TripAdvisor 2014 Annual Report Download - page 54

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Term Loan Facility Due 2016 and Revolving Credit Facility
On December 20, 2012, in connection with the Spin-Off, we entered into the Credit Agreement, which provides $600 million of
borrowing including:
x 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
x 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 150 basis points,
or the Eurocurrency Spread, or the alternate base rate (“ABR”) plus 50 basis points, and undrawn amounts are currently subject to a
commitment fee of 22.5 basis points.
As of December 31, 2014 we are using a one-month interest period Eurocurrency Spread which is approximately 1.7% 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. 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. As of December 31, 2014 there are no outstanding borrowings under our Revolving Credit Facility.
Prepayments
We may voluntarily repay any outstanding borrowing under the Credit Agreement at any time without premium or penalty,
other than customary breakage costs with respect to Eurocurrency loans.
Guarantees
All obligations under the Credit Agreement are unconditionally guaranteed by us and each of our existing and subsequently
acquired or organized direct or indirect wholly-owned domestic and foreign restricted subsidiaries, subject to certain exceptions for
subsidiaries that are controlled foreign corporations, foreign subsidiaries in jurisdictions where applicable law would otherwise be
violated and non-material subsidiaries.
Covenants
The Credit Agreement contains a number of covenants that, among other things, restrict our ability to: incur additional
indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets, pay
dividends and distributions, make investments, loans or advances, prepay certain subordinated indebtedness, make certain
acquisitions, engage in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness,
and change our fiscal year. The Credit Agreement also requires us to maintain a maximum leverage ratio and a minimum cash interest
coverage ratio, and contains certain customary affirmative covenants and events of default, including a change of control. If an event
of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of all
amounts due under Credit Agreement and all actions permitted to be taken by a secured creditor.
As of December 31, 2014 we are in compliance with all of our debt covenants.
Chinese Credit Facilities
In addition to our borrowings under the Credit Agreement, we maintain our Chinese Credit Facilities. As of December 31, 2014
and 2013, we had $38 million and $28 million of short term borrowings outstanding, respectively.