cluding all debt issued by off-balance sheet special purpose entities our debt to net worth ratio was 53.2 and ex- cluding all securitization trust debt, our debt to net worth ratio was 8.2), and our ratio of earnings to fixed charges, including interest expense on the above-mentioned debt, was 0.77.
Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes by, among other things:
increasing our vulnerability to general adverse economic and industry conditions;
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing amounts available for working capital, capital expenditures and other general corporate purposes;
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
placing us at a competitive disadvantage compared to our competitors that have less debt; and
limiting our ability to borrow additional funds.
Although we believe we will generate sufficient free cash flow to service this debt and our obligations under the notes, there is no assurance that we will be able to do so. If we do not generate sufficient operating prof- its, our ability to make required payments on our senior debt, as well as on the debt represented by the notes de- scribed in this prospectus, may be impaired.
If we incur substantially more indebtedness that is senior to your notes, our ability to pay the notes may be impaired.
Subject to limitations contained in our credit facilities and in the indenture, we may incur substantial ad- ditional indebtedness in the future. The indenture for the notes does not prohibit us from incurring additional in- debtedness. Any such borrowings would be senior to the notes. If we borrow more money, the risks to noteholders described in this prospectus could intensify.
Our management has broad discretion over the use of proceeds from the offering.
We expect to use the proceeds from the offering to fund the purchase of automobile contracts and for oth- er general corporate purposes, which may include the payment of general and administrative expenses. Because no specific allocation of the proceeds is required in the indenture, our management will have broad discretion in determining how the proceeds of the offering will be used. See “Use of Proceeds.”
Because we are subject to many restrictions in our existing credit facilities, our ability to pay the notes may be impaired.
The terms of our existing credit facilities and our securitization trust debt impose significant operating and financial restrictions on us and our subsidiaries and require us to meet certain financial tests. The indenture for the notes also imposes certain limited restrictions on our ability and that of our subsidiaries to take certain ac- tions. Such terms and restrictions may be amended or supplemented from time to time without requiring any no- tice to or consent of the holders of the notes or the trustee. These restrictions may have an adverse impact on our business activities, results of operations and financial condition. These restrictions may also significantly limit or prohibit us from engaging in certain transactions, including the following:
incurring or guaranteeing additional indebtedness;
making capital expenditures in excess of agreed upon amounts;
paying dividends or other distributions to our stockholders or redeeming, repurchasing or retir-
ing our capital stock or subordinated obligations;
creating or permitting liens on our assets or the assets of our subsidiaries;
issuing or selling capital stock of our subsidiaries;