TripAdvisor 2014 Annual Report Download - page 28

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x Entrance into markets in which we have no direct prior experience and increased complexity in our business;
x Impairment of goodwill or other intangible assets such as trademarks or other intellectual property arising from
acquisitions; and
x 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.
If we fail to manage our growth effectively, our brand, results of operations and business could be harmed.
We have experienced rapid growth in our headcount and operations, which places substantial demands on management and our
operational infrastructure. We continue to make substantial investments in our technology, sales and marketing and community
management organizations. As we continue to grow, we must effectively integrate, develop and motivate a large number of new
employees, including employees in international markets, while maintaining the beneficial aspects of our company culture. If we do
not manage the growth of our business and operations effectively, the quality of our platform and efficiency of our operations could
suffer, which could harm our brand, results of operations and business.
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 with a remaining principal of $300 million, as well as a revolving credit facility of $200 million at
December 31, 2014. 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, which we
consider indefinitely reinvested. 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.
We have significant indebtedness, which could adversely affect our business and financial condition.
The remaining principal on our term loan $300 million at December 31, 2014. Risks relating to our indebtedness include:
x Increasing our vulnerability to general adverse economic and industry conditions;
x Requiring us to dedicate a portion of our cash flow from operations to principal and interest payments on our
indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and
investments and other general corporate purposes;
x Making it more difficult for us to optimally capitalize and manage the cash flow for our businesses;
x Limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;
x Possibly placing us at a competitive disadvantage compared to our competitors that have less debt;
x Limiting our ability to borrow additional funds or to borrow funds at rates or on other terms that we finds acceptable; and
x Exposing us to the risk of increased interest rates because our outstanding debt is expected to be subject to variable rates
of interest.