FairPoint Communications 2004 Annual Report Download - page 61

•limiting our ability in the future to obtain additional financing for working capital, capital expenditures or acquisitions;
•we may not be able to refinance our indebtedness on terms acceptable to us or at all;
•limiting our flexibility in planning for, or reacting to, changes in our business and the communications industry;
•a significant portion of our cash flow from operations is likely to be dedicated to the payment of the principal of and interest on
our indebtedness, thereby reducing funds available for future operations, acquisitions, dividends on our common stock and/or
capital expenditures;
•we may be vulnerable to economic and industry downturns and conditions, including increases in interest rates; and
•placing us at a competitive disadvantage compared to those of our competitors that have less indebtedness.


Subject to certain covenants, our credit facility will permit us to incur additional indebtedness. Any additional indebtedness that we may
incur would exacerbate the risks described in the preceding risk factor.

Our credit facility contains significant restrictions on our ability to pay dividends on our common stock based on meeting a total leverage
ratio, satisfying a restricted payment covenant and compliance with other conditions. See "—Description of Certain Indebtedness—Credit
Facility."

 
As a result of general economic conditions, conditions in the lending markets, the results of our business or for any other reason, we
may elect or be required to amend or refinance our credit facility, at or prior to maturity, or enter into additional agreements for indebtedness.
Any such amendment, refinancing or additional agreement may contain covenants which could limit in a significant manner our ability to
pay dividends to you.

 
The Company is a holding company and conducts all of its operations through its operating subsidiaries. The Company currently has no
significant assets other than equity interests in its first tier subsidiaries. These first tier subsidiaries have no significant assets other than a
direct or indirect equity interest in the Company's operating subsidiaries. As a result, the Company will rely on dividends and other
payments or distributions from its operating subsidiaries to pay dividends with respect to its common stock and to meet its debt service
obligations generally. The ability of the Company's subsidiaries to pay dividends or make other payments or distributions to the Company
will depend on their respective operating results and may be restricted by, among other things:
•the laws of their jurisdiction of organization;
•the rules and regulations of state regulatory authorities;
•agreements of those subsidiaries;
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