The terms of the Indentures governing the Notes do not prohibit us from
incurring additional indebtedness, although they do place certain limitations on
such additional indebtedness. Further, the Indentures allow for the incurrence
of all such indebtedness by our subsidiaries, all of which would be structurally
senior to the Notes. In addition, after giving effect to the Marcus Combination,
the Refinancing and the Pending Acquisitions, the Credit Facilities permit
additional borrowings thereunder of up to approximately $0.8 billion, and all of
those borrowings would be structurally senior to the Notes. We expect to
continue to borrow funds under the Credit Facilities. If new debt is added to
our current debt levels, the related risks that we and you now face could
intensify. See "Description of Notes" and "Description of the Credit
SIGNIFICANT CASH FLOW REQUIREMENTS -- TO SERVICE OUR INDEBTEDNESS AND GROW OUR
BUSINESS, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE
CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on and to refinance our indebtedness,
including the Notes and the Credit Facilities, and to fund planned capital
expenditures will depend on our ability to generate cash and secure financing in
the future. This, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control.
If our business does not generate sufficient cash flow from operations, and
sufficient future borrowings are not available to us under the Credit Facilities
or from other sources of financing, we may not be able to repay our
indebtedness, including the Notes and the Credit Facilities, to grow our
business or to fund our other liquidity needs. We may need to refinance all or a
portion of our indebtedness, including the Notes and the Credit Facilities, on
or before maturity. Furthermore, we may not be able to refinance any of our
indebtedness, including the Notes and the existing credit facilities or the
Credit Facilities, on commercially reasonable terms, or at all.
RISKS ASSOCIATED WITH OTHER RESTRICTIONS IMPOSED BY THE CREDIT FACILITIES -- OUR
CREDIT FACILITIES IMPOSE SIGNIFICANT RESTRICTIONS ON US.
The Credit Facilities contain a number of significant covenants that, among
other things, restrict the ability of our subsidiaries to:
- distribute funds to service principal and interest payments on the Notes;
- pay dividends;
- pledge assets;
- dispose of assets or merge;
- incur indebtedness;
- issue equity;
- repurchase or redeem equity interests and indebtedness;
- create liens;
- make certain capital expenditures; and
- make certain investments or acquisitions.
In addition, the Credit Facilities contain, among other covenants,
requirements that each borrowing subsidiary maintain specified financial ratios.
The Credit Facilities also