The worldwide travel industry is a large and dynamic market. It is believed that aggregate gross bookings in the global airline, hotel, vacation package, car rental and cruise industry were approximately $900 billion in 2005. Approximately 75% of global travel gross bookings are currently made in the U.S., Europe and the Asia Pacific region. According to the World Travel and Tourism Council, for the five year period between 2005 and 2010, total travel and tourism dollars spent in the Asia Pacific region, the U.S. and Europe are expected to grow annually 10%, 6% and 6%, respectively.

Online travel is the fastest growing segment of the travel industry. The emergence of the Internet as the most efficient way to book travel has revolutionized the way millions of people research and purchase travel and has led to the growth of online travel companies. In 2006, the online travel industry in the North American, European and Asia Pacific regions grew by 30% to approximately $196 billion in gross bookings and represented the single largest e-commerce category.

The U.S. is the largest online travel marketplace, totaling $116 billion in gross bookings in 2006 and is expected to grow at a CAGR of approximately 19% from 2006 to 2008. Growth in the U.S. will continue to be driven by increasing online travel penetration, which is expected to grow from 47% in 2006 to 59% in 2008. According to PhoCusWright, online bookings of leisure air travel are expected to grow at a 17% CAGR from 2006 to 2008. In the U.S., the fastest-growing and most profitable online travel categories include vacation packages and hotels. PhoCusWright projects vacation packages (including dynamic packaging) and hotel bookings will both grow at a 20% CAGR from 2006 through 2008.

Orbitz, the Company’s largest full service online travel brand, is one of the leading domestic online travel websites. Orbitz is a full service travel company that offers travelers a wide variety of travel options and has historically introduced many innovations in online booking technology, including the industry\\\\\\\\\\\\\\\'s first Matrix display, Flex Search, and Deal Detector.

CheapTickets is a leading U.S. travel website focused on value-conscious, leisure travelers and was the fastest growing major travel website in the U.S. in 2006. 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.

ebookers is one of the leading full service travel websites in Europe. ebookers offers customers a wide range of travel services through its online business, ebookers.com, and telephone call centers. ebookers currently operates 13 country specific websites in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, the Netherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom.

Flairview Travel operates two global hotel booking websites, HotelClub.com and RatesToGo.com. These websites offer discounted hotel rates for more than 23,000 hotels in approximately 100 countries worldwide. To accommodate their broad client base, HotelClub and RatesToGo offer certain services in multiple languages, including Chinese, English, French, German, Italian, Japanese, Spanish, and fourteen currencies.

Cost of revenue increased $12 million, or 12%, from $101 million in the year ended December 31, 2005 to $113 million in the year ended December 31, 2006.

Depreciation and amortization decreased $23 million, or 29%, from $78 million in the year ended December 31, 2005 to $55 million in the year ended December 31, 2006.

Amortization of customer, vendor and other relationship related intangible assets totaled $13 million and $12 million in the year ended December 31, 2005 and 2006, respectively.

Interest expense increased by $5 million, or 23%, from $22 million in the year ended December 31, 2005 to $27 million in the year ended December 31, 2006.