Item 1A. Risk Factors

We are subject to many risks and uncertainties including, without limitation, our results of operations and cash flows. Some of these risks and uncertainties may cause our financial performance, business or operations to vary, or they may materially or adversely affect our financial performance. These are discussed below. The risks and uncertainties described in this Annual Report on Form 10-K are not the only ones we face. Others—which are not currently known to us, or that we believe are immaterial—also may adversely affect our financial performance, business or operations.

Risks Relating to the Proposed Acquisition by Sysco

There can be no assurance that Sysco will assume the Senior Notes. There also can be no assurance as to the credit worthiness of the obligors under the indenture for the Senior Notes after the Acquisition.

There can be no assurance as to the credit worthiness of the obligors under the indenture for the Senior Notes after the Acquisition has been completed. At that time, US Foods and the subsidiary guarantors of the Senior Notes will all become indirect subsidiaries of Sysco. Sysco has advised us that if any of our Senior Notes remain outstanding following the Acquisition, it intends to fully and unconditionally guarantee those obligations. However, Sysco is under no contractual or legal obligation to do this under the indenture, the Merger Agreement or otherwise or to redeem or refinance the Senior Notes. If Sysco assumes the Senior Notes, there is no assurance it will have the same credit worthiness that it does now, or that it will continue to maintain that credit worthiness after it integrates US Foods and its subsidiaries. If Sysco does not assume the Senior Notes—and we and the subsidiary guarantors continue to be obligors under the indenture—there can be no assurances on the credit worthiness or operational plans of US Foods or the subsidiary guarantors after they have been acquired by Sysco. Further, pursuant to the consent of the holders of the Senior Notes, the Acquisition will not be deemed to be a change of control under the indenture, and Sysco will not need to make a change of control offer.

The proposed acquisition is subject to receiving consents and approvals from government entities with the power to impose conditions that could have an adverse effect on us, or could delay or prevent the Acquisition.

Completion of the Acquisition by Sysco is conditioned upon, among other things, the expiration or termination of applicable waiting periods under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). In addition, we must receive other regulatory approvals, each as described in the Merger Agreement. The state attorneys general of Florida, Indiana and other U.S. states have announced they are reviewing the proposed Acquisition. These reviews may cause extensive delays in the consummation of the Acquisition. The reviewing authorities may not permit the Acquisition at all, or they may impose restrictions or conditions on the completion of the Acquisition. There is no assurance that US Foods and Sysco will obtain the governmental approvals necessary for the Acquisition. Any delay in completing the Acquisition could diminish its anticipated benefits, or result in additional transaction costs, loss of revenue, or other negative effects associated with uncertainty about the situation. In February 2014, the Federal Trade Commission (the “FTC”) requested additional information and documentary materials in connection with the Acquisition under

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notification requirements of the HSR Act, which is frequently referred to as a “second request,” and Sysco and US Foods are continuing to work closely and cooperate with the FTC as it conducts its review of the Acquisition.

Sysco’s failure to acquire us could adversely affect our business.

There is no assurance this Acquisition or any other transaction will occur. Consummation of the Acquisition is subject to various conditions, including the consents or approvals of government authorities noted above. We will have incurred significant costs—including the diversion of management resources—for which we will receive little or no benefit if the Acquisition does not happen. The Merger Agreement is subject to termination by either party if the Acquisition is not completed on or before March 8, 2015. The agreement also is subject to extension by either party to allow for clearance under the HSR Act, but not past September 8, 2015. In addition, the Merger Agreement contains certain other termination rights for both USF Holding Corp. and Sysco. A failed transaction may result in negative publicity. Any of these events—individually or in combination—could have a material adverse effect on our results of operations.

The announcement of our impending acquisition by Sysco could adversely affect our business, financial results and operations, including our relationships with customers, vendors and employees.

The announcement of the proposed Acquisition could cause disruptions in and create uncertainty surrounding our business. This could affect our relationships with customers, vendors and employees, which could have an adverse effect on our business, financial results and operations. In particular, we could lose important personnel if some employees decide to leave in light of the proposed Acquisition. We could potentially lose customers or suppliers, or our customers or suppliers could modify their relationships with us in an adverse manner. In addition, we have devoted—and will continue to devote—significant management resources to complete the Acquisition. This may cause our business and operating results to suffer.

The Merger Agreement also places restrictions on how we conduct our business before the Acquisition is completed. These restrictions could result in our inability to respond effectively, and in a timely manner, to competitive pressures, industry developments and future opportunities. This could harm our business, financial results and operations. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information about the proposed acquisition by Sysco and its impact on our business, including restrictive covenants relating to our operations.

Risks Related to Our Business

Ours is a low-margin business, and our profitability is directly affected by cost inflation, commodity volatility and other factors.

Foodservice distribution is characterized by relatively high inventory turnover with relatively low profit margins. We make a significant portion of our sales at prices that are based on the cost of products we sell, plus a percentage margin. As a result, our profit levels may be negatively affected during periods of product cost deflation, even though our gross profit percentage may remain relatively constant. Prolonged periods of product cost inflation also may reduce our profit margins and earnings, if product cost increases cannot be passed on to customers because they resist paying higher prices. In addition, periods of rapid inflation may have a negative effect on our business. There may be a lag between the time of the price increase and the time at which we are able to pass it along, as well as the impact it may have on discretionary spending by consumers.

Competition in our industry is intense, and we may not be able to compete successfully.

Foodservice distribution is highly competitive. This includes a large number of local and regional distributors. These companies often align themselves with other smaller distributors through purchasing cooperatives and marketing groups. The goal is to enhance their geographic reach, private label offerings, overall purchasing

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power, cost efficiencies, and ability to meet customer distribution requirements. These suppliers also rely on local presence as a source of competitive advantage, and they may have lower costs and other competitive advantages due to geographic proximity. Additionally, alternative distribution channels—such as cash and carry operations, commercial wholesale outlets, club stores and grocery stores—continue to serve the commercial foodservice market. We also experience competition from online direct food wholesalers, such as Amazon.com. We generally do not have exclusive service agreements with our customers, and they may switch to others that offer lower prices, differentiated products or customer service that is perceived to be superior. We believe most purchasing decisions in the foodservice distribution industry are based on the quality and price of the product, plus a distributor’s ability to completely and accurately fill orders and provide timely deliveries.

Increased competition has caused the foodservice distribution industry to change, as distributors seek to lower costs, further increasing pressure on the industry’s profit margins. Heightened competition among our suppliers, significant pricing initiatives or discount programs established by competitors, new entrants, and trends toward vertical integration could create additional competitive pressures that reduce margins and adversely affect our business, financial condition and results of operations.

We rely on third-party suppliers, and our business may be affected by interruption of supplies or increases in product costs.

We get substantially all of our foodservice and related products from third-party suppliers. We typically do not have long-term contracts with suppliers. Although our purchasing volume can provide leverage when dealing with suppliers, they may not provide the foodservice products and supplies we need in the quantities and at the prices requested. We do not control the actual production of the products we sell. This means we are also subject to delays caused by interruption in production and increases in product costs based on conditions outside our control. These conditions include work slowdowns, work interruptions, strikes or other job actions by employees of suppliers; severe weather; crop conditions; product recalls; transportation interruptions; unavailability of fuel or increases in fuel costs; competitive demands; and natural disasters or other catastrophic events (including, but not limited to, the outbreak of food-borne illnesses in the U.S.). Our inability to obtain adequate supplies of foodservice and related products because of any of these or other factors could mean that we could not fulfill our obligations to our customers and, as a result, our customers may turn to other distributors.

Significant increases in fuel costs could hurt our business.

The high cost of fuel can negatively affect consumer confidence and discretionary spending. As a result, this reduces the frequency and amount spent by consumers for food prepared away from home. In addition, the high cost of fuel can also increase the price we pay for products, as well and the costs we incur to deliver products to our customers. These factors in turn negatively affect our sales, margins, operating expenses and operating results. Additionally, from time to time, we enter into forward purchase commitments for some of our fuel requirements—at prices equal to the then-current market price. If fuel prices decrease significantly, these forward purchases may prove ineffective and result in us paying higher than market costs for part of our fuel. As of December 28, 2013, we had diesel fuel forward purchase commitments totaling $37 million through December 2014, which locked in approximately 20% of our projected diesel fuel purchase needs for the contracted period. A 10% change in diesel prices would cause our uncommitted diesel fuel costs through December 2014 to change by approximately $14 million. See “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” for further discussion of market risks relating to diesel fuel.

An economic downturn, or other factors affecting consumer confidence, could reduce the amount of food prepared and consumed away from home, which could harm our business.

The foodservice market is sensitive to national and regional economic conditions. The general U.S. economic slowdown in the recent years, the uncertainty in the financial markets, and slow job growth affected consumer confidence and discretionary spending. Inflation, a renewed decline in economic activity, and other factors

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affecting consumer confidence—and the frequency and amount spent by consumers for food prepared away from home—may reduce our sales and operating results in the future. Additionally, prolonged periods of product cost inflation may have a negative impact on our profit margins and earnings, if the product cost increases cannot be passed on to customers who resist paying higher prices or negatively affect consumer spending. Our operating results are also sensitive to, and may be adversely affected by, other factors. These include difficulties collecting accounts receivable, competitive price pressures, severe weather conditions, and unexpected increases in fuel or other transportation-related costs that are beyond our control. There can be no assurance that one or more of these factors will not reduce future operating results.

We face risks related to labor relations and the availability of qualified labor.

On December 28, 2013, we had approximately 25,000 employees. About 4,500 were members of local unions associated with the International Brotherhood of Teamsters and other labor organizations. In fiscal year 2013, eight agreements covering approximately 900 employees were renegotiated. In fiscal 2014, twelve agreements covering approximately 1,600 employees will be subject to renegotiation. Failure to effectively renegotiate any of these contracts could result in work stoppages. We may be subject to increased efforts to subject us to a multi-location labor dispute, as an individual labor agreements expire. This would place us at greater risk of being materially adversely affected by labor disputes. We also believe we have satisfactory relationships with our employees, including the unions that represent some of our employees. However, a work stoppage due to our failure to renegotiate union contracts could have a significant negative effect on us. So could any shortage of qualified labor. We do extensive contingency planning in advance of all negotiations. Our goal is to ensure that we are able to operate a facility that may be affected by a work stoppage. Recruiting and retention efforts, and actions to increase productivity may not be successful, and we could encounter a shortage of qualified drivers in the future. This kind of shortage would decrease our ability to effectively serve customers. It would also likely lead to higher wages for employees and a corresponding reduction in our profitability.

A change in our relationships with Group Purchasing Organizations could negatively affect our relationships with customers, which could reduce our profitability.

No single customer represented more than 4% of our total customer sales in fiscal 2013. However, some of our customers purchase their products under arrangements with Group Purchasing Organizations (“GPOs”). GPOs act as agents on behalf of their members by negotiating pricing, delivery, and other terms with us. Our customers who are members of GPOs purchase products directly from us on the terms negotiated by their GPO. GPOs use the combined purchasing power of their members to lower the prices paid by their members, and we have experienced some pricing pressure from customers who associate with GPOs. Approximately 24% of our net sales in fiscal 2013 were made by customers under terms negotiated by GPOs. To the extent our customers are able to independently negotiate competitive pricing or become members of GPOs, we may be forced to lower our prices so they will remain customers, which would negatively affect operating margins. In addition, if we are unable to maintain our relationships with GPOs—or if GPOs are able to negotiate more favorable terms for their members with our competitors—we could lose some or all of that business. This could adversely affect our future operating profits.

If we fail to increase or maintain our sales to independent restaurant customers, our profitability may suffer.

Our most profitable customers are independent restaurants. We typically provide a higher level of services to these customers and are able to earn a higher operating margin on sales. Our ability to continue to gain market share of independent customers is critical to achieving increased operating profits. Changes in the buying practices of independent customers or decreases in our sales to this type of customer could have a material negative impact on our profitability.

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Changes in industry pricing practices could negatively affect our profitability.

Promotional allowances have traditionally generated a significant percentage of foodservice distribution gross margins. These payments from suppliers are based upon the efficiencies that the distributor provides by volume purchasing, and marketing and merchandising expertise. Promotional allowances are a standard industry practice and represent a significant source of profitability for our competitors and us. Any change in industry practices that reduced or eliminated purchasing allowances—without corresponding increases in sales margin—could be disruptive to us and the industry as a whole, and could have a material negative effect on our profitability.

If our competitors implement a lower cost structure, they may be able to offer reduced prices to customers. We may be unable to adjust our cost structure to compete profitably.

Over the last several decades, the food retail industry has undergone a significant change. Companies such as Wal-Mart and Costco have developed a lower cost structure, so they can provide their customers with an everyday low-cost product offering. In addition, commercial wholesale outlets, such as Restaurant Depot, offer an additional low-cost option in the markets they serve. As a large-scale foodservice distributor, we have similar strategies to remain competitive in the marketplace by reducing our cost structure. However, to the extent more of our competitors adopt an everyday low price strategy, we would potentially be pressured to lower prices to our customers. That would require us to achieve additional cost savings to offset these reductions. We may be unable to change our cost structure and pricing practices rapidly enough to successfully compete in that environment.

Our business may be subject to significant environmental, health and safety costs.

Our operations face a broad range of federal, state and local laws and regulations. These include environmental issues, such as discharges to air, soil and water; the handling and disposal of hazardous substances; the investigation and remediation of contamination resulting from releasing petroleum products and other hazardous substances; employee health and safety; and fleet safety. In the course of our operations, we use and dispose of limited volumes of hazardous substances, and we store fuel in on-site aboveground and underground storage tanks. At several current and former facilities, we are investigating and remediating known or suspected contamination from releases of fuel and other hazardous substances. We cannot be sure that compliance with existing or future environmental, health and safety laws—such as those related to remediation obligations—will not adversely affect future operating results.

We are subject to extensive governmental regulation, the enforcement of which could adversely affect our business, financial condition and results of operations.

Our operations are subject to a number of complex and stringent food safety, transportation, labor, employment and other laws and regulations. These laws and regulations generally require us to maintain and comply with a wide variety of certificates, permits, licenses and other approvals. (See “Business—Regulation.”) Regulatory authorities have broad powers with respect to our operations. They may revoke, suspend, condition or limit our licenses or ability to conduct business. Our failure to maintain required certificates, permits or licenses—or to comply with applicable laws, ordinances or regulations—could result in substantial fines or possible revocation of our authority to conduct our operations. We cannot be sure that existing laws or regulations will not be revised, or that new laws or regulations—which could have an adverse impact on our operations—will not be adopted or become applicable to us. We also cannot be sure that we will be able to recover any or all increased costs of compliance from our customers, or that our business and financial condition will not be materially and adversely affected by future changes in applicable laws and regulations.

We rely heavily on technology, and any disruption in existing or delay in implementing new technology could adversely affect our business.

Our ability to control costs and maximize profits, as well as to serve customers most effectively, depends on the reliability of our information technology systems and related data entry processes in our transaction intensive business. We rely on software and other technology systems to manage significant aspects of our business. These

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include to make purchases, process orders, manage our warehouses, load trucks in the most efficient manner, and to optimize the use of storage space. Any disruption to these information systems could negatively affect our customer service, decrease the volume of our business, and result in increased costs. We have invested and continue to invest in technology security initiatives, business continuity, and disaster recovery plans. However, these measures cannot fully insulate us from technology disruption that could impair operations and profits. Information technology systems evolve rapidly. To compete effectively, we are required to integrate new technologies in a timely and cost-effective manner. If competitors implement new technologies before we do, allowing them to provide lower priced or enhanced services of superior quality compared to those we provide, our operations and profits could be affected.

A cyber-security incident and other technology disruptions could negatively affect our business and our relationships with customers.

We rely upon information technology networks and systems to process, transmit and store electronic information, and to manage or support virtually all of our business processes and activities. We also use mobile devices, social networking and other online activities to connect with our employees, suppliers, business partners and our customers. These uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information. Our business involves the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including customers’ and suppliers’ personal information, private information about employees, and financial and strategic information about the Company and its business partners. Further, the Company is also expanding and improving its information technologies, resulting in a larger technological presence and corresponding increased exposure to cybersecurity risk. Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective. The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property—or interference with our information technology systems or the technology systems of third parties on which we rely—could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability and competitive disadvantage.

We may be subject to or affected by liability claims related to products we distribute.

We—as any seller of food—may be exposed to liability claims in the event that the products we sell cause injury or illness. We believe we have sufficient primary or excess umbrella liability insurance to cover product liability claims. However, our current insurance may not continue to be available at a reasonable cost or, if available, may not be adequate to cover all of our liabilities. We generally seek contractual indemnification and insurance coverage from parties supplying products to us. But this indemnification or insurance coverage is limited, as a practical matter, to the creditworthiness of the indemnifying party and the insured limits of any insurance provided by suppliers. If we do not have adequate insurance or contractual indemnification available, the liability related to defective products could adversely affect our results of operations.

Any negative media exposure or other event that harms our reputation could hurt our business.

Maintaining a good reputation is critical to our business, particularly in selling our private label products. Any event that damages our reputation, justified or not, could quickly affect our revenues and profits. This includes adverse publicity about the quality, safety or integrity of our products. Reports—whether or not they are true—of food-borne illnesses (such as e. coli, avian flu, bovine spongiform encephalopathy, hepatitis A, trichinosis or salmonella) and injuries caused by food tampering could severely injure our reputation. If patrons of our national chain and local restaurant customers become ill from food-borne illnesses, the customers could be forced to temporarily close restaurant locations and our sales would correspondingly decrease. In addition, instances of food-borne illnesses or food tampering or other health concerns—even those unrelated to our products—can result in negative publicity about the food service distribution industry and dramatically reduce our sales.

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We have been the subject of governmental investigations.

We have received requests for information from the State of Florida’s Department of Financial Services regarding a contract we have with the Florida Department of Corrections, as well as a request from the Office of the Attorney General of the State of California seeking information regarding our California customers from 2001 to present. In each respective instance, we are cooperating with the investigation. We are further aware of two qui tam actions filed in Florida courts against the Company. However, because each suit is sealed, we do not have any further information about the nature of the claims alleged or remedies sought. At this stage, we cannot determine the likelihood of success of any of the above claims or the potential liability if they are successful and therefore there can be no assurance that adverse determination with respect to either matter would not have a material adverse effect on our financial condition.

Our retirement benefits could give rise to significant expenses and liabilities in the future.

We sponsor defined benefit pension and other post-retirement plans. Pension and post-retirement obligations give rise to significant expenses that are dependent on assumptions in Note 17 to our Audited Consolidated Financial Statements included in this Annual Report on Form 10-K.

Pension and post-retirement expense for fiscal 2013 was $40 million. The amount by which the present value of projected benefit obligations of our pension and other post-retirement plans exceeded the market value of plan assets of our plans, as of December 28, 2013, was $101 million. We review our pension and post-retirement plan assumptions regularly. We participate in various “multi-employer” pension plans administered by labor unions representing some of our employees. We make periodic contributions to these plans to allow them to meet their pension benefit obligations to their participants. In the event that we withdraw from participating in one of these plans, then-applicable law could require us to make withdrawal liability payments to the plan, and we would have to reflect that on our balance sheet. Our withdrawal liability for any multi-employer plan would depend on the extent of the plan’s funding of vested benefits. In connection with the closing of our Boston South distribution facility in 2011, we incurred a withdrawal liability of approximately $40 million, to be paid in installments, including interest, through 2031. In 2012, we incurred an $18 million settlement charge resulting from lump-sum payments to former employees participating in several Company-sponsored pension plans. In the ordinary course of our renegotiation of collective bargaining agreements with labor unions that maintain these plans, we could decide to discontinue participation in a plan. In that event, we could face a withdrawal liability. We could also be treated as withdrawing from participation in one of these plans, if the number of our employees participating in these plans is reduced to a certain degree over certain periods of time. Such reductions in the number of employees participating in these plans could occur as a result of changes in our business operations, such as facility closures or consolidations. Some multi-employer plans, including ones in which we participate, are reported to have significant underfunded liabilities. Such underfunding could increase the size of our potential withdrawal liability. For a detailed description of our retirement plans, see Note 17 to our Audited Consolidated Financial Statements included in this Annual Report on Form 10-K.

We incur additional risks as a result of being obligated to file reports under the Securities Exchange Act of 1934, as amended, and our management is required to devote substantial time to new compliance initiatives.

As a private company, we were not historically subject to the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the Sarbanes-Oxley Act of 2002. In connection with the 2013 registration of our Senior Notes, we are now required to file annual, quarterly and current reports under the Exchange Act with the SEC with respect to our business and financial condition. In addition, we are now subject to some of the requirements of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC. These require us to implement additional corporate governance practices and adhere to a variety of reporting requirements and complex accounting rules. Compliance with these obligations requires us to devote significant management time and places significant additional demands on our finance and accounting staff and on our financial, accounting and information systems. In addition, as a result of filing the registration statements in connection with the exchange offers, we are required to maintain effective disclosure controls and procedures

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and internal control over financial reporting. There is no guarantee that our disclosure controls and procedures or internal control over financial reporting will be effective in future years. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. If we are unable to conclude that we have effective internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in value and liquidity of our indebtedness, including the Senior Notes, and make it more difficult for us to raise capital in the future. Failure to comply with the Sarbanes-Oxley Act of 2002 or applicable rules and regulations of the SEC could potentially subject us to sanctions or investigations by the SEC, or other regulatory authorities.

We must effectively integrate the businesses we acquire.

Historically, a portion of our growth has come through acquisitions. If we are unable to integrate acquired businesses successfully—or realize anticipated economic, operational and other benefits and synergies in a timely manner—our profitability may decrease. Integrating acquired businesses may be more difficult in a region or market in which we have limited expertise. A significant expansion of our business and operations, in terms of geography or magnitude, could strain our administrative and/or operational resources. Significant acquisitions may also require incurring additional debt. This could increase our interest expense, and make it difficult for us to get favorable financing for other acquisitions or capital investments in the future.

We may be unable to achieve some or all of the benefits that we expect from our cost savings initiatives.

We may not be able to realize some or all of our expected cost savings in the future. A variety of factors could cause us not to realize some of the expected cost savings. These include, among others, delays in the anticipated timing of activities related to our cost savings initiatives, lack of sustainability in cost savings over time, and unexpected costs associated with operating our business. All of these factors could negatively affect our profitability and competitiveness.

Risks Related to Our Substantial Indebtedness

We have substantial debt, which could adversely affect our financial health, and our ability to obtain financing in the future, react to changes in our business, and make payments on our debt.

As of December 28, 2013 we have had an aggregate principal amount of $4,752 million of outstanding debt, excluding $18 million of unamortized premium. Our substantial debt could have important consequences to holders of the Senior Notes, including the following:

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Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further exacerbate the risks associated with our substantial indebtedness.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our debt agreements do not fully prohibit us or our subsidiaries from doing so. As of December 28, 2013, we had commitments for additional borrowings under our asset-based senior secured revolving loan ABL Facility and our 2012 ABS Facility of $901 million (of which approximately $787 million was available based on our borrowing base), all of which were secured. All of those borrowings and any other secured indebtedness permitted under the agreements governing such credit facilities and indentures are effectively senior to the unsecured Senior Notes to the extent of the value of the assets securing such indebtedness. If new debt is added to our current debt levels, the related risks that we now face would increase and we may not be able to meet all our debt obligations, including the repayment of the Senior Notes. In addition, the Indenture does not prevent us from incurring obligations that do not constitute indebtedness.

The agreements and instruments governing our debt contain restrictions and limitations that could significantly impact our ability to operate our business.

Our credit facilities and the indentures contain covenants that, among other things, restrict our ability to do the following:

In addition, if borrowing availability under the ABL Facility—plus the amount of cash and cash equivalents held by us—falls below a specified threshold of $100 million, the borrowers are required to comply with a minimum fixed charge coverage ratio of 1 to 1. In addition, if our borrowing availability under the ABL Facility falls below $110 million, additional reporting responsibilities are triggered under the ABL Facility and the 2012 ABS Facility.

Our ability to comply with these provisions in future periods will depend on our ongoing financial and operating performance, which in turn will be subject to economic conditions and to financial, market and competitive factors, many of which are beyond our control. Our ability to comply with these provisions in future periods will also depend substantially on the pricing of our products, our success at implementing cost reduction initiatives and our ability to successfully implement our overall business strategy.

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The restrictions under the terms of our credit facilities may prevent us from taking actions that we believe would be in the best interest of our business, and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted. We may also incur future debt obligations that might subject us to additional restrictive covenants that could affect our financial and operational flexibility. We cannot assure you that we will be granted waivers or amendments to these agreements if for any reason we are unable to comply with these agreements or that we will be able to refinance our debt on terms acceptable to us, or at all.

Our ability to comply with the covenants and restrictions contained in our credit facilities may be affected by economic, financial and industry conditions beyond our control. The breach of any of these covenants or restrictions could result in a default under our credit facilities that would permit the applicable lenders or note holders, as the case may be, to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. If we are unable to repay debt, lenders having secured obligations, the lenders could proceed against the collateral securing the debt. In any such case, we may be unable to borrow under and may not be able to repay the amounts due under our credit facilities. This could have serious consequences to our financial condition and results of operations and could cause us to become bankrupt or insolvent.

Our ability to generate the significant amount of cash needed to pay interest and principal on our debt facilities and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.

Our ability to make scheduled payments on, or to refinance our obligations under our debt will depend on our financial and operating performance. This, in turn, will be subject to prevailing economic and competitive conditions and to the financial and business factors, many of which may be beyond our control, as described under “Risk Factors—Risks Relating to Our Business” above.

If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital or restructure our debt. In the future, our cash flow and capital resources may not be sufficient for payments of interest on and principal of our debt, and such alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

The 2012 ABS Facility will mature in 2015. The ABL Facility will mature in 2016. The Amended 2011 Term Facility will mature in 2019. The CMBS Fixed Rate Loan will also mature in 2017. The Senior Notes will mature in 2019. We cannot assure you that we will be able to refinance any of our indebtedness or obtain additional financing, particularly because of our anticipated high levels of debt and the debt incurrence restrictions imposed by the agreements governing our debt, as well as prevailing market conditions. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our credit facilities and indentures restrict our ability to dispose of assets and use the proceeds from any such dispositions. As a result, we cannot assure you we will be able to consummate those sales, or if we do, what the timing of the sales will be, or whether the proceeds that we realize will be adequate to meet the debt service obligations when due.

An increase in interest rates would increase the cost of servicing our debt and could reduce our profitability.

A significant portion of our outstanding debt bears interest at variable rates. As a result, an increase in interest rates—whether because of an increase in market interest rates or a decrease in our creditworthiness—would increase the cost of servicing our debt and could materially reduce our profitability and cash flows. The impact of such an increase would be more significant for us than it would be for some other companies because of our substantial debt.

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