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The following is an excerpt from a S-1/A SEC Filing, filed by ORBITZ INC on 7/3/2002.
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ORBITZ INC - S-1/A - 20020703 - DILUTION


DILUTION

        If you invest in our Class A common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the net tangible book value per share of Class A common stock upon the completion of this offering.

        Calculations relating to shares of Class A common stock in the following discussion and tables assume the following have occurred as of March 31, 2002: (i) the April 2002 restructuring (see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Overview—Restructuring"), (ii) the exchange of all membership units of Orbitz, LLC held by our Founding Airlines or their affiliates for 105,329,154 shares of Class B common stock, (iii) the subsequent conversion of all shares of Class B common stock into 105,349,646 shares of Class A common stock and (iv) the automatic conversion of all shares of Class C common stock into 426,997 shares of Class A common stock.

        Our net tangible book value as of March 31, 2002 equaled approximately $52 million, or $0.49 per share of Class A common stock. Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the total number of shares of Class A common stock outstanding. After giving effect to the sale of shares of Class A common stock offered by us in this offering at an assumed initial public offering price of $         per share (the mid-point of the estimated price range shown on the cover page of this prospectus) and after deducting the estimated underwriting discounts and commissions and offering expenses payable by us, our net tangible book value, as adjusted, as of March 31, 2002, would have equaled approximately $         , or $        per share of Class A common stock. This represents an immediate increase in net tangible book value of $         per share to our existing stockholders and an immediate dilution in net tangible book value of $         per share to new investors of Class A common stock in this offering. If the initial public offering price is higher or lower, the dilution to new investors will be greater or less, respectively. The following table illustrates this per share dilution to new investors purchasing our Class A common stock in this offering.

 
   
   
Assumed initial public offering price per share       $            
  Net tangible book value per share as of March 31, 2002   $0.49    
  Increase in net tangible book value per share attributable to this offering        
   
   
Net tangible book value per share after this offering        
       
Dilution per share to new investors       $            
       

        The following table as of March 31, 2002 summarizes the differences between our existing stockholders and new investors with respect to the number of shares of Class A common stock issued by us, the total consideration paid and the average price per share paid. The calculations with respect to shares purchased by new investors in this offering reflect an assumed initial public offering price of $         per share (the mid-point of the estimated price range shown on the cover of this prospectus).

 
  Shares Purchased
  Total Consideration
   
 
  Average Price
Per Share

 
  Number
  Percentage
  Amount
  Percentage
Existing stockholders   105,776,643         %   $204,772,000         %   $1.94
New investors                    
   
 
 
 
   
  Total       100%   $   100%    
   
 
 
 
   

        The preceding tables assume no issuance of shares of Class A common stock under our stock plans after March 31, 2002. As of March 31, 2002, 17,044,372 shares were subject to outstanding options at an exercise price of $2.32 per share. To the extent outstanding options are exercised, there will be further dilution to new investors.

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