Community Health Systems 2015 Annual Report Download - page 106

Although we believe that these forward-looking statements are based upon reasonable assumptions, these
assumptions are inherently subject to significant regulatory, economic and competitive uncertainties and
contingencies, which are difficult or impossible to predict accurately and may be beyond the control of the
Company. Accordingly, the Company cannot give any assurance that its expectations will in fact occur and
cautions that actual results may differ materially from those in the forward-looking statements. Given these
uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking
statements. These forward-looking statements are made as of the date of this filing. The Company undertakes no
obligation to revise or update any forward-looking statements, or to make any other forward-looking statements,
whether as a result of new information, future events or otherwise.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to interest rate changes, primarily as a result of our Credit Facility which bears interest based
on floating rates. In order to manage the volatility relating to the market risk, we entered into interest rate swap
agreements described under the heading “Liquidity and Capital Resources” in Part II, Item 7. We utilize risk
management procedures and controls in executing derivative financial instrument transactions. We do not
execute transactions or hold derivative financial instruments for trading purposes. Derivative financial
instruments related to interest rate sensitivity of debt obligations are used with the goal of mitigating a portion of
the exposure when it is cost effective to do so. As of December 31, 2015, our approximately $3.0 billion notional
amount of interest rate swap agreements outstanding represented approximately 37.9% of our variable rate debt.
A 1% change in interest rates on variable rate debt in excess of that amount covered by interest rate swaps
would have resulted in interest expense fluctuating approximately $61 million in 2015, $59 million in 2014 and
$20 million in 2013. On a prospective basis, a 1% change in interest rates on the remaining unhedged variable
rate debt existing as of December 31, 2015, would result in interest expense fluctuating approximately $53
million per year.
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