Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

3.    Discontinued Operations

On May 5, 2011, the Company completed the sale of the GTA business to Kuoni. The Company realized a gain of $312 million, net of tax, on the transaction. Proceeds from the sale, together with existing cash, were used to make a $655 million early repayment of indebtedness outstanding under the Company’s senior secured credit agreement. The gain from the disposal of the GTA business and the results of operations of the GTA business are presented as discontinued operations in the Company’s consolidated statements of operations and consolidated statements of cash flows. The assets and liabilities of the GTA business are classified as discontinued operations on the Company’s consolidated balance sheets for periods presented prior to the sale.

Summarized statements of operations data for the discontinued operations of the GTA business, excluding intercompany transactions, are as follows:

		From January 1,			From January 1,			From January 1,
(in $ millions)	From January 1, 2011 to May 5, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009
Net revenue		76			294			267
Operating expenses		86			254			266
Impairment of goodwill, intangible assets and other non-current assets		—			—			833
Operating (loss) income before income taxes		(10	)		40			(832	)
Benefit (provision) for income taxes		4			(13	)		91
(Loss) income from discontinued operations, net of tax		(6	)		27			(741	)
Gain from disposal of discontinued operations, net of tax of $0		312			—			—
Total income (loss) from discontinued operations, net of tax		306			27			(741	)

During 2009, the Company observed indicators of potential impairment related to the GTA business. As a result, an impairment test was performed. In estimating the fair value of the reporting unit, the Company used the income approach. The income approach, which results in a Level 3 fair value, is based on discounted expected future cash flows from the business. As a result of this testing, the Company determined that additional impairment analysis was required as the carrying value exceeded the fair value. The estimated fair value of GTA was allocated to the individual fair value of the assets and liabilities of GTA as if GTA had been acquired in a business combination, which resulted in the implied fair value of the goodwill. The allocation of the fair value required the Company to make a number of assumptions and estimates about the fair value of assets and liabilities where the fair values were not readily available or observable.

As a result of this assessment, the Company recorded an impairment charge of $833 million during the year ended December 31, 2009, of which $491 million related to goodwill, $87 million related to trademarks and tradenames and $255 million related to customer relationships. A tax benefit of $96 million was recognized as a result of the impairment charge in the year. Accordingly, the non-current deferred income tax liability was reduced by $96 million. This included $72 million related to the impairment of customer relationships and $24 million related to the impairment of trademarks and trade names. There was no tax impact arising from the impairment of the goodwill. The net charge of $737 million is included within the (loss) income from discontinued operations, net of tax line item in the consolidated statements of operations.

The GTA business had various commercial agreements with Orbitz Worldwide, and under those commercial agreements, it earned approximately $22 million, $23 million and $39 million of revenue and recorded approximately $20 million, $21 million and $36 million of operating expenses in the period from January 1, 2011 through May 5, 2011 and the years ended December 31, 2010 and 2009, respectively.

Summarized balance sheet data for the discontinued operations of the GTA business, excluding intercompany balances, is as follows:

(in $ millions)	December 31, 2010
Cash and cash equivalents		148
Accounts receivable		187
Other current assets		20
Current assets		355
Goodwill		291
Trademarks and tradenames		99
Other intangible assets, net		279
Other non-current assets		42
Total assets		1,066
Accounts payable		111
Accrued expenses and other current liabilities		335
Current liabilities		446
Deferred income taxes		96
Other non-current liabilities		13
Total liabilities		555

In connection with the sale of the GTA business to Kuoni, the Company agreed to indemnify Kuoni up to May 2017 for certain potential tax liabilities relating to pre-sale events. An estimate of the Company’s obligations under those indemnities is included within other non-current liabilities on the Company’s consolidated balance sheet as of December 31, 2011.

In connection with the sale of the GTA business, the Company entered into a transitional services agreement with Kuoni on May 5, 2011 in order to facilitate the orderly transition of certain administrative functions. This agreement mainly covers human resources and payroll related services within the United States. The term for most transitional services is less than twelve months, and the income and cash flows associated with these activities are not expected to be significant to the future results of operations or cash flows of the Company.