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Orbitz Worldwide, Inc. Reports Fourth Quarter and Full Year 2009 Results
CHICAGO, Feb 23, 2010 /PRNewswire via COMTEX/ -- Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the fourth quarter and full year ended December 31, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20070813/AQM125LOGO)

"We have made tremendous progress this past year towards strengthening our global hotel business and we are pleased with our momentum heading into 2010. During 2009, we significantly improved our customer value proposition by removing air booking fees on most flights, eliminating our hotel change and cancellation fees, launching Hotel Price Assurance, launching Total Price hotel search results, cutting hotel booking fees and enhancing our hotel Low Price Guarantee program," said Barney Harford, president and CEO of Orbitz Worldwide. "As a result of these improvements and strong performance at ebookers, we saw accelerating year over year transaction and hotel room night growth during the course of 2009."

    Summary Operating Results
    (in millions, except per share data)

                      Three Months Ended               Years Ended
                         December 31,                  December 31,
                        -------------                  ------------
                        2009    2008  Change (a)      2009    2008  Change (a)
                        ----    ----  ----------      ----    ----  ----------
    Gross bookings    $2,523  $2,156      17%      $10,149  $10,808      -6%
    Net revenue         $175    $180      -3%         $738     $870     -15%
    Net (loss) income   ($18)     $8       **        ($337)   ($299)     13%
    Basic and
     Diluted EPS      ($0.21)  $0.10       **       ($4.01)  ($3.58)     12%
    Operating
     cash flow            $1    ($45)      **         $105      $76      38%
    Capital spending     $12     $16     -23%          $43      $58     -26%
    EBITDA (b)           $24     $41     -41%        ($202)   ($172)     17%
      Impairment           -       -       **         $332     $297      12%
      Other adjustments   $3     ($8)      **          $14       $8       **
    Adjusted EBITDA
     (b)(c)              $27     $33     -15%         $144     $133       9%

                        2009 Year over Year Growth Trends
                        ---------------------------------
                           Q1      Q2      Q3       Q4    Full Year
                           --      --      --       --    ---------
    Transaction
     Growth (d)           -12%      3%     7%       19%         3%
    Hotel Room Night
     Growth (e)            -1%      2%     3%       13%         4%
    **  Not meaningful.
    (a)  Percentages are calculated on unrounded numbers.
    (b)  Non-GAAP financial measures.  A definition of EBITDA and Adjusted
         EBITDA and a reconciliation of these non-GAAP financial measures to
         the most comparable GAAP financial measure is contained in Appendix
         A.
    (c)  EBITDA is no longer adjusted for severance charges which were
         $2 million during each of the three months ended December 31, 2009
         and December 31, 2008, and $7 million and $3 million during the
         years ended December 31, 2009 and December 31, 2008, respectively.
    (d)  Represents transaction growth on a booked basis.
    (e)  Represents hotel room nights on a stayed basis and includes both
         standalone hotel room nights and hotel room nights included in
         dynamic vacation packages.

"In full year 2009, we improved the quality of our revenue by removing or significantly reducing a number of domestic consumer fees. Despite these fee changes, we achieved 9 percent Adjusted EBITDA growth," said Marsha Williams, SVP and CFO of Orbitz Worldwide. "Our operating cash flow increased 38 percent compared with last year, which, combined with the recapitalization has strengthened our balance sheet considerably."

Full Year 2009 Financial Results

For the year ended December 31, 2009, net revenue was $738 million, down 15 percent (13 percent on a constant currency basis) from the same period of 2008. This net revenue decline was due primarily to the removal of most domestic air booking fees and a significant reduction in hotel net revenue due to lower average daily rates, lower hotel booking fees, lower breakage and disappointing results at HotelClub. Higher transaction volume partially offset the decline in net revenue per transaction.

The company reported a net loss of $337 million or ($4.01) per diluted share for the full year 2009, compared with a net loss of $299 million or ($3.58) per diluted share for the full year 2008. The net loss in both years was due primarily to non-cash goodwill and intangible asset impairment charges.

Adjusted EBITDA increased 9 percent to $144 million for the year ended December 31, 2009 compared with the prior year. This year on year increase in Adjusted EBITDA was driven by the significant cost reductions made since November 2008 and a rationalization of the company's online marketing spending.

Fourth Quarter 2009 Financial Results

Gross Bookings and Net Revenue

Global gross bookings increased 17 percent (15 percent on a constant currency basis) year over year. This increase was primarily due to higher transaction volume partially offset by lower air fares and lower average hotel room rates. Air gross bookings increased 19 percent (17 percent on a constant currency basis) and non-air gross bookings increased 12 percent (8 percent on a constant currency basis) year over year. Domestic gross bookings increased 15 percent compared with the fourth quarter 2008, and international gross bookings increased 32 percent (15 percent on a constant currency basis) year over year.

Net revenue was $175 million for the fourth quarter 2009, down 3 percent (6 percent on a constant currency basis) year over year. Domestic net revenue declined 12 percent while international net revenue increased 48 percent (24 percent on a constant currency basis). The net revenue decline was due primarily to the removal of most domestic air booking fees. Higher transaction volume partially offset the decline in net revenue per transaction.

    Gross Bookings and Net Revenue
    (in millions)

                       Three Months Ended            Years Ended
                          December 31,               December 31,
                         -------------              -------------
                         2009    2008  Change (a)   2009    2008   Change (a)
                         ----    ----  ----------   ----    ----   ----------
    Gross Bookings
      Air              $1,893   $1,593     19%    $7,349    $7,883     -7%
      Non-air             630      563     12%     2,800     2,925     -4%
                          ---      ---     --      -----     -----     --
    Total Gross
     Bookings          $2,523   $2,156     17%   $10,149   $10,808     -6%
      Domestic         $2,142   $1,867     15%    $8,742    $9,134     -4%
      International       381      289     32%     1,407     1,674    -16%
                          ---      ---     --      -----     -----    ---
    Total Gross
     Bookings          $2,523   $2,156     17%   $10,149   $10,808     -6%
    Net Revenue
      Air                 $60      $67    -11%      $270      $339    -21%
      Hotel                46       44      3%       184       239    -23%
      Dynamic Packaging    27       26      2%       117       114      3%
      Advertising and
       Media               17       18     -7%        60        60      -
      Other                25       25      5%       107       118     -9%
                           --       --     --        ---       ---     --
    Total Net Revenue    $175     $180     -3%      $738      $870    -15%
    Transactional Net
     Revenue
      Domestic           $117     $132    -12%      $517      $616    -16%
      International        38       26     48%       148       177    -16%
                           --       --     --        ---       ---    ---
    Total Transactional
     Net Revenue (b)      155      158     -2%       665       793    -16%
    Non-transactional
     Net Revenue
      Domestic             18       21    -11%        68        70     -3%
      International         2        1     43%         5         7    -29%
                           --       --     --         --        --    ---
    Total Non-
     transactional Net
     Revenue (c)           20       22     -8%        73        77     -5%
                           --       --     --         --        --     --
    Total Net Revenue    $175     $180     -3%      $738      $870    -15%
    (a)  Percentages are calculated on unrounded numbers.
    (b)  Transactional net revenue is comprised of net revenue from air
         bookings, hotel bookings, dynamic packaging, car bookings, cruise
         bookings, destination services and travel insurance.
    (c)  Non-transactional net revenue is primarily comprised of advertising
         and media revenue and revenue from our hosting business.
  • Air net revenue (which consists of revenue from standalone air bookings) was $60 million in the fourth quarter, down 11 percent (13 percent on a constant currency basis) from the fourth quarter 2008. Domestic air net revenue declined 21 percent due to the removal in early April of most domestic booking fees offset in part by higher air transactions as a result of both lower fees and lower air fares. The company's domestic year over year air transaction growth rate increased by 37 percentage points in the fourth quarter 2009 versus the first quarter 2009 when the company still charged booking fees on all airline tickets. International air net revenue increased 56 percent year on year (40 percent on a constant currency basis) due primarily to higher air transactions at ebookers.
  • Hotel net revenue (which consists of revenue from standalone hotel bookings) was $46 million in the fourth quarter, up 3 percent (down 4 percent on a constant currency basis) year over year. Hotel net revenue declined on a constant currency basis due largely to lower average daily rates for hotel rooms, lower hotel booking fees and lower breakage, partially offset by an increase in global hotel transactions.
  • Dynamic packaging net revenue increased 2 percent in the quarter to $27 million due to higher dynamic packaging transactions, partially offset by lower average daily rates for hotel rooms.
  • Advertising and media net revenue declined 7 percent in the fourth quarter to $17 million, as the company focused on driving transaction growth and optimized its mix of advertising, media and transaction revenue.
  • Other net revenue, which primarily includes car, cruise, destination services and travel insurance revenue, increased 5 percent (4 percent on a constant currency basis) in the fourth quarter year on year, primarily due to an increase in travel insurance revenue as a result of increased ticket volume.

The company has posted on its website (http://www.orbitz-ir.com/) a schedule that adjusts net revenue for currency impacts in order to provide a more comparable view of operating performance across periods.

Operating Expenses

Cost of revenue increased from 18.4 to 20.1 percent of net revenue year over year, primarily due to lower revenue per transaction.

Selling, general and administrative expense increased $19 million in the fourth quarter 2009 to $67 million. In the fourth quarter 2008, the company's operating expenses were lowered by $14 million due to a non-cash reduction in the present value of the company's tax sharing liability as a result of a lower projected state income tax rate. After adjusting for this tax sharing benefit, fourth quarter 2009 selling, general and administrative expense increased by $5 million year over year. This increase was attributable to higher year over year bonus expense partially offset by cost reductions. In late 2008, the company announced that it would reduce cash operating and capital costs by $40-45 million in 2009, and the company was successful in meeting that goal. The company realized over $30 million of selling, general and administrative expense savings and $15 million of capital cost reductions.

Marketing expense in the fourth quarter was $49 million, a decrease of 16 percent compared with the same period in 2008. This decrease occurred in the online channel globally as the company has focused on optimizing the performance of its online marketing channels.

Equity Transactions

In January 2010, the Company closed the equity transactions with PAR Investment Partners ("PAR") and Travelport that it announced in November 2009. As a result, the company currently has 101.0 million common shares outstanding, approximately 55.0 million of which are beneficially owned by affiliates of The Blackstone Group, which includes Travelport, and approximately 24.6 million of which are owned by PAR. The company reduced its term loan by $50 million and received $50 million in cash at the close of the transactions.

Interest Expense

Orbitz Worldwide incurred net interest expense of $14 million in the fourth quarter compared with $16 million in the fourth quarter 2008. This decline in interest expense for the quarter was due primarily to a lower effective interest rate on the company's term loan versus the prior year. Interest expense is expected to decline further in 2010 as a result of the January 2010 retirement of $50 million of the company's term loan, the January 2010 repayment of $42 million of outstanding borrowings under the company's revolving credit facility, the December 2009 expiration of a floating-to-fixed interest rate swap, which previously fixed the interest rate on $200 million of the company's term loan at an effective rate of 8.21 percent and an approximate $21 million cash flow recapture payment the company will make on its term loan in March 2010.

In January 2010, the company entered into two new floating-to-fixed interest rate swaps, which fix the interest rate on $200 million of the company's term loan at a blended rate of 4.18 percent through January 2012.

As a result of these transactions, $400 million of the $527 million currently outstanding on the company's term loan has fixed interest rates. The company's weighted average effective interest rate on the term loan is currently 4.71 percent. After the March 2010 cash flow recapture payment, the company's term loan balance is expected to approximate $506 million for the rest of 2010.

Provision for Income Taxes

The company recorded tax expense of $10 million in the fourth quarter 2009 primarily due to a non-cash full valuation allowance established against the deferred tax assets of one of its international subsidiaries.

Net (Loss) Income

The company reported a net loss of $18 million or ($0.21) per diluted share for the fourth quarter 2009, compared with net income of $8 million or $0.10 per diluted share for the same period last year. The net loss in the fourth quarter 2009 was largely due to a non-cash increase in the company's provision for income taxes due to the valuation allowance established against international deferred tax assets. Fourth quarter 2008 net income benefited from $14 million of non-cash income relating to a change in projected state income tax rates.

Adjusted EBITDA

Adjusted EBITDA decreased to $27 million from $33 million for the fourth quarter 2008. This decrease was due to higher bonus expense year over year and the negative impact of foreign exchange changes on the results of our foreign operations, partially offset by cost savings.

Cash Flow

Orbitz Worldwide reported operating cash flow of $1 million for the fourth quarter compared with operating cash flow of ($45) million for the same period in 2008. The increase in operating cash flow is primarily attributable to higher merchant hotel gross bookings during the fourth quarter 2009 compared with the fourth quarter 2008. At December 31, 2009, cash and cash equivalents were $89 million, including $42 million of cash provided by borrowings under the revolving credit facility, compared with cash and cash equivalents at December 31, 2008 of $31 million, including $21 million of outstanding revolver borrowings.

Operational Highlights

  • In November, the company enhanced its hotel Low Price Guarantee. Under the new program, customers who find their prepaid hotel room available for a lower price on any website, including Orbitz.com, can receive a refund for the difference and a $50 discount on a future hotel or vacation package booking. These refunds are available up until the hotel's cancellation deadline.
  • During the fourth quarter, the company entered into a global agreement with Four Seasons through which Four Seasons hotels are available for booking on the company's websites.
  • As of December 31, 2009, Orbitz Worldwide offered approximately 100,000 bookable hotels on its websites. Orbitz Worldwide websites offer 40,000 hotels in the EMEA region and 16,000 hotels in the Asia Pacific region.
  • During the fourth quarter, Orbitz Worldwide signed contracts with a number of destination marketing organizations including Hawaii Visitors and Convention Bureau, Canadian Tourism Commission, Bermuda Department of Tourism and Nassau Paradise Island Promotion Board to promote travel to those destinations across our global websites and to provide travel information to our customers. Orbitz Worldwide now has partner marketing agreements with nearly 170 destination marketing organizations.
  • In February 2010, Orbitz launched Orbitz for Agents, a groundbreaking program that offers travel agents the opportunity to earn commissions on hotel reservations and customized travel package bookings made on behalf of their customers.
  • In February 2010, Jeremy Bellinghausen was named President, HotelClub. Jeremy brings extensive leadership and product management experience to HotelClub, as developed in a variety of roles at Business.com and eBay's Rent.com.

Q1 2010 Outlook

Beginning this quarter, the company will provide quarterly guidance on select financial metrics. For the first quarter 2010, the company expects to report:

  • 2% to 6% year over year decline in net revenue, reflecting the removal of most domestic air booking fees and significant reduction of hotel booking fees in the second quarter of 2009;
  • 20% to 22% cost of revenue as a percentage of net revenue, reflecting lower net revenue per transaction as a result of the fee reductions as well as increased costs associated with higher transaction volume; and
  • 0% to 10% year over year decrease in quarterly Adjusted EBITDA.

For the full year 2010, the company anticipates annual capital expenditures in the range of $40 million to $45 million, consistent with 2009 levels.

Quarterly Conference Call

Orbitz Worldwide will host a conference call to discuss its fourth quarter and full year 2009 results at 12:00 p.m. EST (11:00 a.m. CST) on Tuesday, February 23, 2010. A live webcast of the conference call can be accessed through the Orbitz Worldwide Investor Relations website at http://orbitz-ir.com/. An archive of the webcast and a transcript will also be available on the website for a period of at least 30 days.

About Orbitz Worldwide

Orbitz Worldwide is a leading global online travel company that uses innovative technology to enable leisure and business travelers to research, plan and book a broad range of travel products. Orbitz Worldwide owns a portfolio of consumer brands that includes Orbitz (http://www.orbitz.com/), CheapTickets (http://www.cheaptickets.com/), ebookers (http://www.ebookers.com/), HotelClub (http://www.hotelclub.com/), RatesToGo (http://www.ratestogo.com/), The Away Network (http://www.away.com/), and corporate travel brand Orbitz for Business (http://www.orbitzforbusiness.com/). For more information on how your company can partner with Orbitz Worldwide, visit corp.orbitz.com.

Orbitz Worldwide uses its Investor Relations website to make information available to its investors and the public at http://www.orbitz-ir.com/. You can sign up to receive email alerts whenever the company posts new information to the website.

Forward-Looking Statements

This press release and its attachments may contain forward-looking statements that involve risks, uncertainties and other factors concerning, among other things, Orbitz Worldwide's (the "Company's") expected financial performance and its strategic and operational plans. The results presented are unaudited. The Company's actual results could differ materially from the results expressed or implied by such forward-looking statements and reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release and its attachments include, but are not limited to, the current economic downturn and global financial crisis; competition in the travel industry; factors affecting the level of travel activity, particularly air travel volume; maintenance and protection of the Company's information technology and intellectual property; the outcome of pending litigation; the Company's level of indebtedness; risks associated with doing business in multiple currencies; trends in the travel industry; and general economic and business conditions. More information regarding these and other risks, uncertainties and factors is contained in the section entitled "Risk Factors" in the Company's filings with the Securities and Exchange Commission ("SEC") which are available on the SEC's website at http://www.sec.gov/ or the Company's Investor Relations website at http://www.orbitz-ir.com/. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of February 23, 2010, and the Company undertakes no obligation to publicly revise any forward-looking statement.

About Non-GAAP Financial Measures

This press release and its attachments include certain non-GAAP financial measures as defined by the SEC. These measures may be different from non-GAAP measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP). Further information regarding the non-GAAP financial measures included in this press release is contained in Appendix A attached to this press release.

                             Orbitz Worldwide, Inc.
                Consolidated Statements of Operations (Unaudited)
                 (in millions, except share and per share data)
                                  Three Months Ended         Years Ended
                                     December 31,            December 31,
                                  ------------------       ----------------
                                   2009        2008        2009        2008
                                   ----        ----        ----        ----
    Net revenue                    $175        $180        $738        $870
    Cost and expenses
      Cost of revenue                35          33         138         163
      Selling, general and
       administrative                67          48         257         272
      Marketing                      49          58         215         310
      Depreciation and
       amortization                  18          17          69          66
      Impairment of goodwill
       and intangible assets          -           -         332         297
                                    ---         ---         ---         ---
    Total operating expenses        169         156       1,011       1,108
                                    ---         ---       -----       -----
    Operating income (loss)           6          24        (273)       (238)
    Other (expense) income
      Net interest expense          (14)        (16)        (57)        (63)
      Gain on extinguishment
       of debt                        -           -           2           -
                                    ---         ---         ---         ---
    Total other (expense)           (14)        (16)        (55)        (63)
                                    ---         ---         ---         ---
    (Loss) income before
     income taxes                    (8)          8        (328)       (301)
    Provision (benefit) for
     income taxes                    10           -           9          (2)
                                     --         ---         ---          --
    Net (loss) income              ($18)         $8       ($337)      ($299)
                                   ====          ==       =====       =====
    Net (loss) income per
     share-basic:
      Net (loss) income per
       share                     ($0.21)      $0.10      ($4.01)     ($3.58)
                                 ======       =====      ======      ======
      Weighted average
       shares outstanding    84,437,135  83,505,126  84,073,593  83,342,333
                             ==========  ==========  ==========  ==========
       Net (loss) income per
        share-diluted:
       Net (loss) income per
        share                    ($0.21)      $0.10      ($4.01)     ($3.58)
                                 ======       =====      ======      ======
       Weighted average
        shares outstanding   84,437,135  83,535,817  84,073,593  83,342,333
                             ==========  ==========  ==========  ==========

                             Orbitz Worldwide, Inc.
                     Consolidated Balance Sheets (Unaudited)
                        (in millions, except share data)
                                       December 31, 2009  December 31, 2008
                                       -----------------  -----------------
    Assets
    Current assets:
      Cash and cash equivalents                      $89                $31
      Accounts receivable (net of
       allowance for doubtful accounts
       of $1 and $1, respectively)                    55                 58
      Prepaid expenses                                17                 17
      Deferred income taxes, current                   -                  6
      Due from Travelport, net                         3                 10
      Other current assets                             5                  6
                                                     ---                ---
    Total current assets                             169                128
    Property and equipment, net                      181                190
    Goodwill                                         713                949
    Trademarks and trade names                       155                232
    Other intangible assets, net                      19                 34
    Deferred income taxes, non-current                10                  9
    Other non-current assets                          47                 48
                                                      --                 --
    Total Assets                                  $1,294             $1,590
                                                  ======             ======
    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable                               $30                $37
      Accrued merchant payable                       219                205
      Accrued expenses                               113                106
      Deferred income                                 31                 23
      Term loan, current                              21                  6
      Other current liabilities                        5                  9
                                                     ---                ---
    Total current liabilities                        419                386
    Term loan, non-current                           556                587
    Line of credit                                    42                 21
    Tax sharing liability                            109                109
    Unfavorable contracts                             10                 13
    Other non-current liabilities                     28                 36
                                                      --                 --
    Total Liabilities                              1,164              1,152
                                                   -----              -----
    Commitments and contingencies
    Shareholders' Equity:
      Preferred stock, $0.01 par value,
       100 shares authorized, no shares
       issued or outstanding                           -                  -
      Common stock, $0.01 par value,
       140,000,000 shares authorized,
       83,831,561 and 83,345,437 shares
       issued and outstanding, respectively            1                  1
      Treasury stock, at cost, 24,521
       and 18,055 shares held,
       respectively                                    -                  -
      Additional paid in capital                     922                908
      Accumulated deficit                           (787)              (450)
      Accumulated other comprehensive
       loss (net of accumulated tax benefit
       of $2 and $2, respectively)                    (6)               (21)
                                                      --                ---
    Total Shareholders' Equity                       130                438
                                                     ---                ---
    Total Liabilities and
     Shareholders' Equity                         $1,294             $1,590
                                                  ======             ======

                          Orbitz Worldwide, Inc.
             Consolidated Statements of Cash Flows (Unaudited)
                               (in millions)
                                                    Years Ended December 31,
                                                    ------------------------
                                                          2009       2008
                                                          ----       ----
      Operating activities:
      Net loss                                           ($337)     ($299)
      Adjustments to reconcile net loss
       to net cash provided by operating activities:
        Gain on extinguishment of debt                      (2)         -
        Depreciation and amortization                       69         66
        Impairment of goodwill and intangible assets       332        297
        Non-cash revenue                                    (3)        (3)
        Non-cash net interest expense                       15         18
        Deferred income taxes                                7         (4)
        Stock compensation                                  14         15
        Provision for bad debts                              1          -
        Changes in assets and liabilities:
          Accounts receivable                                4          -
          Deferred income                                    9          -
          Due to/from Travelport, net                        6         (5)
          Accrued merchant payable                           4          3
          Accounts payable, accrued expenses and other
           current liabilities                             (11)        (3)
          Other                                             (3)        (9)
                                                            --         --
      Net cash provided by operating activities            105         76
                                                           ---         --
      Investing activities:
        Property and equipment additions                   (43)       (58)
                                                           ---        ---
      Net cash (used in) investing activities              (43)       (58)
                                                           ---        ---
      Financing activities:
        Capital lease payments and principal payments
         on the term loan                                   (6)        (7)
        Payments to extinguish debt                         (8)         -
        Payment to satisfy employee tax withholding
         obligations upon vesting of equity-based awards     -         (1)
        Payments on tax sharing liability                  (11)       (20)
        Proceeds from line of credit                       100         69
        Payments on line of credit                         (81)       (49)
                                                           ---        ---
      Net cash (used in) financing activities               (6)        (8)
                                                            --         --
      Effects of changes in exchange rates on cash and
       cash equivalents                                      2         (4)
                                                           ---         --
      Net increase in cash and cash equivalents             58          6
      Cash and cash equivalents at beginning of year        31         25
                                                            --         --
      Cash and cash equivalents at end of year             $89        $31
                                                           ===        ===
      Supplemental disclosure of cash flow information:
        Income tax payments (refunds), net                  $1        ($2)
        Cash interest payments, net of capitalized
         interest of almost nil and $1, respectively       $42        $47
      Non-cash investing activity:
        Capital expenditures incurred not yet paid           -         $2

                                                            Appendix A
                        Non-GAAP Financial Measures
    EBITDA is a performance measure used by management that is defined as net
    income or net loss plus:  net interest expense, provision (benefit) for
    income taxes and depreciation and amortization.  Adjusted EBITDA
    represents EBITDA as adjusted for certain non-cash and unusual or non-
    recurring items as described below.  Orbitz Worldwide uses and believes
    investors and other external users of the Company's financial statements
    benefit from the presentation of EBITDA and Adjusted EBITDA in evaluating
    its operating performance because:
    - These measures provide greater insight into management decision making
      at Orbitz Worldwide as they are among the primary metrics by which
      management evaluates the operating performance of the Company's
      business.  Management believes that when viewed with GAAP results and
      the accompanying reconciliation, EBITDA and Adjusted EBITDA provide
      additional information that is useful for management and other external
      users to gain an understanding of the factors and trends affecting the
      ongoing cash earnings capability of the Company's business, from which
      capital investments are made and debt is serviced.  These supplemental
      measures are used by management and the board of directors to evaluate
      the Company's actual results against management's expectations.  The
      compensation of management and other employees within the Company is
      also tied to the Company's actual performance, as measured by Adjusted
      EBITDA less capital expenditures relative to performance targets
      established by the Company's board of directors and its compensation
      committee.
    - EBITDA measures performance apart from items such as interest expense,
      income taxes and depreciation and amortization.  Management believes
      that the exclusion of interest expense is necessary to evaluate the
      cash earnings capability of the business.  The Company generally only
      funds working capital requirements with borrowed funds (specifically,
      funds borrowed under its revolving credit facility) in the fourth
      quarter of the year when its cash balances are typically the lowest.
      As a result, nearly all of the Company's interest expense is not
      incurred to fund its operating activities.  In addition, excluding
      interest expense from the Company's non-GAAP measures is consistent
      with the Company's intent to disclose the ongoing cash earnings
      capability of the business, from which capital investments are made and
      debt is serviced.  Management believes that the exclusion of non-cash
      depreciation and amortization is also necessary to evaluate the cash
      earnings capability of the business.  Management believes that the
      review of its non-GAAP measures in conjunction with other GAAP metrics,
      such as capital expenditures, is more useful in understanding the
      Company's business than the inclusion of depreciation and amortization
      expense in the non-GAAP measures used by management, since depreciation
      and amortization expense has historically fluctuated as a result of
      purchase accounting and this expense involves management judgment (e.g.
      estimated useful lives).
    - Adjusted EBITDA corresponds more closely to the ongoing cash earnings
      capability of the Company's business, by excluding the items described
      above, as well as certain other non-cash items, such as goodwill and
      intangible asset impairment charges and stock-based compensation, and
      other unusual and non-recurring items, such as restructuring expense.
      Adjusted EBITDA does not exclude certain non-cash items, such as
      accruals of revenue and expense, because these items represent timing
      differences and management believes that by including these items, it
      is providing a better view of the cash earnings capability of the
      business.

    EBITDA and Adjusted EBITDA, as presented for the three months and years
    ended December 31, 2009 and December 31, 2008, are not defined under GAAP
    and do not purport to be an alternative to net income or net loss as a
    measure of operating performance.  EBITDA and Adjusted EBITDA have certain
    limitations in that they do not take into account the impact of certain
    expenses to the Company's income statement, such as stock-based
    compensation, goodwill and intangible asset impairment charges,
    acquisition-related accounting and certain one-time items, if applicable.
    Because not all companies use identical calculations, this presentation of
    EBITDA and Adjusted EBITDA may not be comparable to other similarly-titled
    measures used by other companies.
    The following table provides a reconciliation of net (loss) income to
    EBITDA:
                                        Three Months
                                           Ended          Years Ended
                                        December 31,      December 31,
                                        ------------      ------------
                                        2009    2008     2009     2008
                                        ----    ----     ----     ----
    (in millions)
    Net (loss) income                   $(18)     $8    $(337)   $(299)
    Net interest expense                  14      16       57       63
    Provision (benefit) for income
     taxes                                10       -        9       (2)
    Depreciation and amortization         18      17       69       66
                                          --      --       --       --
    EBITDA                               $24     $41    $(202)   $(172)
                                         ===     ===    =====    =====
    EBITDA was adjusted by the items listed and described in more detail
    below.  The following table provides a reconciliation of EBITDA to
    Adjusted EBITDA.

                                        Three Months
                                           Ended          Years Ended
                                        December 31,      December 31,
                                        ------------      ------------
                                        2009    2008     2009     2008
                                        ----    ----     ----     ----
    (in millions)
    EBITDA                               $24     $41    $(202)   $(172)
    Impairment of goodwill and
     intangible assets (a)                 -       -      332      297
    Stock-based compensation expense (b)   3       4       15       17
    Professional services fees (c)         -       2        1        5
    Adjustment to tax sharing
     liability (d)                         -     (14)       -      (14)
    Gain on extinguishment of debt (e)     -       -       (2)       -
                                         ---     ---       --      ---
    Adjusted EBITDA (f)                  $27     $33     $144     $133
                                         ===     ===     ====     ====


    (a)  Represents non-cash charges recorded for impairment of goodwill and
         intangible assets at both the Company's international and domestic
         subsidiaries during the first quarter of 2009 and the third quarter
         of 2008. Management adjusts for this item because it represents a
         significant non-cash operating expense that is not reflective of the
         cash earnings capability of the business.
    (b)  Primarily represents non-cash stock compensation expense; also
         includes expense related to restricted cash awards granted prior to
         the Company's initial public offering in July 2007 ("IPO").
         Management adjusts for this item as it represents a significant
         non-cash operating expense that is not indicative of the cash
         earnings capability of the business.
    (c)  Represents accounting and consulting services primarily associated
         with the IPO and post-IPO transition period. Management adjusts for
         these costs because they are non-recurring charges, representative of
         our transition to a public company.
    (d)  Represents an adjustment recorded to properly reflect the present
         value of the tax sharing liability. Management adjusts for this item
         as it represents a non-cash item that is not indicative of the
         performance of the Company's core operations, and it impacts
         comparability across periods.
    (e)  Represents the non-cash gain recorded upon extinguishment of a
         portion of the Company's $600 million term loan facility.
         Management adjusts for this item because it represents a significant
         non-recurring charge that is not indicative of the cash earnings
         capability of the business.
    (f)  During the first quarter of 2009, the Company reviewed the nature of
         the items for which EBITDA is adjusted and concluded that although
         the Company had initially considered severance charges to be
         non-recurring in nature, given the frequency of occurrence of these
         charges, the Company believes that they are more likely to be viewed
         as recurring in nature. As a result, beginning in the first quarter
         of 2009, the Company no longer adds severance charges back to EBITDA
         to arrive at Adjusted EBITDA. For comparability purposes, the Company
         has adjusted prior periods for this change. The Company recorded
         severance charges of $2 million during each of the three months ended
         December 31, 2009 and December 31, 2008, and $7 million and
         $3 million during the years ended December 31, 2009 and December 31,
         2008, respectively.

SOURCE Orbitz Worldwide

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Orbitz Worldwide Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.