related to the
  Blackstone Acquisition
  
  
  
  $
  7
  
  $
  1,290
  
  Non-cash financing activity:Non-cash capital contributions and distributions to
  Travelport
  
  
  
  $
  (814
  )
  
  
  Non-cash forgiveness of receivable from Cendant
  
  
  
  
  
  
  
  $
  (67
  )Non-cash use of tax benefits by Cendant
  
  
  
  
  
  
  
  $
  10  See Notes to
Consolidated Financial Statements.  4


ORBITZ
WORLDWIDE, INC. CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS (in
millions)  Year Ended
  December 31,
  2008
  Successor
  
  Year Ended
  December 31,
  2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31,
  2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22,
  2006
  PredecessorNet loss
  
  $
  (299
  )
  $
  (85
  )
  $
  (25
  )
  $
  (121
  )Other comprehensive (loss) income, net of income
  taxesCurrency translation adjustment
  
  (7
  )
  (4
  )
  2
  
  (32
  )Unrealized (losses) on floating to fixed interest
  rate swaps (net of tax benefit of $0, $2, $0 and $0, respectively)
  
  (8
  )
  (4
  )
  
  
  Other comprehensive (loss) income
  
  (15
  )
  (8
  )
  2
  
  (32
  )Comprehensive (loss)
  
  $
  (314
  )
  $
  (93
  )
  $
  (23
  )
  $
  (153
  )  See Notes to
Consolidated Financial Statements.  5


ORBITZ
WORLDWIDE, INC. CONSOLIDATED
STATEMENTS OF INVESTED EQUITY/SHAREHOLDERS EQUITY (in
millions)  Accumulated Other
  Comprehensive
  Income (Loss)Cendant or
  
  
  
  
  
  
  
  
  
  Net Unrealized Gains
  (Losses) from
  
  Total
  InvestedTravelport
  
  
  
  
  
  Additional
  
  
  
  Interest
  
  Foreign
  
  Equity/Net
  
  Common Stock
  
  Paid in
  
  Accumulated
  
  Rate
  
  Currency
  
  ShareholdersInvestment
  
  Shares
  
  Amount
  
  Capital
  
  Deficit
  
  Swaps
  
  Translation
  
  EquityPredecessorBalance as of December 31, 2005
  
  $
  1,418
  
  
  
  
  
  
  
  
  
  
  
  $
  6
  
  $
  1,424Non-cash forgiveness of receivable from Cendant
  
  (67
  )
  
  
  
  
  
  
  
  
  
  
  
  
  (67
  )Use of income tax benefits by Cendant
  
  10
  
  
  
  
  
  
  
  
  
  
  
  
  
  10Net loss
  
  (121
  )
  
  
  
  
  
  
  
  
  
  
  
  
  (121
  )Other comprehensive loss, net of tax benefit of $0
  
  
  
  
  
  
  
  
  
  
  
  
  
  (32
  )
  (32
  )Balance as of August 22, 2006
  
  $
  1,240
  
  
  
  
  
  
  
  
  
  
  
  $
  (26
  )
  $
  1,214SuccessorBalance as of August 23, 2006
  
  $
  1,290
  
  
  
  
  
  
  
  
  
  
  
  
  
  $
  1,290Net loss
  
  (25
  )
  
  
  
  
  
  
  
  
  
  
  
  
  (25
  )Other comprehensive income, net of tax benefit of $0
  
  
  
  
  
  
  
  
  
  
  
  
  
  $
  2
  
  2Balance at December 31, 2006
  
  1,265
  
  
  
  
  
  
  
  
  
  
  
  2
  
  1,267Capital distribution to Travelport and other, net
  
  (841
  )
  
  
  
  
  
  
  
  
  
  
  
  
  (841
  )Issuance of common stock to Travelport in connection
  with Reorganization
  
  (381
  )
  49
  
  $
  1
  
  $
  380
  
  
  
  
  
  
  
  Issuance of common stock in connection with initial
  public offering, net of offering costs
  
  
  
  34
  
  
  
  477
  
  
  
  
  
  
  
  477Dividend paid to Travelport
  
  
  
  
  
  
  
  
  
  $
  (109
  )
  
  
  
  
  (109
  )Contributions from Travelport
  
  
  
  
  
  
  
  30
  
  
  
  
  
  
  
  30Amortization of equity-based compensation awards
  granted to employees, net of payments to satisfy employee tax withholding
  obligations upon vesting
  
  
  
  
  
  
  
  7
  
  
  
  
  
  
  
  7Net loss from January 1, 2007 through
  July 17, 2007
  
  (43
  )
  
  
  
  
  
  
  
  
  
  
  
  
  (43
  )Net loss from July 18, 2007 through December 31,
  2007
  
  
  
  
  
  
  
  
  
  (42
  )
  
  
  
  
  (42
  )Other comprehensive loss, net of tax benefit of $2
  
  
  
  
  
  
  
  
  
  
  
  $
  (4
  )
  (4
  )
  (8
  )Balance at December 31, 2007
  
  
  
  83
  
  1
  
  894
  
  (151
  )
  (4
  )
  (2
  )
  738Net loss
  
  
  
  
  
  
  
  
  
  (299
  )
  
  
  
  
  (299
  )Amortization of equity-based compensation awards
  granted to employees, net of payments to satisfy employee tax withholding
  obligations upon vesting
  
  
  
  
  
  
  
  14
  
  
  
  
  
  
  
  14Other comprehensive loss, net of tax benefit of $0
  
  
  
  
  
  
  
  
  
  
  
  (8
  )
  (7
  )
  (15
  )Balance at December 31, 2008
  
  
  
  83
  
  $
  1
  
  $
  908
  
  $
  (450
  )
  $
  (12
  )
  $
  (9
  )
  $
  438  See Notes to
Consolidated Financial Statements.  6


ORBITZ
WORLDWIDE, INC. NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS  1.  Basis
of Presentation  Description of the Business  Orbitz, Inc. (Orbitz) was formed in early 2000 by American
Airlines, Inc., Continental Airlines, Inc., Delta Air Lines, Inc.,
Northwest Airlines, Inc. and United Air Lines, Inc. (the Founding
Airlines). In November 2004, Orbitz was acquired by Cendant Corporation (Cendant),
whose online travel distribution businesses included the CheapTickets,
HotelClub and RatesToGo brands. In February 2005, Cendant acquired
ebookers Limited, an international online travel brand with operations in 13
countries throughout Europe (ebookers).  On August 23, 2006, Travelport Limited (Travelport), which
consisted of Cendants travel distribution services businesses, including the
businesses that currently comprise Orbitz Worldwide, Inc., was acquired by
affiliates of The Blackstone Group (Blackstone) and Technology Crossover
Ventures (TCV). We refer to this acquisition as the Blackstone Acquisition.  Orbitz Worldwide, Inc. was incorporated in Delaware on June 18,
2007 and was formed to be the parent company of the business-to-consumer travel
businesses of Travelport, including Orbitz, ebookers and Travel Acquisition
Corporation Pty. Ltd. (HotelClub) and the related subsidiaries and affiliates
of those businesses. We are the registrant as a result of the completion of our
initial public offering (IPO) of 34,000,000 shares of our common stock
on July 25, 2007. At December 31, 2008 and December 31, 2007,
Travelport and investment funds that own and/or control Travelports ultimate
parent company beneficially owned approximately 58% and 59% of our outstanding
common stock, respectively.  We are a leading global online travel company that uses innovative
technology to enable leisure and business travelers to search for and book a
broad range of travel products. Our brand portfolio includes Orbitz,
CheapTickets, the Away Network, and Orbitz for Business in the Americas;
ebookers in Europe; and HotelClub and RatesToGo based in Sydney, Australia,
which have operations globally. We provide customers with the ability to book a
comprehensive set of travel products from over 85,000 suppliers worldwide,
including air travel, hotels, vacation packages, car rentals, cruises, travel
insurance and destination services such as ground transportation, event tickets
and tours.  Basis of Presentation  The accompanying consolidated financial statements present the accounts
of Orbitz, ebookers and HotelClub and the related subsidiaries and affiliates
of those businesses, collectively doing business as Orbitz Worldwide, Inc.
These entities became wholly owned subsidiaries of ours as part of an
intercompany restructuring that was completed on July 18, 2007 (the Reorganization)
in connection with the IPO. Prior to the IPO, these entities had operated as
indirect, wholly-owned subsidiaries of Travelport. Travelport is beneficially
owned by affiliates of Blackstone, TCV and One Equity Partners.  Prior to the IPO, we had not operated as an independent standalone
company. As a result, our consolidated financial statements have been carved
out of the historical financial statements of Cendant for the period prior to
the Blackstone Acquisition and the historical financial statements of
Travelport for the period subsequent to the Blackstone Acquisition. In
connection with the Blackstone Acquisition, the carrying values of our assets
and liabilities were revised to reflect their fair values as of August 23,
2006, based upon an allocation of the overall purchase price of Travelport to
the underlying net assets of the various Travelport affiliates acquired.  The accompanying consolidated financial statements present separately
our financial position, results of operations, cash flows, comprehensive loss
and changes in equity on a Successor basis (reflecting Travelports ownership
of us) and Predecessor basis (reflecting Cendants ownership of us). Our
financial information has been separated by a vertical line on the face of the
consolidated financial statements to identify these different bases of
accounting.  The legal entity of Orbitz Worldwide, Inc. was formed in
connection with the Reorganization, and prior to the Reorganization there was
no single capital structure upon which to calculate historical loss per share
information. Accordingly, loss per share information is not presented on our
consolidated statements of operations for periods prior to the Reorganization.  7


Our consolidated financial position, results of operations, and cash
flows for the periods presented may not be indicative of our future performance
and do not necessarily reflect what our financial position, results of
operations and cash flows would have been had we operated as a separate,
standalone entity during the periods presented.  Prior to the IPO, certain corporate general and administrative
expenses, including those related to executive management, information
technology, tax, insurance, accounting, legal, treasury services and certain
employee benefits, were allocated to us by Travelport and Cendant based on
forecasted revenue or directly billed based on actual usage. In addition,
certain of our revenue streams were related to contractual arrangements entered
into by Travelport and Cendant on behalf of one or more of its subsidiaries. As
a result, portions of the reported revenue have been determined through
intercompany relationships with other Travelport or Cendant companies.
Management believes these allocations are reasonable. However, the associated
revenues and expenses recorded by the Predecessor and Successor in the
accompanying consolidated statements of operations prior to the IPO may not be
indicative of the actual revenues and expenses that would have been reported
had the Predecessor and Successor been operating as a standalone entity.  On July 5, 2007, we sold Tecnovate, an Indian services
organization, to Travelport. In accordance with Financial Accounting Standards
Board (FASB) Interpretation No. 46(R), Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51, as revised (FIN 46(R)),
we continued to consolidate the results of operations of Tecnovate following
this sale since we were the primary beneficiary of this variable interest
entity (VIE). Our variable interest was the result of the terms of a
contractual relationship we had with Tecnovate.  On December 3, 2007, Travelport subsequently sold Tecnovate, at
which time we were no longer considered the primary beneficiary of this VIE.
Accordingly, minority interest is reported in our consolidated financial
statements for the period from July 5, 2007 to December 3, 2007 since
although we were the primary beneficiary of Tecnovate, we did not have an
ownership interest in the VIE. We no longer consolidate the results of
operations of Tecnovate following the sale on December 3, 2007 (see
Note 18  Related Party Transactions for further information).  2.  Summary
of Significant Accounting Policies  Principles of Consolidation  The accompanying consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States (GAAP). All intercompany balances and transactions have been
eliminated in the consolidated financial statements.  Use of Estimates  The preparation of our consolidated financial statements in conformity
with GAAP requires us to make certain estimates and assumptions. Our estimates
and assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities as of the date of our
consolidated financial statements, and the reported amounts of revenue and
expense during any period.  Our significant estimates include assessing the collectability of
accounts receivable, sales allowances, the realization of deferred tax assets,
amounts that may be due under the tax sharing agreement, the fair value of
assets and liabilities acquired in business combinations, and impairment of
tangible and intangible assets. Actual results could differ from our estimates.  Foreign Currency Translation  Balance sheet accounts of our operations outside of the U.S. are
translated from foreign currencies into U.S. dollars at the exchange rates
as of the consolidated balance sheet dates. Revenues and expenses are
translated at average exchange rates during the period. Foreign currency
translation gains or losses are included in accumulated other comprehensive
loss in shareholders equity. Gains and losses resulting from foreign currency
transactions, which are denominated in currencies other than the entitys
functional currency, are included in our consolidated statements of operations.  8


Revenue Recognition  We record revenue based on Securities and Exchange Commission (SEC)
Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition. We
recognize revenue when it is earned and realizable, when persuasive evidence of
an arrangement exists, services have been rendered, the price is fixed or
determinable, and collectability is reasonably assured. We record revenue
earned net of all amounts paid to our suppliers under both our retail and
merchant models, in accordance with the criteria established in Emerging Issues
Task Force (EITF) No. 99-19, Reporting Revenue Gross as a Principal
versus Net as an Agent.  We offer customers the ability to book airline, hotel, car rental and
other travel reservations through our various brands, including Orbitz,
CheapTickets, ebookers, HotelClub and RatesToGo. These products and services
are made available to our customers for booking on a stand-alone basis or as
part of a dynamic vacation package. We have two primary types of contractual
arrangements with our vendors, which we refer to herein as the retail and merchant
models.  Under the retail model, we pass reservations booked by our customers to
the travel supplier for a commission. We also charge our customers a service
fee for booking the travel reservation. Under this model, we do not take on
credit risk with travelers; we are not the primary obligor with the customer;
we have no latitude in determining pricing; we take no inventory risk; we have
no ability to determine or change the products or services delivered; and we
have no discretion in the selection of the service supplier.  We recognize net revenue under the retail model when the reservation is
made, secured by a customer with a credit card and we have no further
obligations to our customers. For air transactions, this is at the time of
booking. For hotel transactions and car transactions, net revenue is recognized
at the time of check-in or customer pick-up, respectively, net of an allowance
for cancelled reservations. The timing of recognition is different for retail
hotel and retail car transactions than for retail air travel because unlike air
travel where the reservation is secured by a customers credit card at booking,
car rental bookings and hotel bookings are not secured by a customers credit
card until the pick-up date and check-in date, respectively. Allowances for
cancelled reservations primarily relate to cancellations that do not occur
through our website, but instead occur directly through the supplier of the
travel product. The amount of the allowance is determined based on our
historical experience. The majority of commissions earned under the retail
model are based upon contractual agreements.  Under the merchant model, we provide customers the ability to book the
travel reservation, and we contract with various suppliers that provide the
travel products needed to fulfill the reservation. We generate revenue for our
services based on the difference between the total amount the customer pays for
the travel product and the negotiated net rate plus estimated taxes that the
supplier charges for that travel product. We also charge our customers a
service fee for booking the travel reservation. Customers generally pay for
reservations in advance, at the time of booking. Initially, we record these
advance payments as deferred income and accrued merchant payables. In this
model, we do not take on credit risk with travelers, however we are subject to
fraud risk; we have the ability to determine the price; we are not responsible
for the actual delivery of the flight, hotel room, or car rental; we take no
inventory risk; we have no ability to determine or change the products or
services delivered; and the customer is responsible for the selection of the
service supplier.  We recognize net revenue under the merchant model when we have no
further obligations to our customers. For merchant air transactions, this is at
the time of booking. For merchant hotel transactions and merchant car
transactions, net revenue is recognized at the time of check-in or customer
pick-up, respectively. This timing is different for merchant air travel because
our primary service to the customer is fulfilled at the time of booking.  We accrue for the cost of merchant hotel and merchant car transactions
based on amounts we expect to be invoiced by suppliers. If we do not receive an
invoice within a certain period of time, generally within six months, or the
invoice received is less than the accrued amount, we may reverse a portion of
the accrued cost when we determine it is not probable that we will be required
to pay the supplier, based on our historical experience and contract terms.
This would result in an increase in net revenue and a decrease to the accrued
merchant payable.  Dynamic vacation packages offer customers the ability to book a
combination of travel products. For example, travel products booked in a
dynamic vacation package may include a combination of air, hotel and car
reservations. We recognize net revenue for the entire package when customers
use the reservation, which generally occurs on the same day for each travel
product included in the dynamic vacation package.  9


Under both the retail and merchant models, we recognize revenue for
service fees charged to customers for booking travel reservations. This revenue
is recognized at the time we recognize the net revenue for the corresponding
travel product. We also may receive override commissions from suppliers if we
meet certain contractual volume thresholds. These commissions are recognized when
the amount of the commissions becomes fixed or determinable, which is generally
upon notification by the respective travel supplier.  We utilize global distribution systems (GDS) services provided by
Galileo, Worldspan and Amadeus. Under GDS service agreements, we earn revenue
in the form of an incentive payment for each segment that is processed through
a GDS. Revenue is recognized for these incentive payments at the time the
travel reservation is processed through the GDS, which is generally at the time
of booking.  We also generate other revenue, which is primarily comprised of revenue
from advertising, including sponsoring links on our websites, and travel
insurance. Advertising revenue is derived primarily from the delivery of
advertisements on our websites and is recognized either at the time of display
of each individual advertisement, or ratably over the advertising delivery
period, depending on the terms of the advertising contract. Revenues generated
from sponsoring links and travel insurance revenue are both recognized upon
notification from the alliance partner that a transaction has occurred.  Cost of Revenue  Our cost of revenue is primarily comprised of direct costs incurred to
generate revenue, including costs incurred to operate our customer service call
centers, credit card processing fees incurred on our merchant bookings,
ticketing costs, charge-backs, and connectivity and other data processing
costs. These costs are generally variable in nature and are primarily driven by
transaction volume.  Marketing Expense  Our marketing expense is primarily comprised of online marketing costs,
such as search and banner advertising, and offline marketing costs, such as
television, radio and print advertising. Online advertising expense is
recognized based on the terms of the individual agreements, which are generally
over the ratio of the number of impressions delivered over the total number of
contracted impressions, or pay-per-click, or on a straight-line basis over the
term of the contract. Offline marketing expense is recognized in the period in
which it is incurred. Our online marketing costs are significantly greater than
our offline marketing costs.  Income Taxes  We account for income taxes in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes (SFAS No. 109).
Accordingly, our provision for income taxes is determined using the asset and
liability method. Under this method, deferred tax assets and liabilities are
calculated based upon the temporary differences between the financial statement
and income tax bases of assets and liabilities using the combined federal and
state effective tax rates that are applicable to us in a given year. The
deferred tax assets are recorded net of a valuation allowance when, based on
the weight of available evidence, we believe it is more likely than not that
some portion or all of the recorded deferred tax assets will not be realized in
future periods. Increases to the valuation allowance are recorded as increases
to the provision for income taxes. Under the current standard, to the extent
that any valuation allowances established in purchase accounting are reduced,
these reductions are recorded as adjustments to goodwill rather than to the
provision for income taxes. Beginning January 1, 2009, these reductions
will be recorded through our statement of operations as a result of our
adoption of SFAS No. 141(R), Business Combinations (SFAS No. 141(R)).
The realization of the deferred tax assets, net of a valuation allowance, is
primarily dependent on estimated future taxable income. A change in our
estimate of future taxable income may require an increase or decrease to the
valuation allowance.  The Predecessors operations were included in the consolidated U.S. federal
income tax return of Cendant up to the date of the Blackstone Acquisition,
which occurred on August 23, 2006. In addition, the Predecessor has filed
consolidated, combined and unitary state income tax returns with Cendant in
jurisdictions where required or permitted. However, the provision for income
taxes was computed as if the Predecessor filed its U.S. federal, state and
foreign income tax returns on a standalone basis (on a Separate Company
basis). To the extent that the Predecessors Separate Company income tax
payable, if any, relates to a period in which it was included in Cendants
U.S. federal and state income tax returns, any such income tax payable is
included in other current liabilities in our consolidated balance sheets.
Furthermore, the Separate Company deferred tax assets and liabilities related
to the Predecessors operations are based upon estimated differences between
the book and tax basis of the assets and liabilities for the  10


Predecessor as of August 22,
2006 and prior balance sheet dates. The Successors deferred tax assets and
liabilities may be adjusted in connection with the finalization of Cendants
prior years income tax returns, or in connection with the final settlement of
the consequences of the separation of Cendant into four independent companies.  For the period August 23, 2006 to December 31, 2006, our
operations were included in the initial consolidated U.S. federal income
tax return of Travelport. In addition, for this period we filed consolidated,
combined and unitary state income tax returns with Travelport in jurisdictions
where required or permitted. However, the provision for income taxes was
computed as if we filed our U.S. federal, state and foreign income tax
returns on a Separate Company basis. For the period August 23, 2006 to December 31,
2006, we did not have a Separate Company income tax payable.  For the period January 1, 2007 to February 7, 2007, the
operations of Travelport were included in the consolidated U.S. federal
and state income tax returns for the year ended December 31, 2007 for
Orbitz Worldwide, Inc. and its subsidiaries. However, the provision for
income taxes was computed as if we filed our U.S. federal, state and
foreign income tax returns on a Separate Company basis without the inclusion of
the operations of Travelport. Furthermore, the Separate Company deferred tax
assets and liabilities have been calculated using our tax rates on a Separate
Company basis. The deferred tax assets and liabilities are based upon estimated
differences between the book and tax bases of our assets and liabilities as of December 31,
2007. Our tax assets and liabilities may be adjusted in connection with the
ultimate finalization of Travelports income tax returns.  For the year ended December 31, 2008, the provision for
U.S. federal, state and foreign income taxes and the calculation of the
deferred tax assets and liabilities were based solely on the operations of
Orbitz Worldwide, Inc. and its subsidiaries.  Derivative Financial Instruments  We account for derivative and hedging activities in accordance with
SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS No. 133), as amended and interpreted. These
accounting standards require us to measure derivatives, including certain
derivatives embedded in other contracts, at fair value and to recognize them in
our consolidated balance sheets as assets or liabilities, depending on our
rights or obligations under the applicable derivative contract. For our
derivatives designated as fair value hedges, the changes in the fair value of
both the derivative instrument and the hedged item are recorded in earnings.
For our derivatives designated as cash flow hedges, the effective portions of
changes in fair value of the derivative are reported in other comprehensive
income and are subsequently reclassified into earnings when the hedged item
affects earnings. Changes in fair value of derivative instruments not
designated as hedging instruments, and ineffective portions of hedges, are
recognized in earnings in the current period.  We manage interest rate exposure by utilizing interest rate swap
agreements to achieve a desired mix of fixed and variable rate debt. As of December 31,
2008, we have three interest rate swaps that effectively convert
$400 million of the $600 million term loan facility from a variable
to a fixed interest rate (see Note 14  Derivative Financial
Instruments). We determined that our interest rate swaps qualified for hedge
accounting and were highly effective as hedges. Accordingly, we have recorded
the change in fair value of our interest rate swaps in accumulated other
comprehensive income.  We have entered into foreign currency forward contracts to manage
exposure to changes in foreign currencies associated with receivables, payables
and forecasted earnings. These forward contracts did not qualify for hedge
accounting treatment under SFAS No. 133. As a result, the changes in
fair values of the foreign currency forward contracts were recorded in selling,
general and administrative expenses in our consolidated statements of
operations.  We do not enter into derivative instruments for speculative purposes.
We require that the hedges or derivative financial instruments be effective in
managing the interest rate risk or foreign currency risk exposure that they are
designated to hedge. Hedges that qualify for hedge accounting are formally
designated as such at the inception of the contract. When the terms of an
underlying transaction are modified, or when the underlying hedged item ceases
to exist, resulting in some ineffectiveness, the change in the fair value of
the derivative instrument will be included in earnings. Additionally, any
derivative instrument used for risk management that becomes ineffective is
marked-to-market each period. We believe that our credit risk has been
mitigated by entering into these agreements with major financial institutions.
Net interest differentials to be paid or received under our interest rate swaps
are included in interest expense as incurred or earned.  11


Concentration of Credit Risk  Our cash and cash equivalents are potentially subject to concentration
of credit risk. We maintain cash and cash equivalent balances with financial
institutions that, in some cases, are in excess of Federal Deposit Insurance
Corporation insurance limits or are foreign institutions. Our cash and cash
equivalents include interest bearing bank account balances, U.S. treasury
funds, and investment grade institutional money market accounts.  Cash and Cash Equivalents  We consider highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. These short-term
investments are stated at cost, which approximates market value.  Allowance for Doubtful Accounts  Our accounts receivable are reported in our consolidated balance sheets
net of an allowance for doubtful accounts. We provide for estimated bad debts
based on our assessment of our ability to realize receivables, considering
historical collection experience, the general economic environment and specific
customer information. When we determine that a receivable is not collectable,
the account is written-off. Bad debt expense is recorded in selling, general
and administrative expenses in our consolidated statements of operations. We
recorded bad debt expense of almost nil, $2 million, almost nil and
$1 million during the years ended December 31, 2008 and December 31,
2007 and the periods from August 23, 2006 to December 31, 2006 and January 1,
2006 to August 22, 2006, respectively.  Property and Equipment, Net  Property and equipment is recorded at cost, net of accumulated
depreciation and amortization. We depreciate and amortize property and
equipment over their estimated useful lives using the straight-line method. The
estimated useful lives by asset category are:  Asset
  Category
  
  Estimated
  Useful LifeLeasehold
  improvements
  
  Shorter of
  assets useful life or non-cancelable lease termCapitalized
  software
  
  3 -
  10 yearsFurniture,
  fixtures and equipment
  
  3 - 7 years  We capitalize the costs of software developed for internal use in
accordance with Statement of Position (SOP) No. 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use (SOP 98-1)
and EITF Issue No. 00-2, Accounting for Website Development Costs.
Capitalization commences when the preliminary project stage of the application
has been completed and it is probable that the project will be completed and
used to perform the function intended. Amortization commences when the software
is placed into service.  We also capitalize interest on internal software development projects
in accordance with SFAS No. 34, Capitalization of Interest Cost,
and SOP 98-1. The amount of interest capitalized is computed by applying
our weighted average borrowing rate to the average amount of accumulated
expenditures in the period. We capitalized $1 million and $3 million
of interest during the years ended December 31, 2008 and December 31,
2007, respectively, and $0 of interest during the periods from August 23,
2006 to December 31, 2006 and January 1, 2006 to August 22,
2006.  We evaluate the recoverability of our long-lived assets, including
property and equipment and finite-lived intangible assets, when circumstances
indicate that the carrying value of those assets may not be recoverable
pursuant to SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets. This analysis is performed by comparing the carrying
values of the assets to the current and expected future cash flows to be
generated from these assets, on an undiscounted basis. If this analysis
indicates that the carrying value of an asset is not recoverable, the carrying
value is reduced to fair value through an impairment charge in our consolidated
statements of operations.  Goodwill, Trademarks and Other
Intangible Assets  Goodwill represents the excess of the purchase price over the estimated
fair value of the underlying assets acquired and liabilities assumed in the
acquisition of a business. We assign goodwill to reporting units that are
expected to benefit from the business combination as of the acquisition date.
Goodwill is not subject to amortization.  12


Our indefinite-lived intangible assets include our trademarks and trade
names, which are not subject to amortization. Our finite-lived intangible
assets primarily include our customer and vendor relationships and are
amortized over their estimated useful lives, generally 3 to 8 years, using
the straight-line method. Our intangible assets primarily relate to the
acquisition of entities accounted for using the purchase method of accounting
and are estimated by management based on the fair value of assets received.  In accordance with SFAS No. 142, Goodwill and Other
Intangible Assets, we assess the carrying value of goodwill and other
indefinite-lived intangible assets for impairment annually, or more frequently
whenever events occur and circumstances change indicating potential impairment.
We perform our annual impairment testing of goodwill and other indefinite-lived
intangible assets in the fourth quarter of each year, subsequent to the
completion of our annual planning process.  We assess goodwill for possible impairment using a two-step process.
The first step is used to identify if there is potential goodwill impairment.
If step one indicates that an impairment may exist, a second step is performed
to measure the amount of the goodwill impairment, if any. Goodwill impairment
exists when the estimated fair value of goodwill is less than its carrying
value. If impairment exists, the carrying value of the goodwill is reduced to
fair value through an impairment charge in our consolidated statements of
operations.  For purposes of goodwill impairment testing, we estimate the fair value
of our reporting units to which goodwill is allocated using generally accepted
valuation methodologies, including market and income based approaches, and
relevant data available through and as of the testing date. The market approach
is a valuation method in which fair value is estimated based on observed prices
in actual transactions and on asking prices for similar assets. Under the market
approach, the valuation process is essentially that of comparison and
correlation between the subject asset and other similar assets. The income
approach is a method in which fair value is estimated based on the cash flows
that an asset could be expected to generate over its useful life, including
residual value cash flows. These cash flows are then discounted to their
present value equivalents using a rate of return that accounts for the relative
risk of not realizing the estimated annual cash flows and for the time value of
money. Variations of the income approach are used to estimate certain of the
intangible asset fair values.  We assess our trademarks and trade names for impairment by comparing
their carrying value to their estimated fair value. Impairment exists when the
estimated fair value of the trademark or trade name is less than its carrying
value. If impairment exists, then the carrying value is reduced to fair value
through an impairment charge recorded to the consolidated statement of operations.
We use a market or income valuation approach, as described above, to estimate
fair values of the relevant trademarks and trade names.  Tax Sharing Liability  We have a liability included in our consolidated balance sheets that
relates to a tax sharing agreement between Orbitz and the Founding Airlines.
The agreement governs the allocation of tax benefits resulting from a taxable
exchange that took place in connection with the Orbitz initial public offering
in December 2003 (Orbitz IPO). As a result of this taxable exchange, the
Founding Airlines incurred a taxable gain. The taxable exchange also caused
Orbitz to have additional future tax deductions for depreciation and
amortization due to the increased tax basis of its assets. The additional tax
deductions for depreciation and amortization may reduce the amount of taxes we
are required to pay in future years. For each tax period during the term of the
tax sharing agreement, we are obligated to pay the Founding Airlines a
significant percentage of the amount of the tax benefit realized as a result of
the taxable exchange. The tax sharing agreement commenced upon consummation of
the Orbitz IPO and continues until all tax benefits have been utilized.  We use discounted cash flows in calculating and recognizing the tax
sharing liability. We review the calculation of the tax sharing liability on a
quarterly basis and make revisions to our estimated timing of payments when
appropriate. We also assess whether there are any significant changes, such as
changes in timing of payments and tax rates, that could materially affect the
present value of the tax sharing liability. Although the expected gross
remaining payments that may be due under this agreement are $226 million
as of December 31, 2008, the timing of payments may change. Any changes in
timing of payments are recognized prospectively as accretions to the tax
sharing liability in our consolidated balance sheets and interest expense in
our consolidated statements of operations.  13


Equity-Based Compensation  In accordance with SFAS No. 123(R), Share-Based Payments (SFAS No. 123(R)),
we measure equity-based compensation cost at fair value and recognize the
corresponding compensation expense on a straight-line basis over the service
period during which awards are expected to vest. We include equity-based
compensation expense in the selling, general and administrative line of our
consolidated statements of operations. The fair value of restricted stock and restricted
stock units is determined based on the average of the high and low price of our
common stock on the date of grant. The fair value of stock options is
determined on the date of grant using the Black-Scholes valuation model. The
amount of equity-based compensation expense recorded each period is net of
estimated forfeitures. We estimate forfeitures based on historical employee
turnover rates, the terms of the award issued and assumptions regarding future
employee turnover.  Recently Issued Accounting Pronouncements  In September 2006, the FASB issued SFAS No. 157, Fair
Value Measurements (SFAS No. 157), which defines fair value,
establishes a framework for measuring fair value and expands disclosure about
fair value measurements. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007. However, in February 2008, the
FASB issued FASB Staff Position No. FAS 157-2, Effective Date of
FASB Statement No. 157 (FSP 157-2), which delayed the effective
date of SFAS No. 157 for one year for non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis. Our adoption of
SFAS No. 157 on January 1, 2008 for our financial assets and
liabilities did not have a material impact on our consolidated financial
position or results of operations. We do not expect the adoption of SFAS No. 157
for our non-financial assets and non-financial liabilities, effective January 1,
2009, to have a material impact on our consolidated financial position or
results of operations.  In February 2007, the FASB issued SFAS No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159),
which provides companies with an option to report selected financial assets and
liabilities at fair value. SFAS No. 159s objective is to reduce both
complexity in accounting for financial instruments and the volatility in
earnings caused by measuring related assets and liabilities differently.
SFAS No. 159 helps to mitigate this type of accounting-induced
volatility by enabling companies to report related assets and liabilities at
fair value, which would likely reduce the need for companies to comply with
detailed rules for hedge accounting. SFAS No. 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. SFAS No. 159 requires
companies to provide additional information that will help investors and other
users of financial statements to more easily understand the effect of their
choice to use fair value on their earnings. It also requires companies to
display the fair value of those assets and liabilities for which they have
chosen to use fair value on the face of the balance sheet. SFAS No. 159
was effective on January 1, 2008. We have chosen not to apply the
provisions of SFAS No. 159 to any of our existing financial assets
and liabilities.  In December 2007, the FASB issued SFAS No. 141(R), which
establishes principles and requirements for the reporting entity in a business
combination, including recognition and measurement in the financial statements
of the identifiable assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree. This statement also establishes
disclosure requirements to enable financial statement users to evaluate the
nature and financial effects of the business combination. SFAS No. 141(R) applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after December 15,
2008, and interim periods within those fiscal years. SFAS No. 141(R) will
become effective for our fiscal year beginning January 1, 2009. We do not
expect the adoption of SFAS No. 141(R) to have an effect on our
consolidated financial statements unless we enter into a business combination
or reduce our deferred tax valuation allowance that was established in purchase
accounting. In connection with the Blackstone Acquisition, we established a
deferred income tax valuation allowance of $408 million in purchase
accounting. Under the current standard, any reductions in our remaining
deferred income tax valuation allowance that was originally established in
purchase accounting are recorded through goodwill. Beginning January 1,
2009, these reductions will be recorded through our statement of operations.  In March 2008, the FASB issued SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities (SFAS No. 161),
which changes the disclosure requirements for derivative instruments and
hedging activities previously identified under SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities (SFAS No. 133).
SFAS No. 161 provides for enhanced disclosures regarding (a) how
and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS No. 133
and its related interpretations and (c) how derivative instruments and
related hedged items affect an entitys financial position, financial
performance, and cash flows. SFAS No. 161 will become effective for
our fiscal year beginning January 1, 2009. We do not expect the adoption
of SFAS No. 161 to have a material impact on our consolidated
financial position or results of operations.  14


3.  Blackstone
Acquisition  Assets acquired and liabilities assumed in business combinations are
recorded in our consolidated balance sheets based upon their estimated fair
values at the respective acquisition dates. The results of operations of
businesses acquired by us have been included in our consolidated statements of
operations since their respective dates of acquisition. The excess of the
purchase price over the estimated fair values of the underlying assets acquired
and liabilities assumed was allocated to goodwill.  On August 23, 2006, Blackstone and TCV acquired Travelport, which
consisted of Cendants travel distribution services businesses, for
$4.1 billion in cash. The assets acquired and liabilities assumed in
connection with the Blackstone Acquisition were recorded at their relative fair
values on the acquisition date. This allocation was based on a valuation
derived from assumptions and estimates provided by management. The preliminary
allocation was subject to revision until final resolution was reached on
certain outstanding contingent liabilities. During the third quarter of 2007,
the allocation of the purchase price was finalized. We were allocated
$1.3 billion of the $4.1 billion purchase price based on the relative
fair value of the businesses included in the acquisition. The table below
summarizes the final allocation of the purchase price to our businesses:  Amount(in millions)Cash
  
  $
  26Current assets
  
  101Property and equipment
  
  161Other non-current assets
  
  90Intangible assets (a)
  
  405Goodwill
  
  1,186Total assets
  
  1,969Total current liabilities
  
  402Total non-current liabilities
  
  270Total liabilities
  
  672Fair value of net assets acquired
  
  $
  1,297  
 (a)
  This amount
  represents $310 million of indefinite-lived trademarks, $91 million
  of customer relationships with an estimated weighted-average life of six
  years and $4 million of other intangible assets with an estimated
  weighted-average life of seven years.  The total amount of goodwill that was assigned to us was
$1.2 billion. Tax amortizable goodwill exists from a prior transaction,
and any carryover tax basis associated with the goodwill amount is expected to
be tax deductible. No additional tax amortizable goodwill arose from the
Blackstone Acquisition.  Pro
Forma Financial Information (Unaudited)  The following unaudited pro forma financial information for our portion
of the Blackstone Acquisition reflects our results of operations as if the
acquisition had been consummated as of the beginning of the period presented.
This pro forma financial information is based on historical information and
does not necessarily reflect the actual results of operations that would have
occurred, nor is it indicative of future results.  PredecessorPeriod from January 1, 2006 to
  August 22, 2006Historical
  as Reported
  
  Adjustments(a)
  
  Pro
  Forma(in millions)Net revenue
  
  $
  510
  
  $
  (20
  )
  $
  490Net (loss) income from continuing operations
  
  $
  (121
  )
  $
  108
  
  $
  (13
  )  
 (a)
  This amount
  includes adjustments to amortization and depreciation expense based on the
  fair value and estimated useful lives assigned to tangible and intangible
  assets at the time of the Blackstone Acquisition. This amount also includes
  adjustments recorded to deferred revenue as well as the amortization of
  certain below market contracts with suppliers recorded as a result of the
  acquisition, which reduced net revenue and net income. The impairment of
  intangible assets recorded in the period is also excluded in the calculation
  of pro forma net (loss) income from operations, as goodwill and intangible
  assets would have been stated at fair value at the beginning of the period
  presented had purchase accounting been applied, and therefore impairment
  would not have existed.  15


4.  Impairment
of Goodwill and Intangible Assets  In accordance with SFAS No. 142, Goodwill and Other
Intangible Assets, we assess the carrying value of goodwill and other
indefinite-lived intangible assets for impairment annually, or more frequently
whenever events occur and circumstances change indicating potential impairment.
We also evaluate the recoverability of our long-lived assets, including our
finite-lived intangible assets, when circumstances indicate that the carrying
value of those assets may not be recoverable pursuant to SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets. Refer to
Note 2  Summary of Significant Accounting Policies for further
information on our accounting policy for goodwill, other indefinite-lived
intangible assets and finite-lived intangible assets.  2008  During the year ended December 31, 2008, in connection with our
annual planning process, we lowered our long-term earnings forecast in response
to changes in the economic environment, including the potential future impact
of airline capacity reductions, increased fuel prices and a weakening global
economy. These factors, coupled with a prolonged decline in our market
capitalization, indicated potential impairment of our goodwill, trademarks and
trade names. Additionally, given the current environment, our distribution
partners are under increased pressure to reduce their overall costs and could
attempt to terminate or renegotiate their agreements with us on more favorable
terms to them. These factors indicated that the carrying value of certain of
our finite-lived intangible assets, specifically customer relationships, may
not be recoverable. As a result, in connection with the preparation of our
financial statements for the third quarter of 2008, we performed an interim
impairment test of our goodwill, indefinite-lived intangible assets and
finite-lived intangible assets.  For purposes of testing goodwill for potential impairment, we estimated
the fair value of the applicable reporting units to which all goodwill is
allocated using generally accepted valuation methodologies, including market
and income based approaches, and relevant data available through and as of September 30,
2008.  We further used appropriate valuation techniques to separately estimate
the fair values of all of our indefinite-lived intangible assets as of September 30,
2008 and compared those estimates to the respective carrying values. Our
indefinite-lived intangible assets are comprised of trademarks and trade names.
We used a market or income valuation approach, as described above, to estimate
fair values of the relevant trademarks and trade names.  We also determined the estimated fair values of certain of our
finite-lived intangible assets as of September 30, 2008, specifically
certain of our customer relationships whose carrying values exceeded their
expected future cash flows on an undiscounted basis. We determined the fair
values of these customer relationships by discounting the estimated future cash
flows of these assets. We then compared the estimated fair values to the
respective carrying values.  As a result of this testing, we concluded that the goodwill, trademarks
and trade names related to both our domestic and international subsidiaries as
well as the customer relationships related to our domestic subsidiaries were
impaired. As a result, we recorded a non-cash impairment charge of
$297 million during the year ended December 31, 2008, of which
$210 million related to goodwill, $74 million related to trademarks
and trade names and $13 million related to customer relationships. This
charge is included in the impairment of goodwill and intangible assets expense
line item in our consolidated statements of operations.  Due to the current economic uncertainty and other factors, we cannot
assure that goodwill, indefinite-lived intangible assets and finite-lived
intangible assets will not be further impaired in future periods.  2006  In 2006, we performed impairment testing on our goodwill, other
indefinite-lived intangible assets and finite-lived intangible assets prior to
the date of the Blackstone Acquisition because the offer price indicated a need
for an assessment prior to our annual testing date. As a result of this
testing, we recorded a non-cash impairment charge of $122 million during
the period from January 1, 2006 to August 22, 2006, of which
$115 million related to goodwill, $6 million related to other
indefinite-lived intangible assets and $1 million related to finite-lived
intangible assets. This charge is included in the impairment of goodwill and
intangible assets expense line item in our consolidated statements of
operations.  16


5.  Property and
Equipment, Net  Property and equipment, net, consisted of the following:  SuccessorDecember 31, 2008
  
  December 31, 2007(in millions)Capitalized software
  
  $
  188
  
  $
  149Furniture, fixtures and equipment
  
  60
  
  60Leasehold improvements
  
  13
  
  15Construction in progress
  
  15
  
  7Gross property and equipment
  
  276
  
  231Less: accumulated depreciation and amortization
  
  (86
  )
  (47
  )Property and equipment, net
  
  $
  190
  
  $
  184  For the years ended December 31, 2008 and December 31, 2007
and for the periods from August 23, 2006 to December 31, 2006 and January 1,
2006 to August 22, 2006, we recorded depreciation and amortization expense
related to property and equipment in the amount of $48 million,
$37 million, $11 million and $32 million, respectively.  The gross amount of assets subject to capital leases at December 31,
2008 and December 31, 2007 was $0 and $4 million, respectively.
Assets subject to capital leases are included in furniture, fixtures and
equipment. The accumulated amortization of assets subject to capital leases was
$0 and $3 million at December 31, 2008 and December 31, 2007,
respectively. The corresponding amortization expense is included in
depreciation and amortization expense in our consolidated statements of
operations. As of December 31, 2008 and December 31, 2007, we had a
liability of $0 and $1 million under our capital leases, respectively,
which was included in other current liabilities in our consolidated balance
sheets.  6.  Goodwill
and Intangible Assets  Goodwill and indefinite-lived intangible assets consisted of the
following:  SuccessorDecember 31, 2008
  
  December 31, 2007(in millions)Goodwill and Indefinite-Lived Intangible Assets:Goodwill
  
  $
  949
  
  $
  1,181Trademarks and trade names
  
  232
  
  313  The changes in the carrying amount of goodwill are as follows:  Amount(in millions)Successor:Balance at December 31, 2006 (a)
  
  $
  1,190Adjustments to goodwill acquired during 2006:Tax sharing liability (b)
  
  (8
  )Impact of foreign currency translation (c)
  
  6Other (d)
  
  (7
  )Balance at December 31, 2007
  
  $
  1,181Impairment (e)
  
  (210
  )Impact of foreign currency translation (c)
  
  (22
  )Balance at December 31, 2008
  
  $
  949  
 (a)
  The assets
  acquired and liabilities assumed in connection with the Blackstone
  Acquisition were recorded at their relative fair values on the date of
  acquisition, August 23, 2006, in accordance with SFAS No. 141,
  Business Combinations As of December 31, 2006, $1,190 million of
  the purchase price was allocated to goodwill (see Note 3  Blackstone
  Acquisition).(b)
  This amount
  represents adjustments to goodwill related to the refinement of certain
  estimates, including the applicable tax rate and period of payment,
  previously used to determine the net present value of the tax sharing
  liability as of the date of the Blackstone Acquisition (see
  Note 9  Tax Sharing Liability). We finalized the purchase price
  allocations for the Blackstone Acquisition during the third quarter of 2007.  17


(c)
  Goodwill is
  allocated among our subsidiaries, including certain international
  subsidiaries. As a result, the carrying amount of our goodwill is impacted by
  foreign currency translation each period.(d)
  This amount
  represents other adjustments to goodwill related to purchase price
  allocations, including the refinement of the fair value of assets acquired
  and liabilities assumed. We finalized the purchase price allocations for the
  Blackstone Acquisition during the third quarter of 2007.(e)
  During the third
  quarter of 2008, we performed an interim impairment test on our goodwill and
  indefinite-lived intangible assets. As a result of this testing, we recorded
  a non-cash impairment charge of $210 million related to goodwill and
  $74 million related to trademarks and trade names (see Note 4 
  Impairment of Goodwill and Intangible Assets).  Finite-lived intangible assets consisted of the following:  SuccessorDecember 31, 2008
  
  December 31, 2007Gross
  Carrying
  Amount
  
  Accumulated
  Amortization
  
  Net
  Carrying
  Amount
  
  Weighted
  Average
  Useful Life
  
  Gross
  Carrying
  Amount
  
  Accumulated
  Amortization
  
  Net
  Carrying
  Amount
  
  Weighted
  Average
  Useful Life(in millions)
  
  
  
  (in years)
  
  
  
  (in millions)
  
  
  
  (in years)Finite-Lived Intangible Assets:Customer relationships (a)
  
  $
  68
  
  $
  (37
  )
  $
  31
  
  4
  
  $
  90
  
  $
  (26
  )
  $
  64
  
  6Vendor relationships and other
  
  4
  
  (1
  )
  3
  
  7
  
  5
  
  (1
  )
  4
  
  7Total Finite-Lived Intangible Assets
  
  $
  72
  
  $
  (38
  )
  $
  34
  
  5
  
  $
  95
  
  $
  (27
  )
  $
  68
  
  6  
 (a)
  During the third
  quarter of 2008, we performed an impairment test on our finite-lived
  intangible assets. As a result of this testing, we recorded a non-cash impairment
  charge of $13 million related to our customer relationships (see
  Note 4  Impairment of Goodwill and Intangible Assets).  For the years ended December 31, 2008 and December 31, 2007
and for the periods from August 23, 2006 to December 31, 2006 and January 1,
2006 to August 22, 2006, we recorded amortization expense related to
finite-lived intangible assets in the amount of $18 million,
$20 million, $7 million and $5 million, respectively. These
amounts are included in depreciation and amortization expense in our
consolidated statements of operations.  The table below shows estimated amortization expense related to our
finite-lived intangible assets over the next five years:  Year
  
  (in millions)2009
  
  $
  172010
  
  102011
  
  32012
  
  22013
  
  1Thereafter
  
  1Total
  
  $
  34  7.  Accrued
Expenses  Accrued expenses consisted of the following:  SuccessorDecember 31, 2008
  
  December 31, 2007(in millions)Advertising and marketing
  
  $
  29
  
  $
  25Tax sharing liability, current
  
  15
  
  27Employee costs
  
  13
  
  15Technology costs
  
  7
  
  6Rebates
  
  6
  
  6Customer service costs
  
  5
  
  5Facilities costs
  
  4
  
  8Professional fees
  
  4
  
  4Contract exit costs (a)
  
  4
  
  1Unfavorable contracts, current
  
  3
  
  3Other
  
  16
  
  21Total accrued expenses
  
  $
  106
  
  $
  121  18


(a)
  During 2007, we
  terminated an agreement, and as a result, we are required to make a total of
  $18 million of termination payments from January 1, 2008 to December 31,
  2016. At December 31, 2007, the net present value of these payments of
  $14 million was included in our consolidated balance sheets,
  $1 million of which was included in accrued expenses and
  $13 million of which was included in other non-current liabilities. A
  corresponding expense of $13 million was recorded to selling, general
  and administrative expense in our consolidated statements of operations for
  the year ended December 31, 2007, and we accreted $1 million of
  interest expense related to the liability. During the year ended December 31,
  2008, we made $1 million of termination payments and accreted
  $1 million of interest expense related to this liability. At December 31,
  2008, the net present value of the remaining termination payments of
  $14 million was included in our consolidated balance sheets,
  $4 million of which was included in accrued expenses and
  $10 million of which was included in other non-current liabilities.  8.  Term
Loan and Revolving Credit Facility  On July 25, 2007, concurrent with the IPO, we entered into a
$685 million senior secured credit agreement (Credit Agreement)
consisting of a seven-year $600 million term loan facility (Term Loan)
and a six-year $85 million revolving credit facility (Revolver).  Term Loan  The Term Loan bears interest at a variable rate, at our option, of
LIBOR plus a margin of 300 basis points or an alternative base rate plus a
margin of 200 basis points. The alternative base rate is equal to the
higher of the Federal Funds Rate plus one half of 1% and the prime rate (Alternative
Base Rate). The principal amount of the Term Loan is payable in quarterly
installments of $1.5 million beginning on December 31, 2007, with the
final installment of approximately $560 million due upon maturity on July 25,
2014. However, these payments could change, as beginning in the first quarter
of 2009, we are required to make mandatory prepayments on the Term Loan
annually in an amount up to 50% of the prior years excess cash flow, as
defined in the Credit Agreement. Mandatory prepayments are applied, in order of
maturity, to the scheduled quarterly term loan principal payments. Based on our
cash flow for the year ended December 31, 2008, we are not required to
make a mandatory prepayment in the first quarter of 2009. The potential amount
of mandatory prepayments that will be required beyond the first quarter of 2009
is not reasonably estimable as of December 31, 2008. At December 31,
2008 and December 31, 2007, $593 million and $599 million was
outstanding on the Term Loan, respectively.  At December 31, 2008, we have interest rate swaps outstanding that
effectively convert $400 million of the Term Loan to a fixed interest rate
(see Note 14  Derivative Financial Instruments). At December 31,
2008, $200 million of the Term Loan effectively bears interest at a fixed
rate of 8.21%, $100 million of the Term Loan effectively bears interest at
a fixed rate of 6.39% and an additional $100 million of the Term Loan
effectively bears interest at a fixed rate of 5.98%, through these interest
rate swaps. Of the remaining $193 million of the Term Loan,
$100 million bears interest at a variable rate of LIBOR plus
300 basis points, or 4.46%, as of December 31, 2008, which is based
on the three-month LIBOR, and $93 million bears interest at a variable
rate of LIBOR plus 300 basis points, or 3.46%, as of December 31,
2008, which is based on the one-month LIBOR.  At December 31, 2007, we had interest rate swaps outstanding that
effectively converted $300 million of the Term Loan to a fixed interest
rate of 8.21%. The remaining $299 million of the Term Loan had a variable
interest rate of LIBOR plus 300 basis points, or 7.85%, as of December 31,
2007.  Revolver  The Revolver provides for borrowings and letters of credit of up to $85 million
and bears interest at a variable rate, at our option, of LIBOR plus a margin of
250 basis points or an Alternative Base Rate plus a margin of
150 basis points. The margin is subject to change based on our total
leverage ratio, as defined in the Credit Agreement, with a maximum margin of
250 basis points on LIBOR-based loans and 150 basis points on
Alternative Base Rate loans. We also incur a commitment fee of 50 basis
points on any unused amounts on the Revolver. The Revolver matures on July 25,
2013.  Lehman Commercial Paper Inc. (LCPI), which filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code on October 5,
2008, holds a $12.5 million commitment, or 14.7% percent, of the
$85 million available under the Revolver. As a result, total availability
under the Revolver has effectively been reduced from $85 million to
$72.5 million.  19


At December 31, 2008 and December 31, 2007, $21 million
and $1 million was outstanding under the Revolver, respectively. At December 31,
2008, $11 million of the amount outstanding bears interest at a rate equal
to the Alternative Base rate plus 150 basis points, or 4.75%, and
$10 million of the amount outstanding bears interest at a variable rate of
LIBOR plus 250 basis points, or 2.96%. The amount outstanding at December 31,
2007 had an interest rate equal to the Alternative Base Rate plus
150 basis points, or 8.75%. Commitment fees on unused amounts under the
Revolver were almost nil and almost nil for each of the years ended December 31,
2008 and December 31, 2007, respectively.  We incurred an aggregate of $5 million of debt issuance costs in
connection with the Term Loan and Revolver. These costs are being amortized to
interest expense over the contractual terms of the Term Loan and Revolver based
on the effective-yield method. Amortization of debt issuance costs was
$1 million and almost nil for the years ended December 31, 2008 and December 31,
2007, respectively.  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 and our subsidiaries ability to, among other things: incur
additional indebtedness or 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 restricted
payments. The Credit Agreement requires us not to exceed a maximum total leverage
ratio and to maintain a minimum fixed charge coverage ratio, each as defined in
the Credit Agreement. As of December 31, 2008, we were in compliance with
these covenants.  The table below shows the aggregate maturities of the Term Loan and
Revolver over the next five years, excluding any mandatory repayments that
could be required under the Term Loan beyond the first quarter of 2009:  Year
  
  (in millions)2009
  
  $
  62010
  
  62011
  
  62012
  
  62013
  
  27Thereafter
  
  563Total
  
  $
  614  9.  Tax
Sharing Liability  We have a liability included in our consolidated balance sheets that
relates to a tax sharing agreement between Orbitz and the Founding Airlines.
The agreement governs the allocation of tax benefits resulting from a taxable
exchange that took place in connection with the Orbitz IPO in December 2003.
As a result of this taxable exchange, the Founding Airlines incurred a taxable
gain. The taxable exchange also caused Orbitz to have additional future tax
deductions for depreciation and amortization due to the increased tax basis of
its assets. The additional tax deductions for depreciation and amortization may
reduce the amount of taxes we are required to pay in future years. For each tax
period during the term of the tax sharing agreement, we are obligated to pay
the Founding Airlines a significant percentage of the amount of the tax benefit
realized as a result of the taxable exchange. The tax sharing agreement
commenced upon consummation of the Orbitz IPO and continues until all tax benefits
have been utilized.  As of December 31, 2008, the estimated remaining payments that may
be due under this agreement were approximately $226 million. Payments
under the tax sharing agreement are generally due in the second, third and
fourth calendar quarters of the year, with two payments due in the second
quarter. We estimate that the net present value of our obligation to pay tax
benefits to the Founding Airlines was $124 million and $141 million
at December 31, 2008 and December 31, 2007, respectively. This
estimate is based upon certain assumptions, including our future operating
performance and taxable income, the tax rate, the timing of tax payments,
current and projected market conditions, and the applicable discount rate, all
of which we believe are reasonable. The discount rate assumption is based on
our weighted average cost of capital at the time of the Blackstone Acquisition,
which was approximately 12%. These assumptions are inherently uncertain,
however, and actual results could differ from our estimates.  The table below shows the changes in the tax sharing liability over the
past two years:  20


Amount(in millions)Balance at December 31, 2006
  
  $
  135Accretion of interest expense (a)
  
  14Adjustment recorded in finalizing purchase
  accounting for the Blackstone Acquisition (b)
  
  (8
  )Balance at December 31, 2007
  
  141Accretion of interest expense (a)
  
  17Cash payments
  
  (20
  )Adjustment due to a reduction in our effective tax rate
  (c)
  
  (14
  )Balance at December 31, 2008
  
  $
  124  
 (a)
  We accreted
  interest expense related to the tax sharing liability of $17 million,
  $14 million, $5 million and $13 million for the years ended
  December 31, 2008 and December 31, 2007 and for the periods from
  August 23, 2006 to December 31, 2006 and January 1, 2006 to
  August 22, 2006, respectively.(b)
  In connection
  with finalizing the purchase accounting for the Blackstone Acquisition, we
  refined certain estimates previously used to determine the net present value
  of the tax sharing liability as of the date of the Blackstone Acquisition.
  This resulted in an $8 million decrease in the tax sharing liability and
  a corresponding decrease in goodwill in our consolidated balance sheet (see
  Note 6  Goodwill and Intangible Assets).(c)
  This adjustment
  was recorded to appropriately reflect our liability under the tax sharing
  agreement following a reduction in our effective tax rate during the year
  ended December 31, 2008, which resulted from a change in state tax law
  as it relates to the apportionment of income. The reduction in our effective
  tax rate reduces the estimated remaining payments that may be due to the
  airlines under the tax sharing agreement. The adjustment to the tax sharing
  liability was recorded as a reduction to selling, general and administrative
  expense in our consolidated statements of operations, as this liability
  represents a commercial liability, not a tax liability. If our effective tax
  rate changes in the future, at either the federal or state level, we may be
  required to further adjust our liability under the tax sharing agreement.  Based upon the future payments we expect to make, the current portion
of the tax sharing liability of $15 million and $27 million is
included in accrued expenses in our consolidated balance sheets at December 31,
2008 and December 31, 2007, respectively. The long-term portion of the tax
sharing liability of $109 million and $114 million is reflected as
the tax sharing liability in our consolidated balance sheets at December 31,
2008 and December 31, 2007, respectively. At the time of the Blackstone
Acquisition, Cendant indemnified Travelport and us for amounts due under the
tax sharing agreement. As a result, we recorded a receivable of
$37 million which is included in other non-current assets in our
consolidated balance sheets at December 31, 2008 and December 31,
2007, respectively. We expect to collect this receivable when Cendant receives
the tax benefit. Similar to our trade accounts receivable, if we were, in the
future, to determine that all or a portion of this receivable is no longer
collectable, the portion of this receivable that is no longer deemed
collectable would be written off.  The table below shows the estimated payments under our tax sharing
liability over the next five years:  Year
  
  (in millions)2009
  
  $
  152010
  
  182011
  
  212012
  
  172013
  
  18Thereafter
  
  137Total
  
  $
  226  21


10.  Unfavorable
Contracts  In December 2003, we entered into amended and restated airline
charter associate agreements, or Charter Associate Agreements, with the
Founding Airlines as well as US Airways (Charter Associate Airlines). These
agreements pertain to our Orbitz business, which was owned by the Founding
Airlines at the time we entered into the agreements. Under each Charter
Associate Agreement, the Charter Associate Airline has agreed to provide Orbitz
with information regarding the airlines flight schedules, published air fares
and seat availability at no charge and with the same frequency and at the same
time as this information is provided to the airlines own website or to a
website branded and operated by the airline and any of its alliance partners or
to the airlines internal reservation system. The agreement also provides
Orbitz with nondiscriminatory access to seat availability for published fares,
as well as marketing and promotional support. Under each agreement, the Charter
Associate Airline provides us with agreed upon transaction payments when
consumers book air travel on the Charter Associate Airline on Orbitz.com. The
payments we receive are based on the value of the tickets booked and gradually
decrease over time. The agreements expire on December 31, 2013. However,
certain of the Charter Associate Airlines may terminate their agreements for
any reason or no reason prior to the scheduled expiration date upon thirty days
prior notice to us.  Under the Charter Associate Agreements, we must pay a portion of the
GDS incentive revenue earned from Worldspan back to the Charter Associate
Airlines in the form of a rebate. The rebate payments are required when airline
tickets for travel on a Charter Associate Airline are booked through the
Orbitz.com website utilizing Worldspan. The rebate payments are made in part
for in-kind marketing and promotional support we receive. However, a portion of
the rebate payments are deemed to be unfavorable because we receive no benefit
for these payments.  The rebate structure under the Charter Associate Agreements was
considered unfavorable when compared to market conditions at the time of the
Blackstone Acquisition. As a result, an unfavorable contract liability was
recorded at its fair value at the acquisition date. The fair value of the
unfavorable contract liability was determined using the discounted cash flows
of the expected rebates, net of the expected fair value of in-kind marketing
support.  At December 31, 2008 and December 31, 2007, the net present
value of the unfavorable contract liability was $16 million and
$20 million, respectively. The current portion of the liability of
$3 million was included in accrued expenses in our consolidated balance
sheets at December 31, 2008 and December 31, 2007, respectively. The
long term portion of the liability of $13 million and $17 million is
included in unfavorable contracts in our consolidated balance sheets at December 31,
2008 and December 31, 2007, respectively.  This liability is being amortized to revenue in our consolidated
statements of operations on a straight-line basis over the remaining
contractual term. We recognized revenue for the unfavorable portion of the
Charter Associate Agreements in the amount of $3 million, $3 million,
$1 million and $1 million for the years ended December 31, 2008
and December 31, 2007 and for the periods from August 23, 2006 to December 31,
2006 and January 1, 2006 to August 22, 2006, respectively.  11.  Commitments
and Contingencies  The following table summarizes our commitments and contingencies as of December 31,
2008:  2009
  
  2010
  
  2011
  
  2012
  
  2013
  
  Thereafter
  
  Total(in millions)Operating leases (a)
  
  $
  6
  
  $
  6
  
  $
  5
  
  $
  4
  
  $
  4
  
  $
  25
  
  $
  50Travelport GDS contract (b)
  
  45
  
  20
  
  20
  
  20
  
  20
  
  20
  
  145Telecommunications service agreement
  
  1
  
  2
  
  
  
  
  
  
  
  
  
  3Software license agreement
  
  9
  
  9
  
  
  
  
  
  
  
  
  
  18Total
  
  $
  61
  
  $
  37
  
  $
  25
  
  $
  24
  
  $
  24
  
  $
  45
  
  $
  216  
 (a)These
operating leases are primarily for facilities and equipment and represent
non-cancelable leases. Certain leases contain periodic rent escalation
adjustments and renewal options. Our operating leases expire at various dates,
with the latest maturing in 2023. For the years ended December 31, 2008
and December 31, 2007 and for the periods from August 23, 2006 to December 31,
2006 and January 1, 2006 to August 22, 2006, we recorded rent expense
in the amount of $6 million, $8 million, $3 million and
$8 million, respectively. As a result of various subleasing arrangements
that we have entered into, we are expecting approximately $5 million in
sublease income through 2012.  22


(b)The
Travelport GDS service agreement is structured such that we earn incentive
revenue for each segment that is processed through Galileo or Worldspan. The
agreement also required us to process 38 million segments during 2008,
16 million segments through Worldspan and 22 million segments through
Galileo. The required number of segments processed in future years for
Worldspan remains fixed at 16 million segments, while the required number
of segments for Galileo is subject to adjustment based upon the actual segments
processed in the preceding year. In 2009, we are required to process approximately
20 million segments through Galileo. Our failure to process the required
number of segments would result in a shortfall payment of $1.25 per segment
below the required minimum. The table above includes shortfall payments
required by the agreement if we do not process any segments through Worldspan,
as well as shortfall payments required if we do not process any segments
through Galileo during the year ended December 31, 2009. Because the
required number of segments for Galileo adjusts based on the actual segments
processed in the preceding year, we are unable to predict shortfall payments
that may be required by the agreement beyond 2009. If we meet the minimum
number of segments, we are not required to make payments of any kind to Galileo
or Worldspan (see Note 18  Related Party Transactions). No payments
were made to Travelport in 2008 related to the required minimum segments.  In addition to the commitments and contingencies shown above, we are
required to make principal payments on our Term Loan and pay down amounts
outstanding on our Revolver (see Note 8  Term Loan and Revolving
Credit Facility). We also expect to make approximately $226 million of
payments in connection with the tax sharing agreement with the Founding
Airlines (see Note 9  Tax Sharing Liability). Also excluded from the
above table are $6 million of liabilities for uncertain tax positions for
which the period of settlement is not currently determinable.  Company Litigation  We are involved in various claims, legal proceedings and governmental
inquiries related to contract disputes, business practices, intellectual
property and other commercial, employment and tax matters.  We are party to various cases brought by consumers and municipalities
and other U.S. governmental entities involving hotel occupancy taxes and
our merchant hotel business. Some of the cases are purported class actions and
most of the cases were brought simultaneously against other Internet travel
companies, including Expedia, Travelocity and Priceline. The cases allege,
among other things, that we violated the jurisdictions hotel occupancy tax
ordinance with respect to the charges and remittance of amounts to cover taxes
under the ordinance. While not identical in their allegations, the cases
generally assert similar claims, including violations of local or state
occupancy tax ordinances, violations of consumer protection ordinances,
conversion, unjust enrichment, imposition of a constructive trust, demand for a
legal or equitable accounting, injunctive relief, declaratory judgment, and in
some cases, civil conspiracy. The plaintiffs seek relief in a variety of forms,
including: declaratory judgment, full accounting of monies owed, imposition of
a constructive trust, compensatory and punitive damages, disgorgement,
restitution, interest, penalties and costs, attorneys fees, and where a class
action has been claimed, an order certifying the action as a class action. An
adverse ruling in one or more of these cases could require us to pay tax
retroactively and prospectively and possibly pay penalties, interest and fines.
The proliferation of additional cases could result in substantial additional
defense costs.  We have also been contacted by several municipalities or other taxing
bodies concerning our possible obligations with respect to state or local hotel
occupancy or related taxes. The cities of New Orleans, Louisiana, Phoenix,
Arizona, North Little Rock and Pine Bluff, Arkansas, 26 cities in
California (including Los Angeles and Oakland), an entity representing 84 cities
and 14 counties in Alabama, the counties of Jefferson, Arkansas, Brunswick and
Stanly, North Carolina, Duval County, Florida and the Hawaii Department of
Taxation issued audit notices against the Company. These municipalities have
not issued assessments, but have requested information to conduct an audit
and/or have requested that the Company register to pay local hotel occupancy
taxes. Additional jurisdictions have begun audit proceedings and some have
issued assessments. They include: the cities of Anaheim, San Diego and
San Francisco, California, the counties of Miami-Dade and Broward,
Florida, the cities of Alpharetta, Cartersville, Cedartown, College Park,
Dalton, East Point, Hartwell, Macon, Rockmart, Rome, Tybee Island and Warner Robins,
Georgia, the counties of Augusta, Clayton, Cobb, DeKalb, Fulton, Gwinnett, Hart
and Richmond, Georgia, the city of Philadelphia, Pennsylvania, and state tax
officials from Indiana and Wisconsin. The Company disputes that any hotel
occupancy or related tax is owed under these ordinances and is challenging the
assessments made against the Company. If the Company is found to be subject to
the hotel occupancy tax ordinance by a taxing authority and appeals the
decision in court, certain jurisdictions may attempt to require us to provide
financial security or pay the assessment to the municipality in order to
challenge the tax assessment in court.  We believe that we have meritorious defenses and we are vigorously
defending against these claims, proceedings and inquiries. We have not recorded
any reserves related to these hotel occupancy tax matters.  23


Litigation is inherently unpredictable and, although we believe we have
valid defenses in these matters based upon advice of counsel, unfavorable
resolutions could occur. While we cannot estimate our range of loss, an adverse
outcome from these unresolved proceedings could be material to us with respect
to earnings or cash flows in any given reporting period. We do not believe that
the impact of this unresolved litigation would result in a material liability
to us in relation to our financial position or liquidity.  We are currently seeking to recover insurance reimbursement for costs
incurred to defend the hotel occupancy tax cases. We recorded a reduction to
selling, general and administrative expense in our consolidated statements of
operations for reimbursements received of $8 million and $3 million
for the years ended December 31, 2008 and December 31, 2007,
respectively. The recovery of additional amounts, if any, by us and the timing
of receipt of these recoveries is unclear. As such, in accordance with
SFAS No. 5, Accounting for Contingencies, as of December 31,
2008, we have not recognized a reduction to selling, general and administrative
expense in our consolidated statements of operations for the outstanding
contingent claims for which we have not yet received reimbursement.  Surety Bonds and Bank Guarantees  In the ordinary course of business, we obtain surety bonds and bank
guarantees, issued for the benefit of a third party, to secure performance of
certain of our obligations to third parties. At December 31, 2008 and December 31,
2007, there were $3 million and $3 million of surety bonds
outstanding, respectively, and $2 million and $6 million of bank
guarantees outstanding, respectively.  Financing Arrangements  We are required to issue letters of credit to certain suppliers and
non-U.S. government agencies. Substantially all of these letters of credit
were issued by Travelport on our behalf under the terms of the Separation
Agreement entered into in connection with the IPO. The letter of credit fees
were $3 million, $2 million, almost nil and almost nil for the years
ended December 31, 2008 and December 31, 2007 and for the periods
from August 23, 2006 to December 31, 2006 and January 1, 2006 to
August 22, 2006, respectively. At December 31, 2008 and December 31,
2007, there were $67 million and $74 million of outstanding letters
of credit issued by Travelport on our behalf, respectively (see
Note 18  Related Party Transactions).  12.  Income
Taxes  Pre-tax (loss) income for U.S. and non-U.S. operations
consisted of the following:  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22, 2006
  Predecessor(in millions)U.S.
  
  $
  (124
  )
  $
  (6
  )
  $
  (1
  )
  $
  31Non-U.S.
  
  (177
  )
  (35
  )
  (23
  )
  (151
  )Loss before income taxes
  
  $
  (301
  )
  $
  (41
  )
  $
  (24
  )
  $
  (120
  )  The (benefit) provision for income taxes consists of the following:  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22, 2006
  Predecessor(in millions)CurrentU.S. federal and state
  
  $
  
  
  $
  
  
  $
  
  
  $
  Non-U.S.
  
  2
  
  5
  
  (1
  )
  172
  
  5
  
  (1
  )
  17DeferredU.S. federal and state
  
  1
  
  6
  
  
  
  Non-U.S.
  
  (5
  )
  32
  
  2
  
  (16
  )(4
  )
  38
  
  2
  
  (16
  )(Benefit) provision for income taxes
  
  $
  (2
  )
  $
  43
  
  $
  1
  
  $
  1  24


For the period from August 23, 2006 to December 31, 2006, we
were part of a consolidated U.S. federal income tax filing group and were
included in Travelports consolidated U.S. federal and state income tax
returns. For the period from January 1, 2006 to August 22, 2006,
prior to the Blackstone Acquisition, the Predecessor was part of Cendants
consolidated U.S. federal income tax filing group and was included in
Cendants consolidated U.S. federal and state income tax returns. The
results of operations of Travelport for the period from January 1, 2007 to
February 7, 2007 was included in the consolidated U.S. federal and
state income tax returns for the year ended December 31, 2007 filed by
Orbitz Worldwide, Inc. and its subsidiaries. However, the provision for
income taxes was computed as if we filed our U.S. federal, state and
foreign income tax returns on a Separate Company basis without the inclusion of
the results of operations of Travelport for the period from January 1,
2007 to February 7, 2007.  For the year ended December 31, 2008, the provision for
U.S. federal, state and foreign income taxes and the calculation of the
deferred tax assets and liabilities were based solely on the operations of
Orbitz Worldwide, Inc. and its subsidiaries.  Our effective income tax rate differs from the U.S. federal
statutory rate as follows for the periods specified below:  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22, 2006
  PredecessorFederal statutory rate
  
  35.0
  %
  35.0
  %
  35.0
  %
  35.0
  %State and local income taxes, net of federal benefit
  
  0.1
  
  (1.2
  )
  (1.4
  )
  Rate change impact on deferred income taxes
  
  
  
  (2.4
  )
  
  
  Taxes on non-U.S. operations at differing rates
  
  (1.3
  )
  (2.4
  )
  (36.0
  )
  (45.4
  )Taxes on other repatriated foreign income, net of
  tax credits
  
  
  
  
  
  (3.1
  )
  Change in valuation allowance
  
  (9.0
  )
  (110.6
  )
  3.2
  
  9.7Goodwill impairment
  
  (24.8
  )
  
  
  
  
  Foreign deemed dividends
  
  
  
  (12.5
  )
  
  
  Non deductible public offering costs
  
  
  
  (2.0
  )
  
  
  Reserve for uncertain tax positions
  
  0.1
  
  (5.1
  )
  
  
  Other
  
  0.6
  
  (1.5
  )
  (1.9
  )
  (0.1
  )Effective income tax rate
  
  0.7
  %
  (102.7
  )%
  (4.2
  )%
  (0.8
  )%  Current and non-current deferred income tax assets and liabilities in
various jurisdictions are comprised of the following:  SuccessorDecember 31,2008
  
  2007(in millions)Current deferred income tax assets (liabilities):Accrued liabilities and deferred income
  
  $
  12
  
  $
  19Provision for bad debts
  
  1
  
  1Prepaid expenses
  
  (2
  )
  (3
  )Tax sharing liability
  
  6
  
  4Change in reserve accounts
  
  2
  
  Other
  
  3
  
  Valuation allowance
  
  (16
  )
  (18
  )Current net deferred income tax assets
  
  $
  6
  
  $
  3Non-current deferred income tax assets
  (liabilities):U.S. net operating loss carryforwards
  
  $
  45
  
  $
  27Non-U.S. net operating loss carryforwards
  
  97
  
  113Accrued liabilities and deferred income
  
  6
  
  39Depreciation and amortization
  
  107
  
  93Tax sharing liability
  
  39
  
  47Change in reserve accounts
  
  5
  
  7Other
  
  13
  
  (2
  )Valuation allowance
  
  (304
  )
  (312
  )Non-current net deferred income tax assets
  
  $
  8
  
  $
  12  25


The current and deferred income tax assets and liabilities are presented
in our consolidated balance sheets as follows:  SuccessorDecember 31,2008
  
  2007(in millions)Current net deferred income tax assets:Deferred income tax asset, current
  
  $
  6
  
  $
  3Current net deferred income tax assets
  
  $
  6
  
  $
  3Non-current net deferred income tax assets
  (liabilities):Deferred income tax asset, non-current
  
  $
  9
  
  $
  12Deferred income tax liability, non-current (a)
  
  (1
  )
  Non-current net deferred income tax assets
  
  $
  8
  
  $
  12  
 (a)
  
  The non-current
  portion of the deferred income tax liability at December 31, 2008 of
  $1 million is included in other non-current liabilities in our
  consolidated balance sheet.  During the year ended December 31, 2007, we recorded a full
valuation allowance against $30 million of foreign deferred tax assets
related to portions of our U.K.-based business in accordance with SFAS No. 109.
SFAS No. 109 requires that companies assess whether valuation
allowances should be established against their deferred tax assets based on the
consideration of all available evidence using a more likely than not
standard. Prior to the IPO, we had the ability to offset these losses with
taxable income of Travelport subsidiaries and affiliates in the U.K. As a
result of the IPO, these subsidiaries are no longer in our U.K. group and, as a
result, their income is not available to offset our losses in the U.K. group at
December 31, 2007.  During the year ended December 31, 2007, we also recorded an
adjustment to reduce the deferred tax assets and associated valuation allowance
by $115 million, resulting in no impact to the net deferred income tax
asset. This adjustment related to the difference between the book and tax basis
in the liability.  At December 31, 2008, we established valuation allowances against
the majority of our deferred tax assets. As a result, any changes in our gross
deferred tax assets and liabilities during the year ended December 31,
2008 were largely offset by corresponding changes in our valuation allowances, resulting
in a $1 million decrease in our net deferred tax assets.  As of December 31, 2008, we had a valuation allowance of
$320 million, $272 million of which was established in purchase
accounting for the Blackstone Acquisition. Prior to January 1, 2009, to
the extent that any valuation allowances established in purchase accounting
were reduced, these reductions were recorded as adjustments to goodwill rather
than the provision for income taxes (see Note 2  Summary of
Significant Accounting Policies).  The net deferred tax asset at December 31, 2008 and December 31,
2007 amounted to $14 million and $15 million, respectively. These net
deferred tax assets relate to temporary tax to book differences in
non-U.S. jurisdictions, the realization of which is, in managements
judgment, more likely than not. We have assessed, based on experience with
relevant taxing authorities, our expectations of future taxable income,
carry-forward periods available and other relevant factors, that we will be
more likely than not to recognize this deferred tax asset.  As of December 31, 2008, we had U.S. federal and state net
operating loss carry-forwards of approximately $110 million and
$153 million, respectively, which expire between 2021 and 2028. In
addition, we had $344 million of non-U.S. net operating loss
carry-forwards, most of which do not expire. Additionally, we have
$4 million of U.S. federal and state income tax credit carry-forwards
which expire between 2027 and 2028 and $1 million of U.S. federal income
tax credits which have no expiration date. No provision has been made for
U.S. federal or non-U.S. deferred income taxes on approximately
$9 million of accumulated and undistributed earnings of foreign
subsidiaries at December 31, 2008. A provision has not been established
because it is our present intention to reinvest the undistributed earnings
indefinitely in those foreign operations. The determination of the amount of
unrecognized U.S. federal or non-U.S. deferred income tax liabilities
for unremitted earnings at December 31, 2008 is not practicable.  We adopted the provisions of FIN 48 effective January 1,
2007. Given the inherent complexities of the business and that we are subject
to taxation in a substantial number of jurisdictions, we routinely assess the
likelihood of additional assessment in each of the taxing jurisdictions. In
accordance with FIN 48, we have established a liability for unrecognized
tax benefits that management believes to be adequate. Once established,
unrecognized tax benefits are adjusted if more accurate information becomes
available, or a change in circumstance or an event occurs necessitating a
change to the liability.  26


The table below shows the changes in this liability during the years
ended December 31, 2008 and December 31, 2007:  Amount(in millions)Balance as of January 1, 2007
  
  $
  2Increase in unrecognized tax benefits as a result of
  tax positions taken during the current year
  
  2Decrease in unrecognized tax benefits as a result of
  tax positions taken during prior years
  
  (1
  )Settlements
  
  (1
  )Balance as of December 31, 2007
  
  2Increase in unrecognized tax benefits as a result of
  tax positions taken during the prior year
  
  6Decrease in unrecognized tax benefits as a result of
  tax positions taken during the prior year
  
  (1
  )Impact of foreign currency translation
  
  (1
  )Balance as of December 31, 2008
  
  $
  6  The total amount of unrecognized tax benefits that, if recognized,
would affect our effective tax rate was $1 million as of December 31,
2008 and $2 million as of December 31, 2007. We do not expect to make
any cash tax payments nor do we expect any statutes of limitations to lapse
related to this liability within the next twelve months.  We recognize interest and penalties related to unrecognized tax
benefits in income tax expense. During each of the years ended December 31,
2008 and December 31, 2007, we recognized interest and penalties of almost
nil. Accrued interest and penalties were almost nil as of December 31,
2008 and December 31, 2007.  We file income tax returns in the U.S. federal jurisdiction and
various state and foreign jurisdictions. A number of years may elapse before an
uncertain tax position, for which we have unrecognized tax benefits, is audited
and finally resolved. We adjust these unrecognized tax benefits, as well as the
related interest and penalties, in light of changing facts and circumstances.
Settlement of any particular position could require the use of cash. Favorable
resolution could be recognized as a reduction to our effective income tax rate
in the period of resolution.  The number of years with open tax audits varies depending on the tax
jurisdiction. Our major taxing jurisdictions include the U.S. (federal and
state), the U.K. and Australia. With limited exceptions, we are no longer
subject to U.S. federal, state and local income tax examinations by tax
authorities for the years before 2004. We are no longer subject to U.K. federal
income tax examinations for years before 2007. We are no longer subject to
Australian federal income tax examinations for the years before 2004.  For purposes of FIN 48, with respect to periods prior to the
Blackstone Acquisition, we are only required to take into account income tax
returns for which we or one of our subsidiaries is the primary taxpaying
entity, namely separate state returns and non-U.S. returns. Uncertain tax
positions related to U.S. federal and state combined and unitary income
tax returns filed are only applicable in the post-acquisition accounting
period. We and our domestic subsidiaries currently file a consolidated income
tax return for U.S. federal income tax purposes.  In connection with our IPO, on July 25, 2007, the Company entered
into a tax sharing agreement with Travelport (the Tax Sharing Agreement),
pursuant to which the Company and Travelport agreed to split, on a 29%/71%
basis, all:  ·taxes attributable to certain
restructuring transactions undertaken in contemplation of the IPO;  ·certain taxes imposed as a result of prior
membership in a consolidated group, including (i) the consolidated group
for U.S. federal income tax purposes of which the Company was the common parent
and (ii) the consolidated group of which Cendant Corporation was the
common parent; and  ·any tax-related liabilities under the
agreement by which Travelport (which, at the time, included the Company) was
acquired from Cendant Corporation.  13.  Equity-Based
Compensation  Our employees participated in three equity based compensation plans
during the years ended December 31, 2008, 2007 and 2006: the Orbitz
Worldwide, Inc. 2007 Equity and Incentive Plan, as amended (the Plan),
the Travelport Equity-Based Long-Term Incentive Plan (the Travelport Plan),
and the Cendant Stock-Based Compensation Plan (the Cendant Plan). The awards
granted under each plan are described below.  27


Orbitz Worldwide, Inc. 2007
Equity and Incentive Plan  On July 18, 2007, our board of directors and TDS Investor
(Luxembourg) S.à r.l, as our sole stockholder prior to the IPO, approved the
Orbitz Worldwide, Inc. 2007 Equity and Incentive Plan. The Plan provides
for the grant of equity-based awards, including restricted stock, restricted
stock units, stock options, stock appreciation rights and other equity-based
awards to our directors, officers and other employees, advisors and consultants
who are selected by the Compensation Committee of the Board of Directors (the Compensation
Committee) for participation in the Plan. In addition, we may grant annual
cash bonuses and long-term cash awards. At our Annual Meeting of Shareholders
on May 8, 2008, our shareholders approved an amendment to the Plan, increasing
the number of shares of our common stock available for issuance under the Plan
from 6,100,000 shares to 15,100,000 shares, subject to adjustment as
provided in the Plan. As of December 31, 2008, 7,057,932 shares were
available for future issuance under the Plan.  Stock Options  The table below summarizes the option activity under the Plan for the
year ended December 31, 2008 and the period from July 18, 2007 to December 31,
2007:  Shares
  
  Weighted Average
  Exercise Price
  (per share)
  
  Weighted Average
  Remaining
  Contractual Term
  (in years)
  
  Aggregate
  Intrinsic
  Value(a)Outstanding at July 18, 2007
  
  
  
  
  
  Granted
  
  2,732,950
  
  $
  14.96
  
  9.6Forfeited
  
  (172,274
  )
  $
  15.00
  
  9.6
  
  Outstanding at December 31, 2007
  
  2,560,676
  
  $
  14.96
  
  9.6Granted
  
  2,130,059
  
  $
  6.26
  
  6.5Forfeited
  
  (473,930
  )
  $
  12.19
  
  7.9
  
  Outstanding at December 31, 2008
  
  4,216,805
  
  $
  10.88
  
  7.6
  
  Exercisable at December 31, 2008
  
  687,825
  
  $
  14.96
  
  8.6
  
    
 (a)Intrinsic
value for stock options is defined as the difference between the current market
value and the exercise price. The exercise price of stock options exercisable
at December 31, 2008 exceeded the market value, and therefore, the
aggregate intrinsic value for these stock options was $0. The aggregate
intrinsic value for stock options outstanding at December 31, 2008 and December 31,
2007 was almost nil and $0, respectively.  The exercise price of stock options granted under the Plan is equal to
the fair market value of the underlying stock on the date of grant. Stock
options generally expire seven to ten years from the grant date. The stock
options granted at the time of the IPO as additional compensation to our
employees who previously held equity awards under the Travelport Plan, as
described below, vested 5.555% in August 2007 and vest an additional
8.586% on each subsequent November, February, May and August through February 2010,
and become fully vested in May 2010. All other stock options granted vest
annually over a four-year period. The fair value of stock options on the date
of grant is amortized on a straight-line basis over the requisite service
period.  The fair value of stock options granted under the Plan is estimated on
the date of grant using the Black-Scholes option-pricing model. The weighted
average assumptions for stock options granted during the year ended December 31,
2008 and the period from July 18, 2007 to December 31, 2007 are
outlined in the following table. Expected volatility is based on implied volatilities
for publicly traded options and historical volatility for comparable companies
over the estimated expected life of the stock options. The expected life
represents the period of time the stock options are expected to be outstanding
and is based on the simplified method, as defined in SEC Staff Accounting
Bulletin No. 110, Share-Based Payments. The risk-free interest rate
is based on yields on U.S. Treasury strips with a maturity similar to the
estimated expected life of the stock options. We use historical turnover to
estimate employee forfeitures.  Assumptions:
  
  Year Ended
  December 31,
  2008
  
  Period from
  July 18, 2007 to
  December 31,
  2007Dividend yield
  
  
  
  Expected volatility
  
  41
  %
  38
  %Expected life (in years)
  
  4.76
  
  6.16Risk-free interest rate
  
  3.62
  %
  4.86
  %  28


Based on the above assumptions, the weighted average grant-date fair
value of stock options granted during the year ended December 31, 2008 and
the period from July 18, 2007 to December 31, 2007 was $2.54 and
$6.89, respectively.  Restricted Stock Units  The table below summarizes activity regarding unvested restricted stock
units under the Plan for the year ended December 31, 2008 and the period
from July 18, 2007 to December 31, 2007:  Restricted
  Stock Units
  
  Weighted Average
  Grant Date
  Fair Value
  (per share)Unvested at July 18, 2007
  
  
  
  Granted
  
  2,687,836
  
  $
  13.16Vested (a)
  
  (181,003
  )
  $
  11.73Forfeited
  
  (210,482
  )
  $
  13.08Unvested at December 31, 2007
  
  2,296,351
  
  $
  13.28Granted
  
  1,492,703
  
  $
  6.12Vested (a)
  
  (296,366
  )
  $
  11.61Forfeited
  
  (768,332
  )
  $
  12.26Unvested at December 31, 2008
  
  2,724,356
  
  $
  9.83  
 (a)We
issued 233,878 and 142,440 shares of common stock in connection with the
vesting of restricted stock units during the year ended December 31, 2008
and the period from July 18, 2007 to December 31, 2007, respectively,
which is net of the number of shares retained (but not issued) by us in
satisfaction of minimum tax withholding obligations associated with the
vesting.  The restricted stock units granted at the time of the IPO upon
conversion of unvested equity-based awards previously held by our employees
under the Travelport Plan, as described below, vested 5.555% in August 2007
and vest an additional 8.586% on each subsequent November, February, May and
August through February 2010, and become fully vested in May 2010.
All other restricted stock units cliff vest at the end of either a two-year or
three-year period, or vest annually over a three-year or four-year period. The
fair value of restricted stock units on the date of grant is amortized on a
straight-line basis over the requisite service period.  The total number of restricted stock units that vested during the year
ended December 31, 2008 and the period from July 18, 2007 to December 31,
2007 and the total fair value thereof was 296,366 restricted stock units and
181,003 restricted stock units, respectively, and $3 million and
$2 million, respectively.  Restricted Stock  The table below summarizes activity regarding unvested restricted stock
under the Plan for the year ended December 31, 2008 and the period from July 18,
2007 to December 31, 2007:  Restricted
  Stock
  
  Weighted Average
  Grant Date
  Fair Value
  (per share)Unvested at July 18, 2007
  
  
  
  Granted
  
  61,795
  
  $
  8.45Vested (a)
  
  (13,130
  )
  $
  8.45Forfeited (b)
  
  (6,586
  )
  $
  8.45Unvested at December 31, 2007
  
  42,079
  
  $
  8.45Granted
  
  
  
  Vested (a)
  
  (16,832
  )
  $
  8.45Forfeited (b)
  
  (6,586
  )
  $
  8.45Unvested at December 31, 2008
  
  18,661
  
  $
  8.45  
 (a)Includes
2,617 and 2,266 shares of common stock transferred to us in satisfaction
of minimum tax withholding obligations associated with the vesting of
restricted stock during the year ended December 31, 2008 and the period
from July 18, 2007 to December 31, 2007, respectively. These shares
are held by us in treasury.  29


(b)These
shares are held by us in treasury.  Shares of restricted stock were granted upon conversion of the Class B
partnership interests previously held by our employees under the Travelport
Plan. The restricted stock vested 5.555% in August 2007 and vests an
additional 8.586% on each subsequent November, February, May and August through
February 2010, and become fully vested in May 2010. The fair value of
restricted stock on the date of grant is amortized on a straight-line basis
over the requisite service period.  The total number of shares of restricted stock that vested during the
year ended December 31, 2008 and the period from July 18, 2007 to December 31,
2007 and the total fair value thereof was 16,832 shares and
13,130 shares and almost nil and almost nil, respectively.  Performance-Based Restricted Stock
Units  On June 19, 2008, the Compensation Committee approved a grant of
performance-based restricted stock units (PSUs) under the Plan to certain of
our executive officers. The PSUs entitle the executives to receive a certain
number of shares of our common stock based on the Companys satisfaction of
certain financial and strategic performance goals, including net revenue
growth, adjusted EBITDA margin improvement and the achievement of specified
technology milestones during fiscal years 2008, 2009 and 2010 (the Performance
Period). The performance conditions also provide that if the Companys
aggregate adjusted EBITDA during the Performance Period does not equal or
exceed a certain threshold, each PSU award will be forfeited. Based on the
achievement of the performance conditions during the Performance Period, the
final settlement of the PSU awards will range between 0 and 166 2/3% of the
target shares underlying the PSU awards based on a specified objective formula
approved by the Compensation Committee. The PSUs will vest within 75 days
of the end of the Performance Period.  The target number of shares underlying the PSUs that were granted to
certain executive officers during the year ended December 31, 2008 totaled
249,108 shares and had a grant date fair value of $6.28 per share. As of December 31,
2008, the Company expects that none of the PSUs will vest.  Non-Employee Directors Deferred
Compensation Plan  The table below summarizes the deferred stock unit activity under the
Plan for the year ended December 31, 2008 and the period from July 18,
2007 to December 31, 2007:  Deferred
  Stock Units
  
  Weighted Average
  Grant Date
  Fair Value
  (per share)Outstanding at July 18, 2007
  
  
  
  Granted
  
  62,316
  
  $
  12.90Outstanding at December 31, 2007
  
  62,316
  
  $
  12.90Granted
  
  203,353
  
  $
  5.58Common stock issued (a)
  
  (12,853
  )
  $
  11.94Outstanding at December 31, 2008
  
  252,816
  
  $
  7.06  
 (a)A
non-employee director terminated service from our board of directors during the
year ended December 31, 2008. As a result, the non-employee director was
entitled to receive one share of our common stock for each deferred stock unit
held by him, or 12,853 shares of our common stock.  In connection with the IPO, we adopted a deferred compensation plan to
enable our non-employee directors to defer the receipt of certain compensation
earned in their capacity as non-employee directors. Eligible directors may
elect to defer up to 100% of their annual retainer fees (which are paid by us
on a quarterly basis). We require that at least 50% of the annual retainer be
deferred under the plan. In addition, 100% of the annual equity grant payable
to non-employee directors is deferred under the plan.  We grant deferred stock units to each participating director on the
date that the deferred fees would have otherwise been paid to the director. The
deferred stock units are issued as restricted stock units under the Orbitz
Worldwide, Inc. 2007 Equity and Incentive Plan, as amended.  30


The deferred stock units are issued as restricted stock units under the
plan and are immediately vested and non-forfeitable. The deferred stock units
entitle the non-employee director to receive one share of our common stock for
each deferred stock unit on the date that is 200 days immediately
following the non-employee directors retirement or termination of service from
the board of directors, for any reason. The entire grant date fair value of
deferred stock units is expensed on the date of grant.  Travelport Equity-Based Long-Term
Incentive Program  Travelport introduced an equity-based long-term incentive program in
2006 for the purpose of retaining certain key employees, including certain of
our employees. Under this program, key employees were granted restricted equity
units and interests in the partnership that indirectly owns Travelport.
Travelports board of directors approved the grant of up to 100 million
units under the plan. The equity awards issued consisted of four classes of
partnership interest. The Class A-2 equity units vested at a pro-rata rate
of 6.25% per quarter through May 2010. The Class B partnership
interests vested annually over a four-year period beginning in August 2007.
The Class C and D partnership interests were scheduled to vest upon the
occurrence of certain liquidity events.  On July 18, 2007, the unvested restricted equity units and Class B
partnership interests held by our employees were converted to restricted stock
units and restricted shares in Orbitz Worldwide under its 2007 Equity and
Incentive Plan. This conversion affected 14 employees of Orbitz Worldwide.
The conversion of the restricted equity units was based on the relative value
of the shares of our common stock compared to that of Travelports Class A-2
capital interests at the time of the IPO. The conversion of the Class B
partnership interests was based on the relative value of the shares of our
common stock compared to the aggregate liquidation value of the Class B
partnership interests at the time of the IPO. The Class C and D
partnership interests were deemed to have no fair value as of the conversion
date and as such were forfeited. Subsequent to the conversion, we also granted
restricted stock units and stock options as additional compensation to the
employees who previously held the Travelport interests. This compensation was
granted as an award in consideration of potential future increases in value of
the awards previously granted under the Travelport Plan. No incremental
compensation expense was recognized as a result of the conversion.  The fair value of the Class A-2 capital interests granted under
the Travelport Plan was estimated on the date of grant based on the fair market
value of Travelports common equity relative to the number of Class A
shares then outstanding. The fair value of the Class B, Class C and Class D
partnership interests was estimated on the date of grant using the Monte-Carlo
valuation model with the weighted average assumptions outlined in the table
below.  Partnership Interests
  Granted InAssumptions:
  
  2007
  
  2006Dividend yield
  
  
  
  Expected volatility
  
  45
  %
  40
  %Expected life (in years)
  
  6.2
  
  6.6Risk-free interest rate
  
  4.64
  %
  4.73
  %  The table below summarizes our activity under the Travelport Plan
during 2007, immediately prior to the conversion date, and the year ended December 31,
2006:  Restricted Equity
  Units
  
  Partnership InterestClass A-2
  
  Class B
  
  Class C
  
  Class DNumber
  of
  Shares
  
  Weighted
  Average
  Grant Date
  Fair Value
  (per share)
  
  Number
  of
  Shares
  
  Weighted
  Average
  Grant Date
  Fair Value
  (per share)
  
  Number
  of
  Shares
  
  Weighted
  Average
  Grant Date
  Fair Value
  (per share)
  
  Number
  of
  Shares
  
  Weighted
  Average
  Grant Date
  Fair Value
  (per share)Balance at August 22, 2006
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  Granted
  
  5,367,234
  
  $
  1.00
  
  1,103,501
  
  $
  0.49
  
  1,103,501
  
  $
  0.43
  
  1,103,501
  
  $
  0.38Balance at December 31, 2006
  
  5,367,234
  
  $
  1.00
  
  1,103,501
  
  $
  0.49
  
  1,103,501
  
  $
  0.43
  
  1,103,501
  
  $
  0.38Granted
  
  230,881
  
  $
  1.84
  
  99,863
  
  $
  0.67
  
  99,863
  
  $
  0.65
  
  99,863
  
  $
  0.56Balance immediately prior to conversion date
  
  5,598,115
  
  $
  1.03
  
  1,203,364
  
  $
  0.50
  
  1,203,364
  
  $
  0.45
  
  1,203,364
  
  $
  0.39  31


During 2007, prior to the conversion date, and the period from August 23,
2006 to December 31, 2006, 728,625 and 670,904 restricted equity units
vested, respectively, for a total fair value of $1 million and
$1 million, respectively. No partnership interests were vested prior to
the conversion date. We expensed the restricted equity units and the Class B
partnership interests on a straight-line basis over the requisite service
period based upon the fair value of the award on the grant date. We did not
record any compensation expense for the Class C and Class D
partnership interests as it was determined that it was not probable that these
awards would vest.  Cendant Stock-Based Compensation
Plans  During the period in which we were owned by Cendant, from November 2004
to August 2006, certain of our employees were granted equity awards in
Cendants equity under Cendants existing stock-based compensation plans. The
activity under the Cendant Plan that related to our employees is described
below.  Stock Options  Stock options granted by Cendant to its employees generally expired ten
years from the grant date. In 2004, Cendant adopted performance and time
vesting criteria for stock option grants. The predetermined performance
criteria determined the number of options that would ultimately vest and were
based on the growth of Cendants earnings and cash flows over the vesting
period of the respective award. The number of options that vested ranged from
0% to 200% of the base award. Vesting occurred over a four-year period, but did
not exceed 25% of the base award in each of the three years following the grant
date. All unvested stock options vested 30 days subsequent to the
separation of certain subsidiaries of Cendant. Cendants policy was to grant
stock options with exercise prices at the then-current fair market value.  The table below summarizes our stock option activity under the Cendant
Plan during the period from January 1, 2006 to August 22, 2006:  PredecessorPeriod from January 1, 2006 to
  August 22, 2006Number of
  Options
  
  Weighted
  Average
  Exercise
  Price
  (per share)Outstanding at beginning of period
  
  3,098,203
  
  $
  14.42Exercised
  
  (1,041
  )
  17.15Forfeited/cancelled
  
  (211,939
  )
  14.35Vested/converted as a result of the Blackstone
  Acquisition
  
  (2,885,223
  )
  14.41Outstanding at end of period
  
  
  
    Restricted Stock Units  Restricted stock units granted by Cendant entitled employees, including
certain of our employees, to receive one share of Cendant common stock upon
vesting. In 2004, Cendant adopted performance and time vesting criteria for
restricted stock unit grants. The predetermined performance criteria determined
the number of restricted stock units that will ultimately vest and were based
on the growth of Cendant earnings and cash flows over the vesting period of the
respective award. The number of restricted stock units that vested may range
from 0% to 200% of the base award. Vesting occurred over a four-year period,
but did not exceed 25% of the base award in each of the three years following
the grant date.  32


The table below summarizes our employees restricted
stock unit activity in the Cendant Plan during the period from January 1,
2006 to August 22, 2006:  PredecessorPeriod from January 1, 2006
  to August 22, 2006Number of
  Restricted
  Stock Units
  
  Weighted
  Average
  Grant Date
  Fair Value
  (per share)Balance at beginning of period
  
  1,570,957
  
  $
  15.51Vested/exercised
  
  (69,732
  )
  19.88Forfeited/cancelled
  
  (180,098
  )
  21.25Vested/converted as a result of the Blackstone
  Acquisition
  
  (1,321,127
  )
  13.11Balance at end of period
  
  
  
    Compensation Expense  We recognized total equity-based compensation expense
of $15 million, $8 million and $2 million during the years ended
December 31, 2008 and December 31, 2007 and the period from August 23,
2006 to December 31, 2006, respectively, none of which has provided us a
tax benefit.  For the period from January 1, 2006 to August 22,
2006, Cendant allocated pre-tax equity based compensation expense of
$4 million to us, none of which has provided us a tax benefit.  As of December 31, 2008, a total of
$29 million of unrecognized compensation costs related to unvested stock
options, unvested restricted stock units, unvested PSUs and unvested restricted
stock are expected to be recognized over the remaining weighted-average period
of 2 years.  14.  Derivative
Financial Instruments  Interest Rate Hedges  On July 25, 2007, we entered into two interest
rate swaps that effectively converted $300 million of the Term Loan from a
variable to a fixed interest rate. The first swap had a notional amount of
$100 million and matured on December 31, 2008. The second swap has a
notional amount of $200 million and matures on December 31, 2009. We
pay a fixed rate of 5.21% on both swaps and in exchange receive a variable rate
based on the three-month LIBOR.  On May 1, 2008, we entered into a third interest
rate swap that effectively converts an additional $100 million of the Term
Loan from a variable to a fixed interest rate. The swap was effective on May 30,
2008, has a notional amount of $100 million and matures on May 31,
2011. We pay a fixed rate of 3.39% on the swap and in exchange receive a
variable rate based on the three-month LIBOR.  On September 12, 2008, we entered into a fourth
interest rate swap that effectively converts an additional $100 million of
the Term Loan from a variable to a fixed interest rate. The swap was effective
on September 30, 2008, has a notional amount of $100 million and
matures on September 30, 2010. We pay a fixed rate of 2.98% on the swap
and in exchange receive a variable rate based on the one-month LIBOR.  The objective of entering into our interest rate swaps
is to protect against volatility of future cash flows and effectively hedge the
variable interest payments on the Term Loan. We determined that these
designated hedging instruments qualify for cash flow hedge accounting treatment
under SFAS No. 133.  The interest rate swaps are reflected in our
consolidated balance sheets at market value. At December 31, 2008 and December 31,
2007, $15 million and $6 million of the total market value of the
swaps, respectively, represented a liability, of which $8 million and
$1 million was included in other current liabilities and $7 million
and $5 million was included in other non-current liabilities in our
consolidated balance sheets, respectively. The corresponding market adjustment
was recorded to accumulated other comprehensive income. There was no hedge
ineffectiveness during the years ended December 31, 2008 and December 31,
2007, respectively.  33


Foreign Currency Hedges  We enter into foreign currency forward contracts (forward
contracts) to manage exposure to changes in the foreign currency associated
with foreign receivables, payables, intercompany transactions and forecasted
earnings. As of December 31, 2008, we have forward contracts outstanding
with a total net notional amount of $61 million, which matured in January 2009.
The forward contracts do not qualify for hedge accounting treatment under
SFAS No. 133. Accordingly, changes in the fair value of the forward
contracts are recorded in net income, as a component of selling, general and
administrative expenses in our consolidated statements of operations. We
recognized gains (losses) related to foreign currency forward contracts of
$14 million, $(2) million and $(1) million for the years ended December 31,
2008 and December 31, 2007 and for the period from January 1, 2006 to
August 22, 2006, respectively. The total market value of forward contracts
represented a liability of $1 million at December 31, 2008 and an
asset of almost nil at December 31, 2007, which was included in other
current liabilities and other current assets in our consolidated balance
sheets, respectively. There were no forward contracts held by us, or on our
behalf, during the period from August 23, 2006 to December 31, 2006.  15.  Severance  During the year ended December 31, 2008, we
reduced our workforce by approximately 160 domestic and international
employees, primarily in response to weakening demand in the travel industry and
deteriorating economic conditions. In connection with this workforce reduction,
we incurred total expenses of $3 million in the year ended December 31,
2008 related to severance benefits and other termination-related costs, which
are included in selling, general and administrative expense in our consolidated
statements of operations. The majority of these costs had been paid as of December 31,
2008.  16.  Employee
Benefit Plans  Prior to our IPO, Travelport (subsequent to the
Blackstone Acquisition) and Cendant (prior to the Blackstone Acquisition)
sponsored defined contribution savings plans for employees in the
U.S. that provided certain of our eligible employees an opportunity to
accumulate funds for retirement. HotelClub and ebookers sponsor similar defined
contribution savings plans. In September 2007, we adopted a qualified
defined contribution savings plan for employees in the U.S. that replaced
the existing defined contribution savings plans sponsored by Travelport and
Cendant, but did not alter the plans of HotelClub and ebookers. We match the
contributions of participating employees on the basis specified by the plans.  We recorded expense related to these plans in the
amount of $7 million, $5 million, $2 million and $2 million
for the years ended December 31, 2008 and December 31, 2007 and for
the periods from August 23, 2006 to December 31, 2006 and January 1,
2006 to August 22, 2006, respectively.  17.  Loss
per Share  The following table presents the calculation of basic
and diluted loss per share:  Year Ended
  December 31, 2008
  
  Period from
  July 18, 2007 to
  December 31, 2007(in millions, except share and per share data)Net Loss
  
  $
  (299
  )
  $
  (42
  )Net Loss per Share  Basic and Diluted:Weighted Average Shares Outstanding for Basic and
  Diluted Net Loss Per Share (a)
  
  83,342,333
  
  81,600,478Basic and Diluted (b)
  
  $
  (3.58
  )
  $
  (0.51
  )  
 (a)
  
  Stock options,
  restricted stock, restricted stock units and PSUs are not included in the
  calculation of diluted loss per share for the year ended December 31,
  2008 and for the period from July 18, 2007 to December 31, 2007
  because we had a net loss for each period. Accordingly, the inclusion of
  these equity awards would have had an antidilutive effect on diluted loss per
  share.(b)
  
  Net loss per
  share may not recalculate due to rounding.  34


The following equity awards are not included in the
diluted loss per share calculation above because they would have had an
antidilutive effect:  Antidilutive equity awards
  
  As of
  December 31, 2008
  
  As of
  December 31, 2007Stock options
  
  4,216,805
  
  2,560,676Restricted stock units
  
  2,724,356
  
  2,296,351Restricted stock
  
  18,661
  
  42,079Performance-based restricted stock units
  
  249,108
  
  Total
  
  7,208,930
  
  4,899,106  18.  Related
Party Transactions  Related Party Transactions with Travelport and its
Subsidiaries  The following table summarizes the related party balances
with Travelport and its subsidiaries as of December 31, 2008 and December 31,
2007, reflected in our consolidated balance sheets. We net settle amounts due
to and from Travelport.  SuccessorDecember 31, 2008
  
  December 31, 2007(in millions)Due from Travelport, net
  
  $
  10
  
  Due to Travelport, net
  
  
  
  $
  8  We also purchased assets of $1 million from
Travelport and its subsidiaries during the year ended December 31, 2008
which are included in property and equipment, net in our consolidated balance
sheet at December 31, 2008.  The following table summarizes the related party
transactions with Travelport and its subsidiaries for the years ended December 31,
2008 and December 31, 2007 and for the periods from August 23, 2006
to December 31, 2006 and January 1, 2006 to August 22, 2006,
reflected in our consolidated statements of operations:  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22, 2006
  Predecessor(in
  millions)Net revenue (a)
  
  $
  149
  
  $
  126
  
  $
  29
  
  $
  65Cost of revenue
  
  
  
  
  
  1
  
  Selling, general and administrative expense
  
  3
  
  11
  
  4
  
  Interest expense
  
  3
  
  48
  
  4
  
    
 (a)
  
  These amounts
  include net revenue related to our GDS services agreement and bookings
  sourced through Donvand Limited and OctopusTravel Group Limited (doing
  business as Gullivers Travel Associates, GTA) for the periods presented.  In connection with our IPO, we paid a dividend to
Travelport in the amount of $109 million. Any future determination to pay
dividends would require the prior consent of Travelport, until such time as
Travelport no longer beneficially owns at least 33% of the votes entitled to be
cast by our outstanding common shares.  Capital Contributions  Prior to our IPO, we received capital contributions
from Travelport for operational funding and certain acquisitions.  Corporate Related Functions  Our consolidated statements of operations reflect an
allocation from Travelport of both general corporate overhead expenses and
direct billed expenses incurred on our behalf prior to our IPO. General
corporate overhead expenses were allocated based on a percentage of the
forecasted revenue. Direct billed expenses were based upon actual utilization
of the services. Cost subject to the overhead allocations and direct billings
included executive management, tax, insurance, accounting, legal, treasury,
information technology, telecommunications, call center support and real estate
expenses.  35


Intercompany Notes Payable  In August 2006, in connection with the Blackstone
Acquisition, $106 million of intercompany notes payable were executed
among subsidiaries of Travelport and our subsidiaries. These notes accrued
interest at a variable rate of LIBOR plus 500 basis points and were
scheduled to mature in February 2017. Concurrent with our IPO, the notes
were assigned to us, and we repaid the interest that had accrued through the
date of assignment.  On January 26, 2007 and January 30, 2007, we
became the obligor on two intercompany notes payable to affiliates of
Travelport in the amounts of $25 million and $835 million,
respectively. These notes accrued interest at a fixed rate of 10.25% and were
scheduled to mature on February 19, 2014. These notes represented a
portion of the debt used to finance the Blackstone Acquisition. Because we did
not receive any cash consideration for the assumption of this debt from
Travelport in January 2007, the transaction was effectively a distribution
of capital. Accordingly, we recorded an $860 million reduction to net
invested equity. On July 25, 2007, we used proceeds from the IPO and Term
Loan to repay the notes and the interest accrued thereon in full.  Separation Agreement  We entered into a Separation Agreement with Travelport
at the time of our IPO. This agreement, as amended, provided the general terms
for the separation of our respective businesses. As a wholly-owned subsidiary
of Travelport, Travelport provided guarantees, letters of credit and surety
bonds on our behalf under our commercial agreements and leases and for the
benefit of certain regulatory agencies. Under the Separation Agreement, we are
required to use commercially reasonable efforts to have Travelport released
from any then outstanding guarantees and surety bonds. As a result, Travelport
no longer provides surety bonds on our behalf or guarantees in connection with
commercial agreements or leases entered into or replaced by us subsequent to
the IPO.  In addition, Travelport agreed to continue to issue
letters of credit on our behalf through at least March 31, 2010 and
thereafter so long as Travelport and its affiliates (as defined in the
Separation Agreement, as amended) own at least 50% of our voting stock, in an
aggregate amount not to exceed $75 million (denominated in U.S. dollars).
Travelport charges us fees for issuing, renewing or extending letters of credit
on our behalf. This fee is included in interest expense in our consolidated
statements of operations. At December 31, 2008 and December 31, 2007,
there were $67 million and $74 million of letters of credit issued by
Travelport on our behalf, respectively (see Note 11  Commitments and
Contingencies).  Transition Services Agreement  At the time of our IPO, we entered into a Transition
Services Agreement with Travelport. Under this agreement, as amended,
Travelport has provided us with certain transition services, including
insurance, human resources and employee benefits, payroll, tax, communications,
collocation and data center facilities, information technology and other
existing shared services. We have also provided Travelport with certain
services, including accounts payable, information technology hosting, data
warehousing and storage as well as Sarbanes-Oxley compliance testing and
deficiency remediation. The terms for the services provided under the
Transition Services Agreement generally expired on March 31, 2008, subject
to certain exceptions. The term of the Transition Services Agreement has been
extended until June 30, 2009 for services Travelport provides us related
to the support of applications for storage of certain financial and human
resources data. The charges for the services are based on the time expended by
the employee or service provider billed at the approximate human resource cost,
including wages and benefits.  Master License Agreement  We entered into a Master License Agreement with
Travelport at the time of our IPO. Pursuant to this agreement, Travelport
licenses certain of our intellectual property and pays us fees for related
maintenance and support services. The licenses include our supplier link
technology; portions of ebookers booking, search and dynamic packaging technologies;
certain of our products and online booking tools for corporate travel; portions
of our white label dynamic packaging technology; and our extranet supplier
connectivity functionality currently being implemented as part of our new
technology platform.  The Master License Agreement granted us the right to
use a corporate online booking product that Travelport was developing at the
time we entered into the agreement. The development of this product is now
complete, and we have entered into a value added reseller license with
Travelport for this product.  36


Equipment, Services and Use
Agreements  Prior to our IPO, we shared office locations with
Travelport in twelve locations worldwide. In connection with our IPO, we
separated the leasehold properties based upon our respective business
operations and assigned a leasehold interest where one company had exclusive
use or occupation of a property.  We also entered into an Equipment, Services and Use
Agreement for each office occupied by both parties. This agreement commenced in
most locations on June 1, 2007 and provided that the cost of the shared
space would be ratably allocated. The agreement expired on December 31,
2007 but automatically renewed if no termination notice was served. Termination
notices were served at five of the twelve locations in 2007 and at three
additional locations in 2008. The agreement for the remaining four locations
expires in 2009.  Travelport remained liable to landlords for all lease
obligations with guarantee agreements, unless expressly released from this
liability by the relevant landlord.  GDS Service Agreements  Prior to the IPO, certain of our subsidiaries had
subscriber services agreements with Galileo, a subsidiary of Travelport. Under
these agreements, Galileo provided us GDS services and paid us an incentive
payment for each segment processed using its GDS services.  In connection with our IPO, we entered into a new
agreement with Travelport to use GDS services provided by both Galileo and
Worldspan. The new agreement replaced the former Galileo agreement discussed
above as well as a GDS contract we had with Worldspan. The new agreement became
effective in July 2007 with respect to GDS services provided by Galileo.
In August 2007, upon completion of Travelports acquisition of Worldspan,
the new agreement became effective for GDS services provided by Worldspan. This
agreement expires on December 31, 2014.  The new Travelport GDS service agreement is structured
such that we earn incentive revenue for each segment that is processed through
Galileo or Worldspan. The agreement also required us to process 33 million
segments during 2007, 16 million segments through Worldspan and
17 million segments through Galileo. The required number of segments
processed in future years for Worldspan remains fixed at 16 million
segments, while the required number of segments for Galileo is subject to
adjustment based upon the actual segments processed in the preceding year. In
2008, we were required to process approximately 22 million segments
through Galileo. Our failure to process the required number of segments would
result in a shortfall payment of $1.25 per segment below the required minimum.
If we meet the minimum number of segments, we are not required to make payments
of any kind to Galileo or Worldspan.  A significant portion of our GDS services are provided
through this agreement. For the years ended December 31, 2008 and December 31,
2007, we recognized $108 million and $111 million of incentive
revenue for segments processed through Galileo and Worldspan, respectively,
which accounted for more than 10% of our total net revenues. For the year ended
December 31, 2007, this amount includes incentive payments received for
GDS services provided under the new agreement with Travelport as we well as the
former Galileo agreement and Worldspan contract.  Hotel Sourcing and Franchise
Agreement  GTA is a wholly-owned subsidiary of Travelport and
provided certain of our subsidiaries with hotel consulting services and access
to hotels and destination services pursuant to franchise agreements. As
franchisees, we have the ability to make available for booking hotel rooms and
destination services provided by GTA at agreed-upon rates. When a customer books
a hotel room that we have sourced through GTA, we record to net revenue the
difference between what the customer paid and the agreed-upon rate we paid to
GTA. We also paid franchise fees to GTA, which we recorded as contra revenue.
These franchise agreements continued until December 31, 2007, when our new
Master Supply and Services Agreement (the GTA Agreement) became effective.  Under the GTA Agreement, we pay GTA a contract rate
for hotel and destination services inventory it makes available to us for
booking on our websites. The contract rate exceeds the prices at which
suppliers make their inventory available to GTA for distribution and is based
on a percentage of the rates GTA makes such inventory available to its other
customers. We are also subject to additional fees if we exceed certain
specified booking levels. The initial term of the GTA Agreement expires on December 31,
2010. Under this agreement, we are restricted from providing access to hotels
and destination services content to certain of GTAs clients until December 31,
2010.  37


Corporate Travel Agreement  We provide corporate travel management services to Travelport and its
subsidiaries. We believe that these agreements have been executed on terms
comparable to those of unrelated third parties.  Agreements Involving Tecnovate  On July 5, 2007, we sold Tecnovate, an Indian Services
Organization (ISO), to Travelport for $25 million. In connection with
the sale, we entered into an agreement to continue using the services of the
ISO, which included call center and telesales, back office administrative,
information technology and financial services. The ISO charges us based on an
hourly billing rate for the services provided to us.  The agreement included a termination clause in the event of certain
changes in control. In December 2007, Travelport completed the sale of
Tecnovate to an affiliate of Blackstone, which qualified as a change in control
under the termination clause. Prior to the sale, Travelport paid us an
incentive fee of $5 million for entering into an amended service agreement
to continue using the services of the ISO. We deferred the incentive fee and
recognize it as a reduction to expense on a straight-line basis over the term
of the agreement, which expires in 2010.  Financial Advisory Services
Agreement  On July 16, 2007, we completed the sale of an offline U.K. travel
subsidiary. Pursuant to an agreement between Travelport and Blackstone,
Blackstone provided financial advisory services to Travelport and to us in
connection with certain business transactions, including dispositions. Under
the terms of that agreement, Travelport paid $2 million to Blackstone on
our behalf for advisory services upon completion of the sale. As a result, we
recorded a $2 million capital contribution from Travelport in our consolidated
balance sheet.  Related Party Transactions with Affiliates of Blackstone and
TCV  The following table summarizes the related party balances with
affiliates of Blackstone and TCV as of December 31, 2008 and December 31,
2007, reflected in our consolidated balance sheets:  SuccessorDecember 31, 2008
  
  December 31, 2007(in millions)Accounts payable
  
  $
  5
  
  $
  1Accrued expenses
  
  1
  
    The following table summarizes the related party transactions with
affiliates of Blackstone and TCV for the years ended December 31, 2008 and
December 31, 2007 and for the period from August 23, 2006 to December 31,
2006, reflected in our consolidated statements of operations:  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor(in millions)Net revenue
  
  $
  14
  
  $
  12
  
  $
  5Cost of revenue
  
  30
  
  
  
  Selling, general and administrative expense
  
  5
  
  1
  
  Marketing expense
  
  
  
  1
  
    Service Agreements  We have entered into various service agreements with an affiliate of
Blackstone that provide us with call center and telesales, back office
administrative, information technology and financial services.  38


Other Agreements  In the normal course of conducting business, we have entered into
various agreements with affiliates of Blackstone and TCV. We believe that these
agreements have been executed on terms comparable to those of unrelated third
parties. For example, we have agreements with certain hotel management
companies that are affiliates of Blackstone and that provide us with access to
their inventory. We also purchase services from certain Blackstone and TCV
affiliates such as telecommunications and advertising. In addition, various
Blackstone and TCV affiliates utilize our partner marketing programs and
corporate travel services.  Related Party Transactions with Former Cendant Affiliates  The following table summarizes the related party transactions with Cendant
affiliates for the period from January 1, 2006 to August 22, 2006,
reflected in our consolidated statements of operations:  Period from
  January 1, 2006 to
  August 22, 2006
  Predecessor(in millions)Net revenue
  
  $
  10Selling, general and administrative expense
  
  6Interest expense
  
  5  Corporate Related Functions  Our consolidated statements of operations reflect an allocation of both
general and corporate overhead expenses and directly billed expenses incurred
on our behalf from Cendant. General corporate overhead expenses have been
allocated based on a percentage of the forecasted revenue. Direct billed
expenses were based upon actual utilization of the services. Cost subject to
the overhead allocations and direct billings include executive management, tax,
insurance, accounting, legal, treasury, information technology,
telecommunications, call center support and real estate expenses.  Marketing Services
Division Agreements  In October 2005, Cendant sold the companies that made up its Marketing
Services Division (MSD). We are a party to a number of agreements with the
MSD companies, pursuant to which we provide each other with a combination of
technical support, marketing services and travel fulfillment services. The
initial terms of these agreements generally extend for five to six years,
unless terminated by either party in accordance with the terms of those
agreements. With respect to the technical support, we pay MSD an inducement
payment for each net booking made by MSD through our GDS, and MSD pays us
management fees for access to our GDS and the equipment, software and services
provided. With respect to the marketing arrangements, MSD typically pays us
commissions, either based on customers referred or products and services sold.
With respect to the fulfillment services agreement, MSD pays us fees based on
services used plus a share of revenue from reservations of select hotels.  Media Services  Avis Budget Group provided us with media planning and advertising
buying services until December 31, 2006. We paid advertising costs
directly to the third-party vendors.  Realogy Corporation (Realogy) provided us with media planning and
advertising buying services. We paid advertising costs directly to the
third-party vendors; however, we also paid Realogy a fee for access to these
vendors.  Wright Express Agreement  In February 2005, Cendant completed the initial public offering of
all of the outstanding common stock of its wholly owned Wright Express
subsidiary. We are a party to an agreement with Wright Express where we
participate in a MasterCard rotating account program. Under this agreement, we
participate in the program for our purchasing needs, particularly for our
online reservation systems. Wright Express earns money from the interchange
rate a vendor is charged for all purchases made on any rotating account, and
Wright Express pays us a rebate based upon our purchase volume.  39


Corporate Travel Agreements  We provide Cendant, Wyndham Worldwide Corporation (Wyndham), Avis
Budget Group and Realogy with corporate travel management services. The
agreements have an initial term of three years, unless terminated earlier by
either party in accordance with the terms of the agreement.  Vendor, Partner Marketing and White
Label and Hosting Agreements  In the normal course of conducting business, we have entered into
various agreements with Wyndham and Avis Budget Group, both of which were
affiliates of Cendant. We believe that these agreements have been executed on
terms comparable to those of unrelated third parties and include the following:  ·vendor agreements that provide us access
to their products and services for distribution on our various websites;  ·partner marketing agreements provide for
the promotion of Wyndham and Avis Budget Group products and services on our
various websites; and  ·white label and hosting agreements
pursuant to which we host various white label websites that incorporate their
design elements and allow for the booking of air, car and hotel packages.  19.  Fair
Value Measurements  We adopted SFAS No. 157 on January 1, 2008. Under this
standard, fair value is defined as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date (an exit price). The standard outlines a
valuation framework and creates a fair value hierarchy in order to increase the
consistency and comparability of fair value measurements and the related
disclosures. In accordance with FSP 157-2, we deferred the adoption of
SFAS No. 157 for our non-financial assets and non-financial
liabilities, except those items recognized or disclosed at fair value on an
annual or more frequently recurring basis, until January 1, 2009. Under
SFAS No. 159, companies may choose to measure many financial
instruments and certain other items at fair value. We did not elect the fair
value measurement option under SFAS No. 159 for any of our financial
assets or liabilities (see Note 2  Summary of Significant Accounting
Policies).  We have derivative financial instruments that must be measured under
the new fair value standard. We currently do not have non-financial assets and
non-financial liabilities that are required to be measured at fair value on a
recurring basis. SFAS No. 157 establishes a valuation hierarchy for
disclosure of the inputs to valuation used to measure fair value. This
hierarchy prioritizes the inputs into three broad levels as follows.
Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities. Level 2 inputs are quoted prices for
similar assets and liabilities in active markets or inputs that are observable
for the asset or liability, either directly or indirectly through market
corroboration, for substantially the full term of the financial instrument.
Level 3 inputs are unobservable inputs based on our own assumptions used
to measure assets and liabilities at fair value. A financial asset or liabilitys
classification within the hierarchy is determined based on the lowest level
input that is significant to the fair value measurement.  In accordance with the fair value hierarchy described above, the
following table shows the fair value of our financial assets and liabilities
that are required to be measured at fair value as of December 31, 2008,
which are classified as other current liabilities and other non-current
liabilities in our consolidated balance sheets:  Fair Value Measurements as of December 31, 2008Balance at
  December 31, 2008
  
  Quoted prices in
  active markets
  (Level 1)
  
  Significant other
  observable
  inputs
  (Level 2)
  
  Significant
  unobservable
  inputs
  (Level 3)(in millions)Foreign currency hedge liability (see
  Note 14  Derivative Financial Instruments)
  
  $
  1
  
  $
  1
  
  
  
  Interest rate swap liabilities (see
  Note 14  Derivative Financial Instruments)
  
  $
  15
  
  
  
  $
  15
  
    We value our interest rate hedges using valuations that are calibrated
to the initial trade prices. Subsequent valuations are based on observable
inputs to the valuation model including interest rates, credit spreads and volatilities.  40


We value our foreign currency hedges based on the difference between
the foreign currency forward contract rate and widely available foreign
currency forward rates as of the measurement date. Our foreign currency hedges
consist of forward contracts that are short-term in nature, generally maturing
within 30 days.  20.  Segment
Information  We determine operating segments based on how our chief operating
decision maker manages the business, including making operating decisions and
evaluating operating performance. We operate in one segment and have one
reportable segment as defined by SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information.  We maintain operations in the U.S., U.K., Australia, Germany, Sweden,
France, Finland, Ireland, the Netherlands, Switzerland, Spain and other
international territories. The table below presents net revenue by geographic
area: the U.S. and all other countries. We allocate net revenue based on
where the booking originated.  Year Ended
  December 31, 2008
  Successor
  
  Year Ended
  December 31, 2007
  Successor
  
  Period from
  August 23, 2006 to
  December 31, 2006
  Successor
  
  Period from
  January 1, 2006 to
  August 22, 2006
  Predecessor(in millions)Net revenueUnited States
  
  $
  686
  
  $
  679
  
  $
  200
  
  $
  411All other countries
  
  184
  
  180
  
  42
  
  99$
  870
  
  $
  859
  
  $
  242
  
  $
  510  The table below presents property and equipment, net, by geographic
area: the U.S. and all other countries.  SuccessorDecember 31, 2008
  
  December 31, 2007(in millions)Long-lived assetsUnited States
  
  $
  181
  
  $
  174All other countries
  
  9
  
  10$
  190
  
  $
  184  21.  Quarterly
Financial Data (Unaudited)  The following table presents certain unaudited consolidated quarterly
financial information for each of the eight quarters in the period ended December 31,
2008. Prior to the Reorganization, there was no single capital structure upon
which to calculate historical earnings (loss) per share information.
Accordingly, the table below does not present earnings (loss) per share
information for periods prior to the Reorganization.  Three Months EndedDecember 31, 2008
  Successor
  
  September 30, 2008
  Successor
  
  June 30,
  2008
  Successor
  
  March 31, 2008
  Successor(in millions, except per share data)Net revenue
  
  $
  180
  
  $
  240
  
  $
  231
  
  $
  219Cost and expenses
  
  156
  
  516
  
  216
  
  220Operating income (loss)
  
  24
  
  (276
  )
  15
  
  (1
  )Net income (loss)
  
  8
  
  (287
  )
  (5
  )
  (15
  )Basic and diluted income (loss) per share
  
  0.10
  
  (3.44
  )
  (0.06
  )
  (0.18
  )  Three Months EndedDecember 31,
  2007
  Successor
  
  September 30,
  2007
  Successor
  
  June 30,
  2007
  Successor
  
  March 31,
  2007
  Successor(in millions)Net revenue
  
  $
  197
  
  $
  221
  
  $
  229
  
  $
  212Cost and expenses
  
  182
  
  202
  
  230
  
  203Operating income (loss)
  
  15
  
  19
  
  (1
  )
  9Net (loss)
  
  (11
  )
  (32
  )
  (32
  )
  (10
  )  41


Three
  Months Ended
  December 31,
  2007
  Successor
  
  Period from
  July 18,
  2007 to
  September 30,
  2007
  Successor(in millions, exceptper share data)Net (loss)
  
  $
  (11
  )
  $
  (31
  )Basic and diluted (loss) per share
  
  (0.13
  )
  (0.38
  )  22.  Subsequent
Events  On January 6, 2009, Steven D. Barnhart resigned as President and
Chief Executive Officer of the Company. In connection with his resignation and
pursuant to the terms of his employment agreement with the Company, we will
incur total expenses of $2 million in the first quarter of 2009 relating
to severance benefits and other termination-related costs, all of which will be
cash expenditures. The majority of these cash payments will be made in equal
amounts over a twenty-four month period from his resignation date, but will be
delayed until July 7, 2009, as required by applicable tax law.  In addition, we estimate that we will record $2 million of
additional equity-based compensation expense in the first quarter of 2009
related to the accelerated vesting of certain equity-based awards held by him,
as provided for in the award agreements related to these equity-based awards.
These awards will vest on his last day of employment with the Company, or April 6,
2009.  42


Schedule II 
Valuation and Qualifying Accounts  Balance at
   Beginning of
  Period
  
  Charged to
  Costs and
  Expenses
  
  Charged to
  Other Accounts
  
  Deductions
  
  Balance at
  End of Period(in millions)Tax Valuation AllowanceSuccessorYear Ended December 31, 2008
  
  $
  330
  
  $
  27
  
  $
  (37)
  (a)
  $
  
  
  $
  320Year Ended December 31, 2007
  
  415
  
  46
  
  (117)
  (b)
  (14)
  (c)
  330Period from August 23, 2006 to
  December 31, 2006
  
  408
  
  7
  
  
  
  
  
  415PredecessorPeriod from January 1, 2006 to August 22,
  2006
  
  577
  
  114
  
  (18)
  (d)
  
  
  673  
 (a)
  
  Represents
  current year foreign currency translation adjustments to the valuation
  allowance.(b)
  
  Represents
  adjustments made to reflect the decreases in the valuation allowance related
  to the tax sharing agreement with the Founding Airlines.(c)
  
  Represents the
  expiration of a U.S. federal income tax capital loss carryforward.(d)
  
  Represents
  reductions related to a corresponding reduction in deferred tax assets not
  recorded through our consolidated statements of operations.  43