GameStop 2014 Annual Report Download - page 42

Risks Relating to Indebtedness
Because of ourfloating rate creditfacility,wemay be adverselyaffected by interest rate changes.
Our financial position may be affected by fluctuations in interest rates, as our senior credit facility is subject to floating interest
rates.
Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international
economic and political conditions and other factors beyond our control. If we were to borrow against our senior credit facility,a
significant increase in interest rates could have an adverse effect on ourfinancial position and results of operations.
The terms of our Senior Notesand senior credit facility may impose significant operating and financial restrictions on us.
The terms of our Senior Notes and senior credit facility may impose significant operating and financial restrictions on us in
certain circumstances. These restrictions, among other things, limit our ability to:
•incur,assumeorpermit to exist additional indebtedness or guarantyobligations;
•incur liens or agree to negative pledgesinother agreements;
•engage in sale and leaseback transactions;
•make loans and investments;
•declare dividends, make payments or redeem or repurchasecapital stock;
•engage in mergers, acquisitions and otherbusinesscombinations;
•prepay,redeem or purchase certain indebtedness;
•amend or otherwisealter the terms of our organizational documents and indebtedness;
•sell assets; and
•engage in transactions with affiliates.
We cannot assure you that these covenants will not adversely affect our ability to finance our future operations or capital
needs or to pursue available business opportunities and may affect our ability to grow in accordance with our strategy.Abreach
of the covenants or restrictions under the indenture for the Senior Notes, or under our senior credit facility,could result in an event
of default under the applicable indebtedness. Such adefault may allow the creditors to accelerate the repayment of the related
debt and may result in the acceleration of the repayment of any other debt to which across-acceleration or cross-default provision
applied. In addition, an event of default under our senior credit facility would permit the lenders to terminate all commitments to
extend further credit under that facility.Furthermore, if we were unable to repay the amounts due and payable under our senior
credit facility,those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event that our
lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay
that indebtedness. See Note 10, "Debt," to our consolidated financial statements for adescription of our Senior Notes and senior
credit facility.
To service our indebtedness, we will require asignificant amount of cash.Wemay notbeabletogeneratesufficient cash
flow to meet our debt service obligations.
Our ability to generate sufficient cash flow from operations to make scheduled payments on our indebtedness, including
without limitation any payments required to be made under our senior credit facility or to holders of our Senior Notes, and to fund
our operations, will depend on our ability to generate cash in the future. This, to acertain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient cash
flow from operations to satisfy our debt obligations, including interest payments and the payment of principal at maturity,wemay
have to undertake alternative financing plans, such as refinancing or restructuring our debt, including the Senior Notes, selling
assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot provide assurance that any
refinancing would be possible, that any assets could be sold, or,ifsold, of the timing of the sales and the amount of proceeds
realized from those sales, that additional financing could be obtained on acceptable terms, if at all, or if that additional financing
would be permitted under the terms of our various debt instruments, then in effect. Our senior credit facility and the indenture
governing the Senior Notes restrict our ability to dispose of assets and use the proceeds from those sales and raise debt or equity
to meet any debt service obligations then due. Our ability to refinance would also depend upon the condition of the finance and
credit markets. Our inability to generate sufficient cash flow to satisfy our debt obligations, including the Senior Notes, or to
refinance our obligations on commercially reasonable terms or on atimely basis, would have an adverse effect on our business,
results of operations and financial condition.
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