- place us at a disadvantage compared to our competitors that have
proportionately less debt; and
- limit our ability to borrow additional funds in the future, if we need
them, due to applicable financial and restrictive covenants in such debt.
We anticipate incurring significant additional debt in the future to fund
the expansion, maintenance and upgrade of our systems. We will also incur debt
to finance pending acquisitions and related debt repayments, and may incur debt
to finance additional acquisitions. If new debt is added to our current debt
levels, the related risks that we and you now face could intensify.
THE AGREEMENTS AND INSTRUMENTS GOVERNING OUR DEBT CONTAIN RESTRICTIONS AND
LIMITATIONS WHICH COULD SIGNIFICANTLY IMPACT OUR ABILITY TO OPERATE OUR
Our credit facilities and the indentures governing our notes contain a
number of significant covenants that could adversely impact our business. These
covenants, among other things, restrict the ability of our subsidiaries to:
- pay dividends;
- pledge assets;
- dispose of assets or merge;
- incur additional debt;
- issue equity;
- repurchase or redeem equity interests and debt;
- create liens; and
- make certain investments or acquisitions.
Furthermore, in accordance with our credit facilities, we are required to
maintain specified financial ratios and meet financial tests. The ability to
comply with these provisions may be affected by events beyond our control. The
breach of any of these covenants will result in a default under the applicable
debt agreement or instrument.
OUR ABILITY TO GENERATE THE SIGNIFICANT AMOUNT OF CASH NEEDED TO SERVICE OUR
DEBT AND GROW OUR BUSINESS DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on our debt and to fund our planned capital
expenditures for upgrading our cable systems and for other purposes 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 beyond our control. If our business
does not generate sufficient cash flow from operations, and sufficient future
borrowings are not available to us under our credit facilities or from other
sources of financing, we may not be able to repay our debt, to grow our business
or to fund our other liquidity needs.