TripAdvisor 2015 Annual Report Download - page 51


Investing Activities
FortheyearendedDecember31,2014,netcashusedininvestingactivitiesincreasedby$38millionwhencomparedtothesameperiodin2013,primarily
duetoanincreaseincashpaidforacquisitionsofbusinessesin2014of$296millionandanincreaseincapitalexpendituresof$26millionin2014,when
comparedagainst2013,partiallyoffsetbyanetdecreaseincashusedforthepurchases,salesandmaturitiesofmarketablesecuritiesof$284million.
Financing Activities
FortheyearendedDecember31,2014,netcashusedinfinancingactivitiesdecreasedby$129millionwhencomparedtothesameperiodin2013,
primarilyduetoanincreaseof$8millioninexcesstaxbenefitsrelatedtostockcompensation,adecreaseof$12millioninrepaymentsofouroutstanding
borrowingsonourChineseCreditFacilitiesin2014,andpaymentsof$145millionforcommonstocksharerepurchasesunderourauthorizedsharerepurchase
programin2013,whichdidnotreoccurin2014.Thiswasoffsetbyareductioninproceedsfromtheexerciseofourstockoptionsof$21millionin2014,duetothe
introductioninthethirdquarterof2013ofthenetsharesettlementofthemajorityofourstockoptionsandanincreaseinpaymentsofminimumwithholdingtaxes
relatedtonetsharesettlementofequityawardsof$19millionin2014.
Off-Balance Sheet Arrangements
AsofDecember31,2015,wedidnothaveanyoff-balancesheetarrangements,asdefinedinItem303(a)(4)(ii)ofRegulationS-KoftheSEC,thathave,or
arereasonablylikelytohave,acurrentorfutureeffectonourfinancialcondition,resultsofoperations,liquidity,capitalexpendituresorcapitalresources.
Contingencies
Intheordinarycourseofbusiness,weandoursubsidiariesarepartiestoregulatoryandlegalmatters.Thesemattersmayrelatetoclaimsinvolvingalleged
infringementofthird-partyintellectualpropertyrights,defamation,taxes,regulatorycomplianceandotherclaims.Periodically,wereviewthestatusofall
significantoutstandingmatterstoassessthepotentialfinancialexposure.When(i)itisprobablethatanassethasbeenimpairedoraliabilityhasbeenincurred,
and(ii)theamountofthelosscanbereasonablyestimated,werecordtheestimatedlossinourconsolidatedstatementsofoperations.Weprovidedisclosureinthe
notestotheconsolidatedstatementsforlosscontingenciesthatdonotmeetbothoftheseconditionsifthereisareasonablepossibilitythatalossmayhavebeen
incurredthatwouldbematerialtothefinancialstatements.Significantjudgmentisrequiredtodeterminetheprobabilitythataliabilityhasbeenincurredand
whethersuchliabilityisreasonablyestimable.Webaseaccrualsmadeonthebestinformationavailableatthetimewhichcanbehighlysubjective.Although
occasionaladversedecisionsorsettlementsmayoccur,theCompanydoesnotbelievethatthefinaldispositionofanyofthesematterswillhaveamaterialadverse
effectonthebusiness.However,thefinaloutcomeofthesematterscouldvarysignificantlyfromourestimates.Theremaybeclaimsoractionspendingor
threatenedagainstusofwhichwearecurrentlynotawareandtheultimatedispositionofwhichwouldhaveamaterialadverseeffectonus.
WearealsounderauditbytheInternalRevenueService(IRS)andvariousotherdomesticandforeigntaxauthoritieswithregardstoincometaxmatters.
Wehavereservedforpotentialadjustmentstoourprovisionforincometaxesthatmayresultfromexaminationsby,oranynegotiatedagreementswith,thesetax
authorities.Althoughwebelieveourtaxestimatesarereasonable,thefinaldeterminationofauditscouldbemateriallydifferentfromourhistoricalincometax
provisionsandaccruals.Theresultsofanauditcouldhaveamaterialeffectonourfinancialposition,resultsofoperations,orcashflowsintheperiodforwhich
thatdeterminationismade.
Additionally,weearnanincreasingportionofourincome,andaccumulateagreaterportionofcashflows,inforeignjurisdictionswhichweconsider
indefinitelyreinvested.Anyrepatriationoffundscurrentlyheldinforeignjurisdictionsmayresultinhighereffectivetaxratesandincrementalcashtaxpayments.
Inaddition,therehavebeenproposalstoamendU.S.taxlawsthatwouldsignificantlyimpactthemannerinwhichU.S.companiesaretaxedonforeignearnings.
Althoughwecannotpredictwhetherorinwhatformanylegislationwillpass,ifenacted,itcouldhaveamaterialadverseimpactonourU.S.taxexpenseandcash
flows.See“Note9—Income Taxes ”inthenotestoourconsolidatedfinancialstatementsinItem8forfurtherinformationonpotentialcontingenciessurrounding
incometaxes.
Related Party Transactions
ForinformationonourrelationshipswithExpediaandLibertyTripAdvisorHoldings,Inc.referto“Note15—Related Party Transactions ”inthenotesto
ourconsolidatedfinancialstatementsinItem8.

48