S-4 1 a2173366zs-4.htm FORM S-4
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As filed with the Securities and Exchange Commission on March 30, 2007        No. 333-      



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933


Travelport Limited
(Exact name of registrant parent guarantor as specified in its charter)

Bermuda
(State or jurisdiction
of incorporation or organization)
  4700
(Primary Standard Industrial
Classification Code Number)
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
  98-0505100
(I.R.S. Employer
Identification No.)

TDS Investor (Luxembourg) S.à.r.l.
(Exact name of registrant intermediate parent guarantor as specified in its charter)

Luxembourg
(State or jurisdiction
of incorporation or organization)
  4700
(Primary Standard Industrial
Classification Code Number)
4a, vue Henri Schnadt
Luxembourg 2530
Luxembourg
  98-0505096
(I.R.S. Employer
Identification No.)

Travelport LLC
(Exact name of registrant issuer as specified in its charter)

(see also Table of Additional Registrant Subsidiary Guarantors)


Delaware
(State or other jurisdiction of
incorporation or organization)
  4700
(Primary Standard Industrial
Classification Code Number)
  20-8662915
(I.R.S. Employer
Identification No.)
400 Interpace Parkway
Building A
Parsippany, NJ 07054

Travelport Holdings, Inc.
(Exact name of registrant co-obligor as specified in its charter)

Delaware
(State or jurisdiction
of incorporation or organization)
  4700
(Primary Standard Industrial
Classification Code Number)
400 Interplace Parkway
Building A
Parsippany, NJ 07054
  20-8657242
(I.R.S Employer
Identification No.)
(973) 939-1000
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Eric J. Bock
Executive Vice President, General Counsel & Corporate Secretary
400 Interpace Parkway
Building A
Parsippany, NJ 07054
Tel: (973) 939-1620
Fax: (973) 939-1199
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies:
Edward P. Tolley III, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017-3954
Tel: (212) 455-2000
Fax: (212) 455-2502

        Approximate date of commencement of proposed sale of the securities to the public: The exchange will occur as soon as practicable after the effective date of this Registration Statement.

        If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o


Title of Each Class Of
Securities to be Registered

  Amount to Be
Registered

  Proposed
Maximum
Offering Price
Per Unit

  Proposed
Maximum
Aggregate
Offering Price

  Amount Of
Registration
Fee


Senior Dollar Floating Rate Notes due 2014   $ 150,000,000   100%(1 ) $ 150,000,000(1 ) $4,605(2)     

Guarantees of Senior Dollar Floating Rate Notes due 2014(3)     (4 ) (4 )   (4 )            (4)     

Senior Euro Floating Rate Notes due 2014     €235,000,000   100%(1 )   €235,000,000(1 ) $5,410(2)(5)

Guarantees of Senior Euro Floating Rate Notes due 2014(3)     (4 ) (4 )   (4 )              (4)     

97/8% Senior Fixed Rate Notes due 2014   $ 450,000,000   100%(1 ) $ 450,000,000(1 ) $13,815(2)     

Guarantees of 97/8% Senior Fixed Rate Notes due 2014(3)     (4 ) (4 )   (4 )              (4)     

117/8% Senior Dollar Subordinated Notes due 2016   $ 300,000,000   100%(1 ) $ 300,000,000(1 ) $9,210(2)     

Guarantees of 117/8% Senior Dollar Subordinated Notes due 2016(3)     (4 ) (4 )   (4 )              (4)     

107/8% Senior Euro Subordinated Notes due 2016     €160,000,000   100%(1 )   €160,000,000(1 ) $3,683(2)(5)

Guarantees of 107/8% Senior Euro Subordinated Notes due 2016(3)     (4 ) (4 )   (4 )              (4)     

(1)
Estimated solely for the purpose of calculating the registration fee under Rule 457 of the Securities Act of 1933, as amended.
(2)
The registration fee for the securities offered hereby has been calculated under Rule 457(f)(2) of the Securities Act of 1933, as amended.
(3)
See inside facing page for table of additional registrant guarantors.
(4)
Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no separate fee for the guarantees is payable.
(5)
The amount of registration fee was calculated based on the noon buying rate for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York on March 26, 2007 of 1.3336 = 1.00


        The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.





TABLE OF ADDITIONAL REGISTRANT SUBSIDIARY GUARANTORS

Exact Name of Registrant As
Specified In Its Charter

  State or other
Jurisdiction of
Incorporation or
Organization

  IRS Employer
Identification
Number

  Address, Including
Zip Code, of
Registrant's Principal
Executive Offices

  Phone Number
Apollo Galileo USA Partnership   Delaware   36-3882203   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Apollo Galileo USA Sub I, Inc.   Delaware   36-4182201   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Apollo Galileo USA Sub II, Inc.   Delaware   36-4182202   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Distribution Systems, Inc.   Delaware   11-2935545   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo Ba, Inc.   Delaware   52-1578385   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo Brasil Limited   Delaware   36-4077064   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo International, Inc.   Delaware   36-4156005   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo International, L.L.C.   Delaware   36-4169692   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo International Services, Inc.   Delaware   36-4280951   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo Operations, LLC   Delaware   22-3826920   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Galileo Technologies LLC   Delaware   36-3751366   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Gta North America, Inc.   Delaware   42-1595566   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
HotelPORT, Inc.   Delaware   20-3458272   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
HotelPORT International, Inc.   Delaware   20-8208528   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Internetwork Publishing Corporation   Florida   65-0543622   5455 N. Federal Hwy,
Suite O
Boca Raton, FL, 33487
  973-939-1000
                 

ii


Landmark Holding Company, Inc.   Delaware   20-2743927   5455 N. Federal Hwy,
Suite O
Boca Raton, FL, 33487
  973-939-1000
Magellen Technologies, Inc.   Delaware   36-4274991   400 Interpace
Parkway, Building A,
Parsippany, NJ 07054
  973-939-1000
National Internet Travel Agency   Florida   65-0821014   5455 N. Federal Hwy,
Suite O
Boca Raton, FL 33487
  973-939-1000
Neat Group Corporation   Delaware   01-0774064   400 Interpace
Parkway, Building A,
Parsippany, NJ 07054
  973-939-1000
O Holdings Inc.   Delaware   61-1463518   500 W. Madison
Chicago, IL 60661
Assistant Secretary
  973-939-1000
OctopusTravel.com (USA) Limited   Delaware   n/a   400 Interpace Parkway,
Building A
Parsippany, NJ 07054
  973-939-1000
Orbitz Away LLC   Delaware   20-2420283   500 W. Madison
Chicago, IL 60661
  973-939-1000
Orbitz, Inc.   Delaware   52-2237052   500 W. Madison
Chicago, IL 60661
  973-939-1000
Orbitz, LLC   Delaware   36-4349713   500 W. Madison
Chicago, IL 60661
  973-939-1000
Orbitz Worldwide, Inc.   Delaware   20-5337455   400 Interpace Parkway,
Building A
Parsippany, NJ 07054
  973-939-1000
Quantitude, Inc.   Delaware   36-4359335   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Quantitude Services, Inc.   Delaware   36-4444070   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Raccoon Acquisition I, LLC   Delaware   90-0112349   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
S.D. Shepherd Systems, Inc.   Texas   76-0213055   400 Interpace Parkway,
Building A
Parsippany, NJ 07054
  973-939-1000
Travel Industries, Inc.   Delaware   84-0751209   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Travelport Americas, Inc.   Delaware   90-0112349   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Travelport Inc.   Delaware   20-8352702   400 Interpace Parkway,
Building A
Parsippany, NJ 07054
  973-939-1000
                 

iii


Travelport China Holdings, Inc.   Delaware   20-1620478   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Travelport Development, LLC   Delaware   20-4455259   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Travelport Fulfillment Services, Inc.   Tennessee   62-1149420   801 Royal Parkway,
Suite 200,
Nashville, TN 37214
  973-939-1000
Travelport for Business, Inc.   Delaware   20-5280097   400 Interpace Parkway,
Building A,
Parsippany, NJ 07054
  973-939-1000
Travelport Operations, Inc.   Delaware   20-4141935   400 Interpace Parkway,
Building A,
Parsippany, NJ 07054
  973-939-1000
Travelport Technology Holdings, LLC   Delaware   04-3703583   400 Interpace Parkway,
Building A,
Parsippany, NJ 07054
  973-939-1000
Travelport UK Acquisition Corporation   Delaware   20-3593112   400 Interpace Parkway,
Building A
Parsippany, NJ 07054
  973-939-1000
Trip Network, Inc.   Delaware   22-3768144   400 Interpace Parkway,
Building A,
Parsippany, NJ 07054
  973-939-1000
Trip.com, Inc.   Delaware   36-4342931   400 Interpace Parkway,
Building A,
Parsippany, NJ 07054
  973-939-1000
Trust International Hotel Reservation Services, Inc.   Florida   59-3500280   400 Interpace Parkway, Building A
Parsippany, NJ 07054
  973-939-1000
Warpspeed Sub, Inc.   Delaware   20-8210659   400 Interpace Parkway,
Building A
Parsippany, NJ 07054
  973-939-1000
Wizcom, Inc.   Delaware   20-4465398   400 Interpace Parkway,
Building A,
Parsippany, NJ 07054
  973-939-1000

iv


Information contained herein is subject to completion or amendment. A registration statement relating to those securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy.

Subject to Completion, dated March 30, 2007

PRELIMINARY PROSPECTUS
GRAPHIC


Travelport LLC


Travelport Holdings, Inc.

OFFER TO EXCHANGE

$150,000,000 aggregate principal amount of Senior Dollar Floating Rate Notes due 2014, which have been registered under the Securities Act of 1933, for any and all outstanding Senior Dollar Floating Rate Notes due 2014.

€235,000,000 aggregate principal amount of Senior Euro Floating Rate Notes due 2014, which have been registered under the Securities Act of 1933, for any and all outstanding Senior Euro Floating Rate Notes due 2014.

$450,000,000 aggregate principal amount of 97/8% Senior Fixed Rate Notes due 2014, which have been registered under the Securities Act of 1933, for any and all outstanding 97/8% Senior Fixed Rate Notes due 2014.

$300,000,000 aggregate principal amount 117/8% Senior Dollar Subordinated Notes due 2016, which have been registered under the Securities Act of 1933, for any and all outstanding 117/8% Senior Dollar Subordinated Notes due 2016.

€160,000,000 aggregate principal amount 107/8% Senior Euro Subordinated Notes due 2016, which have been registered under the Securities Act of 1933, for any and all outstanding 107/8% Senior Euro Subordinated Notes due 2016.

The exchange notes will be fully and unconditionally guaranteed on an unsecured basis by certain of our domestic subsidiaries.


        We are conducting the exchange offer in order to provide you with an opportunity to exchange your unregistered outstanding notes for freely tradeable exchange notes that have been registered under the Securities Act.

The Exchange Offer

    We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable.

    You may withdraw tenders of outstanding notes at any time prior to the expiration date of the exchange offer.

    The exchange offer expires at 5:00 p.m., New York City time, on            , 2007 which is the 21st business day after the date of this prospectus.

    The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.

    The terms of the exchange notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the exchange notes will be freely tradeable.

        All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indentures. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the outstanding notes under the Securities Act.

        You should carefully consider the "Risk Factors" beginning on page 21 of this prospectus before participating in the exchange offer.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the exchange notes to be distributed in the exchange offer or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is            , 2007.


\


TABLE OF CONTENTS

 
  Page
Exchange Rate Information   ii
Enforcement of Civil Liabilities   ii
Industry Data   iii
Prospectus Summary   1
Risk Factors   21
Forward-Looking Statements   45
The Transactions   47
Use of Proceeds   50
Capitalization   51
Unaudited Pro Forma Condensed Financial Information   52
Selected Historical Financial Information   57
Management's Discussion and Analysis of Financial Condition and Results of Operations   60
Industry   92
Business   97
Management   119
Security Ownership of Certain Beneficial Owners and Management   142
Certain Relationships and Related Party Transactions   144
Description of Other Indebtedness   155
The Exchange Offer   158
Description of Senior Notes   171
Description of Senior Subordinated Notes   233
Registration Rights   294
Book-Entry, Settlement and Clearance   296
Material U.S. Federal Income Tax Consequences   299
Certain ERISA Considerations   300
Plan of Distribution   301
Legal Matters   301
Experts   301
Available Information   302
Index to Financial Statements   F-1

        We have not authorized any dealer, salesperson or other person to give any information or represent anything to you other than the information contained in this prospectus. You must not rely on unauthorized information or representations.

        This prospectus does not offer to sell nor ask for offers to buy any of the securities in any jurisdiction where it is unlawful, where the person making the offer is not qualified to do so, or to any person who cannot legally be offered the securities. The information in this prospectus is current only as of the date on its cover, and may change after that date.


        The following, which are used in this prospectus, are either (i) our registered trademarks or service marks, or trademarks or service marks for which we have pending applications or common law rights to, or (ii) registered trademarks or service marks or pending trademarks or service marks for which we have licenses to use: Galileo®; Apollo®; CheapTickets®; Orbitz®; Orbitz and Go™; OrbitzTLC™; Travelport®; HotelClub®; RatesToGo®; Gullivers Travel Associates™; GTA®; OctopusTravel®; ebookers®; Travelbag®; The Less You Pay, The Better It Feels™; and Deal Detector™.

i



EXCHANGE RATE INFORMATION

        The following table sets forth, for the periods indicated, certain information regarding the noon buying rate in the City of New York for the euro, expressed in U.S. dollars per euro. These rates are presented for informational purposes and are not the same as the rates that are used for purposes of translating euros into U.S. dollars in our financial statements or for determining the equivalent amounts of the euro-denominated notes. The exchange rate used for presenting the amounts in U.S. dollars of the euro-denominated notes was one euro to $1.3199.

 
  U.S. Dollars per Euro at
and for the Year Ended
December 31,

 
  2003
  2004
  2005
  2006
Exchange rate at end of period   $ 1.26   $ 1.35   $ 1.18   $ 1.32
Average exchange rate during period(1)     1.14     1.25     1.24     1.26
Highest exchange rate during period     1.26     1.36     1.35     1.33
Lowest exchange rate during period     1.04     1.18     1.17     1.19

(1)
The average of the noon buying rates for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York on the last business day of each month during the applicable period.



ENFORCEMENT OF CIVIL LIABILITIES

        Travelport Limited, or the Parent Guarantor, is a Bermuda company and TDS Investor (Luxembourg) S.à.r.l., or the Intermediate Parent Guarantor, is a Luxembourg company. A substantial portion of their assets, at any given time, is or may be located in jurisdictions outside the United States. Although the Parent Guarantor and the Intermediate Parent Guarantor have appointed CT Corporation System as their agent to receive service of process with respect to any actions against them arising out of violations of the U.S. federal securities laws in any federal or state court in the United States relating to the transactions covered by this prospectus, it may be difficult for investors to enforce against them judgments of U.S. courts predicated upon civil liability provisions of the U.S. federal securities laws.

        The Parent Guarantor has been advised by its Bermuda counsel that there is no treaty in force between the United States and Bermuda providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As a result, whether a U.S. judgment would be enforceable in Bermuda against the Parent Guarantor depends on whether the U.S. court that entered the judgment is recognized by a Bermuda court as having jurisdiction over it, as determined by reference to Bermuda conflict of law rules. The courts of Bermuda would recognize as a valid judgment, a final and conclusive judgment in personam obtained in a U.S. court pursuant to which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty). The courts of Bermuda would recognize such a U.S. judgment as long as (1) the U.S. court had proper jurisdiction over the parties subject to the judgment, (2) the U.S. court did not contravene the rules of natural justice of Bermuda, (3) the U.S. judgment was not obtained by fraud, (4) the enforcement of the U.S. judgment would not be contrary to the public policy of Bermuda, (5) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Bermuda and (6) there is due compliance with the correct procedures under the laws of Bermuda.

        In addition to and irrespective of jurisdictional issues, Bermuda courts will not enforce a provision of the U.S. federal securities law that is either penal in nature or contrary to public policy. It is the advice of the Parent Guarantor's Bermuda counsel that an action brought pursuant to a public or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the state

ii



in its sovereign capacity, is unlikely to be entertained by Bermuda courts. Specified remedies available under the laws of U.S. jurisdictions, including specified remedies under U.S. federal securities laws, would not be available under Bermuda law or enforceable in a Bermuda court, as they are likely to be contrary to Bermuda public policy. Further, no claim may be brought in Bermuda against the Parent Guarantor in the first instance for a violation of U.S. federal securities laws because these laws have no extraterritorial application under Bermuda law and do not have force of law in Bermuda.

        The Intermediate Parent Guarantor has been advised by its Luxembourg counsel that there is no treaty in force between the United States and Luxembourg providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. As a result, whether a U.S. judgment would be enforceable in Luxembourg against the Intermediate Parent Guarantor depends on whether the U.S. court that entered the judgment is recognized by a Luxembourg court as having jurisdiction over it, as determined by reference to Luxembourg conflict of law rules. The courts of Luxembourg would recognize as a valid judgment, a final and conclusive judgment in personam obtained in a U.S., court pursuant to which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty): The courts of Luxembourg would recognize such a U.S. judgment as long as (1) the U.S. court had proper jurisdiction over the parties subject to the judgement both according to its own laws and to the Luxembourg rules on jurisdiction, (2) the U.S. court applied the proper law to the matter submitted to it, the procedure must have been regular and did not contravene the rules of natural justice of Luxembourg, (3) the U.S. judgment was not obtained by fraud, (4) the enforcement of the U.S. judgment would not be contrary to the public policy of Luxembourg, (5) the judgement is final and enforceable in the U.S. and no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Luxembourg and (6) there is due compliance with the correct procedures under the laws of Luxembourg.

        In addition to and irrespective of jurisdictional issues, Luxembourg courts may not enforce a provision of the U.S. federal securities law that is either penal in nature or contrary to public policy. It is the advice of the Intermediate Parent Guarantor's Luxembourg counsel that an action brought pursuant to a public or penal law, the purpose of which is the enforcement of a sanction, power or right at the instance of the state in its sovereign capacity, is unlikely to be entertained by Luxembourg courts. Specified remedies available under the laws of U.S. Jurisdictions, including specified remedies under U.S. federal securities laws, would not be available under Luxembourg law or enforceable in a Luxembourg court, as they are likely to be contrary to Luxembourg public policy. Further, no claim may be brought in Luxembourg against the Intermediate Parent Guarantor in the first instance for a violation of U.S. federal securities laws because these laws have no extraterritorial application under Luxembourg law and do not have force of law in Luxembourg.



INDUSTRY DATA

        We obtained the industry and competitive position data used throughout this prospectus from our own internal estimates and research as well as from industry publications and research, surveys and studies conducted by third parties, including PhoCusWright, Inc. and World Travel and Tourism Council, third-party providers of industry research. In addition, some of the data, including our determinations of industry size and share within our industry included in this prospectus is based on our processing of raw airline bookings data compiled by Galileo and sold as marketing information data tapes, or MIDT. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these publications, studies and surveys is reliable, we have not independently verified industry and competitive position data from third-party sources. While we believe our internal business research is reliable and the industry definitions are appropriate, neither such research nor these definitions have been verified by any independent source.

iii



PROSPECTUS SUMMARY

        This summary highlights key aspects of the information contained elsewhere in this prospectus and may not contain all of the information you should consider before participating in the exchange offer. You should read this summary together with the entire prospectus, including the information presented under the heading "Risk Factors" and the more detailed information in the pro forma financial statements and the historical financial statements and related notes appearing elsewhere in this prospectus.

        Unless otherwise indicated or the context otherwise requires, "we," "us," "our," "Travelport" and "our company" refer to Travelport Limited, or the Parent Guarantor, the indirect parent company of Travelport LLC, and its consolidated subsidiaries, which were acquired pursuant to the Transactions (as described below). See "The Transactions." The "Issuer" refers to Travelport LLC, formerly TDS Investor Corporation, the issuer of the notes. "Avis Budget Group, Inc." and "Avis Budget" refer to Avis Budget Group, Inc. and its consolidated subsidiaries, formerly known as Cendant Corporation, or "Cendant". Financial information identified in this prospectus as "pro forma" gives effect to the closing of the Transactions.


Our Business

        We provide a highly effective worldwide system for the distribution of travel and travel-related products and services. Our comprehensive portfolio of Business to Business, or B2B, and Business to Consumer, or B2C, businesses spans the spectrum of travel distribution channels, allowing us to achieve significant geographic breadth and business diversity. We believe our breadth and diversity are core strengths of our business. We distribute content we aggregate from airlines, hotels, car rental companies, cruise lines and other travel suppliers through more than 227,000 global points of sale in our B2B businesses and to millions of travelers that visit our wholly owned online travel agencies in our B2C businesses. We are an important component of the worldwide travel industry as we provide travel suppliers with access to an extensive customer base of travelers, and provide travel agencies and consumers with robust booking technology and access to considerable supplier inventory. For the year ended December 31, 2006, we recorded revenue of $2.6 billion and derived approximately 50% of our revenue from regions outside the United States.

        Our B2B businesses primarily focus on electronic travel distribution services that connect travel suppliers to travel agencies, who in turn distribute travel and travel-related products and services to their customers. In addition, our B2B businesses provide wholesale accommodation and destination services as well as offer transaction processing solutions for travel suppliers and other travel industry customers. Our B2B businesses consist principally of Galileo, our global distribution system, or GDS, and Gullivers Travel Associates, or GTA, our wholesale travel business. In addition, we derive revenue from our supplier services businesses, which provide technology services and solutions for the airline and hotel industries, and from our corporate solutions operations, which offer corporate travel fulfillment solutions. For the year ended December 31, 2006, our B2B businesses represented approximately 70% of our revenue. Our B2C businesses focus on offering travel products and services directly to consumers, largely through online travel agencies that offer a full range of travel products and services easily and efficiently. We operate several leading online travel agencies, or OTAs, in the United States, Europe and Asia Pacific serving various customer segments in the travel industry, including Orbitz and CheapTickets in the United States and ebookers in Europe. For the year ended December 31, 2006, our B2C businesses represented approximately 30% of our revenue.

        Our B2B and B2C businesses operate globally and across the entire spectrum of travel distribution channels, allowing us to generate revenue at all significant points of sale and providing us with a hedge against potential strategic and geographic shifts in the industry. We believe we are one of the most diversified travel distribution companies in the world both geographically and in the scope of services we provide, as outlined below.

1


GRAPHIC


(1)
Utilize a different GDS pursuant to a pre-existing contract that expires in 2011.

        Our principal B2B and B2C businesses are leaders in their industries being one of the top players in many of the regions in which they operate. Galileo achieved a 23% worldwide share of GDS processed air segments in 2005, which consisted of strong share in attractive international regions, including Europe, Asia Pacific, the Middle East and Africa in 2005. Our online and offline travel agency businesses recorded approximately $10 billion in combined gross bookings in 2006, resulting in the number two industry position by gross bookings in the United States and one of the leading online travel agencies internationally. Our consumer brands include powerful online brands such as Orbitz and CheapTickets in the U.S. and ebookers in Europe.

        We were formed by Cendant in 2001 following its acquisitions of Galileo and CheapTickets. In 2004 and 2005, we significantly enhanced our worldwide travel distribution system through the acquisitions of Flairview, Orbitz, ebookers and GTA. Each acquisition was aimed at building scale and enhancing diversity in our businesses. Flairview, which operates under the HotelClub and RatesToGo brands, provides us with access to merchant hotel inventory and an online presence in Asia Pacific. Orbitz provides us with significant scale in the U.S., leading technology, significant brand recognition and the ability to achieve cost savings with our other online travel agencies including CheapTickets and

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ebookers. ebookers provides significant international presence and the opportunity to compete in Europe. Finally, GTA further differentiates our system by providing access to favorable rates and allocations of hotel inventory through its relationships with a broad range of independent hotels and its wide variety of non-hotel destination services. GTA also provides multiple opportunities to cross-sell this inventory through our various distribution channels. As a result of these acquisitions, we operate a comprehensive global travel distribution system with significant geographic breadth and business diversity.


Industry Overview

        The worldwide travel industry represents a large and dynamic market. We believe that gross bookings in the global airline, hotel, car rental, vacation package and cruise industry were approximately $900 billion in 2005. Europe, the United States and Asia Pacific account for approximately 75% of the global travel industry. Gross bookings in these regions are expected to grow from approximately $670 billion in 2005 to $710 billion in 2007, representing a compound annual growth rate of 3%. Current drivers of industry growth include:

    Favorable global macro-economic trends, including income growth in emerging regions such as Asia Pacific and the Middle East;

    Increased customer discretionary spending on travel and recreation;

    Greater business travel resulting from the growth in the global economy;

    Growing sophistication of online travel offerings such as dynamic packaging, comprehensive global inventory and customer reviews; and

    Continued migration to the Internet as an efficient vehicle to research and book travel.

        The bulk of current global travel bookings is divided among Europe, the United States and Asia Pacific. Asia Pacific is expected to gain share over the next several years, as large growing populations combined with rising spending power drive increased business and leisure travel. The global travel industry can be divided into five main segments: air, hotel, car rental, vacation package, and cruise. For the total 2005 U.S. travel market, air was the largest segment based on gross bookings, followed by hotel, car and vacation packages.

        Thousands of travel suppliers compete to reach travelers. The fragmented nature of the industry has created an opportunity for distributors to capture value by developing and managing efficient systems that are capable of bridging travel supply and demand on a global, real-time basis. Success in the travel distribution industry depends on securing comprehensive inventory and then delivering this inventory to travelers to purchase through a system of owned and third-party distribution channels.

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        The key players of the travel value chain are outlined below:

GRAPHIC

        At the top of the travel distribution value chain are suppliers which seek cost-effective ways to reach end-user travelers. Historically, these suppliers largely relied on traditional GDSs to connect their inventory of products and services with travel agencies who in turn distribute the products and services to travelers. In recent years, however, travel suppliers have begun to utilize other forms of distribution, including direct distribution via their own websites and emerging third party GDS-bypass technologies. Wholesalers are another distribution channel through which travel agencies obtain access to travel products and services and distribute them to groups or independent travelers. Wholesalers acquire inventory from suppliers and distribute this inventory primarily to tour operators and travel agencies. In addition, connectivity, or "switch", providers connect hotel and car suppliers to GDSs, thereby providing accurate real-time inventory information to the GDSs to facilitate sales by these suppliers.

        Historically, offline travel agencies, supplier reservation centers and ticket offices were the largest distribution channels to reach travelers. With the emergence of the Internet, however, numerous alternatives have developed for reaching travelers. For instance, OTAs and "meta-search" companies such as Kayak.com, Sidestep, Inc. and Yahoo!/Farechase provide a way for travelers to view multiple alternatives and book travel directly, while travel suppliers provide access to their own inventory on their own direct websites. New companies, often referred to as GDS New Entrants or "GNEs," are also offering alternative distribution technologies that perform the same function as a GDS without the large technology investment and network of a traditional GDS.

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Competitive Strengths

        We believe the following are our key competitive strengths:

        Breadth and diversity.    Our worldwide travel distribution system is characterized by geographic breadth, business diversity and a broad customer base, all of which provide a competitive advantage and a high degree of stability to our consolidated cash flows.

    Geographic Breadth.  We operate in more than 130 countries, and for the year ended December 31, 2006, we generated approximately 50% of our revenue from regions outside the United States.

    Business Diversity.  The diverse mix of our business allows us to capitalize on opportunities across the spectrum of worldwide travel distribution channels and types of customers and helps to better protect us against potential strategic and geographic shifts in the industry.

    Broad Supplier Base.  Our worldwide travel distribution system includes more than 425 airlines, 68,000 hotels, 20 car rental companies, 430 tour operators and 20 cruise lines.

        Significant presence in attractive international regions.    Our principal businesses have significant presence in a number of attractive international regions. International regions such as Asia Pacific, parts of Europe and the Middle East have attractive volume growth outlooks, driven by favorable demographic trends and growth trends of the underlying economies. We believe the international online segment has significant opportunities due to the accelerating penetration of online travel agencies in a number of key regions.

        Leading technology platform.    We have a strong track record in developing leading technological innovations, particularly in the online travel industry.

        Strong and consistent cash flow generation.    We have historically generated strong cash flows on a consistent basis. Drivers of our cash flows include our ability to successfully leverage growth in transaction volume and customer base across a shared infrastructure, our existing, modest capital expenditure requirements, attractive working capital dynamics and a favorable tax structure. These characteristics, combined with the contractual nature of our revenue and costs, our leading industry positions and long-standing customer relationships provide a strong, stable stream of cash flows.

        Considerable cross-selling opportunities.    We are able to cross-sell differentiated content across our portfolio of businesses, which often leads to higher sell-through rates for suppliers and increased revenue for us.

        Highly experienced management team and premier sponsorship.    Our management team is committed to improving and maintaining operational excellence by utilizing their extensive knowledge of the travel and technology industries. The Blackstone Group, our sponsor, is a leading global private equity firm with deep experience in the travel and leisure industry through previous investments.


Strategy

        We intend to pursue the following strategic initiatives:

        Drive operational efficiency and lower costs.    Our comprehensive worldwide travel distribution system was created by our former parent company through the acquisition of approximately 15 businesses beginning in 2001. We believe the synergies inherent in our business model provide more

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effective distribution services for our suppliers as well as greater choice of travel products and services at more competitive prices to travel agencies and travelers.

        Expand and deepen our global footprint.    We intend to continue to increase the geographic presence of our B2B and B2C businesses. We believe that we can increase our presence as a significant value-added distributor for travel suppliers, travel agencies and travelers around the world by utilizing our global inventory of products and services, our leading technology, and our established relationships with travel suppliers and travel agencies.

        Sell more higher margin and complex travel offerings.    We intend to increase revenue and profitability by further increasing our sales of higher margin, complex or dynamically packaged travel products to be more in line with those achieved by other online travel agencies. We have implemented and intend to continue implementing more effective merchandising and promotions, expanded product offerings and greater personalization through more targeted and efficient e-mail marketing to our base of existing customers.

        Provide value-added technology-based services to suppliers, travel agencies and travelers.    We intend to complement our travel distribution system by continuing to provide important technology-based services to travel suppliers, travel agencies and travelers.

        Evaluate strategic opportunities.    While our strategy is focused on realizing the organic revenue growth potential of our existing businesses and cost savings from fully integrating our portfolio, we will continue to evaluate strategic transactions to enhance the value of our enterprise.


Company Information

        Travelport LLC, a Delaware limited liability company, formerly TDS Investor Corporation, is the issuer of the notes, and Travelport Holdings, Inc., a Delaware corporation, is the corporate co-obligor of the notes. Our principal executive offices are located at 400 Interpace Parkway, Building A, Parsippany, NJ 07054, and our telephone number at that address is (973) 939-1000.


Recent Developments

Reorganization

        Prior to January 1, 2007, we operated in two segments: Business to Business and Business to Consumer. On September 27, 2006, we announced that we will be organized under three global businesses—Galileo, Orbitz Worldwide, and GTA—effective January 1, 2007. Galileo is now comprised of our GDS business and our supplier services offerings, including United Airlines reservations, Global Fares and Shepherd Systems. Orbitz Worldwide is now comprised of our business to consumer businesses, including Orbitz, CheapTickets, ebookers, Flairview Travel, our Supplier.com hosting business and our corporate travel business. Gullivers Travel Associates is now comprised of GTA, our leading wholesaler, TRUST International, Wizcom and OctopusTravel.

Proposed Acquisition of Worldspan

        On December 7, 2006, we announced that we entered into a definitive agreement to acquire Worldspan Technologies Inc., or Worldspan, to create a leading global travel solution provider. Simultaneously with the execution of the merger agreement, Worldspan completed a recapitalization plan. As part of this recapitalization plan, Travelport loaned $125 million to Worldspan in exchange for a payment in kind ("PIK") note which Travelport funded through cash on hand. In addition, one of

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Travelport's parent companies also loaned Worldspan $125 million in exchange for a PIK note, which was funded by a $125 million equity contribution by investment funds affiliated with OEP TP, Ltd, or OEP. The transaction has been unanimously approved by the boards and major shareholders of both companies but consummation of the transaction remains subject to customary conditions to closing, including regulatory approvals. This transaction will be financed with approximately $1.04 billion of new funded indebtedness. Of the $1.04 billion of new indebtedness, we intend to use approximately $951 million to retire existing indebtedness of Worldspan after completion of our acquisition, approximately $72 million for fees and expenses and approximately $13 million to buy out the remaining equity of Worldspan's existing owners. Audited financial statements of Worldspan are included in the prospectus beginning on page F-64. See also "Unaudited Pro Forma Condensed Financial Information."

Proposed IPO of Orbitz Worldwide

        On March 14, 2007, we announced our intention to sell a portion of our ownership interest in our Orbitz Worldwide businesses in an initial public offering. The size of the ownership interest to be sold and the amount of proceeds to be received from the disposition of Orbitz Worldwide are yet to be determined. A portion of the proceeds would be used by us to reduce our outstanding indebtedness.

New PIK Term Loan at Parent Company

        On March 27, 2007, Travelport Holdings Limited, the parent of the Parent Guarantor, borrowed $1.1 billion of senior unsecured PIK term loans. Interest on the PIK term loans is payable quarterly in arrears by adding such interest to the principal amount of the outstanding PIK term loans. The PIK term loans were funded in U.S. dollars and mature five years after the PIK term loans were made. Travelport Holdings Limited intends to use the net proceeds from the borrowing of the PIK term loans to pay a dividend to its shareholders. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Parent Company PIK Loans."

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Summary of the Terms of The Exchange Offer

        On August 23, 2006, we completed the private offering of the outstanding notes. In this prospectus, the terms "outstanding notes" refers to the Senior Dollar Floating Rate Notes due 2014; the Senior Euro Floating Rate Notes due 2014; the 97/8% Senior Fixed Rate Notes due 2014; the 117/8% Senior Dollar Subordinated Notes due 2016; and the 107/8% Senior Euro Subordinated Notes due 2016, all issued in the private offering. The terms "exchange notes" refers to Senior Dollar Floating Rate Notes due 2014; the Senior Euro Floating Rate Notes due 2014; the 97/8% Senior Fixed Rate Notes due 2014; the 117/8% Senior Dollar Subordinated Notes due 2016; and the 107/8% Senior Euro Subordinated Notes due 2016, all as registered under the Securities Act of 1933, as amended (the "Securities Act"). The term "notes" refers to both the outstanding notes and the exchange notes.


General

 

In connection with the private offering, we entered into registration rights agreements with Lehman Brothers Inc., Credit Suisse Securities (USA) LLC, UBS Securities LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities (collectively, the "initial purchasers"), the initial purchasers of the outstanding notes, in which we and the guarantors agreed, among other things, to use our reasonable best efforts to complete the exchange offer for the outstanding notes within 360 days after the date of issuance of the outstanding notes.

 

 

You are entitled to exchange in the exchange offer your outstanding notes for exchange notes, which are identical in all material respects to the outstanding notes except:

 

 


 

the exchange notes have been registered under the Securities Act;

 

 


 

the exchange notes are not entitled to certain registration rights which are applicable to the outstanding notes under the registration rights agreements; and

 

 


 

certain additional interest rate provisions are no longer applicable.

The exchange offer

 

We are offering to exchange up to:

 

 


 

$150,000,000 aggregate principal amount of Senior Dollar Floating Rate Notes due 2014, which have been registered under the Securities Act, for any and all outstanding Senior Dollar Floating Rate Notes due 2014.

 

 


 

€235,000,000 aggregate principal amount of Senior Euro Floating Rate Notes due 2014, which have been registered under the Securities Act, for any and all outstanding Senior Euro Floating Rate Notes due 2014.
         

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$450,000,000 aggregate principal amount of 97/8% Senior Fixed Rate Notes due 2014, which have been registered under the Securities Act, for any and all outstanding 97/8% Senior Fixed Rate Notes due 2014.

 

 


 

$300,000,000 117/8% Senior Dollar Subordinated Notes due 2016, which have been registered under the Securities Act, for any and all outstanding 117/8% Senior Dollar Subordinated Notes due 2016.

 

 


 

€160,000,000 107/8% Senior Euro Subordinated Notes due 2016, which have been registered under the Securities Act, for any and all outstanding 107/8% Senior Euro Subordinated Notes due 2016.

 

 

You may only exchange outstanding notes in denominations of $2,000 and integral multiples of $2,000 in the case of the dollar-denominated notes, and €50,000 and integral multiples of €50,000 in the case of the euro-denominated notes.

 

 

Subject to the satisfaction or waiver of specified conditions, we will exchange the exchange notes for all respective outstanding notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer. We will cause the exchange to be effected promptly after the expiration of the exchange offer.

 

 

Upon completion of the exchange offer, there may be no market for the outstanding notes and you may have difficulty selling them.

Resales:

 

Based on interpretations by the staff of the Securities and Exchange Commission, or the "SEC", set forth in no-action letters issued to third parties referred to below, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act, if:

 

 

(1)

 

you are acquiring the exchange notes in the ordinary course of your business;

 

 

(2)

 

you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes;

 

 

(3)

 

you are not an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act; and

 

 

(4)

 

you are not engaged in, and do not intend to engage in, a distribution of the exchange notes.
         

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If you are not acquiring the exchange notes in the ordinary course of your business, or if you are engaging in, intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the exchange notes, or if you are an affiliate of Travelport, then:

 

 

(1)

 

you cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co., Inc. (available June 5, 1991), Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC's letter to Shearman & Sterling dated July 2, 1993, or similar no- action letters; and

 

 

(2)

 

in the absence of an exception from the position of the SEC stated in (1) above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale or other transfer of the exchange notes.

 

 

If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making or other trading activities, you must acknowledge that you will deliver a prospectus, as required by law, in connection with any resale or other transfer of the exchange notes that you receive in the exchange offer. See "Plan of Distribution."

Expiration date

 

The exchange offer will expire at 5:00 p.m., New York City time, on            , 2007, which is the 21st business day after the date of this prospectus, unless extended by us. We do not currently intend to extend the expiration date of the exchange offer.

Withdrawal

 

You may withdraw the tender of your outstanding notes at any time prior to the expiration date of the exchange offer. We will return to you any of your outstanding notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offer.

Interest on the exchange notes and the outstanding notes

 

Each exchange note will bear interest at the rate per annum set forth on the cover page of this prospectus from the most recent date to which interest has been paid on the outstanding notes. The interest on the senior floating rate notes is payable on each March 1, June 1, September 1 and December 1, beginning December 1, 2006. The interest on the senior dollar fixed rate notes and senior subordinated notes is payable on each March 1 and September 1, beginning March 1, 2007. No interest will be paid on outstanding notes following their acceptance for exchange.
         

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Conditions to the exchange offer

 

The exchange offer is subject to customary conditions, which we may assert or waive. See "The Exchange Offer—Conditions to the exchange offer."

Procedures for tendering outstanding Notes

 

If you wish to participate in the exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal, or a facsimile of the letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal. If you hold outstanding notes through The Depository Trust Company, or "DTC", and wish to participate in the exchange offer for the outstanding notes, you must comply with the Automated Tender Offer Program procedures of DTC.

 

 

The exchange agent and Euroclear and Clearstream, Luxembourg have confirmed that any registered holder of original securities that is a participant in Euroclear's or Clearstream, Luxembourg's book-entry transfer facility system may tender original securities by book-entry delivery by causing Euroclear or Clearstream, Luxembourg to transfer the original securities into the exchange agent's account at Euroclear or Clearstream, Luxembourg in accordance with Euroclear's or Clearstream, Luxembourg's procedures for such transfer. However, a properly completed and duly executed letter of transmittal in the form accompanying this prospectus or an agent's message, and any other required documents, must nonetheless be transmitted to and received by the exchange agent prior to the expiration date.

 

 

By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:

 

 

(1)

 

you are acquiring the exchange notes in the ordinary course of your business;

 

 

(2)

 

you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes;

 

 

(3)

 

you are not an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act; and

 

 

(4)

 

you are not engaged in, and do not intend to engage in, a distribution of the exchange notes.
         

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If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making or other trading activities, you must represent to us that you will deliver a prospectus, as required by law, in connection with any resale or other transfer of such exchange notes.

 

 

If you are not acquiring the exchange notes in the ordinary course of your business, or if you are engaged in, or intend to engage in, or have an arrangement or understanding with any person to participate in, a distribution of the exchange notes, or if you are an affiliate of the Issuer, then you cannot rely on the positions and interpretations of the staff of the SEC and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale or other transfer of the exchange notes.

Special procedures for beneficial owners

 

If you are a beneficial owner of outstanding notes that are held in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those outstanding notes in the exchange offer, you should contact such person promptly and instruct such person to tender those outstanding notes on your behalf.

Guaranteed delivery procedures

 

If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal and any other documents required by the letter of transmittal or you cannot comply with the DTC procedures for book-entry transfer prior to the expiration date, then you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under "The Exchange Offer—Guaranteed delivery procedures."

Effect on holders of outstanding notes

 

In connection with the sale of the outstanding notes, we entered into registration rights agreements with the initial purchasers of the outstanding notes that grants the holders of outstanding notes registration rights. By making the exchange offer, we will have fulfilled most of our obligations under the registration rights agreements. Accordingly, we will not be obligated to pay additional interest as described in the registration rights agreements. If you do not tender your outstanding notes in the exchange offer, you will continue to be entitled to all the rights and limitations applicable to the outstanding notes as set forth in the indenture, except we will not have any further obligation to you to provide for the registration of the outstanding notes under the registration rights agreements and we will not be obligated to pay additional interest as described in the registration rights agreements, except in certain limited circumstances. See "Registration Rights."
         

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To the extent that outstanding notes are tendered and accepted in the exchange offer, the trading market for outstanding notes could be adversely affected.

Consequences of failure to exchange

 

All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the outstanding notes under the Securities Act.

Material income tax considerations

 

The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for United States federal income tax purposes. See "Material U.S. Federal Income Tax Consequences."

Use of proceeds

 

We will not receive any cash proceeds from the issuance of exchange notes in the exchange offer.

Exchange agent

 

The Bank of Nova Scotia Trust Company of New York, whose address and telephone number are set forth in the section captioned "The Exchange Offer—Exchange agent" of this prospectus, is the exchange agent for the dollar tranches of the exchange offer. The Bank of New York, whose address and telephone number is set forth in the section "The Exchange Offer—Exchange agent" of this prospectus, is the exchange agent for the euro tranches of the exchange offer.

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Summary of the Terms of the Exchange Notes

        The terms of the exchange notes are identical in all material respects to the terms of the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreements. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be governed by the same indentures under which the outstanding notes were issued, and the exchange notes and the outstanding notes will constitute a single class for all purposes under the indentures. The following summary is not intended to be a complete description of the terms of the notes. For a more detailed description of the notes, see "Description of Senior Notes" and "Description of Senior Subordinated Notes".

        The senior dollar floating rate notes and the senior euro floating rate notes are collectively referred to herein as the "senior floating rate notes," the dollar senior subordinated notes and the euro senior subordinated notes are collectively referred to herein as the "senior subordinated notes," the senior floating rate notes and the senior dollar fixed rate notes are collectively referred to herein as the "senior notes," and the senior notes and the senior subordinated notes are collectively referred to herein as the "notes," unless the context otherwise requires.

Issuer   Travelport LLC, formerly TDS Investor Corporation, a Delaware limited liability company. Travelport Holdings, Inc., a Delaware corporation, is the corporate co-obligor of the notes.

Securities

 


 

$150 million aggregate principal amount of Senior Dollar Floating Rate Notes due 2014;

 

 


 

€235 million aggregate principal amount of Senior Euro Floating Rate Notes due 2014;

 

 


 

$450 million aggregate principal amount of 97/8% Senior Dollar Fixed Rate Notes due 2014;

 

 


 

$300 million aggregate principal amount of 117/8% Dollar Senior Subordinated Notes due 2016; and

 

 


 

€160 million aggregate principal amount of 107/8% Euro Senior Subordinated Notes due 2016.

Maturity

 

The senior notes will mature on September 1, 2014 and the senior subordinated notes will mature on September 1, 2016.

Interest Payment Dates

 

Interest on the senior floating rate notes is payable on March 1, June 1, September 1, and December 1 of each year.

 

 

Interest on the senior dollar fixed rate notes and the senior subordinated notes is payable on March 1 and September 1 of each year.

Ranking

 

The outstanding senior notes are, and the exchange senior notes will be, senior unsecured obligations of the Issuer and:

 

 


 

rank senior in right of payment to all existing and future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior notes, including the senior subordinated notes;
         

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rank equally in right of payment to all existing and future senior debt and other obligations that are not, by their terms, expressly subordinated in right of payment to the senior notes; and

 

 


 

be effectively subordinated in right of payment to all existing and future secured debt (including obligations under the senior secured credit facilities), to the extent of the value of the assets securing such debt, and be structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the senior notes.

 

 

The outstanding senior subordinated notes are, and the exchange senior subordinated notes will be, unsecured senior subordinated obligations of the Issuer and:

 

 


 

be subordinated in right of payment to all existing and future senior debt, including the senior credit facilities and the senior notes;

 

 


 

rank equally in right of payment to all future senior subordinated debt;

 

 


 

be effectively subordinated in right of payment to all existing and future secured debt (including the senior credit facilities), to the extent of the value of the assets securing such debt, and be structurally subordinated to all obligations of each of our subsidiaries that is not a guarantor of the senior subordinated notes; and

 

 


 

rank senior in right of payment to all future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the senior subordinated notes.

 

 

The notes are structurally subordinated to all existing and future indebtednes of our subsidiaries who do not guarantee the notes. As of December 31, 2006, (1) the notes and related guarantees would have ranked effectively junior to approximately $2,223 million ($3,263 million giving effect to the proposed acquisition of Worldspan) of senior secured indebtedness, (2) the senior notes and related guarantees would have ranked senior to $511 million of senior subordinated notes, (3) the senior subordinated notes and related guarantees would have ranked junior to approximately $3,133 million ($4,173 million giving effect to the proposed acquisition of Worldspan) of senior indebtedness under the senior credit facilities and the senior notes and (4) we would have had an additional $275 million of unutilized capacity under our revolving credit facility, a $125 million synthetic letter of credit facility, under which $105.9 million in letters of credit were issued, and the option to raise incremental senior secured credit facilities of up to $500 million. See "Description of Other Indebtedness."
         

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Guarantees

 

Each of our subsidiaries that guarantees the obligations under our senior credit facilities, the Parent Guarantor and the Intermediate Parent Guarantor jointly and severally and unconditionally guarantee the senior notes on a senior unsecured basis and the senior subordinated notes on a senior subordinated unsecured basis. The guarantees of the senior notes rank equally with all other senior indebtedness of the guarantors. The guarantees of the senior subordinated notes are subordinated to all senior indebtedness of the guarantors. None of our foreign subsidiaries, non-wholly owned subsidiaries or receivables subsidiaries guarantee the senior notes or the senior subordinated notes.

Optional Redemption

 

At any time prior to September 1, 2008, the Issuer may redeem some or all of each series of the senior floating rate notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium (as described in "Description of Senior Notes—Optional Redemption") plus accrued and unpaid interest to the redemption date. At any time on or after September 1, 2008, the Issuer may redeem some or all of each series of the senior floating rate notes at the redemption prices listed under "Description of Senior Notes—Optional Redemption" plus accrued and unpaid interest to the redemption date.

 

 

At any time prior to September 1, 2010, the Issuer may redeem some or all of the senior dollar fixed rate notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium (as described in "Description of Senior Notes—Optional Redemption") plus accrued and unpaid interest to the redemption date. At any time on or after September 1, 2010, the Issuer may redeem some or all of the senior dollar fixed rate notes at the redemption prices listed under "Description of Senior Notes—Optional Redemption" plus accrued and unpaid interest to the redemption date.

 

 

At any time prior to September 1, 2011, the Issuer may redeem some or all of each series of the senior subordinated notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium (as described in "Description of Senior Subordinated Notes—Optional Redemption") plus accrued and unpaid interest to the redemption date. At any time on or after September 1, 2011, the Issuer may redeem some or all of each series of the senior subordinated notes at the redemption prices listed under "Description of Senior Subordinated Notes—Optional Redemption" plus accrued and unpaid interest to the redemption date.
         

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Optional Redemption After
Certain Equity Offerings

 

At any time (i) prior to September 1, 2008, the Issuer may redeem up to 35% of each series of the senior floating rate notes, (ii) prior to September 1, 2009, the Issuer may redeem up to 35% of the senior dollar fixed rate notes and (iii) prior to September 1, 2009, the Issuer may redeem up to 35% of each series of the senior subordinated notes, in each case with proceeds that the Issuer or one of its parent companies raises in one or more equity offerings at redemption prices set forth in this prospectus so long as, in each such case, at least 50% of the aggregate principal amount of the notes issued of the applicable series remains outstanding.

 

 

See "Description of Senior Notes—Optional Redemption" and "Description of Senior Subordinated Notes—Optional Redemption."

Change of Control Offer

 

Upon the occurrence of a change of control, the Issuer will be required to offer to repurchase the notes at 101% of their principal amount, plus accrued and unpaid interest to the repurchase date. See "Description of Senior Notes—Repurchase at the Option of Holders—Change of Control" and "Description of Senior Subordinated Notes—Repurchase at the Option of Holders—Change of Control."

Certain Indenture Provisions

 

The Issuer issued the senior notes and the senior subordinated notes under separate indentures. The indentures governing the notes contain covenants limiting the Parent Guarantor's ability and the ability of its restricted subsidiaries to, among other things:

 

 


 

incur additional indebtedness or issue certain preferred shares;

 

 


 

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

 

 


 

make certain investments;

 

 


 

sell certain assets;

 

 


 

create liens on certain assets to secure debt;

 

 


 

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

 

 


 

enter into certain transactions with their affiliates; and

 

 


 

designate their subsidiaries as unrestricted subsidiaries.
         

17



 

 

These covenants are subject to a number of important limitations and exceptions. During any period in which a series of notes has an Investment Grade Rating (as defined) we will not be subject to many of the covenants. See "Description of Senior Notes—Certain Covenants" and "Description of Senior Subordinated Notes—Certain Covenants."

No Prior Market; Listing

 

The exchange notes will generally be freely transferable (subject to certain restrictions discussed in "The Exchange Offer" and "Registration Rights") but will be a new issue of securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes. The initial purchasers in the private offering of the outstanding notes have advised us that they currently intend to make a market for the exchange notes, as permitted by applicable laws and regulations. However, they are not obligated to do so and may discontinue any such market making activities at any time without notice. We do not intend to apply for a listing of the exchange notes on any securities exchange or automated dealer quotation system. We intend to apply to list the senior euro floating rate notes and the euro senior subordinated notes on an exchange in Europe.

Use of Proceeds

 

We will not receive any cash proceeds from the exchange offer.


Risk Factors

        See "Risk Factors" for a description of the risks you should consider before deciding to participate in the exchange offer.

18



Summary Financial Data

        The following table provides a summary of our financial data as of and for the periods presented. On August 23, 2006, Travelport completed the acquisition of the Travelport businesses of Avis Budget (the "Acquisition"). Prior to the Acquisition, the Company's operations were limited to the formation of the Company and entering into derivative transactions related to the debt that was subsequently issued. Such financing activities resulted in a net loss of $11 million prior to the Acquisition. As a result, the Travelport businesses of Avis Budget are considered a predecessor company (the "Predecessor") to Travelport. The financial statements as of December 31, 2006 and for the period from July 13, 2006 (Formation Date) to December 31, 2006 include the financial condition, results of operations and cash flows for Travelport on a successor basis, reflecting the impact of the preliminary purchase price allocation.

        Set forth below is summary financial data and summary unaudited combined financial data of our business, at the dates and for the periods indicated. The historical data for the fiscal years ended December 31, 2004 and 2005 and the period January 1, 2006 to August 22, 2006 have been derived from historical combined financial statements of the Predecessor included elsewhere in this prospectus. In addition, the historical data for the period July 13 (Formation Date) to December 31, 2006 is derived from historical financial statements of the Successor included elsewhere in this prospectus.

        You should read this data together with the information included under the headings "Risk Factors," "Unaudited Pro Forma Condensed Financial Information," "Selected Historical Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical financial statements and related notes included elsewhere in this prospectus.

 
  Predecessor
  Company
   
 
 
  Year Ended December 31,
  Period from
January 1
Through
August 22,

  Period from
July 13
(formation date)
Through
December 31,

  Combined*
Year Ended
December 31,

 
(dollars in millions)

  2004
  2005
  2006
  2006
  2006
 
 
   
   
   
   
  (unaudited)

 
Statement of Operations Data:                                
  Net revenue(1)   $ 1,758   $ 2,411   $ 1,711   $ 839   $ 2,550  
  Costs and expenses:                                
    Cost of revenue     851     1,006     717     378     1,095  
    Selling, general and administrative     438     851     654     347     1,001  
    Separation and restructuring charges         22     92     16     108  
    Depreciation and amortization     124     204     125     78     203  
    Other income         (4 )   (7 )       (7 )
    Impairment of intangible assets(2)         422     2,376     14     2,390  
   
 
 
 
 
 
  Total operating expenses     1,413     2,501     3,957     833     4,790  
  Operating income (loss)     345     (90 )   (2,246 )   6     (2,240 )
  Interest expense, net     (6 )   (27 )   (39 )   (151 )   (190 )
  Other expense         (1 )   (1 )   (1 )   (2 )
   
 
 
 
 
 
  Income (loss) from continuing operations before income taxes     339     (118 )   (2,286 )   (146 )   (2,432 )
  Provision (benefit) for income taxes     85     (75 )   (115 )   4     (111 )
   
 
 
 
 
 
  Income (loss) from continuing operation, net of tax     254     (43 )   (2,171 )   (150 )   (2,321 )
  Loss from discontinued operations, net of tax     (1 )   (6 )   (6 )   (2 )   (8 )
  (Loss) gain on disposal of discontinued operations, net of tax             (6 )   8     (2 )
   
 
 
 
 
 
  Net income (loss)   $ 253   $ (49 ) $ (2,183 ) $ (144 ) $ (2,327 )
   
 
 
 
 
 

Balance Sheet Data (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Cash and cash equivalents     97        
  Working capital deficit(3)     527        
  Total assets     6,130        
  Long-term debt     3,623        
  Total equity     775        
                                 

19



Statement of Cash Flows Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Net cash provided by (used in) continuing operations of:                                
    Operating activities   $ 381   $ 552   $ 273   $ 12   $ 285  
    Investing activities     (1,575 )   (2,123 )   82     (4,311 )   (4,229 )
    Financing activities     1,213     1,653     (382 )   4,394     4,012  
    Effect of changes in exchange rates on cash and cash equivalents         (36 )   8     2     10  
  Cash provided by (used in) discontinued operations     (10 )   (2 )   (5 )       (5 )

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Capital expenditures     103     152     102     67     169  
  Depreciation and amortization     124     204     125     78     203  
  Ratio of earnings to fixed charges(4)     17.3 x   n/a     n/a     n/a     n/a  
 
  Predecessor
  Combined
 
  Year Ended December 31,
  Year Ended
December 31,

 
  2004
  2005
  2006
Operating Statistics (in thousands, except for gross bookings):      
Business to Business
Americas(5)
                 
    Air segments     95,154     100,086     105,075
    Non-air segments     17,340     17,386     18,008
 
International(6)

 

 

 

 

 

 

 

 

 
    Air segments     153,602     158,798     158,733
    Non-air segments     4,526     4,751     5,164

Gross bookings(7) (in millions)

 

$

6,901

 

$

8,008

 

$

10,169

*
The combined results of the Company and the Predecessor for the periods in 2006 and that of the Predecessor in 2005 are not necessarily comparable due to the change in basis of accounting resulting from the Company's acquisition of the Predecessor and the change in capital structure. The presentation of the 2006 results on this combined basis does not comply with generally accepted accounting principles; however management believes that this provides useful information to assess the relative performance of the businesses in all periods presented in the financial statements. The captions included within our statements of operations that are materially impacted by the change in basis of accounting include net revenue, separation and restructuring charges, depreciation and amortization, impairment of long-lived assets and interest expense. We have disclosed the impact of the change in basis of accounting for each of these captions within our Management's Discussion and Analysis of Financial Condition and Results of Operations.

(1)
Includes non-cash revenue resulting from the impact of deferred credits from unfavorable contracts. For additional information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations."

(2)
Represents a pre-tax impairment charge of $422 million for the year ended December 31, 2005 resulting primarily from our B2C businesses, of which $251 million reduced the value of goodwill and $171 million reduced the value of other intangible assets, $2,376 million for the period January 1 to August 22, 2006 of which $2,375 million reduced the value of goodwill and $1 million reduced the value of definite lived intangible assets, and $14 million for the period from July 13 through December 31, 2006 related to long-lived software marketing licenses. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies."

(3)
Working capital is defined as current assets (excluding cash and cash equivalents) less current liabilities (excluding short term loans and current portion of long-term debt).

(4)
For purposes of calculating the ratio of earnings to fixed charges, earnings represents earnings from continuing operations before income taxes plus fixed charges. Fixed charges comprise interest which includes amortization of debt financing costs and the interest portion of rental payments. Due to the loss in 2005 and for the period from January 1, 2006 through August 22, 2006 and July 13, 2006 (Formation Date) through December 31, 2006 earnings would have been insufficient to cover fixed charges by $118 million, $2,286 million, and $146 million respectively.

(5)
Includes United States, Mexico, Canada and Latin America.

(6)
Includes all countries other than the United States, Mexico, Canada and those in Latin America.

(7)
Gross bookings for all periods presented include gross bookings for all of our online and offline travel agencies as if we had acquired such businesses on January 1, 2004, except gross bookings for OctopusTravel, which are reflected as if we had acquired it on January 1, 2005.

20



RISK FACTORS

        You should consider carefully the following information about these risks, together with the other information contained in this prospectus, before participating in the exchange offer.

Risks Related to Our Indebtedness

Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under the notes.

        We are highly leveraged. As of December 31, 2006, our total indebtedness was approximately $3,647 million ($4,762 million giving effect to the proposed acquisition of Worldspan), including the notes. We also had an additional $275 million ($300 million giving effect to the proposed acquisition of Worldspan) available for borrowing under the revolving credit facility, as well as the additional $19.1 million available under our $125 million ($150 million giving effect to the proposed acquisition of Worldspan) synthetic letter of credit facility under our senior secured credit facilities and the option to raise incremental senior secured credit facilities of up to $500 million. The following chart shows our level of indebtedness as of December 31, 2006 after giving effect to the Transactions (U.S. dollar equivalent at the exchange rate of one euro to $1.3199 with respect to euro denominated amounts).

(in millions)

   
Term loan facilities   $ 2,223
Senior notes     910
Senior subordinated notes     511
Other existing debt     3
   
  Total   $ 3,647
   

        Our high degree of leverage could have important consequences for you, including:

    requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;

    exposing us to the risk of increased interest rates because certain of our borrowings, including borrowings under our senior secured credit facilities and the senior notes, are at variable rates of interest;

    making it more difficult for us to make payments on the notes;

    restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

    limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and

    limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.

Our debt agreements contain restrictions that limit our flexibility in operating our business.

        The senior secured credit agreement and the indentures governing the notes contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit the Parent Guarantor's and its restricted subsidiaries' ability to, among other things:

    incur additional indebtedness or issue certain preferred shares;

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

    make certain investments;

    sell certain assets;

    create liens on certain assets to secure debt;

21


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

    enter into certain transactions with their affiliates; and

    designate their subsidiaries as unrestricted subsidiaries.

        In addition, under the senior secured credit agreement, beginning on March 31, 2007, we are required to satisfy and maintain a maximum total leverage ratio. Our ability to meet that financial ratio can be affected by events beyond our control, and we cannot assure you that we will meet that ratio. A breach of any of these covenants could result in a default under the senior secured credit agreement. Upon the occurrence of an event of default under the senior secured credit agreement, the lenders could elect to declare all amounts outstanding under the senior secured credit agreement to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders under the senior secured credit agreement could proceed against the collateral granted to them to secure that indebtedness. We pledged a significant portion of our assets as collateral under the senior secured credit agreement. If the lenders under the senior secured credit agreement accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay the senior secured credit agreement as well as our unsecured indebtedness, including the notes. See "Description of Other Indebtedness."

Despite our high indebtedness level, we and our subsidiaries may still be able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness.

        We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indentures do not fully prohibit us or our subsidiaries from doing so. In addition to the $275 million available for borrowing under the revolving credit facility and the $19.1 million available under our $125 million synthetic letter of credit facility under our senior secured credit facilities, both as of December 31, 2006, we have the right to add incremental term loan facilities or to increase commitments under the revolving credit facility up to an aggregate amount of $500 million. All of those borrowings and any other secured indebtedness permitted under the senior credit agreement and the indentures are effectively senior to the notes and the subsidiary guarantees. If new debt is added to our and our subsidiaries' existing debt levels, the related risks that we now face would increase. In addition, the indentures governing the notes do not prevent us from incurring obligations that do not constitute indebtedness.

Risks Relating to Our Business

Our revenue is derived from the travel industry, and a prolonged substantial decrease in travel volume, particularly air travel, as well as other industry trends, could adversely affect us.

        Our revenue is derived from the worldwide travel industry. As such, our revenue increases and decreases with the level of travel activity, particularly air travel volume, and is therefore highly subject to declines in or disruptions to travel, particularly air travel, due to factors entirely outside of our control. Such factors include:

    global security issues, political instability, acts or threats of terrorism, hostilities or war, and other political issues that could adversely affect travel volume in our key markets;

    epidemics or pandemics, such as the avian flu and SARS;

    natural disasters, such as hurricanes and earthquakes;

    general economic conditions, particularly to the extent that adverse conditions may cause a decline in travel volume;

    the financial condition of travel suppliers, including the airline and hotel industry, and the impact of such financial condition on the cost and availability of air travel and hotel rooms;

    increases in fuel prices;

    changes to regulations governing the airline and travel industry;

22


    work stoppages or labor unrest at any of the major airlines or airports;

    increased airport security that could reduce the convenience of air travel;

    travelers' perception of the occurrence of travel-related accidents, or of the scope, severity and timing of the other factors described above; and

    changes in occupancy and room rates achieved by hotels.

        For the reasons indicated above, prolonged substantial decreases in travel volumes, particularly air travel, could have an adverse impact on our business, financial condition, results of operations and liquidity and capital resources.

        We may also be adversely affected by shifting trends in the travel industry. For example, a significant portion of the revenue of GTA, our wholesale travel company, is attributable to distribution through traditional wholesale and tour operators serving both group and individual travelers. In certain markets, an increasing proportion of travel is shifting away from that segment towards more independent, unpackaged travel. To the extent GTA or other components of our business are unable to adapt to such shifting trends, our results of operations may be adversely affected.

The travel industry is highly competitive, and we are subject to risks relating to competition that may adversely affect our performance.

        Our B2B businesses, which consist primarily of our GDS and GTA, and our B2C businesses, which consist primarily of our online travel agencies, operate in highly competitive industries. If we cannot compete effectively against our competitors, we may lose business, which may adversely affect our financial performance. Our continued success depends, in large part, upon our ability to compete effectively in industries that contain numerous competitors, some of which may have significantly greater financial, marketing, personnel and other resources than we have.

        Factors affecting the competitive success of travel distribution providers, including our GDS, include the timeliness, reliability and scope of the travel inventory and related information offered, the reliability and ease of use of the system, the fees charged and inducements paid to travel agencies, the transaction fees charged to travel suppliers and the range of products and services available to travel suppliers and travel agencies. GDSs have two different categories of customers—travel suppliers and travel agencies—which gives rise to a two-sided market. We are, therefore, subject to the interrelated network effects arising out of the interaction between these two sides. We need to offer competitive terms to travel suppliers to obtain sufficient travel content that will allow us to provide a competitive offering to travel agencies in order to gain and maintain travel agency customers. If we are not able to attract large numbers of travel agency customers, our ability to obtain content from travel suppliers will be affected adversely.

        The deregulation of the GDS industry in the United States in mid-2004 has significantly increased competitive pressures on GDS providers. In addition, the European Commission is currently contemplating revising or repealing the regulations affecting the GDS industry within the European Union. Increased competition could require us to further increase spending on marketing or product development, decrease our transaction fees and other revenue, increase inducement payments or take other actions that could have a material adverse effect on our business, financial condition or results of operations. Our GDS operations compete with other traditional GDS businesses such as Amadeus Global Travel Distribution S.A., Sabre, Inc. and Worldspan, with alternative intermediate distribution technologies and with direct distribution by travel suppliers, such as airlines, hotels and car rental companies, many of which distribute all or part of their inventory directly through their own websites. Our GDS also competes with new companies in the travel distribution industry that are developing distribution systems without the large technology investment and network costs of a traditional GDS.

        Factors affecting the competitive success of travel wholesalers include customer service, the availability of travel inventory, pricing, the reliability of the reservation system, the geographic scope of products and services offered, and the ability to package products and services in ways appealing to

23



travelers. The wholesale travel industry is highly fragmented, and GTA competes with small regional and local wholesalers, certain global wholesalers such as Miki Travel Limited and Kuoni Group, as well as with travel agencies, particularly online agencies, that do not go through a wholesaler to acquire travel inventory from hotels and other travel suppliers. In addition, the enhanced presence of online travel agencies is placing pressure on GTA's ability to secure allocations of hotel rooms.

        Factors affecting the competitive success of online travel agencies include price, the availability of travel inventory, brand recognition, ease of use, the fees charged to travelers, accessibility, customer service and reliability. A number of our competitors may have greater brand recognition than we do or have greater financial resources or flexibility to finance branding efforts. We compete with traditional travel agencies, other online travel agencies and supplier websites and other online and offline travel planning service providers, including aggregator sites that offer inventory from multiple suppliers.

        We potentially face competition from a number of large Internet companies and services that have expertise in developing online commerce and in facilitating Internet traffic, including Google, AOL and Yahoo!, the latter two of which partner with Travelocity to offer travel products and services directly to consumers. We also compete with "meta-search" companies such as Kayak.com, Sidestep, Inc. and Yahoo!/Farechase, which are companies that leverage their search technology to aggregate travel search results across supplier, online travel agency and other websites. Competition from these and other sources could have a material adverse effect on our business, financial condition or results of operations.

        Some of our competitors may be able to secure services and products from travel suppliers on more favorable terms. In addition, the introduction of new technologies and the expansion of existing technologies may increase competitive pressures. Increased competition may result in reduced operating margins, as well as loss of industry share and brand recognition. We cannot assure you that we will be able to compete successfully against current and future competitors. Competitive pressures faced by us could have a material adverse effect on our business, financial condition or results of operations.

We may not be able to successfully acquire, integrate our operations with or attain the expected benefits of our intended acquisition of Worldspan.

        We have entered into an agreement to acquire Worldspan, and believe this acquisition will enhance our future financial performance by capitalizing on natural operational synergies. The travel distribution industry is highly regulated, and anti-trust and other regulatory approvals for this acquisition are still pending. Regulatory hurdles may prevent us from successfully acquiring Worldspan, depriving us from the anticipated financial benefits of this intended acquisition.

        Moreover, our proposed acquisition of Worldspan presents challenges to management, including the integration of our administrative operations, systems and personnel with those of Worldspan. The acquisition also poses other risks commonly associated with similar transactions, including unanticipated liabilities, unexpected costs and the diversion of management's attention to the integration of the operations of the combined companies. Any difficulties that our combined company encounters in the transition and integration processes, and any level of integration that is not successfully achieved, could have an adverse effect on our revenue, level of expenses and operating results. We may also experience operational interruptions or the loss of key employees, suppliers and customers. As a result, notwithstanding our expectations, we may not realize the anticipated benefits or cost savings of the Worldspan acquisition. In addition, if we do successfully complete the Worldspan acquisition, our total outstanding indebtedness will increase. As of December 31, 2006, after giving effect to the proposed acquisition of Worldspan, our total indebtedness would have been $4,762 million.

We are reliant upon information technology to operate our businesses and maintain our competitiveness, and any failure to adapt them to technological developments or industry trends could harm our business.

        We depend upon the use of sophisticated information technologies and systems, including technologies and systems utilized for reservation systems, communications, procurement and

24



administrative systems. Certain of our businesses also rely on third-party GDSs or other technologies. As our operations grow in both size and scope, we continuously need to improve and upgrade our systems and infrastructure to offer an increasing number of customers and travel suppliers enhanced products, services, features and functionality, while maintaining the reliability and integrity of our systems and infrastructure. Our future success also depends on our ability to adapt to rapidly changing technologies in our industry, particularly the increasing use of Internet-based products and services, to change our services and infrastructure so they address evolving industry standards, and to improve the performance, features and reliability of our service in response to competitive service and product offerings and the evolving demands of the marketplace. Furthermore, our use of such technology could be challenged by claims that we have infringed upon the patents, copyrights or other intellectual property rights of others.

        One of our online travel agencies, ebookers, operates on systems that require a significant amount of manual processing, which have resulted in substantial reporting and maintenance costs. If we are unable to improve its systems to address these concerns, we may incur excess costs, be unable to take advantage of efficiencies of scale, or lose customers. Finally, we are in the process of implementing a new enterprise resource planning system developed by Oracle throughout our businesses in order to improve our ability to report information accurately, reduce our reliance on manual processing, and enhance our ability to respond to market developments more quickly. Delays or difficulties in implementing the system may keep us from achieving the desired results in a timely manner, to the extent anticipated, or at all.

        There generally can be no assurances that we will be able to maintain existing systems, obtain new technologies and systems, or replace or introduce new technologies and systems as quickly as our competitors or in a cost-effective manner. Also, there can be no assurances that we will achieve the benefits anticipated or required from any new technology or system, or that we will be able to devote financial resources to new technologies and systems in the future.

System interruptions may cause us to lose customers or business opportunities or to incur liabilities.

        Our inability to maintain and improve our information technology systems and infrastructure may result in system interruptions. For example, ebookers, OctopusTravel.com and GTA operate on systems that have had stability and other attendant risks. System interruptions and slow delivery times, unreliable service levels, prolonged or frequent service outages, or insufficient capacity may prevent us from efficiently providing services to our customers or other third parties, which could result in our losing customers and revenue, or incurring liabilities. In addition to the risks from inadequate maintenance or upgrading, our information technologies and systems are vulnerable to damage or interruption from various causes, including (i) natural disasters, war and acts of terrorism, (ii) power losses, computer systems failure, Internet and telecommunications or data network failures, operator error, losses and corruption of data, and similar events, (iii) computer viruses, penetration by individuals seeking to disrupt operations or misappropriate information and other physical or electronic breaches of security, and (iv) the failure of third-party systems or services that we rely upon to maintain our own operations. Any extended interruption in our technologies or systems could significantly curtail our ability to conduct our businesses and generate revenue.

We are dependent upon third-party systems and service providers.

        We rely on certain third-party computer systems, service providers and software companies, such as AT&T and IBM. In particular, Galileo and our B2C businesses rely on third parties to conduct searches for airfares, our B2C businesses use third parties to access certain hotel inventory, and Orbitz also relies on third party providers of computer infrastructure critical to its business. Any interruption in these third-party services or deterioration in their performance may have a material adverse effect on us. In particular, the loss of our search technology licenses from a third party, which may expire as early as 2007, would have an adverse effect on us, as Orbitz has developed proprietary support services

25



and software architecture that enables it to use such search technology in connection with its booking engine. Some of our agreements with third-party service providers are terminable upon short notice and in many cases do not provide recourse for service interruptions.

        In addition, Orbitz uses Worldspan for its GDS under an agreement that expires in 2011. Because Orbitz operates under this agreement, any interruption or deterioration in Worldspan's products or services could prevent us from searching and/or booking airline and rental car reservations, which could have an adverse effect on us.

        Galileo utilizes third party, independently owned and managed, national distribution companies to distribute and provide its services in certain international jurisdictions.

        In the event the performance of such third parties deteriorates or our arrangements with any of such third parties are terminated, we may not be able to find an alternative source of systems support on a timely basis or on commercially reasonable terms or be able to do so without significant cost or disruptions to our businesses. These may have a material adverse effect on our business, financial condition and/or results of operations.

Trends in pricing and other terms of agreements among airlines, GDSs and travel agencies have reduced, and could further reduce in the future, our revenue and margins.

        A significant portion of our revenue depends on the fees paid by airlines for bookings made through our GDS. Airlines have sought to reduce or eliminate these fees in an effort to reduce distribution costs. One manner in which they have done so is to differentiate the fares and inventory, also known as content, that they provide to us and to our GDS competitors. In these cases, airlines provide some of their content to GDSs, while withholding other content, such as lower cost "web" fares, unless the GDSs and the agencies agree to participate in a cost reduction program. Certain airlines have also threatened to withdraw content, in whole or in part, from individual GDSs as a means of obtaining lower segment fees. Travel agencies have sought to counteract the effect of these cost reduction programs and lower commissions received from airlines by demanding higher financial incentives from the GDSs.

        We have entered into full content agreements with the six largest U.S. airlines that generally expire in 2011. The full content agreements we have with international airlines generally expire over the next three years. There is no way to predict our ability to renew these agreements, the loss of which may disadvantage us compared to other competitors, and could materially weaken our financial results. The U.S. full content agreements require us to make significant concessions to the participating airlines, which could have a material adverse effect on our business, financial condition and results of operations. Moreover, as existing content agreements come up for renewal, there is no guarantee that the participating airlines will continue to provide their content to us to the same extent as they do now. A substantial reduction in the amount of content received from the participating airlines could also negatively affect our revenue and financial condition.

        In addition, certain GDSs, including Galileo, Sabre, Amadeus and Worldspan, have announced an alternative business and financial model for GDSs, generally referred to as the "opt-in" model. Under the opt-in model, travel agencies are offered the opportunity of paying a fee to the GDS or agreeing to a reduction in the financial incentives to be paid to them by the GDS to be assured of having access to full content from participating airlines or to avoid an airline-imposed surcharge on GDS-based bookings. The opt-in model in the United States may result in lower fees paid by the major airlines to a GDS, partially offset by fees from travel agencies and/or lower inducement payments to travel agencies. The opt-in model already has been introduced in the United Kingdom and Australia. In these countries, there were very high rates of travel agency opt-in, or agreement to significantly reduced inducement fees, without any industry disruption among airlines, GDSs and travel agencies. If the opt-in model becomes widely adopted, GDSs, including Galileo, could receive lower fees from the airlines, which would adversely affect our results of operations.

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We depend on a relatively small number of airlines for a significant portion of our revenue and may be adversely affected by changes in the financial condition of one or more of these airlines.

        We depend on a relatively small number of airlines for a significant portion of our revenue. The top ten airlines combined accounted for approximately 28% of our revenue in 2005. Several major U.S. airlines (including Delta Air Lines, Inc. and Northwest Airlines, Inc.) have either filed for reorganization under the United States Bankruptcy Code, discussed publicly the risks of bankruptcy or are struggling financially. If any of our suppliers currently in bankruptcy liquidates or does not emerge from bankruptcy, or another of our major suppliers declares bankruptcy and is similarly unable to recover, and we are unable to compensate for the loss by offering comparable travel options on comparable terms, our businesses would be adversely affected.

Adverse changes in, or interruptions to, our relationships with other travel suppliers such as hotels could affect our access to travel offerings and reduce our revenue.

        In addition to airlines, we also rely significantly on our relationships with our hotel and other travel suppliers. Adverse changes in any of these relationships could reduce the amount of inventory that we are able to offer through our B2B and B2C businesses. We depend on travel suppliers to enable us to offer our customers comprehensive access to travel services and products. We cannot assure you that our arrangements with travel suppliers will remain in effect on current or similar terms, that the net impact of future pricing options will not adversely impact revenue, or that any of these suppliers will continue to supply us with the same level of access to travel inventory in the future.

        For example, during the course of our business, we are in continuous dialogue with our major hotel suppliers about the nature and extent of their participation in our GDS, our wholesale accommodation business and our online travel agencies. If hotel occupancy rates improve to the point that our hotel suppliers no longer place the same value on our distribution systems, such suppliers may reduce the amount of inventory they make available through our distribution channels or the amount we are able to earn in connection with hotel transactions. The significant reduction on the part of any of our major suppliers of their participation in our GDS, our wholesale accommodation business or business with our online travel agencies for a sustained period of time or their complete withdrawal could have a material adverse effect on our business, financial condition and results of operations.

        Certain of our B2C businesses, such as Orbitz and CheapTickets, operate under what is commonly referred to as the "merchant model," in which the hotel operator negotiates a rate with us that the hotel is willing to accept for the room when it is booked through our websites. We then market that room for an amount that includes the hotel's charge plus a fee for the services we provide. Certain of our B2B businesses, such as GTA, also receive access to inventory directly from hotels at negotiated rates and then distribute the rooms for a fee to travel agencies and tour operators who then make available such inventory to travelers. Many hotels use these types of arrangements with businesses such as those we operate to dispose of excess hotel room inventory or to increase their inventory distribution. If hotels experience increased demand for rooms, they might reduce the amount of room inventory they make available through these merchant or negotiated rate arrangements. Moreover, hotels might seek to increase the cost of merchant or negotiated rate offerings, which may also adversely affect our revenue. In addition, several international hotel chains no longer allow distributors, including GTA, to distribute online rooms that they have purchased or gained access to at a lower, "net" rate that GTA and other distributors could then mark up, instead requiring that they distribute rooms in a manner that gives the hotel greater ability to set prices on a more real-time basis. As a result, a larger percentage of our bookings may be completed under the traditional agency model, which may adversely affect our revenue. To the extent that other hotel chains or hotels adopt such a model, our ability to maintain or raise the current level of margins on hotel bookings, or our ability to adjust pricing in light of market trends and other factors, may be adversely affected. Such pressures may also adversely affect our financial condition and results of operations.

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Travel suppliers are seeking alternative distribution models, including those involving direct access to travelers, which may adversely affect our results of operations.

        Some travel suppliers are seeking to decrease their reliance on third-party distributors, including GDSs. For example, some travel suppliers have created or expanded commercial relationships with online and traditional travel agencies that book travel with those suppliers directly, rather than through a GDS. Many airlines, hotels, car rental companies and cruise operators have also established or improved their own travel distribution websites, and may offer advantages such as bonus miles or loyalty points, lower or no transaction or processing fees, priority waitlist clearance, e-ticketing or discounted prices for sales through these channels. Due to direct bookings with the airlines, "supplier.com" websites and other non-GDS distribution channels, a growing number of transactions are occurring outside a GDS. In the United States, in 2003, bookings made direct with the airlines accounted for approximately 50% of total air bookings and 54.5% of total air bookings in 2005. In Europe, in 2004, direct bookings with the airlines constituted 49% of total air bookings, while in 2006, direct bookings with the airlines constituted 55.9% of total air bookings. Conversely, they have made some of these offerings unavailable to unrelated distributors, or made them available only in exchange for lower distribution fees. Some low-price carriers distribute exclusively through such direct channels, bypassing GDSs and other third-party distributors completely, and as a result some low-cost airlines have been enhancing their share within the travel industry. In addition, several suppliers have formed joint ventures or alliances that offer multi-supplier travel distribution websites. Finally, some airlines are exploring alternative global distribution methods recently developed by new entrants to the global distribution marketplace. Such new entrants propose technology that is purported to be less complex than traditional GDSs, and that enables the distribution of airline tickets in a manner that is more cost-effective to the airline suppliers because no or lower inducement payments are paid to travel agencies. If these trends lead to lower participation by airlines and other travel suppliers in our GDS, our business, financial condition or results of operations could be materially adversely affected.

        In addition, given the diverse and growing number of alternative travel distribution channels, such as travel suppliers' direct to consumer websites and direct connects between airlines and travel agencies, as well as new technologies that allow travel agencies and consumers to bypass a GDS, increases in travel volumes, particularly air, may not translate in the same proportion to increases in volumes passing through our GDS.

We may not be able to achieve all of our expected cost savings.

        In connection with the Acquisition, we have identified potential annual cost savings of approximately $86 million that are reflected in our pro forma Adjusted EBITDA and set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt and Financing Arrangements." We also believe other cost saving opportunities exist. For a more detailed description of these cost saving measures, see "Management's Discussion and Analysis of Financial Condition and Results of Operations." We cannot assure you, however, that we will be able to achieve our expected cost savings and any other cost savings opportunities, that any identified savings will be achieved in a timely manner or that other unexpected costs will not offset any savings we do achieve. A variety of risks could cause us not to achieve the expected cost savings, including among others:

    higher than expected severance costs related to staff reductions;

    higher than expected retention costs for employees that will be retained;

    delays in the anticipated timing of activities related to our cost-saving plan; and

    other unexpected costs associated with operating the business.

        The run-rate cost savings reflected in our presentation of pro forma Adjusted EBITDA assume the full implementation of the proposed cost-saving measures for the entire period presented. Because

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some of the measures will take time to implement, any cost savings we achieve will not immediately affect our financial results in the amounts presented.

        Our failure to achieve our expected annual cost savings could have a material adverse effect on our financial condition and results of operations.

Consolidation in the travel industry may result in increased expenses, lost bookings and reduced revenue.

        Consolidation among travel suppliers, including airline mergers and alliances, may increase competition from distribution channels related to those suppliers and place more leverage in the hands of those suppliers to negotiate lower booking fees and lower commissions. Changes in ownership of travel agencies may also cause them to direct less business towards us. If we are unable to compete effectively, competitors could divert our customers away from our travel distribution channels and it could adversely affect our results of operations.

        Consolidation among travel agencies and competition for travel agency customers may also adversely affect our results of operations, since GDSs, such as Galileo, compete to attract and retain travel agency customers. Reductions in commissions paid by some travel suppliers, such as airlines, to travel agencies contribute to travel agencies having a greater dependency on traveler-paid service fees and GDS-paid inducements and may contribute to travel agencies consolidating. Consolidation of travel agencies increases competition for these travel agency customers and increases the ability of those agencies to negotiate higher GDS paid inducements. In order to compete effectively, we may need to increase inducements, pre-pay inducements or increase spending on marketing or product development.

A reduction in or elimination of our customer service fee could reduce our revenue.

        Our online travel agencies generally charge customers a service fee each time they book certain airline reservations or hotel rooms or purchase certain other travel products and services through the online travel agencies. Although our online travel agency competitors generally charge service fees, most travel supplier websites do not charge such a service fee and this could discourage customers from using our online travel agencies to purchase these travel products and services. If we have to reduce or eliminate our service fee, our revenue could decline as a result.

We depend on our international operations, which are subject to additional risks generally not encountered when doing business solely in the United States.

        Our international operations involve risks that may not exist when doing business in the United States. Excluding the United States, currently we operate in over 130 countries throughout Europe, Asia, the South Pacific, North America, South America and Africa. In order to achieve widespread acceptance in each country we enter, we believe that we must tailor our services to the unique customs and cultures of that country. Learning the customs and cultures of various countries, particularly with respect to travel patterns and practices, is a difficult task and our failure to do so could slow our growth in those countries.

        In addition, the risks involved in non-U.S. operations, or in having operations in multiple countries generally, that could result in losses include:

    delays in the development of the Internet as a broadcast, advertising and commerce medium in overseas markets;

    difficulties in staffing and managing operations due to distance, time zones, language and cultural differences, including issues associated with establishing management systems infrastructures in various countries;

    unexpected changes in regulatory requirements;

    increased risk of piracy and limits on our ability to enforce our intellectual property rights in non-U.S. countries;

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    for some of those operations where we have physical offices, increased risk of terrorism, political instability and war;

    exposure to local economic conditions, security issues, epidemics or natural disasters;

    potential adverse changes in the diplomatic relations of non-U.S. countries with the United States;

    preference of local populations for local providers;

    restrictions on the withdrawal of non-U.S. investment and earnings, including potentially substantial tax liabilities if we repatriate any of the cash generated by our international operations back to the United States;

    restrictions on travel;

    government policies against businesses owned by non-U.S. citizens, including U.S. trade sanctions;

    investment restrictions or requirements;

    diminished ability to legally enforce our contractual rights in non-U.S. countries;

    currency exchange restrictions;

    withholding and other taxes on remittances and other payments by subsidiaries; and

    changes in non-U.S. taxation structures.

Our businesses are highly regulated and any failure to comply with such regulations or any changes in such regulations could adversely affect us.

        We operate in a highly regulated industry. Our businesses, financial condition and results of operations could be adversely affected by unfavorable changes in or the enactment of new laws, rules and regulations applicable to us, which could decrease demand for products and services, increase costs or subject us to additional liabilities. Moreover, regulatory authorities have relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Accordingly, such regulatory authorities could prevent or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us if our practices were found not to comply with the then current regulatory or licensing requirements or any interpretation of such requirements by the regulatory authority. Our failure to comply with any of these requirements or interpretations could have a material adverse effect on our operations.

        The European Commission is engaged in a comprehensive review of E.U. regulations governing GDSs. It is unclear at this time when the European Commission will complete its review and what changes, if any, will be made to the E.U. regulations. We could be adversely affected if the E.U. regulations are withdrawn or revised. In addition, we could be adversely affected if changes to the regulations, changes in interpretations of the regulations, or new regulations increase our cost of doing business, limit our ability to establish relationships with travel agencies, airlines, or others, impair the enforceability of existing agreements with travel agencies and other users of our system, prohibit or limit us from offering services or products, or limit our ability to establish or change fees. Continued GDS regulation in the E.U. and elsewhere, while GDS regulations have terminated in the United States, could also create the operational challenge of supporting different products, services and business practices to conform to the different regulatory regimes.

        There are also GDS regulations in Canada, under the regulatory authority of the Canadian Department of Transport. On April 27, 2004, a significant number of these regulations were lifted. Amendments to the rules include eliminating the "obligated carrier" rule, which required larger airlines in Canada to participate equally in the GDSs, and elimination of the requirement that transaction fees charged by GDSs to airlines be non-discriminatory. Due to the elimination of the obligated carrier rule in Canada, Air Canada, the dominant Canadian airline, could choose distribution channels that it owns and controls or distribution through another GDS rather than through our GDS.

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        In our processing of travel transactions, we receive and store a large volume of personally identifiable data. This data is increasingly subject to legislation and regulations in numerous jurisdictions around the world, including the European Union through its Data Protection Directive and implementations of that Directive in the member states of the E.U. These laws and regulations are typically intended to protect the privacy of personal data that is collected, processed and transmitted in or from the governing jurisdiction. We could be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that diminish our ability to conduct business.

        Our B2C businesses, particularly our online travel agencies, are subject to laws and regulations relating to our sales and marketing activities, including those prohibiting unfair and deceptive advertising or practices. Our travel services are subject to regulation and laws governing the offer and/or sale of travel products and services, including laws requiring us to register as a "seller of travel" in various states and to comply with certain disclosure requirements. As a seller of air transportation products in the United States, we are also subject to regulation by the Department of Transportation, which has authority to enforce economic regulations, and may assess civil penalties or challenge our operating authority.

        In addition, there is, and will likely continue to be, an increasing number of laws and regulations pertaining to the Internet and online commerce, which may relate to liability for information retrieved from or transmitted over the Internet, user privacy, taxation and the quality of products and services. Furthermore, the growth and development of online commerce may prompt calls for more stringent customer protection laws that may impose additional burdens on online businesses generally.

        In the aftermath of the terrorist attacks of September 11, 2001 in the United States, government agencies have been contemplating or developing initiatives to enhance national and aviation security, including the Transportation Security Administration's Computer-Assisted Passenger Prescreening System, known as CAPPS II. These initiatives may result in conflicting legal requirements with respect to data handling. As privacy and data protection has become a more sensitive issue, we may also become exposed to potential liabilities as a result of differing views on the privacy of travel data. Travel businesses have also been subjected to investigations, lawsuits and adverse publicity due to allegedly improper disclosure of passenger information. These and other privacy developments that are difficult to anticipate could adversely impact our business, financial condition and results of operations.

        We are also subject to various other rules and regulations such as:

    various state and federal privacy laws;

    U.S. and E.U. regulations relating to Advance Passenger Information System (APIS) data;

    insurance and bonding regulations;

    the USA PATRIOT Act;

    Office of Foreign Assets Control regulations;

    the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act;

    laws that require us to register as a "seller of travel" to comply with disclosure requirements;

    the Package Travel, Package Holidays and Package Tours Directive in the E.U., which regulates the sale of travel products and services in Europe directly to customers as part of a "package"; and

    laws and regulations in jurisdictions outside the United States in which we do business.

        Our failure to comply with any of the foregoing or other applicable laws and regulations may subject us to fines, penalties and potential criminal violations. Any changes to these laws or regulations or any new laws or regulations may make it more difficult for us to operate our businesses and may have a material adverse effect on our operations.

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Government regulation could impose taxes or other burdens on us, which could increase our costs or decrease demand for our products.

        We rely upon generally available interpretations of tax laws and regulations in the states, countries and regions in which we operate and for which we provide travel inventory. We cannot be sure that these interpretations are accurate or that the responsible taxing authority is in agreement with our views. The imposition of additional taxes could cause us to have to pay taxes that we currently do not collect or pay or increase the costs of our products or services or increase our costs of operations.

        Federal legislation imposing limitations on the ability of states to tax Internet-based sales was enacted in 1998. The Internet Tax Freedom Act, which was extended by the Internet Tax Non-Discrimination Act, exempts specific types of sales transactions conducted over the Internet from multiple or discriminatory state and local taxation through November 1, 2007. If this legislation is not renewed when it terminates, state and local governments could impose additional taxes on Internet-based sales and these taxes could decrease the demand for our products or increase our costs of operations.

        In addition, despite the federal statute, state and local tax authorities may seek to establish that we have a nexus in the traditional sense or act as a hotel operator. Although we do not believe we are subject to such taxes, these jurisdictions could rule that we are subject to sales and occupancy taxes and seek to collect taxes on certain forms of revenue, either retroactively, prospectively or both.

Seasonal fluctuations in the travel industry could adversely affect us.

        Some of our businesses experience seasonal fluctuations, reflecting seasonal trends for the products and services we offer. These trends cause our revenue to be generally highest in the second and third calendar quarters of the year as travelers plan and purchase their spring and summer travel, and then flatten in the fourth and first calendar quarters of the year. Our results may also be affected by seasonal fluctuations in the inventory made available to us by our travel suppliers. For instance, during seasonal periods when demand is high, suppliers may impose blackouts for their inventory that prohibit us from selling their inventory during such periods. As a result, we may be required to borrow cash in order to fund operations or to meet debt service obligations during seasonal slowdowns or at other times. Since the terms of our indebtedness may restrict our ability to incur additional debt, we cannot assure you that we would be able to borrow such cash. Our inability to finance our funding needs during a seasonal slowdown or at other times could have a material adverse effect on us.

We may not realize anticipated benefits from past and future acquisitions or have the ability to complete future acquisitions.

        We have pursued an active acquisition strategy as a means of strengthening our businesses and have sought to integrate acquisitions into our operations to achieve economies of scale. For example, in 2005, we completed acquisitions of GTA and ebookers. We have derived a substantial portion of our recent growth in revenue and net income from acquired businesses. The success of any future acquisition strategy will continue to depend upon our ability to find suitable acquisition candidates on favorable terms and to finance and complete these transactions. In addition, upon completion of an acquisition, we may encounter risks related to the possible inability to integrate the acquired business into our operations, the possible departure of a significant number of employees, the loss in value of acquired intangibles, the diversion of management's attention and unanticipated problems or liabilities. These risks may adversely affect our ability to realize anticipated cost savings and revenue growth from our acquisitions. Acquisitions may not be accretive to our earnings, as expected or at all, and may negatively impact our results of operations through, among other things, the incurrence of debt to finance the Acquisition, non-cash write-offs of goodwill or intangibles and increased amortization expenses in connection with intangible assets. For example, for the year ended December 31, 2005, we

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recorded a $422 million pre-tax non-cash intangibles impairment charge, primarily relating to reduced return expectations at our ebookers business, of which $251 million reduced the value of goodwill and $171 million reduced the value of other intangible assets. In addition, for the period January 1, 2006 to August 22, 2006, we recorded a $2,376 million pre-tax non-cash impairment charge, primarily relating to the difference between the price at which Travelport was sold to The Blackstone Group and the historical carrying value of Travelport's net assets, of which $2,375 million reduced the value of goodwill and $1 million reduced the value of definite lived intangible assets. Acquisition integration activities can also put further demands on management, which could result in negative operating results.

We are not currently required to evaluate our internal controls over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002. The current inapplicability of these rules, or any failure to comply when applicable may lead investors to lack confidence in our reported financial information.

        We are not subject to the requirements of the Sarbanes-Oxley Act of 2002, including Section 404 thereof. Section 404 requires management of a reporting company to annually review, assess and disclose the effectiveness of the company's internal controls over financial reporting and the independent auditors to prepare a report addressing such assessments. Even if we successfully register an exchange offer for the notes with the SEC, we would not be subject to Section 404 until our fiscal year ending December 31, 2007. Moreover, once those requirements become applicable, there can be no assurance that the results of our assessment would not include the identification of material weaknesses in our internal controls. Any of these conditions, or our failure to comply with the requirements of Section 404 when they become applicable, may lead investors to lack or lose confidence in the accuracy of our reported financial information, which may adversely affect the trading price of the notes.

We are exposed to risks associated with online commerce security and credit card fraud.

        The secure transmission of confidential and personally identifiable information over the Internet is essential in maintaining customer and supplier confidence in our services. Substantial or ongoing security breaches, whether instigated internally or externally on our system or other Internet-based systems, could significantly harm our business. We currently require buyers to guarantee their transactions with their credit card online. We rely on licensed encryption and authentication technology to effect secure transmission of confidential information, including credit card numbers. It is possible that advances in computer capabilities, new discoveries or other developments could result in a compromise or breach of the technology used by us to protect customer transaction data.

        We incur substantial expense to protect against and remedy security breaches and their consequences. However, we cannot guarantee that our security measures will prevent security breaches. A party (whether internal, external, an affiliate or unrelated third party) that is able to circumvent our security systems could steal proprietary information or cause significant interruptions in our operations. Security breaches also could damage our reputation and expose us to a risk of loss or litigation and possible liability. Security breaches could also cause customers and potential customers to lose confidence in our security, which would have a negative effect on the demand for our products and services.

        We also face risks associated with security breaches affecting third parties conducting business over the Internet. Customers generally are concerned with security and privacy on the Internet, and any publicized security problems could inhibit the growth of the Internet and, therefore, our services as a means of conducting commercial transactions.

        In addition, participants in the payment card industry have proposed standards related to the processing of payments, as well as a target date by which they ask vendors to be compliant. The participants have stated that they may take actions against vendors who are not compliant by the target

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date, including imposing cash penalties for violations or prohibiting them from processing transactions on participant cards. To the extent any of our businesses are not compliant by the industry-proposed target date, and payment card companies take punitive actions against us, our financial conditions and results of operations may be adversely affected.

We may not protect our technology effectively, which would allow competitors to duplicate our products and services. This could make it more difficult for us to compete with them.

        Our success and ability to compete depend, in part, upon our technology and other intellectual property, including our brands. Among our significant assets are our software and other proprietary information and intellectual property rights. We rely on a combination of copyright, trademark and patent laws, trade secrets, confidentiality procedures and contractual provisions to protect these assets. Our software and related documentation, however, are protected principally under trade secret and copyright laws, which afford only limited protection, and the laws of some non-U.S. jurisdictions provide less protection for our proprietary rights than the laws of the United States. Unauthorized use and misuse of our intellectual property could have a material adverse effect on our business, financial condition and results of operations, and there can be no assurance that our legal remedies would adequately compensate us for the damage caused by unauthorized use.

        Intellectual property challenges have been increasingly brought against members of the travel industry. In the future, we may need to take legal actions to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. This legal action might result in substantial costs and diversion of resources and management attention. For a description of certain intellectual property proceedings in which we are involved, see "Business—Legal Proceedings."

Third parties may claim that we have infringed their intellectual property rights, which could expose us to substantial damages and restrict our operations.

        We have faced, are facing and in the future could face claims that we have infringed the patents, copyrights or other intellectual property rights of others. In addition, we may be required to indemnify travel suppliers for claims made against them. Any claims against us or them could require us to spend significant time and money in litigation, delay the release of new products or services, pay damages, develop new intellectual property or acquire licenses to intellectual property that is the subject of the infringement claims. Resolutions of these matters may not be available on acceptable terms or at all. As a result, intellectual property claims against us could have a material adverse effect on our business, financial condition and/or results of operations, and such claims may result in a loss of intellectual property protections that relate to certain parts of our business. For a description of certain intellectual property proceedings in which we are involved, see "Business—Legal Proceedings."

We are subject to certain risks related to litigation filed by or against us, and adverse results may harm us.

        We cannot predict with certainty the cost of defense, the cost of prosecution or the ultimate outcome of litigation and other proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation and other proceedings may harm us. Such litigation and other proceedings may include, but are not limited to, actions relating to intellectual property, in particular patent claims against us, tax matters, employment law or other harm resulting from negligence or fraud by individuals or entities outside our control.

        We are party to (or responsible in part for) certain legal actions that we describe in "Business—Legal Proceedings." The defense of these actions may increase our expenses and an adverse outcome in any such actions could have a material adverse effect on our business, financial condition and/or results of operations.

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Our ability to attract, train and retain executives and other qualified employees is crucial to results of operations and future growth.

        We depend substantially on the continued services and performance of our key executives, senior management and skilled personnel, particularly our professionals with experience in our business and operations, including our information technology and systems, and the GDS industry. We cannot assure you that any of these individuals will continue to be employed by us. The specialized skills needed by our business are time-consuming and difficult to acquire and in short supply, and this shortage is likely to continue. A lengthy period of time is required to hire and train replacement personnel when skilled personnel depart the company. An inability to hire, train and retain a sufficient number of qualified employees could materially hinder our business by, for example, delaying our ability to bring new products and services to market or impairing the success of our operations. Even if we are able to maintain our employee base, the resources needed to attract and retain such employees may adversely affect our profits, growth and operating margins.

United Airlines has announced its intention to use another provider to host and manage its reservation system.

        We host and manage United Airlines' reservations system and provide related services pursuant to an agreement that expires in 2013. United Airlines, however, has stated its intent to transition its reservation system from us to another provider, which cannot occur before 2008 under the agreement. If United Airlines completes the transition to another provider, our results of operations would be adversely affected due to the loss of revenue from the agreement.

Fluctuations in the exchange rate of the U.S. dollar and other foreign currencies could have a material adverse effect on our financial performance and results of operations.

        While most of our revenue is denominated in U.S. dollars, a portion of our costs and revenue, including interest obligations on a portion of our new senior secured credit facilities and on the senior euro floating rate notes and euro senior subordinated notes, is denominated in other currencies, such as the pound sterling, the euro and the Australian dollar. As a result, changes in the exchange rates of these currencies or any other applicable currencies to the U.S. dollar will affect, to the extent not hedged in the financial markets, our operating expenses and operating margins and could result in exchange losses despite our efforts to manage our exposure to foreign currency fluctuations.

Our Sponsors control us and may have conflicts of interest with us or you in the future.

        Investment funds associated with or designated by affiliates of The Blackstone Group, Technology Crossover Ventures and One Equity Partners, or our Sponsors, beneficially own substantially all of the outstanding voting shares of our ultimate parent company. As a result of this ownership, the Sponsors are entitled to elect all of our directors, to appoint new management and to approve actions requiring the approval of the holders of our outstanding voting shares as a single class, including adopting most amendments to our articles of incorporation and approving or rejecting proposed mergers or sales of all or substantially all of our assets, regardless of whether noteholders believe that any such transactions are in their own best interests. Through control of the Parent Guarantor, the Sponsors control us and all of our subsidiaries.

        The interests of the Sponsors may differ from yours in material respects. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of the Sponsors and their affiliates, as equity holders, might conflict with your interests as a noteholder. The Sponsors and their affiliates may also have an interest in pursuing acquisitions, divestitures, financings (including financings that are senior to the senior subordinated notes) or other transactions that, in their judgment, could enhance their equity investments, even though such transactions might involve

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risks to you as a note holder. Additionally, the indentures governing the notes permit us to pay advisory fees, dividends or make other restricted payments under certain circumstances, and the Sponsors may have an interest in our doing so. For example, borrowings under our revolving credit facility and a portion of the proceeds from asset sales may be used for such purposes.

        The Sponsors and their affiliates are in the business of making investments in companies, and may from time to time in the future, acquire interests in businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. The Sponsors may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. So long as investment funds associated with or designated by the Sponsors continue to indirectly own a significant amount of the outstanding shares of our common stock, even if such amount is less than 50%, the Sponsors will continue to be able to strongly influence or effectively control our decisions. You should consider that the interests of the Sponsors may differ from yours in material respects. See "Certain Relationships and Related Party Transactions," "Description of Other Indebtedness," "Description of Senior Notes" and "Description of Senior Subordinated Notes."

We have identified four significant deficiencies in our internal controls over financial reporting.

        We are not currently required to comply with Section 404 of the Sarbanes-Oxley Act of 2002, and are therefore not required to make an assessment of the effectiveness of our internal controls over financial reporting for that purpose. However, in connection with the audit of our financial statements for the periods ended August 22, 2006 and December 31, 2006, our auditors and we have identified certain matters involving our internal control over financial reporting that constitute significant deficiencies under standards established by the Public Company Accounting Oversight Board ("PCAOB").

        The PCAOB defines a significant deficiency as a control deficiency, or a combination of control deficiencies, that adversely affects the company's ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the company's annual or interim financial statements that is more than inconsequential will not be prevented or detected. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective is not always met. A deficiency in operation exists when a properly designed control does not operate as designed, or when the person performing the control does not possess the necessary authority or qualifications to perform the control effectively.

        Certain controls over the financial closing and reporting process did not operate as designed during the audit process. We and our auditors identified four significant deficiencies: (i) account reconciliation process was not operating effectively to identify errors in balances; (ii) communication between business units and technical accounting for non-routine transactions was not operating effectively; (iii) controls over the identification and disclosure of related party transactions were not designed properly; and (iv) our fraud risk assessment process was not fully implemented.

        We are in the process of implementing changes to strengthen our internal controls. Additional measures may be necessary and the measures we expect to take to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that such material weakness or other material weaknesses would not result in a material misstatement of our annual or interim financial statements. In addition, we cannot guarantee that other material weaknesses or significant deficiencies will not be identified in the future. If we are unable to

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correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively affect the market price and trading liquidity of the notes, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.

Risks Relating to Our Separation from Avis Budget

We have a limited operating history as an independent company and our historical and pro forma financial information is not necessarily representative of the results we would have achieved as an independent company and may not be a reliable indicator of our future results.

        The historical and pro forma financial information prior to August 22, 2006 included in this prospectus does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as an independent company during the periods presented or those that we will achieve in the future, primarily as a result of the following factors:

    Until August 2006, our businesses were operated by Avis Budget as part of its broader corporate organization, rather than as an independent company. Avis Budget or one of its affiliates historically performed various corporate functions for us, including, but not limited to, tax administration, certain governance functions (including compliance with the Sarbanes-Oxley Act of 2002 and internal audit) and external reporting. Our historical and pro forma financial results reflect allocations of corporate expenses from Avis Budget for these and similar functions. These allocations are less than the comparable expenses we believe we would have incurred had we operated as an independent company.

    Historically, we shared economies of scope and scale in costs, employees, vendor relationships and customer relationships, as well as pursued integrated strategies with Avis Budget's other businesses, including those operated by Wyndham Worldwide and Realogy as separate companies. We entered into a Transition Services Agreement and other agreements with Avis Budget, Wyndham Worldwide and Realogy; however, such temporary arrangements may not capture the benefits our businesses have enjoyed as a result of being integrated with the other businesses of Avis Budget. The loss of these benefits could have an adverse effect on our business, results of operations and financial condition following the completion of the Acquisition. See "Certain Relationships and Related Party Transactions" for a further description of these agreements.

    Generally, our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, were historically satisfied as part of the corporate-wide cash management policies of Avis Budget. Avis Budget no longer provides us with funds to finance our working capital or other cash requirements. Accordingly, we obtained, and may in the future need to obtain additional, financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements.

    Our cost of capital is higher than Avis Budget's cost of capital prior to the Acquisition because Avis Budget's credit ratings are higher than ours following the Acquisition.

Other significant changes may occur in our cost structure, management, financing and business operations as a result of the Acquisition that we cannot predict.

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We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent company, and we may experience increased costs after the Acquisition or as a result of the Acquisition.

        Avis Budget, Wyndham Worldwide and Realogy are contractually obligated to provide to us only those services specified in the Transition Services Agreement and the other agreements we entered into with them in connection with the Acquisition and the spin-offs of Realogy and Wyndham Worldwide to stockholders of Avis Budget on July 31, 2006, or the Spin-Offs. All services to be provided under the Transition Services Agreement will be provided for a specified period of time, generally for one year from the date of the Acquisition. We may be unable to replace in a timely manner or on comparable terms the services or other benefits that Avis Budget previously provided to us that are not specified in the Transition Services Agreement or the other agreements, or the services or benefits that are so specified upon the expiration of the periods for which they are to be provided pursuant to those agreements. Also, upon the expiration of the Transition Services Agreement or such other agreements, many of the services that are covered in such agreements will be provided internally or by unaffiliated third parties, and we expect that in some instances, we may incur higher costs to obtain such services than we incurred under the terms of such agreements. In addition, if Avis Budget, Wyndham Worldwide or Realogy do not continue to perform effectively the transition and other services called for under the Transition Services Agreement and other agreements, we may not be able to operate our businesses effectively and our profitability may decline.

The ownership by our executive officers of shares of common stock, options or other equity awards of Avis Budget, Wyndham Worldwide or Realogy may create, or may create the appearance of, conflicts of interest.

        Because of their former positions with Cendant, substantially all of our executive officers held shares of Cendant common stock, options to purchase shares of Cendant common stock or other equity-related instruments. Following the Spin-Offs, these officers now hold shares of common stock and options to purchase shares of common stock in Avis Budget, Wyndham Worldwide and Realogy. The individual holdings of common stock and options to purchase common stock of Avis Budget, Wyndham Worldwide and Realogy may be significant for some of these persons compared to these persons' total assets. Ownership by our officers, after the Acquisition, of common stock and options to purchase common stock of Avis Budget, Wyndham Worldwide and Realogy, creates, or, may create the appearance of, conflicts of interest when these officers are faced with decisions that could have different implications for Avis Budget, Wyndham Worldwide and Realogy than the decisions have for us.

We are contractually obligated to indemnify Avis Budget for certain taxes relating to our separation from Avis Budget.

        Our separation from Avis Budget involved a restructuring of our business whereby certain of our former foreign subsidiaries were separated independent of our separation from Avis Budget. It is possible that the independent separation of these foreign subsidiaries could give rise to an increased tax liability for Avis Budget that would not have existed had these foreign subsidiaries been separated with us. In order to induce Avis Budget to approve the separation structure, we agreed to indemnify Avis Budget for any increase in their tax liability resulting from the structure. We are not able to predict the amount of such tax liability, if any. To the extent that our obligation to indemnify Avis Budget subjects us to additional costs, such costs would be treated as an adjustment to the purchase price, increasing tax-deductible goodwill, and could significantly and negatively affect our financial condition.

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Risks Relating to the Notes

We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

        Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the notes.

        If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior secured credit agreement and the indentures governing the notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.

Your right to receive payments on each series of outstanding notes is, and payments on the exchange notes will be, effectively junior to the right of lenders who have a security interest in our assets to the extent of the value of those assets.

        Our obligations under the notes and our guarantors' obligations under their guarantees of the notes are unsecured, but our obligations under our senior secured credit facilities and each guarantor's obligations under their guarantees of the senior secured credit facilities are secured by a security interest in substantially all of our domestic tangible and intangible assets, including the stock of substantially all of our wholly-owned U.S. subsidiaries and a portion of the stock of certain of our non-U.S. subsidiaries. If we are declared bankrupt or insolvent, or if we default under our senior secured credit agreement, the lenders could declare all of the funds borrowed thereunder, together with accrued interest, immediately due and payable. If we were unable to repay such indebtedness, the lenders could foreclose on the pledged assets to the exclusion of holders of the notes, even if an event of default exists under the indentures governing the notes at such time. Furthermore, if the lenders foreclose and sell the pledged equity interests in any subsidiary guarantor under the notes, then that guarantor will be released from its guarantee of the notes automatically and immediately upon such sale. In any such event, because the notes will not be secured by any of our assets or the equity interests in subsidiary guarantors, it is possible that there would be no assets remaining from which your claims could be satisfied or, if any assets remained, they might be insufficient to satisfy your claims fully. See "Description of Other Indebtedness."

        As of December 31, 2006, we had approximately $2,223 million ($3,263 million giving effect to the proposed acquisition of Worldspan) of senior secured indebtedness, all of which was indebtedness under our senior secured credit facilities, not including availability of $275 million ($300 million giving effect to the proposed acquisition of Worldspan) under our revolving credit facility, $19.1 million available to be drawn under our $125 million ($150 million giving effect to the proposed acquisition of Worldspan) synthetic letter of credit facility, and the option to raise incremental senior secured credit facilities of up to $500 million. The indentures governing the notes permit the Parent Guarantor and its restricted subsidiaries to incur substantial additional indebtedness in the future, including senior secured indebtedness.

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Claims of noteholders are structurally subordinate to claims of creditors of all of our non-U.S. subsidiaries and some of our U.S. subsidiaries because they do not guarantee the notes.

        The Issuer bought Travelport and its U.S. subsidiaries in the Acquisition, while substantially all of the non-U.S. subsidiaries were purchased by Travelport (Bermuda) Ltd., a direct subsidiary of the Parent Guarantor. Although Travelport (Bermuda) Ltd. and its subsidiaries are generally subject to the covenants in our senior secured credit facilities and the indentures governing the notes, none of them guarantee the senior secured credit facilities or the notes. The notes are also not guaranteed by any of our less than wholly-owned U.S. subsidiaries. Accordingly, claims of holders of the notes will be structurally subordinate to the claims of creditors of these non-guarantor subsidiaries, including trade creditors. All obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, to us or a guarantor of the notes. See "The Transactions" and notes 8 and 15 to our combined financial statements contained elsewhere herein.

Your right to receive payments on the senior subordinated notes are junior to the rights of the lenders under our senior secured credit facilities and all of our other senior debt and any of our future senior indebtedness.

        The senior subordinated notes are general unsecured obligations that are junior in right of payment to all of our existing and future senior indebtedness. As of December 31, 2006, we had outstanding approximately $3,133 million ($4,173 million giving effect to the proposed acquisition of Worldspan) of senior indebtedness, including the senior notes and $2,223 million ($3,263 million giving effect to the proposed acquisition of Worldspan) under the senior secured credit facilities. As of December 31, 2006, an additional $275 million ($300 million giving effect to the proposed acquisition of Worldspan) was available to be drawn under our revolving credit facility and an additional $19.1 million was available under our $125 million ($150 million giving effect to the proposed acquisition of Worldspan) synthetic letter of credit facility. In addition, we have the option to raise incremental senior secured credit facilities of up to $500 million. We may not pay principal, premium, if any, interest or other amounts on account of the senior subordinated notes in the event of a payment default or certain other defaults in respect of certain of our senior indebtedness, including debt under the senior secured credit facilities, unless the senior indebtedness has been paid in full or the default has been cured or waived. In addition, in the event of certain other defaults with respect to the senior indebtedness, we may not be permitted to pay any amount on account of the senior subordinated notes for a designated period of time.

        Because of the subordination provisions in the senior subordinated notes, in the event of our bankruptcy, liquidation or dissolution, our assets will not be available to pay obligations under the senior subordinated notes until we have made all payments in cash on our senior indebtedness. We cannot assure you that sufficient assets will remain after all these payments have been made to make any payments on the senior subordinated notes, including payments of principal or interest when due.

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

        Any default under the agreements governing our indebtedness, including a default under the senior secured credit agreement, that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness, could prevent us from paying principal, premium, if any, and interest on the notes and substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including covenants in our senior secured credit facilities and the indentures governing the notes), we could be in default under the terms of the agreements governing such indebtedness,

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including our senior secured credit agreement and the indentures governing the notes. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under our senior secured credit facilities could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to obtain waivers from the required lenders under our senior secured credit facilities to avoid being in default. If we breach our covenants under our senior secured credit facilities and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under our senior secured credit agreement, the lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation.

We may not be able to repurchase the notes upon a change of control.

        Upon the occurrence of specific kinds of change of control events, we will be required to offer to repurchase all outstanding notes at 101% of their principal amount plus accrued and unpaid interest. The source of funds for any such purchase of the notes will be our available cash or cash generated from our subsidiaries' operations or other sources, including borrowings, sales of assets or sales of equity. We may not be able to repurchase the notes upon a change of control because we may not have sufficient financial resources to purchase all of the notes that are tendered upon a change of control. Further, we are contractually restricted under the terms of our senior secured credit agreement from repurchasing all of the notes tendered by holders upon a change of control. Accordingly, we may not be able to satisfy our obligations to purchase the notes unless we are able to refinance or obtain waivers under our senior secured credit agreement. Our failure to repurchase the notes upon a change of control would cause a default under the indentures governing the notes and a cross-default under the senior secured credit agreement. The senior secured credit agreement also provides that a change of control will be a default that permits lenders to accelerate the maturity of borrowings thereunder. Any of our future debt agreements may contain similar provisions.

The lenders under the senior secured credit facilities have the discretion to release the guarantors under the senior secured credit agreement in a variety of circumstances, which will cause those guarantors to be released from their guarantees of the notes.

        While any obligations under the senior secured credit facilities remain outstanding, any guarantee of the notes may be released without action by, or consent of, any holder of the notes or the trustee under the indentures governing the notes, at the discretion of lenders under the senior secured credit facilities, if the related guarantor is no longer a guarantor of obligations under the senior secured credit facilities or any other indebtedness. See "Description of Senior Notes" and "Description of Senior Subordinated Notes." The lenders under the senior secured credit facilities have the discretion to release the guarantees under the senior secured credit facilities in a variety of circumstances. You will not have a claim as a creditor against any subsidiary that is no longer a guarantor of the notes, and the indebtedness and other liabilities, including trade payables, whether secured or unsecured, of those subsidiaries will effectively be senior to claims of noteholders.

You may face foreign exchange risks or tax consequences as a result of investing in the euro notes.

        The senior euro floating rate notes and the euro senior subordinated notes are denominated and payable in euros. If you are a U.S. investor, an investment in euro-denominated notes will entail foreign exchange-related risks due to, among other factors, possible significant changes in the value of the euro relative to the U.S. dollar because of economic, political and other factors over which we have no control. Depreciation of the euro against the U.S. dollar could cause a decrease in the effective yield of the euro-denominated notes below their stated coupon rates and could result in a loss to you

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on a U.S. dollar basis. Investing in the euro-denominated notes by U.S. investors may also have important tax consequences.

Federal and state fraudulent transfer laws may permit a court to void the guarantees, and, if that occurs, you may not receive any payments on the notes.

        Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the notes and the incurrence of the guarantees. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the notes or guarantees could be voided as a fraudulent transfer or conveyance if (1) we or any of the guarantors, as applicable, issued the notes or incurred the guarantees with the intent of hindering, delaying or defrauding creditors or (2) we or any of the guarantors, as applicable, received less than reasonably equivalent value or fair consideration in return for either issuing the notes or incurring the guarantees and, in the case of (2) only, one of the following is also true at the time thereof:

    we or any of the guarantors, as applicable, were insolvent or rendered insolvent by reason of the issuance of the notes or the incurrence of the guarantees;

    the issuance of the notes or the incurrence of the guarantees left us or any of the guarantors, as applicable, with an unreasonably small amount of capital to carry on the business;

    we or any of the guarantors intended to, or believed that we or such guarantor would, incur debts beyond our or such guarantor's ability to pay as they mature; or

    we or any of the guarantors was a defendant in an action for money damages, or had a judgment for money damages docketed against us or such guarantor if, in either case, after final judgment, the judgment is unsatisfied.

        If a court were to find that the issuance of the notes or the incurrence of the guarantee was a fraudulent transfer or conveyance, the court could void the payment obligations under the notes or such guarantee or further subordinate the notes or such guarantee to presently existing and future indebtedness of ours or of the related guarantor, or require the holders of the notes to repay any amounts received with respect to such guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the notes. Further, the voidance of the notes could result in an event of default with respect to our and our subsidiaries' other debt that could result in acceleration of such debt.

        As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied. A debtor will generally not be considered to have received value in connection with a debt offering if the debtor uses the proceeds of that offering to make a dividend payment or otherwise retire or redeem equity securities issued by the debtor.

        We cannot be certain as to the standards a court would use to determine whether or not we or the guarantors were solvent at the relevant time or, regardless of the standard that a court uses, that the issuance of the guarantees would not be further subordinated to our or any of our guarantors' other debt. Generally, however, an entity would be considered solvent if, at the time it incurred indebtedness:

    the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets; or

    the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

    it could not pay its debts as they become due.

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We have no operations of our own and may not have sufficient cash to make payments on the notes.

        The Issuer, the Intermediate Parent Guarantor and the Parent Guarantor have no operations of their own and derive substantially all of their revenue and cash flows from their subsidiaries. Their principal assets are the equity interests they hold in their operating subsidiaries. As a result, these entities are dependent upon dividends and other payments from their subsidiaries to generate the funds necessary to meet their outstanding debt service and other obligations. The subsidiaries may not generate sufficient cash from operations to enable the Issuer, the Intermediate Parent Guarantor or the Parent Guarantor to make principal and interest payments on their indebtedness, including the notes. In addition, any payments on dividends, distributions, loans or advances to them by their subsidiaries could be subject to restrictions on dividends or repatriation of earnings under applicable local law, taxation and monetary transfer restrictions in the jurisdictions in which the subsidiaries operate. In addition, payments to them by their subsidiaries will be contingent upon the subsidiaries' earnings. The subsidiaries are, or in the future may be, subject to agreements that may restrict payments from the applicable subsidiary to the Issuer, the Intermediate Parent Guarantor or the Parent Guarantor. While the indentures governing the notes and the senior secured credit facilities provide for limitations on these restrictions, we cannot assure you that agreements governing the current and future indebtedness of their subsidiaries will permit the applicable subsidiary to provide them with sufficient cash to fund payments on the notes when due.

The Parent Guarantor is a Bermuda company, and the Intermediate Parent Guarantor is a Luxembourg company; it may be difficult for you to enforce judgments against them.

        The Parent Guarantor and the Intermediate Parent Guarantor were incorporated under the laws of, and their businesses are based in, Bermuda and Luxembourg, respectively. In addition, a portion of their assets may be located in jurisdictions outside the United States. As such, it may be difficult or impossible to effect service of process within the United States upon them, or to recover against them on judgments of U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Further, no claim may be brought in Bermuda against the Parent Guarantor in the first instance for violation of U.S. federal securities laws because these laws have no extraterritorial application under Bermuda law and do not have force of law in Bermuda; however, a Bermuda court may impose civil liability, including the possibility of monetary damages on it if the facts alleged in a complaint constitute or give rise to a cause of action under Bermuda law. Similarly, it is unlikely that a claim may be brought in Luxembourg against the Intermediate Parent Guarantor in the first instance for violation of U.S. federal securities laws because it is unlikely that any provisions of laws have extraterritorial application under Luxembourg law and have force of law in Luxembourg; however, a Luxembourg court may impose civil liability, including the possibility of monetary damages on it if the facts alleged in a complaint constitute or give rise to a cause of action under Luxembourg law.

        We have been advised by Conyers Dill & Pearman, the Parent Guarantor's special Bermuda counsel, that there is doubt as to whether the courts of Bermuda would enforce judgments of U.S. courts obtained in actions against us or our directors and officers, as well as the experts named herein, predicated upon the civil liability provisions of the U.S. federal securities laws, or original actions brought in Bermuda against us or such persons predicated solely upon U.S. federal securities laws. Further, we have been advised by Conyers Dill & Pearman that there is no treaty in effect between the United States and Bermuda providing for the enforcement of judgments of U.S. courts in civil and commercial matters, and there are grounds upon which Bermuda courts may decline to enforce the judgments of U.S. courts. Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, may not be allowed in Bermuda courts as contrary to public policy in Bermuda. Because judgments of U.S. courts are not automatically enforceable in Bermuda, it may be difficult for you to recover against us based upon such judgments.

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        In addition, we have been advised by Arendt & Redernach, as special Luxembourg counsel, that there is doubt as to whether the courts of Luxembourg would enforce judgments of U.S. courts obtained in actions against us or our directors and officers, as well as the experts named herein, predicated upon the civil liability provisions of the U.S. federal securities laws, or original actions brought in Luxembourg against us or such persons predicated solely upon U.S. federal securities laws. Further, we have been advised by Luxembourg that there is no treaty in effect between the United States and Luxembourg providing for the enforcement of judgments of U.S. courts in civil and commercial matters, and there are grounds upon which Luxembourg courts may decline to enforce the judgments of U.S. courts. Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, may not be allowed in Luxembourg courts as contrary to public policy in Luxembourg. Because judgments of U.S. courts are not automatically enforceable.

If you choose not to exchange your outstanding notes in the exchange offer, the transfer restrictions currently applicable to your outstanding notes will remain in force and the market price of your outstanding notes could decline.

        If you do not exchange your outstanding notes for exchange notes in the exchange offer, then you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the prospectus distributed in connection with the private offering of the outstanding notes. In general, the outstanding notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreements, we do not intend to register resales of the outstanding notes under the Securities Act. You should refer to "Prospectus Summary—Summary of the Terms of the Exchange Offer" and "Registration Rights" for information about how to tender your outstanding notes.

        The tender of outstanding notes under the exchange offer will reduce the principal amount of the outstanding notes outstanding, which may have an adverse effect upon and increase the volatility of, the market price of the outstanding notes due to reduction in liquidity.

Your ability to transfer the notes may be limited by the absence of an active trading market, and there is no assurance that any active trading market will develop for the notes.

        The exchange notes are a new issues of securities for which there is no established public market. The initial purchasers have advised us that they intend to make a market in the exchange notes as permitted by applicable laws and regulations; however, the initial purchasers are not obligated to make a market in any of the exchanges notes, and they may discontinue their market-making activities at any time without notice. Therefore, an active market for any of the exchange notes may not develop or, if developed, it may not continue. Historically, the market for non investment-grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes. The market, if any, for any of the exchange notes may not be free from similar disruptions and any such disruptions may adversely affect the prices at which you may sell your exchange notes. In addition, subsequent to their initial issuance, the exchange notes may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar notes, our performance and other factors.

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FORWARD-LOOKING STATEMENTS

        This prospectus contains "forward-looking" statements that involve risks and uncertainties. Many of the statements appear, in particular, in the sections entitled "Prospectus Summary," "Risk Factors," "Unaudited Pro Forma Condensed Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business." 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 identify forward-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 read statements that contain these words carefully because they discuss our future priorities, goals, strategies, actions to improve business performance, market growth assumptions and expectations, new products, product pricing, changes to our manufacturing processes, future business opportunities, capital expenditures, financing needs, financial position and other information that is not historical information or state other "forward-looking" information.

        The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

    our substantial indebtedness;

    our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our businesses;

    interest rate movements;

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

    general economic and business conditions, both nationally and in our markets;

    competition in the travel industry;

    pricing, regulatory and other trends in the travel industry;

    risks associated with doing business in multiple international jurisdictions and in multiple currencies;

    maintenance and protection of our information technology and intellectual property;

    the outcome of pending litigation;

    our ability to consummate the proposed acquisition of Worldspan;

    acquisition opportunities and our ability to successfully integrate acquired businesses and realize anticipated benefits of such acquisitions, including the proposed Worldspan acquisition;

    financing plans and access to adequate capital on favorable terms; and

    our ability to achieve anticipated cost savings.

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

        Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and

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uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. The factors listed in the section captioned "Risk Factors," as well as any other cautionary language in this prospectus, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. You should be aware that the occurrence of the events described in these risk factors and elsewhere in this prospectus could have an adverse effect on our business, results of operations and financial position.

        Forward-looking statements speak only as of the date the statements are made. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.

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THE TRANSACTIONS

The Acquisition and Related Financings

        On June 30, 2006, Cendant Corporation and its indirect subsidiary, Travelport Americas, Inc. (f/k/a Travelport Inc.), entered into a Purchase Agreement with TDS Investor LLC, a newly-formed Delaware limited liability company controlled by affiliates of The Blackstone Group, or the Sponsor, providing for the sale of Travelport.

        Investment funds associated with Blackstone and certain other investors who co-invested with Blackstone invested approximately $900 million in our business as part of the Acquisition. These funds are invested by the Sponsors directly or indirectly in TDS Investor (Cayman) L.P., or the Partnership, a Cayman exempt limited partnership, which caused these funds to be contributed through its direct and indirect subsidiaries to the Issuer, one of its indirect wholly owned subsidiaries.

        The Acquisition was financed with proceeds from $2,200 million in term loans under our senior secured credit facilities. As part of the Acquisition, subsidiaries of Travelport (Bermuda) Ltd., a Bermuda limited company, and a direct subsidiary of the Parent Guarantor, purchased substantially all of the foreign subsidiaries of Travelport with a portion of the funds described above, which it received from the Issuer in the form of an intercompany loan, and the Issuer acquired Travelport Americas, Inc. and its U.S. subsidiaries.

        As a result of the Acquisition, as of September 7, 2006, investment funds controlled by the Sponsor held approximately 86.1% of the shares of the Cayman limited company that acts as general partner of the Partnership and fully controls the Partnership. By virtue of this ownership and the Partnership's 100% ownership of us, Blackstone controls us. Investment funds controlled by Technology Crossover Ventures, or TCV, invested in the remaining Class A-1 Partnership Interests of the Partnership and the remaining shares of the general partner of the Partnership.

        In October 2006, the partners entered into an amended and restated partnership agreement and other agreements with its existing general partner and limited partners, as well as certain officers, directors and key employees (collectively, the "Executives") of the Company, pursuant to which the Partnership awarded and sold various classes of equity interests to the Executives. The Partnership received aggregate proceeds of approximately $1.6 million as a result of the sales of interests to Executives in the offering, which was made pursuant to the Partnership's 2006 Interest Plan (the "Interest Plan"). In addition, the Partnership also awarded, pursuant to the Interest Plan, additional interests to Executives with a fair market value for purposes of FAS 123R of $49 million, based on a preliminary valuation.

        In connection with our agreement to acquire Worldspan, One Equity Partners, or OEP, made an equity contribution of $125 million in the Partnership that was used by one of our parent companies to make a $125 million loan to Worldspan. As a result of this contribution, OEP became a limited partner in the Partnership. A second amended and restated limited partnership agreement for the Partnership reflecting certain amendments requested by OEP was entered on March 26, 2007.

        We entered into a Separation and Distribution Agreement, a Transition Services Agreement and certain other agreements with Avis Budget, Realogy and Wyndham Worldwide that effected the separation of Realogy and Wyndham Worldwide from Avis Budget and provide a framework for our relationships with Avis Budget, Wyndham Worldwide and Realogy. These agreements govern the relationships among us, Avis Budget, Realogy and Wyndham Worldwide and provide for the allocation among us, Avis Budget, Realogy and Wyndham Worldwide of Cendant's assets, liabilities and obligations (including employee benefits and tax-related assets and liabilities) attributable to periods prior to the respective separations of each of the businesses from Cendant.

47



        See "Certain Relationships and Related Party Transactions—Agreements with Avis Budget, Wyndham Worldwide and Realogy" for a summary of these agreements and other arrangements among Avis Budget, Realogy and Wyndham Worldwide and us.

        The Transition Services Agreement provides for the provision of certain transition services by Avis Budget, Realogy and Wyndham Worldwide to us, including services relating to human resources and employee benefits, corporate real estate, payroll, financial systems management, treasury and cash management, telecommunications and information technology. The cost of each transition service is based on either a flat fee or an allocation (based on size or usage) of the cost incurred by the company providing the service. All services to be provided under the Transition Services Agreement will be provided for a specified period of time, generally one year from the date of the Acquisition, and the parties' abilities to terminate those services in advance without penalty will be limited.

        The following chart shows a summary of our organizational structure prior to the proposed Worldspan acquisition. The dotted line indicates the Issuer, the co-obligor and the entities that guarantee the senior secured credit facilities and the notes.

LOGO


(1)
Guarantor of the senior secured credit facilities on a senior secured basis, the senior notes on a senior basis and the senior subordinated notes on a senior subordinated basis.

48


(2)
The Issuer lent a portion of the proceeds from the senior secured credit facilities and the offering of the outstanding notes to Travelport (Bermuda) Ltd. to finance the purchase of substantially all of the foreign subsidiaries of Travelport as part of the Transactions. See "The Transactions."

(3)
Travelport Holdings, Inc. is the co-obligor of the notes.

(4)
The non-guarantor subsidiaries include all of our non-U.S. subsidiaries as well as Galileo International Technology, LLC, a Delaware limited liability company. These entities are more restricted than the Issuer and the guarantors in their ability to incur indebtedness. See "Description of Senior Notes—Certain Covenants" and "Description of Senior Subordinated Notes—Certain Covenants."

Sources and Uses

        The sources and uses of the funds for the Transactions are shown in the table below.

(in millions)

   
   
   
Sources
   
  Uses
   
Revolving credit facility(1)   $   Purchase price   $ 4,179
Term loan facilities(2)     2,200   Cash on hand     219
Senior notes(3)     899   Fees and expenses(5)     105
             
Senior subordinated notes(4)     504          
Equity contribution     900          
   
         
  Total Sources   $ 4,503   Total Uses   $ 4,503
   
     

(1)
Upon the closing of the Transactions, we entered into a $275 million senior secured revolving credit facility with a six-year maturity, none of which was drawn on the closing date of the Transactions. See "Description of Other Indebtedness."

(2)
Upon the closing of the Transactions, we entered into $2,200 million in aggregate principal amount of senior secured term loan facilities consisting of a U.S. dollar-denominated facility and a euro-denominated facility, each having a seven-year maturity, and all of which were drawn on the closing date of the Transactions. We also entered into a $125 million senior secured synthetic letter of credit facility. On the closing date of the Transactions, we issued approximately $38 million in letters of credit under this facility. See "Description of Other Indebtedness."

(3)
Includes $150 million aggregate principal amount of senior dollar floating rate notes due 2014, €235 million aggregate principal amount of senior euro floating rate notes due 2014 and $450 million aggregate principal amount of 97/8% senior dollar fixed rate notes due 2014.

(4)
Includes $300 million aggregate principal amount of 117/8% dollar senior subordinated notes due 2016 and €160 million aggregate principal amount of 107/8% euro senior subordinated notes due 2016.

(5)
Reflects fees and expenses associated with the Transactions, including placement and other financing fees, advisory fees, transaction fees paid to affiliates of the Sponsor, and other transaction costs and professional fees. See "Certain Relationships and Related Party Transactions."

49



USE OF PROCEEDS

        The exchange offer is intended to satisfy our obligations under the registration rights agreements that we entered into in connection with the private offering of the outstanding notes. We will not receive any cash proceeds from the issuance of the exchange notes in the exchange offer. As consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of outstanding notes, the terms of which are identical in all material respects to the exchange notes, except that the exchange notes will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreements. The outstanding notes that are surrendered in exchange for the exchange notes will be retired and cancelled and cannot be reissued. As a result, the issuance of the exchange notes will not result in any increase or decrease in our capitalization.

50



CAPITALIZATION

        The following table summarizes our cash position and capitalization as of December 31, 2006 on an actual basis and as adjusted for our proposed acquisition of Worldspan.

        This table should be read in conjunction with the information included under the headings "The Transactions," "Use of Proceeds," "Unaudited Pro Forma Condensed Financial Information," "Selected Historical Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Other Indebtedness" and our combined financial statements and related notes included elsewhere in this prospectus.

        This table also excludes indebtedness of our parent company. In particular, this table excludes the $1.1 billion of senior PIK term loans made by a syndicate of lenders to Travelport Holdings Limited on March 27, 2007.

 
  Actual
  As Adjusted
(in millions)

  As of
December 31,
2006

  As of
December 31,
2006

Cash and cash equivalents   $ 97   $ 129
   
 
Senior secured credit facilities:            
  Revolving credit facility(1)        
  Term loan facilities(2)     2,223     3,263
Senior notes(3)     910     910
Senior subordinated notes(4)     511     511
Capital leases     3     78
   
 
  Total debt     3,647     4,762
             
Equity(5)     775     900
   
 
  Total capitalization   $ 4,422   $ 5,662
   
 

(1)
Upon the closing of the Transactions, we entered into a $275 million senior secured revolving credit facility with a six-year maturity, none of which was drawn on the closing date of the Transactions. Upon closing of the proposed acquisition of Worldspan, the revolving credit facility will increase to $300 million. See "Description of Other Indebtedness."

(2)
Upon the closing of the Transactions, we entered into $2,200 million in aggregate principal amount of senior secured term loan facilities consisting of a U.S. dollar-denominated facility and a euro-denominated facility, in each case having a seven-year maturity, and all of which were drawn on the closing date of the Transactions. We also entered into a $125 million senior secured synthetic letter of credit facility. Upon closing of the proposed acquisition of Worldspan, we will incur an additional $1,040 million of term loans and increase the synthetic letter of credit facility to $150 million.

(3)
Includes $150 million aggregate principal amount of senior dollar floating rate notes due 2014, €235 million aggregate principal amount of senior euro floating rate notes due 2014 and $450 million aggregate principal amount of 97/8% senior dollar fixed rate notes due 2014.

(4)
Includes $300 million aggregate principal amount of 117/8% dollar senior subordinated notes due 2016 and €160 million aggregate principal amount of 107/8% euro senior subordinated notes due 2016.

(5)
Actual amount includes $908 million equity contribution, $144 million of deficit accumulated and $11 million of accumulated other comprehensive income for the period July 13, 2006 to December 31, 2006. As adjusted equity includes $125 million to be contributed as a result of the forgiveness of the PIK note issued to a parent affiliate of Travelport to occur upon the closing of the proposed acquisition of Worldspan.

51



UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

        The following unaudited pro forma financial information is based on the audited financial statements of Travelport appearing elsewhere in this prospectus, as adjusted to illustrate the estimated pro forma effects of the Acquisition (including the preliminary application of purchase accounting) and related financing transactions, including the offering of notes and the preliminary estimates of the purchase price allocation, and also of the proposed acquisition of Worldspan. The unaudited pro forma financial information should be read in conjunction with the financial statements and related notes of Travelport and Worldspan and other financial information appearing elsewhere in this prospectus, including "Management's Discussion and Analysis of Financial Condition and Results of Operations."

        The unaudited pro forma statement of operations gives effect to the Transactions and the proposed acquisition of Worldspan as if they had occurred on January 1, 2006. The unaudited pro forma balance sheet gives effect to the acquisition of Worldspan as if it had occurred on December 31, 2006.

        The unaudited pro forma financial information includes reported amounts from Worldspan's financial statements. The unaudited pro forma information does not reflect preliminary estimates of purchase price allocation for this proposed transaction as the transaction has not been consummated. We have assumed that, for Worldspan, historical values of current assets acquired and current liabilities assumed reflect fair value. The unaudited pro forma information does not include any Worldspan fair value adjustments for intangible assets and the possible impact on amortization on such possible fair value adjustments. Upon the allocation of the consummated Worldspan purchase price, there may be adjustments to depreciable and amortizable assets that could have a material impact on the balance sheet and statement of operations.

        The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. Adjustments to depreciation and amortization are based upon the preliminary valuation and allocation of goodwill that resulted from the Acquisition, and are subject to revision.

        The unaudited pro forma financial information is for informational purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the Transactions been completed as of the dates presented, and should not be taken as representative of our future combined results of operations or financial position.

52



UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2006
(in millions)

 
  Travelport
Limited

  Worldspan
  Pro forma
adjustments

  Pro forma
Assets                        
Current assets                        
  Cash and cash equivalents   $ 97   $ 32       $ 129
  Accounts receivable, net     454     72     (3 )(b)   523
  Deferred income taxes     6             6
  Other current assets     155     23         178
   
 
 
 
Total current assets     712     127     (3 )   836

Property and equipment, net

 

 

516

 

 

100

 

 

 

 

 

616
Goodwill and intangible assets     4,506     535     554   (a)   5,564
                  (31 )(b)    
Deferred income taxes     12     44         56
Other non-current assets     384     141     (125 )(c)(a)   472
                  72   (d)    
   
 
 
 
Total assets   $ 6,130   $ 947   $ 467   $ 7,544
   
 
 
 

Liabilities and invested equity

 

 

 

 

 

 

 

 

 

 

 

 
Current liabilities:                        
  Accounts payable   $ 308   $ 9       $ 317
  Accrued expenses and other current liabilities     821     135     (11 )(b)   945
  Current portion of long-term debt     22     7     (7 )(a)   22
  Current portion of capital lease obligations     2     13         15
  Deferred income taxes     13             13
   
 
 
 
Total current liabilities     1,166     164     (18 )   1,312

Long-term debt

 

 

3,622

 

 

1,194

 

 

96

  (a)

 

4,662
                  (250 )(c)(a)    
Long-term portion of capital lease obligations     1     62         63
Deferred income taxes     247             247
Tax sharing liability     125             125
Other non-current liabilities     194     64     (23 )(b)   235
   
 
 
 
Total liabilities     5,355     1,484     (195 )   6,644
   
 
 
 

Total equity

 

 

775

 

 

(537

)

 

125

  (c)(a)

 

900
                  537   (a)    
   
 
 
 
Total liabilities and invested equity   $ 6,130   $ 947   $ 467   $ 7,544
   
 
 
 

(a)
The pro forma adjustments give effect to the proposed acquisition of Worldspan by Travelport and the allocation of the preliminary purchase price of $1.4 billion.


The indentures governing approximately $951 million of Worldspan debt contain provisions whereby the acquisition by Travelport, if closed, will represent an event of default and cause the outstanding debt to become immediately due and payable. In addition, the merger agreement requires the proceeds from the new Travelport term loans to be used to repay the Worldspan long-term debt. The excess of the preliminary purchase price less amounts used to pay Worldspan long term debt of $951 million, PIK notes to be forgiven of $250 million, $100 million estimated incremental liabilities to be assumed and capitalized transaction costs of $72 million over the historical December 31, 2006 Worldspan stockholders deficit balance of $537 million results in estimated incremental goodwill of $554 million.


Upon the allocation of the Worldspan purchase price, there may be adjustments to depreciable and amortizable assets that could have a material impact on the balance sheet and statements of operations.


The Worldspan historical basis goodwill and other intangible assets as of December 31, 2006 consisted of approximately $739 million in gross assets less $204 million of accumulated amortization. (See Worldspan financial statements included elsewhere in this prospectus for further details), Worldspan recorded amortization expense for its amortizable intangible assets of $59.6 million for the year ended December 31, 2006.


The amounts reflected as Worldspan goodwill and other intangible assets and related amortization expense in the pro forma financial information is subject to change should the transaction be consummated.

(b)
Eliminates the financial statement impact of transactions between Orbitz and Worldspan related to inducement payments made to Orbitz by Worldspan and the elimination of the impact of a purchase accounting fair value adjustment on the balance sheet of Travelport for certain contracts between Orbitz and Worldspan.

(c)
Reflects forgiveness of the $125 million PIK note issued by Worldspan to Travelport and the $125 million PIK note issued by Worldspan to a parent affiliate of Travelport. The $125 million PIK note issued to Travelport is eliminated from the balance sheet of Travelport and the $125 million PIK note issued to a parent affiliate of Travelport is recorded as a capital contribution.

(d)
Reflects estimated transaction fees directly related to the financing to be capitalized on the balance sheet and to be amortized over the life of the new term loan issuances

53



UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS DATA
FOR THE YEAR ENDED DECEMBER 31, 2006

 
  Company
  Predecessor(I)
   
   
   
   
 
(in millions)

  July 13, 2006
(Formation Date)
to December 31, 2006

  January 1, 2006
to August 22, 2006

  Worldspan
(II)

  Travelport
Adjustments

  Worldspan
Adjustments

  Pro Forma
 
Net revenue   $ 839   $ 1,711     887   $ (31 )(a)   (40 )(g) $ 3,366  
   
 
 
 
 
 
 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Cost of revenue     378     717     597         (40 )(g)   1,630  
                              (22 )(h)      
Selling, general and administrative     347     654     140     4   (b)   (33 )(h)   1,112  
Separation and restructuring charges     16     92                 108  
Depreciation and amortization     78     125     38     14   (c)   55   (h)   310  
Other income         (7 )               (7 )
Impairment of long-lived assets     14     2,376         (2,376) (d)       14  
   
 
 
 
 
 
 
Total operating expenses     833     3,957     775     (2,358 )   (40 )   3,167  
   
 
 
 
 
 
 

Operating income (loss)

 

 

6

 

 

(2,246

)

 

112

 

 

2,327

 

 


 

 

199

 
Interest expense, net     (151 )   (39 )   (70 )   (191 )(e)   (15 )(i)   (465 )
                        1   (a)            

Loss on extinguishment of debt, net

 

 


 

 


 

 

(23

)

 


 

 


 

 

(23

)
Other expense     (1 )   (1 )   3             1  
   
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes     (146 )   (2,286 )   22     2,137     (15 )   (288 )
Provision (benefit) for income taxes     4     (115 )   12     143   (f)   (5)   (j)   39  
   
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax   $ (150 ) $ (2,171 ) $ 10   $ 1,994   $ (10 ) $ (327 )
   
 
 
 
 
 
 

See Notes to Unaudited Pro Forma Condensed Statements of Operations Data.

54



NOTES TO UNAUDITED PRO FORMA CONDENSED
STATEMENTS OF OPERATIONS DATA

(I)
Prior to the Acquisition, the Company had limited operations. As a result, the Travelport businesses of AvisBudget are considered to be a predecessor company ("Predecessor").

(II)
Worldspan includes reported amounts for the year ended December 31, 2006 derived from Worldspan's financial statements.

(a)
Reflects the adjustment to revenue as a result of fair value adjustments as a result of the Acquisition.

(b)
Reflects the adjustment to selling, general and administrative expenses for the annual monitoring fee that the Company is required to pay to the Sponsors.

(c)
Reflects our preliminary estimates of the Travelport purchase price allocated to property, plant and equipment, trademarks and tradenames, developed technology, customer contracts and relationships, vendor contracts and relationships, or other identifiable intangible assets resulting in additional depreciation and amortization expense.

(d)
Impairment of intangible assets is excluded as the goodwill and intangible assets would be stated at fair value at the beginning of each period presented, and therefore an impairment would not exist in the periods presented.

(e)
Represents pro forma interest expense resulting from our new debt structure using the applicable interest rates as follows (in millions):

 
  Year Ended
December 31,

 
(in millions)

  2006
 
Revolving credit facility   $  
Term loan facilities     182   (1)
Senior dollar floating rate notes     15   (2)
Senior euro floating rate notes     31   (3)
Senior fixed rate notes     44   (4)
Dollar senior subordinated notes     36   (5)
Euro senior subordinated notes     26   (6)
Capital lease obligations assumed     4   (7)
Senior secured synthetic letter of credit facility     4   (8)
Commitment fees     1   (9)
   
 
Total cash interest expense     343  
Other existing liabilities     19   (10)
Amortization of capitalized debt issuance costs     19   (11)
   
 
Total pro forma interest expense     381  
Less historical interest expense, net     (190 )
   
 
Total pro forma interest expense adjustment   $ 191  
   
 

(1)
Reflects pro forma interest expense on the $1,410 million U.S. dollar-denominated term loan facility at an assumed per annum interest rate of LIBOR of 5.19% plus 3.00% and the $790 million Euro-denominated term loan facility at an assumed interest rate of 8.136% per annum (reflecting the estimated impact of hedging agreements).

(2)
Reflects pro forma interest expense on the $150 million notes at an assumed interest rate of 9.74% per annum (reflecting the estimated impact of hedging agreement).

(3)
Reflects pro forma interest expense on the €235 million notes at an assumed interest rate of 10.034% per annum (reflecting the estimated impact of hedging agreements).

(4)
Reflects pro forma interest expense on the $450 million notes at an interest rate of 9.875% per annum.

55


(5)
Reflects pro forma interest expense on the $300 million notes at an interest rate of 11.875% per annum.

(6)
Reflects pro forma interest expense on the €160 million notes at an assumed interest rate of 12.70% per annum (reflecting the estimated impact of hedging agreement).

(7)
Reflects historical cash interest expense on assumed capital lease obligations that are not being refinanced.

(8)
Reflects pro forma interest expense under the new senior secured synthetic letter of credit facility at an assumed interest rate of 3.09% on the $125 million facility.

(9)
Reflects pro forma commitment fees of 0.50% on an estimated $275 million average available balance under the revolving credit facility.

(10)
Reflects non-cash accretion of other discounted liabilities being assumed, primarily related to the tax sharing liability.

(11)
Reflects non-cash amortization of capitalized debt issuance costs. These costs are amortized over the term of the related facilities.

Interest rate sensitivity:

A 1/8% change in interest rates would impact pro forma interest expense by approximately $2 million.

(f)
Represents the tax effect of the pro forma adjustments calculated at an assumed applicable statutory rate, net of the estimated impact of a valuation allowance. The actual tax effect depends, among other factors, on the jurisdictions associated with borrowing and our ability to realize taxable income in those jurisdictions, as well as on the deferred tax consequences.

(g)
Reflects elimination of inducements paid by Worldspan to Orbitz.

(h)
Reclassification of depreciation and amortization expense to conform to Travelport presentation. See also (a) of the Unaudited Pro Forma Condensed Combined Balance Sheet.

(i)
Represents pro forma interest expense resulting from the proposed debt structure resulting from the planned acquisition of Worldspan using the applicable interest rates as follows (in millions):

 
  Year Ended
December 31,

 
 
  2006
 
 
  (in millions)

 
Interest on new funded indebtedness   $ 80   (1)
Capital lease obligations assumed     5   (2)
   
 
Total cash interest expense     85  
Amortization of capitalized debt issuance costs     4   (3)
   
 
Total pro forma interest expense     89  
Less historical interest expense, net     (74 )
   
 
Total pro forma interest expense adjustment   $ 15  
   
 

    (1)
    Reflects pro forma interest expense on a $1,040 million U.S. dollar-denominated term loan facility at an assumed interest rate of LIBOR of 5.19% plus 2.500%. This is based on the rates of the existing Travelport floating rate debt in 2006.

    (2)
    Reflects historical interest expense on assumed capital lease obligations.

    (3)
    Reflects non-cash amortization of capitalized debt issuance costs. These costs are amortized over the term of the related facilities.


The pro forma statements of operations data do not reflect incremental stand-alone costs or the effects of any cost savings and any related one-time costs to achieve those cost savings.

(j)
Represents the tax effect of the pro forma adjustments calculated at an assumed applicable statutory rate.

Interest rate sensitivity:

        A 1/8% change in interest rates would impact proforma interest expense related to the new funded indebtedness by approximately $1 million.

56



SELECTED HISTORICAL FINANCIAL INFORMATION

        The following table presents our selected historical financial data and operating statistics. The statement of income data for each of the years in the four-year period ended December 31, 2005 and the periods January 1, 2006 through August 22, 2006 and July 13, 2006 (Formation Date) through December 31, 2006 and the balance sheet data as of December 31, 2006 and 2005 have been derived from our audited financial statements included elsewhere in this prospectus. The statement of operations data for the years ended December 31, 2002 and the balance sheet data as of December 31, 2004, 2003 and 2002 are derived from unaudited financial statements that are not included in this prospectus.

        On August 23, 2006, Travelport completed the acquisition of the Travelport businesses of Cendant Corporation (the "Acquisition"). Prior to the Acquisition, the Issuer's operations were limited to entering into derivative transactions related to the debt that was subsequently issued. As a result, the Travelport businesses of AvisBudget Group, Inc. are considered a predecessor company (the "Predecessor") to Travelport. The financial statements as of December 31, 2006 and for the period July 13, 2006 (Formation Date) to December 31, 2006 include the financial condition, results of operations and cash flows for Travelport on a successor basis (the "Company"), reflecting the impact of the preliminary purchase price allocation.

        The selected historical financial data and operating statistics presented below should be read in conjunction with our financial statements and accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in this prospectus. Our historical financial information may not be indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, including changes that will occur in our operations and capitalization as a result of the Acquisition. Refer to "Unaudited Pro Forma Condensed Financial Information" for a further description of the anticipated changes.

57


 
  Predecessor
  Company
  Combined*
 
 
  Year Ended December 31,
  Period From
January 1,
through
August 22,

  Period From
July 13
(formation date)
through
December 31,

  Year
Ended
December 31,

 
(dollars in millions)

  2002
  2003
  2004
  2005
  2006
  2006
  2006
 
 
   
   
   
   
   
   
  (unaudited)

 
Statement of Operations Data:                                            
Net revenue   $ 1,695   $ 1,656   $ 1,758   $ 2,411   $ 1,711   $ 839   $ 2,550  
Total operating expenses     1,274     1,313     1,413     2,501     3,957     833     4,790  
   
 
 
 
 
 
 
 
Operating income (loss)     421     343     345     (90 )   (2,246 )   6     (2,240 )
Interest expense, net     (5 )   (2 )   (6 )   (27 )   (39 )   (151 )   (190 )
Other expense                 (1 )   (1 )   (1 )   (2 )
   
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes     416     341     339     (118 )   (2,286 )   (146 )   (2,432 )
Provision (benefit) for income taxes     103     75     85     (75 )   (115 )   4     (111 )
   
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax     313     266     254     (43 )   (2,171 )   (150 )   (2,321 )
Loss from discontinued operations, net of tax             (1 )   (6 )   (6 )   (2 )   (8 )
Loss on disposal of discontinued operations, net of tax                     (6 )   8     2  
   
 
 
 
 
 
 
 
Net income (loss)   $ 313   $ 266   $ 253   $ (49 ) $ (2,183 ) $ (144 ) $ (2,327 )
   
 
 
 
 
 
 
 

Balance Sheet Data(at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Total assets   $ 3,898   $ 4,115   $ 6,031   $ 8,022         $ 6,130        
Long-term debt                 352           3,623        
Total liabilities     695     585     1,015     1,832           5,355        
Total invested equity     3,203     3,530     5,016     6,190           775        

Statement of Cash Flows Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Net cash provided by (used in) continuing operations of:                                            
Operating activities   $ 361   $ 381   $ 552   $ 273   $ 12   $ 285  
Investing activities     (345 )   (1,575 )   (2,123 )   82     (4,311 )   (4,229 )
Financing activities     (9 )   1,213     1,653     (382 )   4,394     4,012  
Effect of changes in exchange
rates on cash and cash equivalents
    1         (36 )   8     2     10  

Other Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Ratio of earnings to fixed charges(1)     28.4 x   27.9 x   17.4 x   n/ a   n/a     n/a     n/a  

*
The combined results of the Successor and the Predecessor for the periods in 2006 and that of the Predecessor in 2005 are not necessarily comparable due to the change in basis of accounting resulting from the Company's acquisition of the Predecessor and the change in capital structure. The presentation of the 2006 results on this combined basis does not comply with generally accepted accounting principles, however management believes that this provides useful information to assess the relative performance of the businesses in all periods presented in the financial statements. The captions included within our statements of operations that are materially impacted by the change in basis of accounting include net revenue, separation and restructuring charges, depreciation and amortization, impairment of long-lived assets and interest expense. We have disclosed the impact of the change in basis of accounting for each of these captions within our Management's Discussion and Analysis of Financial Condition and Results of Operations.

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  Predecessor
  Company
 
  Year Ended December 31,
  Combined
Year Ended
December 31,

 
  2002
  2003
  2004
  2005
  2006(5)

Operating Statistics (in thousands, except for gross bookings):

 

 

 

 

 

 

 

 

 

 

 

 

 
Business to Business
Americas(2)
                         
    Air segments   95,200     94,559     95,154     100,086   105,075
    Non-air segments         18,028     17,340     17,386   18,008
 
International(3)

 

 

 

 

 

 

 

 

 

 

 

 

 
    Air segments   153,000     150,630     153,602     158,798   158,733
    Non-air segments         4,190     4,526     4,751   5,164
                           
Gross bookings(4) (in millions)       $ 5,632   $ 6,901   $ 8,008   10,169

(1)
For purposes of calculating the ratio of earnings to fixed charges, earnings represents earnings from continuing operations before income taxes plus fixed charges. Fixed charges comprise interest for the period from January 1, 2006 through August 22, 2006 and the period from July 13 (formation date) through December 31, 2006 which includes amortization of debt financing costs and the interest portion of rental payments. Due to the losses in fiscal year 2005, the period from January 1, 2006 to August 22, 2006 and July 13, 2006 (Formation Date) through December 31, 2006, earnings would have been insufficient to cover fixed changes by $118 million, $2,286 million, and $146 million, respectively.

(2)
Includes United States, Mexico, Canada and Latin America.

(3)
Includes all countries other than the United States, Mexico, Canada and those in Latin America.

(4)
Gross booking, for all periods presented include gross bookings for all of our online and offline travel agencies as if we had acquired such business on January 1, 2004, except gross bookings for OctopusTravel, which are reflected as if we had acquired it on January 1, 2005.

(5)
For the purposes of operating statistics, we have combined the results of the company and the predecessor for the periods in 2006.

    Selected Quarterly Financial Data—(unaudited)

        Provided below is selected unaudited quarterly financial data for 2006 and 2005.

 
  2006
 
 
  Predecessor
  Company
 
 
  First
  Second
  July 1,
to
August 22,

  July 13,
(Formation
Date) to
September 30,

  Fourth
 
Net revenue   $ 636   $ 693   $ 382   $ 246   $ 593  
   
 
 
 
 
 
Income (loss) from continuing operations before depreciation, amortization, interest and income taxes     106     (1,070 )   (1,158 )   16     67  
Less: Depreciation and amortization     48     49     28     26     52  
  Interest expense, net     12     11     16     62     89  
   
 
 
 
 
 
Income (loss) from continuing operations before income taxes   $ 46   $ (1,130 ) $ (1,202 ) $ (72 ) $ (74 )
   
 
 
 
 
 
Net income (loss)   $ 47   $ (1,060 ) $ (1,170 ) $ (71 ) $ (73 )
   
 
 
 
 
 
 
  2005
 
 
  Predecessor
 
 
  First
  Second
  Third
  Fourth
 
Net revenue   $ 546   $ 658   $ 639   $ 568  
Income (loss) from continuing operations before depreciation, amortization, interest and income taxes     123     147     163     (320 )
Less: Depreciation and amortization     53     55     48     48  
         Interest expense, net     3     8     8     8  
   
 
 
 
 
Income (loss) from continuing operations before income taxes   $ 67   $ 84   $ 107   $ (376 )
   
 
 
 
 
Net income (loss)   $ 10   $ 71   $ 80   $ (210 )
   
 
 
 
 

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion and analysis of our results of operations and financial condition covers periods prior to the consummation of the Acquisition. Accordingly, the discussion and analysis of historical periods does not reflect the significant impact that the Acquisition will have on us, including significantly increased leverage and liquidity requirements, new stand-alone costs, as well as cost savings initiatives (and related costs) to be implemented in connection with the Transactions. You should read the following discussion of our results of operations and financial condition with the "Unaudited Pro Forma Condensed Financial Information," "Selected Historical Financial Information" and the audited financial statements appearing elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this prospectus. Actual results may differ materially from those contained in any forward-looking statements.

Overview

        We provide a highly effective worldwide system for the distribution of travel and travel-related products and services. Our comprehensive portfolio of Business to Business, or B2B, and Business to Consumer, or B2C, businesses spans the spectrum of travel distribution channels, allowing us to achieve significant geographic breadth and business diversity. We believe our breadth and diversity are core strengths of our business. We distribute content we aggregate from airlines, hotels, car rental companies, cruise lines and other travel suppliers through more than 227,000 global points of sale in our B2B businesses and to millions of travelers that visit our wholly owned online travel agencies in our B2C businesses. We are an important component of the worldwide travel industry as we provide travel suppliers with access to an extensive customer base of travelers, and provide travel agencies and consumers with robust booking technology and access to considerable supplier inventory.

        We have established a strong competitive position in the travel industry through our two segments:

    Our B2B businesses primarily focus on electronic travel distribution services that connect travel suppliers to travel agencies, who in turn distribute travel and travel-related products and services to their customers. In addition, our B2B businesses provide wholesale accommodation and destination services as well as offer transaction processing solutions for travel suppliers and other travel industry customers. Our B2B businesses represented approximately 70% of our revenue for the year ended December 31, 2006.

    Our B2C businesses focus on offering travel products and services directly to consumers, largely through online travel agencies that offer a full range of travel products and services easily and efficiently. Our B2C businesses represented approximately 30% of our revenue for the year ended December 31, 2006.

Reorganization

        Prior to January 1, 2007, we operated in two segments: Business to Business and Business to Consumer. On September 27, 2006, we announced that we will be organized under three global businesses—Galileo, Orbitz Worldwide, and GTA—effective January 1, 2007. Galileo is now comprised of our GDS business and our supplier services offerings, including United Airlines reservations, Global Fares and Shepherd Systems. Orbitz Worldwide is now comprised of our business to consumer businesses, including Orbitz, CheapTickets, ebookers, Flairview Travel, our Supplier.com hosting business and our corporate travel business. Gullivers Travel Associates is now comprised of GTA, our leading wholesaler, TRUST International, Wizcom and OctopusTravel.

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The Acquisition

        On August 23, 2006, Travelport completed the acquisition of the Travelport businesses of Avis Budget for a total purchase price of $4.1 billion, which was funded with $900 million of equity contributions of the sponsors as well as debt proceeds of $2,200 million in term loans under a new senior secured credit facility, the issuance of $899 million of senior notes and the issuance of $504 million of senior subordinated notes (the "Acquisition"). Prior to the Acquisition, the Company's operations were limited to the formation of the Company and entering into derivative transactions related to the debt that was subsequently issued. As a result, the Travelport businesses of Avis Budget are considered a predecessor company (the "Predecessor") to Travelport. The Condensed Financial Statements as of December 31, 2006 and for the period July 13, 2006 (Formation Date) through December 31, 2006, include the financial condition, results of operations and cash flows for Travelport on a successor basis, reflecting the impact of the preliminary purchase price allocation. The Financial Statements for periods prior to August 23, 2006 include the financial condition, results of operations and cash flows for the Travelport Business of Avis Budget on a predecessor basis, reflecting the historical carrying values of the Travelport businesses of Avis Budget.

    Stand-alone Company

        As the Predecessor, we historically operated as a business segment of Avis Budget and not as a stand-alone company. The combined financial statements for all periods prior to August 23, 2006 included in this prospectus have been derived from the historical condensed combined financial statements of Avis Budget using the historical results of operations and the historical basis of assets and liabilities of Avis Budget's travel distribution services segment. The historical financial information included in this prospectus may not reflect what our results of operations, financial position and cash flows would have been had we operated as a separate, stand-alone company without the shared resources of Avis Budget for the periods presented, and may not be indicative of our future results of operations, financial position and cash flows. See "Risk Factors."

        As the Predecessor, we were allocated general corporate overhead expenses from Avis Budget for corporate-related functions based on a percentage of our forecasted revenue. General corporate overhead expense allocations include executive management, tax, insurance, accounting, legal and treasury services and certain costs for employee benefits. During the period January 1, 2006 to August 22, 2006, we were allocated $22 million and during the years ended December 31, 2005 and 2004, we were allocated $28 million and $22 million, respectively, of general corporate expenses from Avis Budget.

        Avis Budget also incurred certain expenses on our behalf. These expenses, which directly benefited us, were allocated based upon our actual utilization of the services. Direct allocations included costs associated with information technology, telecommunications, call centers and real estate usage. During the period January 1, 2006 to August 22, 2006, we were allocated $62 million and during the years ended December 31, 2005 and 2004, we were allocated $104 million and $105 million, respectively, of expenses.

        We believe the assumptions and methodologies underlying the allocations of general corporate overhead and direct expenses from Avis Budget are reasonable. However, such expenses are not indicative of, nor is it practical or meaningful for us to estimate for all historical periods presented, the actual level of expenses that would have been incurred had we been operating as a separate, stand-alone public or private company.

        Incremental costs associated with operating as an independent company may include: changes in our labor and wage base, additional facilities and equipment, legal fees, insurance, and costs which might be incurred as a public registrant, including Board of Directors fees and filing related fees. For

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the period January 1, 2006 to August 22, 2006 and the year ended December 31, 2005, we estimate the incremental costs would have been approximately $5 million and $14 million, respectively.

        See "Certain Relationships and Related Party Transactions—Agreements with Avis Budget, Wyndham Worldwide and Realogy" for a summary of these agreements and other arrangements among Avis Budget, Realogy and Wyndham Worldwide and us.

Critical Accounting Policies

        In presenting the financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions required relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to the combined results of operations, financial position and liquidity. We believe that the estimates and assumptions used when preparing the financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. We believe these accounting policies are applicable to both the Company and the Predecessor. However, the majority of our businesses operate in environments where a fee is paid for a service performed, and therefore the results of the majority of our recurring operations are recorded in the financial statements using accounting policies that are not particularly subjective, nor complex.

Global Distribution System Revenue Recognition

        Fees are collected from travel suppliers based upon the bookings made by travel agencies, internet sites and other subscribers. We also collect fees from travel agencies, internet sites and other subscribers for providing the ability to access schedule and fare information, book reservations and issue tickets for air through the use of the Galileo GDS. We record revenue for air travel reservations processed through the Galileo GDS at the time of the booking of the reservation. In cases where the airline booking is canceled, the booking fee must be refunded to the customer less any cancellation fee. As a result, we record revenue net of any estimated future cancellation reserve, which is calculated based on the historical cancellation rates. When we determine the estimate of future cancellations, we assume that a significant number of cancellations are immediately replaced with a new reservation, without loss of revenue. This assumption, which is supported by the historical rates of cancellations that resulted in a new reservation, has a significant impact on the amount reserved. In circumstances where expected cancellation rates increased or booking behavior changed, future cancellation estimates could be increased materially and as result revenue decreased by a corresponding amount.

        We distribute our products through a combination of owned sales and marketing organizations, or SMOs, and a network of non-owned national distribution companies, or NDCs. The NDCs are used in markets where we do not have our own SMOs to distribute our own products. In cases where NDCs are owned by airlines, we may pay a commission to the NDCs/airlines for the sales of distribution services to the travel agencies and also receive revenue from the same NDCs/airlines for the sales of segments through the Galileo GDS. We account for the fees received from the NDCs/airlines as revenue, and commissions paid to NDCs/airlines, as cost of revenue. Fees received and commissions paid are presented on the statement of operations on a gross basis, as the benefits derived from the sale of the segment is sufficiently separable from the commissions paid, and we can reasonably estimate the fair value of both the marketing services and the segment fees, although the determination of the objective and reliable evidence of fair value requires judgment.

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Accounts Receivable

        We evaluate the collectibility of accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer's inability to meet its financial obligations (e.g., bankruptcy filings, failure to pay amounts due us or others), we record a specific reserve for bad debts in order to reduce the receivable to the amount reasonably believed to be collectable. For all other customers, we recognize reserves for bad debts based on past write-off history (average percentage of receivables written off historically) and the length of time the receivables are past due. Overall, airlines are experiencing financial difficulty, and some (including United Air Lines, Inc., U.S. Airways, Inc., ATA Holdings Corporation, Northwest Airlines, Inc. and Delta Air Lines, Inc.) have sought bankruptcy protection and still others may consider bankruptcy relief. We believe that we have appropriately considered the effects of these factors as of the date of the financial statements, as well as any other known customer liquidity issues, on the ability of customers to pay amounts owed. However, if demand for commercial air travel softens due to prevailing economic conditions, terrorist acts, war or other incidents involving commercial air transport, or other factors, the financial condition of customers may be adversely impacted.

        The allowance is based on the assessment of the collectibility of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay.

Business Combinations and the Recoverability of Goodwill and Indefinite and Definite Long-Lived Intangible Assets

        A component of our growth strategy has been to acquire and integrate businesses that complement the existing operations. We account for business combinations in accordance with SFAS No. 141, "Business Combinations" and related literature. Accordingly, the purchase price of acquired companies is allocated to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair value at the date of purchase. The difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill.

        In determining the fair value of assets acquired and liabilities assumed in a business combination, the Company uses various recognized valuation methods including present value modeling and referenced market values (where available). Further, we make assumptions within certain valuation techniques including discount rates and timing of future cash flows. Valuations are performed by management or independent valuation specialists under management's supervision, where appropriate. We believe that the estimated fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ from those estimates.

        With regard to goodwill and other indefinite-lived intangible assets recorded in connection with business combinations, we review the carrying values annually or, more frequently if circumstances indicate impairment may have occurred, as required by SFAS No. 142 "Goodwill and Other Intangible Assets." In performing this review, we are required to make an assessment of fair value of goodwill and other indefinite-lived intangible assets. When determining fair value, we utilize various assumptions, including projections of future cash flows and discount rates. A change in these underlying assumptions could cause a change in the results of the tests and, as such, could cause the fair value to be less than the respective carrying amount. In such event, we would then be required to record a charge, which would impact earnings. In connection with the Transactions, we were required to test the carrying value of goodwill and indefinite-lived assets for impairment. We normally perform an annual impairment testing in the fourth quarter of each year subsequent to completing our annual forecasting process although we were required to perform this testing in conjunction with the Transactions. In performing this test, we determine fair value using the present value of expected future cash flows. As a result of

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the impairment test performed we recorded a pretax charge of $2,390 million during 2006, including $2,375 million related to goodwill, $14 million related to long-lived software licenses and $1 million related to definite lived intangible assets. In addition, as a result of the analysis performed in 2005, we determined that the carrying values of goodwill and certain other indefinite-lived intangible assets, primarily in our consumer travel businesses, exceeded their estimated fair values. Consequently, we also tested our other long-lived assets for impairment. In connection with the impairment assessments performed, we recorded a pretax charge of $422 million during 2005, of which $251 million reduced the value of goodwill and $171 million reduced the value of other intangibles assets (including $120 million related to trademarks and tradenames). This impairment resulted from a decline in future anticipated cash flows generated primarily by our consumer travel businesses. The aggregate carrying values of goodwill and other indefinite-lived intangible assets were $2.2 billion and $4.0 billion, as of December 31, 2006 and 2005, respectively.

        With regard to definite-lived intangible assets recorded in connection with business combinations, we review the carrying value if indicators of impairment are present, and determine whether the sum of the estimated undiscounted future cash flows attributable to the long-lived asset is less than our carrying value. If less, we recognize an impairment loss based on the excess of the carrying amount of the long-lived asset over its respective fair value. In performing this review, we are required to make an assessment of whether indicators of impairment are present, the estimate of future cash flows, and ultimately the fair value of the definite-lived intangible assets. When determining fair value, we utilize various assumptions, including projections of future cash flows and discount rates. A change in these underlying assumptions could cause a change in the results of the tests and, as such, could cause the fair value to be less than the respective carrying amount. As discussed above, we recorded a $1 million impairment charge to definite lived intangible assets as a result of impairment tests performed in connection with the acquisition. The aggregate carrying value of definite-lived intangible assets was $1.6 billion and $668 million as of December 31, 2006 and 2005, respectively.

Upfront Inducement Payments

        We pay inducements to traditional and online travel agencies for their usage of the Galileo GDS. These inducements may be paid at the time of signing a long-term agreement, at specified intervals of time, upon reaching specified transaction thresholds or for each transaction processed through the Galileo GDS. Inducements that are payable on a per transaction basis are expensed in the month the transactions are generated. Inducements paid at contract signing or payable at specified dates are capitalized and amortized over the expected life of the travel agency contract. Inducements payable upon the achievement of specified objectives are assessed as to the likelihood and amount of ultimate payment and expensed as incurred. If the estimate of the inducements to be paid to travel agencies in future periods changes, based upon developments in the travel industry or upon the facts and circumstances of a specific travel agency, cost of revenue could increase or decrease accordingly. In addition, we estimate the recoverability of capitalized inducements based upon the expected future cash flows from transactions generated by the related travel agencies. If the estimate of the future recoverability of amounts capitalized changes, cost of revenue will increase as the amounts are written-off. As of December 31, 2006 and 2005 we recorded upfront inducement payments of $79 million and $67 million, respectively, included within other assets in our balance sheet.

Income Taxes

        We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets that we believe will not be ultimately realized. In performing this review, we make estimates and assumptions regarding projected future taxable income, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. A change in these

64



assumptions could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate, which could materially impact the results of operations.

Acquired Company Tax Sharing Liability

        The acquired company tax sharing liability is related to an agreement between Orbitz and its former owners or their affiliates (the "Founding Airlines") governing the allocation of approximately $307 million of tax benefits resulting from a taxable exchange affected at the time of the Orbitz initial public offering in December 2003 ("Orbitz IPO"). For each tax period during the term of the tax agreement, we are obligated to pay the the Founding Airlines a percentage of the amount of any tax benefit realized as a result of additional deductions taken as a result of the taxable exchange. The term of the tax agreement commenced upon consummation of the Orbitz IPO and continues until all tax benefits have been utilized. With respect to each applicable tax period, the tax benefit payment is payable to the Founding Airlines when we receive the tax benefit. The carrying value of this liability is subject to certain assumptions, including the timing of the receipt of such benefits, the estimated tax rate when such benefits are realized and the discount rate. As of December 31, 2006 and 2005 this liability had a balance of $135 million and $175 million, respectively, representing the net present value of the liability based upon the expected realization of such benefits and the related payment to the Founding Airlines. We accreted interest expense related to this liability of approximately $5 million for the period July 13, 2006 (formation date) through December 31, 2006. The Predecessor accreted interest expense related to this liability of $14 million and $16 million for the period January 1, 2006 to August 22, 2006 and for the year ended December 31, 2005, respectively. Based upon the payments expected to be made over the next twelve months as of the balance sheet dates, $10 million and $42 million of the liability is included as a component of accrued expenses and other current liabilities at December 31, 2006 and 2005, respectively. The actual timing of benefits received and payments made under the agreement could differ from the assumptions used to value the liability, including the portion classified as current. Avis Budget agreed to indemnify us for any tax benefits that accrue to Avis Budget related to deductions taken prior to the closing of the Acquisition.

Segments

Business to Business

        Our B2B businesses primarily focus on electronic travel distribution services that connect travel suppliers to travel agencies, who in turn distribute travel and travel-related products and services to their customers. In addition, our B2B businesses provide wholesale accommodation and destination services as well as offer transaction processing solutions for travel suppliers and other travel industry customers. Our B2B businesses consist principally of:

    Galileo, an electronic global distribution system, or GDS.

    GTA, a global travel wholesaler that packages hotel, car, and sightseeing services for sale to travel agencies and tour operators who distribute these vacation packages to leisure and group travelers.

    Supplier Services, which provide comprehensive technology products and services designed to enhance travel suppliers' and distributors' critical business processes including central reservation and related services, website hosting and other data processing services for airlines.

    Travelport for Business and Orbitz for Business, which provide corporate travel fulfillment solutions to a broad array of enterprises, ranging from Fortune 500 companies with sophisticated travel policies and global travel management requirements to small businesses.

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    Net Revenue

        B2B revenue is primarily derived from transaction fees paid by travel suppliers for electronic travel distribution services, and to a lesser extent, revenue earned by GTA and other transaction and subscription fees. Galileo operates an electronic marketplace in which travel suppliers such as airlines, hotels, car rental companies, cruise lines, rail companies and other travel suppliers can store, display, manage and sell their products and services, and in which online and traditional travel agencies are able to electronically locate, price, compare and purchase travel suppliers' services. As compensation for our services, fees are earned, on a per segment or per booking basis, from airline, car rental, hotel and other travel-related suppliers for reservations booked through our GDS. We record and charge one transaction for each segment of an air travel itinerary (e.g., four transactions for a round-trip airline ticket with one connection each way), and one transaction for each car rental, hotel or cruise booking, regardless of the length of time associated with the booking.

        Fees paid by travel suppliers vary according to the levels of functionality at which they can participate in our GDS. These levels of functionality generally depend upon the type of communications and real-time access allowed with respect to the particular travel supplier's internal systems. Revenue for air travel reservations is recognized at the time of the booking of the reservation, net of estimated cancellations. Cancellations are estimated based on the historical level of cancellations, which are not significant. Revenue for car and hotel reservations is recognized upon fulfillment of the reservation. The later recognition of car and hotel reservation revenue reflects the difference in the contractual rights related to such services as compared to the airline reservation services.

        GTA is a leading wholesaler of accommodation and destination services to travel agencies and tour operators, who then sell to individual travelers or groups of travelers. Services provided by GTA include reservation services for hotel, ground transportation and other travel related services, exclusive of airline reservations. The components of the packaged vacations are based on the specifications requested by the travel agencies and tour operators. The revenue generated from the sale of packaged vacation components is recognized upon departure of the individual traveler or the group of travelers, as GTA has performed all services for the travel agency and the tour operator at that time.

        We also provide technology services and solutions for the airline and hotel industry focusing on marketing and sales intelligence, reservation and passenger service system and e-commerce solutions. Such revenue is recognized as the service is performed.

        In international markets, Galileo employs a hybrid sales and marketing model consisting of direct sales SMOs and indirect NDCs. In the United States, Galileo only employs an SMO model.

        In markets supported by our SMOs, Galileo enters into agreements with subscribers which provide for inducements in the form of cash payments, equipment or other services. The amount of the inducements varies depending upon the volume of the subscriber's business. We establish liabilities for these inducements and recognize the related expense as the revenue is earned in accordance with the contractual terms. Where incentives are provided at inception, we defer and amortize the expense over the life of the contract.

        In markets not supported by our SMOs, Galileo utilizes an NDC structure, where feasible, in order to take advantage of the NDC partner's local market knowledge. The NDC is responsible for cultivating the relationship with subscribers in its territory, installing subscribers' computer equipment, maintaining the hardware and software supplied to the subscribers and providing ongoing customer support. The NDC earns a commission based on the booking fees generated in the NDC's territory.

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    Operating Expenses

        Cost of revenue consists of direct costs incurred to generate our revenue, including inducements paid to travel agencies who subscribe to the Galileo GDS, commissions and costs incurred for NDCs and costs for call center operations, data processing and related technology costs.

        Selling, general and administrative, or SG&A, expenses consist primarily of sales and marketing, labor and associated costs, advertising services, professional fees, and expenses for finance, legal, human resources and other administrative functions, including amounts allocated to us from Avis Budget in historic periods.

Business to Consumer

        We provide air, car, hotel, vacation packages, cruise and other travel reservation and fulfillment services to our customers primarily through our network of online travel agencies in the U.S. and internationally that cater to different customer segments in the travel industry. The key consumer brands include:

    Orbitz, acquired in November 2004, a full service online travel agency in the U.S. providing customers the ability to search for and book a wide array of travel products and services;

    CheapTickets, acquired in October 2001, a full service online travel agency in the U.S. designed for the more price-driven traveler who is focused on value;

    ebookers, acquired in February 2005, a full service travel agency serving Europe with an extensive product range, which includes tours, excursions, hotels, car rental, vacation packages and insurance; and

    Other B2C businesses including hotel accommodation businesses RatesToGo and HotelClub (acquired in April 2004 as part of the acquisition of Flairview Travel), Needahotel.com (acquired in February 2006) and OctopusTravel (acquired with GTA in April 2005); long haul, tailor-made tour operator business Travelbag (acquired in February 2005 in conjunction with ebookers); and the specialty travel information business The Away Network (acquired in January 2005).

    Net Revenue

        Our B2C businesses offer their products and services on a stand-alone and packaged basis, primarily through the agency and merchant business models. Under the agency model, we pass on reservations booked by travelers to the travel supplier. We receive commissions or fees from the travel supplier and/or traveler, and may also receive fees from companies operating computer systems through which the reservations are booked. Air agency revenue is generally recorded when the reservation is made and secured with a credit card, net of estimated future cancellations. Non-air agency revenue is generally recognized upon utilization of the reservation by the consumer. Under the merchant model, we negotiate with suppliers for access to travel content at negotiated net rates. We facilitate the booking of those travel products and services by consumers, either on a stand-alone basis or as part of a packaged combination of products, at a price that includes an amount sufficient to pay the travel supplier the net rate along with an estimate of the amount of any occupancy and other local taxes, plus an additional amount we charge for service fees. Consumers pay for merchant transactions prior to departing on their trip, generally when the reservation is booked, and such amounts are included in accrued travel supplier payments, deferred revenue and customer advances until the reservation is utilized. Our B2C businesses do not have purchase obligations for any unsold inventory. We record revenue on a net basis, based upon the amount collected from consumers net of all amounts paid to suppliers. Merchant air revenue is recognized when our obligations are met, which generally occurs when payment is received and the travel voucher is issued to the consumer. Merchant hotel and car booking revenue is recorded upon utilization of the reservation by the consumer. We accrue the

67


estimated amount of the supplier invoice at the time revenue is recognized. In certain cases, the actual amount owed differs from the estimated amount, and the difference is recognized as revenue.

        Revenue recognition for the components of a vacation package is based upon the policy of each separate component of the vacation package as discussed above.

        In connection with the Orbitz acquisition, we recorded a deferred credit relating to the below market rate terms of assumed contracts. Such amounts are recognized into net revenue ratably over the life of the respective contracts. For the years ended December 31, 2006 and 2005, such amounts were $24 million and $31 million, respectively.

        We receive inducements under access agreements with GDSs for travel bookings made through their systems. The level of inducements earned is based on contractual agreements and increases based on the annual volume of bookings. These inducements are collected monthly, based on estimated annual volumes, but are recognized as revenue at the time of booking based on the applicable contractual rate and volume achieved to date.

        Other revenue is primarily comprised of revenue from advertising, sponsoring links on our websites and commissions from sales of various third party travel-related products on the websites. Advertising revenue is derived primarily from the delivery of advertisements on our websites and is recognized either on display of each individual advertisement or ratably over the advertising period, depending on the terms of the advertising contract. Revenue from sponsoring links is recognized upon notification of entitlement from the alliance partner.

    Operating Expenses

        Cost of revenue consists of direct costs incurred to generate our revenue, including costs for call center operations, data processing and related technology costs.

        Selling, general and administrative expenses consist primarily of sales and marketing, labor and associated costs, advertising services, professional fees, and expenses for finance, legal, human resources and other administrative functions, including amounts allocated to us from Avis Budget for historic periods.

Trends

Business to Business

        A GDS system creates value within the travel distribution chain by aggregating supply from multiple suppliers and offering travel agencies streamlined capabilities to provide choice, price and ticket itineraries for their customers. GDS systems face certain challenges such as increasing use of supplier direct sites, emerging technologies that allow travel agencies to directly connect to suppliers, lower airline booking fees, fewer travel agencies leasing computer equipment from GDSs, and potential deregulation of the European GDS industry; however, total worldwide GDS air segments have grown in each of the last two years.

        International markets remain strong with substantial growth in less mature regions including the Middle East and Asia where segment volumes increased by 9% and 6%, respectively, in 2005.

        The European GDS industry is regulated, unlike the U.S. where deregulation occurred several years ago. In regulated GDS industries, airlines who own a GDS are required to treat other GDSs in the same way as their own GDS. This means that the airlines are required to participate in all GDSs to the same extent. There is the potential for deregulation in Europe, but, if this does happen, we do not believe it would occur until 2009 and would only occur in the event that no airline has an ownership interest in any GDS.

68


        In order to provide differentiated services and efficiency for suppliers and travel agencies, GDS companies must have broad and competitive access to the content of travel suppliers, including full content from key airline customers. Galileo has negotiated long-term contracts with the six largest U.S. airlines, although pricing is set at lower levels under the new contracts. Certain GDSs have announced an alternative business and financial model known as the "opt-in" model which previously was only prevalent outside of the U.S. in countries such as the U.K. and Australia. Under the opt-in model, travel agencies have the option of either paying a fee or agreeing to a reduction of all or a portion of their inducement payments if they want to be assured of receiving full content from the participating airlines and avoiding a surcharge on GDS-based bookings. This results in a lower fee paid by the airline to the GDS. We believe the "opt-in" model will have a modest impact on our future operations.

Business to Consumer

        OTAs offer customers the ability to research travel options, search for the best prices or itineraries and book travel directly online. OTAs offer inventory from multiple airlines, hotels and car rental companies, enabling customers to select from a broad range of products in one aggregated display. OTAs offer suppliers access to a broad set of target customers that visit OTA websites with a travel purchase in mind. OTAs also invest in technologies to optimize Internet travel bookings, including dynamic packaging engines where travelers can create their own customized vacations. Also, OTAs have added features to improve the customer experience and increase purchase conversion rates. For example, OTAs continue to make advances in Internet technology, allowing for greater customization of bookings and improved online experiences. Customer interest and proprietary packaging capabilities have bolstered sales of packaged travel on OTA websites. OTAs also offer other services such as trip insurance, destination services (show tickets, tours and other events), reservation change hotlines and live help, as well as technology driven customer service and customer-care. Several trends suggest continued growth for OTAs. Continued customer acceptance of booking travel online and growing Internet access and usage are expected to drive global growth in online travel. PhoCusWright projects rapid growth of U.S. online packaged travel, increasing 82% from $5 billion in 2005 to $9 billion in 2007. There is also significant potential to serve small, medium and large businesses through OTA interfaces rather than traditional corporate travel agencies. New technologies are being designed to improve yield management for suppliers and improve the online experience for customers.

Seasonality

        Some of our businesses experience seasonal fluctuations, reflecting seasonal trends for the products and services we offer. These trends cause our revenue to be generally higher in the second and third calendar quarters of the year as travelers plan and purchase their spring and summer travel, and then flatten in the fourth and first calendar quarters of the year. Our results may also be affected by seasonal fluctuations in the inventory made available to us by our travel suppliers.

Results of Operations

        We evaluate the performance of our segments based on Segment EBITDA, which includes cost of revenue, sales and marketing expenses, technology, other overhead charges directly attributable to the segment, including certain amounts allocated to us by Avis Budget, and impairment of intangible assets. Certain expenses which are managed outside of the segments are excluded from Segment EBITDA. These consist primarily of corporate and unallocated expenses, other income and expense items, and other non-recurring charges such as restructuring and related activities, and gains and losses associated with sale of businesses and investments. Corporate and unallocated expenses consist primarily of indirect expenses, including corporate administrative services that are separately managed. SEC rules regulate the use in filings with the SEC of "non-GAAP financial measures," such as EBITDA and segment EBITDA, that are derived on the basis of methodologies other than in accordance with generally accepted accounting principles, or GAAP. We present certain non-GAAP measures in order to provide supplemental information that we consider relevant for the readers of the financial statements, and such information is not meant to replace or supersede GAAP measures. The non-GAAP measures may not be the same as similarly titled measures used by other companies.

69


RESULTS OF OPERATIONS

Year Ended December 31, 2006 (Combined) Compared to Year Ended December 31, 2005

        The financial statements present our results for the period January 1, 2006 to August 22, 2006 and all periods of 2005 on a "predecessor basis" (reflecting Travelport's ownership by Avis Budget). The Company was formed on July 13, 2006, however, its operations were limited to entering into derivative transactions related to the debt that was subsequently issued, until the acquisition of the Travelport businesses of Avis Budget on August 23, 2006. See notes to the Financial Statements for further discussion of the Acquisition.

        For the purpose of management's discussion and analysis of the results of operations, we have compared the combined results of the Successor and the Predecessor for the periods in 2006 with that of the Predecessor in 2005. The results of the two periods are not necessarily comparable due to the change in basis of accounting resulting from the Company's acquisition of the Predecessor and the change in capital structure which primarily impact depreciation and amortization and interest expense. The captions included within our statements of operations that are materially impacted by the change in basis of accounting include net revenue, separation and restructuring charges, depreciation and amortization, impairment of long-lived assets and interest expense. We have disclosed the impact of the change in basis of accounting for each of these captions in the following discussion of our results of operations. While the presentation of the 2006 results on this combined basis does not comply with generally accepted accounting principles, management believes that this provides useful information to assess the relative performance of the businesses in all periods presented in the financial statements.

        In accordance with SFAS 141 at the date of the Acquisition, the acquired assets and liabilities were recorded at their estimated fair values. This resulted in an increase in value of intangible assets and a corresponding increase in amortization expense. The Company also has a significantly different capital structure to that of the predecessor and therefore incurred additional interest expense.

70


        Our combined results for the Year Ended December 31, 2006 compared to the Year Ended December 31, 2005 are as follows:

 
   
   
  Combined
  Predecessor
   
   
 
 
   
  Predecessor
  Year Ended
December 31,

  Year Ended
December 31,

   
   
 
 
   
  Change
 
 
  July 13, 2006
(Formation Date) to
December 31, 2006

  January 1, 2006 to
August 22, 2006

 
 
  2006
  2005
  $
  %
 
Net revenue   $ 839   $ 1,711   $ 2,550   $ 2,411   $ 139   6 %
   
 
 
 
 
 
 
Costs and expenses                                    
Cost of revenue     378     717     1,095     1,006     89   9 %
Selling, general and administrative     347     654     1,001     851     150   18 %
Separation and restructuring charges     16     92     108     22     86   *  
Depreciation and amortization     78     125     203     204     (1 ) 0 %
Other income         (7 )   (7 )   (4 )   (3 ) 75 %
Impairment of long-lived assets     14     2,376     2,390     422     1,968   *  
   
 
 
 
 
 
 
                                   
Total operating expenses     833     3,957     4,790     2,501     2,289   92 %
   
 
 
 
 
 
 
Operating income (loss)     6     (2,246 )   (2,240 )   (90 )   (2,150 ) *  
Interest expense, net     (151 )   (39 )   (190 )   (27 )   (163 ) *  
Other expense     (1 )   (1 )   (2 )   (1 )   (1 ) *  
   
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes     (146 )   (2,286 )   (2,432 )   (118 )   (2,314 ) *  
Provision (benefit) for income taxes     4     (115 )   (111 )   (75 )   (36 ) *  
   
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax     (150 )   (2,171 )   (2,321 )   (43 )   (2,278 ) *  
Income (loss) from discontinued operations net of tax     (2 )   (6 )   (8 )   (6 )   (2 ) 33 %
(Loss) gain on disposal of discontinued operations, net of tax     8     (6 )   2         2   *  
   
 
 
 
 
 
 
Net loss   $ (144 ) $ (2,183 ) $ (2,327 ) $ (49 ) $ (2,278 ) *  
   
 
 
 
 
 
 

(*)
Not meaningful

71


        Our results on a segment basis for the Year Ended December 31, 2006 as compared to the Year Ended December 31, 2005 are as follows:

 
   
   
  Combined
  Predecessor
   
   
 
 
   
  Predecessor
  Year Ended
December 31,

  Year Ended
December 31,

   
   
 
 
   
  Change
 
 
  July 13, 2006
(Formation Date) to
December 31, 2006

  January 1, 2006 to
August 22, 2006

 
 
  2006
  2005
  $
  %
 
Business to Business                                    
  Net revenue   $ 604   $ 1,199   $ 1,803   $ 1,740   $ 63   4 %
  Segment EBITDA     112     (1,734 )   (1,622 )   479     (2,101 ) *  
Business to Consumer                                    
  Net revenue     255     543     798     703     95   14 %
  Segment EBITDA     14     (277 )   (263 )   (303 )   (40 ) -13 %
Other EBITDA(a)     (43 )   (111 )   (154 )   (63 )   (91 ) 144 %
Intersegment Eliminations                                    
  Net revenue     (20 )   (31 )   (51 )   (32 )   (19 ) 59 %
Combined Totals                                    
  Net revenue     839     1,711     2,550     2,411     139   6 %
  EBITDA   $ 83   $ (2,122 ) $ (2,039 ) $ 113   $ (2,152 ) *  

(*)
Not meaningful

(a)
Other includes the following:

 
   
   
  Combined
  Predecessor
 
 
   
  Predecessor
  Year Ended
December 31,

  Year Ended
December 31,

 
 
  July 13, 2006
(Formation Date) to
December 31, 2006

  January 1, 2006 to
August 22, 2006

 
 
  2006
  2005
 
Corporate and unallocated expenses   $ (21 ) $ (26 ) $ (47 ) $ (39 )
Gain (loss) on foreign currency     (5 )   1     (4 )   (5 )
Other income (expense)     (1 )   6     5     3  
Separation costs     (13 )   (74 )   (87 )    
Restructuring and related activities     (3 )   (18 )   (21 )   (22 )
   
 
 
 
 
Total   $ (43 ) $ (111 ) $ (154 ) $ (63 )
   
 
 
 
 

        Provided below is a reconciliation of EBITDA to income (loss) from continuing operations before income taxes.

 
   
   
  Combined
  Predecessor
 
 
   
  Predecessor
  Year Ended
December 31,

  Year Ended
December 31,

 
 
  July 13, 2006
(Formation Date) to
December 31, 2006

  January 1, 2006 to
August 22, 2006

 
 
  2006
  2005
 
EBITDA   $ 83   $ (2,122 ) $ (2,039 ) $ 113  
Depreciation and amortization     (78 )   (125 )   (203 )   (204 )
Interest expense, net     (151 )   (39 )   (190 )   (27 )
   
 
 
 
 
Income (loss) from continuing operations before income taxes   $ (146 ) $ (2,286 ) $ (2,432 ) $ (118 )
   
 
 
 
 

72


Net Revenue

        The net revenue increase of $139 million (6%) on a combined basis includes a $65 million reduction to revenue due to the impact of fair value adjustments to our balance sheet recorded as a result of the Acquisition. The adjustments resulted in a reduction to deferred revenue as of the opening balance sheet date of August 23, 2006, of which $65 million impacted the results of operations for the period July 13, 2006 (Formation Date) to December 31, 2006 as a reduction to net revenue and Segment Adjusted EBITDA within our B2C and B2B segments of $45 million and $20 million, respectively.

        Excluding the deferred revenue adjustment of $65 million, net revenue increased $204 million (8%), including $136 million (6%) on an organic basis and $68 million from the businesses we acquired during or subsequent to 2005, including GTA in April 2005 and ebookers in February 2005. These business contributed net revenue, cost of revenue and SG&A of $68 million, $16 million and $64 million, respectively.

        Organic revenue increased $136 million as a result of incremental revenue of B2C and B2B of $107 million (15%) and $48 million (3%), respectively, including incremental intersegment revenue of $19 million.

        Excluding the deferred revenue adjustment of $20 million, B2B net revenue increased $83 million (5%) primarily due to a $35 million increase from acquisitions and $48 million of organic growth. We experienced organic growth of $32 million within our Group and Tour business and $31 million (2%) from our GDS business, partially offset by a decline in revenues generated from our subscribers of $12 million (12%) and a $4 million decline in other revenues. Group and Tour business growth is due to the 20% growth in transactions in both our domestic and international markets. The GDS business growth of $31 million is primarily the result of a 2% growth in segments, driven by 5% growth domestically and 5% in Asia, partially offset by a 2% decline in Europe, the Middle East and Africa. Effective yield remained constant, however we experienced 4% growth internationally offset by a 5% decline domestically primarily due to new long-term agreements signed in the third quarter of 2006 under the Galileo Content Continuity program that assure that our travel agency customers have full airline content. Our subscriber fees decrease of $18 million was partially offset by $6 million of incremental revenue generated by our Galileo Content Continuity program

        Excluding the previously discussed acquisitions of GTA and ebookers and the deferred revenue adjustment, B2C net revenue increased $107 million (15%) primarily as a result of a 27% increase in online gross bookings, principally at Orbitz and CheapTickets and $24 million of incremental revenues from our recently acquired online hotel booking business, NeedAHotel. The increase in gross bookings has resulted in incremental hotel booking revenue, dynamic packaging revenue, air booking revenue and other revenue of $21 million, $24 million, $30 million and $8 million, respectively. We believe these increases are attributable to enhanced supplier content, including additional online hotel offerings, more dynamic packaging options and a more robust marketing campaign in 2006.

Cost of Revenue

        Cost of revenue increased $89 million (9%) on a combined basis, including $16 million from acquisitions. Organic cost of revenue increased $73 million (7%) primarily as a result of incremental cost of revenue of B2B and B2C of $36 million (4%) and $56 million (32%), respectively, including intersegment cost of revenue of $19 million.

        B2B cost of revenue increased $48 million (6%), including $12 million from the GTA acquisition. Organic cost of revenue increased $36 million (4%) due to a $52 million increase in inducements and support payments to travel agencies to support our increase in worldwide air booking volumes and increased costs on domestic air bookings resulting from higher contractual rates during 2006.

73



Approximately $19 million of the increase is attributable to support payments made to travel agencies within our B2C segment. This increase in inducements and support payments is partially offset by a $17 million decrease in telecom and technology costs realized primarily as a result of the efforts to improve efficiency in our distribution network.

        B2C cost of revenue increased $60 million (35%), including $4 million from acquisitions. Organic cost of revenue increased $56 million (32%) primarily associated with the 27% increase in gross bookings. The increase in transaction volume has resulted in increased costs associated with credit card processing, customer service costs and information technology costs. In addition we incurred $24 million incremental commissions paid to airlines by our recently acquired online hotel booking business, NeedAHotel.

SG&A

        SG&A increased $150 million on a combined basis, including $64 million related to acquisitions. Organic SG&A increased $86 million (10%), primarily as a result of $58 million (16%) and $21 million (5%) of incremental expenses within B2B and B2C, respectively and $7 million incremental costs within corporate and unallocated expenses and net losses on foreign currency.

        B2B SG&A expenses increased $92 million, including $34 million from the acquisitions. Organic SG&A increased $58 million, primarily attributable to (i) a $44 million increase in salaries and wages as a result of the growth in our operations, (ii) a $15 million increase in bad debt expense primarily from reserves recorded in 2006 related to airlines in bankruptcy and benefits realized in 2005 due to cash collections of amounts previously reserved, (iii) a $10 million increase in facilities expenses due primarily to the absence in 2006 of a benefit realized in 2005 related to a facility sub-lease and increased costs incurred. Such increases to SG&A were partially offset by a $8 million reduction in overhead costs allocated from AvisBudget as we received these charges only through August 22, 2006 as compared to a full year in 2005.

        B2C SG&A increased $51 million, which includes $30 million of incremental SG&A from acquisitions. On an organic basis, SG&A increased $21 million as a result of an increase of $41 million in marketing and advertising expenses related to expanded advertising campaigns promoting our Orbitz brand and $17 million increase in salaries and wages primarily as a result of increased staff levels to support our growth in operations. These increases were offset in part by $24 million of integration charges incurred during 2005, a $5 million reduction in software costs in 2006 as we were able to capitalize additional salaries and wages costs in 2006 that related to the development of our online consumer platform that will soon be launched, and a $3 million reduction in technology and general corporate overhead costs allocated from AvisBudget as we received these charges only through August 22, 2006 as compared to a full year in 2005.

Separation and Restructuring Charges

        Separation and restructuring charges of $108 million on a combined basis consisted of $87 million in separation costs on a combined basis and $21 million of restructuring charges on a combined basis. Separation costs of $13 million for the period July 31, 2006 (Formation Date) through December 31, 2006 consist primarily of payments made to employees related to retention and bonus plans of $6 million as well as $7 million in professional fees and other costs directly related to the separation plan. Separation costs of $74 million recorded by the Predecessor include $29 million of non-cash compensation expense related to the accelerated vesting of stock options and restricted stock units, $16 million for employee severance, $15 million for employee retention and $14 million in various other separation costs including consulting and accounting fees. We also incurred $21 million in restructuring costs during 2006 (of which $18 million was recorded by the Predecessor and $3 million

74



was recorded by the Company), including employee severance costs and contract termination costs, as compared to $22 million in 2005.

Other Income

        Other income increased $3 million on a combined basis. The 2006 amount includes $7 million from the sale of a facility. The 2005 amount includes $4 million from the sale of an investment in a publicly traded company.

Depreciation and Amortization

        Depreciation and amortization decreased $1 million on a combined basis primarily due to the effect of the acceleration of depreciation in 2005 of $30 million primarily related to the revised useful lives of certain assets as a part of the integration of CheapTickets and Orbitz, substantially offset by $29 million incremental amortization expense as a result of the step up in fair value of our definite-lived intangible assets as a result of the Acquisition.

Impairment of Intangible Assets

        As a result of the impairment tests performed, we recorded a total impairment charge of $2,376 million, including $2,375 million related to goodwill and $1 million related to definite lived intangible assets for the period Janury 1, 2006 through August 22, 2006. In preparing the current calculation of the impairment, the Predecessor utilized the updated purchase price allocation of the buyer to determine the fair value of assets and liabilities, including intangible assets. Of the total goodwill impairment of $2,375 million, $2,019 million and $356 million related to reporting units comprising B2B and B2C, respectively. At the time of testing goodwill for impairment, we also tested other intangible assets for impairment as required by SFAS 142 and SFAS 144. As a result of these tests, we recorded an impairment of $1 million which related to definite lived intangible assets related to a reporting unit comprising B2C. Due to a change in the operations after the Acquisition was completed, we recorded an additional impairment of $14 million related to long-lived software marketing licenses for the period July 13, 2006 (Formation Date) through December 31, 2006.

Interest Expense

        Interest expense increased $163 million on a combined basis primarily as a result of the interest expense on our new debt issuances used to finance the Acquisition on August 23, 2006. The Acquisition was financed in part with the proceeds of $2,200 million in term loans under a new senior secured credit facility, the issuance of $899 million of senior notes, the issuance of $504 million of senior subordinated notes. Interest on such financing was $120 million during the year ended December 31, 2006, including $7 million of amortization of deferred financing fees. In addition, we incurred approximately $10 million of interest expense during the years related to borrowings under our interim credit agreement prior to the Acquisition and $10 million of interest related to our existing long term debt borrowed in the fourth quarter of 2005 in connection with the repatriation of foreign earnings to Avis Budget. We also incurred $10 million of fees related to an unused bridge financing arrangement and approximately $11 million related to interest rate hedges prior to the Acquisition for the period July 13, 2006 (Formation Date) through December 31, 2006 that did not meet the criteria for classification within accumulated other comprehensive income.

Benefit for Income Taxes

        Benefit for income taxes increased $36 million on a combined basis.

        Our effective tax rate is impacted on a recurring basis by earnings in foreign jurisdictions which are generally taxed at a rate lower than the United States federal statutory rate of 35%. During the

75



period January 1, 2006 to August 22, 2006 we recorded a tax benefit of $115 million. In addition to the impact of earnings taxed in foreign jurisdictions at a rate lower than the United States rate, during this period the effective tax rate was significantly impacted by the impairment, as the majority of the impairment related to non-deductible goodwill, as well as by costs associated with the Spin-Off from Avis Budget, as these were generally incurred in the United States. In addition the effective tax rate was significantly impacted by a favorable tax ruling received in a foreign jurisdiction, as well as by the impact of an increase in our state tax rate which had the impact of increasing our deferred tax assets, which resulted in a benefit to the effective tax rate. The income tax benefits recorded on the impairment, separation costs, foreign tax ruling and state tax impact on deferred taxes were approximately $87 million, $30 million, $9 million and $21 million, respectively. Excluding these items, the effective tax rate for the period January 1, 2006 to August 22, 2006 was 19%, reflecting the impact of earnings in foreign jurisdictions.

        For the period August 23, 2006 to December 31, 2006 we recorded a tax expense of $4 million. This primarily related to foreign taxes as well as a valuation allowance on certain deferred tax assets recorded during the period, as it is more likely than not that such assets will not be realized.

        The income tax benefit in 2005 is primarily driven by the loss from operations, offset by taxes due to the repatriation of foreign earnings. The American Jobs Creation Act of 2004, which became effective October 22, 2004, provides a one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer, provided certain criteria are met. The Company has applied the provisions of this act to qualifying earnings repatriations through December 31, 2005. In December 2005, we repatriated $350 million of unremitted earnings, which resulted in income tax expense of approximately $28 million.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

 
  Predecessor
   
   
 
  Year Ended
December 31,

   
   
 
  Change
(dollars in millions)

  2004
  2005
  $
  %
Net revenue   $ 1,758   $ 2,411   $ 653   37
   
 
 
   
Costs and expenses                      
  Cost of revenue     851     1,006     155   18
  Selling, general and administrative     438     851     413   94
  Restructuring charges         22     22   *
  Depreciation and amortization     124     204     80   65
  Other income         (4 )   (4 )  
  Impairment of long-lived assets         422     422   *
   
 
 
   
Total operating expenses     1,413     2,501     1,088   77
   
 
 
   
Operating income (loss)     345     (90 )   (435 ) *
  Interest expense, net     (6 )   (27 )   (21 ) *
  Other expense         (1 )   (1 ) *
   
 
 
   
Income (loss) from continuing operations before income taxes     339     (118 )   (457 ) *
  Provision (benefit) for income taxes     85     (75 )   (160 ) *
   
 
 
   
Income (loss) from continuing operations, net of tax     254     (43 )   (297 ) *
  Loss from discontinued operations, net of tax     (1 )   (6 )   (5 ) *
   
 
 
   
Net income (loss)   $ 253   $ (49 )   (302 ) *
   
 
 
   

*
Not meaningful.

76


        The following is a discussion of the results of B2B and B2C:

 
  Predecessor
   
   
 
 
  Year Ended December 31,
   
   
 
 
  Change
 
(dollars in millions)

 
  2005
  2004
  $
  %
 
Business to Business                        
  Net revenue   $ 1,740   $ 1,546   $ 194   13  
  Segment EBITDA     479     503     (24 ) (5 )
Business to Consumer                        
  Net revenue     703     181     522   *  
  Segment EBITDA     (303 )   (22 )   (281 ) *  
Other EBITDA(c)     (63 )   (12 )   (51 ) *  
Intersegment Eliminations(a)                        
  Net revenue     (32 )   (24 )   (8 ) *  
Combined Totals                        
  Net revenue(b)   $ 2,411   $ 1,703   $ 708   42  
  EBITDA   $ 113   $ 469   $ (356 ) 76  

(*)
Not meaningful
(a)
Consists primarily of eliminations related to the inducements paid by B2B to B2C.
(b)
Segment revenue for 2004 excludes $55 million of revenue contributed by the membership travel activities, which were transferred effective January 1, 2005.
(c)
Other includes the following:

 
  Predecessor
 
 
  Year Ended December 31,
 
(dollars in millions)

 
  2005
  2004
 
  Corporate and unallocated expenses   $ (39 ) $ (24 )
  Gain (loss) on foreign currency     (5 )   3  
  Membership travel activities         9  
  Other income (expense)     3      
  Restructuring and related activities     (22 )    
   
 
 
  Total   $ (63 ) $ (12 )
   
 
 

    Provided below is a reconciliation of EBITDA to income (loss) from continuing operations before income taxes:

 
  Predecessor
 
 
  Year Ended December 31,
 
(dollars in millions)

 
  2005
  2004
 
EBITDA   $ 113   $ 469  
  Depreciation and amortization     (204 )   (124 )
  Interest expense, net     (27 )   (6 )
   
 
 
Income (loss) from continuing operations before income taxes   $ (118 ) $ 339  
   
 
 

Net Revenue

        Net revenue increased $653 million primarily as a result of acquisitions in late 2004 and 2005, including Orbitz, GTA, ebookers and Flairview Travel, offset partially by the transfer of our membership travel activities to Avis Budget, effective January 1, 2005. The businesses acquired in 2004

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and 2005 contributed to the increase in net revenue, cost of revenue and SG&A of $661 million, $156 million and $428 million, respectively.

        Apart from these acquisitions, the transfer of our membership travel activities, which contributed $55 million in net revenue in 2004, net revenue on an organic basis increased $47 million (3%), primarily due to $40 million of incremental revenue of B2C and $15 million of incremental revenue of B2B.

        B2C net revenue increased $522 million primarily as a result of recent acquisitions, which contributed incremental revenue of $482 million in the aggregate. Excluding the impact of acquisitions, B2C net revenue on an organic basis increased $40 million (22%) due to a $22 million increase in air transaction revenue and a $18 million increase in non-air transaction revenue. The increase in air revenue was principally driven by a 21% increase in online gross bookings, primarily at our CheapTickets.com website, due to improved site functionality, greater conversion rates, and enhanced content. The increase in non-air revenue is principally due to increased revenue at Flairview resulting primarily from an increase in site visits.

        B2B net revenue increased $194 million, primarily as a result of recent acquisitions, which contributed incremental revenue of $179 million. Excluding the impact of acquisitions, B2B net revenue on an organic basis increased $15 million (1%), primarily as a result of a $36 million (3%) increase in air booking fees, offset by a decline in other distribution revenue of $21 million for the period. By geographic region, international air booking fees increased $50 million (6%) whereas the Americas (defined as the United States, Canada, Mexico and Latin America) booking fees declined $14 million (3%). The increase in international air booking fees is driven by higher booking volumes of 3%, primarily as a result of an increase in travel demand within the Middle East and the Asia/Pacific regions offset in part by a decline in demand in Europe. The total number of air segments in international markets totaled 159 million in 2005. The effective yield on international air bookings remained relatively constant period over period. International air bookings represented approximately two thirds of total air bookings during 2005 and 2004. The decrease in Americas air booking fees is driven by a 8% decline in the effective yield, consistent with our pricing program with major U.S. carriers, which was designed to gain access to all public fares made available by the participating airlines. The volume of air bookings in the Americas increased 5% to approximately 100 million segments.

        B2B other distribution revenue declined $21 million as a result of lower subscription revenue of $44 million, partially offset by an increase of $23 million in solutions revenue from arrangements where the Company provides technology services to airlines. Subcriber fees decline because fewer travel agencies are leasing computer equipment from Galileo and we believe that this trend will continue. The solution revenue increase primarily resulted from $12 million increase in our Web Hosting business, a $6 million increase in our hosting agreement from United Airlines due to increased volume and a $3 million increase other vendor fees.

Cost of Revenue

        Cost of revenue increased $155 million, primarily as a result of acquisitions, which contributed incremental cost of revenue of $156 million in aggregate and offset partially by $2 million related to the transfer of our membership travel activities to Avis Budget. Organic cost of revenue increased $1 million, reflecting an increase of $14 million in our B2B segment, offset by a decrease of $13 million in our B2C segment.

        B2B cost of revenue increased $53 million (7%), including $39 million related to the acquisitions. B2B organic cost of revenue increased $14 million (2%) primarily as a result of (i) $20 million of higher commissions attributable to higher booking volumes, primarily within the Middle East and Asia Pacific regions, and a greater mix of booking volumes in higher commission rate countries, (ii) a

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$4 million increase in inducements and support payments to travel agencies as a result of increased transaction volume, partially offset by (iii) $10 million of expense savings on network communications and equipment maintenance and installation due, in part, to the reduction in subscriber computer equipment as discussed above.

        B2C cost of revenue increased $104 million (155%), including $117 million related to the acquisitions. B2C organic cost of revenue decreased $13 million (20%) primarily as a result of integration efforts executed domestically at our CheapTickets.com and Lodging.com businesses, including the migration of technology to a common platform.

SG&A

        SG&A increased $413 million, primarily as a result of the acquisitions offset partially by the transfer of our membership travel activities. The acquisitions contributed incremental SG&A of $428 million in aggregate. The membership travel activities contributed $44 million of SG&A in 2004. Apart from these factors, organic SG&A increased $29 million (4%), reflecting an increase of $46 million in our B2B segment, a decrease of $31 million in our B2C segment and a $14 million increase within corporate and unallocated expenses.

        B2B SG&A increased $154 million (67%), including $119 million related to the acquisitions. Organic SG&A increased $35 million (15%) primarily as a result of (i) the absence in 2005 of a $41 million expense reduction realized in 2004 in connection with a benefit plan amendment and (ii) $12 million of incremental salaries and wages primarily as a result of an increase in headcount as part of the growth in our business and (iii) and $6 million of additional integration costs incurred in 2005 within our existing B2B businesses associated with our recent acquisitions of Orbitz, GTA and ebookers. Such amounts were offset in part by (i) an $8 million reduction in costs as a result of savings realized on vacated facilities and (ii) a $10 million reduction in bad debt expense primarily as a result of collections on customer accounts in 2005 which were specifically reserved for in prior years and improved collection patterns.

        B2C SG&A increased $289 million (214%), including $309 million related to the acquisitions. B2C Organic SG&A decreased $20 million (15%) due primarily to (i) $18 million of lower wages and benefits due to decreased headcount as a result of integrating our online businesses and (ii) $5 million of savings on advertising and marketing expenditures as a result of a re-alignment of marketing programs across brands.

Restructuring Charges

        Restructuring charges increased $22 million as a result of our restructuring initiatives that we committed to in the first quarter of 2005 targeted principally at reducing costs, enhancing organizational efficiency and consolidation and rationalizing existing processes and facilities, including approximately $15 million of employee severance costs.

Depreciation and Amortization

        Depreciation and amortization increased $80 million (65%), including $59 million related to the Acquisitions and organic incremental depreciation of $12 million related to the revised useful lives of certain assets of CheapTickets in 2005 related to the integration of CheapTickets and Orbitz.

Impairment of Intangible Assets

        Impairment of intangible assets consists of a non-cash impairment charge associated primarily with our B2C segment (see note 2 to our annual combined financial statements included elsewhere herein).

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Interest Expense

        Interest expense, net increased $21 million primarily as a result of imputed interest on several long-term unfavorable contracts we assumed in connection with our recent acquisitions, including imputed interest on the tax sharing liability related to the Orbitz acquisition (see note 6 to our combined financial statements included elsewhere herein). In addition, we borrowed $350 million during the course of 2005 in order to fund the $350 million repatriation of certain foreign earnings to Avis Budget, resulting in increased interest expense of $1 million.

Provision (Benefit) for Income Taxes

        We recorded an income tax benefit of $75 million for 2005 versus an income tax expense of $85 million in 2004. The income tax benefit in 2005 is primarily driven by the loss from operations, offset by taxes due to the repatriation of foreign earnings. The American Jobs Creation Act of 2004, which became effective October 22, 2004, provides a one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer, provided certain criteria are met. The Company has applied the provisions of this act to qualifying earnings repatriations through December 31, 2005. In December 2005, we repatriated $350 million of unremitted earnings, which resulted in income tax expense of approximately $28 million. The income tax expense in 2004 is primarily driven by the income from operations. The effective tax rate for 2005 was 64%, compared to 25% in 2004. The effective tax rate for 2005 differs from the federal statutory rate for various reasons, including taxes on foreign operations at alternate rates, the tax differential on the impairment of intangible assets, state and local taxes, and taxes on repatriated earnings. The effective tax rate for 2004 differs from the federal statutory rate for various reasons, including taxes on foreign operations at alternate rates and state and local taxes.

LIQUIDITY AND CAPITAL RESOURCES

        Our principal source of liquidity is cash flow generated from operations, including working capital. The principal uses of cash are to fund planned operating expenditures, capital expenditures, including investments in products and technology offerings, interest payments on debt and any mandatory or discretionary principal payments of debt issuances. As of December 31, 2006, our financing needs were supported by $275 million of available capacity in our revolving credit agreement.

Cash Flows

        The following table summarizes the changes to our cash flows from continuing operations:

 
   
  Company
  Combined
  Predecessor
   
 
 
  Predecessor
   
 
 
  July 13, 2006
(Formation Date)
to December 31,
2006

  Year Ended December 31,
 
(in millions)

  January 1, 2006
to August 22,
2006

 
  2006
  2005
  Change
 
Cash provided by (used in):                                
  Operating activities   $ 273   $ 12   $ 285   $ 552   $ (267 )
  Investing activities     82     (4,311 )   (4,229 )   (2,123 )   (2,106 )
  Financing activities     (382 )   4,394     4,012     1,653     2,359  
Effects of exchange rate changes     8     2     10     (36 )   46  
   
 
 
 
 
 
Net change in cash and cash equivalents   $ (19 ) $ 97   $ 78   $ 46   $ 32  
   
 
 
 
 
 

Note that cash of $69 million as of the Acquisition date is included as a reduction in the purchase price, and thus is reflected as a source of cash within cash flow from investing activities of continuing operations for the period July 13, 2006 (formation date) through December 31, 2006.

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  Predecessor
 
 
  Year Ended December 31,
 
(in millions)

 
  2005
  2004
  Change
 
Cash provided by (used in):                    
  Operating activities   $ 552   $ 381   $ 171  
  Investing activities     (2,123 )   (1,575 )   (548 )
  Financing activities     1,653     1,213     440  
Effects of exchange rate changes     (36 )       (36 )
   
 
 
 
Net change in cash and cash equivalents   $ 46   $ 19   $ 27  
   
 
 
 

        Operating Activities.    On a combined basis for the year ended December 31, 2006, cash inflow from operations was $285 million, a decrease of $267 million as compared to the year ended December 31, 2005. The decrease is primarily the result of $103 million in incremental interest payments, $58 million in one time cash separation costs, $20 million of first half employee bonuses paid in 2006, and $13 million of contract termination costs as well as the impact on operating cash flows from a decrease in our operating results.

        At December 31, 2005, we had $88 million of cash and cash equivalents, an increase of $46 million as compared to December 31, 2004. Cash inflow from operations was $552 million, an increase of $171 million as compared to the year ended December 31, 2004. The increase primarily represented higher operating results, including amounts generated from the recent acquisitions Orbitz and GTA.

        At December 31, 2006 and December 31, 2005, the working capital deficit (defined as current assets net of cash, and intercompany balances to Avis Budget as of December 31, 2005, minus current liabilities) was $551 million and $367 million, respectively. The increase in the working capital deficit was primarily the result of the timing of collections of our accounts receivable, additional accrued travel supplier payments, deferred revenue, customer advances which relate primarily to merchant model transactions and accrued interest expense. Under the merchant model, we generally receive cash from consumers at the booking date. Such amounts are recorded within accrued travel supplier payments, deferred revenue and customer advances until the revenue is recognized. Typically, hotel suppliers invoice us after the consumers travel is completed, whereas air carriers invoice us shortly after booking.

        Investing Activities.    The use of cash from investing activities for the year ended December 31, 2006 was driven by the use of $4,110 million for the Acquisition and $125 million loaned to Worldspan, offset in part by $199 million of intercompany funding from Avis Budget. The use of cash from investing activities for the year ended December 31, 2005 was driven by $1,100 million for the acquisition of GTA, $403 million for the acquisition of ebookers, and $482 million of intercompany funding to Avis Budget.

        Capital expenditures were $169 million in the year ended December 31, 2006, an increase of $17 million as compared to the year ended December 31, 2005. The increase was due in part to strategic initiatives, including the new global online platform.

        Our cash flow used in investing activities for the year ended December 31, 2005 was $2.1 billion compared to $1.6 billion for the year ended December 31, 2004, an increase of $548 million. Such change primarily reflected (i) the use of $1.5 billion in cash for the 2005 acquisitions, consisting primarily of GTA and ebookers, as compared to $1.2 billion used for the 2004 acquisitions of Orbitz and Flairview, (ii) an increase of $98 million used on intercompany funding primarily as a result of an increase in cash advances made to Avis Budget during 2005, (iii) a $61 million decline in cash proceeds from assets sales in 2005 as a result of investments sold in 2004 that were acquired as part of Orbitz and (iv) an increase of $49 million in capital expenditures during 2005.

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        Financing Activities.    On a combined basis, our cash flow provided by financing activities for the year ended December 31, 2006 was $4,012 million as compared to cash from financing activities of $1,653 million for the year ended December 31, 2005. The 2005 amount related to cash transferred from Avis Budget to affect the purchase of GTA and ebookers. The source of cash in 2006 related primarily to the $3,603 million of debt proceeds and $902 million in capital contributions received in connection with the Acquisition, less $350 million of existing debt repaid in 2006 and $105 of debt issuance costs.

        Our cash flow from financing activities was $1.7 billion for the year ended December 31, 2005 as compared to $1.2 billion for the year ended December 31, 2004, an increase of $440 million. Such change principally reflected (i) an incremental capital contribution from Avis Budget of $476 million used to fund the additional acquisitions consideration made in 2005 as compared to 2004, and (ii) cash proceeds of $350 million received from the issuance of long term debt in connection with Avis Budget's repatriation of $350 million of foreign earnings. These increases were partially offset by a decrease to cash of $350 million for dividends paid to Avis Budget in connection with the repatriation of foreign earnings.

Debt and Financing Arrangements

Senior Secured Credit Facilities

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

        The revolving credit facility includes borrowing capacity available for letters of credit and for short-term borrowings referred to as the swingline borrowings.

        Travelport LLC is the borrower under the senior secured credit facilities. All obligations under the senior secured credit agreement are unconditionally guaranteed by the Parent Guarantor, Intermediate Parent Guarantor and, subject to certain exceptions, each of our existing and future domestic wholly-owned subsidiaries.

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

        Borrowings under the U.S. term loan facility bear interest at LIBOR plus 3.00% 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 interest at LIBOR plus 2.75%. Under the $125 million synthetic letter of credit facility, we must pay a facility fee equal to the applicable margin under the U.S. term loan facility on the amount on deposit. At December 31, 2006, there were no borrowings outstanding under the revolving credit facility and we had commitments of approximately $106 million outstanding under our synthetic letter of credit facility.

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

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

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        The senior secured credit facilities are subject to amortization and prepayment requirements and contain the covenants, events of default and other provisions described under "Description of Other Indebtedness—Existing Senior Secured Credit Facilities."

Senior Notes and Senior Subordinated Notes

        On August 23, 2006, in connection with the Acquisition, we issued $150 million of dollar-denominated senior dollar floating rate notes, €235 million euro-denominated senior floating rate notes ($299 million dollar equivalent) and $450 million 97/8% senior fixed rate notes. The dollar-denominated floating rate senior notes bear interest at a rate equal to LIBOR plus 45/8%. The euro-denominated floating rate senior notes bear interest at a rate equal to EURIBOR plus 45/8%. The senior notes are unsecured senior obligations and are subordinated to all of our existing and future secured indebtedness (including the senior secured credit facility) and will be senior in right of payment to any existing and future subordinated indebtedness (including the senior subordinated notes). The senior notes are redeemable at our option at any time, in whole or in part, at the appropriate redemption prices plus accrued interest through the redemption date.

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

        The indentures governing the senior notes and senior subordinated notes limit the Parent Guarantor's (and most or all of its subsidiaries') ability to:

    incur additional indebtedness or issue certain preferred shares;

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

    make certain investments;

    sell certain assets;

    create liens on certain assets to secure debt;

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

    enter into certain transactions with affiliates; and

    designate subsidiaries as unrestricted subsidiaries.

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

        Subject to certain exceptions, the indentures governing the notes permit us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness. None of Travelport (Bermuda) Ltd. and its subsidiaries, which together comprise the non-U.S. operations of Travelport, guarantee the notes offered hereby. These entities will be more restricted than the Issuer and the guarantors in their ability to incur indebtedness. See "Description of Senior Notes—Certain Covenants" and "Description of Senior Subordinated Notes—Certain Covenants."

        Under the indentures governing the notes, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments and paying certain dividends is tied to ratios based on pro forma Adjusted EBITDA (which is defined as "EBITDA" in the indentures). For example, for the four quarters ended December 31, 2006, the minimum pro forma Adjusted EBITDA to fixed charge ratio required in order to incur additional debt pursuant to the ratio

83



provision in the indentures or to make certain investments and restricted payments under the indentures was 2 to 1 and our pro forma ratio for such period (excluding any effect from the proposed Worldspan acquisition) would have been 1.68 to 1.

        EBITDA, a measure used by management to measure operating 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 an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Our presentation of EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Management believes EBITDA is helpful in highlighting trends because EBITDA excludes the results of decisions that are outside the control of operating management and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. In addition, EBITDA provides more comparability between the historical results of the Travelport business of Avis Budget and results that reflect purchase accounting and the new capital structure. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.

        Adjusted EBITDA is defined as net income (loss), plus interest expense, net, provision (benefit) for income taxes, and depreciation and amortization, as further adjusted to exclude unusual items and other adjustments set forth below and permitted in calculating covenant compliance under the indentures governing the notes. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future. We have included the calculations of Adjusted EBITDA for each of the periods presented as Adjusted EBITDA is the earnings measure defined in the covenants under our bond indenture.

        Because not all companies use identical calculations, our presentation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

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        Historical EBITDA and Adjusted EBITDA are calculated as follows:

 
  Predecessor
  Company
   
 
 
  Year Ended
December 31,

  Period From
January 1,
through
August 22,

  Period from
July 13
(formation date)
through
December 31,

  Combined*
Years Ended
December 31,

 
(in millions)

  2005
  2006
  2006
  2006
 
Net income (loss)   $ (49 ) $ (2,183 ) $ (144 ) $ (2,327 )
  Loss (gain) from discontinued operations, net of tax     6     12     (6 )   6  
  Interest expense, net     27     39     151     190  
  Provision (benefit) for income taxes     (75 )   (115 )   4     (111 )
  Depreciation and amortization     204     125     78     203  
   
 
 
 
 
EBITDA   $ 113   $ (2,122 ) $ 83   $ (2,039 )
  Impairment of intangible assets(a)     422     2,376     14     2,390  
  Other non-cash items(b)     (13 )   16     7     23  
  Restructuring and integration costs(c)     51     100     16     116  
  Unusual or non-recurring items(d)     28     2     74     76  
  Acquired and disposed EBITDA(e)     5              
  Acquisition adjustments(f)     (13 )   (5 )       (5 )
  Cost savings(g)               78     78  
  Sponsor monitoring fee(h)               2     2  
   
 
 
 
 
Adjusted EBITDA   $ 593   $ 367   $ 274   $ 641  
   
 
 
 
 

(a)
Represents a pre-tax impairment charge of $422 million for the year ended December 31, 2005 resulting primarily from our B2C businesses, of which $251 million reduced the value of goodwill and $171 million reduced the value of other intangible assets, $2,376 million for the period January 1, to August 22, 2006 of which $2,375 million reduced the value of goodwill and $1 million reduced the value of definite lived intangible assets, and $14 million for the period from July 13 through December 31, 2006 impairment related to long-lived software marketing licenses. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies."

(b)
Other non-cash items consist of the following:

 
  Predecessor
  Company
   
 
   
   
  Period from
July 13
(formation date)
through
December 31,

   
 
   
  Period from
January 1,
through
August 22,

   
 
  Year Ended
December 31,

  Combined*
Year Ended
December 31,

(in millions)

  2005
  2006
  2006
  2006
Non-cash stock-based compensation costs   $ 15     12     6   $ 18
Reversals of accruals and reserves(i)     (26 )          
Reversal of facility-related liability(ii)     (5 )          
Write-down of capitalized software     1            
Equity in loss of equity investment     1     1     1     2
Other(iii)     1     3         3
   
 
 
 
Total other non-cash items   $ (13 ) $ 16   $ 7   $ 23
   
 
 
 

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            (i)    Includes reductions of allowance for doubtful accounts of $12 million, reduction of liabilities of $11 million, and reduction of affinity card accrued payments of $3 million for each the year ended December 31, 2005.

            (ii)   Represents the reversal of a facility-related liability established prior to 2005.

            (iii)  Represents the historical amortization of pension and postretirement plan actuarial losses of $1 million for each the year ended December 31, 2005 and $1 million for the period from January 1, through August 22, 2006, which will be eliminated in purchase accounting, and amortization of an advance payment under a contractual arrangement to provide technology solutions for a customer of $2 million for the period from January 1, through August 22, 2006.

    (c)
    Restructuring and integration costs consist of the following:

 
  Predecessor
  Company
   
 
   
   
  Period from
July 13,
(formation date)
through
December 31,

   
 
   
  Period from
January 1
through
August 22,

   
 
  Year Ended
December 31,

  Combined*
Year Ended
December 31,

(in millions)

  2005
  2006
  2006
  2006
Integration costs(i)   $ 28   $   $   $
Severance and other restructuring costs(ii)     23     21     3     24
Business optimization costs(iii)         3     2     5
Separation costs (iv)         76     11     87
   
 
 
 
Total restructuring and integration costs   $ 51   $ 100   $ 16   $ 116
   
 
 
 
      (i)
      Primarily represents costs incurred to integrate and combine the operations and internet booking technology at our Orbitz, ebookers, GTA and CheapTickets businesses.

      (ii)
      Primarily represents severance costs and restructuring actions taken to reduce staff levels in some of our online travel businesses and the realignment of our global sales force.

      (iii)
      Represents costs incurred in connection with a business optimization plan to create a single, global technology platform.

      (iv)
      Represents costs incurred in connection with our separation from Avis Budget.

    (d)
    Unusual or non-recurring items consist of the following:

 
  Predecessor
  Successor
   
 
 
   
   
  Company
Period from
July 13
(formation date)
through December 31,

   
 
 
   
  Period from
January 1
through
August 22,

   
 
 
  Year Ended
December 31,

  Combined*
Year Ended
December 31,

 
(in millions)

 
  2005
  2006
  2006
  2006
 
Non-recurring Sarbanes-Oxley and legal compliance costs for acquisitions   $ 9   $   $   $  
Gain on sales of investments and facilities (i)     (6 )   (7 )       (7 )
GTA seller bonus (ii)     11     7     4     11  
Purchase accounting impact on deferred revenue (iii)     15     1     65     66  
Other (iv)     (2 )   1     5     6  
   
 
 
 
 
Total unusual or non-recurring items   $ 28   $ 2   $ 74   $ 76  
   
 
 
 
 

86


      (i)
      Represents gain on sale of available-for-sale securities of $4 million and gain on sale of a facility of $2 million for the year ended December 31, 2005, and gain on sale of a facility of $7 million for the period from January 1, through August 22, 2006.

      (ii)
      Represents bonuses payable to the acquired employees of GTA pursuant to the related purchase agreement.

      (iii)
      Represents the impact on historical net revenue of the reduction of deferred revenue to fair value and recognition of intangible assets related to booking backlog in purchase accounting with respect to Orbitz and GTA.

      (iv)
      Represents technology solutions revenue applicable to services provided in a prior year pursuant to a contractual reconciliation provision.

    (e)
    Includes $5 million of pre-acquisition Adjusted EBITDA for GTA, which was acquired on April 1, 2005, for the year ended December 31, 2005.

    (f)
    Represents preliminary estimates of ongoing incremental stand-alone costs for services that were performed by Avis Budget or expenses that were allocated by Avis Budget prior to the consummation of the Transactions. These additional costs consist primarily of additional personnel, information technology, facility-related, insurance and professional services costs. The additional personnel will provide services historically provided by Avis Budget primarily in the information systems, finance, tax, treasury and legal areas. The additional information technology costs reflect external service and support costs across a variety of information technology functions.

    (g)
    Represents run-rate cost savings expected to be achieved within the twelve months following the Acquisition as permitted in calculating covenant compliance under the indentures governing the notes offered hereby of $75 million initiated after the Acquisition and $11 million initiated in June 2006. The adjustment is net of the $8 million of savings achieved in the results for the period July 13, 2006 to December 31, 2006. The $11 million of run-rate cost savings initiated during the three months ended June 30, 2006 is from global headcount reductions and facility consolidations pursuant to restructuring actions. The costs associated with implementing these cost savings are being borne by Avis Budget and are not taken into account in calculating Adjusted EBITDA. We expect to relieve the $75 million of additional run-rate cost savings through restructuring and other actions by the year ended December 31, 2007 related to telecommunications, information technology and other general and administrative expenses. Estimated run-rate cost savings by category are as follows (in millions):

Telecommunications (i)   $ 15
Information technology (ii)     45
Other general and administrative expenses (iii)     15
   
  Total   $ 75
   
      (i)
      Represents estimated cost savings associated with renegotiating information technology agency connectivity contracts, consolidating our business unit telecommunication network and reducing long haul circuits.

      (ii)
      Represents estimated cost savings associated with renegotiating contracts, centralizing information technology infrastructure, consolidating hardware and software platforms and other operations of multiple brands, reducing discretionary project spending and headcount reductions.

      (iii)
      Represents cost savings associated with adopting a more centralized shared service model for global operations, human resources, finance, and legal, and estimated cost savings associated with offshoring, reducing overhead and general and administrative headcount.

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    Adjusted EBITDA does not take into account the approximately $41 million in estimated one-time costs expected to be incurred through the year ended December 31, 2007 in connection with realizing the additional $75 million of run-rate cost savings over the same period. The adjustments reflecting estimated cost savings constitute forward-looking statements. Actual results may differ materially from those reflected due to a number of factors, including, without limitation, an inability to (i) reduce our telecommunications costs, (ii) renegotiate contracts favorably, (iii) centralize our information technology infrastructure and (iv) an inability to reduce other general and administrative expenses. See "Risk Factors—Risks Relating to Our Business—We may not be able to achieve all of our expected cost savings." for further information.

    (h)
    Represents amount of sponsor monitoring fees.

New Parent Company PIK Loans

        Our parent company, Travelport Holdings Limited, has recently entered into a credit agreement for a $1.1 billion senior unsecured pay-in-kind ("PIK") term loan. Interest is payable quarterly in arrears at a rate starting at LIBOR + 700 base points for the first 18 months, increasing to LIBOR + 750 for the next 12 months and then increasing to LIBOR plus 800 thereafter. Interest may be paid in kind unless our parent company elects to pay in cash. The PIK loans are not prepayable for the first eight months and then would be prepayable at par for the next 13 months and then at declining premiums thereafter. The PIK loans are due five years after they are made. Travelport Holdings Limited intends to use the net proceeds from the borrowings of the PIK term loans to pay a dividend to its shareholders.

Proposed Worldspan Acquisition

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

Interest Rate Risk

        A portion of the debt used to finance much of our operations is exposed to interest rate fluctuations. We use various hedging strategies and derivative financial instruments to create an appropriate mix of fixed and floating rate assets and liabilities. The primary interest rate exposure at December 31, 2006 was to interest rate fluctuations in the United States and Europe, specifically LIBOR and EURIBOR interest rates. We currently use interest rate swaps as the derivative instrument in these hedging strategies. The derivatives used to manage the risk associated with our floating rate debt were designated as cash flow hedges.

Commitments and Contingencies

        Orbitz sued Worldspan in Illinois state court in September 2005. The complaint alleged that Worldspan misrepresented and omitted material facts in connection with the parties' negotiation of amendments to the parties' CRS access contract ("The CRS Agreement") in 2002 and 2004, and that the omissions and misrepresentations violated the Illinois Consumer Fraud Act. Orbitz's complaint sought to rescind the amendments to the CRS Agreement and unspecified monetary damages. On September 19, 2005, Worldspan removed Orbitz's state court case to federal court. On April 3, 2006, the case was remanded back to state court. On July 5, 2006, Orbitz filed an Amended Complaint against Worldspan, asserting 8 causes of action including Director Conflict of Interest, Fraudulent Inducement under the Illinois Consumer Fraud Act, Common Law Fraud, Equitable Estoppel, two Breach of Contract counts, and Declaratory Relief. In the Amended Complaint, Orbitz seeks rescission of the contract, unspecified monetary damages and costs, and a Declaratory Judgment. On August 14, 2006, Worldspan filed a motion to dismiss 4 of Orbitz's claims in the Amended Complaint (consumer

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fraud, fraud, director conflict and equitable estoppel). The parties have briefed the issues raised by Worldspan's motion, but the case has been stayed by agreement of the parties.

        Worldspan sued Orbitz in federal court in Chicago in September 2005. The complaint alleged breach of contract and the violation of the federal Computer Fraud and Abuse Act. Worldspan alleged that Orbitz violated the parties' CRS Agreement by using certain Worldspan data to support Orbitz's Supplier Link product, and by using the services of non-Worldspan CRS's to support Supplier Link bookings. Additionally, Worldspan alleged that Orbitz's shopping provider, ITA, is a CRS and that the use of ITA's non-CRS related services breached the CRS Agreement. Worldspan's Computer Fraud and Abuse Act claim related to Orbitz's alleged impermissible use of Worldspan's system for use or support of Supplier Link bookings. The complaint sought in excess of $50 million as damages. On April 19, 2006, Worldspan's federal complaint was dismissed in its entirety. Worldspan appealed the order, and filed its opening brief in support of the appeal with the Seventh Circuit on November 6, 2006. The appeal has been stayed by agreement of the parties, and no hearing or ruling date has been set.

        Worldspan filed a separate Illinois state court case against Orbitz on April 24, 2006. In that complaint, Worldspan alleged the same state law claims as its dismissed federal suit. Worldspan filed an amended complaint on October 16, 2006 adding a claim under the Georgia Computer Systems Protection Act and contract claims alleging failure by Orbitz to mediate certain issues and breach of the covenant of good faith and fair dealing. On November 17, 2006, Orbitz filed a motion to dismiss Worldspan's complaint, and the parties have briefed the issues. This case has been stayed by the agreement of the parties.

        We and certain of our online travel businesses are parties to litigation brought by consumers and municipalities and other governmental entities involving hotel occupancy taxes. We believe that the claims in such litigation lack merit and we will continue to defend vigorously against them.

        We believe that we have adequately accrued for such matters as appropriate or, for matters not requiring accrual, believe that such matter will not have a material adverse effect on our results of operations, financial position or cash flows based on information currently available. However, litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters based upon advice of counsel, unfavorable resolutions could occur. As such, an adverse outcome from such unresolved proceedings for which claims are awarded in excess of the amounts accrued for could be material to us with respect to earnings or cash flows in any given reporting period. However, we do not believe that the impact of such unresolved litigation would result in a material liability to us in relation to our combined financial position or liquidity.

        See "Business—Legal Proceedings."

Contractual Obligations

        The following table summarizes our future contractual obligations as of December 31, 2006. The table below does not include future cash payments related to (i) contingent payments that may be made to Avis Budget and/or third parties at a future date in connection with the arrangements described under "Certain Relationships and Related Party Transactions", (ii) payments that may result

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from the transfer to us of certain assets by Avis Budget or (iii) the various guarantees described in the notes to the financial statements included elsewhere herein.

(in millions)

  2007
  2008
  2009
  2010
  2011
  Thereafter
  Total
Debt(a)   $ 24   $ 24   $ 22   $ 22   $ 22   $ 3,533   $ 3,647
Interest payments(b)     341     338     336     334     332     717     2,398
Operating leases     33     31     31     27     23     90     235
Other purchase commitments(*)     125     82     69     61     48         385
   
 
 
 
 
 
 
Total   $ 523   $ 475   $ 458   $ 444   $ 425   $ 4,340   $ 6,665
   
 
 
 
 
 
 

(*)
Primarily reflects our agreement with IBM for data center services.

(a)
The information above excludes the $1.1 billion of senior PIK term loans due 2012 of our parent company, Travelport Holdings Limited.

(b)
Includes interest payments on fixed and floating rate long term debt. Interest rate assumption for all periods presented is based on the actual weighted average interest rate for 2006.

Other Commercial Commitments and Off-Balance Sheet Arrangements

        Purchase Commitments.    In the normal course of business, we make various commitments to purchase goods or services from specific suppliers and for other capital expenditures. As of December 31, 2006, the Company had approximately $385 million of outstanding purchase commitments, primarily relating to service contracts for information technology. These purchase obligations extend through 2011.

        Standard Guarantees/Indemnifications.    In the ordinary course of business, we enter into numerous agreements that contain standard guarantees and indemnities whereby we indemnify another party for breaches of representations and warranties. In addition, many of these parties are also indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees and indemnifications are granted under various agreements, including those governing (i) purchases, sales or outsourcing of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks or other intellectual property, (iv) access to credit facilities and use of derivatives and (v) issuances of debt securities. The guarantees and indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) financial institutions in credit facility arrangements and derivative contracts and (iv) underwriters in debt security issuances. While some of these guarantees and indemnifications extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that we could be required to make under these guarantees and indemnifications, nor are we able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees and indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned guarantees and indemnifications, such as indemnifications of landlords against third-party claims for the use of real estate property leased by us, insurance coverage is maintained that mitigates any potential payments to be made.

        Other.    Bastion Surety, a joint venture with Orbis Capital Limited, is a bond provider on behalf of travel agencies and tour operators in the United Kingdom. It is authorized and regulated by the UK Financial Services Authority to provide bonding insurance in the United Kingdom, Belgium, France, Ireland and the Netherlands as an alternative to cash and bank bonds to protect consumers 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 draw down on these bonds, which can result in the loss of the amount of the bond provided on behalf of such travel agent or tour operator. The total bonds outstanding as of March 30, 2007 are approximately $105 million. We were notified of potential defaults on bonds

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totaling approximately $6 million during 2006 and approximately $1 million in 2007. The majority of bonds have an expiration date during 2007, and we are not currently actively issuing new bonds at this time, other than renewals for existing clients. While we endeavor to only issue bonds after appropriate credit diligence on the travel agent or tour operator, we can provide no assurance that such agents or operators will not ultimately default on their bond obligations to Travelport.

Changes in Accounting Policies

        We have adopted the recently issued standards as required, SFAS No. 154, "Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3".

        For detailed information regarding this pronouncement and the impact thereof on our business, see note 2 to the combined financial statements included elsewhere herein.

Quantitative and Qualitative Disclosures About Market Risk

        We may hedge, as appropriate, our interest rate and currency exchange rate exposure. We use foreign currency forwards to manage and reduce the foreign currency exchange rate risk associated with our foreign currency denominated receivables, forecasted earnings of foreign subsidiaries and other transactions.

        We are exclusively an end user of these instruments, which are commonly referred to as derivatives. We do not engage in trading, market making or other speculative activities in the derivatives markets. More detailed information about these financial instruments is provided in note 15 to the combined financial statements. Our principal market exposure is foreign currency rate risks.

        We have foreign currency rate exposure to exchange rate fluctuations worldwide and particularly with respect to the pound sterling, the euro and the Australian dollar. We anticipate that such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future.

        We assess our market risk based on changes in foreign currency exchange rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact in earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in currency rates.

        The fair values of cash and cash equivalents, trade receivables, accounts payable and accrued expenses and other current liabilities approximate carrying values due to the short-term nature of these assets. We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities and derivatives. The primary assumption used in these models is a hypothetical 10% weakening or strengthening of the U.S. dollar against all our currency exposures as of December 31, 2006 and 2005.

        Our total market risk is influenced by a wide variety of factors including the volatility present within the markets and the liquidity of the markets. There are certain limitations inherent in the sensitivity analyses presented. While probably the most meaningful analysis, these "shock tests" are constrained by several factors, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled.

        We used December 31, 2006, 2005 and 2004 market rates on outstanding financial instruments to perform the sensitivity analyses separately for each of our currency rate instruments. The estimates are based on the market risk sensitive portfolios described in the preceding paragraphs and assume instantaneous, parallel shifts in exchange rates.

        We have determined that the impact of a 10% change in foreign currency exchange rates and prices on our earnings, fair values and cash flows would not be material. While these results may be used as benchmarks, they should not be viewed as forecasts.

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INDUSTRY

        The worldwide travel industry represents a large and dynamic market. We believe that gross bookings in the global airline, hotel, car rental, vacation package and cruise industry were approximately $900 billion in 2005. Europe, the United States and Asia Pacific account for approximately 75% of the global travel industry. Gross bookings in these regions are expected to grow from approximately $670 billion in 2005 to $710 billion in 2007, representing a compound annual growth rate of 3%. Current drivers of industry growth include:

    Favorable global macro-economic trends, including income growth in emerging regions such as Asia Pacific and the Middle East;

    Increased customer discretionary spending on travel and recreation;

    Greater business travel resulting from the growth in the global economy;

    Growing sophistication of online travel offerings such as dynamic packaging, comprehensive global inventory and customer reviews; and

    Continued migration to the Internet as an efficient vehicle to research and book travel.

        The bulk of current global travel bookings is divided among Europe, the United States and Asia Pacific. Asia Pacific is expected to gain share over the next several years, as large growing populations combined with rising spending power drive increased business and leisure travel. According to the World Travel and Tourism Council, for the 5-year period between 2005 and 2010, the total travel and tourism in Asia Pacific, the United States and Europe is expected to grow 11%, 6% and 5%, respectively.

        The three major regions have distinct characteristics:

Region

  2005 Gross Bookings
(dollars in
billions)(1)(2)

  2005 Relative
Share, by Gross
Bookings (%)(1)

  Key Characteristics
Europe   $ 263   39 % •  Largest travel region
•  Regulated GDS industry
•  Growing online penetration
•  Large number of independent travelers
•  Fragmented hotel industry

United States

 

$

224

 

33

%

•  Large, growing travel region
•  De-regulated GDS industry
•  Highest online penetration
•  Large number of business and independent traveler segments

Asia Pacific

 

$

185

 

28

%

•  Online segments experiencing high growth
•  Large number of tour and managed travelers
•  Significant long-term growth potential

    (1)
    Source: PhoCusWright, Inc.
    (2)
    Reflects gross bookings of airlines, hotels, car rentals, vacation packages and cruises.

        The global travel industry can be divided into five main segments: air, hotel, car rental, vacation package and cruise. For the total 2005 U.S. travel market, air was the largest segment based on gross bookings, followed by hotel, car and vacation packages.

        According to PhoCusWright, leisure and unmanaged business travelers represented approximately 57% of U.S. gross bookings in 2005 and is expected to grow faster than the managed business travel sector.

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Travel Distribution Overview

        Thousands of travel suppliers compete to reach travelers. The fragmented nature of the industry has created an opportunity for distributors to capture value by developing and managing efficient systems that are capable of bridging travel supply and demand on a global, real-time basis. Success in the travel distribution segment depends on securing comprehensive inventory and then delivering this inventory to travelers to purchase through a system of owned and third-party distribution channels. The key players of the travel value chain are outlined below:

GRAPHIC

        At the top of the travel distribution value chain are suppliers which seek cost-effective ways to reach end-user travelers. Historically, these suppliers largely relied on traditional GDSs to connect their inventory of products and services with travel agencies who in turn distribute the products and services to travelers. In recent years, however, travel suppliers have begun to utilize other forms of distribution, including direct distribution via their own websites and emerging third party GDS-bypass technologies. Wholesalers are another distribution channel through which travel agencies obtain access to travel products and services and distribute them to groups or independent travelers. Wholesalers acquire inventory from suppliers and distribute this inventory primarily to tour operators and travel agencies. In addition, connectivity, or "switch", providers connect hotel and car suppliers to GDSs, thereby providing accurate real-time inventory information to the GDSs to facilitate sales by these suppliers.

        Historically, offline travel agencies, supplier reservation centers and ticket offices were the largest distribution channels to reach travelers. With the emergence of the Internet, however, numerous alternatives have developed for reaching travelers. For instance, OTAs and "meta-search" companies such as Kayak.com, Sidestep, Inc. and Yahoo!/Farechase provide a way for travelers to view multiple alternatives and book travel directly, while travel suppliers provide access to their own inventory on their own direct websites. New companies, often referred to as GDS New Entrants or "GNEs," are also

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offering alternative distribution technologies that perform the same function as a GDS without the large technology investment and network of a traditional GDS.

Business to Business Industry Overview

        The business to business, or B2B, industry primarily consists of companies that assist travel suppliers in distributing other travel and travel-related inventory to travelers. Participants in this segment include global distribution systems, or GDSs, and providers of alternative technologies that link travel agencies and travel suppliers. The B2B industry also consists of wholesale travel operators, which primarily offer accommodation and destination services. In addition, the B2B industry includes businesses that provide technology services to industry participants, including airlines and other suppliers. Finally, the B2B industry consists of corporate services such as online travel solutions for corporations.

GDS

        A GDS creates value within the travel distribution chain by aggregating inventory from multiple suppliers and offering travel agencies streamlined capabilities to provide choice, price and itineraries for their customers. A GDS is primarily characterized as a fee-per-service business whereby a GDS provider collects a distribution fee per segment of a particular travel booking. Although travel agencies initiate and complete transactions using a GDS, it is the travel supplier that generally pays transaction fees to the GDS. Moreover, GDSs typically offer volume-based and other economic inducements to travel agencies in order to gain and maintain client relationships.

        Outside of the United States opportunities for GDS remain strong with notable growth in less mature regions, including Asia Pacific and the Middle East, where segment volumes increased by 9% and 6%, respectively, in 2005. Europe has also historically been a strong region for GDSs. In Europe, GDSs are still regulated, unlike the United States where deregulation occurred two years ago. In Europe, airlines who own a GDS are generally required to participate in all GDSs. As GDS businesses have adapted to the shifting competitive landscape, several changes in the GDS business model have taken place. GDS companies now offer far greater breadth of content beyond airline segments and provide travel agencies with more value-added products, including hotels and vacation packages. GDSs have also become more focused on reducing costs and improving efficiency in an attempt to maintain margins given reduced airline booking fees. Additionally, GDSs are introducing online interfaces, services and technologies to help travel agencies improve effectiveness for their clients. GDSs are also providing travel technologies to travel suppliers, including hosting services.

        GDS companies in the U.S. are negotiating new airline pricing contracts with five to seven year time frames. Certain GDSs, including Galileo, Sabre, Amadeus and Worldspan, have announced an alternative business and financial model for GDSs, generally referred to as the "opt-in" model. Under the opt-in model, travel agencies may be offered the opportunity of paying a fee to the GDS or agreeing to a reduction of their inducement payments to be assured of receiving full content or to avoid an airline-imposed surcharge on GDS-based bookings. The opt-in model in the United States may result in lower fees paid by the major airlines to a GDS, partially offset by fees from travel agents and/or lower inducement payments to travel agencies. The opt-in model already has been introduced outside of the United States in countries such as the United Kingdom and Australia. In these countries, there were very high rates of travel agency opt-in, or agreement to reduced inducement fees, without any industry disruption among airlines, GDSs and travel agencies.

Wholesale travel

        Wholesalers of travel are primarily involved in the distribution of hotel accommodations and tours. Wholesalers earn revenue on the difference between the price at which suppliers make travel products

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and services available to them and the price at which the wholesalers offer those products or services to travel agencies or consumers. Suppliers often utilize wholesalers to distribute excess or distressed inventory and are willing to provide significantly reduced net rates with guaranteed allocations. In some instances, wholesalers may even pre-buy inventory at deeply discounted net rates. Wholesalers in turn are able to make certain travel products and services available at prices lower than those at which the individual components could be purchased. The wholesale travel industry remains highly fragmented, with most participants either focused on specific regions or private, local operators.

Travel supplier services

        Supplier services providers design and provide comprehensive technology products and services designed to enhance travel suppliers' and distributors' critical business processes. Technology services include central reservation and related services, website hosting for individual supplier websites, management of the ticketing process, and other data processing services for airlines. Outsourcing these services helps airlines and other suppliers limit their investment in direct cost structures. These services strive to integrate all of the reservation, distribution and other related business and technical processes instead of just offering suppliers a specific application. In addition to technology solutions, other supplier services include consulting services and data management and airline solutions, which include technology solutions and related services (including white label supplier hosting solutions) for airlines.

Business to Consumer Industry Overview

        The emergence of the Internet as a travel booking tool has revolutionized the way millions of people research and book their travel and has led to the establishment of OTAs, which provide a direct link between suppliers and consumers. The U.S. online travel segment grew by over 25% in 2005 and is expected to grow by approximately 20% annually through 2007. Online travel in the United States represented 28% of gross bookings in 2005. This penetration is expected to increase to 37% in two years. Outside of the United States, online penetration has been slower to take hold, but has recently been accelerating and represents a significant opportunity for increased penetration in both Europe and Asia Pacific. According to PhoCusWright, the European online travel industry is expected to grow by 75% between 2005 and 2007, and the Asia Pacific online travel industry is expected to grow by 63% between 2005 and 2007. The table below indicates the gross bookings of online leisure and unmanaged gross bookings by region for the periods shown.

 
  2005
  2007 Estimated
  2005—2007
Estimated
Compound
Annual Growth
Rate

 
(dollars in millions)
Region

  Gross Bookings
  % of Total
  Gross Bookings
  % of Total
 
United States   $ 64   56 % $ 97   52 % 23 %
Europe     36   30     63   34   33  
Asia Pacific     16   14     26   14   27  
   
 
 
 
     
Total   $ 116   100 % $ 186   100 % 27 %
   
 
 
 
     

Source:    PhoCusWright, Inc.

        Travel agencies typically generate revenue by receiving GDS inducements and commissions from travel suppliers and by charging service fees to travelers. Under the "merchant model," however, travel agencies, including OTAs, may also generate revenue based on the difference between the price to travelers and the "net" price the suppliers quoted to the travel agencies for the product or service. OTAs create value within the travel distribution chain by offering travelers one of several means by which to research travel options from multiple airlines, hotels and car rental companies, search for the best prices or itineraries and book travel directly online. OTAs offer suppliers access to a broad set of

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travelers that visit OTA websites with a travel purchase in mind. OTAs also invest in technologies to optimize Internet travel bookings, including dynamic packaging engines where travelers can create their own customized vacations.

        The environment in which OTAs do business is dynamic and growing, and has become increasingly competitive. Heightened competition has resulted from the deployment of substantial capital by large competitors, growth of supplier direct websites, the emergence of "meta-search" companies such as Kayak.com, Sidestep, Inc. and Yahoo!/Farechase, travelers use of multiple OTAs for price comparisons while booking elsewhere and increased use of retail promotions/coupons to attract travelers and gain market share.

        Several OTAs have robust technology platforms, significant marketing budgets, comprehensive supplier inventory and large customer bases. Also, OTAs have added features to improve functionality and the travelers experience, and to increase purchase conversion rates. For example, OTAs continue to make advances in Internet technology, allowing for greater customization of bookings via dynamic packaging and other improved online experiences, such as user generated hotel reviews. Travelers' interest and proprietary packaging capabilities have bolstered sales of packaged travel on OTA websites. OTAs also offer additional services such as trip insurance, destination services, reservation change hotlines and live help, as well as technology driven customer service and care, that increase customer loyalty and create new revenue streams. Furthermore, OTAs have increased their efforts to provide services to the corporate segment by offering new comprehensive corporate travel solutions.

        Several trends suggest continued growth for OTAs. Continued customer acceptance of booking travel online and growing Internet access and usage are expected to drive global growth in online travel. PhoCusWright projects rapid growth of online packaged travel, increasing 65% from $5 billion in 2005 to $8 billion in 2007. There is also significant potential to serve small, medium and large businesses through OTA interfaces rather than through traditional corporate travel agencies.

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BUSINESS

Overview

        We provide a highly effective worldwide system for the distribution of travel and travel-related products and services. Our comprehensive portfolio of B2B and B2C businesses spans the spectrum of travel distribution channels, allowing us to achieve significant geographic breadth and business diversity. We believe our breadth and diversity are core strengths of our business. We distribute content we aggregate from airlines, hotels, car rental companies, cruise lines and other travel suppliers through more than 227,000 global points of sale in our B2B businesses and to millions of travelers that visit our wholly owned online travel agencies in our B2C businesses. We are an important component of the worldwide travel industry as we provide travel suppliers with access to an extensive customer base of travelers, and provide travel agencies and consumers with robust booking technology and access to considerable supplier inventory. For the year ended December 31, 2006, we recorded revenue of $2.6 billion and derived approximately 50% of our revenue from regions outside the United States.

        Our B2B businesses primarily focus on electronic travel distribution services that connect travel suppliers to travel agencies, who in turn distribute travel and travel-related products and services to their customers. In addition, our B2B businesses provide wholesale accommodation and destination services as well as offer transaction processing solutions for travel suppliers and other travel industry customers. Our B2B businesses consist principally of Galileo, our GDS, and GTA, our wholesale travel business. In addition, we derive revenue from our supplier services businesses, which provide technology services and solutions for the airline and hotel industries, and from our corporate solutions operations, which offer corporate travel fulfillment solutions. For the year ended December 31, 2006, our B2B businesses represented approximately 70% of our revenue. Our B2C businesses focus on offering travel products and services directly to consumers, largely through online travel agencies that offer a full range of travel products and services easily and efficiently. We operate several leading OTAs in the United States, Europe and Asia Pacific serving various customer segments in the travel industry, including Orbitz and CheapTickets in the United States and ebookers in Europe. For the year ended December 31, 2006, our B2C businesses represented approximately 30% of our revenue.

        Our B2B and B2C businesses operate globally and across the entire spectrum of travel distribution channels, allowing us to generate revenue at all significant points of sale and providing us with a hedge against potential strategic and geographic shifts in the industry. We believe we are one of the most diversified travel distribution companies in the world both geographically and in the scope of services we provide, as outlined below.

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GRAPHIC


(1)
Utilizes the Worldspan GDS pursuant to a pre-existing contract that expires in 2011.

        Our principal B2B and B2C businesses are leaders in their industries being one of the top three players in many of the regions in which they operate. Galileo achieved a 23% worldwide share of GDS processed air segments in 2005, which consisted of strong share in attractive international regions, including a 23% share in Europe, a 28% share in Asia Pacific, a 60% share in the Middle East and a 66% share in Africa in 2005. Our online and offline travel agency businesses recorded approximately $10 billion in combined gross bookings in 2006, resulting in the number two industry position by gross bookings in the United States and one of the leading online travel agencies internationally. Our consumer brands include powerful online brands such as Orbitz and CheapTickets in the U.S. and ebookers in Europe.

        We were formed by Cendant in 2001 following its acquisitions of Galileo and CheapTickets. In 2004 and 2005, we significantly enhanced our worldwide travel distribution system through the acquisitions of Flairview, Orbitz, ebookers and GTA. Each acquisition was aimed at building scale and enhancing diversity in our businesses. Flairview, which operates under the HotelClub and RatesToGo brands, provides us with access to merchant hotel inventory and an online presence in Asia Pacific. Orbitz provides us with significant scale in the U.S., leading technology, significant brand recognition and the ability to achieve cost savings with our other online travel agencies including CheapTickets and

98



ebookers. ebookers provides significant international presence and the opportunity to compete in Europe. Finally, GTA further differentiates our system by providing access to favorable rates and allocations of hotel inventory through its relationships with a broad range of independent hotels and its wide variety of non-hotel destination services. GTA also provides multiple opportunities to cross-sell this inventory through our various distribution channels. As a result of these acquisitions, we operate a comprehensive global travel distribution system with significant geographic breadth and business diversity.

Competitive Strengths

        We believe the following are our key competitive strengths:

        Breadth and diversity.    Our worldwide travel distribution system is characterized by geographic breadth, business diversity and a broad customer base, all of which provide a competitive advantage and a high degree of stability to our combined cash flows.

    Geographic Breadth.  We operate in more than 130 countries, and for the year ended December 31, 2006, we generated approximately 50% of our revenue from regions outside the United States.

    Business Diversity.  The diverse mix of our business allows us to capitalize on opportunities across the spectrum of worldwide travel distribution channels and types of customers and provides us with a hedge against potential strategic and geographic shifts in the industry.

    Broad Supplier Base.  Our worldwide travel distribution system includes more than 425 airlines, 68,000 hotels, 20 car rental companies, 430 tour operators and 20 cruise lines.

        Significant presence in attractive international regions.    Our principal businesses have significant presence in a number of attractive international regions. International regions such as Asia Pacific, parts of Europe and the Middle East have attractive volume growth outlooks, driven by favorable demographic trends and growth trends of the underlying economies. We believe the international online segment has significant opportunities due to the accelerating penetration of online travel agencies in a number of key regions.

        Leading technology platform.    We have a strong track record in developing leading technological innovations, particularly in the online travel industry.

        Strong and consistent cash flow generation.    We have historically generated strong cash flows on a consistent basis. Drivers of our cash flows include our ability to successfully leverage growth in transaction volume and customer base across shared infrastructure, our existing, modest capital expenditure requirements, attractive working capital dynamics and a favorable tax structure. These characteristics, combined with the contractual nature of our revenue and costs, our leading industry positions and long-standing customer relationships provide a strong, stable stream of cash flows.

        Considerable cross-selling opportunities.    We are able to cross-sell differentiated content across our portfolio of businesses, which often leads to higher sell-through rates for suppliers and increased revenue for us.

        Highly experienced management team and premier sponsorship.    Our management team is committed to improving and maintaining operational excellence by utilizing their extensive knowledge of the travel and technology industries. The Blackstone Group, our sponsor, is a leading global private equity firm with deep experience in the travel and leisure industry through previous investments.

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Strategy

        We intend to pursue the following strategic initiatives:

        Drive operational efficiency and lower costs.    Our comprehensive worldwide travel distribution system was created by our former parent company through the acquisition of approximately 15 businesses beginning in 2001. We believe the synergies inherent in our business model provide more effective distribution services for our suppliers as well as greater choice of travel products and services at more competitive prices to travel agencies and travelers.

        Expand and deepen our global footprint.    We intend to continue to increase the geographic presence of our B2B and B2C businesses. We believe that we can increase our presence as a significant value-added distributor for travel suppliers, travel agencies and travelers around the world by utilizing our global inventory of products and services, our leading technology, and our established relationships with travel suppliers and travel agencies.

        Sell more higher margin and complex travel offerings.    We intend to increase revenue and profitability by further increasing our sales of higher margin, complex or dynamically packaged travel products to be more in line with those achieved by other online travel agencies. We have implemented and intend to continue implementing more effective merchandising and promotions, expanded product offerings and greater personalization through more targeted and efficient e-mail marketing to our base of existing customers.

        Provide value-added technology-based services to suppliers, travel agencies and travelers.    We intend to complement our travel distribution system by continuing to provide important technology-based services to travel suppliers, travel agencies and travelers.

        Evaluate strategic opportunities.    While our strategy is focused on realizing the organic revenue growth potential of our existing businesses and cost savings from fully integrating our portfolio, we will continue to evaluate strategic transactions to enhance the value of our enterprise.

Reorganization

        Prior to January 1, 2007, we operated in two segments: Business to Business and Business to Consumer. On September 27, 2006, we announced that we will be organized under three global businesses—Galileo, Orbitz Worldwide and GTA, effective January 1, 2007. Galileo is now comprised of our GDS business and our supplier services offerings, including United Airlines reservations, Global Fares and Shepherd Systems. Orbitz Worldwide is now comprised of our business to consumer businesses, including Orbitz, CheapTickets, ebookers, Flairview Travel, our Supplier.com hosting business and our corporate travel business. Gullivers Travel Associates is now comprised of GTA, our leading wholesaler, TRUST International, Wizcom and OctopusTravel. The description set forth below of our businesses reflects our historical two-segment structure of B2B and B2C.

Business to Business

Overview

        Our B2B businesses primarily focus on electronic travel distribution services that connect travel suppliers to travel agencies, who in turn distribute travel and travel-related products and services to their customers. In addition, our B2B businesses provide wholesale accommodation and destination services as well as offer transaction processing solutions for travel suppliers and other travel industry customers. Our B2B businesses consist principally of Galileo, GTA, as well as our supplier services and corporate solutions operations. Our B2B businesses primarily generate revenue by charging booking fees to travel suppliers, marking up inventory GTA sells to travel agencies and other customers, and charging license, support and maintenance fees for other products and services. For the year ended December 31, 2006, our B2B businesses represented approximately 70% of our revenue.

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Galileo

        Galileo is one of the most geographically diverse of the traditional GDSs, with an attractive and balanced book of business in Europe and the United States, as well as other rapidly growing regions such as Asia Pacific and the Middle East. Galileo operates an electronic marketplace in which travel suppliers such as airlines, hotels, car rental companies, cruise lines, rail companies and other travel suppliers can store, display, manage and sell their products and services, and in which online and traditional travel agencies are able to electronically locate, price, compare and purchase travel suppliers' services. As of December 31, 2005, Galileo connected approximately 425 airlines, 68,000 hotels, 20 car rental companies, 430 tour operators and major cruise lines to approximately 52,000 travel agency locations.

        Through Galileo, a travel agency customer is able to obtain schedule, availability and pricing information, and purchase travel services from multiple travel suppliers. Galileo also facilitates travel agencies' internal business processes such as quality control, operations and financial information management. Increasingly, this includes the integration of products and services from independent parties that complement our core product and service offering. We also provide technical support, training and other assistance to travel agencies. Galileo enables its travel agency customers to achieve measurable results through a customized combination of content, productivity tools and marketing solutions. Galileo offers its travel agency customers numerous customized access options, productivity tools, automation, training and customer support focusing on process automation, back-office efficiency, aggregation of content at the desktop and online booking solutions.

        The majority of Galileo's revenue is derived from distribution fees paid by travel suppliers, particularly airlines. As compensation for its services, Galileo generally charges the travel supplier a segment fee for the bookings it processes. For example, we record and charge one booking for each segment of an air travel itinerary (e.g., four bookings for a round-trip airline ticket with one connection each way), and one transaction for each car rental, hotel or cruise booking, regardless of the length of time associated with the booking. In addition, travel agencies may pay a fee for access to our GDS and for the equipment, software and services provided. Additionally, we provide inducement payments to a significant number of travel agencies as a means of facilitating greater use of our GDS. In 2005, we generated approximately 93% of our booking fee revenue from airlines, while revenue from hospitality and destination services suppliers, primarily car rental companies and hotels, accounted for approximately 7%. Bookings generated by our ten largest travel agency customers constituted approximately 26% of the bookings made through Galileo in 2005.

GTA

        GTA is a leading wholesaler of accommodation and destination services to travel agencies and tour operators worldwide. GTA has significantly increased the amount of proprietary content we make available through Galileo and our global B2C businesses, which increasingly differentiates us. In 2006, GTA serviced more than 26,000 groups and made over 2.9 million bookings. GTA has contracts with over 23,000 hotels worldwide and sells travel products and services in over 140 countries, including countries in the Americas, Europe, the Middle East, Africa, Asia and Australia. We have expanded GTA's customer base by offering GTA's enhanced hotel content to Galileo's travel agency customers and to travelers who book through our B2C businesses.

        GTA primarily offers its hotel inventory through the wholesaler model in which it enters into arrangements with individual hotel chains and independent hotel properties, giving it access to the inventory of participating hotels at negotiated rates. The room inventory to which GTA has access under these arrangements is provided to GTA on an allocation basis, which assures availability of those rooms. GTA then distributes the inventory to travel agencies and directly to travelers on its customers' own websites. GTA also may provide the ground portion of a travel package that travel agencies and

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tour operators offer to travelers and also can arrange coach transfers from airports, hotels, restaurant bookings and sight seeing trips.

        GTA's business model provides us with opportunities to earn incremental revenue by cross-selling to Galileo travel agency customers and our B2C customers. We believe GTA also allows us to benefit from growth of low cost air carriers. A new route by a low-cost airline can create demand for services at the new destination, including hotel and ground transportation, which may increase GTA's booking volumes.

Supplier Services

        We provide technology services and solutions for the airline industry focusing on marketing and sales intelligence, reservation and passenger service system and e-commerce solutions. We also provide end-to-end reservation, technology and distribution solutions for hospitality suppliers that allow them to reduce their distribution costs and maximize reservation potential. Outsourcing these services enables airlines and other suppliers to limit their investment in direct cost structures and reduce variable costs and to focus on core business competence. Our Supplier Services offerings include the following:

    United Airlines Reservations.    We host and manage United Airlines' reservations system and provide related services. An airline's reservation system is an integral part of its operations, as it supports, among other activities, airline inventory management, ticket sales, departure control and crew scheduling. For sophisticated, multi-national carriers, the airline reservation system typically interfaces with many other systems within the airline. The current agreement under which we provide these services to United Airlines expires in 2013.

    Global Fares.    Global Fares provides searching and pricing solutions for more than a dozen leading airlines worldwide, including United Airlines, Air New Zealand and Alitalia.

    Shepherd Systems.    Shepherd provides a comprehensive suite of innovative technologies, airline marketing intelligence and sales force automation tools to the travel industry. Serving more than 40 of the world's leading airlines worldwide, Shepherd's tools are used throughout different airline departments, including network, planning, revenue, yield, scheduling, sales and marketing to strengthen their ability to make strategic decisions and help drive better business results.

    Supplier.com Hosting.    We provide e-commerce solutions, including the hosting of customer websites for American Airlines (AA.com) and for Northwest Airlines (NWA.com), as well as providing the technology for United Airlines' and American Airlines' corporate travel portals. In addition, we also provide an Internet booking engine for united.com.

    TRUST International.    TRUST develops and implements a state-of-the-art central reservation system, providing tailor-made, real-time reservations and global distribution solutions to the hospitality industry. TRUST's services include call center outsourcing, connectivity to all GDSs and various online travel agency businesses and Internet platforms. TRUST operates three global call centers, serving 46 countries in 9 languages and its customers include, as of December 31, 2005, approximately 2,900 well-known hotels and hotel chains at 685 destinations in approximately 120 countries.

    WizCom.    WizCom provides hotel and car rental suppliers with seamless connectivity to electronic distribution and e-commerce solutions for Internet, GDSs and other travel reservation systems.

Corporate Solutions

        We offer corporate travel fulfillment solutions to a broad array of enterprises, ranging from Fortune 500 companies with sophisticated travel policies and global travel management requirements to

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small businesses through the Travelport for Business and Orbitz for Business brands. We offer the services of Galileo, a choice of the Travelport for Business or Orbitz for Business online booking tools, and customer care and fulfillment services to meet those corporate travel requirements.

        Travelport for Business is generally marketed to policy intensive, control oriented companies. Travelport for Business is an easy-to-use, configurable solution with 24 hour a day, seven days a week proactive customer care—ideal for companies seeking to reduce costs without sacrificing agency services. Orbitz for Business is a full-service online travel management program for corporations that provides, depending on the level of service requested, online bookings, 24 hour a day, seven days a week reservation and service support; and premier travel services. Corporate Solutions seeks to minimize transaction costs and ticket price, while providing a high degree of price transparency, access to a wide choice of low fares, and a superior, automation-enhanced service experience to its customers. Orbitz for Business capitalizes on Orbitz's strong customer reputation and traveler related services.

        We generate per transaction fees paid by corporate customers. We also collect transaction fees from corporate customers for fulfillment of customer care services offered as part of our end-to-end corporate travel solution, as well as fees from supplier agreements that we have negotiated for the benefit of all of our customers.

Business to Consumer

Overview

        We own and operate several online travel agencies that offer business travelers the ability to search for and book a broad range of travel products and services, including airline tickets, hotel accommodations, car rentals, vacation packages, cruises and destination services, such as tours and show tickets. We offer such services primarily through Orbitz and CheapTickets in the United States and ebookers in Europe, as well as through our online accommodation sites, HotelClub.com, RatesToGo.com, OctopusTravel.com and needahotel.com. Our B2C businesses generate revenue by earning commissions and fees from travel suppliers and GDSs. We also generate revenue by charging travelers service fees for booking certain transactions and charging travel suppliers and other companies advertising fees for advertising on our websites. Approximately 30% of our revenue was generated by our B2C businesses in 2006.

Orbitz

        Orbitz, our largest full service online travel brand, is one of the leading domestic OTAs. Orbitz was founded by five major domestic airlines in 2000 and began full service operation in 2001. Orbitz is a full service travel agency that offers travelers a wide variety of travel options and has historically introduced many innovations in online booking technology, including the Matrix display and our proactive customer care platform, OrbitzTLC. Orbitz enables travelers to search for and book a broad array of travel products and services, including airline tickets, hotel accommodations, rental cars, vacation packages and cruises. Orbitz provides a comprehensive display of fares and rates in a single location, and has augmented this capability through expanded product offerings including a vast number of travel products and services such as dynamic packaging, destination services (shows, events and other attractions) and insurance. Search results are presented in the easy-to-use Matrix display that enables travelers to select the price and supplier that best meet their individual travel needs. Our search process enables travelers to purchase airline tickets, rent cars, reserve lodging and book cruises and vacation packages 24 hours a day, seven days a week. Key features of Orbitz appear below:

    Air travel.    We provide travelers with what we believe is one of the largest selection of low fares generally available as we have agreements with the major domestic airlines and are able to offer fares that are as low as those the airlines offer on their own websites and the sites of other OTAs. Our technology and Matrix display allow travelers to quickly and easily evaluate a broad

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      range of potential fare and supplier combinations through an intuitive design. Our Matrix display enables travelers to search based on their preferred travel dates, destinations, times, number of passengers, class of service and number of stops, and then displays fare and flight offerings matching those specifications according to price and other specified criteria. Travelers can also prioritize the categories according to their specific preferences. On Orbitz.com, our Matrix display provides comprehensive information to travelers in an unbiased manner to enable them to select their preferred carrier. Once a consumer selects a flight, our booking process makes it easy for travelers to purchase their tickets. We also provide "Tips," a dynamic tool which, in real time, identifies to the traveler savings available at nearby airports or alternate times. By selecting our "anytime" and "Flex Search" features, travelers with flexible travel schedules can expand the choices available to them. "Flex Search" is a powerful search tool that allows travelers to review travel options over a range of dates that displays flight and fare combinations that would require dozens of searches on competitive sites.

    Accommodations.    We enable travelers to search, compare and book reservations at numerous independent and chain hotel properties via the merchant model and also via the traditional agency/retail model. In addition to information on destination, dates and number of guests, travelers can select a specific lodging or hotel chain, location and budget preference. Travelers can also specify amenity preferences such as restaurants, swimming pools, room service, health club facilities, handicapped facilities, business centers and meeting rooms. We also offer customer-generated hotel reviews and interactive neighborhood maps. The majority of our hotel transactions are completed using the merchant model, which provides greater pricing flexibility than the traditional agency model. Further, by negotiating access to fixed room rates with suppliers, we are able to market rooms to travelers at a rate that includes fees for the services we provide resulting in higher net revenue than we achieve on bookings via the agency model. We established our merchant program in 2003.

    Car rentals.    We enable travelers to search and reserve car rentals online at most major car rental companies and certain regional independent companies. In addition to specifying date and location preferences, travelers can select a specific car company, request specific features and obtain credit for any potential discounts (such as American Automobile Association) when renting a car. We display our car rental options using our Matrix display.

    Vacation packages.    We introduced our own dynamic packaging engine in 2004 and have since experienced significant growth in this area. Our packaging functionality leverages our Matrix display and enables travelers to see multiple combinations of airlines and hotels to assemble a vacation package that best meets their objectives, frequently for less than purchasing the individual components separately.

    Cruises.    Our cruise product allows travelers to purchase cruise travel on 73 cruise lines. The "cruise tools" feature provides answers to frequently asked questions about cruises and feedback from other users. At present we work through Cruise.com, a third party provider, to book cruises.

    OrbitzTLC.    OrbitzTLC is our proactive customer care service that provides travelers with technology delivered information to enhance their travel experience. OrbitzTLC Alerts update travelers on real-time events that could affect their travel plans before they leave or while they are traveling. Some key features of OrbitzTLC Alerts include:

    Flight departure and arrival delays—even if the delay occurs after the flight has departed;

    Flight cancellations;

    Airport conditions and closures;

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      Gate changes and baggage claim information;

      Severe weather and potential delays;

      Transportation strikes and travel alternatives; and

      Street closures for major events.

        Supporting our innovative OrbitzTLC technology platform, Orbitz has an in-house team of air traffic controllers, travel journalists, weather analysts, and airport, passenger and security specialists monitoring nationwide travel conditions. This team interprets and gathers FAA, National Weather Service and other data to provide travelers with real-time information regarding developments such as flight delays, airport closures and transportation strikes so they are aware of any changes or problems that may affect their travel plans. In 2004 and 2005, we distributed nearly 50 million care alerts to travelers, and, in 2005, over 60% were sent to travelers' wireless devices.

CheapTickets

        CheapTickets is a leading United States online travel company focused on value-conscious travelers. Although it possesses many of the same features as Orbitz, CheapTickets is designed for the more price-driven, leisure traveler. CheapTickets has certain features designed for bargain hunters such as price alerts to inform travelers when a certain price is available for a desired trip and "Cheap of the Week" notices for exceptional fares. CheapTickets was founded in 1986 as an outlet for deeply discounted airfares. CheapTickets is well regarded by price conscious travelers and is the #1 non-paid result for "cheap" in both Google and Yahoo. In July 2005, we successfully combined the management and operations of CheapTickets with Orbitz, allowing us to reduce costs and leverage best practices as well as marketing and technology experience in order to provide travelers with enhanced inventory and features and functionality to find travel fares worldwide.

ebookers

        ebookers is one of the leading full service online travel agencies in Europe. ebookers offers customers a wide range of travel services through its online travel agency business, ebookers.com, and telephone call centers. ebookers currently operates local online travel agencies in nine European countries, which are Finland, France, Germany, Ireland, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom. Dedicated websites service four other European countries, which are Austria, Belgium, Denmark and Norway. Millions of unique potential customers visit ebookers websites each month, while other ebookers customers may also book travel through our call centers. The key features of ebookers appear below:

    Air travel.    ebookers enables customers to book air travel on over 110 full service airlines, plus over 25 low cost carriers. We have agreements for negotiated fares with approximately 65 major airlines, which allow us to offer discounted airfares, both online and offline, to customers in each of the European countries in which ebookers operates.

    Lodging.    ebookers provides customers with numerous hotel selections, all of which are sourced through GTA. This allows us to leverage the purchasing power of GTA to offer our customers discounted hotel rates in approximately 120 countries around the world. Our technology allows customers to specify desired room types and hotel amenities, view details such as hotel pictures and interactive maps, before completing the reservation online.

    Car rentals.    ebookers has developed its own car rental reservation system, which allows us to offer our customers with discounted car rental rates at over 7,000 car rental locations worldwide. We have agreements with the world's largest car rental companies, which offer a combined fleet of over 400,000 vehicles. We offer our car rental product on an "opaque" basis, where the

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      customer does not know the name of the car provider until after the reservation is completed. This system has allowed us to negotiate unique reduced net rates with our car rental partners. Car rentals are sold on ebookers as part of an air travel purchase or on a stand-alone basis as well as an affiliate site, carbookers.com, which recently won the TravelMole "Best Car Rental Website 2005" award.

    Vacation packages.    In 2006, ebookers introduced vacation packages, combining discounted airfares and discounted hotel accommodations into a single transaction at an inclusive price. This new functionality was initially developed for ebookers' online travel agencies in the United Kingdom and Switzerland and has since been rolled out to other ebookers sites.

    Insurance.    ebookers has agreements with Europe's largest insurance companies, and we offer travel insurance through the ebookers online travel agencies throughout Europe, our call centers and standalone online travel agency, insurancebookers.com.

Other B2C Businesses

    Flairview Travel, a leading international online provider of hotel reservation services headquartered in Australia, operates two global hotel accommodation businesses, HotelClub.com and RatesToGo.com. HotelClub offers discounted hotel rates for more than 24,000 hotels in approximately 100 countries worldwide directly to travelers through websites in multiple languages. To accommodate its broad client base, HotelClub offers its services in twelve languages, which are traditional Chinese and simplified Chinese, English, French, German, Italian, Japanese, Korean, Portuguese, Spanish. HotelClub purchases its hotel inventory predominantly through GTA. RatesToGo offers last-minute online accommodations reservations (rooms bookable within 21 days of the planned hotel stay) in over 12,000 hotels in more than 60 countries. RatesToGo has established agreements with hotels worldwide for last minute inventory.

    OctopusTravel provides travelers with the ability to book reservations online from a large inventory of hotels and apartments, car rentals, bus and limousine transfers and sightseeing services in numerous cities and countries. It offers accomodations in more than 150 countries worldwide and operates in 34 different languages. The vast majority of OctopusTravel's bookings are made through its affiliate customer channel, which offers white label and co-branded solutions to its business partners, with a minority of bookings made through its consumer direct channel. This allows its affiliate partners, such as airlines, financial institutions and travel portals, to incorporate booking services and content of OctopusTravel into their own websites. Further, OctopusTravel manages content, online marketing and customer service on behalf of its affiliates. OctopusTravel has more than 3,700 agreements with affiliate partners, including major airlines in Europe, Middle East, and Asia/Pacific.

    Travelbag is a long haul, tailor-made tour operator based in the UK whose products include boutique hotels and customized travel packages with complex itineraries. Due to the complexity and generally high ticket value of Travelbag's products, Travelbag is predominantly an off-line business selling through its eight retail stores and its call centers. Travelbag's sales require specialized knowledge and high customer interaction.

    Other B2C businesses include needahotel.com, which operates an online and call center accommodation booking service; The Away Network, which specializes in travel content for travelers seeking unique experiences and activities; and the Neat Group, which develops markets and operates dynamic packaging technology that enables travelers to choose among a broad range of discounted air, car and hotel offerings to create customized travel packages.

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Customers

        Our customers in our B2B businesses primarily consist of travel suppliers and travel agencies, while our principal customers in our B2C businesses are travelers who access our online travel agencies.

    Travel suppliers

        Our travel supplier customers include approximately 425 airlines, 68,000 hotel properties, 20 car rental companies, 430 tour operators and major cruise lines. The table below depicts our largest travel suppliers in the airline, hotel, and car rental categories for 2005.

Airlines
  Hotels
  Car Rental Companies
 
•    United Airlines

 

        •    Wyndham Worldwide

 

        •    Dollar
 
•    American Airlines

 

        •    Marriott International

 

        •    Budget
 
•    Alitalia Airlines

 

        •    Intercontinental Hotel Group

 

        •    Alamo
 
•    Delta Airlines

 

        •    Hilton

 

        •    Hertz
 
•    Northwest Airlines

 

        •    Choice Hotels

 

        •    Thrifty

        Our top ten suppliers, all of which are airlines, represented approximately 28% of our revenue for 2005.

    Travel agencies

        Our travel agency customers include approximately 52,000 travel agency locations in more than 130 countries. Our largest travel agency customers for 2005 were American Express, CheapTickets, Carlson Wagonlit Travel, Flight Centre Limited and BCD. Our top ten travel agencies, which includes CheapTickets, generated approximately 25% of our total segments booked for 2005. Four of our top five travel agencies have been customers for at least 14 years, with two being customers for over 25 years.

    Online customers

        Through our B2C businesses, we serviced millions of online customers in 2005. Revenue generated through our B2C channel is highly diversified, with no single customer representing a material portion of our revenue in the segment.

Sales and Marketing

Business to Business

        Our B2B sales and marketing teams are responsible for developing existing and initiating new commercial relationships with travel suppliers and travel agencies on a worldwide basis.

    Galileo

        In international markets, we employ a hybrid sales and marketing model consisting of direct sales and marketing organizations, or SMOs, that we manage and indirect, third party national distribution companies, or NDCs. In the United States, we only employ an SMO model. We market, distribute and support our B2B products and services primarily through our SMOs. In regions outside the Americas not supported directly by our SMOs, we provide our products and services through our relationships with NDCs which are typically independently owned and operated by a local travel-related business in the related country. For example, in the Middle East, our GDS products are distributed through an arrangement with the Arab Air Carriers Organization which includes Saudi Arabia Airlines, Emirates

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and Kuwait Airways. Each NDC is responsible for maintaining the relationship with travel agency customers in its territory and providing ongoing customer support. We pay each NDC a commission based upon the booking fees generated in the NDC's territory, and the NDC retains all subscriber fees billed in the territory.

        Our SMOs and NDCs are organized by country and are typically divided between the new account teams, which seek to add new travel agencies to our distribution system, and account management teams, which service and expand existing business. We also provide global account management to large selected multi-national customers. In certain markets, smaller customers are managed by telemarketing teams.

    GTA

        GTA operates full-service sales offices in London, New York, Hong Kong, Japan and Dubai that are responsible for maintaining and building relationships with retail travel agents, wholesale tour operators and corporate travel clients in 120 countries around the world.

    Travel Suppliers

        Galileo manages existing and initiates new commercial relationships with its travel suppliers through teams organized by product categories including air, hotel and car rental services.

        Galileo also has a dedicated Airline Solutions sales and service organization that is responsible for marketing information technology services such as airline hosting and e-commerce solutions to airlines globally.

        Within GTA, we have dedicated contractors globally that are tasked with securing local content. These contractors are responsible for negotiating commercial terms for hotels (including rates and allocations) and other ground services (including restaurants, sightseeing, excursions, transfers and long distance coaches).

Business to Consumer

        Our B2C sales and marketing efforts are focused on driving visitors to our web sites and creating differentiated brands by demonstrating clear value propositions for our distinct customer segments. We also use a variety of marketing tactics to encourage the sale of more complex travel, particularly dynamic travel packages which we believe offer value to our customers while also generating more revenue per transaction for us. Domestically, we employ a combination of traditional retail and online marketing strategies to persuade customers to book their travel online with Orbitz and CheapTickets. We believe this combination has been successful and we intend to leverage such strategies internationally. Each major brand has a core marketing campaign to focus on distinct consumer messaging for distinct consumer segments. The major components of our marketing strategy are brand marketing and online marketing:

    Brand Marketing

        We use traditional broadcast advertising such as television and radio that focuses on brand differentiation and emphasizes certain features of our businesses that we believe are valuable to our customers, such as OrbitzTLC and dynamic packaging. We are currently testing the efficacy of print advertising as a component of our advertising media mix. In all of our marketing strategies, we are focusing on promotional marketing to emphasize attractive deals for our consumers and encourage the purchase of certain types of travel.

    Online Marketing

        We use various forms of online marketing to drive traffic to our online travel agencies. Representative online marketing strategies include search engine marketing on Google, Yahoo! and

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MSN, advertising placements on travel research and content sites such as Trip Advisor and TravelZoo, interactive "pop-under" advertising, affiliate marketing and search engine optimization. We also generate traffic and transactions from certain meta-search travel websites, such as Kayak, SideStep and Yahoo! Farechase. Email marketing is an important component of our marketing strategy and we are currently focused on improving our abilities to target customers with specific offers that correspond to their particular interests.

Supplier Relations

        Our supplier relations efforts are focused on managing and developing mutually beneficial relationships with travel suppliers, including airlines, hotels, rental car companies and destination service providers. Our supplier relations team negotiates commercial terms with travel suppliers and works closely with our product development and marketing teams to ensure we build and maintain products that meet the needs of travel suppliers and our customers.

Technology and Operations

Technology

        We operate our worldwide travel distribution system primarily in commercial data center facilities in Denver, Chicago, and London. These highly secure, high technology facilities provide redundant environmental support for power, cooling, and fire suppression with dedicated generators and multiple backup systems. Our redundant systems and telecommunication infrastructure is online 24 hours a day, 7 days a week, 365 days a year.

        Our GDS and other B2B systems handle thousands of messages per second. Our extensive global telecommunications infrastructure allows real-time updating of supplier information across a private Transmission Control Protocol/Internet Protocol (TCP/IP) network which offers a high level of security and privacy. Our systems infrastructure has proven to be highly scalable and reliable, leveraging transaction processing facility and open systems technology extensively across our production environment.

        The core systems infrastructures that are utilized for our B2B businesses, other than our GDS, include our proprietary Galileo 360o Fares Solution and Galileo Web Services.

    Galileo 360o Fares Solution.    Galileo 360o Fares is an open systems solution, delivering up-to-date automated worldwide fares options, performing fare transactions, as well as supporting domestic and international public and private fares. This solution is used by the B2B and B2C travel industry and is built with a high level of scalability and redundancy.

    Galileo Web Services.    Galileo Web Services, or GWS, refers to a collection of services that provide travel agencies with access to key functionality on our GDS. Our GWS products use industry-standard technology such as XML, HTTP, and SOAP to support data transfer between client travel applications and our GDS. Our GWS products allow disparate systems to communicate with each other using a common framework. Consequently, our GWS products provide a valuable tool to customers as they do not need to update their infrastructure to access certain of our services.

        Our B2C systems handle millions of searches a day for available travel options across air, hotel, car, packaging, and attractions and services. Our distributed open systems architecture has proven to be highly scalable and resilient in the event of a system failure, handling high transaction volumes across our multiple branded websites on shared infrastructure. Real-time monitoring provides comprehensive business and operational insight into the functionality and use of our system.

        The core systems infrastructures that are utilized for our B2C businesses are:

    Orbitz.com and CheapTickets.com run on open systems technology leveraging a distributed Java systems framework. Architected as a very high volume transaction processing engine, proven to

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      be highly scaleable and reliable, the applications are primarily deployed on RedHat Linux running on AMD Opteron processors and Sun Solaris running on Sun Microsystems multi-core servers. We aggressively support and leverage open standards such as XML, RSS and SOAP.

    ebookers is built on open systems technology, primarily running on IBM xSeries servers. This solution was built for horizontal scalability and leverages open source based systems such as MySQL and RedHat Linux.

    HotelClub.com and RatesToGo.com are built on a Microsoft.NET framework that runs on a IBM XSeries servers.

    OctopusTravel is a Java application that runs IBM Websphere which leverages the business logic and content store of an IBM AS/400 platform based travel reservation and booking engine.

        We have technological strengths in multiple areas. These include:

    early and aggressive open systems strategies within our GDS business, resulting in a significant portion of our GDS processing being conducted outside the more costly mainframe environment;

    extensive experience in supporting and scaling low fare search in our B2C business using open systems commodity hardware rather than more expensive mainframes, resulting in an increasingly high performance and low cost flight search capability;

    dynamic packaging capability, which enables travelers to see multiple combinations of airlines and hotels to assemble a vacation package resulting in trips that are, on average, less expensive and more flexible for the traveler;

    real-time business event monitoring, which provides comprehensive business and operational insight, resulting in our ability to manage the business in real time;

    a globally sourced technology organization, resulting in a flexible and scalable organization with global productivity;

    Matrix display technology for simultaneous display of multiple online travel options; and

    the ability to connect and book on multiple supplier host systems, creating inherent technology flexibility and a powerful consumer experience.

        We are committed to protecting the security of our customers' information. We maintain an information security team that is responsible for implementing and maintaining controls to limit the potential of unauthorized users from entering our system. These controls include the implementation of information security policies and procedures, security monitoring software, encryption policies, access policies, password policies, physical access limitations, and detection and monitoring of fraud from internal staff. We use a combination of off-the-shelf and proprietary authentication technology to ensure that the integrity of our data is not compromised. Our information security team also coordinates internal and external audits. Security audits are conducted semi-annually. In addition, we maintain a comprehensive information systems security policy that provides guidelines for protecting customers' data and information, safeguarding our proprietary information, reporting security incidents, and policies for administrative controls of end user access to computing resources.

        We plan to invest significantly in our technology platform over the next two years, of which a significant portion will be paid by Avis Budget prior to the completion of the Acquisition or will be funded through a purchase price adjustment pursuant to the Purchase Agreement. We are investing in building a scaleable, service-oriented technology platform to create a single, global, comprehensive platform that will allow us to extend this technology across our portfolio of online brands around the world. This will result in long-term cost savings due to a more scaleable platform, improved flexibility, and improved ability to process, as improvements made on our platform will apply to all of our B2C brands. We expect this transition will allow our online businesses to improve site merchandising, browsing and searching functionality, add significant personalization features, and ultimately improve

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our ability to drive higher return-on-investment in our online and offline advertising. We expect this transition to occur in a phased approach, with certain of our worldwide B2C sites migrating to the new platform over the next two years. Moreover, we will continue to invest in our core systems to ensure that we maintain a product suite that enables traditional and non-traditional content and adds value for our vendors and customers.

Operations

        Our B2B and B2C operations have over 4,500 insourced and outsourced staff in 40 countries, supporting all of our businesses. Operation functions consist of general customer service, call center support, email processing support and all other post purchase support, telesales activities for customer brands, and a variety of back office and fulfillment functions across all businesses. We use a combination of insourced and outsourced vendor locations to service all our brands. Most support functions for our customer businesses are available 24 hours a day, 7 days a week.

        Our operations group supports these brands with internal operations located in Denver, Chicago, Sydney, Frankfurt, Rome, New Delhi, New York City, Los Angeles, London, Langley, Glasgow and Dublin, while smaller regional offices for B2B and B2C sales and service exist across Europe, the Middle East and Asia Pacific. We also operate remote agent locations in support of help desk operations for Galileo in the United States in and around the Atlanta and Denver areas and some specific sites in Mexico and South America based on in-country customer support requirements. In addition, to maximize savings and ensure process redundancy, we utilize a variety of vendors to manage call centers and back office operations.

        In addition to the broad services discussed above, the operations team also manages key aspects of proactive service to our customers. The OrbitzTLC program was designed as a proactive way to keep travelers informed about flight delays, schedule information and relevant news/events that may impact their travel plans. OrbitzTLC has broad customer participation and enables us to forecast events and travel situations, pinpoint impacted travelers and notify travelers in large numbers through multiple methods, such as e-mail, cell phone and pager. Data synthesized by a team of experts in our Chicago and Denver internal operational locations helps ensure we manage every aspect of a customer's trip. We believe OrbitzTLC contributes to our customer retention, and in 2004 and 2005, we distributed nearly 50 million care alerts. As we look to consolidate our platforms and gain synergies with our multi-functional service desktop applications and interactive voice response support systems, we will have the capability to migrate this technology to other brands, on a domestic and international basis.

Competition

        The marketplace for travel distribution is large and highly competitive. Galileo competes with the other traditional GDSs, Amadeus Global Travel Distribution S.A., Sabre, Inc. and Worldspan, as well as other GDSs and travel suppliers that offer information and booking functionality through their own websites. In addition, GDSs compete with technology providers offering a direct connection between travel content providers and travel agents by-passing GDSs, such as Navitaire, and so-called GNEs such as ITA, Farelogix and others that aggregate travel content from different sources. GTA's competitors include regional and local wholesalers, as well as global wholesalers such as Miki Travel Limited, Kuoni Group and Tourico Holidays, Inc. Each of our primary competitors offers products and services substantially similar to ours. We believe competition in our B2B business is based on the following criteria:

    travel supplier and travel agency relationships;

    the number and size of travel agencies utilizing our GDS;

    travel supplier participation levels and inventory;

    technology;

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    pricing;

    the timeliness, reliability and scope of the information offered;

    service reliability and ease of use; and

    range of products and services offered.

        In the B2C industry, we compete with other OTAs owned by Expedia, Inc., Priceline.com Incorporated and Sabre, Inc., as well as supplier direct-distribution channels such as supplier websites and toll-free numbers and a large number of offline leisure travel agencies, including among others Liberty Travel, Inc. and American Express Travel Related Services Company, Inc. We also face competition from a number of large Internet companies, such as Google, AOL and Yahoo!, and "meta-search" companies, such as Kayak.com, Side Step, Inc. and Yahoo!/Farechase. We believe competition in our B2C business is based on the following criteria:

    price;

    travel inventory;

    brand recognition;

    customer service

    ease of use;

    accessibility; and

    reliability.

Trademarks and Intellectual Property

        The trademarks and service marks "Galileo®", "CheapTickets®", "Orbitz®", "Orbitz and Go™", "OrbitzTLC™", "Travelport®", "HotelClub®", "RatesToGo®", "Gullivers Travel Associates™", "GTA®", "OctopusTravel®", "ebookers®", "Travelbag®", "The Less You Pay, The Better It Feels™" and "Deal Detector™" and related trademarks and logos used in 2005 are material to our businesses. We and our subsidiaries and their licensees actively use these marks. All of the material marks used by these companies are registered (or have applications pending for registration) in their appropriate markets. We own the material marks used in our businesses. We take reasonable precautions to protect against unauthorized or infringing uses of our trademarks in the marketplace.

        We also use a combination of patent, copyright, trade secret, confidentiality procedures and contractual provisions to protect the software, business processes and other proprietary information we use to conduct our businesses. These assets and the related intellectual property rights are important assets of our businesses.

        Unauthorized use of our intellectual property could have a material adverse effect on us and there can be no assurance that our legal remedies would adequately compensate us for the damage caused by such use.

Employees

        We have approximately 8,000 employees, including approximately 5,700 employees in international markets and approximately 2,300 employees in the Americas. We have approximately 4,500 employees in our B2B businesses, approximately 1,750 in our B2C businesses and approximately 1,750 employees in our shared services functions. None of our employees in the U.S. are subject to collective bargaining agreements governing their employment with us; we have several legislatively created relationships in Europe. We believe that our employee relations are good.

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Properties and Facilities

        Our primary facilities are as follows:

        Corporate Headquarters.    We currently are headquartered in Parsippany, New Jersey pursuant to a lease with a term of ten years. We also lease space in New York City pursuant to a lease with a term of four years.

        Data Center.    We own a data center located in Greenwood Village, Colorado. A two-building secure campus, it houses the systems infrastructure and web and database servers for our B2B operations, including our GDS, and our domestic B2C operations, as well as the data centers for Realogy, Wyndham Worldwide, Avis Budget Group and other third parties. Every month, more than 1 billion transactions are run through the data center. The data center powers travel agency terminals and Internet travel websites and provides access 24 hours a day, 7 days a week, 365 days a year.

        B2B Businesses.    Galileo conducts its main operations at our leased offices in Langley, United Kingdom. GTA businesses conduct their main operations at our owned offices in London, United Kingdom. Domestically, our B2B businesses operate primarily from Parsippany, NJ and Chicago, IL. There are also leased facilities in over 40 countries that function as call centers or fulfillment or sales offices.

        B2C Businesses.    Our B2C businesses conduct their main operations at our leased offices in Chicago, IL and London. There are also leased facilities within the United States and throughout Europe and Asia Pacific that function as administrative, call centers or fulfillment or sales offices.

        The table below provides a summary of our key facilities.

Summary of Key Facilities

Location

  Purpose
  Employees
  Leased / Owned
Parsippany, NJ   Corporate headquarters   230   Leased
Chicago, IL   B2C domestic headquarters   765   Leased
London, UK   B2C international headquarters   175   Leased
Langley, UK   Galileo headquarters   325   Leased
Denver, CO   Application Development and Data Center   45   Owned
London, UK   GTA headquarters   730   Owned
New Delhi, India   Call Center and Business Process Outsourcing   1,500   Leased

Government Regulation

        We are subject to or affected by international, federal, state and local laws, regulations and policies, which are constantly subject to change. The descriptions of the laws, regulations and policies that follow are summaries and should be read in conjunction with the texts of the laws and regulations described below. The descriptions do not purport to describe all present and proposed laws, regulations and policies that affect our businesses.

        We believe that we are in material compliance with these laws, regulations and policies. Although we cannot predict the effect of changes to the existing laws, regulations and policies or of the proposed laws, regulations and policies that are described below, we are not aware of proposed changes or proposed new laws, regulations and policies that will have a material adverse affect on our business.

        Privacy and Data Collection Regulation.    Privacy regulations continue to evolve and on occasion may be inconsistent from one jurisdiction to another. Many states have introduced legislation or enacted laws and regulations that require strict compliance with standards for data collection and protection of privacy and provide for penalties for failure to notify customers when such standards are breached, even by third parties. The Federal Trade Commission adopted "do not call" and "do not fax" regulations in October 2003. In compliance with such regulations, our affected businesses have developed and implemented plans to block phone numbers listed on the "do not call" and "do not fax"

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registries and have instituted new procedures for preventing unsolicited telemarketing calls. In response to "do not call" and "do not fax" regulations, our affected businesses have reduced their reliance on outbound telemarketing.

        As an online business, customers provide us with personally identifiable information, or PII, that has been specifically and voluntarily given. PII includes information that can identify a customer as a specific individual, such as name, phone number, or e-mail address. We only share customer PII with our authorized travel service providers or as required by law, and only as necessary in order to complete a transaction that customers specifically request. We do not sell or rent PII to anyone. We provide customers with choice and control over the collection and use of their PII, as well as a means of updating, correcting, or removing any PII stored in their customer profile. Customers are provided the opportunity to specifically choose the promotional marketing communications they wish to receive from our company. If they choose to opt-out of the promotional communication services that we provide, then we will only send communications that relate to a specific travel purchase made by the customer.

        Many states have enacted or are considering legislation to regulate the protection of private information of consumers, as well as limiting unsolicited commercial email on the internet to consumers. The legislation that has become state law is a small percentage of the number still pending, and is similar to what has been introduced at the federal level. We cannot predict whether any of the proposed state privacy legislation currently pending will be enacted and what effect, if any, it would have on our company.

        The primary international privacy regulations to which our international operations are subject are Canada's Personal Information and Protection of Electronic Documents Act and the European Union Data Protection Directive:

    Canada:    The Personal Information and Protection of Electronic Documents Act, or PIPEDA, provides Canadian residents with privacy protections in regard to transactions with businesses and organizations in the private sector. PIPEDA recognizes the individual's right to privacy of their personal information. Additionally, it recognizes the need of organizations to collect, use and share personal information and establishes rules for handling personal information. On January 1, 2004, PIPEDA was extended to the collection, use, or disclosure of personal information in the course of any commercial activity within a province.

    Europe:    Individual countries within the EU have specific regulations related to the transborder dataflow of personal information (i.e., sending personal information from one country to another). The EU Data Protection Directive is the source of many of these individual regulations and requires companies doing business in EU member states to comply with its standards. It provides for specific regulations requiring all non-EU countries doing business with EU member states to provide adequate data privacy protection when sending personal data from any of the EU member states. Effective July 25, 2000, the EU member states adopted a safe-harbor arrangement that provides that United States organizations can adopt procedures that comply with European privacy regulations and can certify their compliance through notice to the U.S. Department of Commerce. Participation in the safe harbor is voluntary and indicates that the organization provides an adequate level of privacy protection and qualifies the company to receive data from EU member states. A company does not have to join the safe harbor to be in compliance with the EU Data Protection Directive. It may choose instead to seek approval for the data transfers from the specific individual or otherwise qualify for an exception. United States companies that avail themselves of the safe harbor arrangement are subject to oversight and possible enforcement actions by the Federal Trade Commission or the Department of Transportation (which has authority over "ticket agents") if they violate the provisions of their certification. Such violations may be found to be unfair and deceptive practices. Additionally, the European Commission has approved a set of standard form clauses for the transfer of personal

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      data. These allow companies to put in place a contractual chain in order to transfer data outside of Europe.

        Marketing Operations.    The products and services offered by our various businesses are marketed through a number of distribution channels, including online. These channels are regulated on the international, state and federal levels, and we believe that our marketing operations will increasingly be subject to such regulation. Such regulation, including anti-fraud laws, customer protection laws, and privacy laws may limit our ability to solicit new customers or to market additional products or services to existing customers. We are also aware of, and are actively monitoring the status of, certain proposed state legislation related to privacy and to email marketing that may be enacted in the future. It is unclear at this point what effect, if any, such state legislation may have on our businesses. California, in particular, has enacted legislation that requires enhanced disclosure on Internet websites regarding customer privacy and information sharing among affiliated entities. We cannot predict whether these laws will affect our practices with respect to customer information and inhibit our ability to market our products and services nor can we predict whether other states will enact similar laws.

        Internet Regulation.    We must also comply with laws and regulations applicable to businesses engaged in online commerce. An increasing number of laws and regulations apply directly to the Internet and commercial online services. For example, e-mail activities are subject to the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act. The CAN-SPAM Act regulates the sending of unsolicited, commercial electronic mail by requiring the sender to (i) include an identifier that the message is an advertisement or solicitation if the recipient did not expressly agree to receive electronic mail messages from the sender, (ii) provide the recipient with an online opportunity to decline to receive further commercial electronic mail messages from the sender and (iii) list a valid physical postal address of the sender. The CAN-SPAM Act also prohibits predatory and abusive electronic mail practices and electronic mail with deceptive headings or subject lines. Moreover, there is currently great uncertainty whether or how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet and commercial online services. It is possible that laws and regulations may be adopted to address these and other issues. Further, the growth and development of the market for online commerce may prompt calls for more stringent customer protection laws.

        New laws or different applications of existing laws would likely impose additional burdens on companies conducting business online and may decrease the growth of the Internet or commercial online services. In turn, this could decrease the demand for our products or increase our cost of doing business.

        Federal legislation imposing limitations on the ability of states to impose taxes on Internet-based sales was enacted in 1998. The Internet Tax Freedom Act, which was extended by the Internet Nondiscrimination Act, exempted certain types of sales transactions conducted over the Internet from multiple or discriminatory state and local taxation through November 1, 2007. The majority of products and services we offer are already taxed: hotel rooms and car rentals at the local level and air transportation at the federal level with state taxation preempted. In Europe, there are laws and regulations governing e-commerce and distance-selling which primarily affect our recently-acquired customer travel businesses. These regulations require our businesses to act fairly towards customers, for example, by giving customers a cooling-off period during which they can cancel transactions without penalty. There are various exceptions for the leisure and travel industry.

        Global Distribution Systems Regulation.    Our GDS business is subject to specific GDS regulations in the EU and Canada. As of July 31, 2004, all GDS regulations in the United States expired.

        In Europe, the European Commission continues to examine the ongoing need for GDS regulations. In 2002, the European Commission advised that it was considering revising or repealing many regulations, including the regulations which prevent an airline that owns a GDS from

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discriminating against other GDS systems in terms of services, commissions and fees. While the European Commission continues to consider deregulation of the GDS industry in the EU, it did not issue a formal proposal in 2005. A decision to completely deregulate or to issue an amended set of regulations could be announced in 2007 or later.

        There are also GDS regulations in Canada, under the regulatory authority of the Canadian Department of Transport. On April 27, 2004, a significant number of these regulations were lifted. Amendments to the rules include eliminating the "obligated carrier" rule, which required larger airlines in Canada to participate equally in the GDSs, and elimination of the requirement that transaction fees charged by GDSs to airlines be non-discriminatory. Due to the elimination of the obligated carrier rule in Canada, Air Canada, the dominant Canadian airline, could choose distribution channels that it owns and controls or distribution through another GDS rather than through our GDS.

        Travel Agency Regulation.    The products and services we provide are subject to various international, federal, state and local regulations. We must comply with laws and regulations relating to our sales and marketing activities, including those prohibiting unfair and deceptive advertising or practices. Our travel services are subject to regulation and laws governing the offer and/or sale of travel products and services, including laws requiring us to register as a "seller of travel" in various states and to comply with certain disclosure requirements. As a seller of air transportation products in the United States, we are subject to regulation by the Department of Transportation (DOT), which has jurisdiction over economic issues affecting the sale of air travel, including customer protection issues and competitive practices. The DOT has authority to enforce economic regulations, and may assess civil penalties or challenge our operating authority. In addition, many of our travel suppliers and trade customers are heavily regulated by the United States and other governments and we are indirectly affected by such regulation.

        Where we sell travel products and services in Europe directly to travelers as part of a "package", The Package Travel, Package Holidays and Package Tours Regulations Directive regulates us, as implemented by EU member states into country-specific regulations, or Package Travel Regulations. Where the Package Travel Regulations apply, they impose primary liability on us for all elements of a trip sold through us, whether or not we own or control those services or whether we sub-contract them to independent suppliers. The Package Travel Regulations principally affect the businesses of ebookers and Travelbag, as well as other online brands where the sale is made in the EU.

        Additionally, certain jurisdictions abroad may require that we hold a local travel agencies' license in order to sell travel product to travelers.

        Our businesses are also subject to regulations affecting issues such as telecommunications and exports of technology.

        Insurance Regulation.    Bastion Surety, a joint venture with Orbis Capital Limited, is a bond provider for travel agencies and tour operators in the United Kingdom. It is authorized and regulated by the UK Financial Services Authority, FSA, to provide bonding insurance in the United Kingdom, Belgium, France, Ireland and the Netherlands as an alternative to cash and bank bonds to protect consumers in the event of business failure of a travel agent or tour operator. The FSA regulates the financial services industry through statutory powers under the Financial Services and Markets Act (2000).

        The FSA imposes minimum standards of fitness and propriety on both companies and certain individuals (notably company directors and controllers) that fall within its remit. These minimum standards are embodied in the FSA's Threshold Conditions and Principles for Business. If one of the Threshold Conditions or Principles is breached (e.g. ceases to maintain a minimum level of financial resources), the FSA can remove permission to trade.

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        We are required to deal with the FSA in an open and cooperative manner and to inform them of matters in a timely fashion. In addition, we are required to provide annual returns to the FSA concerning the state of Bastion, notably in respect of its financial position.

        In addition, Insurancebookers Limited sells stand-alone travel insurance online and off-line to consumers. It is authorized by the FSA and trades as an Appointed Representative of Landmark Insurance Company, part of the AIG Group.

Legal Proceedings

    Worldspan

        On September 19, 2005, Worldspan, L.P., or Worldspan, sued Orbitz, LLC in the United States District Court for the Northern District of Illinois, asserting five causes of action: a violation of the Computer Fraud and Abuse Act, three breach of contract claims, and a claim for injunctive relief. Orbitz moved to dismiss the action for lack of federal jurisdiction on the ground that the sole federal cause of action (for the alleged violation of the Computer Fraud and Abuse Act) failed to state a claim upon which relief could be granted. On April 19, 2006, the trial judge granted Orbitz's motion and dismissed the remaining state claims. Worldspan has appealed the trial court's decision to the United States Court of Appeals for the Seventh Circuit. On December 12, 2006, the Seventh Circuit agreed at the parties' request to stay the appeal indefinitely, with periodic updates to the court. On April 24, 2006, after the trial court dismissed its claims in the federal action, Worldspan filed a second suit against Orbitz, LLC in the Circuit Court of Cook County, County Department, Law Division. Worldspan's original Cook County complaint set forth the three breach of contract claims and the claim for injunctive relief that were dismissed from the earlier federal action. The breach of contract counts relate to Orbitz's alleged improper use of Worldspan's seatmap data, Orbitz's alleged use of a Computer Reservation System named ITA Software, Inc., and Orbitz's alleged use of Galileo in connection with non-direct connect bookings. Worldspan asserts that this alleged conduct violates a Worldspan and Orbitz agreement concerning Orbitz's use of Worldspan as a Computer Reservation System for airline tickets. The count for injunctive relief seeks to prevent Orbitz from engaging in the alleged conduct that was the substance of the breach of contract counts. Worldspan subsequently filed an Amended Complaint, adding three breach of contract claims and a claim under the Georgia Computer Systems Protection Act. Worldspan's prior four claims remain. The new breach of contract claims relate to Orbitz's alleged improper use of Galileo to book AirTran flights, Orbitz's alleged failure to follow certain dispute resolution provisions in the parties' agreement, and Orbitz's alleged bad faith request for certain services under the parties' agreement. The new Georgia Computer Systems Protection Act claim is based on the same factual allegations as the federal Computer Fraud and Abuse Act claim that was dismissed by the federal trial court. Worldspan claims damages in its Amended Complaint in excess of $109 million, as well as the injunctive relief set forth above. Orbitz moved to dismiss the Worldspan lawsuit on the ground that Worldspan failed to state any claims upon which relief may be granted. After Orbitz filed its motion to dismiss, Worldspan filed a Second Amended Complaint attempting to assert the same causes of action. The case is currently pending before Judge Brigid McGrath. On December 28, 2006, at the request of the parties, the court stayed the action until further order of the court. Orbitz will vigorously defend against Worldspan's asserted claims.

        On September 16, 2005, before Worldspan filed the federal case described above, Orbitz, LLC sued Worldspan, L.P. in the Circuit Court of Cook County, Illinois, County Department, Law Division. Orbitz's original complaint set forth two claims for rescission of certain provisions of the parties' agreement, one brought under the Illinois Consumer Fraud Act and one based on equitable estoppel. Both claims relate to Worldspan's alleged deceptive conduct inducing Orbitz into certain amendments to the parties' agreement concerning Orbitz's use of Worldspan as a Computer Reservations System. On October 18, 2005, Worldspan removed Orbitz's Cook County case to the United States District Court for the Northern District of Illinois, asserting that Orbitz's case raised issues of federal law.

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Orbitz moved the federal court to remand the case back to Cook County. On April 3, 2006, the court granted Orbitz's motion and remanded the case. On July 5, 2006, Orbitz filed its First Amended Complaint in the Cook County case, adding two breach of contract claims, two claims for declaratory relief, a common law fraud claim, and a claim for rescission of certain amendments to the parties' agreement based on a director conflict at the time of the amendments. Orbitz's two prior claims remain. The new breach of contract claims and claims for declaratory relief relate to Orbitz's rights to certain low-cost airline content under the parties' agreement and Orbitz's right to have Worldspan provide data to ITA Software, Inc. on Orbitz's behalf. The new fraud claim generally addresses the same deceptive conduct as Orbitz's prior Illinois Consumer Fraud Act and equitable estoppel claims. The new director conflict claim is brought under the Illinois Business Practices Act and Illinois law, and asserts that Worldspan and Orbitz were jointly owned and controlled, in material part, when certain amendments to the parties' agreement were executed. Orbitz alleges that Worldspan cannot enforce the agreement because it is unfair to Orbitz and thus violates Illinois law due to the conflict. Worldspan filed a motion to dismiss Orbitz's First Amended Complaint on the grounds that Orbitz failed to state claims upon which relief may be granted. The Orbitz lawsuit was consolidated with the Worldspan Cook County lawsuit described above and is currently pending before Judge Brigid McGrath. On December 28, 2006, at the request of the parties, the court stayed the action until further order of the court.

    Tax Cases

        Along with other similar online companies, Travelport Americas, Inc. (f/k/a Travelport, Inc., which was f/k/a Cendant Travel Distribution Services Group, Inc.), Orbitz, LLC, Orbitz, Inc., Trip Network, Inc. (d/b/a CheapTickets.com), and/or Internetwork Publishing Corp. (d/b/a Lodging.com) (collectively referred to herein as the "Orbitz defendants") have been named in a number of lawsuits relating to the alleged failure to pay certain taxes to plaintiffs in connection with making hotel room reservations for consumers. As the parent of Travelport Americas, Inc., Cendant Corporation (n/k/a Avis Budget Group, Inc.) was named in only a few of the tax litigation cases, but has now been dismissed in all but two of the pending cases. The Orbitz defendants are members of a joint defense group with other industry members including IACI, Sabre-Travelocity, and priceline.com

        Currently, 29 cases are pending which were filed by state municipality (or in some instances, a county or a visitors' bureau) plaintiffs, 15 in federal court and 14 in state court. Of these cases, 14 were filed as class actions, which means that the named plaintiff /county seeks to represent all similar municipalities/counties in its state with a similar hotel tax statute. The other 15 cases are actions brought by individual municipalities/counties only, as opposed to class actions. While these tax cases are not entirely identical, most allege that the companies violated certain tax provisions by failing to remit certain taxes to plaintiffs and/or charged more in taxes than was remitted to plaintiffs. The cases assert violation of state and local tax provisions, as well as various common law claims based on the same factual allegations. Most of these cases are still at the initial pleading stages, with motions to dismiss pending in many jurisdictions. Some initial written and oral discovery has been taken in some of the actions. No classes have been certified in any of the cases and no cases have yet gone to trial.

        In addition to the cases brought by the municipalities, two additional similar actions have been brought by plaintiffs' class action attorneys on behalf of consumers who booked hotel rooms through the defendants' online travel websites. These cases, pending in Illinois and California state courts, are based on allegations that the defendants wrongfully charged for taxes that were not legitimate in that they were not required by the taxing authorities to be collected. As with the municipality actions, both of these actions are still at fairly preliminary stages, no classes have been certified, and no trial dates are scheduled.

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MANAGEMENT

Executive Officers and Directors

        The following table sets forth information about our executive officers and directors:

Name

  Age
  Position
Jeff Clarke   45   President, Chief Executive Officer and Director
Michael Rescoe   54   Executive Vice President and Chief Financial Officer
Gordon Wilson   40   President and Chief Executive Officer, Galileo
Steven Barnhart   45   President and Chief Financial Officer, Orbitz Worldwide
Kenneth S. Esterow   42   President and Chief Executive Officer, GTA
Eric J. Bock   41   Executive Vice President, General Counsel and Corporate Secretary
Patrick J. Bourke III   48   Executive Vice President and Chief Reengineering Officer
Terence P. Conley   43   Executive Vice President and Chief Administrative Officer
Jo-Anne Kruse   41   Executive Vice President, Human Resources
Paul C. Schorr IV   39   Director
Martin Brand   32   Director
William Griffith   35   Director
David L. Weinberg   55   Director Nominee

        Jeff Clarke has served as our President and Chief Executive Officer since May 2006. Mr. Clarke has 20 years of strategic, operational and financial experience with leading high-technology firms. From April 2004 to May 2006, Mr. Clarke was Chief Operating Officer of the software company CA, Inc. (formerly Computer Associates Inc.). Mr. Clarke also served as Executive Vice President and Chief Financial Officer of CA, Inc. from April 2004 until February 2005. From 2002 through November 2003, Mr. Clarke was Executive Vice President, Global Operations at Hewlett-Packard Company. Before then, Mr. Clarke joined Compaq Computer Corporation in 1998 and held several positions, including Chief Financial Officer of Compaq from 2001 until the time of Compaq's merger with Hewlett-Packard Company in 2002. From 1985 to 1998, Mr. Clarke held several financial, operational, international and managerial positions with Digital Equipment Corporation. Mr. Clarke serves on the Board of Directors of UTStarcom, Inc., a Nasdaq company and global leader in IP-based, end-to-end networking solutions.

        Michael Rescoe has served as our Executive Vice President and Chief Financial Officer since November 2006. Most recently, Mr. Rescoe was Chief Financial Officer for Tennessee Valley Authority (TVA), which he joined in July 2003. His responsibilities included treasury, accounting, risk management, financial planning, investor relations and retirement services, and he oversaw the development and implementation of all financial strategies for the corporation. Before joining TVA, Mr. Rescoe served as Chief Financial Officer and Senior Vice President of Finance and Planning at 3Com Corporation, a global leader in network technology solutions, in Santa Clara, California. While at 3Com, Mr. Rescoe helped to complete one of the most successful IPO's in the history of the technology sector: Palm Inc., the corporation's hand-held computing division. Prior to that, Mr. Rescoe was Chief Financial Officer of PG&E Corporation, one of the nation's largest utility and energy companies, located in San Francisco. Mr. Rescoe also served as Executive Vice President and Chief Financial Officer for Dallas-based Enserch Corporation (formerly Lone Star Gas), a diversified energy and utility company that was merged into TXU Inc., a larger, vertically integrated investor-owned utility. For over a dozen years, Mr. Rescoe was an investment banker serving the energy and utility sector. Mr. Rescoe serves on the Board of Directors and as Chairman of the Audit Committee of Global Crossing Limited.

        Gordon Wilson is our President and Chief Executive Officer, Galileo. Mr. Wilson was President and Chief Executive Officer of B2B International Markets for Cendant's Travel Distribution Services Division from April 2003 to August 2006. From 2002 to April 2003, Mr. Wilson was Managing Director of Galileo EMEA and Asia Pacific. From 2001 to 2002, Mr. Wilson was Managing Director of Galileo

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EMEA. Mr. Wilson also served as VP Global Customer Delivery based in Denver, CO, Managing Director of Galileo South Africa in Johannesburg, Managing Director of Galileo Portugal and Spain in Lisbon, and General Manager of Airline Sales and Marketing. Prior to joining Galileo International in 1991, which was acquired by Avis Budget in 2001, Mr. Wilson held a number of positions in the European airline and chemical industries.

        Steven Barnhart is our President and Chief Financial Officer of Orbitz Worldwide. Mr. Barnhart joined Orbitz in May 2003, and was a key member of the finance team that took Orbitz public. Following the November 2004 acquisition of Orbitz, he led the finance integration with Cendant Corporation's other online travel brands. Soon after, Mr. Barnhart was appointed as the consumer travel unit's Chief Financial Officer within Cendant's Travel Distribution Services division. In 2006, Mr. Barnhart was appointed President of Orbitz Worldwide. Prior to joining Orbitz, Mr. Barnhart held various finance positions over a 13-year period with PepsiCo and its Pepsi-Cola and Frito-Lay subsidiaries. In his final role, Mr. Barnhart was Director of Finance for a division of the Pepsi Bottling Group with over $1 billion in revenue and 5000 employees. Prior to PepsiCo, Mr. Barnhart was an economic analyst in New Jersey for the Brussels-based Polyurethanes division of ICI, and worked in the commercial lending field for American National Bank in Chicago.

        Kenneth S. Esterow is our President and Chief Executive Officer, GTA. Mr. Esterow was President and Chief Executive Officer of Travel Industry Services, Americas for Cendant's Travel Distribution Division from July 2005 to August 2006. From May 2003 to June 2005, Mr. Esterow was Executive Vice President, Supplier Services for Cendant's Travel Distribution Division. From September 2001 to April 2003, Mr. Esterow was Senior Vice President and Chief Development Officer of Cendant's Travel Distribution Division. Prior thereto, Mr. Esterow served as Senior Vice President, Strategic Development Group of Avis Budget, as well as was Senior Vice President and General Manager of AutoVantage.com, TravelersAdvantage.com and PrivacyGuard.com. Mr. Esterow joined Avis Budget in 1996 from Deloitte & Touche LLP, where he was a management consultant.

        Eric J. Bock is our Executive Vice President, General Counsel and Corporate Secretary. Mr. Bock was Executive Vice President, Law and Corporate Secretary of Cendant from May 2002 to August 2006 where he oversaw legal groups in multiple functions, including corporate matters, finance, mergers and acquisitions, corporate secretarial and governance, as well as Travelport since its inception in 2001. From July 1997 until December 1999, Mr. Bock served as Vice President, Legal and Assistant Secretary and was promoted to Senior Vice President in January 2000 and Corporate Secretary in May 2000. Mr. Bock joined HFS Incorporated in 1997. Prior to joining Cendant, Mr. Bock was an associate in the corporate group at Skadden, Arps, Slate, Meagher & Flom LLP in New York, New York.

        Patrick J. Bourke III is our Executive Vice President and Chief Reengineering Officer. Prior to joining us in July 2006, Mr. Bourke served as Chairman of the Board of Directors of Bid.com and has worked as a consultant to various venture capital and private equity portfolio companies. Starting in 1996, Mr. Bourke held numerous positions in sales and consulting services of Intersolv, which he joined as Vice President. From 1988 to 1996, Mr. Bourke held various management positions in insurance and marketing divisions of Perot Systems, Inc., where he managed strategic planning and was responsible for North American operations. Prior thereto, he served in various technical and management positions with Electronic Data System.

        Terence P. Conley is our Executive Vice President and Chief Administrative Officer. Mr. Conley was Executive Vice President, Human Resources and Corporate Services of Cendant from 2003 to August 2006, responsible for oversight of global human resources, facilities management, corporate real estate, events marketing and security functions. Prior thereto, Mr. Conley was Senior Vice President, Global Human Resources of Cendant since July 1999. Prior to joining Cendant, Mr. Conley spent nearly ten years with the PepsiCo organization in various roles, including Vice President of Human Resources at The Pepsi-Cola Company, Director of Human Resources with PepsiCo's Frito Lay division, Director of Human Resources for PepsiCo Corporate and Director of Human Resources with PepsiCo's KFC unit.

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        Jo-Anne Kruse is our Executive Vice President, Human Resources. Ms. Kruse was Executive Vice President, Human Resources of Cendant's Travel Distribution Division from January 2005 to August 2006. Ms. Kruse was Senior Vice President, Human Resources of Cendant's Travel Distribution Division from October 2001 to January 2005. Previously, Ms. Kruse was Vice President, Human Resources for Cendant from December 1999 to October 2001. Prior to joining Cendant, Ms. Kruse served in a variety of human resource positions at PepsiCo, Inc./Frito-Lay for five years. Prior thereto, Ms. Kruse served in various human resources positions at Bristol-Myers Squibb/Clairol and Chase Manhattan Bank.

        Paul C. Schorr IV ("Chip") is a Senior Managing Director in the Private Equity Group of The Blackstone Group. Mr. Schorr principally concentrates on investments in technology. Before joining Blackstone in 2005, Mr. Schorr was a Managing Partner of Citigroup Venture Capital in New York where he was responsible for the firm's technology/telecommunications practice. Mr. Schorr was involved in such transactions as Fairchild Semiconductor, ChipPAC, Intersil, AMI Semiconductor, Worldspan, NTelos and MagnaChip. He had been with Citigroup Venture Capital for nine years. Mr. Schorr received his MBA with honors from Harvard Business School and a BSFS magna cum laude from Georgetown University's School of Foreign Service. He is a member of the board of directors of AMI Semiconductor, Inc. and MagnaChip. Mr. Schorr is also a member of the board of Jazz at Lincoln Center.

        Martin Brand is a Principal in the Private Equity Group of The Blackstone Group. Mr. Brand joined Blackstone's London office in 2003 and transferred to Blackstone's New York office in 2005. Since joining Blackstone, Mr. Brand has been involved in the execution of the firm's direct investments in SULO, Kabel BW, Primacom, New Skies, CineUK, NHP and Travelport. Before joining Blackstone, Mr. Brand was a consultant with McKinsey & Company. Prior to that, Mr. Brand was a derivatives trader with the FICC division of Goldman, Sachs & Co. in New York and Tokyo. Mr. Brand received his BA/MA in Mathematics and Computation, First Class Honours, from Oxford University and his MBA from Harvard Business School.

        William Griffith is a General Partner of Technology Crossover Ventures, or TCV. Mr. Griffith joined TCV as a Principal in 2000 and became a General Partner in 2003. Mr. Griffith brings over eleven years of financing experience to TCV. Mr. Griffith has both led and co-led investments in 2Wire, Continuous Computing, InPhonic, Lynk Systems (acquired by Royal Bank of Scotland), Paciolan, Fandango, Techwell, Egenera, INFOnxx, Liquidnet, Motricity, Nextag, Riskmetrics, Whitepages, Oak Pacific and Adknowledge. Mr. Griffith currently serves on the Boards of Directors of 2Wire, CCPU, Motricity, Paciolan, Whitepages and Adknowledge and is a board observer at Capital Access. Before joining TCV, Mr. Griffith was an associate at The Beacon Group, a private equity firm that was acquired by JP Morgan Chase in 1999. Prior to that, Mr. Griffith was an investment banking analyst at Morgan Stanley. Mr. Griffith has also worked at or consulted for a number of private technology companies, including Tellme Networks and Quantumshift.

        David L. Weinberg has been a Senior Operating Partner at One Equity Partners in New York since 2001. From 1998 to 2000, Mr. Weinberg served as a Managing Director for Allegro Capital Ltd. in London. From 1995 to 1998, Mr. Weinberg served as a Managing Director at Nippon Credit International, Ltd. in London and the Chief Executive Officer of the securities subsidiary of the Nippon Credit Bank. From 1988 to 1994, Mr. Weinberg was a Partner at Eastbridge Capital, Inc. in New York. From 1980 to 1988, Mr. Weinberg served in varying senior positions at EF Hutton, Inc. and Citicorp, both in New York.

        Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships between our directors and executive officers.

Compensation Committee Interlocks and Insider Participation

        As a privately-held company, we are not required to have independent directors on our Board of Directors. None of our directors is independent.

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Board Composition

Committees of the Board

        Our board of directors has an audit committee, a compensation committee and an executive committee. Our board of directors may also establish from time to time any other committees that it deems necessary and advisable. None of the directors in these committees are independent directors. See "Certain Relationships and Related Party Transactions—Agreements Between Our Company and the Sponsors."

    Audit Committee

        Our audit committee is comprised of Messrs. Schorr, Brand and Griffith. Mr. Brand is the Chairman of the Audit Committee. The audit committee is responsible for assisting our board of directors with its oversight responsibilities regarding: (i) the integrity of our financial statements; (ii) our compliance with legal and regulatory requirements; (iii) our independent registered public accounting firm's qualifications and independence; and (iv) the performance of our internal audit function and independent registered public accounting firm.

    Compensation Committee

        Our Compensation Committee is comprised of Messrs. Schorr, Brand and Griffith. Mr. Schorr is the Chairman of the Compensation Committee. The compensation committee is responsible for determining executive base compensation and incentive compensation and approving the terms of stock option grants pursuant to our equity incentive plans.

Limitations of Liability and Indemnification Matters

        Our corporate by-laws provide that, to the fullest extent permitted by law, every current and former director, officer or other legal representative of our company shall be entitled to be indemnified by our company against judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees and disbursements) resulting from any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including, but not limited to, an action by or in the right of the company to procure a judgment in its favor, by reason of the fact that such person is or was a director or officer of the company, or is or was serving in any capacity at the request of the company for any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. Persons who are not our directors or officers may be similarly indemnified in respect of service to the company or to any other entity at the request of the company to the extent our Board of Directors at any time specifies that such persons are entitled to indemnification.

        To the fullest extent permitted by applicable law, we or one or more of our affiliates plan to enter into agreements to indemnify our directors, executive officers and other employees. Any such agreements would provide for indemnification for related expenses including attorneys' fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these provisions and agreements are necessary to attract and retain qualified persons as our directors and executive officers.

        As of the date of this prospectus, we are not aware of any pending litigation or proceeding involving any director, officer, employee or agent of our company where indemnification will be required or permitted. Nor are we aware of any threatened litigation or proceeding that might result in a claim for indemnification.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

    Introduction

        Both prior to and following our Acquisition by an affiliate of Blackstone, our executive compensation plans were and are designed to attract and retain talented individuals and to link the compensation of those individuals to our performance. Prior to the Acquisition, Cendant, of which we were a part, determined the compensation of our executives, including establishing certain incentives for our senior executives to ensure retention of these key executives throughout the process leading up to our sale.

        Following the Acquisition, we adjusted the compensation of our executives to reflect our status as a newly-independent company. Specifically, we entered into the equity arrangements described below, and we entered into employment agreements with most of our senior executives, which standardized the employment terms for these individuals and reflected the financial terms, such as the base salary and annual target bonus, in light of their new roles in Travelport.

        We have, from time to time, used market data provided by Towers Perrin and Hewitt Associates to obtain comparative information about the levels and forms of compensation that companies of comparable size to us award to executives in comparable positions. We use this data to ensure that our executive compensation program is competitive and that the compensation we award to our senior executives is generally at the midpoint of that awarded to senior executives in similar positions at similarly-sized companies. In addition, we consult, from time to time, with representatives of Blackstone regarding the compensation practices of its affiliates.

        On September 26, 2006, our board of directors approved the terms of the employment agreements of most of our executive officers. Our board of directors also formed a compensation committee, which is comprised of Mr. Schorr, Mr. Brand and Mr. Griffith and is chaired by Mr. Schorr. The purpose of the Compensation Committee is to, among other things, determine executive compensation and approve the terms of our equity incentive plans.

    Compensation of Our Named Executive Officers

        Our Named Executive Officers for 2006 are Jeff Clarke, our President and Chief Executive Officer, Michael Rescoe, our Executive Vice President and Chief Financial Officer, Gordon Wilson, our President and Chief Executive Officer, Galileo, Kenneth Esterow, our President and Chief Executive Officer, GTA, Jo-Anne Kruse, our Executive Vice President, Human Resources, Mitch Truwit, our former Chief Executive Officer, Orbitz Worldwide, and Daryl Raiford our former Chief Financial Officer. Mr. Truwit and Mr. Raiford no longer serve as our executive officers.

        In the tables below, we include (1) compensation from Cendant to employees who worked solely for the Travelport businesses of Cendant prior to the Acquisition and (2) compensation from us following the Acquisition. We have excluded all compensation from Cendant to employees who did not work solely for the Travelport businesses of Cendant prior to the Acquisition. As a result of this determination, the Named Executive Officers included in the tables are not necessarily reflective of our current most highly paid executive officers.

    Executive Compensation Objectives and Philosophy

        As a privately-held company that is part of Blackstone's private equity portfolio, our primary executive compensation objective is to attract and retain top talent from within the highly competitive global marketplace so as to maximize shareholder value. We seek to recruit and retain individuals who have demonstrated a high level of expertise and who are market leaders in our unique, technology-based industry. As a result of the industry's historical and current developments, cash and other compensation are at the high end of the competitive range.

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        Our highly competitive compensation program is composed of four principal components, all of which are identified in the Summary Compensation Table below:

    salary;

    annual incentive compensation (bonus awards);

    long-term incentive compensation (in the form of restricted equity and/or restricted cash awards); and

    other limited perquisites and benefits.

        Our strategy uses cash compensation and perquisites to attract and retain talent and variable cash and long-term incentives to ensure a performance-based delivery of pay that aligns, as much as possible, our Named Executive Officers' rewards with our shareholders' interests and takes into account competitive factors and the need to attract talented individuals.

    Other Considerations

        We also consider individual circumstances related to each executive's retention. For example, when Mr. Clarke was hired by Cendant as our chief executive officer to guide us through either the completion of the sale of the Travelport businesses to a third party or through an initial public offering, he forfeited certain economic incentives associated with his previous employment. As a result, Cendant provided Mr. Clarke with a compensation package designed to compensate Mr. Clarke for the awards he had forfeited. The level of his compensation was also set by Cendant to be commensurate with the compensation of other similarly situated chief executives in the industry and within Cendant. Likewise, in connection with the Acquisition, Mr. Clarke agreed to amend certain terms of his employment agreement in light of the fact that we would continue to be a privately-held company, and we provided Mr. Clarke with a compensation package that was comparable in economic terms to his former compensation package at Cendant and reflected his enhanced responsibility due to our sale by Cendant. The specific terms of Mr. Clarke's employment agreement are set forth below under "—Employment Agreements."

        In addition, the other Named Executive Officers, with the exception of Mr. Rescoe, who joined us following the Acquisition, and Mr. Truwit, who serves as an advisor to our board of directors pursuant to a consulting agreement, similarly received compensation packages that reflect their new responsibilities since the Acquisition.

        Salary.    Base salaries for Named Executive Officers reflect each executive's level of experience, responsibilities and expected future contributions to our success, as well as market competitiveness. The base salaries currently in effect are in most cases increased from the base salaries established by Cendant prior to the Acquisition. Base salaries are specified in the individual employment agreements, which dictate the individual's base salary for so long as the contract specifies, as described more fully below under "—Employment Agreements." We expect to review base salaries on an annual basis and we expect to consider factors such as individual and company performance and the competitive environment in our industry in determining whether salary adjustments are warranted.

        Bonuses.    We pay two different types of bonuses:

      Discretionary Bonus. In 2006, we awarded discretionary signing, retention and sale bonuses. While these bonuses related to our particular circumstances in 2006, we may elect to pay additional discretionary bonuses from time to time in the future.

      Annual Incentive Compensation (Bonus). We have developed an annual cash bonus program to align executives' goals with our earnings growth objectives for the applicable year. The target payment for each of our current Named Executive Officers is specified in each Named Executive Officer's employment agreement entered into in 2006 and ranges from 100% to 150% of base salary. These bonuses are based primarily upon the achievement of an annual EBITDA target established by our Board of Directors within the first three

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        months of the applicable fiscal year. The Travelport EBITDA target for 2006 was $554.8 million, broken down to targets of $275.6 million in EBITDA for the first half of 2006 and $279.2 million in EBITDA for the second half of 2006. Our Board of Directors has established an EBITDA target of $620 million for the 2007 fiscal year, broken down to targets of $290 million in EBITDA for the first half of 2007 and $330 million in EBITDA for the second half of 2007. As these awards are subject to the attainment of performance criteria, they may be paid, to the extent earned or not earned, at, below or above target levels (with a maximum of 350% of the target level for Mr. Clarke). In 2007, the Board determined that, for 2007, executive officers other than Mr. Clarke will have a maximum award of 200% of base salary. The maximum award for Mr. Clarke will continue to be 350% of target level. The amounts earned for 2006 pursuant to these arrangements are set forth in the Summary Compensation Table under the "Non-Equity Compensation Incentive Plan" column.

        Long-Term Incentive Compensation.    The principal goal of our long-term incentive plans is to align the interests of our executives and shareholders.

      Option awards. We do not currently utilize options as part of our executive compensation program.

      Stock Partnership. We provide long-term incentives through our equity incentive plan, which utilizes different classes of equity and is described further below under "—Our Equity Incentive Plan." Under the terms of the plan, we may grant equity incentive awards in the form of Class A-2 Units, Restricted Equity Units, Class B Units, Class C Units or Class D Units of our ultimate parent, TDS Investor (Cayman) L.P., a limited partnership, to officers, employees, non-employee directors or consultants.

        Each Restricted Equity Unit entitles its holder to receive one Class A-2 Unit at a future date, subject to certain vesting conditions. The Class A-2 Units are interests in a limited partnership and have economic characteristics that are similar to those of shares of common stock in a corporation.

        The Class B, C and D Units are profits interests that are tied to the following targets more fully described below under "—Our Equity Incentive Plan." Table and which enable the holders to participate in our future growth after the date the interests are granted:

      Class B Units vest 25% annually over four years. Upon a "change of control" while the executive is employed, all unvested Class B profits interests will vest in full.

      Class C Units will vest upon a "liquidity event" where Blackstone earns a return of 200% of its invested capital.

      Class D Units will vest upon a "liquidity event" where Blackstone earns a return of 300% of its invested capital.

        Pension and Non-Qualified Deferred Compensation.    None of our Named Executive Officers receives pension benefits. We do, however, provide for limited deferred compensation arrangements for executives.

        All Other Compensation.    We have a limited program granting perquisites and other benefits to our executive officers.

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Summary Compensation Table

        The following table contains compensation information for our Named Executive Officers for the fiscal year ended December 31, 2006. Note that in establishing our Named Executive Officers, we did not consider the compensation earned by Cendant employees who were not previously part of the Travelport, as they did not receive compensation from the Travelport businesses of Cendant prior to the Acquisition. Mr. Raiford, our former Chief Financial Officer, is still employed by us but no longer serves as an executive officer. Mr. Truwit, the former President and Chief Executive Officer of Orbitz Worldwide, is no longer employed with us but has entered into an agreement to serve as an advisor to our board of directors.

Name and
Principal
Position

  Salary
($)

  Bonus(1)
($)

  Stock Awards(2)
($)

  Non-Equity
Compensation
Incentive Plan
($)

  All Other
Compensation
($)

  Total
($)


Jeff Clarke, President, Chief Executive Officer and Director

 

653,846

 

7,005,000

(3)

7,003,098

(4)

980,769

(5)

115,069

(6)

15,757,782

Daryl Raiford, Former Executive Vice President and Chief Financial Officer

 

457,564

 

1,392,149

 

n/a

 

410,650

 

860,073

(7)

3,120,436

Michael Rescoe, Executive Vice President and Chief Financial Officer

 

53,846

(8)

0

 

2,842,207

 

250,000

(8,9)

16,791

(10)

3,162,844

Gordon Wilson, President and CEO, Galileo

 

604,853

 

1,903,638

 

4,156,915

 

510,696

 

185,627

(11)

7,361,729

Kenneth Esterow, President and Chief Executive Officer, GTA

 

380,671

 

1,788,125

(12)

3,315,971

 

417,812

 

70,707

(13)

5,973,286

Jo-Anne Kruse, Executive Vice President, Human Resources

 

311,057

 

1,000,000

 

1,391,598

 

260,385

 

68,515

(14)

3,031,555

Mitch Truwit, Former President and Chief Executive Officer, Orbitz Worldwide

 

407,115

 

1,575,000

(15)

n/a

 

251,346

 

50,829

(16)

2,284,285

        (1)   Amounts included in this column reflect signing, retention and sale bonuses awarded in 2006. The amounts in this column include certain sale bonuses awarded in 2006 that are payable in January and August 2007 only to awardees who are still employed with us in good standing at that time. In addition, cash bonuses that were rolled over to purchase equity are included.

        (2)   Amounts included in this column reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2006 in accordance with FAS 123R in connection with awards of restricted equity units, Class B Units, Class C Units and Class D Units. Assumptions used in the calculation of these amounts are included in footnote 18, "Equity—Based Compensation," to the financial statements.

        (3)   Includes a $2,100,000 restricted cash award granted to Mr. Clarke to compensate him for compensation and benefits forgone when he left his previous employer. Additionally, a sign on bonus of $1,500,000 and a $3,405,000 retention bonus connected to his original employment terms upon hire by Cendant are included.

        (4)   Includes $2,295,000 in lieu of which Mr. Clarke received rollover restricted equity units.

        (5)   Includes $250,000 in lieu of which Mr. Clarke received restricted equity units.

        (6)   Includes relocation and housing benefits of $14,349. As of the date hereof, there are some outstanding expenses related to 2006 that have yet to be reconciled and paid. Also includes deferred income match of $91,145.

        (7)   Includes a severance payment of $800,000, matching 401(k) contributions of $12,422, deferred income company contributions of $8,239, financial planning benefits of $1,625, tax assistance of $6,273 and car benefits of $19,081.

        (8)   Reflects partial year employment.

        (9)   Includes $250,000 in lieu of which Mr. Rescoe received restricted equity units.

        (10) Includes relocation and housing benefits of $15,453.

        (11) Includes company matching pension contributions of $98,807, financial planning benefits of $9,795, car benefits of $57,235, tax assistance of $2,037 and travel benefits of $9,796. All amounts expressed for Mr. Wilson in this prospectus are paid in British pounds and have been converted to U.S. dollars at the exchange rate as in effect on December 31, 2006 of 1.95910 British pounds to 1 U.S. dollar.

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        (12) Includes $100,000 in lieu of which Mr. Esterow received restricted equity units, as well as a one-time special payment of $400,000.

        (13) Includes matching 401(k) contributions of $13,200, deferred compensation employer contributions of $24,750, car benefits of $13,177 and tax assistance of $3,690.

        (14) Includes matching 401(k) contributions of $13,788, deferred compensation employer contributions of $18,991, financial planning benefits of $2,438, tax assistance of $10,328 and car benefits of $11,670.

        (15) Includes $500,000 in lieu of which Mr. Truwit received restricted equity units.

        (16) Includes matching 401(k) contributions of $3,956, deferred compensation employer contributions of $15,081, financial planning benefits of $1,155 and car benefits of $15,927.

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Grants of Plan-Based Awards During 2006

 
   
   
  Estimated Potential Payouts
Under Non-Equity Incentive
Plan Awards

  Estimated Future Payouts
Under Equity
Plan Awards

  All Other
Stock
Awards:
Number of
Shares of
Stock Units
(#)

  Grant Date
Fair Value
of Stock
and Option
Awards
($)

 
Name

  Type of
Award

  Grant Date
  Threshold
($)

  Target
($)

  Maximum
($)

  Threshold
(#)

  Target
(#)

  Maximum
(#)

 
Jeff Clarke, President, Chief Executive Officer and Director   Non-equity incentive plan       $ 980,769   $ 980,769   $ 2,971,154                        
    REUs   10/13/06                                 2,295,000 (1) $ 2,295,000 (2)
    REUs   10/13/06                                 250,000 (3) $ 250,000  
    REUs   10/13/06                                 4,708,098   $ 4,708,098  
    Class B Units   10/13/06                                 3,059,361   $ 1,499,087  
    Class C Units   10/13/06                         3,059,361           $ 1,315,525  
    Class D Units   10/13/06                         3,059,061           $ 1,162,557  
Daryl Raiford, Former Executive Vice President and Chief Financial Officer   Non-equity incentive plan         0   $ 410,650   $ 513,313                        
Michael Rescoe, Executive Vice President and Chief Financial Officer   Non-equity incentive plan         0   $ 250,000   $ 312,500                        
    REUs   10/13/06                                 250,000 (4) $ 250,000  
    REUs   10/13/06                                 1,506,591   $ 1,506,591  
    Class B Units   10/13/06                                 1,027,397   $ 503,425  
    Class C Units   10/13/06                         1,027,397           $ 441,781  
    Class D Units   10/13/06                         1,027,397           $ 390,411  
Gordon Wilson, President and CEO, Galileo   Non-equity incentive plan         0   $ 510,696   $ 638,370                        
    REUs   10/13/06                                 2,504,708   $ 2,504,708  
    Class B Units   10/13/06                                 1,270,928   $ 622,755  
    Class C Units   10/13/06                         1,270,928           $ 546,499  
    Class D Units   10/13/06                         1,270,928           $ 482,953  
Kenneth Esterow, President and Chief Executive Officer, GTA   Non-equity incentive plan         0   $ 417,812   $ 522,265                        
    REUs   10/13/06                                 100,000 (5) $ 100,000  
    REUs   10/13/06