CDW 2012 Annual Report Download - page 12

Table of Contents
to time, including drawing on our Revolving Loan, to finance working capital, capital expenditures, investments or acquisitions, or for other
purposes. If we do so, the risks related to our business associated with our high level of debt could intensify. Specifically, our high level of debt
could have important consequences, including the following:
Restrictive covenants under our senior credit agreements and indentures may adversely affect our operations and liquidity.
Our senior credit agreements and our indentures contain, and any future indebtedness of ours may contain, various covenants that limit
our ability to, among other things:
Upon the occurrence of an event of default under our senior credit agreements or indentures, the holders of such indebtedness could
elect to declare all amounts outstanding to be due and payable, require us to apply all of our available cash to repay these amounts and exercise
other remedies. If such indebtedness were to be accelerated, there can be no assurance that our assets would be sufficient to repay this
indebtedness in full.
Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Certain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and expose us to
interest rate risk. As of December 31, 2012, we had $1,339.5 million of variable rate debt outstanding. If interest rates increase, our debt service
obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would
decrease. Although we have entered into interest rate cap agreements on our term loan facility to reduce interest rate volatility, we cannot assure
you we will be able to do so in the future on acceptable terms or that such caps or the caps we have in place now will be effective.
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making it more difficult for us to satisfy our obligations with respect to our indebtedness;
• requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries'
debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes;
• requiring us to comply with restrictive covenants in our senior credit facilities and indentures, which limit the manner in which we
conduct our business;
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making it more difficult for us to obtain vendor financing from our vendor partners;
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limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;
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placing us at a competitive disadvantage compared to any of our less leveraged competitors;
• increasing our vulnerability to both general and industry-
specific adverse economic conditions; and
• limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or
other general corporate requirements and increasing our cost of borrowing.
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incur or guarantee additional debt;
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pay dividends or make distributions to holders of our capital stock or to make certain other restricted payments or investments;
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repurchase or redeem capital stock;
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make loans, capital expenditures or investments or acquisitions;
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receive dividends or other payments from our subsidiaries;
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enter into transactions with affiliates;
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create liens;
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merge or consolidate with other companies or transfer all or substantially all of our assets;
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transfer or sell assets, including capital stock of subsidiaries; and
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prepay, repurchase or redeem debt.