America Online 2014 Annual Report Download - page 40

Any restructuring actions and cost reduction initiatives that we undertake may not deliver the expected results
and these actions may adversely affect our business operations.
We have undertaken and expect to continue to undertake various restructuring activities and cost reduction
initiatives in an effort to better align our organizational structure and costs with our strategy. In connection with
such activities, we may experience a disruption in our ability to perform functions important to our strategy. Such
activities could result in significant disruptions to our operations, including adversely affecting the timeliness of
product releases, the successful implementation and completion of our strategic objectives and the results of our
operations. If we do not fully realize or maintain the anticipated benefits of this or any restructuring plans and
cost reduction initiatives, our business could be adversely affected.
The terms of our revolving credit facility contain restrictive covenants which limit our business and financing
activities.
The terms of our revolving credit facility include customary covenants which impose restrictions on our
business and financing activities, subject to certain exceptions or the consent of our lenders including, among
other things, limits on our ability to incur additional debt, create liens, enter into merger, acquisition and
divestiture transactions, pay dividends and engage in transactions with affiliates. The credit facility contains
certain customary affirmative covenants, including a requirement that we maintain a maximum consolidated
leverage ratio and a minimum consolidated interest coverage ratio, and customary events of default. Our ability
to comply with these covenants may be adversely affected by events beyond our control, including economic,
financial and industry conditions. A breach of any of the credit facility covenants, including a failure to maintain
a required ratio or meet a required test, may result in an event of default. This may allow our lenders to terminate
the commitments under the credit facility, declare all amounts outstanding under the credit facility (if any),
together with accrued interest, to be immediately due and payable and exercise other rights and remedies. If this
occurs, we may not be able to refinance the accelerated indebtedness on acceptable terms, or at all, or otherwise
repay the accelerated indebtedness.
We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash, repay the
Notes at maturity or repurchase the Notes upon a fundamental change.
Holders of our Notes have the right to require us to repurchase all or a portion of their Notes upon the
occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the Notes to
be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the Notes, unless we
elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of
delivering any fractional share), we will be required to make cash payments in respect of the Notes being
converted. Moreover, we will be required to repay the Notes in cash at their maturity, unless earlier converted or
repurchased. However, we may not have enough available cash or be able to obtain financing at the time we are
required to make repurchases of Notes surrendered therefor or pay cash with respect to Notes being converted or
at their maturity.
In addition, our ability to repurchase or to pay cash upon conversion or at maturity of the Notes may be
limited by law, regulatory authority or agreements governing our future indebtedness. Our failure to repurchase
Notes at a time when the repurchase is required by the Indenture or to pay cash upon conversion or at maturity of
the Notes as required by the Indenture would constitute a default under the Indenture. A default under the
Indenture for the Notes or the fundamental change itself could also lead to a default under our credit facility or
agreements governing our future indebtedness. Moreover, the occurrence of a fundamental change under the
Indenture could constitute an event of default under any such agreements. If the payment of the related
indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient
funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversion or at maturity of the
Notes.
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