TripAdvisor 2012 Annual Report Download - page 64

Investing Activities
For the year ended December 31, 2011, net cash used in investing activities increased by $399 million or
286% when compared to the same period in 2010 primarily due to a distribution of approximately $406 million
paid to Expedia immediately prior to the Spin-Off, higher net cash transfers to Expedia related to business
operations between us and Expedia prior to Spin-Off of $30 million and, in October 2011, an acquisition of a
common control subsidiary in China from Expedia for $28 million, net of cash acquired, partially offset by a
decrease of $27 million in cash paid for business acquisitions and a maturity of a short term investment of $20
million.
Financing Activities
For the year ended December 31, 2011, net cash provided by financing activities increased $408 million
when compared to the same period in 2010, primarily due to our term loan facility borrowing in conjunction with
the Spin-Off of $400 million and additional short-term borrowings of $16 million, consisting of $10 million from
our new revolving credit facility related to the Spin-Off and an additional $6 million related to our existing
revolving credit facility in China. This was partially offset by a payment of a contingent purchase consideration
of which $10 million affected cash used in financing activities.
Related Party Transactions
For information on our relationships with Expedia, Barry Diller and Liberty Interactive Corporation and
recent material transactions and change in voting control in the fourth quarter of 2012, refer to “Note 16 –
Related Party Transactions” in the notes to our consolidated and combined financial statements.
Critical Accounting Policies and Estimates
Critical accounting policies and estimates are those that we believe are important in the preparation of our
consolidated and combined financial statements because they require that management use judgment and
estimates in applying those policies. We prepare our consolidated and combined financial statements and
accompanying notes in accordance with GAAP.
Preparation of the consolidated and combined financial statements and accompanying notes requires that
management make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities as of the date of the consolidated and combined financial statements
as well as revenue and expenses during the periods reported. Management bases its estimates on historical
experience, where applicable, and other assumptions that it believes are reasonable under the circumstances.
Actual results may differ from estimates under different assumptions or conditions.
There are certain critical estimates that we believe require significant judgment in the preparation of the
consolidated and combined financial statements. We consider an accounting estimate to be critical if:
• It requires us to make an assumption because information was not available at the time or it included
matters that were highly uncertain at the time management was making the estimate; and/or
• Changes in the estimate or different estimates that management could have selected may have had a
material impact on our financial condition or results of operations.
For more information on each of these policies, see “Note 2—Significant Accounting Policies” in the notes
to our consolidated and combined financial statements. A discussion of information about the nature and
rationale for our critical accounting estimates is below.
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