CENTURY CASINOS, INC. Forward-Looking Statements, Business Environment and Risk Factors
This quarterly report on Form 10-Q contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the Private Securities Litigation Reform Act of 1995. In addition,
References in this item to "we," "our," or "us" are to the Company and its subsidiaries on a consolidated basis unless the context otherwise requires. The term "USD" refers to US dollars, the term "CAD" refers to Canadian dollars, and the term "PLN" refers to Polish zloty. Certain terms used in this Item 2 without definition are defined in Item 1.
Amounts presented in this Item 2 are rounded. As such, rounding differences could occur in period over period changes and percentages reported throughout this Item 2.
EXECUTIVE OVERVIEW Overview
Since our inception in 1992, we have been primarily engaged in developing and operating gaming establishments and related lodging, restaurant and entertainment facilities. Our primary source of revenue is from the net proceeds of our gaming machines and tables, with ancillary revenue generated from hotel, restaurant, horse racing (including off-track betting), sports betting, iGaming, bowling and entertainment facilities that are in most instances a part of the casinos.
We view each market in which we operate as a separate operating segment and each
casino or other operation within those markets as a reporting unit. We aggregate
all operating segments into three reportable segments based on the geographical
locations in which our casinos operate:
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The table below provides information about the aggregation of our operating
segments and reporting units into reportable segments. The reporting units,
except for Century Downs Racetrack and Casino and Casinos Poland, are owned,
operated and managed through wholly-owned subsidiaries. Our ownership and
operation of Century Downs Racetrack and Casino and Casinos Poland are discussed
below. The real estate assets at our
Reportable Segment Operating Segment Reporting Unit
United States Colorado Century Casino & Hotel - Central City
Century Casino & Hotel - Cripple Creek
West Virginia Mountaineer Casino, Racetrack & Resort
Missouri Century Casino Cape Girardeau
Century Casino Caruthersville (1)
Canada Edmonton Century Casino & Hotel - Edmonton
Century Casino St. Albert
Century Mile Racetrack and Casino
Calgary (2) Century Downs Racetrack and Casino
Poland Poland Casinos PolandCorporate and Other Corporate and Other Cruise Ships & Other
Corporate Other (3)
(1)Includes The Farmstead.
(2)We operated
In
We have controlling financial interests through our subsidiary CRM in the following reporting units:
?We have a 66.6% ownership interest in CPL and we consolidate CPL as a
majority-owned subsidiary for which we have a controlling financial interest.
Polish Airports owns the remaining 33.3% of CPL. We account for and report the
33.3% Polish Airports ownership interest as a non-controlling financial
interest. CPL has been in operation since 1989. As of
City Location License Expiration Number of Slots Number of Tables Warsaw Marriott Hotel September 2028 70 37 Warsaw Hilton Hotel July 2024 70 26 Warsaw LIM Center June 2025 65 4 Bielsko-Biala Hotel President October 2023 49 5
Katowice Park Inn by Radisson October 2023 70 14
Wroclaw Double Tree Hilton Hotel November 2023 70 20
Krakow Dwor Kosciuszko Hotel May 2024 70 5
Lodz Manufaktura Entertainment June 2024 69 10
Complex
In
Casino licenses are granted for six years. When a casino license expires, the Polish Minister of Finance notifies the public of its availability, and interested parties can submit an application for the casino license. Following approval of a casino license by the Minister of Finance, there is a period in which applicants can appeal the decision.
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?We have a 75% ownership interest in CDR, and we consolidate CDR as a
majority-owned subsidiary for which we have a controlling financial interest. We
account for and report the remaining 25% ownership interest in CDR as a
non-controlling financial interest. CDR operates Century Downs Racetrack and
Casino, a REC in
Through our wholly owned subsidiary
As of
Recent Developments Related to COVID-19
Since the inception of the COVID-19 pandemic in
Other Projects and Developments
In
We purchased 50% of the membership interests in Smooth Bourbon for approximately
On
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Recent Developments Related to
On
We are building a new land-based casino with a small hotel. We estimate the
project will cost
In
We are building a hotel at our
Additional Gaming Projects
We currently are exploring additional potential gaming projects and acquisition opportunities. Along with the capital needs of potential projects, there are various other risks which, if they materialize, could affect our ability to complete a proposed project or acquisition or could eliminate its feasibility altogether.
Presentation of Foreign Currency Amounts
The average exchange rates to the US dollar used to translate balances during each reported period are as follows:
For the three months
ended March 31,
Average Rates 2023 2022 % Change
Canadian dollar (CAD) 1.3523 1.2669 (6.7%)
Euros (EUR) 0.9324 0.8909 (4.7%)Polish zloty (PLN) 4.3913 4.1182 (6.6%) Source: Xe Currency Converter
We recognize in our condensed consolidated statements of (loss) earnings foreign
currency transaction gains or losses resulting from the translation of casino
operations and other transactions that are denominated in a currency other than
US dollars. Our casinos in
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DISCUSSION OF RESULTS
For the three months
ended March 31, %
Amounts in thousands 2023 2022 Change Change
Gaming Revenue $ 94,297 $ 89,876 $ 4,421 4.9%
Pari-mutuel, Sports Betting and
iGaming Revenue 3,385 3,430 (45) (1.3%)
Hotel Revenue 2,522 2,074 448 21.6%
Food and Beverage Revenue 5,767 5,038 729 14.5%
Other Revenue 2,537 2,685 (148) (5.5%)
Net Operating Revenue 108,508 103,103 5,405 5.2%
Gaming Expenses (48,062) (44,749) 3,313 7.4%
Pari-mutuel, Sports Betting and
iGaming Expenses (3,712) (3,768) (56) (1.5%)
Hotel Expenses (797) (642) 155 24.1%
Food and Beverage Expenses (5,645) (4,979) 666 13.4%
General and Administrative Expenses (26,702) (26,971) (269) (1.0%) Depreciation and Amortization
(6,855) (6,795) 60 0.9%
Gain on Sale of Casino Operations 574 - 574 100.0%
Loss on Sale of Assets - (2,154) (2,154) (100.0%)
Total Operating Costs and Expenses (91,199) (90,058) 1,141 1.3%
Earnings from
1,091 - 1,091 100.0%
Earnings from Operations 18,400 13,045 5,355 41.1%
Income Tax Expense (1,623) (1,435) 188 13.1%
Non-Controlling Interest (4,274) (2,491) 1,783 71.6%
Net (Loss) Earnings Attributable to
$ 26,054 $ 23,824 $ 2,230 9.4%
(Loss) Earnings Per Share Attributable to
$ (0.04) $ 0.01 $ (0.05) (500.0%) Diluted$ (0.04) $ 0.01 $ (0.05) (500.0%)
(1)For a discussion of Adjusted EBITDA and reconciliation of Adjusted EBITDA to
net (loss) earnings attributable to
Items impacting comparability of the results include the following:
COVID-19 (
Inflation - We have seen operating expenses, such as utilities, maintenance costs and food and beverage costs, increase at our properties but the increases have not been material to date.
Staffing - We have experienced difficulties attracting and retaining staff at
some locations in the US and
Pari-Mutuel
Pari-mutuel revenue includes live racing, export, advanced deposit wagering and off-track betting. Pari-mutuel expense relates to the revenue above and the operation of our racetracks.
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Results of Operations
Net operating revenue increased by
?United States increased by$1.1 million , or 1.7%. ?Canada increased by$0.5 million , or 3.2%. ?Poland increased by$3.8 million , or 17.2%. ?Corporate and Other remained constant.
Operating costs and expenses increased by
?United States increased by$2.4 million , or 4.8%. ?Canada decreased by($2.9) million , or (18.8%). ?Poland increased by$3.1 million , or 15.5%. ?Corporate and Other decreased by($1.4) million , or (27.8%).
Earnings from operations increased by
?United States decreased by($1.3) million , or (8.1%). ?Canada increased by$3.4 million , or 566.8%. ?Poland increased by$0.7 million , or 34.8%. ?Corporate and Other increased by$2.5 million , or 50.1%.
Net earnings attributable to
For a discussion of the factors that impacted each reportable segment, please see "Reportable Segments" below.
Non-US GAAP Measures - Adjusted EBITDA
We define Adjusted EBITDA as net earnings (loss) attributable to
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Management believes that Adjusted EBITDA is a valuable measure of the relative performance of the Company and its properties. The gaming industry commonly uses Adjusted EBITDA as a method of arriving at the economic value of a casino operation. Management uses Adjusted EBITDA to evaluate and forecast the operating performance of the Company and its properties as well as to compare results of current periods to prior periods. Management believes that presenting Adjusted EBITDA to investors provides them with information used by management for financial and operational decision-making in order to understand the Company's operating performance and evaluate the methodology used by management to evaluate and measure such performance. Management believes that using Adjusted EBITDA is a useful way to compare the relative operating performance of separate reportable segments by eliminating the above-mentioned items associated with the varying levels of capital expenditures for infrastructure required to generate revenue, and the often high cost of acquiring existing operations. Our computation of Adjusted EBITDA may be different from, and therefore may not be comparable to, similar measures used by other companies within the gaming industry.
The reconciliation of Adjusted EBITDA to net earnings (loss) attributable to
For the three months ended March 31, 2023
United Corporate
Amounts in thousands States Canada Poland and Other Total
Net earnings (loss)
attributable to Century
Casinos, Inc. shareholders $ 5,375 $ 1,867 $ 1,574 $ (10,059) $ (1,243)
Interest expense (income),
net (1) 7,119 523 (95) 9,957 17,504
Income taxes (benefit) 1,776 1,634 632 (2,419) 1,623
Depreciation and
amortization 5,032 1,127 635 61 6,855
Net earnings attributable to
non-controlling interests - 3,488 786 - 4,274
Non-cash stock-based
compensation - - - 736 736
(Gain) loss on foreign
currency transactions, cost
recovery income and other
(2) - (4,085) (254) 7 (4,332)
Loss on disposition of fixed
assets 470 3 1 5 479
Acquisition costs - - - 158 158
Adjusted EBITDA $ 19,772 $ 4,557 $ 3,279 $ (1,554) $ 26,054 (1)Expense of
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For the three months ended March 31, 2022
United Corporate
Amounts in thousands States Canada Poland and Other Total
Net earnings (loss)
attributable to Century
Casinos, Inc. shareholders $ 8,521 $ (703) $ 931 $ (8,531) $ 218
Interest expense (income),
net (1) 7,007 567 (13) 3,233 10,794
Income taxes - 622 558 255 1,435
Depreciation and
amortization 4,768 1,225 681 121 6,795
Net earnings attributable to
non-controlling interests - 2,025 466 - 2,491
Non-cash stock-based
compensation - - - 673 673
Loss (gain) on foreign
currency transactions and
cost recovery income (2) - 243 18 (12) 249
Loss on disposition of fixed
assets 19 15 3 - 37
Acquisition costs - - - 1,132 1,132
Adjusted EBITDA $ 20,315 $ 3,994 $ 2,644 $ (3,129) $ 23,824 (1)Expense of
Non-US GAAP Measures - Net Debt
We define Net Debt as total long-term debt (including current portion) plus deferred financing costs minus cash and cash equivalents. Net Debt is not considered a liquidity measure recognized under US GAAP. Management believes that Net Debt is a valuable measure of our overall financial situation. Net Debt provides investors with an indication of our ability to pay off all of our long-term debt if it became due simultaneously. The reconciliation of Net Debt is presented below.
Amounts in thousands March 31, 2023 March 31, 2022
Total long-term debt, including current portion
16,170 7,304
Total principal $ 365,175 $ 188,299
Less: Cash and cash equivalents $ 102,707 $ 117,217
Net Debt $ 262,468 $ 71,082
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Reportable Segments
The following discussion provides further detail of consolidated results by reportable segment.United States For the three months ended March 31, % Amounts in thousands 2023 2022 Change Change Gaming Revenue$ 58,393 $ 58,245 $ 148 0.3% Pari-mutuel, Sports Betting and iGaming Revenue 1,282 963 319 33.1% Hotel Revenue 2,403 1,990 413 20.8% Food and Beverage Revenue 3,110 2,934 176 6.0% Other Revenue 1,181 1,116 65 5.8% Net Operating Revenue 66,369 65,248 1,121 1.7% Gaming Expenses (29,662) (29,055) 607 2.1% Pari-mutuel, Sports Betting and iGaming Expenses (631) (467) 164 35.1% Hotel Expenses (733) (596) 137 23.0% Food and Beverage Expenses (2,542) (2,486) 56 2.3%
General and Administrative Expenses (13,499) (12,348) 1,151 9.3% Depreciation and Amortization
(5,032) (4,768) 264 5.5%
Total Operating Costs and Expenses (52,099) (49,720) 2,379 4.8% Earnings from Operations
14,270 15,528 (1,258) (8.1%)
Income Tax Expense (1,776) - 1,776 100.0%
Net Earnings Attributable to
Century Casinos, Inc. Shareholders 5,375 8,521 (3,146) (36.9%)
Adjusted EBITDA $ 19,772 $ 20,315 $ (543) (2.7%)
Sports wagering in
We operate an internet and mobile interactive gaming application in
There are two potential competing casinos that may open in the
The table below provides results by operating segment withinthe United States reportable segment. For the three months ended March 31, % Amounts in millions 2023 2022 Change Change Net Operating Revenue Colorado$ 10.6 $ 10.3 $ 0.3 3.1% West Virginia 26.7 26.3 0.4 1.4% Missouri 29.1 28.7 0.4 1.5% Total United States 66.4 65.3 1.1 1.7% Operating Costs and Expenses (1) Colorado$ 7.5 $ 7.1 $ 0.4 5.6% West Virginia 22.7 22.0 0.7 3.2% Missouri 16.8 15.9 0.9 5.7% Total United States 47.0 45.0 2.0 4.4%
(1)Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.
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Three Months Ended
The following discussion highlights results for the three months ended
A reconciliation of net earnings attributable to
Canada For the three months ended March 31, % Amounts in thousands 2023 2022 Change Change Gaming Revenue$ 10,598 $ 9,976 $ 622 6.2% Pari-mutuel, Sports Betting and iGaming Revenue 2,103 2,467 (364) (14.8%) Hotel Revenue 119 84 35 41.7% Food and Beverage Revenue 2,426 1,914 512 26.8% Other Revenue 1,257 1,558 (301) (19.3%) Net Operating Revenue 16,503 15,999 504 3.2% Gaming Expenses (2,257) (2,217) 40 1.8% Pari-mutuel, Sports Betting and iGaming Expenses (3,081) (3,301) (220) (6.7%) Hotel Expenses (64) (46) 18 39.1% Food and Beverage Expenses (2,182) (1,767) 415 23.5%
General and Administrative Expenses (4,365) (4,689) (324) (6.9%) Depreciation and Amortization
(1,127) (1,225) (98) (8.0%)
Gain on Sale of Casino Operations 574 - 574 100.0%
Loss on Sale of Assets - (2,154) (2,154) (100.0%)
Total Operating Costs and Expenses (12,502) (15,399) (2,897) (18.8%) Earnings from Operations
4,001 600 3,401 566.8%
Income Tax Expense (1,634) (622) 1,012 162.7%
Non-Controlling Interest (3,488) (2,025) 1,463 72.2%
Net Earnings (Loss) Attributable to
Century Casinos, Inc. Shareholders 1,867 (703) 2,570 365.6%
Adjusted EBITDA $ 4,557 $ 3,994 $ 563 14.1%
In
The AGLC approved the relocation of a competing casino to a new site
approximately eight miles south of Century Downs that opened in late
On
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Results in US dollars were impacted by a (6.7%) decrease in the average exchange
rate between the US dollar and Canadian dollar for the three months ended
The tables below provide results by operating segment within theCanada reportable segment. For the three months ended March 31, % Amounts in CAD, in millions 2023 2022 Change Change Net Operating Revenue Edmonton$ 16.2 $ 13.6 $ 2.6 18.8% Calgary 6.2 6.7 (0.5) (7.5%) Total Canada 22.4 20.3 2.1 10.2% Operating Costs and Expenses (1) Edmonton$ 12.4 $ 11.2 $ 1.2 10.7% Calgary 3.0 4.0 (1.0) (25.0%) Total Canada 15.4 15.2 0.2 1.3% For the three months ended March 31, % Amounts in USD, in millions 2023 2022 Change Change Net Operating Revenue Edmonton$ 11.9 $ 10.7 $ 1.2 11.3% Calgary 4.6 5.3 (0.7) (13.4%) Total Canada 16.5 16.0 0.5 3.2% Operating Costs and Expenses (1) Edmonton$ 9.1 $ 8.9 $ 0.2 2.2% Calgary 2.8 3.2 (0.4) (12.5%) Total Canada 11.9 12.1 (0.2) (1.7%)
(1)Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization and gain on sale of casino operations and loss on sale of assets.
Three Months Ended
The following discussion highlights results for the three months ended
Through early
A reconciliation of net earnings (loss) attributable to
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Poland For the three months ended March 31, % Amounts in thousands 2023 2022 Change Change Gaming Revenue$ 25,249 $ 21,625 $ 3,624 16.8% Food and Beverage Revenue 231 190 41 21.6% Other Revenue 99 9 90 1000.0% Net Operating Revenue 25,579 21,824 3,755 17.2% Gaming Expenses (16,101) (13,450) 2,651 19.7% Food and Beverage Expenses (921) (726) 195 26.9%
General and Administrative Expenses (5,279) (5,007) 272 5.4% Depreciation and Amortization
(635) (681) (46) (6.8%)
Total Operating Costs and Expenses (22,936) (19,864) 3,072 15.5%
Earnings from Operations 2,643 1,960 683 34.8%
Income Tax Expense (632) (558) 74 13.3%
Non-Controlling Interest (786) (466) 320 68.7%
Net Earnings Attributable to
Century Casinos, Inc. Shareholders 1,574 931 643 69.1%
Adjusted EBITDA $ 3,279 $ 2,644 $ 635 24.0%
In
Results in US dollars were impacted by a (6.6%) decrease in the average exchange
rate between the US dollar and Polish zloty for the three months ended
The tables below provide results for the
For the three months
ended March 31, %
Amounts in PLN, in millions 2023 2022 Change Change
Net Operating Revenue
Poland $ 112.3 $ 90.2 $ 22.1 24.6%
Operating Costs and Expenses (1)
Poland $ 97.9 $ 79.1 $ 18.8 23.8%
For the three months
ended March 31, %
Amounts in USD, in millions 2023 2022 Change Change
Net Operating Revenue
Poland $ 25.6 $ 21.8 $ 3.8 17.2%
Operating Costs and Expenses (1)
Poland $ 22.3 $ 19.2 $ 3.1 16.1%
(1)Operating costs and expenses are calculated as total operating costs and expenses less depreciation and amortization.
Three Months Ended
The following discussion highlights results for the three months ended
Net operating revenue increased primarily due to increased gaming revenue. We saw an increase in revenue throughout 2022 and into 2023 as COVID-19 related travel restrictions lessened. Operating costs and expenses increased due to an increase in payroll costs and gaming-related expenses.
A reconciliation of net earnings attributable to
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Corporate and Other
For the three months
ended March 31, %
Amounts in thousands 2023 2022 Change Change
Gaming Revenue $ 57 $ 30 $ 27 90.0%
Other Revenue - 2 (2) (100.0%)
Net Operating Revenue 57 32 25 78.1%
Gaming Expenses (42) (27) 15 55.6%General and Administrative Expenses (3,559) (4,927) (1,368) (27.8%) Depreciation and Amortization
(61) (121) (60) (49.6%)
Total Operating Costs and Expenses (3,662) (5,075) (1,413) (27.8%)
Earnings from
1,091 - 1,091 100.0%
Loss from Operations (2,514) (5,043) 2,529 50.1%
Income Tax Benefit (Expense) 2,419 (255) (2,674) (1048.6%)
Net Loss Attributable to Century
Casinos, Inc. Shareholders (10,059) (8,531) (1,528) (17.9%)
Adjusted EBITDA $ (1,554) $ (3,129) $ 1,575 50.3%
The following operations make up the reporting unit Cruise Ships & Other in the Corporate and Other reportable segment:
?As of
Ship Operated From Operated ToMein Schiff Herz April 5, 2022 April 16, 2023 Mein Schiff 6June 11, 2021 April 18, 2022
Three Months Ended
General and administrative expenses decreased by
A reconciliation of net loss attributable to
Non-Operating Income (Expense)
Non-operating income (expense) was as follows:
For the three months
ended March 31, %
Amounts in thousands 2023 2022 $ Change Change
Interest Income $ 145 $ 17 $ 128 752.9%
Interest Expense (17,649) (10,811) 6,838 63.3%
Gain on Foreign Currency
Transactions, Cost Recovery
Income and Other 3,758 1,893 1,865 98.5%
Non-Operating (Expense)
Income $ (13,746) $ (8,901) $ 4,845 54.4%
Interest income
Interest income is directly related to interest earned on our cash reserves and the Acquisition Escrow.
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Interest expense
Interest expense is directly related to interest owed on our borrowings under
our Goldman Credit Agreement, Macquarie Credit Agreement, our financing
obligation with VICI PropCo, our CPL and CRM borrowings, our capital lease
agreements and interest expense related to the CDR land lease. Interest expense
increased as a result of an additional
Gain on foreign currency transactions, cost recovery income and other
CDR received cost recovery income of
Taxes
Income tax expense is recorded relative to the jurisdictions that recognize book
earnings. During the three months ended
LIQUIDITY AND CAPITAL RESOURCES
Our business is capital intensive, and we rely heavily on the ability of our casinos to generate operating cash flow. We use the cash flows that we generate to maintain operations, fund reinvestment in existing properties for both refurbishment and expansion projects, repay third party debt, and pursue additional growth via new development and acquisition opportunities. When necessary and available, we supplement the cash flows generated by our operations with either cash on hand or funds provided by bank borrowings or other debt or equity financing activities.
Cash Flows - Summary
Our cash flows; cash, cash equivalents and restricted cash; and working capital
consisted of the following:
For the three months
ended March 31,
Amounts in thousands 2023 2022
Net cash provided by operating activities $ 12,280 $ 11,545 Net cash (used in) provided by investing activities (10,791) 1,082 Net cash used in financing activities
(337) (3,412)
Cash, cash equivalents and restricted cash (1)
$ 161,237 $ 80,157
(1)Cash, cash equivalents and restricted cash as of
Operating Activities
Our cash flows from operations have historically been positive and sufficient to fund ordinary operations. Trends in our operating cash flows tend to follow trends in earnings from operations, excluding non-cash charges. Please refer to the condensed consolidated statements of cash flows in Part I, Item 1 of this Form 10-Q and to management's discussion of the results of operations above in this Item 2 for a discussion of earnings from operations.
Investing Activities
Net cash used in investing activities for the three months ended
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Net cash provided by investing activities for the three months ended
Financing Activities
Net cash provided by financing activities for the three months ended
Net cash used in financing activities for the three months ended
Borrowings and Repayments of Long-Term Debt and Lease Agreements
As of
The following table lists the amount of remaining 2023 maturities of our debt:
Amounts in thousands
Goldman Credit UniCredit Century Downs
Agreement (1) Term Loans ?Land Lease Total
$ 2,625 $ 1,359 $ - $ 3,984 (1)The Term Loan under the Goldman Credit Agreement requires scheduled quarterly
payments of
Based on our current interest and Term Loan payment requirements under the
Goldman Credit Agreement, we expect our cash payments under the Goldman Credit
Agreement due for the remainder of 2023 will be approximately
The following table lists the amount of remaining 2023 payments due under our operating and finance lease agreements:
Amounts in thousands
Operating Leases Finance Leases $ 3,948 $ 137
Cash payments due under the Master Lease for the remainder of 2023 are
Common Stock Repurchase Program
Since
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Potential Sources of Liquidity and Short-Term Liquidity
Historically, our primary source of liquidity and capital resources has been
cash flow from operations. As of
Impact of COVID-19
The duration and impact of the COVID-19 pandemic remains uncertain. We cannot predict the negative impacts that COVID-19 will have on our consumer demand, workforce, suppliers, contractors and other partners, and, whether future closures will be required. While the severity and duration of such business impacts cannot currently be estimated, the effects of COVID-19, governmental health and safety requirements and any future closures are expected to have a material impact on our business. We will continue to monitor our liquidity and make reductions to marketing and operating expenditures, where possible, if future government mandates or closures are required that would have an adverse impact on us.
Planned Projects, the Nugget Acquisition, the Rocky Gap Acquisition and Sources of Liquidity
Planned capital expenditures for the remainder of 2023 include approximately
In
On
We may be required to raise additional capital to address our liquidity and
capital needs. We have a shelf registration statement with the
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If necessary, we may seek to obtain further term loans, mortgages or lines of credit with commercial banks or other debt or equity financings to supplement our working capital and investing requirements. Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings. A financing transaction may not be available on terms acceptable to us, or at all, and a financing transaction may be dilutive to our current stockholders. The failure to raise the funds necessary to fund our debt service and rent obligations and finance our operations and other capital requirements could have a material and adverse effect on our business, financial condition and liquidity.
In addition, we expect our US domestic cash resources will be sufficient to fund
our US operating activities and cash commitments for investing and financing
activities. While we currently do not have an intent nor foresee a need to
repatriate funds, we could require more capital in the US than is generated by
our US operations for operations, capital expenditures or significant
discretionary activities such as acquisitions of businesses and share
repurchases. If so, we could elect to repatriate earnings from foreign
jurisdictions in the form of a cash dividend, which would generally be exempt
from taxation with the exception of the adverse impact of withholding taxes. We
also could elect to raise capital in the US through debt or equity issuances. We
estimate that approximately
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