FairPoint Communications 2013 Annual Report Download - page 23

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To operate and expand our business, service our indebtedness and meet our other cash needs, we will require a significant
amount of cash, which may not be available to us. We may not be able to generate sufficient cash to repay or refinance our
indebtedness at maturity or otherwise or to fund our operations, and may be forced to take other actions to satisfy such
obligations, which may not be successful.
Our ability to make payments on, or repay or refinance, our indebtedness, to fund our operations and to fund planned capital
expenditures, unanticipated capital expenditures and other cash needs will depend largely upon our financial condition and operating
performance, including our ability to execute on our business plan. Our future operating performance, to a certain extent, is subject
to general economic, financial, competitive, legislative, regulatory and other factors, such as any pension contributions required
by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that are beyond our control. For example, the
minimum amount of pension contributions that we are required to make, which may be substantial, are determined under the rules
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
Our ability to borrow additional amounts, including under our New Revolving Facility, if necessary to meet our cash needs,
will depend on our ability to remain in compliance with the covenants contained in our debt agreements. If our operating results
are not adequate to meet the financial ratio tests in our debt agreements or if we are unable to generate sufficient cash to service
our debt requirements, we will be required to restructure or refinance our existing indebtedness, which we may not be able to
accomplish under such circumstances on commercially reasonable terms or at all. If we are unable to refinance our debt or obtain
new financing under these circumstances, we may have to consider other options, including:
• sales of assets;
• reduction or delay of capital expenditures, strategic acquisitions, investments and alliances;
• obtaining additional capital; or
• negotiations with our lenders to restructure or refinance the applicable debt.
Our ability to restructure or refinance our indebtedness may depend on the condition of the capital markets and our
financial condition at such time, and any such restructuring and/or refinancing may come with higher interest rates and more
onerous covenants. These alternative measures may not be successful and may not permit us to meet our scheduled debt service
obligations.
An inability to generate sufficient cash from operations to repay or refinance our indebtedness at maturity or otherwise or
to fund our operations could have a material adverse impact on our business, financial condition, results of operations, liquidity
and/or the market price of our outstanding securities.
Our debt agreements contain restrictions that limit our flexibility in operating our business.
The New Credit Agreement and the Indenture contain various covenants that limit our ability to engage in specified types
of transactions. These covenants, under certain circumstances, limit us and our restricted subsidiaries' ability to, among other
things:
• incur additional indebtedness;
• pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;
• make certain investments;
• sell certain assets;
• create or incur liens;
• enter into sale and leaseback transactions;
• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and
• enter into certain transactions with our affiliates.
A breach of any of these covenants could result in a default under the New Credit Agreement or the Indenture. In addition,
any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions. A breach
of any of these covenants could result in a default under one or more of these agreements, including as a result of cross default
provisions. Such default may allow the creditors 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.
In addition, the restrictive covenants in the New Credit Agreement require us to maintain specified financial ratios and to
satisfy other financial condition tests. Our ability to meet those financial ratios and tests depends on our ongoing financial and
operating performance, which, in turn, is subject to economic conditions and to financial, market, and competitive factors, many
of which are beyond our control. See “Item 7. Management's Discussion and Analysis of Financial Conditions and Results of