Orbitz being managed to maintain covenant compliance in light of step downs

By Jennifer Lanning Drey

Portland, Ore., Jan. 7 - Orbitz Worldwide Inc. is being proactively managed to ensure it will remain in compliance with its financial covenants, which include step downs on the permissible leverage ratio through March 2011, Marsha Williams, chief financial officer of Orbitz, said during a Wednesday investor presentation.

"We have been tracking our covenants and our cash position and our forecast for the year pretty closely, and we feel good about where we are with our ability to meet those future covenants," Williams said.

The company is in compliance with all of its debt covenants.

Speaking at the 2009 Citi Global Entertainment & Telecommunications Conference in Phoenix, Williams decline to quantify the amount of cushion the company has with regard to the debt covenants.

Orbitz had cash of $103 million at Sept. 30.

Looking ahead in 2009 the company expects the travel markets to continue to be challenging.

Accordingly, Orbitz' planning for 2009 includes conservative transaction totals and a series of cost-reduction initiatives taken as proactive measures should the economy be softer than projected, Williams said.

Orbitz recently announced plans for $20 million to $25 million of incremental cost reductions, which came on top of $20 million of annual cost reductions announced in November.

The more recent cost reductions are expected to come primarily from less foreign contract labor, Williams said.

Orbitz is a Chicago-based online travel company.

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