TripAdvisor 2013 Annual Report Download - page 33

marketplace or owners and/or travelers pay us fees upon booking a transaction. As a result, our success in this
area primarily depends on our ability to attract owners, managers, travelers and advertisers to our marketplace. If
property owners and managers do not perceive the benefits of marketing their properties through our websites, or
elect to list them with a competitor instead of listing with us, our volume of new listings and listing renewals may
suffer. As a result, we may be unable to offer a sufficient supply and variety of vacation properties to attract
travelers to our websites. A larger competitor already exists in the vacation rental space, with significantly more
users and listed properties, and new competitors with significant financial resources are continually emerging.
We may be subject to claims that we violated intellectual property rights of others, which claims can be
extremely costly to defend and could require us to pay significant damages and limit our ability to operate.
Companies in the Internet and technology industries, and other patent and trademark holders seeking to
profit from royalties in connection with grants of licenses, own large numbers of patents, copyrights, trademarks
and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of
intellectual property rights. We have received in the past, and may in the future receive, notices that claim we
have misappropriated or misused other parties’ intellectual property rights. There may be intellectual property
rights held by others, including patents, copyrighted works and/or trademarks, which cover significant aspects of
our technologies or content. Any intellectual property claim against us, regardless of merit, could be time
consuming and expensive to settle or litigate and could divert management’s attention and other resources. These
claims also could subject us to significant liability for damages and could result in our having to stop using
technology or content found to be in violation of another party’s rights. We might be required or may opt to seek
a license for rights to intellectual property held by others, which may not be available on commercially
reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which
would increase our operating expenses. We may also be required to develop alternative non-infringing
technology, or content, which could require significant effort and expense and make us less competitive in the
relevant market. Any of these results could harm our business and financial performance.
We may have future capital needs and may not be able to obtain additional financing on acceptable terms.
We are party to a term loan in the amount of $400 million, as well as a revolving credit facility of
$200 million. These arrangements may limit our ability to secure significant additional financing in the future on
favorable terms or our operating cash flow may be insufficient to satisfy our financial obligations under
indebtedness outstanding from time to time. Our ability to secure additional financing and satisfy our financial
obligations under indebtedness outstanding from time to time will depend upon our future operating
performance, which is subject to then prevailing general economic and credit market conditions, including
interest rate levels and the availability of credit generally, and financial, business and other factors, many of
which are beyond our 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. If financing is not available when needed or is not
available on favorable terms, we may be unable to issue or develop new or enhanced existing services, complete
acquisitions, repurchase equity or otherwise take advantage of business opportunities, any of which could have a
material adverse effect on our business, financial condition and results of operations. If we raise additional funds
through the issuance of equity securities, our stockholders may experience significant dilution.
Furthermore, we are also accumulating a greater portion of our cash flows in foreign jurisdictions than
previously. The repatriation of such funds for use in the United States, including for corporate purposes such as
acquisitions, stock repurchases, dividends or debt refinancings, may result in additional U.S. income tax expense
and higher cost for such capital.
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