TripAdvisor 2015 Annual Report Download - page 24

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creditmarkets,therecanbenoassurancethatsufficientfinancingwill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.
We have indebtedness which could adversely affect our business and financial condition.
Wecurrentlyhaveoutstandingapproximately$200millioninlong-termdebt.Risksrelatingtoourindebtednessinclude:
·Increasingourvulnerabilitytogeneraladverseeconomicandindustryconditions;
·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;
·Makingitmoredifficultforustooptimallycapitalizeandmanagethecashflowforourbusinesses;
·Limitingourflexibilityinplanningfor,orreactingto,changesinourbusinessesandthemarketsinwhichweoperate;
·Possiblyplacingusatacompetitivedisadvantagecomparedtoourcompetitorsthathavelessdebt;
·Limitingourabilitytoborrowadditionalfundsortoborrowfundsatratesoronothertermsthatwefindacceptable;and
·Exposingustotheriskofincreasedinterestratesbecauseouroutstandingdebtisexpectedtobesubjecttovariableratesofinterest.
Inaddition,itispossiblethatwemayneedtoincuradditionalindebtednessinthefutureintheordinarycourseofbusiness.Thetermsofourrevolving
creditfacilitywillallowustoincuradditionaldebtsubjecttocertainlimitations;however,thereisnoassurancethatadditionalfinancingwillbeavailabletouson
termsfavorabletous,ifatall.Inaddition,ifnewdebtisaddedtocurrentdebtlevels,therisksdescribedabovecouldintensify.
The agreements that govern our revolving credit facility contain various covenants that limit our discretion in the operation of our business and also require us
to meet financial maintenance tests and other covenants. The failure to comply with such tests and covenants could have a material adverse effect on us.
Wearepartytoacreditagreementprovidingfortherevolvingcreditfacility.Theagreementsthatgoverntherevolvingcreditfacilitycontainvarious
covenants,includingthosethatlimitourabilityto,amongotherthings:
·Incurindebtedness;
·Paydividendson,redeemorrepurchaseourcapitalstock;
·Enterintocertainassetsaletransactions,includingpartialorfullspin-offtransactions;
·Enterintosecuredfinancingarrangements;
·Enterintosaleandleasebacktransactions;and
·Enterintounrelatedbusinesses.
Thesecovenantsmaylimitourabilitytooptimallyoperateourbusiness.Inaddition,ourrevolvingcreditfacilityrequiresthatwemeetcertainfinancial
tests,includingaleverageratiotest.Anyfailuretocomplywiththerestrictionsofourcreditfacilitymayresultinaneventofdefaultundertheagreements
governingsuchfacilities.Suchdefaultmayallowthecreditorstoacceleratethedebtincurredthereunder.Inaddition,lendersmaybeabletoterminateany
commitmentstheyhadmadetosupplyuswithfurtherfunds(includingperiodicrolloversofexistingborrowings).
Our effective tax rate is impacted by a number of factors that could have a material impact on our financial results and could increase the volatility of those
results.
Duetotheglobalnatureofourbusiness,wearesubjecttoincometaxesintheUnitedStatesandotherforeignjurisdictions.Intheeventweincurnetincome
incertainjurisdictionsbutincurlossesinotherjurisdictions,wegenerallycannotoffsettheincomefromonejurisdictionwiththelossfromanother,whichcould
increaseoureffectivetaxrate.Furthermore,significantjudgmentisrequiredtocalculateourworldwideprovisionforincometaxes.Intheordinarycourseofour
businesstherearemanytransactionsandcalculationswheretheultimatetaxdeterminationisuncertain.Byvirtueofourpreviouslyfiledseparatecompanyand
consolidatedincometaxreturnswithExpediaweareroutinelyunderauditbyfederal,stateandforeigntaxingauthorities.Althoughwebelieveourtaxestimates
arereasonable,thefinaldeterminationofauditscouldbemateriallydifferentfromourhistoricalincometaxprovisions
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