HCA Holdings 2011 Annual Report Download - page 42

Item 1A. Risk Factors
If any of the events discussed in the following risk factors were to occur, our business, financial position,
results of operations, cash flows or prospects could be materially, adversely affected. Additional risks and
uncertainties not presently known, or currently deemed immaterial, may also constrain our business and
operations.
Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations,
limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent
of our variable rate debt and prevent us from meeting our obligations.
We are highly leveraged. As of December 31, 2011, our total indebtedness was $27.052 billion. As of
December 31, 2011, we had availability of $1.935 billion under our senior secured revolving credit facility and
$202 million under our asset-based revolving credit facility, after giving effect to letters of credit and borrowing
base limitations. Our high degree of leverage could have important consequences, including:
• increasing our vulnerability to downturns or adverse changes in general economic, industry or
competitive conditions and adverse changes in government regulations;
• requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal
and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our
operations, capital expenditures and future business opportunities;
• exposing us to the risk of increased interest rates as certain of our unhedged borrowings are at variable
rates of interest;
• limiting our ability to make strategic acquisitions or causing us to make nonstrategic divestitures;
• limiting our ability to obtain additional financing for working capital, capital expenditures, product or
service line development, debt service requirements, acquisitions and general corporate or other
purposes; and
• limiting our ability to adjust to changing market conditions and placing us at a competitive
disadvantage compared to our competitors who are less highly leveraged.
We and our subsidiaries have the ability to incur additional indebtedness in the future, subject to the
restrictions contained in our senior secured credit facilities and the indentures governing our outstanding notes. If
new indebtedness is added to our current debt levels, the related risks that we now face could intensify.
We may not be able to generate sufficient cash to service all of our indebtedness and may not be able to
refinance our indebtedness on favorable terms. If we are unable to do so, 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 debt obligations depends on our financial
condition and operating performance, which are subject to prevailing economic and competitive conditions and
to certain financial, business and other factors beyond our control. We cannot assure you 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.
In addition, we conduct our operations through our subsidiaries. Accordingly, repayment of our
indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash
available to us by dividend, debt repayment or otherwise. Our subsidiaries may not be able to, or may not be
permitted to, make distributions to enable us to make payments in respect of our indebtedness. Each subsidiary is
a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to
obtain cash from our subsidiaries.
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