TripAdvisor 2011 Annual Report Download - page 54

Table of Contents
In connection with the Credit Agreement, we incurred debt financing costs totaling $3.5 million, which were capitalized as deferred
financing costs. Of the $3.5 million costs, approximately $1 million was recorded in other current assets and approximately $ 2.5 million was
reported in other long term assets on the consolidated and combined balance sheet as of December 31, 2011, net of amortization, for the period
from December 21, 2011 through December 31, 2011. These costs will be amortized from the Spin-Off date over the remaining term using the
effective interest rate method and will be included in interest expense.
The Revolving Credit Facility includes $40 million of borrowing capacity available for letters of credit and $40 million for borrowings on
same-day notice, referred to as the Swingline Loan. Immediately following the Spin-Off, $10 million was drawn down under the Revolving
Credit Facility and is expected to be repaid in full during the year ended December 31, 2012.
Prepayments
We may voluntarily repay any outstanding borrowing under the Credit Agreement at any time without premium or penalty, other than
customary breakage costs with respect to eurocurrency loans.
Guarantees
All obligations under the Credit Agreement are unconditionally guaranteed by us and each of our existing and subsequently acquired or
organized direct or indirect wholly-owned domestic and foreign restricted subsidiaries, subject to certain exceptions for controlled foreign
corporations, foreign subsidiaries where applicable law would otherwise be violated or non-material subsidiaries.
Covenants
The Credit Agreement contains a number of covenants that, among other things, restrict our ability to: incur additional indebtedness, create
liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions or
repurchase our capital stock, make investments, loans or advances, prepay certain subordinated indebtedness, make certain acquisitions, engage
in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness, and change our fiscal year. The
Credit Agreement also requires us to maintain a maximum leverage ratio and a minimum cash interest coverage ratio, and contains certain
customary affirmative covenants and events of default, including a change of control. If an event of default occurs, the lenders under the Credit
Agreement will be entitled to take various actions, including the acceleration of all amounts due under Credit Agreement and all actions
permitted to be taken by a secured creditor.
As of December 31, 2011 we have concluded we are in compliance with all of our debt covenants.
The full text of the Credit Agreement, by and among TripAdvisor, TripAdvisor Holdings, LLC, and TripAdvisor LLC, the lenders party
thereto, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Europe Limited, as London agent, dated as of December 20,
2011, is incorporated by reference in this Annual Report on Form 10-K as Exhibit 4.2.
Chinese Credit Facility
In August 2010, certain of our Chinese subsidiaries entered into a RMB 67,000,000 (approximately $10 million), one-
year revolving credit
facility, or the Chinese Credit Facility, with Bank of America. In June 2011, the Chinese Credit Facility was amended to extend the facility to
March 2012 and increase the borrowing capacity to RMB 130,000,000 (approximately $20 million). In December 2011 the Chinese Credit
Facility was amended to extend the facility to September 2012. The Chinese Credit Facility was unconditionally guaranteed by Expedia prior to
the Spin-Off. This guarantee was subsequently released in connection with the Spin-Off. As of December 31, 2011, there was $17 million of
borrowings outstanding under this facility. The facility bears interest based on the People’s Bank of China’s base rate, which was 6.56% and
5.81% as of December 31, 2011 and December 31, 2010, respectively.
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