UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ________ Commission file number 001-15925 COMMUNITY HEALTH SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 13-389 ...

Community Health Systems, Inc. (NYSE:CYH) Q4 2021 Results Earnings Conference Call February 17, 2022 11:00 AM ET Company Participants Ross Comeaux - VP, IR Tim Hingtgen - CEO Kevin Hammons - President & CFO Lynn Simon - President of Clinical Operations & Chief Medical Officer Conference Call Participants Brian Tanquilut - Jefferies Josh Raskin - Nephron Research Kevin Fischbeck - Bank of America Ben Hendrix - RBC Capital Markets Jason Cassorla - Citi Andrew Mok - UBS Operator Good day. And thank you for sta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-15925 COMMUNITY HEALTH SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 13-3893191 (State or other juris ...

Financial Data and Key Metrics Changes - In Q3 2021, consolidated net operating revenues reached $3.115 billion, with same-store net revenue increasing by 7.1% year-over-year [17] - Adjusted EBITDA was $482 million, up 7% year-over-year, with an adjusted EBITDA margin of 14.8% [10][18] - Excluding pandemic relief funds, adjusted EBITDA was $463 million, reflecting a 19% increase compared to Q3 2019 [10][18] Business Line Data and Key Metrics Changes - Same-store admissions increased by 2.8%, adjusted admissions rose by 4.7%, and surgeries grew by 1.5% [8] - Emergency room visits surged by 24.2%, indicating a strong recovery in non-COVID healthcare demand [8] - Compared to pre-pandemic Q3 2019, same-store admissions decreased by 3%, while surgeries declined by 4% [8] Market Data and Key Metrics Changes - The company provided care for approximately 15,000 inpatient COVID admissions, representing 13% of total admissions, marking the highest quarterly case count to date [6] - Non-COVID healthcare demand was higher in Q3 2021 than in previous quarters with elevated COVID-19 cases [9] Company Strategy and Development Direction - The company is focused on growth strategies, including investments in bed capacity, outpatient access points, and physician recruitment [12] - Recent investments include new joint ventures in rehab, long-term acute care, and behavioral health, as well as expansions in existing facilities [13][14] - The company is optimistic about its portfolio and market opportunities, raising adjusted EBITDA guidance for the full year [15][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in managing costs despite increased staffing and supply expenses due to COVID-19 [11][29] - The company anticipates a return of deferred healthcare demand over the next several quarters [9] - Management highlighted the importance of their strategic margin improvement program, which is expected to drive efficiency and cost savings [19] Other Important Information - Cash flows from operations for the first nine months of 2021 were $400 million, compared to $2.1 billion in the same period of 2020 [20] - The company had $1.3 billion in cash on the balance sheet as of September 30, 2021, with no outstanding borrowings [22] Q&A Session Summary Question: Concerns about cost management and revenue initiatives - Management discussed their margin improvement program and initiatives in supply chain management to reduce costs while managing increased labor expenses due to COVID-19 [28][29] Question: Breakdown of contract labor usage and non-COVID volumes - Management noted that contract labor costs increased significantly but were offset by savings in other areas, and non-COVID volumes showed strong performance despite some deferrals [36][38] Question: Demographic shifts and market share changes - Management acknowledged anecdotal evidence of urban flight to suburban markets, positioning the company well for growth in those areas [41][42] Question: Volume trends into October and non-COVID utilization rebound - Management indicated that while COVID admissions peaked in late August, non-COVID care is expected to rebound as deferred cases are addressed [44][46] Question: Core margin discussion and normalization - Management believes current margins are a good indicator of operational performance and expects continued progress towards their medium-term margin targets [50]

[Part I. Financial Information](index=2&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including income, balance sheets, cash flows, and related notes [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement summarizes the company's revenues, expenses, and net income over specific periods | Metric | Three Months Ended Sep 30, 2021 (in millions) | Three Months Ended Sep 30, 2020 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---|:---|:---| | Net operating revenues | $3,115 | $3,126 | $9,135 | $8,670 | | Total operating costs and expenses | $2,775 | $2,841 | $8,157 | $7,980 | | Income from operations | $340 | $285 | $978 | $690 | | Interest expense, net | $216 | $257 | $666 | $779 | | Net income | $144 | $128 | $146 | $254 | | Net income attributable to Community Health Systems, Inc. stockholders | $111 | $112 | $52 | $200 | | Basic EPS | $0.87 | $0.98 | $0.41 | $1.74 | | Diluted EPS | $0.85 | $0.97 | $0.40 | $1.74 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement presents net income and other comprehensive income components, reflecting total comprehensive income | Metric | Three Months Ended Sep 30, 2021 (in millions) | Three Months Ended Sep 30, 2020 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---|:---|:---| | Net income | $144 | $128 | $146 | $254 | | Other comprehensive income (loss) | $1 | $0 | $(1) | $4 | | Comprehensive income | $145 | $128 | $145 | $258 | | Comprehensive income attributable to Community Health Systems, Inc. stockholders | $112 | $112 | $51 | $204 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and stockholders' deficit at specific dates | Metric | September 30, 2021 (in millions) | December 31, 2020 (in millions) | |:---|:---|:---| | Total current assets | $4,177 | $4,510 | | Total assets | $15,670 | $16,006 | | Total current liabilities | $3,090 | $2,815 | | Long-term debt | $11,976 | $12,093 | | Total liabilities | $16,670 | $17,060 | | Total stockholders' deficit | $(1,493) | $(1,538) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement details cash flows from operating, investing, and financing activities for the reporting periods | Metric | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---| | Net cash provided by operating activities | $400 | $2,102 | | Net cash (used in) provided by investing activities | $(313) | $9 | | Net cash used in financing activities | $(469) | $(504) | | Net change in cash and cash equivalents | $(382) | $1,607 | | Cash and cash equivalents at end of period | $1,294 | $1,823 | | Interest payments | $(572) | $(765) | | Income tax payments, net | $(3) | $(2) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the basis of financial statement presentation and significant accounting policies, including COVID-19 impacts - Corporate office costs increased from **$41 million** to **$56 million** for the three months ended September 30, 2021 and 2020, respectively, and from **$136 million** to **$168 million** for the nine months ended September 30, 2021 and 2020, respectively, primarily due to increased stock compensation and annual cash incentive compensation[22](index=22&type=chunk) | Payor Source | Three Months Ended Sep 30, 2021 (in millions) | Three Months Ended Sep 30, 2020 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---|:---|:---| | Medicare | $653 | $723 | $1,988 | $2,086 | | Medicaid | $412 | $419 | $1,223 | $1,167 | | Managed Care and other third-party payors | $2,010 | $1,967 | $5,845 | $5,425 | | Self-pay | $40 | $17 | $79 | $(8) | | Total Net Operating Revenues | $3,115 | $3,126 | $9,135 | $8,670 | - Charity care services, valued at standard charges, were estimated to be **$215 million** and **$285 million** for the three months ended September 30, 2021 and 2020, respectively, and **$659 million** and **$751 million** for the nine months ended September 30, 2021 and 2020, respectively. The estimated cost incurred to provide these services was approximately **$25 million** and **$36 million** for the three months, and **$77 million** and **$90 million** for the nine months, respectively[35](index=35&type=chunk) - The Company recognized approximately **$19 million** and **$102 million** in pandemic relief funds during the three and nine months ended September 30, 2021, respectively, based on expenses incurred attributable to coronavirus and lost revenues compared to the 2020 budget. No pandemic relief funds were recognized during the three months ended September 30, 2020, but **$448 million** was recognized for the nine months ended September 30, 2020[43](index=43&type=chunk) - As of September 30, 2021, approximately **$249 million** of Medicare accelerated payments have been recouped by CMS, and an additional **$18 million** was repaid or assumed by buyers related to divested hospitals. The outstanding balance of **$814 million** as of September 30, 2021, was repaid in full to CMS in October 2021[47](index=47&type=chunk)[130](index=130&type=chunk) [2. ACCOUNTING FOR STOCK-BASED COMPENSATION](index=11&type=section&id=2.%20ACCOUNTING%20FOR%20STOCK-BASED%20COMPENSATION) This section details the accounting for stock-based compensation, including award types, vesting, and financial impact | Metric | Three Months Ended Sep 30, 2021 (in millions) | Three Months Ended Sep 30, 2020 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---|:---|:---| | Effect on income before income taxes | $(5) | $(3) | $(18) | $(8) | | Effect on net income | $(4) | $(2) | $(14) | $(6) | - As of September 30, 2021, **$29 million** of unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of **25 months**[50](index=50&type=chunk) - Restricted stock awards subject to performance objectives granted on March 1, 2018, vested at **200%** of the shares originally granted based on cumulative performance for the 2018-2020 period[59](index=59&type=chunk) [3. ACQUISITIONS AND DIVESTITURES](index=14&type=section&id=3.%20ACQUISITIONS%20AND%20DIVESTITURES) This section details the Company's acquisition and divestiture activities, including hospital sales and equity interest divestments - During the nine months ended September 30, 2021, the Company paid approximately **$3 million** to acquire operating assets of certain physician practices, clinics, and other ancillary businesses[64](index=64&type=chunk) | Hospital | City, State | Licensed Beds | Effective Date | |:---|:---|:---|:---| | Lea Regional Medical Center | Hobbs, NM | 84 | January 1, 2021 | | Tennova Healthcare - Tullahoma | Tullahoma, TN | 135 | January 1, 2021 | | Tennova Healthcare - Shelbyville | Shelbyville, TN | 60 | January 1, 2021 | | Northwest Mississippi Medical Center | Clarksdale, MS | 181 | February 1, 2021 | | AllianceHealth Midwest | Midwest City, OK | 255 | April 1, 2021 | - On July 30, 2021, the Company sold its **38%** unconsolidated minority equity interests in Macon Healthcare, LLC for **$110 million** in cash, recognizing a pre-tax gain of approximately **$26 million**[67](index=67&type=chunk) [4. INCOME TAXES](index=15&type=section&id=4.%20INCOME%20TAXES) This section discusses the Company's income tax provisions, effective tax rates, and ongoing IRS examinations - The Company's effective tax rates were **6.5%** and **13.5%** for the three months ended September 30, 2021 and 2020, respectively, and **47.5%** and **(669.7)%** for the nine months ended September 30, 2021 and 2020, respectively[71](index=71&type=chunk) - The difference in effective tax rates was primarily due to an increase in the valuation allowance on IRC Section 163(j) interest carryforwards and changes in tax benefits from increased deductible interest expense allowed by the CARES Act[71](index=71&type=chunk) - Federal income tax returns for 2014, 2015, and 2018 are under IRS examination, with no material impact anticipated[70](index=70&type=chunk) [5. LONG-TERM DEBT](index=16&type=section&id=5.%20LONG-TERM%20DEBT) This section details the Company's long-term debt structure, including various notes and recent refinancing activities | Debt Type | September 30, 2021 (in millions) | December 31, 2020 (in millions) | |:---|:---|:---| | 6⅝% Senior Secured Notes due 2025 | $1,462 | $1,462 | | 8% Senior Secured Notes due 2026 | $2,101 | $2,101 | | 5⅝% Senior Secured Notes due 2027 | $1,900 | $1,900 | | 4¾% Senior Secured Notes due 2031 | $1,095 | $0 | | 6⅞% Junior-Priority Secured Notes due 2029 | $1,775 | $0 | | 6⅛% Junior-Priority Secured Notes due 2030 | $1,440 | $0 | | Total debt | $12,011 | $12,216 | | Total long-term debt | $11,976 | $12,093 | - The Company redeemed **$95 million** of 6¼% Senior Secured Notes due 2023 in January 2021 and **$126 million** of 6⅞% Senior Notes due 2022 in March 2021 using cash on hand[74](index=74&type=chunk)[84](index=84&type=chunk) - New issuances include **$1.775 billion** of 6⅞% Junior-Priority Secured Notes due 2029, **$1.095 billion** of 4¾% Senior Secured Notes due 2031, and **$1.440 billion** of 6⅛% Junior-Priority Secured Notes due 2030, used to refinance existing debt[75](index=75&type=chunk)[80](index=80&type=chunk)[85](index=85&type=chunk) - As of September 30, 2021, the ABL Facility had an available borrowing base of **$836 million**, with **$728 million** in excess availability and no outstanding borrowings[89](index=89&type=chunk) [6. FAIR VALUE OF FINANCIAL INSTRUMENTS](index=19&type=section&id=6.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This section provides fair value estimates for financial instruments, primarily using market-based measurements | Financial Instrument | September 30, 2021 Carrying Amount (in millions) | September 30, 2021 Estimated Fair Value (in millions) | December 31, 2020 Carrying Amount (in millions) | December 31, 2020 Estimated Fair Value (in millions) | |:---|:---|:---|:---|:---| | Cash and cash equivalents | $1,294 | $1,294 | $1,676 | $1,676 | | Investments in equity securities | $126 | $126 | $129 | $129 | | Available-for-sale debt securities | $169 | $169 | $110 | $110 | | Trading securities | $12 | $12 | $12 | $12 | | Total debt (net of unamortized deferred debt issuance costs) | $12,011 | $12,999 | $12,216 | $13,022 | - The estimated fair value for financial instruments with a fair value that does not equal its carrying value is considered a **Level 1 valuation**, utilizing market approach and publicly available subscription services for indicative pricing[93](index=93&type=chunk) [7. FAIR VALUE (Hierarchy)](index=20&type=section&id=7.%20FAIR%20VALUE) This section defines the fair value hierarchy (Levels 1, 2, and 3) for financial assets and liabilities - Fair value measurements are classified into **Level 1** (quoted market prices in active markets), **Level 2** (observable market-based inputs or unobservable inputs corroborated by market data), and **Level 3** (unobservable inputs significant to fair value)[100](index=100&type=chunk)[101](index=101&type=chunk) | Financial Asset | September 30, 2021 Total (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | |:---|:---|:---|:---|:---| | Investments in equity securities | $126 | $126 | $0 | $0 | | Available-for-sale debt securities | $169 | $0 | $169 | $0 | | Trading securities | $12 | $0 | $12 | $0 | | Total assets | $307 | $126 | $181 | $0 | - There were no transfers between levels within the fair value hierarchy during the nine-month periods ended September 30, 2021 or 2020[102](index=102&type=chunk) [8. LEASES](index=21&type=section&id=8.%20LEASES) This section outlines the Company's lease costs and related balance sheet and cash flow information for leases | Lease Cost Component | Three Months Ended Sep 30, 2021 (in millions) | Three Months Ended Sep 30, 2020 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---|:---|:---| | Total operating lease cost | $75 | $85 | $231 | $248 | | Total finance lease cost | $4 | $4 | $11 | $14 | | Balance Sheet Classification | September 30, 2021 (in millions) | December 31, 2020 (in millions) | |:---|:---|:---| | Operating Lease ROU Assets | $667 | $642 | | Finance Lease ROU Assets, net | $144 | $104 | | Current finance lease liabilities | $9 | $5 | | Long-term finance lease liabilities | $112 | $74 | | Cash Flow Information | Nine Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2020 (in millions) | |:---|:---|:---| | Operating cash flows from operating leases | $149 | $141 | | Operating cash flows from finance leases | $5 | $6 | | Financing cash flows from finance leases | $4 | $5 | | Right-of-use assets obtained for new finance lease liabilities | $46 | $22 | | Right-of-use assets obtained for new operating lease liabilities | $118 | $119 | [9. STOCKHOLDERS' DEFICIT](index=22&type=section&id=9.%20STOCKHOLDERS'%20DEFICIT) This section details the Company's capital structure, including authorized shares and dividend restrictions from debt covenants - As of September 30, 2021, the Company had **132,041,102** shares of common stock issued and outstanding, with a total stockholders' deficit of **$(1,493) million**[14](index=14&type=chunk)[113](index=113&type=chunk) - The Company's ABL Facility and outstanding notes restrict subsidiaries from paying dividends and making distributions, limiting the Company's ability to pay dividends or repurchase stock. As of September 30, 2021, approximately **$200 million** of capacity was available for such payments[110](index=110&type=chunk)[317](index=317&type=chunk) [10. EARNINGS PER SHARE](index=27&type=section&id=10.%20EARNINGS%20PER%20SHARE) This section provides components for calculating basic and diluted earnings per share for common stockholders | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Weighted-average number of shares outstanding — basic | 127,077,786 | 115,015,460 | 126,638,291 | 114,764,050 | | Weighted-average number of shares outstanding — diluted | 130,885,139 | 115,640,852 | 129,885,951 | 115,012,202 | - Dilutive securities, including restricted stock awards and employee stock options, increased the weighted-average number of shares outstanding for diluted EPS calculations[121](index=121&type=chunk) [11. CONTINGENCIES](index=27&type=section&id=11.%20CONTINGENCIES) This section addresses legal, regulatory, and governmental proceedings, and the reconciliation of probable contingencies - Management does not believe that loss contingencies from pending legal, regulatory, and governmental matters will have a material adverse effect on the Company's financial position or liquidity[122](index=122&type=chunk) | Probable Contingencies (in millions) | |:---| | Balance as of December 31, 2020: $11 | | Expense: $1 | | Reserve for insured claim: $(1) | | Cash payments: $(1) | | Balance as of September 30, 2021: $10 | [12. SUBSEQUENT EVENTS](index=28&type=section&id=12.%20SUBSEQUENT%20EVENTS) This section details significant events after the balance sheet date, including hospital transitions and debt repayment - Effective October 1, 2021, Tyler Memorial Hospital transitioned to an outpatient campus, resulting in the Company owning or leasing **83 hospitals**[128](index=128&type=chunk) - The Company submitted applications for Phase 4 of the Provider Relief Fund (PRF Phase 4) and American Rescue Plan Act (ARPA) Rural funds in October 2021, with no amounts received as of the Form 10-Q date[129](index=129&type=chunk) - The outstanding balance of Medicare accelerated payments, **$814 million** as of September 30, 2021, was fully repaid to CMS in October 2021[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operations, liquidity, and critical accounting policies [Executive Overview](index=29&type=section&id=Executive%20Overview) This section provides an overview of the Company's operations, hospital count, and potential future divestitures - Community Health Systems, Inc. is one of the largest publicly traded hospital companies in the U.S., operating **84 hospitals** (**83** effective October 1, 2021) and outpatient facilities[135](index=135&type=chunk) - The Company continues to receive interest from potential acquirers for certain hospitals and may consider additional divestitures[136](index=136&type=chunk) [COVID-19 Pandemic](index=29&type=section&id=COVID-19%20Pandemic) This section discusses the significant impact of the COVID-19 pandemic on operations, expenses, and financial uncertainty - The COVID-19 pandemic significantly affected operations in 2020 and continued to impact results in the nine months ended September 30, 2021, with increased cases and hospitalizations in Q3 2021[137](index=137&type=chunk) - The Company incurred increased expenses for labor, supply chain, and capital due to the pandemic, and observed deterioration in collectability of patient accounts receivable from uninsured patients[140](index=140&type=chunk)[141](index=141&type=chunk) - The ultimate impact of the pandemic on financial results remains uncertain, depending on factors like duration, patient volumes, treatment availability, and government actions[143](index=143&type=chunk) [Completed Divestiture and Acquisition Activity](index=30&type=section&id=Completed%20Divestiture%20and%20Acquisition%20Activity) This section details the Company's completed divestiture and acquisition activities, including hospital sales and equity interests - During the nine months ended September 30, 2021, the Company divested **five hospitals**, generating approximately **$28 million** in net proceeds[144](index=144&type=chunk) - In 2020, the Company divested **13 hospitals**, which represented approximately **$1.2 billion** in annual net operating revenues in 2019, and received approximately **$845 million** in net proceeds[145](index=145&type=chunk) - On July 30, 2021, the Company sold its minority equity interests in Macon Healthcare, LLC for **$110 million** cash, recognizing a pre-tax gain of approximately **$26 million**[150](index=150&type=chunk) [Overview of Operating Results](index=31&type=section&id=Overview%20of%20Operating%20Results) This section provides an overview of the Company's operating results, including revenues, net income, and admissions trends - Net operating revenues remained consistent at **$3.1 billion** for the three months ended September 30, 2021 and 2020. On a same-store basis, net operating revenues increased by **$205 million** (**7.1%**) for the three months and **$1.2 billion** (**14.8%**) for the nine months ended September 30, 2021, compared to the prior year periods[151](index=151&type=chunk)[154](index=154&type=chunk)[197](index=197&type=chunk)[208](index=208&type=chunk) - Net income attributable to Community Health Systems, Inc. stockholders was **$111 million** for the three months ended September 30, 2021, compared to **$112 million** in the prior year, and **$52 million** for the nine months ended September 30, 2021, compared to **$200 million** in the prior year[151](index=151&type=chunk)[155](index=155&type=chunk)[207](index=207&type=chunk)[219](index=219&type=chunk) - Consolidated inpatient admissions decreased by **5.5%** for both the three and nine months ended September 30, 2021. Same-store inpatient admissions increased by **2.8%** for three months and **4.3%** for nine months, while same-store adjusted admissions increased by **4.7%** for three months and **7.3%** for nine months[153](index=153&type=chunk)[158](index=158&type=chunk) [Overview of Legislative Developments](index=32&type=section&id=Overview%20of%20Legislative%20Developments) This section discusses legislative developments, including the ACA, COVID-19 relief, vaccine mandates, and DSH payments - The Affordable Care Act (ACA) has positively impacted net operating revenues through expanded coverage but also increased operating costs and impacted reimbursement. Its future remains uncertain due to potential legislative and regulatory changes[164](index=164&type=chunk)[165](index=165&type=chunk) - Federal and state governments provided COVID-19 relief through the CARES Act, PPPHCE Act, CAA, and ARPA, authorizing over **$178 billion** in funding via the PHSSEF and expanding the Medicare Accelerated and Advance Payment Program[168](index=168&type=chunk)[169](index=169&type=chunk) - The Company received approximately **$709 million** in PHSSEF and state/local payments through September 30, 2021. Medicare accelerated payments of **$1.2 billion** were received in April 2020, with recoupment beginning in April 2021 and full repayment in October 2021[173](index=173&type=chunk)[176](index=176&type=chunk) - New vaccine mandates from OSHA and CMS could lead to personnel loss, adversely affecting operations[180](index=180&type=chunk) - Uncertainty exists regarding potential Medicare DSH payments due to the Azar v. Allina Health Services ruling, which could have a material positive impact if remitted[181](index=181&type=chunk) [Sources of Revenue](index=36&type=section&id=Sources%20of%20Revenue) This section analyzes the Company's revenue sources by payor type and discusses expected shifts in payor mix | Payor Source | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Medicare | 21.0% | 23.1% | 21.7% | 24.1% | | Medicaid | 13.2% | 13.4% | 13.4% | 13.5% | | Managed Care and other third-party payors | 64.5% | 63.0% | 64.0% | 62.5% | | Self-pay | 1.3% | 0.5% | 0.9% | (0.1)% | | Total | 100.0% | 100.0% | 100.0% | 100.0% | - The Company expects the portion of revenues from Medicare and Medicaid to increase long-term due to population aging and ACA impact, while managed care enrollment may adversely affect operating revenue[186](index=186&type=chunk) - CMS published a final rule to increase the Medicare inpatient acute care services index by **2.7%** starting October 1, 2021, expected to yield an average **2.5%** reimbursement increase[188](index=188&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section analyzes the Company's operating results, including revenue, admissions, and interest expense trends | Metric (as % of net operating revenues) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Income from operations | 10.9% | 9.1% | 10.7% | 8.0% | | Interest expense, net | (6.9)% | (8.2)% | (7.3)% | (9.0)% | | Net income attributable to Community Health Systems, Inc. stockholders | 3.6% | 3.6% | 0.6% | 2.3% | | Metric (YoY % change) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | |:---|:---|:---|:---|:---| | Net operating revenues | (0.4)% | (3.7)% | 5.4% | (12.6)% | | Admissions | (5.5)% | (13.0)% | (5.5)% | (16.6)% | | Adjusted admissions | (3.4)% | (18.0)% | (2.4)% | (20.0)% | | Net income attributable to Community Health Systems, Inc. | (0.9)% | 758.8% | (74.0)% | 166.2% | - Same-store net operating revenues increased **7.1%** for the three months and **14.8%** for the nine months ended September 30, 2021, primarily due to increased volumes and higher acuity[197](index=197&type=chunk)[208](index=208&type=chunk) - Interest expense, net, decreased by **$41 million** for the three months and **$113 million** for the nine months ended September 30, 2021, primarily due to debt refinancing activities[200](index=200&type=chunk)[212](index=212&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's liquidity, cash flows, working capital, and ability to meet financial obligations - Net cash provided by operating activities decreased by **$1.7 billion** to **$400 million** for the nine months ended September 30, 2021, primarily due to the receipt of Medicare accelerated payments and PHSSEF funds in the prior year[220](index=220&type=chunk) - Net cash used in investing activities was **$313 million** for the nine months ended September 30, 2021, a **$322 million** decrease from the prior year, mainly due to lower cash proceeds from dispositions and increased purchases of property and equipment[221](index=221&type=chunk) - Net working capital decreased by approximately **$608 million** to **$1.1 billion** at September 30, 2021, primarily due to decreased cash from debt repayments and Medicare accelerated payment repayments[233](index=233&type=chunk) - The Company believes internally generated cash flows, available ABL Facility capacity (**$728 million** excess availability at Sep 30, 2021), and capital market access will be sufficient to finance operations and debt obligations for the next **12 months**[235](index=235&type=chunk)[247](index=247&type=chunk) [Critical Accounting Policies](index=44&type=section&id=Critical%20Accounting%20Policies) This section outlines the Company's critical accounting policies, including revenue recognition, goodwill, and professional liability - Revenue recognition involves significant estimates for transaction price, contractual allowances, and implicit price concessions. A **1%** difference in estimated contractual reimbursement percentage would change net income by **$88 million** and net accounts receivable by **$113 million** for the nine months ended September 30, 2021[257](index=257&type=chunk)[262](index=262&type=chunk) - Patient accounts receivable are recorded at net realizable value, with self-pay accounts reserved based on historical collection experience. A **1%** difference in estimated collection percentage would change net income by **$42 million** and net accounts receivable by **$54 million**[265](index=265&type=chunk)[266](index=266&type=chunk) - Goodwill, totaling **$4.2 billion** at September 30, 2021, is evaluated annually for impairment. No impairment indicators were identified as of September 30, 2021[274](index=274&type=chunk) - The Company accrues for professional liability claims based on specific claim facts, historical patterns, and actuarially determined projections, discounted using risk-free interest rates (**1.9%** at Sep 30, 2021)[278](index=278&type=chunk)[279](index=279&type=chunk) - Estimates are made for income tax provisions, deferred tax assets/liabilities, and valuation allowances. Unrecognized tax benefits were less than **$1 million** as of September 30, 2021[289](index=289&type=chunk)[290](index=290&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms no material changes in market risk disclosures from the prior year's Form 10-K - No material changes in quantitative and qualitative disclosures about market risk during the three months ended September 30, 2021[298](index=298&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and no material changes in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2021[299](index=299&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended September 30, 2021[300](index=300&type=chunk) [Part II. Other Information](index=53&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, and other disclosures [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section details various legal, regulatory, and governmental proceedings, including shareholder and qui tam actions - The Company is responding to civil investigative demands related to call coverage services and emergency department charges in New Mexico hospitals[302](index=302&type=chunk) - Shareholder litigation includes a federal securities class action (Caleb Padilla v. Community Health Systems, Inc., et al.) and four purported shareholder derivative cases, all currently pending or stayed[304](index=304&type=chunk)[305](index=305&type=chunk) - A qui tam complaint (U.S. ex rel Larry Bomar v. Bayfront HMA Medical Center, LLC, et al) alleges False Claims Act violations related to the Florida Low Income Pool Program, with the U.S. declining to intervene[307](index=307&type=chunk) - Commercial litigation includes insurance coverage disputes (Steadfast Insurance Company, et al v. Community Health Systems, Inc., et al), an alleged wrongful retaliation case (Thomas Mason, MD, Steven Folstad, MD and Mid-Atlantic Emergency Medical Associates, PA v Health Management Associates, LLC, et al), a breach of contract action (Tower Health, f/k/a Reading Health System, et al v CHS/Community Health Systems, Inc., et al), a breach of fiduciary duty case (Lancaster County Investors Company, et al v CHS/Community Health Systems, Inc.), and a complaint related to the spin-off of Quorum Health Corporation (Daniel H. Golden, as Litigation Trustee of the QHC Litigation Trust, and Wilmington Savings Fund Society, FSB, solely in its capacity as indenture trustee v Community Health Systems, Inc., et al)[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[313](index=313&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section states there are no material changes to the risk factors previously disclosed in the 2020 Form 10-K - No material changes to risk factors previously disclosed in the 2020 Form 10-K[314](index=314&type=chunk) [Item 2. Unregistered Sale of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no common stock purchases and details limitations on dividends and share repurchases - No shares of common stock were purchased by the Company during the three months ended September 30, 2021[316](index=316&type=chunk) - As of September 30, 2021, the Company had approximately **$200 million** of capacity to pay permitted dividends and/or repurchase shares of stock or make other restricted payments, as limited by debt covenants[317](index=317&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities[319](index=319&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company's operations - Mine Safety Disclosures are not applicable[319](index=319&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) This section confirms that there is no other information to report for the current period - No other information to report[320](index=320&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL financial information - Exhibits include CEO and CFO certifications (**31.1**, **31.2**, **32.1**, **32.2**) and financial information in Inline XBRL format (**101**, **104**)[322](index=322&type=chunk) [SIGNATURES](index=58&type=section&id=SIGNATURES) This section contains the official signatures of the Company's key executives, certifying the report's accuracy - The report is duly signed by Tim L. Hingtgen (Director and CEO), Kevin J. Hammons (President and CFO), and Jason K. Johnson (Senior Vice President and Chief Accounting Officer) on October 28, 2021[326](index=326&type=chunk)[327](index=327&type=chunk)

Community Health Systems Inc. (NYSE:CYH) Q2 2021 Earnings Conference Call July 29, 2021 11:00 AM ET Company Participants Ross Comeaux - Vice President of Investor Relations Tim Hingtgen - CEO & Director Kevin Hammons - President & CFO Lynn Simon - President of Clinical Operations & Chief Medical Officer Conference Call Participants Brian Tanquilut - Jefferies Frank Morgan - RBC Capital Markets Josh Raskin - Nephron Research A.J. Rice - Crédit Suisse Ralph Giacobbe - Citi Steven Valiquette - Barclays Kevin F ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ________ Commission file number 001-15925 COMMUNITY HEALTH SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 13-3893 ...

Earnings Presentation — 1গ্ Quarter, 2021 Community alth Systems Disclaimer Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. All statements in this presentation other than statements of historical fact, including statements regarding projections, expected operat ...

Community Health Systems, Inc. (NYSE:CYH) Q1 2021 Earnings Conference Call April 29, 2021 11:00 AM ET Company Participants Ross Comeaux - Vice President and Investor Relations Tim Hingtgen - Chief Executive Officer Lynn Simon - President, Clinical Operations and Chief Medical Officer Kevin Hammons - President and Chief Financial Officer Conference Call Participants Josh Raskin - Nephron Research Frank Morgan - RBC Capital Markets Jack Slevin - Jefferies Ralph Giacobbe - Citi Kevin Fischbeck - Bank of Americ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ________ Commission file number 001-15925 COMMUNITY HEALTH SYSTEMS, INC. | --- | --- | --- | |------------------------------------------------- ...