Community Health Systems 2015 Annual Report Download - page 44

We may not be able to generate sufficient cash to service all of our indebtedness, and we may be forced to take
other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or to refinance our indebtedness depends on our financial and
operating performance, which is subject to prevailing economic and competitive conditions and to financial,
business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows
from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our
indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced
to reduce or delay capital expenditures, including those required for operating our existing hospitals, for
integrating our historical acquisitions or for future acquisitions. We also may be forced to sell assets or
operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we
would be able to take any of these actions, that these actions would be successful and permit us to meet our
scheduled debt service obligations or that these actions would be permitted under the terms of our existing or
future debt agreements, including our credit facility and the indentures governing our outstanding notes. For
example, our credit facility and the indentures governing our outstanding notes restrict our ability to dispose of
assets and use the proceeds from any dispositions. We may not be able to consummate those dispositions and any
proceeds we receive may not be adequate to meet any debt service obligations then due.
In addition, we are a holding company with no direct operations. Our principal assets are the equity interests
we hold in our operating subsidiaries. As a result, we are dependent upon dividends and other payments from our
subsidiaries to generate the funds necessary to meet our outstanding debt service and other obligations. Our
subsidiaries may not generate sufficient cash from operations to enable us to make principal and interest
payments on our indebtedness. In addition, any payments of dividends, distributions, loans or advances to us by
our subsidiaries are subject to certain legal and contractual restrictions, including under our credit facility and
indentures.
Restrictive covenants in the agreements governing our indebtedness may adversely affect us.
Our credit facility and the indentures governing our outstanding notes contain various covenants that limit our
ability to take certain actions, including our ability to:
• incur, assume or guarantee additional indebtedness;
• issue redeemable stock and preferred stock;
• repurchase capital stock;
• make restricted payments, including paying dividends and making certain loans and investments;
• redeem debt that is subordinated in right of payment to our outstanding notes;
• create liens;
• sell or otherwise dispose of assets, including capital stock of subsidiaries;
• enter into agreements that restrict dividends and certain other payments from subsidiaries;
• merge, consolidate, sell or otherwise dispose of substantially all our assets;
• enter into transactions with affiliates; and
• guarantee certain obligations.
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