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WILLIAMS CAPITAL RESEARCH

Equity Research Orbitz Worldwide, Inc.(OWW)


Company Update Current Rating: Market Perform

January 19, 2011 Initiating Coverage on Orbitz with a


Market Perform rating
Internet Analyst: Brian Bolan 773-413-0285; Bolan@willcap.com
Trading Desk: NY 800-924-1511 CT 800-688-6349

OWW Mkt Perform Fiscal Year Curr. Q. 1 yr ago Q Next 4 Quarters


Price $5.30 Key Data
Price Target $5 (Rev in $M) FY09 FY10E FY11E 12/31/2010 12/31/2009 3/31/2011 6/30/2011 9/30/2011 12/31/2011
52 Week High $7.65 Rev prev.
52 Week Low $3.56 Rev new 737.65 777.42 846.6 202.29 174.69 202.11 208.11 214.25 222.13
NTM P/E 23.74 EPS prev.
Market Cap $539.15M EPS new 0.06 0.21 0.18 0.01 0.21 0.04 0.06 0.1 0.03
Ent Value $896.16M P/E NM 25.24 29.44
Shares Outstanding 102.30M
Avg Daily Volume 268,956
Cash/Share 1.36
BV/Share 2.59

Overview

What started out as a potential anti-trust case when first proposed by the five major carriers has moved on to focus
on the hotel aspect of the travel industry. With a broad array of brands, Orbitz Worldwide Inc. offers customers
travel services from several major suppliers.

With a complex capital structure and significant debt load the company is often overlooked by investors in the
travel space. We believe that with solid execution in the remainder of 2010, the company will be profitable. This
could cause a number of investors to take a second look at one of the smaller players in the space.

We initiate coverage of Orbitz with a neutral rating and $5 price target.

Company Background

Founded in 1999 by five major airlines that invested $145M in an effort to derail the success of Travelocity,
Orbitz Worldwide Inc. (Orbitz) officially launched in June of 2001. The company went public in 2003 and was
subsequently purchased by Cendant in November of 2004. After the sale of Cendant’s travel properties
(Travelport) to BlackStone Group L.P. (BX, $15.31 – Not rated) in 2006 the company was again sent into the
market in a July 2007 IPO. Travelport still holds approximately 60% of Orbitz shares.

PLEASE SEE PAGES 13-16 FOR IMPORTANT DISCLOSURES, REG AC ANALYST CERTIFICATION AND DISCLAIMERS
Analyst: Brian Bolan 773.413.0285 Bolan@willcap.com January 19, 2011
WILLIAMS CAPITAL RESEARCH PAGE 2 January 19, 2011

Orbitz has several brands for distinct segments of the travel market.

Orbitz – Orbitz.com allows consumers to search and book travel services provided by Airlines, Hotels and rental
car companies. Users can purchase packages of services in order to obtain a better rate.

CheapTickets - U.S. travel website that focuses on value-conscious customers.

The Away Network is a series of travel content websites that includes Away.com, Trip.com, GORP.com,
GORPTravel.com and Lodging.com. The Away Network also hosts, maintains and develops outsideonline.com

Orbitz for Business is a full-service global travel management company that provides online booking and call
center support to a broad array of organizations, ranging from small businesses to Fortune 500 companies.

ebookers offers customers the ability to book an array of travel products and services through websites in Austria,
Belgium, Denmark, Finland, France, Germany, Ireland, the Netherlands, Norway, Sweden, Switzerland and the
U.K.

HotelClub, Accomline and Asia-hotels are hotel-only websites that offer customers the opportunity to book hotel
stays in over 130 countries.

RatesToGo website offers customers the opportunity to book hotel stays at last-minute discounts.

Business Models Merchant vs. Retail

Merchant Model

The merchant model provides customers the ability to book air, hotel, car, destination services reservations and
dynamic vacation packages. Hotel transactions comprise the majority of merchant bookings. The company
generates revenue for services based on the difference between the total amount the customer pays for the travel
product and the negotiated net.

Retail Model

The retail model provides customers the ability to book air, hotel, cruise and car rental reservations. Air
transactions comprise the majority of retail bookings. The company earns commissions from suppliers for airline
tickets, hotel stays, car rentals and other travel products and services booked on our websites.

Traffic to Orbitz

The clickstream for Orbitz is provided below.

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 3 January 19, 2011

Exhibit 1

Upstream Sites
Which sites did users visit immediately preceding orbitz.com?

15.89% google.com
6.13% expedia.com
5.36% travelocity.com
4.67% priceline.com
4.65% kayak.com
4.41% yahoo.com
3.37% facebook.com
3.07% tripadvisor.com
2.51% hotwire.com
2.08% hotels.com
Source: Alexa.com

This table shows a sizeable dependence on the major search engines and a surprisingly high number of referrals
from properties that compete directly with Orbitz. We believe that this suggests that consumers are looking at
multiple sources for pricing information. It also shows the total reach of Expedia as its sites dominate this list.

Management

Barney Harford, President and Chief Executive Officer and also serves as a director and as a member of the
executive committee of the board of directors. Prior to joining the Company in January 2009, Mr. Harford served
in a variety of roles at Expedia, Inc. from 1999 to 2006. He holds an M.B.A. from INSEAD and a Master of Arts
degree in Natural Sciences from Clare College, Cambridge University.

Marsha C. Williams, Senior Vice President, Chief Financial Officer, having served in that capacity since July
2007. From August 2002 to February 2007, Ms. Williams served as Executive Vice President and Chief Financial
Officer of Equity Office Properties Trust, the nation’s largest owner and operator of office buildings. Ms.
Williams earned an M.B.A. from the University of Chicago Graduate School of Business and a Bachelor of Arts
degree from Wellesley College.

Financial Statement Analysis

Revenue was down slightly in 1Q10 vs. the same period a year ago, a trend that persisted throughout the entire
calendar year of 2009. We expect that the company will post its first year over year increase in revenue in 2Q10.

Challenges still present themselves to Orbitz as consolidation in airlines (United and Continental) (UAL, $25.02 –
Not rated) and in the rental car business mean less potential clients for the company. Problems in the airline
sector include the removal of Delta (DAL, $11.70 – Not rated) and American Airlines (AMR, $8.29 – Not rated)

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 4 January 19, 2011

from its listings. We believe that other airlines may follow the lead of Delta and American as Orbitz has
highlighted the possibility that consumer can save money with two one way trips from different carriers as
opposed to standard round trip purchases.

Balance Sheet

At the end of 3Q10, Orbitz had more than $139 million in cash and equivalents and short term
investments on the balance sheet. This is an increase of 14% from the year ago period when the
company had approximately $122 million. At the end of the first quarter of 2010 the company has
more than $162 million in cash, similarly a decrease of 14% from the high point of the year.

At the end of 3Q10, Priceline.com had approximately $485 million in long term debt. We should note that long
term debt has decreased approximately 31% from the year ago period as excess cash flow was used to repay debt.

Financial Outlook

As airlines increase prices for due to higher oil prices, we believe that consumers will continue to look to OTA’s
for discounts and optimal rates. This bodes well for Orbitz despite the expected weakness in European travel
market. We believe that there could be upside to our below consensus 2011 EPS estimate of $0.18.

Investment Thesis
The online travel agent (OTA) industry has four major players that compete for the business of a highly
fragmented hotel industry as and to a lesser extent the airline industry and rental car industry. Airlines sales
provide large gross dollar bookings, but contribute little to the bottom line. The rental car industry, while possibly
constrained by supply, has the exact opposite problem the airlines have in that their gross bookings are very small.
The savior of the sector is the hotel industry which is highly fragmented and the biggest contributor to net income
of the three major suppliers.

We believe that hotel bookings will continue to drive the OTA industry due to the consolidation in the airline
industry (United and Continental) and in the rental car business (Hertz HTZ, $14.21 – Not rated) plans to acquire
Dollar Thrifty (DTG, $48.08 – Not rated) , although Avis (CAR, $14.52 – Not rated) may show up as a late
bidder). The hotel industry is coming off of a consolidation boom which saw both strategic (hotel buying hotel)
and financial (private equity buying hotel) buyers bidding up a market that had severe capacity concerns in 2005-
2007. Another chronic problem for the hotel industry has been its ill timed expansions that seem to coincide with
economic downturns. With occupancy rates around 60%, hotels are lowering average daily rates (ADR) to
stimulate demand, and continue to look to OTA’s to find customers.

There are several concerns that the OTA’s face in both the short and near terms. One of the biggest is the
economic concerns of Europe. Priceline.com in particular generates a majority of its revenues from the hotel
business in Europe, which, given the economic uncertainty, may not be a destination of choice for foreign
travelers. The situation could be compounded should a second volcano from Iceland erupt and possibly disrupt
travel on an even larger scale that than the Eyjafjallajokull eruption in April 2010.

Longer term the implications of contract re-negotiations with several airlines loom on the horizon for 2012.
Crude oil prices which continue to dramatically affect the airline industry, which also affects the hotel and rental
car industries, could move higher and again strangle the leisure travel market as they did in the summer of 2008.

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 5 January 19, 2011

Our view of the industry is that there will be several players for some time to come. Competition, whether via
metasearch players like Kayak.com, or other OTA’s tends to benefit the consumer and stimulate travel. We view
Expedia.com as having the deepest breadth throughout the categories of services provided, and Orbitz the weakest
in that category. Priceline.com is our top pick in the space due to its clean balance sheet, brand recognition and
retention and market perception of being a leader in the space. Expedia is also attractive but its brand is diluted
across several properties and its financial structure may worry some. Orbitz, founded by five airlines, has shifted
its focus to hotels and continues to try to build its brand, but its debt structure may impede future third party
investment.

Industry Discussion

As we look at the online travel industry we want to highlight a few key areas to better understand the industry as a
whole. First we will discuss the primary components of the online travel agent, the suppliers of travel services.
Then we will look into the fees and metasearch and, finally, we will touch on traffic.

Airline Segment

The airline industry has been plagued by overcapacity, financial losses and volatility in oil prices. Consolidation
continues in the space, with the most recent tie up of United Airlines and Continental showing that even the
biggest airlines need to find ways to save on costs. From the consumer perspective, bigger isn’t necessarily
better, as less competition ultimately drives prices higher. The same is true for OTA’s in that fewer suppliers
could lead to lower revenues sources and thus potential decreases in future sales. Although an airline ticket does
a lot to boost gross bookings, it is generally a very small contribution to net income.

The recent moves by bother American Airlines and Delta point to further consolidation and cost cutting in the
airline industry. We expect other airlines to look the potential of squeezing the OTA’s for better pricing or face a
100% elimination of supply. Positioning in front of negotiations is one move that Expedia has employed and it
resulted in the airline suggesting consumers use Priceline.com. The eventual consumer decision has traditionally
been one that has included competitor information unless a purchase comes solely from brand loyalty or brand
“dislike”. Our research shows that air related revenue for all OTA’s has been dropping over the last few years.

Rental Car Segment

The proposed consolidation of two major players in the rental car industry supports some recent anecdotal stories
of very low supply of rental cars in select markets. The inventory issues of rental cars companies is a problem
that can be solves quite quickly and with minimal impact to the OTA’s. The health of the business appears to be
relatively stable with a small majority of rental cars coming from corporate travelers as opposed to leisure. Avis
notes its mix is a 60/40 split of corporate and leisure customers respectively. Currently, the rental car sector is a
small focus of the OTA’s.

Hotel Segment

With a highly fragmented ecosystem, the hotel industry appears as though it will always need the OTA’s to
inform potential consumers and provide an easy transaction for those wishing to be customers. Large national
chains serve as good proxies for the entire industry, but there are many smaller entities that will require OTA’s to
maintain acceptable occupancy rates.

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 6 January 19, 2011

The hotel sector has historically been out of touch with the supply and demand of the broader market over the last
few decades. When times were good, supply was constrained and new construction was initiated. As the broader
economy cooled, many new properties came on line just as demand was close to or had bottomed. More recently
the pattern has repeated itself as supply grew in the face of economic recession. Hotel News Resources has
estimated that there are 1.1 million new hotel rooms under construction as of April 2010, suggesting that the trend
will continue.

While lower occupancies have historically increased the availability of discounted hotel rooms, and a lower rate
of ADR growth can positively impact underlying room night growth, lower ADRs also decrease Expedia revenue
per room night as their payment varies proportionally with the room price. Revenue per room night in 2009
declined 17% primarily due to the downward movement in ADRs as well as adverse movements in foreign
exchange rates and lower fees. Key leisure markets like Las Vegas and Hawaii have seen dramatic declines in
ADR’s.

Fees and Metasearch

The OTA’s are coming off the anniversary of a reduction in fees that occurred in 1Q09. This reduction in fees
was spurred on by the success of the metasearch companies such as Kayak.com. Metasearch is simply an
aggregator of all of the data from several sites presented to the consumer in a usable format to help locate the
lowest price or best outcome from multiple service provider locations. Other metasearch companies in the past
would “scrape” data off sites, sometimes with permission, mostly without. Kayak.com employs a different
model, one where the OTA’s pay them for placement.

This aggregation of prices ended up prompting a price war that saw the end of most fees by the OTA’s. This led
to lower revenue and earnings for OTA’s and lower prices for consumers. The advertising expense that the
OTA’s pay Kayak.com and the other metasearch sites is likely to be the focus of other technology companies,
particularly Google which has been rumored to be interested in purchasing ITA Software. Yahoo! (YHOO,
$16.50 – Not rated) has a travel site that has transactions powered by Travelocity, whereas Google (GOOG,
$639.63 – Not rated) is not likely to partner for a transaction but instead deliver consumers to advertisers. This
means that Google is a threat to the metasearch companies more than the OTA’s, and Yahoo! has partnered with
Travelocity potentially limiting the amount of advertising the other OTA’s are willing to spend on Yahoo!.

The graph below from Compete.com shows that Expedia holds an edge over the other OTA’s in terms of unique
users per month over the last year. Expedia’s depth of portfolio is the likely reason for the sizeable advantage it
enjoys over its rival OTA’s.

Exhibit 2

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 7 January 19, 2011

Macro Concerns for OTA’s

The OTA’s are facing a challenging 2011. The weakening of the Euro may become a material problem for the
entire industry as US-based travelers, who would normally take leisure trips to Europe when the exchange rate is
so favorable, may not travel abroad due to the economic concerns in multiple countries. Those same concerns
cast doubt on the amount of intra-European leisure travel as well, in effect causing a double hit to demand.

Asian travel is also coming under pressure as civil unrest in Thailand will undoubtedly curtail a percentage of
travel to the region. Australia and Canada have lowered the threat level to its citizens that have planned travel but
still advise that people use caution and reconsider their travel plans.

The volcano in Iceland that disrupted air travel in Europe in April 2010 due to the massive ash cloud may see its
larger neighbor erupt in the near term as well. Mid-May earthquakes around the site of the larger Katla volcano
were thought to signal an eruption in near future. Although the near term in geological time could be several
decades, it could also mean in the next several months or quarters. Should this volcano erupt, we would believe
that shares of OTA companies will face severe pressure as European travel would like halt entirely.

Finally, domestic concerns over the oil spill in the Gulf of Mexico have derailed travel in several Gulf states,
particularly in the tourist-heavy Florida Gulf coast. The struggles of the Gulf Coast have been well documented
and there is limited proof of any full scale tourism increase. This may benefit other domestic travel destinations,
but concerns of a double dip recession may keep the leisure traveler spending less than average again this year.

Comparable Companies

OTA’s compete directly with one another (Priceline.com, Expedia, Orbitz and Travelocity) as well as many other
firms. The OTA’s offer transaction services that separate them from the metasearch players such as Kayal.com
and the Fly.com division of TravelZoo.

Priceline.com Expedia and Orbitz compete for advertising revenue with large internet portal sites, such as
America Online (AOL, $24.73 – Not rated) and MSN (MSFT, $28.66 – Not rated) who offer listing or other
advertising opportunities for travel-related companies. The companies also compete with search engines like
Google, Bing and Yahoo! Search that offer pay-per-click advertising services.

Priceline.com (NASDAQ: PCLN - $440.91, rated Outperform) - Priceline.com Incorporated enables


consumers to use the Internet to save money on a variety of products and services. The Company's product allows
customers to name their own price on products or services and communicates that demand directly to
participating sellers or to their private databases. Participants include domestic and international airlines, and
hotel chains.

Expedia (NASDAQ: EXPE - $26.69, rated Market Perform) - Expedia, Inc. provides branded online travel
services for leisure and small business travelers. The Company offers a wide range of travel shopping and
reservation services, providing real-time access to schedule, pricing and availability information for airlines,
hotels, and car rental companies..

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 8 January 19, 2011

Orbitz. (NYSE: OWW) - Orbitz Worldwide, Inc. offers travel services over the Internet. The Company's website
offers air, hotel, vacation package, car rental, cruise, travel insurance, ground transportation, event ticket, and
tour bookings.

Travelzoo (NASDAQ: TZOO - $51.72, Not rated) - Travelzoo Inc. provides online marketing solutions to the
travel industry. Through the Company's Web site, its newsletter, and by using its listing management software,
travel companies can inform Internet users about their specials. Travelzoo serves companies such as Alamo Rent-
A-Car, Delta Airlines, Expedia, and Hilton Hotels.

Universal Travel Group (NYSE: UTA - $7.20, Not rated) - Universal Travel Group provides travel services.
The Company's core services include booking services for air tickets, hotels, restaurants as well as tour routing
for customers.

Ctrip.com (NYSE: CTRP - $43.03, Not rated) - Ctrip.com International, Ltd. is a consolidator of hotel
accommodations and airline tickets in China.

Sabre Holdings (Privately Held) - Sabre Holdings, owner of Travelocity, is a world leader in the travel
marketplace, Sabre Holdings merchandises and retails travel products and provides distribution and technology
solutions for the travel industry. Sabre Holdings supports travelers, travel agents, corporations and travel
suppliers around the worl

Exhibit 3
$ Market 2010 eps est. Forward P/E
Symbol Price Cap $ eps $ 2011 $ (1yr) PE P/B P/S ev/EBITDA
EXPE 26.36 7.18B 1.71 1.98 13.31 15.42 2.69 2.33 8.85
PCLN 431.21 21.27B 13.02 17.65 24.43 32.67 12.93 6.97 27.24
TZOO 47.11 787.45M 0.77 0.99 47.59 61.18 18.47 7.17 31.76
AMZN 184.34 82.54B 2.50 3.49 52.82 73.74 12.94 2.67 41.94
EBAY 28.36 36.88B 1.69 1.86 15.25 16.78 2.46 4.09 11.33
YHOO 16.58 21.63B 0.86 0.79 20.99 19.28 1.79 3.50 13.82
GOOG 616.01 196.97B 28.90 33.65 18.31 21.32 4.54 7.11 14.67

OWW 5.23 539.15M 0.13 0.23 22.74 40.23 2.02 0.67 6.37

Average: 35.08 7.23 4.31 19.50

SOURCE: YAHOO! FINANCE, ALL STOCKS PRICED ON THE CLOSE OF 1/11/11

Amazon.com Inc (AMZN, $191.25 – Not rated), eBay Inc. (EBAY, $29.45 – Not rated)

Conclusion and Valuation

We are initiating coverage of Orbitz Worldwide with a Market Perform rating and a one-year price target of $5.
We estimate topline growth of 9% in calendar 2011, well below that of its peers although the growth is better than
the decrease of 15% witnessed in 2009. We are also forecasting profitability for Orbitz in calendar 2010, but we

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 9 January 19, 2011

caution investors from focusing too much on PE in this instance. A multiple of 28x 2011 EPS brings us to a
target price of $5, right around where shares trade currently.

We are wary of potential multiple contraction which would be based on uncertainty in Europe, civil unrest in Asia
and a potential for a double dip domestic recession. There are several other scenarios that could cause our
projections not to come true, which could derail the path to profitability. We recognize the hard to swallow
premium of 29x could also go down a little easier if the company were to beat expectation by only 8%, as shown
in the table below. An 8% improvement in earnings for the year could translate to a higher target price if the
multiple remains the same, but we would be more inclined to lower the multiple and maintain our $5 target.

Exhibit 4

Source: Williams Capital Research

Exhibit 5 Income Statement

Source: Company reports and Williams Capital estimates

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 10 January 19, 2011

Exhibit 6 3Q10 Earnings Review

Source: Company reports and Williams Capital estimates

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 11 January 19, 2011

Investment Risks

If the company experiences any or all of the following risk factors, as well as others, the company’s stock price
may be affected.

 The travel market is susceptible to significant swings. Terrorism, SARS, H1N1 and volcanic ash are just a
few random events that can significantly affect travel behaviors of consumers and business travelers alike.
Should such an unforeseen event occur, travel patterns are likely to swing and could cause a material impact
on revenue and earnings.

 Orbitz is dependent on the leisure travel market and select suppliers. Leisure travel accounts for a
majority of travel bookings for Orbitz and unforeseen catastrophic events that derail travel would significantly
impact the company. The company is also reliant on relatively few domestic airlines for its air ticketing
services.

 Competition is intense and moves quickly. Orbitz faces intense competition from Expedia, Priceline.com
and Travelocity.com among others. Should a competitor develop a more efficient platform or provide a
unique or differentiated service, Orbitz would face a significant challenge.

 Changes in search engine algorithms could impact Orbitz. Orbitz relies on Google, Yahoo and other
search engines for traffic, changes to the process of how the consumers are routed to their site or sites like
Kayak.com, which sends a large amount of traffic to Orbitz.

 Loss of key management. Turnover at Orbitz could become a challenge to top management. Should large
scale turnover occur the talent drain will result in an inability to properly serve clients which would put
future revenues at risk.

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 12 January 19, 2011

Exhibit 7 Balance Sheet

2010 Q3 2010 Q2 2010 Q1 2009 Q4 2009 Q3


9/30/10 6/30/10 3/31/10 12/31/09 9/30/09
ASSETS
Cash & Short Term Investments 139 145 162 89 122
Receivables - Net 79 68 82 58 73
Inventories - Total 0 0 0 0 0
Prepaid Expenses 19 17 18 17 15
Other Current Assets 5 21 4 5 18
CURRENT ASSETS - TOTAL 243 250 265 169 228
Property, Plant and Equipment - Gross 343 330 323 317 305
Accumulated Depreciation (180) (163) (150) (136) (123)
Property, Plant and Equipment - Net 163 167 173 181 182
Total Intangible Other Assets - Net 883 873 884 887 890
Other Assets - Total 941 935 949 944 952
TOTAL ASSETS 1,339 1,343 1,378 1,284 1,349
LIABILITIES
Accounts Payable 22 25 31 30 32
Short Term Debt & Current Portion of Long Term Debt 8 10 20 21 6
Other Current Liabilities 435 450 470 368 400
CURRENT LIABILITIES - TOTAL 465 485 521 419 438
Long Term Debt 484 482 486 598 635
Deferred Taxes - Debit 7 9 9 10 13
DEFERRED TAXES (7) (9) (9) (10) (13)
Other Liabilities 133 136 146 147 148
TOTAL LIABILITIES 1,075 1,094 1,143 1,154 1,208
EQUITY
Non-Equity Reserves 0 0 0 0 0
Minority Interest 0 0 0 0 0
Preferred Stock 0 0 0 0 0
Common Stock 1 1 1 1 1
Capital Surplus 1,027 1,027 1,023 922 919
Retained Earnings (766) (781) (791) (787) (769)
Treasury Stock (52)K (52)K 0 0 0
COMMON EQUITY 265 249 235 130 141
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY 1,339 1,343 1,378 1,284 1,349
SHARE INFORMATION
Common Shares Outstanding 102 84 84 84 84
() = Negative Values
In U.S. Dollars
Values are displayed in Millions except for earnings per share and where noted

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 13 January 19, 2011

APPENDIX
Exhibit 8

Source: BigCharts.com

All prices as of 1/18/11

ANALYST CERTIFICATION

I, Brian Bolan, hereby certify that the views expressed in the foregoing research report accurately
reflect my personal views about the subject companies and their securities mentioned in this
report. I further certify that no part of my compensation was, is, or will be directly, or indirectly,
related to the specific recommendations or views contained in this research report.

Financial Interests: Neither I, Brian Bolan, nor a member of my household owns securities in any of
the subject companies mentioned in this research report. Neither I, nor a member of my household
is an officer, director, or advisory board member of the subject company or has another significant
affiliation with the subject company. I do not know or have reason to know at the time of this
publication of any other material conflict of interest.

By: Brian Bolan

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 14 January 19, 2011

__________________________________________________________________________

IMPORTANT DISCLOSURE INFORMATION

Analyst Compensation: The author's compensation is based upon the value directly or indirectly
attributed to the research services by Williams Capital institutional brokerage clients. The author of
this report is compensated based on the performance of the firm, and has not received any
compensation in the past 12 months from any of the subject companies mentioned in this report.
The performance of the firm is driven by its secondary trading revenues, investment banking
revenues, and asset management revenues.

WILLIAMS CAPITAL RESEARCH STOCK RATING KEY:

Outperform: (BUY) In the analyst's opinion, the stock will outperform the sector by 5% over the next
12 months.

Perform: (HOLD) In the analyst's opinion, the stock will perform in line with the sector over the next
12 months.

Underperform: (SELL) In the analyst's opinion, the stock will underperform the sector by 5% over
the next 12 months.

Company Ratings History as of January 19, 2011


Prior Current Target
Company Name Ticker Date Action Rating Rating Price Price
Orbitz World Wide. OWW 1-19-11 Initiate coverage none Perform $5.30 $ 5.00

Valuation Methodology:

As of the market close on January 18, 2011, Orbitz traded at 25.24x our 2010 earnings estimate
of $.21 and 29.44x our 2011 earnings estimate of $.18 Our price target of $5 is based on a
multiple of 28x 2011 EPS brings us to a target price of $5, right around where shares trade
currently.

Risks:

 The travel market is susceptible to significant swings. Terrorism, SARS, H1N1 and volcanic ash
are just a few random events that can significantly affect travel behaviors of consumers and
business travelers alike. Should such an unforeseen event occur, travel patterns are likely to
swing and could cause a material impact on revenue and earnings.

Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349


WILLIAMS CAPITAL RESEARCH PAGE 15 January 19, 2011

 Orbitz is dependent on the leisure travel market and select suppliers. Leisure travel accounts
for a majority of travel bookings for Orbitz and unforeseen catastrophic events that derail travel
would significantly impact the company. The company is also reliant on relatively few domestic
airlines for its air ticketing services.

 Competition is intense and moves quickly. Orbitz faces intense competition from Expedia,
Priceline.com and Travelocity.com among others. Should a competitor develop a more efficient
platform or provide a unique or differentiated service, Orbitz would face a significant challenge.

 Changes in search engine algorithms could impact Orbitz. Orbitz relies on Google, Yahoo and
other search engines for traffic, changes to the process of how the consumers are routed to
their site or sites like Kayak.com, which sends a large amount of traffic to Orbitz.

ADDITIONAL DISCLOSURE INFORMATION:

The Williams Capital Group, L.P. or its Affiliates do and seek to do business with companies
mentioned in its research reports. As a result, investors should be aware that the firm may have a
conflict of interest that could affect the objectivity of this report. Investors should consider this
report as only a single factor in making their investment decision. Additional information is
available upon request.

“Investment Banking Clients” is defined as companies in respect of which The Williams Capital
Group, L.P. (the “firm”) or its affiliates have received or are entitled to receive compensation for
investment banking services in connection with transactions that were publicly announced in the
past 12 months.

Distribution of Equity Research Ratings as of: January 18, 2010

Outperform Perform Underperform

All Research Coverage: 88.9% 11.1% 0%


Universe of IBC: 0% 0% 0%
Internet: 50.0% 50.0% 0%
Internet - IBC: 0% 0% 0%

Investment Banking Disclosures: Within the past 12 months, the research analyst authoring this
report has not participated in a solicitation of any subject company mentioned within this report,
with or at the request of investment bankers, for investment banking business. Within the past 12
months, the firm and its affiliates have managed or co-managed a public offering of the securities

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WILLIAMS CAPITAL RESEARCH PAGE 16 January 19, 2011

of a subject company mentioned within this report, and the firm received compensation for
investment banking products or services from the company. The firm does not expect to receive or
intend to seek compensation for investment banking services from this subject company during the
next three months.

Firm Compensation: Within the past 12 months, the firm and its affiliates have not received
compensation for any non-investment banking products or services from subject companies
mentioned in this report, and the subject company has been a client of the firm during the past 12
months.

Stock Ownership: The firm and its affiliates do not own 1% or more of any class of equity security
discussed in this report, and do not make a market in any such securities.

DISCLAIMER

The information and opinions contained in this report were prepared by the firm and have been
derived from sources believed to be reliable, but no representation or warranty, expressed or
implied, can be made as to their accuracy. All opinions expressed herein are subject to change
without notice. This report is for information purposes only and should not be construed as an offer
to buy or sell any securities. The firm makes every effort to use valuation methodologies that it
believes to be reasonable in the derivation of price targets, but we do not guarantee that such
methodologies are accurate.

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individuals or write to:

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research@willcap.com

Suling Lew, Head of Institutional Sales or Jack Murphy, Director of Research


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Brian Bolan Bolan@willcap.com Trading NY 800-924-1511, CT 800-688-6349