TripAdvisor 2011 Annual Report Download - page 55

Table of Contents
Commitments, Contingencies and Off-Balance Sheet Arrangements
The following table summarizes our material contractual obligations, commercial commitments and outstanding debt as of December 31,
2011:
Certain of our entities were guarantors of Expedia’s credit facility and outstanding senior notes prior to the Spin-Off. These guarantees
were full, unconditional, joint and several, and were released upon the completion of the Spin-Off.
Other than the items described above, we do not have any off-balance sheet arrangements as of December 31, 2011.
Income Taxes
We record income taxes under the liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences
of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes
based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the
deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying
items of income and expense. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including
our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax
reporting purposes, as well as other relevant factors. We may establish a valuation allowance to reduce deferred tax assets to the amount we
believe
51
By Period
Total
Less than
1 year
1 to 3 years
3 to 5 years
More than
5 years
(In thousands)
Operating leases
$
14,887
$
5,616
$
7,851
$
1,420
$
—
Purchase obligations
2,761
1,320
1,096
345
—
Term Loan (1)
400,000
20,000
80,000
300,000
—
Expected interest payments on Term Loan (1)
33,115
8,086
14,214
10,815
Revolving credit facility (1)
10,000
10,000
—
—
—
Chinese credit facility
16,734
16,734
—
—
—
Total(2)(3)
$
477,497
$
61,756
$
103,161
$
312,580
$
—
(1) For a discussion of debt that we entered into in connection with the Spin-Off, see “Note 11— Debt ” in the notes to our consolidated and
combined financial statements and the section entitled “—Term Loan Facility Due 2016 and Revolving Credit Facility related to the Spin-
Off” above. Interest is currently due and payable monthly under the Term Loan, as we are currently using a one-month interest period
Eurocurrency Spread and principal is paid on a quarterly basis. The amounts included as expected interest payments on the Term Loan in
this table are based on the effective interest rate as of December 31, 2011 related to the Term Loan, but, could change significantly in the
future.
(2) Excluded from the table was $13 million of unrecognized tax benefits for which we cannot make a reasonably reliable estimate of the
amount and period of payment. We estimate that none of this amount will be paid within the next year.
(3)
In addition, in connection with the Spin
-
Off, we assumed Expedia
’
s obligation to fund a charitable foundation. The Board of Directors of
the charitable foundation is currently comprised of Stephen Kaufer, Julie M.B. Bradley and Seth J. Kalvert. The obligation was calculated
at 1.7% of OIBA in 2011 and was fully paid through Spin-Off and will be calculated at 2.0% of OIBA for subsequent years. For a
discussion regarding OIBA, see “Note 12— Segment Information ” in the notes to our consolidated and combined financial statements.
This future commitment has been excluded from the table above.