GNC 2011 Annual Report Download - page 27

Table of Contents
Our ability to continue to access credit on the terms previously obtained for the funding of our operations and capital projects may be limited due to
changes in credit markets.
In recent periods, the credit markets and the financial services industry have experienced disruption characterized by the bankruptcy, failure, collapse or
sale of various financial institutions, increased volatility in securities prices, diminished liquidity and credit availability and intervention from the United
States and other governments. Continued concerns about the systemic impact of potential long-term or widespread downturn, energy costs, geopolitical issues,
the availability and cost of credit, the global commercial and residential real estate markets and related mortgage markets and reduced consumer confidence
have contributed to increased market volatility. The cost and availability of credit has been and may continue to be adversely affected by these conditions. We
cannot be certain that funding for our capital needs will be available from our existing financial institutions and the credit markets if needed, and if available,
to the extent required, and on acceptable terms. The Revolving Credit Facility matures in March 2012. If we cannot renew or refinance this facility upon its
maturity or, more generally, obtain funding when needed, in each case on acceptable terms, we may be unable to continue our current rate of growth and store
expansion, which may have an adverse effect on our revenues and results of operations.
On February 7, 2011, we announced that we intend to enter into, subject to market and other conditions, the Refinancing. We currently expect to use the
proceeds from the Refinancing, if consummated, to, among other things, refinance our existing indebtedness. We currently expect to consummate the
Refinancing in March 2011; however, there can be no assurance that we will complete the Refinancing either on terms acceptable to us or at all. See
"Liquidity and Capital Resources — Cash Used in Financing Activities — Proposed Refinancing".
We require a significant amount of cash to service our debt. Our ability to generate cash depends on many factors beyond our control and, as a result, we
may not be able to make payments on our debt obligations.
We may be unable to generate sufficient cash flow from operations or to obtain future borrowings under our credit facilities or otherwise in an amount
sufficient to enable us to pay our debt or to fund our other liquidity needs. In addition, because we conduct our operations through our operating subsidiaries,
we depend on those entities for dividends and other payments to generate the funds necessary to meet our financial obligations, including payments on our
debt. Under certain circumstances, legal and contractual restrictions, as well as the financial condition and operating requirements of our subsidiaries, may
limit our ability to obtain cash from our subsidiaries. If we do not have sufficient liquidity, we may need to refinance or restructure all or a portion of our debt
on or before maturity, sell assets, or borrow more money, which we may not be able to do on terms satisfactory to us or at all. In addition, any refinancing
could be at higher interest rates and may require us to comply with more onerous covenants which could further restrict our business operations.
If we are unable to meet our obligations with respect to our debt, we could be forced to restructure or refinance our debt, seek equity financing or sell
assets. A default on any of our debt obligations could trigger certain acceleration clauses and cause those and our other obligations to become immediately
due and payable. Upon an acceleration of any of our debt, we may not be able to make payments under our other outstanding debt.
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