EFTA01377987.pdf

borrowings under the Revolving Credit Facility and the application of proceeds of these transactions, as of September 30, 2015, we would have had total debt outstanding of approximately $1.3 billion and borrowing availability of $438.3 million under the Revolving Credit Facility (or total debt outstanding of approximately $1.2 billion and borrowing availability of $500 million under the Revolving Credit Facility if the undeminters exercise in lull their option to purchase additional shares). Our indebtedness could have important consequences, such as: limiting our ability to obtain additional financing to fund our working capital needs, acquisitions. capital expenditures or other debt service requirements or for other purposes; limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service debt; limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions: restricting us from making strategic acquisitions, developing properties or exploiting business opportunities, restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our and certain of our subsidiaries' existing and future indebtedness, including, in the case of certain indebtedness of subsidiaries, certain covenants that restrict the ability of subsidiaries to pay dividends or make other distributions to us: exposing us to potential events of default (if not oared or waived) under financial and operating covenants contained in our or our subsidiaries debt instruments that could have a material adverse effect on our business. financial condition and operating results: 31 TAW CAntentS increasing our vulnerability to a downturn in general economic conditions or in pricing of our products: and limiting our ability to react to changing market conditions in our industry and in our customers' industries. In addition to our debt service obligations, our operations require substantial investments on a continuing basis. Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital and non-capital expenditures necessary to maintain the condition of our operating assets and properties. as well as to provide capacity for the growth of our business, depends on our financial and operating performance, which. in turn, is subject to prevailing economic conditions and financial, business, competitive, legal and other factors. Subject to the restrictions in the Credit Agreement and the restrictions to be included in the indenture related to the Match Notes, we and our subsidiaries may incur significant additional indebtedness, including additional secured indebtedness. Although the terms of the Credit Agreement contain, and the terms of the indenture related to the Match Notes will contain, restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and additional indebtedness incurred in compliance with these restnctions could be significant. If new debt is added to our or our subsidiaries current debt levels, the risks described above could increase. We may not be able to generate sufficient cash to service all of our current and planned indebtedness and may be forced to take other actions to satisfy our obligations under our Indebtedness that may not be successful. Our ability to satisfy our debt obligations will depend upon, among other things: our future financial and operating performance, which will be affected by prevailing economic conditions and finance', business. regulatory and other factors, many of which are beyond our control; and our future ability to borrow under the Revolving Credit Facility, the availability of which will depend on, among other things, our complying with the covenants in the then-existing agreements governing our indebtedness. We cannot assure you that our business will generate sufficient cash flow from operations. or that we will be able to draw under the Revolving Credit Facility or otherwise, in an amount sufficient to fund our liquidity needs. If our cash flows and capital resources are insufficient to service our indebtedness. we may be forced to reduce or delay capital expenditures, sell assets. seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants. which could further restrict our business operations. In addition, the terms of existing or future debt agreements may restrict us from adopting some of these alternatives. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations. sell equity, and/or negotiate with our lenders to restructure the applicable debt. in order to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. The Credit Agreement and the indenture related to the Match Notes may restrict, or market or business conditions may limit, our ability to avail ourselves of some or all of these options. 32 Table of Contejg Imp: wwwscc.groanArnhncs dan't 5751894100104746915006431422264511/3-tahlnif11,9,2013 911:17 Ahfl CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0075147 CONFIDENTIAL SONY GM_00221331 EFTA01377987