**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

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**Form 10-Q**

**x**                              QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

**Forthe quarterly period ended March 31, 2007**

**or**

**o**                                 TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

**Forthe transition period from _____ to _____**

**CommissionFile No. 333-141714**

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**Travelport Limited**

(Exact name of registrantas specified in its charter)

| **Bermuda**                        |   | **98-0505100**          |
|------------------------------------|--------|-------------------------|
| (State or other  jurisdiction      |   | (I.R.S. Employer        |
| of incorporation  or organization) |   | Identification  Number) |

 

| **400 Interpace Parkway**                                     |
|---------------------------------------------------------------|
| **Building  A**                                               |
| **Parsippany,  NJ 07054**                                     |
| (Address of  principal executive offices, including zip code) |
| **(973) 939-1000**                                            |
| (Registrant’s  telephone number, including area code)    |

 

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Indicate by check markwhether the registrant: (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days. Yes o  No x

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer o |   | Accelerated filer  o |   | Non-accelerated  filer x |
|---------------------------|--------|----------------------|--------|--------------------------|

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). Yes o  No x

 

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**Tableof Contents**

|                  | ** ** |                                                                                             | ** ** | **Page** | ** ** |
|------------------|------------|---------------------------------------------------------------------------------------------|------------|----------|------------|
| **PART I**  |       | Financial Information                                                                       |       |     | 4          |   |   |
| Item 1.          |       | Financial Statements                                                                        |       |     | 4          |   |   |
|             |       | Condensed Statements of Operations for the Three  Months Ended March 31, 2007 and 2006 |       |     | 4          |   |   |
|             |       | Condensed Balance Sheets as of March 31, 2007 and  December 31, 2006              |       |     | 5          |   |   |
|             |       | Condensed Statements of Cash Flows for the Three  Months Ended March 31, 2007 and 2006 |       |     | 6          |   |   |
|             |       | Notes to Condensed Financial Statements                                                     |       |     | 8          |   |   |
| Item 2.          |       | Management’s Discussion  and Analysis of Financial Condition and Results of Operations |       |     | 22         |   |   |
| Item 3.          |       | Quantitative  and Qualitative Disclosures About Market Risk                                 |       |     | 31         |   |   |
| Item 4.          |       | Controls and  Procedures                                                                    |       |     | 31         |   |   |
| **PART II** |       | Other Information                                                                           |       |     | 31         |   |   |
| Item 1.          |       | Legal Proceedings                                                                           |       |     | 31         |   |   |
| Item  1A.        |       | Risk  Factors                                                                               |       |     | 32         |   |   |
| Item 2.          |       | Unregistered  Sales of Equity Securities and Use of Proceeds                                |       |     | 32         |   |   |
| Item 3.          |       | Defaults upon  Senior Securities                                                            |       |     | 32         |   |   |
| Item 4.          |       | Submission of  Matters to a Vote of Security Holders                                        |       |     | 32         |   |   |
| Item 5.          |       | Other Information                                                                           |       |     | 32         |   |   |
| Item  6.         |       | Exhibits                                                                                    |       |     | 32         |   |   |
|             |       | Signatures                                                                                  |       |     | 33         |   |   |

** **

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**FORWARD-LOOKINGSTATEMENTS**

The forward-lookingstatements contained herein involve risks and uncertainties. Many of thestatements appear, in particular, in the sections entitled ‘‘Risk Factors’’ and‘‘Management’s Discussion and Analysis of Financial Condition and Results ofOperations.’’ Forward-looking statements identify prospective information.Important factors could cause actual results to differ, possibly materially,from those in the forward-looking statements. In some cases you can identifyforward-looking statements by words such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘could,’’‘‘estimate,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘may,’’ ‘‘plan,’’ ‘‘predict,’’ ‘‘potential,’’‘‘should,’’ ‘‘will’’ and ‘‘would’’ or other similar words. You should readstatements that contain these words carefully because they discuss our futurepriorities, goals, strategies, actions to improve business performance, marketgrowth assumptions and expectations, new products, product pricing, changes toour business processes, future business opportunities, capital expenditures,financing needs, financial position and other information that is nothistorical information or state other ‘‘forward-looking’’ information. Thefollowing list represents some, but not necessarily all, of the factors thatcould cause actual results to differ from historical results or thoseanticipated or predicted by these forward-looking  statements:

·       oursubstantial indebtedness;

·       ourability to service our outstanding indebtedness and the impact suchindebtedness may have on the way we operate our businesses;

·       interestrate movements;

·       factorsaffecting the level of travel activity, particularly air travel volume,including security concerns, natural disasters and other disruptions;

·       generaleconomic and business conditions, both nationally and in our markets;

·       competitionin the travel industry including competition from supplier distribution channelsand other distribution entrants;

·       airlineslimiting their participation in travel marketing and distribution services;

·       airlinesaltering their content or changing the pricing of such content;

·       pricing,regulatory and other trends in the travel industry;

·       risksassociated with doing business in multiple international jurisdictions and inmultiple currencies;

·       maintenanceand protection of our information technology and intellectual property;

·       theoutcome of pending litigation;

·       ourability to execute on our strategic plans including the initial public offeringof Orbitz Worldwide common stock and the proposed acquisition of Worldspan;

·       acquisitionopportunities and our ability to successfully integrate acquired businesses andrealize anticipated benefits of such acquisitions, including the proposedWorldspan acquisition;

·       financingplans and access to adequate capital on favorable terms; and

·       ourability to achieve anticipated cost savings.

We caution you that the foregoing list of importantfactors may not contain all of the factors that are important to you. Inaddition, in light of these risks and uncertainties, the matters referred to inthe forward-looking statements contained in this report may not in fact occur.

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Forward-looking statements should not be read as aguarantee of future performance or results, and will not necessarily beaccurate indications of the times at, or by which, such performance or resultswill be achieved. Forward-looking information is based on information availableat the time and/or management’s good faith belief with respect to futureevents, and is subject to risks and uncertainties that could cause actualperformance or results to differ materially from those expressed in thestatements. The factors listed in the section captioned ‘‘Risk Factors’’ inthis report and in our Registration Statement on Form S-4 filed with theSecurities and Exchange Commission on March 30, 2007, as amended, as wellas any other cautionary language in this report, provide examples of risks,uncertainties and events that may cause our actual results to differ materiallyfrom the expectations we describe in our forward-looking statements. You shouldbe aware that the occurrence of the events described in these risk factors andelsewhere in this report could have an adverse effect on our business, resultsof operations and financial position.

Forward-looking statements speak only as of the datethe statements are made. We assume no obligation to update forward-lookingstatements to reflect actual results, changes in assumptions or changes inother factors affecting forward-looking information except to the extentrequired by applicable securities laws. If we do update one or moreforward-looking statements, no inference should be drawn that we will makeadditional updates with respect thereto or with respect to otherforward-looking statements.

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**PART 1—FINANCIALINFORMATION**

**Item 1. FinancialStatements**

**TRAVELPORT LIMITEDCONDENSED STATEMENTS OF OPERATIONS(Unaudited) (in millions)**

| ** **                                                        | ** ** | ** **                       | ** ** | ** ** | ** ** | **Predecessor**                  | ** ** |
|-------------------------------------------------------------------|------------|----------------------------------|------------|------------|------------|----------------------------------|------------|
| ** **                                                        | ** ** | **Three Months Ended** | ** ** | ** ** | ** ** | **Three Months Ended** | ** ** |
| ** **                                                        | ** ** | **March 31, 2007**     | ** ** | ** ** | ** ** | **March 31, 2006**     | ** ** |
| **Net  revenue**                                                  |       |                             |       | $          | 668        |                             |       |   |   |   | $ | 636 |   |
| **Costs  and expenses**                                           | ** ** |                             |       |       |       |                             |       |   |   |   |   |
| Cost of revenue                                                   |       |                             |       | 280        |       |                             |       |   |   | 278 |   |
| Selling, general  and administrative                              |       |                             |       | 265        |       |                             |       |   |   | 250 |   |
| Separation and  restructuring charges                             |       |                             |       | 23         |       |                             |       |   |   | 7 |   |
| Depreciation and  amortization                                    |       |                             |       | 55         |       |                             |       |   |   | 49 |   |
| Other expense (income)                                            |       |                             |       | 1          |       |                             |       |   |   | (6 | ) |
| Total operating  expense                                          |       |                             |       | 624        |       |                             |       |   |   | 578 |   |
| **Operating income**                                              |       |                             |       | 44         |       |                             |       |   |   | 58 |   |
| Interest expense,  net                                            |       |                             |       | (86        | )          |                             |       |   |   | (12 | ) |
| **Income  (loss) from continuing operations before income taxes** |       |                             |       | (42        | )          |                             |       |   |   | 46 |   |
| Provision  (benefit) for income taxes                             |       |                             |       | (3         | )          |                             |       |   |   | (2 | ) |
| **Income  (loss) from continuing operations, net of tax**         |       |                             |       | (39        | )          |                             |       |   |   | 48 |   |
| Loss from  discontinued operations, net of tax                    |       |                             |       | —     |       |                             |       |   |   | (1 | ) |
| **Net income (loss)**                                             |       |                             |       | $          | (39        | )                                |       |   |   |   | $ | 47 |   |

 

See Notes to Financial Statements

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**TRAVELPORTLIMITEDCONDENSED BALANCE SHEETS (in millions)**

| ** **                                                                                    | ** ** | **(Unaudited)  March 31, 2007** | ** **                                           | **December 31, 2006** | ** ** |
|-----------------------------------------------------------------------------------------------|------------|-------------------------------------------|------------------------------------------------------|---------------------------------|------------|
| **Assets**                                                                                    |       |                                      |                                                 |                            |       |   |   |
| Current assets:                                                                               |       |                                      |                                                 |                            |       |   |   |
| Cash and cash equivalents                                                                     |       |                                      | $        221 |                            |       | $            97 |   |
| Accounts receivable                                                                           |       |                                      | 436                                                  |                            |       | 454 |   |
| Deferred income taxes                                                                         |       |                                      | 8                                                    |                            |       | 6 |   |
| Other current assets                                                                          |       |                                      | 136                                                  |                            |       | 155 |   |
| Assets held for sale                                                                          |       |                                      | 43                                                   |                            |       | 42 |   |
| Total current  assets                                                                         |       |                                      | 844                                                  |                            |       | 754 |   |
| Property and equipment, net                                                                   |       |                                      | 480                                                  |                            |       | 474 |   |
| Goodwill                                                                                      |       |                                      | 2,174                                                |                            |       | 2,165 |   |
| Trademarks and  tradenames                                                                    |       |                                      | 710                                                  |                            |       | 707 |   |
| Other intangible  assets, net                                                                 |       |                                      | 1,593                                                |                            |       | 1,634 |   |
| Deferred income  taxes                                                                        |       |                                      | 9                                                    |                            |       | 12 |   |
| Other non-current  assets                                                                     |       |                                      | 373                                                  |                            |       | 384 |   |
| **Total  assets**                                                                             |       |                                      | $    6,183                       |                            |       | $       6,130 |   |
| **Liabilities  and equity**                                                                   |       |                                      |                                                 |                            |       |   |   |
| Current liabilities:                                                                          |       |                                      |                                                 |                            |       |   |   |
| Accounts payable                                                                              |       |                                      | $        336 |                            |       | $          308 |   |
| Accrued expenses and other current liabilities                                                |       |                                      | 903                                                  |                            |       | 821 |   |
| Current portion of long term debt                                                             |       |                                      | 24                                                   |                            |       | 24 |   |
| Deferred income taxes                                                                         |       |                                      | 12                                                   |                            |       | 13 |   |
| Total current  liabilities                                                                    |       |                                      | 1,275                                                |                            |       | 1,166 |   |
| Long-term debt                                                                                |       |                                      | 3,633                                                |                            |       | 3,623 |   |
| Deferred income  taxes                                                                        |       |                                      | 251                                                  |                            |       | 247 |   |
| Tax sharing  liability                                                                        |       |                                      | 128                                                  |                            |       | 125 |   |
| Other non-current  liabilities                                                                |       |                                      | 144                                                  |                            |       | 194 |   |
| Total liabilities                                                                             |       |                                      | 5,431                                                |                            |       | 5,355 |   |
| Commitments and  contingencies                                                                |       |                                      |                                                 |                            |       |   |   |
| Equity:                                                                                       |       |                                      |                                                 |                            |       |   |   |
| Common stock  $1.00 par value; 12,000 shares authorized, 12,000 shares issued and outstanding |       |                                      | —                                               |                            |       | — |   |
| Additional paid  in capital                                                                   |       |                                      | 913                                                  |                            |       | 908 |   |
| Accumulated  deficit                                                                          |       |                                      | (184                                                 | )                               |       | (144 | ) |
| Accumulated other  comprehensive income                                                       |       |                                      | 23                                                   |                            |       | 11 |   |
| Total equity                                                                                  |       |                                      | 752                                                  |                            |       | 775 |   |
| **Total  liabilities & equity**                                                      |       |                                      | $    6,183                       |                            |       | $       6,130 |   |

 

 

See Notes to Financial Statemens

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**TRAVELPORTLIMITEDCONDENSED STATEMENTS OF CASH FLOWS(Unaudited)(in millions)**

| ** **                                                                                                    | ** ** | ** **                                                 | ** ** | ** ** | ** ** | **Predecessor**                                            | ** ** |
|---------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------|------------|------------|------------|------------------------------------------------------------|------------|
| ** **                                                                                                    | ** ** | **Three Months Ended  March 31, 2007** | ** ** | ** ** | ** ** | **Three Months Ended  March 31, 2006** | ** ** |
| **Operating  activities of continuing operations**                                                            | ** ** |                                                       | ** ** | ** ** |       |                                                       |       | ** ** | ** ** |
| Net income (loss)                                                                                             |       |                                                       | $          | (39        | )          |                                                       |       |   | $ | 47 |   |
| Loss from  discontinued operations                                                                            |       |                                                       | —     |       |       |                                                       |       | (1 | ) |
| Income (loss) from  continuing operations                                                                     |       |                                                       | (39        | )          |       |                                                       |       | 48 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities from  continuing operations |       |                                                       |       |       |       |                                                       |       |   |   |
| Depreciation and amortization                                                                                 |       |                                                       | 55         |       |       |                                                       |       | 49 |   |
| Deferred income  taxes                                                                                        |       |                                                       | 1          |       |       |                                                       |       | (5 | ) |
| Provision for bad  debts                                                                                      |       |                                                       | 3          |       |       |                                                       |       | 3 |   |
| Gain on sale of  property                                                                                     |       |                                                       | 1          |       |       |                                                       |       | (7 | ) |
| Amortization of  debt issuance costs                                                                          |       |                                                       | 5          |       |       |                                                       |       | — |   |
| Non-cash charges  related to tax sharing liability                                                            |       |                                                       | 3          |       |       |                                                       |       | 3 |   |
| Equity based  compensation                                                                                    |       |                                                       | 3          |       |       |                                                       |       | — |   |
| Changes in assets  and liabilities, net of effects from acquisitions and disposals                            |       |                                                       |       |       |       |                                                       |       |   |   |
| Accounts  receivable                                                                                          |       |                                                       | 20         |       |       |                                                       |       | 24 |   |
| Other current  assets                                                                                         |       |                                                       | (8         | )          |       |                                                       |       | 3 |   |
| Accounts payable,  accrued expenses and other current liabilities                                             |       |                                                       | 110        |       |       |                                                       |       | 86 |   |
| Other                                                                                                         |       |                                                       | 9          |       |       |                                                       |       | (6 | ) |
| **Net cash  provided by operating activities of continuing operations**                                       | ** ** |                                                       | **163**    | ** ** |       |                                                       |       | **198** | ** ** |
| **Investing  activities of continuing operations**                                                            | ** ** |                                                       | ** ** | ** ** |       |                                                       |       | ** ** | ** ** |
| Property and  equipment additions                                                                             |       |                                                       | (32        | )          |       |                                                       |       | (34 | ) |
| Businesses acquired,  net of cash                                                                             |       |                                                       | (5         | )          |       |                                                       |       | (21 | ) |
| Net intercompany  funding with Avis Budget                                                                    |       |                                                       | —     |       |       |                                                       |       | (36 | ) |
| Proceeds from  asset sales                                                                                    |       |                                                       | —     |       |       |                                                       |       | 10 |   |
| Other                                                                                                         |       |                                                       | 1          |       |       |                                                       |       | 2 |   |
| **Net cash  used in investing activities of continuing operations**                                           | ** ** |                                                       | **(36**    | **)**      |       |                                                       |       | **(79** | **)** |
| **Financing  activities of continuing operations**                                                            | ** ** |                                                       | ** ** | ** ** |       |                                                       |       | ** ** | ** ** |
| Principal payments  on borrowings                                                                             |       |                                                       | (6         | )          |       |                                                       |       | (1 | ) |
| Issuance of common  stock                                                                                     |       |                                                       | 2          |       |       |                                                       |       | — |   |
| **Net cash  used in financing activities of continuing operations**                                           | ** ** |                                                       | **(4**     | **)**      |       |                                                       |       | **(1** | **)** |
| Effect of changes  in exchange rates on cash & cash equivalents                                      |       |                                                       | 1          |       |       |                                                       |       | (1 | ) |
| **Net  increase in cash and cash equivalents from continuing operations**                                     |       |                                                       | 124        |       |       |                                                       |       | 117 |   |
| **Cash  used in discontinued operations**                                                                     | ** ** |                                                       | ** ** | ** ** |       |                                                       |       | ** ** | ** ** |
| Investing  activities                                                                                         |       |                                                       | —     |       |       |                                                       |       | (1 | ) |
|                                                                                                          |       |                                                       | —     |       |       |                                                       |       | (1 | ) |
| Cash and cash  equivalents at beginning of period                                                             |       |                                                       | 97         |       |       |                                                       |       | 93 |   |
| Cash and cash  equivalents at end of period                                                                   |       |                                                       | 221        |       |       |                                                       |       | 209 |   |
| Less cash of  discontinued operations                                                                         |       |                                                       | —     |       |       |                                                       |       | (4 | ) |
| **Cash and  cash equivalents of continuing operations**                                                       |       |                                                       | $          | 221        |       |                                                       |       |   | $ | 205 |   |
| Supplemental  disclosure of cash flow information                                                             |       |                                                       |       |       |       |                                                       |       |   |   |
| Interest payments                                                                                             |       |                                                       | $          | 118        |       |                                                       |       |   | $ | 10 |   |
| Income tax payments, net                                                                                      |       |                                                       | $          | 4          |       |                                                       |       |   | $ | 9 |   |

 

See Notes to Financial Statements

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**TRAVELPORT LIMITEDCONDENSED STATEMENT OF CHANGES IN EQUITY(Unaudited)**

**(in millions)**

| ** **                                                            | ** ** | **Common  Stock** | ** ** | **Additional  Paid In  Capital** | ** ** | **Accumulated  Deficit** | ** ** | **Accumulated  Other  Comprehensive  Income (Loss)** | ** ** | **Total  Equity** | ** ** |
|-----------------------------------------------------------------------|------------|-------------------|------------|---------------------------------------|------------|--------------------------|------------|-----------------------------------------------------------|------------|-------------------|------------|
| **Balance  at December 31, 2006**                                |       |              | $          | —                                |       |                     | $          | 908                                                       |       |              | $          | (144 | ) |   | $ | 11 |   |   | $ | 775 |   |
| Cumulative effect  of change in accounting principle—FIN 48 |       |              | —     |                                  |       | —                   |       |                                                      | (1         | )                 |       | — |   |   | (1 | ) |
| Balance at  January 1, 2007                                      |       |              | —     |                                  |       | 908                      |       |                                                      | (145       | )                 |       | 11 |   |   | 774 |   |
| Issuance of  common stock                                             |       |              | —     |                                  |       | 2                        |       |                                                      | —     |              |       | — |   |   | 2 |   |
| Equity-based  compensation                                            |       |              | —     |                                  |       | 3                        |       |                                                      | —     |              |       | — |   |   | 3 |   |
| Net loss                                                              |       |              | —     |                                  |       | —                   |       |                                                      | (39        | )                 |       | — |   |   |   |   |
| Currency  translation adjustment                                      |       |              | —     |                                  |       | —                   |       |                                                      | —     |              |       | 17 |   |   |   |   |
| Unrealized loss  on cash flow hedges                                  |       |              | —     |                                  |       | —                   |       |                                                      | —     |              |       | (5 | ) |   |   |   |
| **Total  comprehensive loss**                                         |       |              |       |                                  |       |                     |       |                                                      |       |              |       |   |   |   | (27 | ) |
| **Balance as of March 31,  2007**                                |       |              | $          | —                                |       |                     | $          | 913                                                       |       |              | $          | (184 | ) |   | $ | 23 |   |   | $ | 752 |   |

 

See Notes to Financial Statements

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**TRAVELPORT LIMITEDNOTES TO FINANCIAL STATEMENTS(Unaudited)(Unless otherwise noted, all amounts are in millions)**

**1.**                 Basisof Presentation

Travelport Limited(hereafter “Travelport” or the “Company”) is a Bermuda company formed on July 13,2006 for the purpose of the acquisition of the Travelport businesses of Avis BudgetGroup, Inc. (formerly Cendant Corporation). Travelport is one of the world’slargest travel conglomerates. It operates 20 leading brands, including Galileo,a global distribution system (GDS); Orbitz Worldwide, an on-line travel agency;and Gullivers Travel Associates, a wholesaler of travel content. The Companyhas approximately 8,000 employees and operates in 130 countries. Travelport isa private company owned by affiliates of The Blackstone Group (“Blackstone”) ofNew York, Technology Crossover Ventures (“TCV”) of Palo Alto, California andOne Equity Partners of New York.

On August 23, 2006, Travelport completed theacquisition of the Travelport businesses of Avis Budget Group, Inc. (the “Acquisition”).Prior to the Acquisition, the Company’s operations were limited to theformation of the Company and entering into derivative transactions related tothe debt that was subsequently issued. As a result, the Travelport businessesof Avis Budget are considered  apredecessor company (the “Predecessor”) to Travelport. The financial statementsas of December 31, 2006 and for the three months ended March 31, 2007include the financial condition, results of operations and cash flows for Travelporton a successor basis, reflecting the impact of the preliminary purchase priceallocation. The financial statements for the three months ended March 31,2006 include the results of operations and cash flows for the Travelportbusinesses of Avis Budget on a predecessor basis, reflecting the historicalcarrying values of the Travelport businesses of Avis Budget.

**Business Description**

Effective January 1,2007 the Company reorganized its operations under the following three businesssegments:

**Galileo**—Comprised ofthe  electronic travel distribution services of Galileo that connect travelsuppliers to travel agencies, who in turn distribute travel and travel-relatedproducts and services to their customers. In addition, Galileo includes supplierservices offerings, including United Airlines reservations, Global Fares andShepherd Systems.

**Orbitz Worldwide**—Comprised of businesses that offer travel productsand services directly to consumers, largely through online travel agencies,including Orbitz, CheapTickets, ebookers, Hotel Club, Rates To Go, and ourcorporate travel businesses.

**GTA**—Comprisedof Gullivers Travel Associates, a wholesaler of accommodation and destinationservices, TRUST International, which offers transaction processing solutionsfor travel suppliers and other travel industry customers, Octopus Travel, whichprovides travel products and services largely to affiliate business partners,such as airlines, financial institutions and travel portals, and servicesdirectly to consumers.

**2.**                 CumulativeEffect of Change in Accounting Principle—FIN 48

In June 2006, theFASB issued FASB Interpretation No. 48, “Accounting for Uncertainty inIncome Taxes” (“FIN 48”), which is an interpretation of SFAS No. 109,“Accounting for Income Taxes.” The Company has adopted the provisions of FIN 48effective January 1, 2007, as required, and as a result of its 

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applicationhas recorded an additional income tax liability of approximately $16 millionat March 31, 2007. As the conditions resulting in this liability arose asa result of the terms of the purchase agreement relating to the Acquisition,the Company recorded additional goodwill of approximately $14 million. The interest on such liability for the periodsubsequent to the acquisition through December 31, 2006 has been recordedas a $1 million adjustment to the January 1, 2007 beginning retainedearnings balance.

Under the terms of thepurchase agreement relating to the Acquisition, the Company is indemnified forall pre-closing income tax liabilities. For purposes of FIN 48, with respect toperiods prior to the sale the Company is only required to take into account taxreturns for which it or one of its affiliates is the primary taxpaying entity,namely separate state returns and non-U.S. returns. U.S. Federal and statecombined and unitary tax returns are only applicable in the post-sale period. TheCompany, joined by its domestic subsidiaries, files a consolidated income taxreturn for Federal income tax purposes. During the first quarter of 2007, theCompany implemented a series of transactions that led to the creation of twoU.S. consolidated income tax groups, one for the Galileo and GTA business andone for the Orbitz Worldwide business. With limited exceptions, the Company isno longer subject to U.S  Federal incometax, state and local, or non-U.S. income tax examinations by tax authoritiesfor tax years before 2001.

The Company has undertakenan analysis of all material tax positions in its tax accruals for all openyears and has identified all of its outstanding tax positions and estimated thetransition amounts with respect to each item at the effective date. The Companyexpects no material change for the next 12 months as a result of adopting FIN 48.The Company anticipates making payments of approximately $2 million withrespect to tax assessments within the next 12 months.

Areconciliation of the beginning and ending amount of unrecognized tax benefitsis as follows:

| Additions due to  purchase accounting |   | $  | 14     |   |
|---------------------------------------|--------|----|--------|--------|
| Additions due to  adoption of FIN 48  |   | 1  |   |
| Balance at  December 31, 2006    |   | 15 |   |
| Additions during  2007                |   | 1  |   |
| Balance at  March 31, 2007       |   | $  | 16     |   |

 

The balance as of March 31,2007 includes tax positions for which the ultimate deductibility is highlycertain but for which great uncertainty as to the timing of such deductionsexists. The net value of such positions is $0.

The Company recognizes interestand penalties accrued related to unrecognized tax benefits as part of theprovision for income taxes. The Company had accrued approximately $1 million for purposes of increasing itsunrecognized tax benefits, including interest and penalties, during 2007.

**3.**                 DiscontinuedOperations

During the second quarterof 2006, the Predecessor formalized a plan to dispose of a subsidiary engagedin wholesale travel operations in the United Kingdom. The Company completed thesale of this subsidiary in December 2006.

9

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Summarized statement ofoperations data for discontinued operations is as follows*:*

| ** **                                     | ** ** | **Predecessor**                                        | ** ** |
|------------------------------------------------|------------|--------------------------------------------------------|------------|
| ** **                                     | ** ** | **Three Months  Ended March 31,  2006** | ** ** |
| Net revenue                                    |       |                                                   | $          | 4 |   |
| Loss before income taxes                       |       |                                                   | (2         | ) |
| Benefit for income taxes                       |       |                                                   | 1          |   |
| Loss from discontinued operations,  net of tax |       |                                                   | $          | (1 | ) |

 

*Assets Held for Sale*

During 2007, the Companyformalized a plan to sell and leaseback a GTA facility located in the UnitedKingdom. Although the asset has not been sold as of March 31, 2007, theconditions of such proposed transaction met the criteria for recording thecarrying value of this facility as an asset held for sale on the condensedbalance sheet at March 31, 2007.

**4.**                 Separationand Restructuring Charges

Separationand restructuring charges consisted of:

| ** **             | ** ** | ** **                                             | ** ** | ** ** | ** ** | **Predecessor**                                        | ** ** |
|------------------------|------------|--------------------------------------------------------|------------|------------|------------|--------------------------------------------------------|------------|
| ** **             | ** ** | **Three Months  Ended March 31,  2007** | ** ** | ** ** | ** ** | **Three Months  Ended March 31,  2006** | ** ** |
| Separation costs       |       |                                                   | $          | 2          |       |                                                   |       |   | $ | 7 |   |
| Restructuring  charges |       |                                                   | 21         |       |       |                                                   |       | — |   |
|                   |       |                                                   | $          | 23         |       |                                                   |       |   | $ | 7 |   |

 

*Separation Costs*

Separation costs of $2million for the three months ended March 31, 2007 consist of $1 million inemployee retention and bonus plans as well as $1 million in professional feesrelated to the separation plan. Separation costs incurred by the Predecessor of$7 million for the three months ended March 31, 2006 consist of $3 millionin employee retention and bonus plans as well as $4 million in professionalfees related to the separation plan.

*Restructuring Charges*

During the second quarterof 2006, the Predecessor committed to various strategic initiatives targetedprincipally at reducing costs, enhancing organizational efficiency andconsolidating and rationalizing existing processes and facilities. Subsequentto the Acquisition, the Company committed to additional restructuring actionsin the form of global headcount reductions and facility consolidations. Thoughthe Company began to implement these actions during the fourth quarter of 2006,the Company continues to take restructuring actions in 2007. The recognition ofthe restructuring charges and the corresponding utilization during 2007 aresummarized by category as follows:

| ** **                     | ** ** | **Personnel  Related** | ** ** | **Facility  Related** | ** ** | **Other** | ** ** | **Total** | ** ** |
|--------------------------------|------------|------------------------|------------|-----------------------|------------|-----------|------------|-----------|------------|
| Balance, January 1,  2007 |       |                   | $          | 2                     |       |      | $          | 1         |       |   | 2 |   |   | $ | 5 |   |
| Restructuring charges          |       |                   | 17         |                  |       | 4         |       |      | —     |   |   | 21 |   |
| Cash payments                  |       |                   | (7         | )                     |       | —    |       |      | —     |   |   | (7 | ) |
| Other non-cash reduction       |       |                   | —     |                  |       | (1        | )          |      | (1         | ) |   | (2 | ) |
| Balance, March  31,  2007 |       |                   | $          | 12                    |       |      | $          | 4         |       |   | $ | 1 |   |   | $ | 17 |   |
|                                |            |                        |            |                       |            |           |            |           |            |  |  |  |  |  |  |  |  |

 

10

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The restructuring chargesincluded within “Other non-cash reduction” in the table above include assetimpairments and consulting fees. Approximately $18 million, $1 million and $1million  of the restructuring costs havebeen recorded within the Galileo, Orbitz Worldwide and GTA segments,respectively, and approximately $1 million is recorded within Corporate andunallocated. The Company expects to incur additional restructuring chargesduring 2007, primarily within the Galileo segment.

**5.**                 IntangibleAssets

Intangibleassets consisted of: 

| ** **                           | ** ** | **As of March 31, 2007** | ** ** | **As of December 31, 2006** | ** ** |
|--------------------------------------|------------|----------------------------------------------|------------|-------------------------------------------------|------------|
| ** **                           | ** ** | **Gross  Carrying  Amount**                  | ** ** | **Accumulated  Amortization**                   | ** ** | **Net  Carrying  Amount** | ** ** | **Gross  Carrying  Amount** | ** ** | **Accumulated  Amortization** | ** ** | **Net  Carrying  Amount** | ** ** |
| *Non-Amortizable  Intangible Assets* |       |                                         |       |                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                             |       |                                         | $          | 2,174                                           |       |   |   |   |   |   |   |   | $ | 2,165 |   |   |   |   |   |   |   |
| Trademarks and  tradenames           |       |                                         | $          | 710                                             |       |   |   |   |   |   |   |   | $ | 707 |   |   |   |   |   |   |   |
| *Amortizable  Intangible Assets*     |       |                                         |       |                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer  relationships              |       |                                         | $          | 1,618                                           |       |   | $ | 76 |   |   | $ | 1,542 |   |   | $ | 1,608 |   |   | $ | 44 |   |   | $ | 1,564 |   |
| Vendor  relationships and other      |       |                                         | 52         |                                            |       | 1 |   |   | 51 |   |   | 71 |   |   | 1 |   |   | 70 |   |
|                                 |       |                                         | $          | 1,670                                           |       |   | $ | 77 |   |   | $ | 1,593 |   |   | $ | 1,679 |   |   | $ | 45 |   |   | $ | 1,634 |   |

 

Thechanges in the carrying amount of goodwill for the Company between December 31,2006 and March 31, 2007 are as follows:

| ** **       | ** ** | **Balance at  December 31,  2006** | ** ** | **Goodwill  Acquired** | ** ** | **Adjustments  to Goodwill  Acquired  in 2006** | ** ** | **Foreign  Exchange** | ** ** | **Balance  March 31,  2007** | ** ** |
|------------------|------------|----------------------------------------------|------------|------------------------|------------|-----------------------------------------------------------|------------|-----------------------|------------|-----------------------------------|------------|
| Orbitz Worldwide |       |                                         | $          | 1,242                  |       |                                                      | $          | —                |       |                              | $          | (24 | ) |   | $ | — |   |   | $ | 1,218 |   |
| GTA              |       |                                         | 741        |                   |       | —                                                    |       |                  | 7          |                              |       | 8 |   |   | 756 |   |
| Galileo          |       |                                         | 182        |                   |       | —                                                    |       |                  | 18         |                              |       | — |   |   | 200 |   |
|             |       |                                         | $          | 2,165                  |       |                                                      | $          | —                |       |                              | $          | 1 |   |   | $ | 8 |   |   | 2,174 |   |
|                  |            |                                              |            |                        |            |                                                           |            |                       |            |                                   |            |  |  |  |  |  |  |  |  |  |  |

 

Amortization expense relatingto all intangible assets was as follows:

| ** **                      | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------|------------|--------------------------------------------------|------------|
| ** **                      | ** ** | ** **                                       | ** ** | ** ** | ** ** | **Predecessor** | ** ** |
| ** **                      | ** ** | **2007**                                         | ** ** | ** ** | ** ** | **2006** | ** ** |
| Customer  relationships         |       | $                                                | 32         |   |   |   |   | $ | 11 |   |
| Vendor  relationships and other |       | —                                           |       |   |   |   | 1 |   |
| Total                           |       | $                                                | 32         |   |   |   |   | $ | 12 |   |

 

The Company expects amortization expense relating tointangible assets to be approximately $91 million for the remainder of2007 and $123 million, $123 million, $122 million, $120 millionand $103 million for each of the five succeeding fiscal years.

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**6.**                 Long-Term Debt

Long-termdebt consisted of:

| ** **                              | ** ** | **Maturity**        | ** ** | **As of  March  31,  2007** | ** ** | **As of  December 31,  2006** | ** ** |
|-----------------------------------------|------------|---------------------|------------|--------------------------------------------|------------|-----------------------------------------|------------|
| **Senior Secured Credit  Facilities**   |       |                |       |                                       |       |                                    |       |   |   |
| Term loan facility                      |       |                |       |                                       |       |                                    |       |   |   |
| Dollar-denominated                      |       | August 2013    |       |                                       | $          | 1,403                                   |       |   | $ | 1,407 |   |
| Euro-denominated                        |       | August 2013    |       |                                       | 824        |                                    |       | 816 |   |
| **Senior notes**                        |       |                |       |                                       |       |                                    |       |   |   |
| Dollar-denominated  floating rate notes |       | September 2014 |       |                                       | 150        |                                    |       | 150 |   |
| Euro-denominated  floating rate notes   |       | September 2014 |       |                                       | 314        |                                    |       | 310 |   |
| 97¤8%  notes                       |       | September 2014 |       |                                       | 450        |                                    |       | 450 |   |
| **Senior subordinated notes**           |       |                |       |                                       |       |                                    |       |   |   |
| 117¤8%  Dollar-denominated notes   |       | September 2016 |       |                                       | 300        |                                    |       | 300 |   |
| 107¤8%  Euro-denominated notes     |       | September 2016 |       |                                       | 214        |                                    |       | 211 |   |
| Other                                   |       |                |       |                                       | 2          |                                    |       | 3 |   |
| Total long-term debt                    |       |                |       |                                       | 3,657      |                                    |       | 3,647 |   |
| Less: Current portion                   |       |                |       |                                       | 24         |                                    |       | 24 |   |
| **Long-term debt**                      |       |                |       |                                       | $          | 3,633                                   |       |   | $ | 3,623 |   |

 

During the three monthsended March 31, 2007, the Company repaid approximately $6 million of debtunder our senior secured credit facility as required under our senior securedcredit agreement. In addition, the Euro-denominated facility and notesincreased by approximately $16 million as a result of foreign exchangefluctuations, which are fully offset with foreign exchange hedge instrumentscontracted by the Company. The unrealized impacts of the hedge instruments arerecorded within other current assets and liabilities on the ConsolidatedCondensed Balance Sheet.

**7.**                 Commitments andContingencies

***Company Litigation***

The Company is involved invarious claims, legal proceedings and governmental inquiries related tocontract disputes, business practices, intellectual property and othercommercial, employment and tax matters. The Company believes that it hasadequately accrued for such matters as appropriate or, for matters notrequiring accrual, believes that they will not have a material adverse effecton its results of operations, financial position or cash flows based oninformation currently available. However, litigation is inherentlyunpredictable and, although the Company believes that its accruals are adequateand/or that it has valid defenses in these matters, unfavorable resolutionscould occur, which could have a material adverse effect on the Company’sresults of operations or cash flows in a particular reporting period.  There are no new significant claims, legalproceedings or inquiries from those previously reported by the Company in its2006 Financial Statements included in its Registration Statement on Form S-4filed with the Securities and Exchange Commission on March 30, 2007, asamended.

**Guarantees/Indemnifications**

***Standard Guarantees/Indemnifications***

In the ordinary course ofbusiness, the Company enters into numerous agreements that contain standardguarantees and indemnities whereby the Company indemnifies another party forbreaches of representations and warranties. In addition, many of these partiesare also indemnified against any third party claim resulting from thetransaction that is contemplated in the underlying agreement. Such 

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guaranteesor indemnifications are granted under various agreements, including thosegoverning (i) purchases, sales or outsourcing of assets or businesses, (ii) leasesof real estate, (iii) licensing of trademarks, (iv) use ofderivatives and (v) issuances of debt securities. The guarantees orindemnifications issued are for the benefit of the (i) buyers in saleagreements and sellers in purchase agreements, (ii) landlords in leasecontracts, (iii) financial institutions in derivative contracts and (iv) underwritersin debt security issuances. While some of these guarantees extend only for theduration of the underlying agreement, many survive the expiration of the termof the agreement or extend into perpetuity (unless subject to a legal statuteof limitations). There are no specific limitations on the maximum potentialamount of future payments that the Company could be required to make underthese guarantees, nor is the Company able to develop an estimate of the maximumpotential amount of future payments to be made under these guarantees as thetriggering events are not subject to predictability and there is little or nohistory of claims against the Company under such arrangements. With respect tocertain of the aforementioned guarantees, such as indemnifications of landlordsagainst third party claims for the use of real estate property leased by theCompany, the Company maintains insurance coverage that mitigates any potentialpayments to be made.

***ContractualObligations to Indemnify Avis Budget for Certain Taxes Relating to theSeparation from Avis Budget***

The Company’s separationfrom Avis Budget involved a restructuring of the Travelport business wherebycertain former foreign subsidiaries were separated independent of the Company’sseparation from Avis Budget. It is possible that the independent separation ofthese foreign subsidiaries could give rise to an increased tax liability forAvis Budget that would not have existed had these foreign subsidiaries beenseparated with the Company. In order to induce Avis Budget to approve theseparation structure, the Company agreed to indemnify Avis Budget for anyincrease in Avis Budget’s tax liability resulting from the structure. TheCompany is not able to predict the amount of such tax liability, if any. To theextent that the Company’s obligation to indemnify Avis Budget subjects theCompany to additional costs, such costs would be treated as adjustment to thepurchase price, increasing tax-deductible goodwill, and could significantly andnegatively affect the Company’s financial condition.

**8.      Equity-BasedCompensation**

The Company introduced anequity-based long term incentive program in 2006 for the purpose of retainingcertain key employees. Under this program, key employees were grantedrestricted equity units in the Company and interests in the partnership thatowns 100% of the Company. The Company’s board of directors approved the grantof up to 100 million restricted equity units. The equity awards issued consistof four classes of partnership interests. The Class A-2 equity unitsvest at a pro-rata rate of 6.25% on a quarterly basis and become fully vestedin May 2010. The Class B partnership interests vest annually over afour-year period beginning in August 2007. The Class C and Dpartnership interests vest upon the occurrence of a liquidity event and subjectto certain other performance criteria. None of the awards require the paymentof an exercise price by the recipient.

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Theactivity of the Company’s equity award program is presented below:

| ** **                      | ** ** | **Restricted Equity Units** | ** ** | **Partnership Interests**                          | ** ** |
|---------------------------------|------------|---------------------------------------|------------|---------------------------------------------------------|------------|
| ** **                      | ** ** | **Class A-2**                    | ** ** | **Class B**                                        | ** ** | **Class C** | ** ** | **Class D** | ** ** |
| ** **                      | ** ** | **Number of  Shares**            | ** ** | **Weighted  Average  Grant Date  Fair Value** | ** ** | **Number of  Shares** | ** ** | **Weighted  Average  Grant Date  Fair Value** | ** ** | **Number of  Shares** | ** ** | **Weighted  Average  Grant Date  Fair Value** | ** ** | **Number of  Shares** | ** ** | **Weighted  Average  Grant Date  Fair Value** | ** ** |
| Balance at January 1, 2007 |       | 36,372,213                            |       |                                                    | $          | 1.00 |   | 11,278,539 |   |   | $ | 0.49 |   | 11,278,539 |   |   | $ | 0.43 |   | 11,278,539 |   |   | $ | 0.38 |   |
| Granted at fair market value    |       | —                                |       |                                                    | —     |   | — |   |   | — |   | — |   |   | — |   | — |   |   | — |   |
| Exercised                       |       | —                                |       |                                                    | —     |   | — |   |   | — |   | — |   |   | — |   | — |   |   | — |   |
| Forfeited                       |       | (1,177,025                            | )          |                                                    | —     |   | (228,311 | ) |   | — |   | (228,311 | ) |   | — |   | (228,311 | ) |   | — |   |
| Balance at  March 31, 2007 |       | 35,195,188                            |       |                                                    | $          | 1.00 |   | 11,050,048 |   |   | $ | 0.49 |   | 11,050,048 |   |   | $ | 0.43 |   | 11,050,048 |   |   | $ | 0.38 |   |

 

As of March 31, 2007,6.2 million Class A-2 restricted equity units  were vested, and no partnership interestswere vested. The Company expensed the restricted equity units and the Class Bpartnership interests over their vesting period based upon the fair value ofthe awards on the date of grant. During the three months ended March 31,2007, the Company recognized $3 million in compensation expense related to therestricted equity units and the Class B Partnership interests, none ofwhich is expect to provide a tax benefit. The Company did not record anycompensation expense for the Class C and Class D partnershipinterests as it was determined that it is not probable that these awards willvest due to the contingent performance criteria.

**9.**                 SegmentInformation

On an overall basis, management evaluates theperformance of the Company based upon net revenue and “EBITDA”, which isdefined as net income before interest, income taxes, depreciation andamortization, each of which is presented on the Company’s Statements ofOperations.

The reportable segments presented below represent theCompany’s operating segments for which separate financial information isavailable and which is utilized on a regular basis by its management to assessfinancial performance and to allocate resources. Certain expenses which are managed outside ofthe segments are excluded from the results of the segments and are includedwithin Corporate and other. Although not presented herein, the Companyalso evaluates the performance of its segments based on EBITDA adjusted toexclude; the impact of deferred revenue written off due to purchase accountingon the acquisition of Travelport by an affiliate of The Blackstone Group,impairment of intangibles assets, expenses incurred in conjunction with Travelport’sseparation from Cendant, expenses incurred to acquire and integrateTravelport’s portfolio of businesses, costs associated with Travelport’srestructuring efforts and development of a global on-line travel platform,non-cash equity-based compensation, and other adjustments made to excludeexpenses management views as outside the normal course of operations

14

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TheCompany’s presentation of EBITDA may not be comparable to similarly-titledmeasures used by other companies.

| ** **                        | ** ** | ** **                                             | ** ** | ** ** | ** ** | **Predecessor**                                        | ** ** |
|-----------------------------------|------------|--------------------------------------------------------|------------|------------|------------|--------------------------------------------------------|------------|
| ** **                        | ** ** | **Three Months  Ended March 31,  2007** | ** ** | ** ** | ** ** | **Three Months  Ended March 31,  2006** | ** ** |
| **Galileo**                       |       |                                                   |       |       |       |                                                   |       |   |   |
| Net revenue                       |       |                                                   | $          | 414        |       |                                                   |       |   | $ | 403 |   |
| Segment EBITDA                    |       |                                                   | 117        |       |       |                                                   |       | 132 |   |
| **Orbitz  Worldwide**             |       |                                                   |       |       |       |                                                   |       |   |   |
| Net revenue                       |       |                                                   | 207        |       |       |                                                   |       | 185 |   |
| Segment EBITDA                    |       |                                                   | 17         |       |       |                                                   |       | 15 |   |
| **GTA**                           |       |                                                   |       |       |       |                                                   |       |   |   |
| Net revenue                       |       |                                                   | 64         |       |       |                                                   |       | 62 |   |
| Segment EBITDA                    |       |                                                   | —     |       |       |                                                   |       | (8 | ) |
| **Corporate  and other**          |       |                                                   |       |       |       |                                                   |       |   |   |
| EBITDA(a)                         |       |                                                   | (35        | )          |       |                                                   |       | (32 | ) |
| **Intersegment  eliminations(b)** |       |                                                   |       |       |       |                                                   |       |   |   |
| Net revenue                       |       |                                                   | (17        | )          |       |                                                   |       | (14 | ) |
| **Combined  Totals**              |       |                                                   |       |       |       |                                                   |       |   |   |
| Revenue                           |       |                                                   | $          | 668        |       |                                                   |       |   | $ | 636 |   |
| EBITDA                            |       |                                                   | $          | 99         |       |                                                   |       |   | $ | 107 |   |

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(a)           Other includes corporategeneral and administrative costs not allocated to the segments.

(b)          Consists primarily ofeliminations related to the inducements paid by Galileo to Orbitz Worldwide.

Providedbelow is a reconciliation of EBITDA to income before income taxes: 

| ** **                             | ** ** | ** **                                             | ** ** | ** ** | ** ** | **Predecessor**                                        | ** ** |
|----------------------------------------|------------|--------------------------------------------------------|------------|------------|------------|--------------------------------------------------------|------------|
| ** **                             | ** ** | **Three Months  Ended March 31,  2007** | ** ** | ** ** | ** ** | **Three Months  Ended March 31,  2006** | ** ** |
| **EBITDA**                             |       |                                                   | $          | 99         |       |                                                   |       |   | $ | 107 |   |
| Interest Expense,  Net                 |       |                                                   | (86        | )          |       |                                                   |       | (12 | ) |
| Depreciation and  Amortization         |       |                                                   | (55        | )          |       |                                                   |       | (49 | ) |
| **Income (Loss) Before Income  Taxes** | ** ** | ** **                                             | **$**      | **(42**    | **)**      | ** **                                             | ** ** | ** ** | **$** | **46** |   |

 

Providedbelow is a reconciliation of segment assets to total assets:

| ** **          | ** ** | **March 31,  2007** | ** ** | ** ** | ** ** | **December 31,  2006** | ** ** |
|---------------------|------------|--------------------------|------------|------------|------------|-----------------------------|------------|
| Galileo             |       |                     | $          | 1,870      |       |                        |       |   | $ | 1,824 |   |
| Orbitz Worldwide    |       |                     | 2,058      |       |       |                        |       | 2,053 |   |
| GTA                 |       |                     | 1,986      |       |       |                        |       | 1,935 |   |
| Corporate and other |       |                     | 269        |       |       |                        |       | 318 |   |
| Total               |       |                     | $          | 6,183      |       |                        |       |   | $ | 6,130 |   |

 

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**10.**          Guarantorand Non-Guarantor Condensed Financial Statements

The following condensed financial information presentsthe Company’s Consolidated Condensed Balance Sheet as of March 31, 2007and December 31, 2006 and the Consolidated Condensed Statements ofOperations and Statements of Cash Flows for the three months endedMarch 31, 2007 for: (a) Travelport Limited (‘‘the ParentGuarantor’’); (b) Waltonville Limited, which is currently in dissolution,and TDS Investor (Luxembourg) s.a.r.l (“the Intermediate Parent Guarantor”),(c) Travelport LLC (formerly known as Travelport Inc.) (“the Issuer”),(d) the guarantor subsidiaries; (e) the non-guarantor subsidiaries;(f) elimination and adjusting entries necessary to combine the Parent,Intermediate Parent Guarantor with the guarantor and non-guarantorsubsidiaries; and (e) the Company and Predecessor on a Consolidated andCombined basis, respectively.

**TRAVELPORT LIMITEDCONSOLIDATING CONDENSED STATEMENT OF OPERATIONSFor the Three Months Ended March 31, 2007**

| ** **                            | ** ** | **Parent  Guarantor** | ** ** | **Intermediate  Parent  Guarantor** | ** ** | **Issuer** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Travelport  Consolidated** | ** ** |
|---------------------------------------|------------|-----------------------|------------|-------------------------------------|------------|------------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|------------------------------|------------|
| **Net revenue**                       |       |                  | $          | —                              |       |       | $          | —                      |       |                            | $          | —           |       |                         | $          | 320 |   |   | $ | 363 |   |   | $ | (15 | ) |   | $ | 668 |   |
| **Cost and expenses**                 |       |                  |       |                                |       |       |       |                        |       |                            |       |             |       |                         |       |   |   |   |   |   |   |   |
| Cost of revenue                       |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 107              |       |                         | 171        |   |   | 2 |   |   | 280 |   |
| Selling, general  and administrative  |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 101              |       |                         | 181        |   |   | (17 | ) |   | 265 |   |
| Separation and  restructuring charges |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 23               |       |                         | —     |   |   | — |   |   | 23 |   |
| Depreciation and  amortization        |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 35               |       |                         | 20         |   |   | — |   |   | 55 |   |
| Other income                          |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 1                |       |                         | —     |   |   | — |   |   | 1 |   |
| Total operating expenses              |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 267              |       |                         | 372        |   |   | (15 | ) |   | 624 |   |
| **Operating  Income**                 |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 53               |       |                         | (9         | ) |   | — |   |   | 44 |   |
| Interest expense                      |       |                  | —     |                                |       | —     |       |                        | (83        | )                               |       | (5               | )          |                         | 2          |   |   | — |   |   | (86 | ) |
| Equity in earnings  of subsidiaries   |       |                  | (39        | )                                   |       | (36        | )          |                        | 47         |                            |       | —           |       |                         | —     |   |   | 28 |   |   | — |   |
| **Income(loss) before income  taxes** |       |                  | (39        | )                                   |       | (36        | )          |                        | (36        | )                               |       | 48               |       |                         | (7         | ) |   | 28 |   |   | (42 | ) |
| Provision (benefit) for  income       |       |                  | —     |                                |       | —     |       |                        | —     |                            |       | 1                |       |                         | (4         | ) |   | — |   |   | (3 | ) |
| **Net income (loss)**                 | ** ** | ** **            | **$**      | **(39**                             | **)**      | ** ** | **$**      | **(36**                     | **)**      | ** **                      | **$**      | **(36**          | **)**      | ** **                   | **47**     |   | ** ** | **(3** | **)** | ** ** | **$** | **28** |   | ** ** | **$** | **(39** | **)** |
|                                       |            |                       |            |                                     |            |            |            |                             |            |                                 |            |                  |            |                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**TRAVELPORT LIMITEDCONSOLIDATING CONDENSED BALANCE SHEETAs of March 31, 2007**

| ** **                                     | ** ** | **Parent  Guarantor** | ** ** | **Intermediate  Parent  Guarantor** | ** ** | **Issuer** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Travelport  Consolidated** | ** ** |
|------------------------------------------------|------------|-----------------------|------------|-------------------------------------|------------|------------|------------|-----------------------------|------------|---------------------------------|------------|------------------|------------|------------------------------|------------|
| **Assets**                                     | ** ** |                  | ** ** |                                |       | ** ** |       | ** **                  | ** ** |                            | ** ** |             |       | ** **                   |       |   | ** ** |   |   | ** ** |   |
| Current assets:                                |       |                  |       |                                |       |       |       |                        |       |                            |       |             |       |                         |       |   |   |   |   |   |   |
| Cash and cash equivalents                      |       |                  | $          | —                              |       |       | $          | —                      |       | $                               | —     |             |       | $                            | 47         |   |   | $ | 174 |   |   | $ | — |   |   | $ | 221 |   |
| Accounts receivable                            |       |                  | —     |                                |       | —     |       | —                      |       |                            | 82         |             |       | 354                          |       |   | — |   |   | 436 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                            | (1         | )                |       | 9                            |       |   | — |   |   | 8 |   |
| Other current assets                           |       |                  | 5          |                                |       | —     |       | 33                          |       |                            | 27         |             |       | 71                           |       |   | — |   |   | 136 |   |
| Assets held for sale                           |       |                  | —     |                                |       | —     |       | —                      |       |                            | —     |             |       | 43                           |       |   |   |   |   | 43 |   |
| Total current assets                           |       |                  | 5          |                                |       | —     |       | 33                          |       |                            | 155        |             |       | 651                          |       |   | — |   |   | 844 |   |
| Investment in subsidiary/intercompany          |       |                  | 607        |                                |       | (1,278     | )          | 2,288                       |       |                            | —     |             |       | —                       |       |   | (1,617 | ) |   | — |   |
| Property and equipment, net                    |       |                  | —     |                                |       | —     |       | —                      |       |                            | 367        |             |       | 113                          |       |   | — |   |   | 480 |   |
| Goodwill                                       |       |                  | —     |                                |       | —     |       | —                      |       |                            | 1,006      |             |       | 1,168                        |       |   | — |   |   | 2,174 |   |
| Trademarks and tradenames                      |       |                  | —     |                                |       | —     |       | —                      |       |                            | 528        |             |       | 182                          |       |   | — |   |   | 710 |   |
| Other intangible assets, net                   |       |                  | —     |                                |       | —     |       | —                      |       |                            | 907        |             |       | 686                          |       |   | — |   |   | 1,593 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                            | (29        | )                |       | 38                           |       |   | — |   |   | 9 |   |
| Other non-current assets                       |       |                  | 140        |                                |       | —     |       | 69                          |       |                            | 115        |             |       | 49                           |       |   | — |   |   | 373 |   |
| **Total assets**                               | ** ** |                  | **$**      | **752**                             |       |       | **$**      | **(1,278**                  | )          | **$**                           | **2,390**  | ** **       |       | **$**                        | **3,049**  |   |   | **$** | **2,887** |   |   | **$** | **(1,617** | ) |   | **$** | **6,183** |   |
| **Liabilities  and equity**                    | ** ** |                  | ** ** |                                |       | ** ** |       | ** **                  | ** ** |                            | ** ** |             |       | ** **                   |       |   | ** ** |   |   | ** ** |   |
| Current liabilities:                           |       |                  |       |                                |       |       |       |                        |       |                            |       |             |       |                         |       |   |   |   |   |   |   |
| Accounts payable                               |       |                  | $          | —                              |       |       | $          | —                      |       | $                               | —     |             |       | $                            | 92         |   |   | $ | 244 |   |   | $ | — |   |   | $ | 336 |   |
| Accrued expenses and other current liabilities |       |                  | —     |                                |       | —     |       | 14                          |       |                            | 418        |             |       | 471                          |       |   | — |   |   | 903 |   |
| Current portion of long-term debt              |       |                  | —     |                                |       | —     |       | 22                          |       |                            | 2          |             |       | —                       |       |   | — |   |   | 24 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                            | 3          |             |       | 9                            |       |   | — |   |   | 12 |   |
| Total current liabilities                      |       |                  | —     |                                |       | —     |       | 36                          |       |                            | 515        |             |       | 724                          |       |   | — |   |   | 1,275 |   |
| Long-term debt                                 |       |                  | —     |                                |       | —     |       | 3,632                       |       |                            | 1          |             |       | —                       |       |   | — |   |   | 3,633 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                            | 1          |             |       | 250                          |       |   | — |   |   | 251 |   |
| Tax sharing liability                          |       |                  | —     |                                |       | —     |       | —                      |       |                            | 128        |             |       | —                       |       |   | — |   |   | 128 |   |
| Other non-current liabilities                  |       |                  | —     |                                |       | —     |       | —                      |       |                            | 116        |             |       | 28                           |       |   | — |   |   | 144 |   |
| **Total liabilities**                          |       |                  | —     |                                |       | —     |       | 3,668                       |       |                            | 761        |             |       | 1,002                        |       |   | — |   |   | 5,431 |   |
| Total equity/intercompany                      |       |                  | 752        |                                |       | (1,278     | )          | (1,278                      | )          |                            | 2,288      |             |       | 1,885                        |       |   | (1,617 | ) |   | 752 |   |
| **Total  liabilities and equity**              | ** ** |                  | **$**      | **752**                             |       |       | **$**      | **(1,278**                  | )          | **$**                           | **2,390**  | ** **       |       | **$**                        | **3,049**  |   |   | **$** | **2,887** |   |   | **$** | **(1,617** | ) |   | **$** | **6,183** |   |

 

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**TRAVELPORT LIMITEDCONSOLIDATING CONDENSED BALANCE SHEETAs of December 31, 2006**

| ** **                                     | ** ** | **Parent  Guarantor** | ** ** | **Intermediate  Parent  Guarantor** | ** ** | **Issuer** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Travelport  Consolidated** | ** ** |
|------------------------------------------------|------------|-----------------------|------------|-------------------------------------|------------|------------|------------|-----------------------------|------------|-----------------------------------|------------|------------------|------------|------------------------------|------------|
| **Assets**                                     | ** ** |                  | ** ** |                                |       | ** ** |       | ** **                  | ** ** |                              | ** ** |             |       | ** **                   |       |   | ** ** |   |   | ** ** |   |
| Current assets:                                |       |                  |       |                                |       |       |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |   |
| Cash and cash equivalents                      |       |                  | $          | —                              |       |       | $          | —                      |       | $                                 | —     |             |       | $                            | 19         |   |   | $ | 78 |   |   | $ | — |   |   | $ | 97 |   |
| Accounts receivable                            |       |                  | —     |                                |       | —     |       | —                      |       |                              | 78         |             |       | 376                          |       |   | — |   |   | 454 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                              | (2         | )                |       | 8                            |       |   | — |   |   | 6 |   |
| Other current assets                           |       |                  | —     |                                |       | —     |       | 59                          |       |                              | 32         |             |       | 64                           |       |   | — |   |   | 155 |   |
| Assets held for sale                           |       |                  | —     |                                |       | —     |       | —                      |       |                              | —     |             |       | 42                           |       |   |   |   |   | 42 |   |
| Total current assets                           |       |                  | —     |                                |       | —     |       | 59                          |       |                              | 127        |             |       | 568                          |       |   | — |   |   | 754 |   |
| Investment in subsidiary/intercompany          |       |                  | 775        |                                |       | (1,214     | )          | 2,327                       |       |                              | —     |             |       | —                       |       |   | (1,888 | ) |   | — |   |
| Property and equipment, net                    |       |                  | —     |                                |       | —     |       | —                      |       |                              | 361        |             |       | 113                          |       |   | — |   |   | 474 |   |
| Goodwill                                       |       |                  | —     |                                |       | —     |       | —                      |       |                              | 953        |             |       | 1,212                        |       |   | — |   |   | 2,165 |   |
| Trademarks and tradenames                      |       |                  | —     |                                |       | —     |       | —                      |       |                              | 538        |             |       | 169                          |       |   | — |   |   | 707 |   |
| Other intangible assets, net                   |       |                  | —     |                                |       | —     |       | —                      |       |                              | 954        |             |       | 680                          |       |   | — |   |   | 1,634 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                              | (27        | )                |       | 39                           |       |   | — |   |   | 12 |   |
| Other non-current assets                       |       |                  | —     |                                |       | —     |       | 125                         |       |                              | 121        |             |       | 138                          |       |   | — |   |   | 384 |   |
| **Total assets**                               | ** ** |                  | **$**      | **775**                             |       |       | **$**      | **(1,214**                  | )          | **$**                             | **2,511**  | ** **       |       | **$**                        | **3,027**  |   |   | **$** | **2,919** |   |   | **$** | **(1,888** | ) |   | **$** | **6,130** |   |
| **Liabilities and equity**                     | ** ** |                  | ** ** |                                |       | ** ** |       | ** **                  | ** ** |                              | ** ** |             |       | ** **                   |       |   | ** ** |   |   | ** ** |   |
| Current liabilities:                           |       |                  |       |                                |       |       |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |   |
| Accounts payable                               |       |                  | $          | —                              |       |       | —     |                        | —     |                              |       | 71               |       |                         | 237        |   |   | — |   |   | $ | 308 |   |
| Accrued expenses and other current liabilities |       |                  | —     |                                |       | —     |       | 55                          |       |                              | 361        |             |       | 405                          |       |   | — |   |   | 821 |   |
| Current portion of long-termdebt               |       |                  | —     |                                |       | —     |       | 22                          |       |                              | 1          |             |       | 1                            |       |   | — |   |   | 24 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                              | 5          |             |       | 8                            |       |   | — |   |   | 13 |   |
| Total current liabilities                      |       |                  | —     |                                |       | —     |       | 77                          |       |                              | 438        |             |       | 651                          |       |   | — |   |   | 1,166 |   |
| Long-term debt                                 |       |                  | —     |                                |       | —     |       | 3,622                       |       |                              | 1          |             |       | —                       |       |   | — |   |   | 3,623 |   |
| Deferred income taxes                          |       |                  | —     |                                |       | —     |       | —                      |       |                              | —     |             |       | 247                          |       |   | — |   |   | 247 |   |
| Tax sharing liability                          |       |                  | —     |                                |       | —     |       | —                      |       |                              | 125        |             |       | —                       |       |   | — |   |   | 125 |   |
| Other non-current liabilities                  |       |                  | —     |                                |       | —     |       | 26                          |       |                              | 136        |             |       | 32                           |       |   | — |   |   | 194 |   |
| **Total liabilities**                          |       |                  | —     |                                |       | —     |       | 3,725                       |       |                              | 700        |             |       | 930                          |       |   | — |   |   | 5,355 |   |
| Total equity/intercompany                      |       |                  | 775        |                                |       | (1,214     | )          | (1,214                      | )          |                              | 2,327      |             |       | 1,989                        |       |   | (1,888 | ) |   | 775 |   |
| **Total  liabilities and equity**              | ** ** |                  | **$**      | **775**                             |       |       | **$**      | **(1,214**                  | )          | **$**                             | **2,511**  | ** **       |       | **$**                        | **3,027**  |   |   | **$** | **2,919** |   |   | **$** | **(1,888** | ) |   | **$** | **6,130** |   |

 

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**TRAVELPORT LIMITEDCONSOLIDATING CASH FLOWSFor the Three Months Ended March 31, 2007**

| ** **                                                                         | ** ** | **Parent  Guarantor** | ** ** | **Intermediate  Parent   Guarantor** | ** ** | **Issuer** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Travelport  Consolidated** | ** ** |
|------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------------------------|------------|------------|------------|-----------------------------|------------|-----------------------------------|------------|------------------|------------|------------------------------|------------|
| **Operating activities**                                                           |       |                  |       |                                      |       |       |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |   |   |
| Net income (loss)                                                                  |       |                  | $          | (39                                       | )          |       | $          | (36                         | )          |                              | $          | (36              | )          |                         | $          | 47 |   |   | $ | (3 | ) |   | $ | 28 |   |   | $ | (39 | ) |
| Adjustments to reconcile net income to net cash  provided by operating activities: |       |                  |       |                                      |       |       |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |   |   |
| Depreciation and  amortization                                                     |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 35               |       |                         | 20         |   |   | — |   |   | 55 |   |
| Deferred income  taxes                                                             |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 1                |       |                         | —     |   |   | — |   |   | 1 |   |
| Provision for bad  debts                                                           |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | —           |       |                         | 3          |   |   | — |   |   | 3 |   |
| Gain on sale of  property                                                          |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | —           |       |                         | 1          |   |   | — |   |   | 1 |   |
| Amortization of  debt issuance costs                                               |       |                  | —     |                                      |       | —     |       |                        | 5          |                              |       | —           |       |                         | —     |   |   | — |   |   | 5 |   |
| Unrealized losses  on derivative instruments                                       |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | —           |       |                         | —     |   |   | — |   |   | — |   |
| Non-cash charges  related to tax sharing liability                                 |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 3                |       |                         | —     |   |   | — |   |   | 3 |   |
| Equity based  compensation                                                         |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 3                |       |                         | —     |   |   | — |   |   | 3 |   |
| Changes in assets and liabilities, net of effects  from acquisitions and disposals |       |                  |       |                                      |       |       |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |   |   |
| Accounts  receivable                                                               |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | (4               | )          |                         | 24         |   |   | — |   |   | 20 |   |
|                                                                               |       |                  |       |                                      |       |       |       |                        |       |                              |       | (17              | )          |                         | 9          |   |   |   |   |   | (8 | ) |
| Accounts payable,  accrued expenses and other current liabilities                  |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | (14              | )          |                         | 124        |   |   | — |   |   | 110 |   |
| Investment in  subsidiaries                                                        |       |                  | 39         |                                      |       | 36         |       |                        | (47        | )                                 |       | —           |       |                         | —     |   |   | (28 | ) |   | — |   |
| Other                                                                              |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 8                |       |                         | 1          |   |   | — |   |   | 9 |   |
| **Net cash  provided by operating activities**                                     |       |                  | —     |                                      |       | —     |       | ** **                  | **(78**    | **)**                             | ** ** | **62**           |       | ** **                   | **179**    |   |   | — |   | ** ** | **163** | ** ** |
| **Investing activities**                                                           |       |                  |       |                                      |       |       |       |                        |       |                              |       |             |       |                         |       | ** ** |   |   |   |   |   |   |
| Property and equipment additions                                                   |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | (26              | )          |                         | (6         | ) |   | — |   |   | (32 | ) |
| Acquisition related payments                                                       |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | (7               | )          |                         | 2          |   |   | — |   |   | (5 | ) |
| Net intercompany  funding                                                          |       |                  | (2         | )                                         |       | —     |       |                        | 84         |                              |       | (1               | )          |                         | (81        | ) |   | — |   |   | — |   |
| Other                                                                              |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | —           |       |                         | 1          |   |   | — |   |   | 1 |   |
| **Net cash  used in investing activities**                                         | ** ** | ** **            | **(2**     | **)**                                     |       | —     |       | ** **                  | **84**     | ** **                        | ** ** | **(34**          | )          | ** **                   | **(84**    | **)** |   | — |   | ** ** | **(36** | **)** |
| **Financing activities**                                                           |       |                  |       |                                      |       |       |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |   |   |
| Principal payments on borrowings                                                   |       |                  | —     |                                      |       | —     |       |                        | (6         | )                                 |       | —           |       |                         | —     |   |   | — |   |   | (6 | ) |
| Issuance of common  stock                                                          |       |                  | 2          |                                      |       | —     |       |                        | —     |                              |       | —           |       |                         | —     |   |   | — |   |   | 2 |   |
| **Net cash  provided by (used in) financing activities**                           | ** ** | ** **            | **2**      |                                      |       | —     |       |                        | (6         | )                                 |       | —           |       |                         | —     |   |   | — |   | ** ** | **(4** | **)** |
| Effect of changes  in exchange rates on cash and cash equivalents                  |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | —           |       |                         | 1          |   |   | — |   |   | 1 |   |
| Net increase in  cash and cash equivalents                                         |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 28               |       |                         | 96         |   |   | — |   |   | 124 |   |
| Cash and cash equivalents  at beginning of year                                    |       |                  | —     |                                      |       | —     |       |                        | —     |                              |       | 19               |       |                         | 78         |   |   | — |   |   | 97 |   |
| **Cash and  cash equivalents at end of year**                                      | ** ** | ** **            | **$**      | **—**                                |       |       | $          | —                      |       |                              | $          | —           | ** ** | ** **                   | **$**      | **47** |   | ** ** | **$** | **174** |   |   | $ | — |   | ** ** | **$** | **221** | ** ** |

 

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The following CombiningCondensed Statements of Operations and Statements of Cash Flows are presentedas if the guarantor/non-guarantor subsidiary structure had been in place at thePredecessor for the three months ended March 31, 2006 for: (a) CendantTravel Distribution Service Group, Inc. (‘‘the Parent’’); (b) theguarantor subsidiaries; (c) the non-guarantor subsidiaries; (d) eliminationand adjusting entries necessary to combine the Parent with the guarantor andnon-guarantor subsidiaries; and (e) the Company on a combined basis. Thecondensed financial information of the Intermediate Parent Guarantor and theIssuer are not included for periods prior to August 22, 2006 as theseentities did not have any operations prior to this date.

**TRAVELPORT BUSINESSES OF AVIS BUDGET GROUP, INC.(PREDECESSOR)COMBINING CONDENSED STATEMENT OF OPERATIONSFor the Three Months Ended March 31, 2006**

| ** **                                          | ** ** | **Parent  Guarantor** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Travelport  Consolidated** | ** ** |
|-----------------------------------------------------|------------|-----------------------|------------|-----------------------------|------------|-----------------------------------|------------|------------------|------------|------------------------------|------------|
| **Net  revenue**                                    |       |                  | $          | —                      |       |                              | $          | 305              |       |                         | $          | 346 |   |   | $ | (15 | ) |   | $ | 636 |   |
| **Cost  and expenses**                              |       |                  |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |
| Cost of revenue                                     |       |                  | —     |                        |       | 128                               |       |             | 154        |                         |       | (4 | ) |   | 278 |   |
| Selling, general and administrative                 |       |                  | —     |                        |       | 107                               |       |             | 154        |                         |       | (11 | ) |   | 250 |   |
| Separation and restructuring  charges               |       |                  | —     |                        |       | 7                                 |       |             | —     |                         |       | — |   |   | 7 |   |
| Depreciation and amortization                       |       |                  | —     |                        |       | 28                                |       |             | 21         |                         |       | — |   |   | 49 |   |
| Other general income                                |       |                  | —     |                        |       | —                            |       |             | (6         | )                            |       | — |   |   | (6 | ) |
| Total operating  expenses                           |       |                  | —     |                        |       | 270                               |       |             | 323        |                         |       | (15 | ) |   | 578 |   |
| **Operating income**                                |       |                  | —     |                        |       | 35                                |       |             | 23         |                         |       | — |   |   | 58 |   |
| Interest expense, net                               |       |                  | —     |                        |       | (6                                | )          |             | (6         | )                            |       | — |   |   | (12 | ) |
| Equity in earnings of subsidiaries                  |       |                  | 47         |                        |       | —                            |       |             | —     |                         |       | (47 | ) |   | — |   |
| **Income  before income taxes**                     |       |                  | 47         |                        |       | 29                                |       |             | 17         |                         |       | (47 | ) |   | 46 |   |
| Provision  (benefit) for income taxes               |       |                  | —     |                        |       | 6                                 |       |             | (8         | )                            |       | — |   |   | (2 | ) |
| **Income from continuing operations, net of tax**   |       |                  | 47         |                        |       | 23                                |       |             | 25         |                         |       | (47 | ) |   | 48 |   |
| Loss from  discontinued operations, net of tax |       |                  | —     |                        |       | —                            |       |             | (1         | )                            |       | — |   |   | (1 | ) |
| **Net income**                                      | ** ** | ** **            | **$**      | **47**                      |       | ** **                        | **$**      | **23**           |       | ** **                   | **$**      | **24** |   | ** ** | **$** | **(47** | **)** | ** ** | **$** | **47** |   |

 

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**TRAVELPORT BUSINESSES OF AVIS BUDGET GROUP,INC. (PREDECESSOR)**

**COMBINING CONDENSED STATEMENTS OF CASH FLOWS**

**For theThree Months Ended March 31, 2006**

| ** **                                                                         | ** ** | **Parent  Guarantor** | ** ** | **Guarantor  Subsidiaries** | ** ** | **Non-  Guarantor  Subsidiaries** | ** ** | **Eliminations** | ** ** | **Travelport  Consolidated** | ** ** |
|------------------------------------------------------------------------------------|------------|-----------------------|------------|-----------------------------|------------|-----------------------------------|------------|------------------|------------|------------------------------|------------|
| **Operating activities of continuing operations**                                  | ** ** |                  | ** ** |                        |       | ** **                        |       |             | ** ** |                         |       | ** ** |   |   | ** ** |   |
| Net income                                                                         |       |                  | $          | 47                          |       |                              | $          | 23               |       |                         | $          | 24 |   |   | $ | (47 | ) |   | $ | 47 |   |
| Loss from discontinued  operations                                                 |       |                  | —     |                        |       | —                            |       |             | (1         | )                            |       | — |   |   | (1 | ) |
| Income from continuing  operations                                                 |       |                  | 47         |                        |       | 23                                |       |             | 25         |                         |       | (47 | ) |   | 48 |   |
| Adjustments to reconcile net income to net cash  provided by operating activities: |       |                  |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |
| Depreciation and  amortization                                                     |       |                  | —     |                        |       | 28                                |       |             | 21         |                         |       | — |   |   | 49 |   |
| Deferred income taxes                                                              |       |                  | —     |                        |       | 2                                 |       |             | (7         | )                            |       | — |   |   | (5 | ) |
| Provision for bad debts                                                            |       |                  | —     |                        |       | 1                                 |       |             | 2          |                         |       | — |   |   | 3 |   |
| Gain on sale of property                                                           |       |                  | —     |                        |       | (7                                | )          |             | —     |                         |       | — |   |   | (7 | ) |
| Non-cash charges related  to tax sharing liability                                 |       |                  | —     |                        |       | 3                                 |       |             | —     |                         |       | — |   |   | 3 |   |
| Changes in assets and liabilities, net of effects  from acquisitions and disposals |       |                  |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |
| Accounts receivable                                                                |       |                  | —     |                        |       | 62                                |       |             | (38        | )                            |       | — |   |   | 24 |   |
| Other current assets                                                               |       |                  | —     |                        |       | —                            |       |             | 3          |                         |       | — |   |   | 3 |   |
| Accounts payable, accrued  expenses and other current liabilities                  |       |                  | —     |                        |       | 40                                |       |             | 46         |                         |       | — |   |   | 86 |   |
| Investment in  subsidiaries                                                        |       |                  | (47        | )                           |       | —                            |       |             | —     |                         |       | 47 |   |   | — |   |
| Other                                                                              |       |                  | —     |                        |       | 39                                |       |             | (45        | )                            |       | — |   |   | (6 | ) |
| **Net cash provided by operating  activities of continuing operations**            | ** ** |                  | **—** |                        |       | **191**                           |       |             | **7**      |                         |       | **—** |   |   | **198** |   |
| **Investing activities of continuing operations**                                  | ** ** |                  | ** ** |                        |       | ** **                        |       |             | ** ** |                         |       | ** ** |   |   | ** ** |   |
| Property and equipment  additions                                                  |       |                  | —     |                        |       | (25                               | )          |             | (9         | )                            |       | — |   |   | (34 | ) |
| Net assets acquired, net  of cash acquired and acquisition-related payments        |       |                  | —     |                        |       | —                            |       |             | (21        | )                            |       | — |   |   | (21 | ) |
| Net intercompany funding  to Avis Budget                                           |       |                  | —     |                        |       | (165                              | )          |             | 129        |                         |       | — |   |   | (36 | ) |
| Proceeds from asset sales                                                          |       |                  | —     |                        |       | 10                                |       |             | —     |                         |       | — |   |   | 10 |   |
| (Increase) decrease in  restricted cash                                            |       |                  | —     |                        |       | —                            |       |             | 2          |                         |       | — |   |   | 2 |   |
| **Net cash used in investing  activities of continuing operations**                | ** ** |                  | **—** |                        |       | **(180**                          | )          |             | **101**    |                         |       | **—** |   |   | **(79** | ) |
| **Financing activities of continuing operations**                                  | ** ** |                  | ** ** |                        |       | ** **                        |       |             | ** ** |                         |       | ** ** |   |   | ** ** |   |
| Principal payments on  borrowings                                                  |       |                  | —     |                        |       | —                            |       |             | (1         | )                            |       | — |   |   | (1 | ) |
| **Net cash used in financing  activities of continuing operations**                | ** ** |                  | **—** |                        |       | **—**                        |       |             | **(1**     | )                            |       | **—** |   |   | **(1** | ) |
| Effect of changes in  exchange rates on cash and cash equivalents                  |       |                  | —     |                        |       | —                            |       |             | (1         | )                            |       | — |   |   | (1 | ) |
| Net increase in cash and  cash equivalents from continuing operations              |       |                  | —     |                        |       | 11                                |       |             | 106        |                         |       | — |   |   | 117 |   |
| Cash used in discontinued operations                                               |       |                  |       |                        |       |                              |       |             |       |                         |       |   |   |   |   |   |
| Investing activities                                                               |       |                  | —     |                        |       |                              |       |             | (1         | )                            |       | — |   |   | (1 | ) |
| Cash and cash equivalents  at   beginning of year                                  |       |                  | —     |                        |       | 13                                |       |             | 80         |                         |       | — |   |   | 93 |   |
| **Cash and cash equivalents at  end of period**                                    | ** ** |                  | **—** |                        |       | **24**                            |       |             | **185**    |                         |       | **—** |   |   | **209** |   |
| **Less cash of discontinued  operations**                                          | ** ** |                  | **—** |                        |       | **—**                        |       |             | **(4**     | )                            |       | **—** |   |   | **(4** | ) |
| **Cash and cash equivalents at  end of year**                                      | ** ** |                  | **$**      | **—**                  |       |                              | **$**      | **24**           |       |                         | **$**      | **181** |   |   | **$** | **—** |   |   | **$** | **205** |   |

 

**11. SubsequentEvent**

On May 7, 2007 the Company made a discretionary$100 million payment on its term loan facility.

 

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**Item 2.**                        Management’sDiscussion and Analysis of Financial Condition and Results of Operations

*The followingdiscussion should be read in conjunction with our Consolidated CondensedFinancial Statements and accompanying Notes thereto included elsewhere hereinand with our 2006 financial statements included in our Registration Statementon Form S-4 filed with the Securities and Exchange Commission on March 30,2007, as amended. Unless otherwise noted, all dollar amounts are in millions.*

On September 27, 2006, we announced that we willbe organized under three global businesses—Galileo, Orbitz Worldwide, and GTA—andwe reorganized effective January 1, 2007.

**Galileo**—Comprisedof the  electronic travel distributionservices of Galileo that connect travel suppliers to travel agencies, who inturn distribute travel and travel-related products and services to theircustomers. In addition, Galileo includes supplier services offerings, includingUnited Airlines reservations, Global Fares and Shepherd Systems.

**OrbitzWorldwide****—Comprised** of businesses thatoffer travel products and services directly to consumers, largely throughonline travel agencies, including Orbitz, CheapTickets, ebookers, FlairviewTravel, and our corporate travel business.

**GTA****—Comprised** of GulliversTravel Associates, a wholesaler of accommodation and destination services,TRUST International, which offers transaction processing solutions for travelsuppliers and other travel industry customers, Octopus Travel , which providestravel products and services largely to affiliate business partners, such asairlines, financial institutions and travel portals, and services directly toconsumers.

**RESULTS OFOPERATIONS**

The financial statements present our results for thethree months ended March 31, 2006 on a ‘‘predecessor basis’’ (reflectingTravelport’s ownership by Avis Budget). Though the Company was formed on July 13,2006, its operations were limited to entering into derivative transactionsrelated to the debt that was subsequently issued, until the acquisition of theTravelport businesses of Avis Budget on August 23, 2006.

For the purpose of this management’s discussion andanalysis of our results of operations, we have compared the results of theSuccessor for the periods in 2007 with that of the Predecessor in 2006. Theresults of the two periods are not necessarily comparable due to the change inbasis of accounting resulting from the Company’s acquisition of the Predecessorand the change in capital structure which primarily impacts depreciation andamortization and interest expense. The captions included within our statementsof operations that are materially impacted by the change in basis of accountinginclude net revenue, separation and restructuring charges, depreciation andamortization, and interest expense. We have disclosed the impact of the changein basis of accounting for each of these captions in the following discussionof our results of operations

EBITDA, a measure used by management to measureoperating performance, is defined as net income (loss), plus interest expense,net, provision (benefit) for income taxes, and depreciation and amortization.EBITDA is not a recognized term under GAAP and does not purport to be analternative to net income as a measure of operating performance or to cashflows from operating activities as a measure of liquidity. Additionally, EBITDAis not intended to be a measure of free cash flow available for management’sdiscretionary use, as it does not consider certain cash requirements such asinterest payments, tax payments and debt service requirements. Our presentationof EBITDA has limitations as an analytical tool, and you should not consider itin isolation or as a substitute for analysis of our results as reported underGAAP. Management believes EBITDA is helpful in highlighting trends becauseEBITDA excludes the results of decisions that are outside the control ofoperating management and can differ significantly from company to companydepending on long-term strategic decisions regarding capital 

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structure, the taxjurisdictions in which companies operate and capital investments. In addition,EBITDA provides more comparability between the historical results of theTravelport business of Avis Budget and results that reflect purchase accountingand the new capital structure. Management compensates for the limitations ofusing non-GAAP financial measures by using them to supplement GAAP results toprovide a more complete understanding of the factors and trends affecting thebusiness than GAAP results alone.

Because not all companiesuse identical calculations, our presentation of EBITDA may not be comparable toother similarly titled measures of other companies.

**Three Months Ended March 31, 2007 Compared toThree Months Ended March 31, 2006.**

| ** **                                   | ** ** | **Three Months Ended  March 31,** | ** ** | **Change**      | ** ** |
|----------------------------------------------|------------|--------------------------------------------------|------------|-----------------|------------|
| ** **                                   | ** ** | ** **                                       | ** ** | **Predecessor** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                   | ** ** | **2007**                                         | ** ** | **2006**        | ** ** | **$ ** | ** ** | **%** | ** ** |
| **Net  revenue**                             |       | $                                                | 668        |            |       | $ | 636 |   | $ | 32 |   | 5 | % |
| **Costs  and expenses**                      |       |                                             |       |            |       |   |   |   |   |   |
| Cost of revenue                              |       | 280                                              |       |            | 278        |   | 2 |   | 1 | % |
| Selling, general  and administrative         |       | 265                                              |       |            | 250        |   | 15 |   | 6 | % |
| Separation and  restructuring charges        |       | 23                                               |       |            | 7          |   | 16 |   | * |   |
| Depreciation and  amortization               |       | 55                                               |       |            | 49         |   | 6 |   | 12 | % |
| Other general  expenses (income)             |       | 1                                                |       |            | (6         | ) | 7 |   |   |   |
| Total operating expenses                     |       | 624                                              |       |            | 578        |   | 46 |   | * |   |
| **Operating income**                         |       | 44                                               |       |            | 58         |   | (14 | ) | * |   |
| Interest expense,  net                       |       | (86                                              | )          |            | (12        | ) | (74 | ) | * |   |
| Income (loss) before income taxes            |       | (42                                              | )          |            | 46         |   | (88 | ) | * |   |
| Provision  (benefit) for income taxes        |       | (3                                               | )          |            | (2         | ) | (1 | ) | * |   |
| Income (loss)  from continuing operations    |       | (39                                              | )          |            | 48         |   | (87 | ) | * |   |
| Loss from  discontinued operationsnet of tax |       | —                                           |       |            | (1         | ) | 1 |   |   |   |
| **Net income (loss)**                        |       | $                                                | (39        | )               |       | $ | 47 |   | $ | (86 | ) | * |   |

 

The reportable segments presented below represent ouroperating segments for which separate financial information is available andwhich is utilized on a regular basis our management to assess financialperformance and to allocate resources. Certain expenses which are managed outside of the segments are excludedfrom the results of the segments and are included within Corporate and other.Although not presented herein, we also evaluate the performance of oursegments based on EBITDA adjusted to exclude; the impact of deferred revenuewritten off due to purchase accounting on the acquisition of Travelport by anaffiliate of The Blackstone Group, impairment of intangibles assets, expensesincurred in conjunction with Travelport’s separation from Cendant, expensesincurred to acquire and integrate Travelport’s portfolio of businesses, costsassociated with Travelport’s restructuring efforts and development of a globalon-line travel platform, non-cash equity-based compensation, and otheradjustments made to exclude expenses management views as outside the normal courseof operations.

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Ourresults on a segment basis for the three months ended March 31, 2007 ascompared to the three months ended March 31, 2006 are as follows:

| ** **                     | ** ** | **Three Months Ended  March 31,** | ** ** | **Change**      | ** ** |
|--------------------------------|------------|--------------------------------------------------|------------|-----------------|------------|
| ** **                     | ** ** | ** **                                       | ** ** | **Predecessor** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                     | ** ** | **2007**                                         | ** ** | **2006**        | ** ** | **$** | ** ** | **%** | ** ** |
| **Galileo**                    | ** ** | ** **                                       | ** ** |            | ** ** | ** ** |   | ** ** | ** ** | ** ** | ** ** |
| Net revenue                    |       | $                                                | 414        | (a)             |       | $ | 403 |   |   | $ | 11 |   | 3 |   |
| Segment EBITDA                 |       | 117                                              | (b)        |            | 132        | (c) |   | (15 | ) | (11 | ) |
| Orbitz Worldwide               | ** ** | ** **                                       | ** ** |            | ** ** | ** ** |   | ** ** | ** ** | ** ** | ** ** |
| Net revenue                    |       | 207                                              | (d)        |            | 185        |   |   | 22 |   | 12 |   |
| Segment EBITDA                 |       | 17                                               | (e)        |            | 15         | (f) |   | 2 |   | 13 |   |
| **GTA**                        | ** ** | ** **                                       | ** ** |            | ** ** | ** ** |   | ** ** | ** ** | ** ** | ** ** |
| Net revenue                    |       | 64                                               | (g)        |            | 62         |   |   | 2 |   | 3 |   |
| Segment EBITDA                 |       | —                                           | (h)        |            | (8         | )(i) |   | 8 |   | (100 | ) |
| **Corporate and other****(l)** | ** ** | ** **                                       | ** ** |            | ** ** | ** ** |   | ** ** | ** ** | ** ** | ** ** |
| EBITDA                         |       | (35                                              | )(j)       |            | (32        | )(k) |   | (3 | ) | (9 | ) |
| **Intersegment Eliminations**  | ** ** | ** **                                       | ** ** |            | ** ** | ** ** |   | ** ** | ** ** | ** ** | ** ** |
| Net revenue                    |       | (17                                              | )          |            | (14        | ) |   | (3 | ) | 21 |   |
| **Combined Totals**            | ** ** | ** **                                       | ** ** |            | ** ** | ** ** |   | ** ** | ** ** | ** ** | ** ** |
| Net revenue                    |       | 668                                              |       |            | 636        |   |   | 32 |   | 5 |   |
| EBITDA                         |       | 99                                               |       |            | 107        |   |   | (8 | ) | (7 | ) |
|                                |            |                                                  |            |                 |            |  |  |  |  |  |  |  |  |  |

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(a)           Includes acquisitionand related adjustments of $2 million.

(b)          Includes acquisitionrelated adjustment of $2 million and $18 million of restructuringcosts.

(c)           Includes $5 millionof net gains realized primarily on the sale of a facility.

(d)          Includes acquisition andrelated adjustments of $13 million.

(e)           Includes acquisitionand related adjustments of $13 million, $1 million of restructuringcosts and $2 million of costs related to the migration of technology to asingle platform across all the consumer brands and $1 million oftransaction costs.

(f)             Includes $2 millionof separation costs and $1 million related to the technology migration.

(g)           Includes acquisitionand related adjustments of $2 million.

(h)          Includes acquisition andrelated adjustment of $2 million and $3 million of costs associatedwith the acquisition of GTA by the predecessor in 2005 and $1 million ofrestructuring costs.

(i)             Includes $3 millionof costs associated with the acquisition of GTA and $1 million integrationcosts.

(j)              Includes $3 millionof costs related to the initial public offering of Orbitz Worldwide, $4 millionof integration costs related to the potential acquisition of Worldspan, $3 millionin non-cash equity compensation, $2 million of management fees incurredunder our new ownership structure, separation costs of $2 million and $1 millionof restructuring costs.

(k)          Includes $7 millionof costs related to the separation from AvisBudget and administrative costs relatedto the realignment of our segments.

(l)             Other includes corporategeneral and administrative costs not allocated to the segments.

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Providedbelow is a reconciliation of EBITDA to income before income taxes:

| **EBITDA**                             | ** ** | **$** | **99**  | ** ** | **$** | **107** | ** ** |
|----------------------------------------|------------|-------|---------|------------|-------|---------|------------|
| Depreciation and amortization          |       | (55   | )       | (49        | )     |
| Interest expense, net                  |       | (86   | )       | (12        | )     |
| **Income (loss) before income  taxes** | ** ** | **$** | **(42** | **)**      | **$** | **46**  | ** ** |

 

**NETREVENUE**

The net revenue increase of $32 million (5%)includes a $16 million reduction torevenue due to  the impact of fair valueadjustments to our balance sheet recorded as a result of the Acquisition. Theadjustments resulted in a reduction to deferred revenue and accrued travelsupplier payment as of the opening balance sheet date of August 23, 2006,which impacted the results of operations for the first quarter 2007 as areduction to net revenue and segment EBITDA within our Orbtiz Worldwide, GTAand Galileo segments of $13 million, $2 million and $2 million,respectively.

In addition to acquisition related adjustments, netrevenue increased $48 million (8%) as a result of incremental revenue of OrbitzWorldwide, GTA and Galileo of $35 million (15%), $4 million (6%) and$12 million (3%), respectively, including incremental intersegment revenueeliminations of $3 million.

In addition to acquisition related adjustments of $2 million,Galileo net revenue increased $12 million (3%) primarily due to a $9 millionincrease in GDS booking fees and a $5 million increase in otherdistribution revenue, partially offset by a ($2) million decrease insubscriber fees. GDS revenue increased $9 million or 3% primarily due tothe 2% growth in total segments. Americas revenue decreased $9 million,(7%) mainly due to a 13% decline in yield, offset by a 2% increase in segments.The yield decline is caused by our new long term agreements signed in the thirdquarter of 2006 under the Galileo Content Continuity Program that assure thatour travel agency customers have full airline content. Internationally, revenueincreased $18 million (7%) due to a 3% increase in segments and yieldgrowth of 5%. Other distribution revenue increased $5 million, or 14%, dueto a $3 million increase in our hosting agreement with United Airlines.

In addition to the acquisition related adjustments of$13 million, Orbitz Worldwide net revenue increased $35 millionprimarily as a result of a 21% increase in gross bookings across our onlineconsumer brands, including increases in Orbitz Worldwide, CheapTickets, ebookersand Flairview. The increase in gross bookings resulted in incremental airbooking revenue, hotel booking revenue, dynamic packaging revenue, and otherconsumer revenue of $14 million, $11 million and $6 million and$4 million, respectively. We believe the increase in gross bookings isattributable to air, hotel and dynamic packaging growth on our Orbitz Worldwideand CheapTickets sites and strong growth at ebookers driven by improvedoperations, more effective marketing and broader content.

In addition to acquisitionrelated adjustments of $2 million, GTA net revenue increased $4 million(6%) primarily as a result of 17% in total transaction value, offset in partby  (i) lower margins on sales, (ii) adecrease in online consumer sales within our Octopus subsidiary and (iii) theabsence in 2007 of a one-time $2 million benefit realized in 2006 revenuerelated to our estimated cost of travel products sold.  A significant portion of the increase in salestransactions in 2007 was due to an increase in sales to small travel groups,which typically yield lower margins. The decrease in Octopus sales is a resultof less focus placed on this business during 2007, which also resulted in areduction in cost of sales and SG&A, discussed below.

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**COSTOF REVENUE**

The cost of revenueincrease of $2 million (1%) is primarily due to an increase in OrbitzWorldwide of $11 million (20%), partially offset by decreases within ourGalileo and GTA segments of $2 million (1%) and $5 million (24%),respectively, and  incrementalintersegment cost of revenue eliminations of $2 million.

Galileo cost of revenue decreased $2 millionprimarily due to $7 million decrease in telecommunications and technologycosts, offset by $5 million increase in commission and inducements tosupport an increase in worldwide bookings. The telecommunications andtechnology cost reductions reflect the restructuring actions implemented during2006.

Orbitz Worldwide cost of revenue increased $11 million,primarily as a result of the 21% increase in gross bookings and $1 millionin incremental costs related to the migration of technology to a singleplatform across all the consumer brands. The increase in transaction volumeresulted in increased costs associated with credit card processing and customerservices costs.

GTA cost of revenuedecreased $5 million primarily as a result of a reduction in commissionsexpense as a result of the realignment of the Needahotel.com customer base andsavings realized as a result of the restructuring actions taken within ouronline consumer business,  OctopusTravel.

**SELLING,GENERAL AND ADMINISTRATIVE EXPENSES (SG&A)**

The SG&A increase of $15 million (6%)includes $7 million of non-recurring charges and $2 million ofincremental equity based compensation charges. Excluding such adjustmentsSG&A increased $7 million (3%) primarily as a result of increases of $9 million (9%) and $2 million(4%) within Orbitz Worldwide and Galileo, respectively, offset by a decreasewithin Corporate and Unallocated of $4 million (16%).

Galileo SG&A increased $2 million, reflectinga $6 million increase in foreign exchange expense partially offset by a $4 milliondecrease in other general and administrative expenses primarily as a result ofcost savings initiatives implemented during 2006.

Orbitz Worldwide SG&A increased $9 million,reflecting $13 million in incremental marketing and advertising expense asa result of expanded advertising campaigns promoting our Orbitz Worldwide andFlairview brands, partially offset by a $3 million decrease in general andadministrative expenses primarily as a result of $2 million of expensesaving realized during 2007 as a result of restructuring actions implementedduring 2006.

GTA SG&A remained constant, reflecting additionaladministrative costs allocated to the segment as a result of the Travelportsegment realignment, offset by savings realized as a result of therestructuring actions taken at Octopus Travel.

Corporate and unallocated SG&A increased $7 millionprimarily as a result of $12 million of incremental cost discussed in thenotes to the above table partially offset by a $5 million reduction inadministrative costs primarily as a result of savings initiatives implementedduring 2006.

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**SEPARATIONAND RESTRUCTURING CHARGES**

Separation andrestructuring cost increased $16 million primarily as a result of $21 millionof restructuring charges incurred during the first quarter of 2007. During thesecond quarter of 2006, we committed to various strategic initiatives targetedprincipally at reducing costs, enhancing organizational efficiency andconsolidating and rationalizing existing processes and facilities. Subsequentto the Acquisition, we committed to additional restructuring actions in theform of global headcount reductions and facility consolidations. Though webegan to implement these actions during the fourth quarter of 2006, we continueto take restructuring actions in 2007. The increase in restructuring chargeswas partially offset by a decrease in separation costs of $5 million.Separation costs of $2 million for the three months ended March 31,2007 consist of $1 million in employee retention and bonus plans as wellas $1 million in professional fees related to the separation plan ascompared to $7 million for the three months ended March 31, 2006,consisting of $3 million in employee retention and bonus plans as well as$4 million in professional fess related to the separation plan. Approximately$18 million, $1 million and $1 million  of the restructuring costs have been recordedwithin the Galileo, Orbitz Worldwide and GTA segments, respectively, andapproximately $1 million is recorded within Corporate and unallocated. Allseparation charges are included within corporate and unallocated.

**OTHERINCOME**

Other income decreased $7 millionprimarily due to a one time benefit of $6 million in 2006 relating to gainon the sale of a facility, offset a $1 million loss on sale of assets in2007.

**DEPRECIATIONAND AMORTIZATION**

Depreciation and amortizationincreased $6 million (12%) due to a $20 million incrementalamortization expense as a result of the allocation of fair value of ourdefinite-lived intangible assets as result of the Acquisition, offset by adecrease of $14 million of depreciation expense due to the extension ofthe useful lives of certain technology assets that were recorded at the time ofthe Acquisition.

**INTERESTEXPENSE**

Interest expense increased$74 million primarily as a result of the interest expense on our new debtissuances used to finance the Acquisition. Interest expense related to thisdebt was $90 million for the quarter, including $5 million inamortization of deferred financing fees. These amounts were offset by $12 millionof interest incurred in 2006, primarily relating to our long term debt borrowedin 2005 to finance the repatriation of foreign earnings to Avis Budget.

**PROVISION(BENEFIT) FOR INCOME TAXES**

We have an income taxbenefit of $3 million for the three months ended March 31, 2007primarily as a result of the benefit of foreign losses, offset by the impact ofa valuation allowance  on certaindeferred tax assets. We recorded an income tax benefit of $2 million forthe three months ended March 31, 2006 due to a one time tax benefit ofapproximately $9 million resulting from a favorable tax ruling received ina foreign jurisdiction,  as well as theimpact of foreign operations subject to tax rates lower than the United Statesstatutory rate.

**LIQUIDITY ANDCAPITAL RESOURCES**

Our principal source ofliquidity is cash flow generated from operations, including working capital.The principal uses of cash are to fund planned operating expenditures, capitalexpenditures, including investments in products and technology offerings,interest payments on debt and any mandatory or 

27

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discretionaryprincipal payments of debt issuances. As of March 31, 2007, our financingneeds were supported by $213 million of available capacity in our revolvingcredit facility.

***Cash Flows***

At March 31,2007, we had $221 million of cash and cash equivalents, an increase of$124 million as compared to December 31, 2006. The following tablesummarizes such increase:

| ** **                              | ** ** | **Three Months  Ended  March 31,** | ** ** | **Change** | ** ** |
|-----------------------------------------|------------|----------------------------------------------|------------|------------|------------|
| ** **                              | ** ** | **2007**                                     | ** ** | **2006**   | ** ** | **$** | ** ** |
| Cash provided by (used  in):            |       |                                         |       |       |       |   |   |   |
| Operating activities                    |       | $                                            | 163        |       | $          | 198 |   |   | $ | (35 | ) |
| Investing activities                    |       | (36                                          | )          | (79        | )          |   | 43 |   |
| Financing activities                    |       | (4                                           | )          | (1         | )          |   | (3 | ) |
| Effects of exchange rate  changes       |       | 1                                            |       | (1         | )          |   | 2 |   |
| Net change in cash and cash equivalents |       | $                                            | 124        |       | $          | 117 |   |   | $ | 7 |   |

 

**OperatingActivities.**   Forthe three months ended March 31, 2007, our cash inflow from operations was$163 million, a decrease of $35 million as compared to three monthsended March 31, 2006. The decrease primarily represented an increase incash interest paid of $108 million, partially offset by approximately $73 millionof incremental cash generated as a result of to the increase in the workingcapital deficit and incremental cash operating results for the three monthsended March 31, 2007 compared to the three months ended March 31,2006.

***InvestingActivities.******  ***Our cash flow used in investingactivities for the three months ended March 31, 2007 was $36 millioncompared to $79 million for the three months ended March 31, 2006, adecrease of $43 million.  Thedecrease in cash used is primarily due to cash activity in 2006, including netcash used of $21 million for an acquisition and $36 million of cashused to settle intercompany accounts with Avis Budget, offset by $10 millionin cash proceeds received on the sale of assets. During 2007 we usedapproximately $5 million of cash for payments related to Acquisitionrelated costs incurred during 2006.

***Financing Activities.******  ***Ourcash used in financing activities during 2007 was due to $6 million incash used to make a required principal payment on our long term debt, partiallyoffset by $2 million of cash received from the issuance of common stock. In2006, we used $1 million in cash to make principal payments on our longterm debt.

**Debt and FinancingArrangements**

***Senior Secured Credit Facilities***

Our senior secured credit facilities provide seniorsecured financing of $2,600 million, consisting of: (i) a $2,200 millionterm loan facility; (ii) a $275 million revolving credit facility;and (iii) a $125 million synthetic letter of credit facility.

The revolving credit facility includes borrowingcapacity available for short-term loans, or for the issuance of letters ofcredit.

Travelport LLC is the borrower under the seniorsecured credit facilities. All obligations under the senior secured credit facilitiesare unconditionally guaranteed by the Parent Guarantor, Intermediate ParentGuarantor and, subject to certain exceptions, each of our existing and futuredomestic wholly owned subsidiaries.

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All obligations under the senior secured creditfacilities, and the guarantees of those obligations, are secured bysubstantially all the following assets of the Borrower and each guarantor,subject to certain exceptions: (i) a pledge of 100% of the capital stockof the Borrower, 100% of the capital stock of each guarantor and 65% of thecapital stock of each of our wholly-owned foreign subsidiaries that aredirectly owned by us or one of the guarantors; and (ii) a securityinterest in, and mortgages on, substantially all tangible and intangible assetsof the Borrower and each guarantor.

Borrowings under the U.S. term loan facility bearinterest at LIBOR plus 2.5% with respect to the dollar-denominated facility,and EURIBOR plus 2.75% with respect to the Euro-denominated facility.Borrowings under the $275 million revolving credit facility bear interestat LIBOR plus 2.75%. Under the $125 million synthetic letter of creditfacility, we must pay a facility fee equal to the applicable margin under theU.S. term loan facility on the amount on deposit. At March 31, 2007, therewere no borrowings outstanding under the revolving credit facility and we had letterof credit issuances of approximately $62 million and $123 millionoutstanding under our revolving credit facility and the synthetic letter ofcredit facility, respectively.

The applicable margin for borrowings under the termloan facility, the revolving credit facility and the synthetic letter of creditfacility may be reduced subject to our attaining certain leverage ratios.

In addition to paying interest on outstandingprincipal under the senior secured credit facilities, we are required to pay acommitment fee to the lenders under the revolving credit facility in respect ofthe unutilized commitments thereunder. The initial commitment fee rate is 0.50%per annum. The commitment fee rate may be reduced subject to our attainingcertain leverage ratios. We are also required to pay customary letter of creditissuance fees.

On May 7, 2007 wemade a discretionary $100 million payment on our term loan facility.

***Senior Notes and Senior Subordinated Notes***

On August 23, 2006, in connection with theAcquisition, we issued $150 million of dollar denominated senior dollarfloating rate notes, €235 millioneuro-denominated senior floating rate notes ($299 million dollarequivalent) and $450 million 97¤8% senior fixed rate notes.The dollar-denominated floating rate senior notes bear interest at a rate equalto LIBOR plus 45¤8%. The euro-denominatedfloating rate senior notes bear interest at a rate equal to EURIBOR plus 45¤8%. The senior notes areunsecured senior obligations and are subordinated to all of our existing andfuture secured indebtedness (including the senior secured credit facility) andwill be senior in right of payment to any existing and future subordinatedindebtedness (including the senior subordinated notes).

On August 23, 2006, in connection with theAcquisition, we issued $300 million of 117¤8% dollar denominated notesand €160 million of 107¤8% Euro-denominated notes($204 million dollar equivalent). The senior subordinated notes areunsecured senior subordinated obligations and are subordinated in right ofpayment to all of our existing and future senior indebtedness and securedindebtedness (including the senior credit facilities and the senior notes).

The indenturesgoverning the senior notes and senior subordinated notes limit the ParentGuarantor’s (and most or all of its subsidiaries’) ability to:

·       incur additional indebtednessor issue certain preferred shares;

·       pay dividends on,repurchase or make other distributions in respect of their capital stock ormake other restricted payments;

·       make certain investments;

·       sell certain assets;

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·       create liens on certainassets to secure debt;

·       consolidate, merge, sell orotherwise dispose of all or substantially all of their assets;

·       enter into certaintransactions with affiliates; and

·       designate subsidiaries asunrestricted subsidiaries.

From time to time, depending upon market, pricing andother conditions, as well as on our cash balances and liquidity, we may seek torepurchase a portion of the senior notes and/or senior subordinated notes inthe open market.

Subject to certainexceptions, the indentures governing the notes permit us and our restrictedsubsidiaries to incur additional indebtedness, including secured indebtedness.None of Travelport (Bermuda) Ltd. and its subsidiaries, which together comprisethe non-U.S. operations of Travelport, guarantee the notes. These entities aremore restricted than Travelport LLC and the guarantors in their ability toincur indebtedness. See ‘‘Description of Senior Notes—Certain Covenants’’ and ‘‘Descriptionof Senior Subordinated Notes—Certain Covenants’’ in our Registration Statementon Form S-4 filed with the SEC on March 30, 2007, as amended.

***New Parent Company PIK Loan***

Our parent company,Travelport Holdings Limited, recently entered into a credit agreement for a$1.1 billion senior unsecured pay-in-kind (‘‘PIK’’) term loan. Interest is capitalizedquarterly in arrears at a rate starting at LIBOR + 700 basis points for thefirst 18 months, increasing to LIBOR + 750 basis points for the next 12 monthsand then increasing to LIBOR plus 800 basis points thereafter. Interest will bepaid in kind unless our parent company elects to pay in cash. The PIK loan is notprepayable for the first eight months and then would be prepayable at par forthe next 13 months and then at declining premiums thereafter. The PIK loan is duefive years after it was made. Travelport Holdings Limited is using the netproceeds from the borrowings of the PIK term loan to pay a dividend to itsshareholders.

***Proposed Worldspan Acquisition***

The proposed acquisitionof Worldspan would be funded with an additional $1,040 million of seniorsecured term loans. In addition, the senior secured revolving credit facilitywould increase by $25 million, as would the synthetic letter of creditfacility.

***Proposed Orbitz WorldwideInitial Public Offering***

***We recently announced our intention to sell a portion of ourownership interest in Orbitz Worldwide, Inc., our wholly owned subsidiary.  We intend to use the net proceeds of thistransaction to repay a portion of our senior secured credit facility.***

***Other***

Bastion Surety, a joint venture with Orbis CapitalLimited, is a bond provider on behalf of travel agencies and tour operators inthe United Kingdom. It is authorized and regulated by the UK Financial ServicesAuthority to provide bonding insurance in the United Kingdom, Belgium, France,Ireland and the Netherlands as an alternative to cash and bank bonds to protectconsumers in the event of business failure of a travel agent or tour operator.From time to time, travel agents and/or tour operators fail, requiring a drawdown on these bonds, which can result in the loss of the amount of the bondprovided on behalf of such travel agent or tour operator. The total bondsoutstanding as of March 31, 2007 were approximately $105 million. We were notified of potentialdefaults on bonds totaling approximately $6 million during 2006 andapproximately $1 million in 2007. The majority of bonds have an expiration dateduring 2007, and 

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weare issuing only limited bonds at this time. While we endeavor to only issuebonds after appropriatecreditdiligence on the travel agent or tour operator, we can provide no assurancethat such agents or operatorswill not ultimately default on their bond obligations to Travelport.

**Interest Rate Risk**

A portion of the debt usedto finance much of our operations is exposed to interest rate fluctuations. Weuse various hedging strategies and derivative financial instruments to createan appropriate mix of fixed and floating rate assets and liabilities. Theprimary interest rate exposure at March 31, 2007 was to interest ratefluctuations in the United States and Europe, specifically LIBOR and EURIBORinterest rates. We currently use interest rate swaps as the derivativeinstrument in these hedging strategies. The derivatives used to manage the riskassociated with our floating rate debt were designated as cash flow hedges.

**ContractualObligations**

Our future contractualobligations have not changed significantly from the amounts reported within our2006 financial statements included in our Registration Statement on Form S-4filed with the SEC on March 30, 2007, as amended. Any changes to ourobligations related to our indebtedness are presented above within the sectionentitled “Debt and Financing Arrangements.”

**Accounting Policies**

**Item 3.**                        QuantitativeAnd Qualitative Disclosures About Market Risks

We assess our market riskbased on changes in interest and foreign currency exchange rates utilizing asensitivity analysis that measures the potential impact in earnings, fairvalues, and cash flows based on a hypothetical 10% change (increase and decrease)in interest and foreign currency rates. We used March 31, 2007 marketrates to perform a sensitivity analysis separately for each of our market riskexposures. The estimates assume instantaneous, parallel shifts in interest rateyield curves and exchange rates. We have determined, through such analyses,that the impact of a 10% change in interest and foreign currency exchange ratesand prices on our earnings, fair values and cash flows would not be material.

**Item 4.**                        Controlsand Procedures

(a)           *DisclosureControls and Procedures.  *Our management, with theparticipation of our Chief Executive Officer and Chief Financial Officer, hasevaluated the effectiveness of our disclosure controls and procedures (as suchterm is defined in Rules 13a-15(e) and 15d-15(e) underthe Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’)) as ofthe end of the period covered by this quarterly report. Based on suchevaluation, our Chief Executive Officer and Chief Financial Officer haveconcluded that, as of the end of such period, our disclosure controls andprocedures are effective.

(b)          *Internal Controls Over Financial Reporting.  *There havebeen no changes in our internal control over financial reporting (as such termis defined in rules 13a-15(f) and 15d-15(f) underthe Exchange Act) during the fiscal quarter to which this report relates thathave materially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.

**PART II—OTHERINFORMATION**

**Item 1.**                        LegalProceedings.

**There are no material changes fromthe description of our legal proceedings disclosed in our RegistrationStatement on Form S-4 filed with the SEC on March 30, 2007, asamended.**

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**Item 1A.**                RiskFactors

There are no materialchanges from the risk factors previously disclosed in our Registration Statementon Form S-4 filed with the SEC on March 30, 2007, as amended.

**Item 2.**                        UnregisteredSales of Equity Securities and Use of Proceeds.

Not Applicable.

**Item 3.**                        DefaultsUpon Senior Securities.

Not Applicable.

**Item 4.**                        Submissionof Matters to a Vote of Security Holders.

Not Applicable.

**Item 5.**                        OtherInformation.

Not Applicable.

**Item 6.**                        Exhibits.

See Exhibit Index.

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**SIGNATURES**

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.
|                          | ** ** | **TRAVELPORT LIMITED**                                |
|--------------------------|------------|-------------------------------------------------------|
| Date:  May 14, 2007 |       | /s/  MICHAEL E. RESCOE                                |   |
|                     |       | Michael E. Rescoe                                     |
|                     |       | Executive Vice President and  Chief Financial Officer |
| Date:  May 14, 2007 |       | /s/  WILLIAM J. SEVERANCE                             |   |
|                     |       | William J. Severance                                  |
|                     |       | Senior Vice President and  Chief Accounting Officer   |

 

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**EXHIBIT INDEX**
| Exhibit No. | ** ** | **Description** | ** ** |
|------------------|------------|-----------------|------------|
|             | 12         |            |       | Statement Re: Computation of Ratio of Earnings to  Fixed Charges. |   |
|             | 31.1       |            |       | Certification of Chief Executive Officer Pursuant to  Rules 13(a)-14(a) and 15(d)-14(a) Promulgated Under the  Securities Exchange Act of 1934, as amended. |   |
|             | 31.2       |            |       | Certification of Chief Financial Officer Pursuant to  Rules 13(a)-14(a) and 15(d)-14(a) Promulgated Under the  Securities Exchange Act of 1934, as amended. |   |
|             | 32         |            |       | Certification Pursuant  to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of  the Sarbanes-Oxley Act of 2002. |   |

 

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