TripAdvisor 2012 Annual Report Download - page 38

around the world, we may be unable to proactively address these techniques or to implement adequate preventive
measures. Security breaches could result in negative publicity, damage to reputation, exposure to risk of loss or
litigation and possible liability due to regulatory penalties and sanctions. Security breaches could also cause
travelers and potential users to lose confidence in our security, which would have a negative effect on the value
of our brand. Failure to adequately protect against attacks or intrusions, whether for our own systems or systems
of vendors, could expose us to security breaches that could have an adverse impact on financial performance.
Acquisitions and investments by us could result in operating and financial difficulties.
We have acquired a number of businesses in the past, and our future growth may depend, in part, on future
acquisitions, any of which could be material to our financial condition and results of operations. Certain financial
and operational risks related to acquisitions that may have a material impact on our business are:
• Use of cash resources and incurrence of debt and contingent liabilities in funding acquisitions may
limit other potential uses of our cash, including stock repurchases, dividend payments and retirement of
outstanding indebtedness;
• Amortization expenses related to acquired intangible assets and other adverse accounting
consequences;
• Expected and unexpected costs incurred in identifying and pursuing acquisitions, and performing due
diligence on potential acquisition targets that may or may not be successful;
• Diversion of management’s attention or other resources from our existing business;
• Difficulties and expenses in integrating the operations, products, technology, privacy protection
systems, information systems or personnel of the acquired company;
• Impairment of relationships with employees, suppliers and affiliates of our business and the acquired
business;
• The assumption of known and unknown debt and liabilities of the acquired company;
• Failure of the acquired company to achieve anticipated traffic, revenues, earnings or cash flows or to
retain key management or employees;
• Failure to generate adequate returns on acquisitions and investments;
• Entrance into markets in which we have no direct prior experience and increased complexity in our
business;
• Impairment of goodwill or other intangible assets such as trademarks or other intellectual property
arising from acquisitions; and
• Adverse market reaction to acquisitions.
Moreover, we rely heavily on the representations and warranties provided to us by the sellers of acquired
companies, including as they relate to creation, ownership and rights in intellectual property and compliance with
laws and contractual requirements. Our failure to address these risks or other problems encountered in connection
with past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such
acquisitions or investments, incur unanticipated liabilities and harm our business generally.
We may be unable to access capital when necessary or desirable.
The availability of funds depends in significant measure on capital markets and liquidity factors over which
we have no control. In light of periodic uncertainty in the capital and credit markets, there can be no assurance
that sufficient financing will be available on desirable or even any terms to fund investments, acquisitions, stock
repurchases, dividends, debt refinancing or extraordinary actions or that counterparties in any such financings
would honor their contractual commitments.
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