TripAdvisor 2012 Annual Report Download - page 60

and scale back the scope of our business growth initiatives, either of which could have a material adverse effect
on our future financial condition or results of operations.
Term Loan Facility Due 2016 and Revolving Credit Facility
On December 20, 2011, in connection with the Spin-Off, we entered into the Credit Agreement, which
provides $600 million of borrowing including:
• the Term Loan Facility, or Term Loan, in an aggregate principal amount of $400 million with a term of
five years due December 2016; and
• the Revolving Credit Facility in an aggregate principal amount of $200 million available in U.S.
dollars, Euros and British pound sterling with a term of five years expiring December 2016.
The Term Loan and any loans under the Revolving Credit Facility bear interest by reference to a base rate or
a Eurocurrency rate, in either case plus an applicable margin based on our leverage ratio. We are also required to
pay a quarterly commitment fee, on the average daily unused portion of the Revolving Credit Facility for each
fiscal quarter and fees in connection with the issuance of letters of credit. The Term Loan and loans under the
Revolving Credit Facility currently bear interest at LIBOR plus 175 basis points, or the Eurocurrency Spread, or
the alternate base rate (“ABR”) plus 75 basis points, and undrawn amounts are currently subject to a commitment
fee of 30 basis points.
As of December 31, 2012 we are using a one-month interest period Eurocurrency Spread which is
approximately 2.0% per annum. Interest is currently payable on a monthly basis while we are borrowing under
the one-month interest rate period. The current interest rates are based on current assumptions, leverage and
LIBOR rates and do not take into account that rates will reset periodically.
The Term Loan principal was repayable in quarterly installments on the last day of each calendar quarter in
2012 equal to 1.25% of the original principal amount, with $20 million paid during the year ended December 31,
2012. Principal payments will be equal to 2.5% of the original principal amount in each year thereafter, with the
balance due on the final maturity date. A 25 basis point change in the interest rate on the current Term Loan
balance would result in an increase or decrease to interest expense of approximately $1 million per annum.
The Revolving Credit Facility includes $40 million of borrowing capacity available for letters of credit and
$40 million for borrowings on same-day notice. Immediately following the Spin-Off, $10 million was drawn
down under the Revolving Credit Facility, which was repaid during the three months ended March 31, 2012. As
of December 31, 2012 there are no outstanding borrowings under our Revolving Credit Facility.
During the years ended December 31, 2012 and 2011, we recorded total interest and commitment fees on
our Credit Agreement of $8.7 million and $0.3 million, respectively, to interest expense on our consolidated
statement of operations. All unpaid interest and commitment fee amounts as of December 31, 2012 and 2011
were not material.
The future minimum principal payment obligations due under the Credit Agreement related to our Term
Loan is as follows (in thousands):
Year Ending December 31, Principal Payments
2013 40,000
2014 40,000
2015 40,000
2016 260,000
Total $380,000
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