Equity-Based Compensation

12 Months Ended

Dec. 31, 2011

Equity-Based Compensation [Abstract]

Equity-Based Compensation

18.    Equity-Based Compensation

Travelport Equity-Based Long-Term Incentive Program

Partnership Restricted Equity Units – Class A-2

TDS Investor (Cayman) L.P., the partnership that indirectly owning a majority shareholding in the Company (the “Partnership”), has an equity-based, long-term incentive program for the purpose of retaining certain key employees. Under several plans within this program, key employees have been granted restricted equity units and profit interests in the Partnership. The board of directors of the Partnership has approved the grant of up to approximately 120 million restricted equity units for this incentive plan. The grant date fair value of each award under a plan within the program is based on a valuation of the total equity of the Partnership at the time of each grant of an award.

In May 2009, the board of directors of the Partnership authorized the grant of 33.3 million restricted equity units under the 2009 Travelport Long-Term Incentive Plan. Of these, 8.2 million and 8.4 million restricted equity units were recognized for accounting purposes as being granted in May 2009 and March 2010, respectively. The grant date fair value of these awards was $1.10 per unit and $1.13 per unit for the May 2009 and March 2010 grants, respectively. In May 2011, there was an acceleration in the vesting of 1.6 million restricted equity units under the 2009 Travelport Long-Term Incentive Plan, with a fair value of $0.47 per unit, due to the sale of the GTA business. As of December 31, 2011, there are 14.7 million restricted equity units authorized for grant under the 2009 Travelport Long-Term Incentive Plan, which will be recognized as granted for accounting purposes over the subsequent period through March 31, 2013. The level of award vesting each year is dependent upon continued service and performance measures of the business as established by the board of directors of the Partnership.

Between August and November 2010, the board of directors of the Partnership authorized the grant of 10.4 million restricted equity units under the 2010 Travelport Long-Term Incentive Plan. Of these, 2.6 million restricted equity units were recognized for accounting purposes as being granted in the year ended December 31, 2010 at a grant date fair value of $1.10 per unit. In May 2011, there was an acceleration in the vesting of 0.1 million restricted equity units under the 2010 Travelport Long-Term Incentive Plan, with a fair value of $0.47 per unit, due to the sale of the GTA business. During the year ended December 31, 2011, the board of directors of the Partnership authorized the grant of 0.8 million restricted equity units under the 2010 Travelport Long-Term Incentive Plan, but none of these restricted equity units have been recognized for accounting purposes as being granted. As of December 31, 2011, there are 7.4 million restricted equity units authorized for grant under the 2010 Travelport Long-Term Incentive Plan, which will be recognized as granted for accounting purposes over the subsequent period through August 1, 2014. The level of award vesting each year is dependent upon continued service and performance measures of the business as established by the board of directors of the Partnership.

During the year ended December 31, 2011, the board of directors of the Partnership authorized the grant of a further 0.5 million restricted equity units, which will be recognized as granted for accounting purposes over the period through August 1, 2015. The level of award vesting each year is dependent upon continued service and performance measures of the business as established by the board of directors of the Partnership.

During the year ended December 31, 2011, the Company completed net share settlements for 2.2 million restricted equity units. These net share settlements were in connection with taxes incurred on the conversion to Class A-2 units of restricted equity units during 2011, creating taxable income for employees of the Company. The Company agreed to pay these taxes on behalf of the employees in return for the employees returning an equivalent value of restricted equity units.

During the year ended December 31, 2011, 5.5 million restricted equity units were forfeited based upon performance and a further 0.5 million restricted equity units were forfeited due to departures, including 0.2 million due to the sale of the GTA business.

Worldwide Equity Plan

In December 2011, Travelport Worldwide Limited (“Worldwide”), a parent company indirectly owning 100% of the Company, introduced a new equity-based long-term incentive program (the “Worldwide Equity Plan”). Under this plan, in December 2011, the board of directors of Worldwide authorized the grant of 2.6 million shares and 0.8 million restricted share units in Worldwide to key employees. All of the shares and restricted share units were recognized as granted for accounting purposes, with the shares vesting immediately and the restricted share units vesting on January 1, 2014, dependent upon continued service. The grant date fair value of each award under the Worldwide Equity Plan is based on a valuation of the total equity of Worldwide at the time of each grant of an award. During December 2011, the Company completed net share settlements for 0.7 million shares in connection with employee taxable income created upon issuance. The Company agreed to pay these taxes on behalf of the employees in return for the employees returning an equivalent value of shares.

The activity of all the Company’s equity award programs is presented below:

	Partnership					Worldwide
	Restricted Equity Units
	(Class A-2)					Shares					Restricted Share Units
	Number of Shares			Weighted Average Grant  Date Fair Value		Number of Shares			Weighted Average Grant  Date Fair Value		Number of Shares		Weighted Average Grant  Date Fair Value
Balance as of January 1, 2009		82.1		$	2.44		—			—		—		—
Granted at fair market value		8.2		$	1.10		—			—		—		—
Net share settlement and repurchases		(0.2	)	$	2.24		—			—		—		—
Forfeited		(0.1	)	$	1.96		—			—		—		—
Balance as of December 31, 2009		90.0		$	2.32		—			—		—		—
Granted at fair market value		11.0		$	1.12		—			—		—		—
Forfeited		(1.5	)	$	1.26		—			—		—		—
Balance as of December 31, 2010		99.5		$	2.20		—			—		—		—
Granted at fair market value		1.7		$	0.47		2.6		$	1.85		0.8	$	1.85
Net share settlement		(2.2	)	$	0.88		(0.7	)	$	1.85		—		—
Forfeited		(6.0	)	$	1.12		—			—		—		—
Balance as of December 31, 2011		93.0		$	2.27		1.9		$	1.85		0.8	$	1.85

During 2011, the Company recorded non-cash equity compensation expense of $6 million, of which $5 million related to awards under the Worldwide Equity Plan, and $1 million related to the Partnership restricted equity units as a result of an acceleration in the vesting of grants under previous years’ programs. This $1 million charge was included within the gain from disposal of discontinued operations in the Company’s consolidated statement of operations. The Company expects the future equity-based compensation expense in relation to awards recognized for accounting purposes as being granted as of December 31, 2011 will be approximately $1 million in the year ending December 31, 2012.

Compensation expense for the year ended December 31, 2011 resulted in a credit to equity on the Company’s consolidated balance sheet of $6 million, which was offset by a decrease of approximately $3 million due to net share settlements as the cash payment of the taxes was effectively a repurchase of previously granted restricted equity units and shares.

For the year ended December 31, 2010, the Company recorded equity-based compensation expense of $5 million, of which $1 million related to awards under the 2010 Travelport Long-Term Incentive Plan and $4 million related to awards under the 2009 Travelport Long-Term Incentive Plan.

For the year ended December 31, 2009, the Company recorded equity-based compensation expense of $10 million, of which $9 million related to grants made in 2009 and $1 million related to grants under previous years’ programs.