Dollar Tree 2015 Annual Report Download - page 33

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17
In addition, certain of these agreements require us to comply with certain financial maintenance covenants. Our ability to
satisfy these financial maintenance covenants can be affected by events beyond our control, and we cannot assure you that we
will meet them.
A breach of the covenants under these agreements could result in an event of default under the applicable indebtedness,
which, if not cured or waived, could result in us having to repay our borrowings before their due dates. Such default may allow
the debt holders to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration
or cross-default provision applies. If we are forced to refinance these borrowings on less favorable terms or if we were to
experience difficulty in refinancing the debt prior to maturity, our results of operations or financial condition could be
materially affected. In addition, an event of default under our credit facilities may permit the lenders under our credit facilities
to terminate all commitments to extend further credit under such credit facilities. Furthermore, if we are unable to repay the
amounts due and payable under our credit facilities, those lenders may be able to proceed against the collateral granted to them
to secure that indebtedness. In the event our lenders or holders of notes accelerate the repayment of such borrowings, we
cannot assure you that we will have sufficient assets to repay such indebtedness.
As a result of these restrictions, we may be:
• limited in how we conduct our business;
• unable to raise additional debt or equity financing to operate during general economic or business downturns; or
• unable to compete effectively, take advantage of new business opportunities or grow in accordance with our plans.
Our variable-rate indebtedness subjects us to interest rate risk, which could cause our annual debt service
obligations to increase significantly.
Certain of our indebtedness, including borrowings under our new revolving credit facility, is subject to variable rates of
interest and exposes us to interest rate risk. 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. An
increase (decrease) of 1.0% on the interest rate would result in an increase (decrease) of $25.2 million in annual interest
expense. Although we may enter into interest rate swaps, involving the exchange of floating- for fixed-rate interest payments,
to reduce interest rate volatility, we cannot assure you we will be able to do so.
Item 1B. UNRESOLVED STAFF COMMENTS
None.