COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES SECOND QUARTER ENDED JUNE 30, 2024 RESULTS Form 8 K

COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES SECOND QUARTER

ENDED JUNE 30, 2024 RESULTS

FRANKLIN, Tenn. (July 24, 2024) - Community Health Systems, Inc. (NYSE: CYH) (the "Company") today announced financial and operating results for the three and six months ended June 30, 2024.

The following highlights the financial and operating results for the three months ended June 30, 2024.

Commenting on the results, Tim L. Hingtgen, chief executive officer of Community Health Systems, Inc., said, "Our team has delivered another solid quarter that includes same-store, year-over-year improvements in operating results, supported by strong volume growth and expense management. This progress further demonstrates our growth mindset and ability to consistently execute on strategic opportunities to enhance our services, care for our communities, and generate value for all of our stakeholders."

Three Months Ended June 30, 2024

Net operating revenues for the three months ended June 30, 2024, totaled $3.140 billion, a 0.8 percent increase compared to $3.115 billion for the same period in 2023. On a same-store basis, net operating revenues increased 4.7 percent for the three months ended June 30, 2024, compared to the same period in 2023. Net operating revenues for the three months ended June 30, 2024, reflect a 2.8 percent decrease in admissions and a 2.4 percent decrease in adjusted admissions, compared to the same period in 2023. On a same-store basis, admissions increased 3.0 percent and adjusted admissions increased 3.2 percent for the three months ended June 30, 2024, compared to the same period in 2023.

Net loss attributable to Community Health Systems, Inc. stockholders was $(13) million, or $(0.10) per share (diluted), for the three months ended June 30, 2024, compared to $(38) million, or $(0.29) per share (diluted), for the same period in 2023. Excluding the adjusting items as presented in the table in footnote (e) on page 15, net loss attributable to Community Health Systems, Inc. stockholders was $(0.17) per share (diluted) for the three months ended June 30, 2024, compared to $(0.22) per share (diluted) for the same period in 2023.

Adjusted EBITDA for the three months ended June 30, 2024, was $387 million compared to $373 million for the same period in 2023.

The decrease in net loss attributable to Community Health Systems, Inc. stockholders for the three months ended June 30, 2024, compared to the same period in 2023, is attributable, in part, to certain non-operating items, including a gain from early extinguishment of debt, as further discussed below, and period-over-period changes in impairment and (gain) loss on the sale of businesses, as well as a lower provision for income taxes. In addition, higher same-store volumes, increased reimbursement rates, a higher net benefit from supplemental reimbursement programs, reduced expense for contract labor and reductions in supplies expense contributed to a decrease in net loss attributable to Community Health Systems, Inc. stockholders and the increase in Adjusted EBITDA for the three months ended June 30, 2024, compared to the same period in 2023.

Six Months Ended June 30, 2024

Net operating revenues for the six months ended June 30, 2024, totaled $6.279 billion, a 0.9 percent increase compared to $6.223 billion for the same period in 2023. On a same-store basis, net operating revenues increased 5.2 percent for the six months ended June 30, 2024, compared to the same period in 2023. Net operating revenues for the six months ended June 30, 2024, reflect a 2.6 percent decrease in admissions and a 3.2 percent decrease in adjusted admissions, compared to the same period in 2023. On a same-store basis, admissions increased 3.4 percent and adjusted admissions increased 2.5 percent for the six months ended June 30, 2024, compared to the same period in 2023.

Net loss attributable to Community Health Systems, Inc. stockholders was $(55) million, or $(0.42) per share (diluted), for the six months ended June 30, 2024, compared to $(89) million, or $(0.68) per share (diluted), for the same period in 2023. Excluding the adjusting items as presented in the table in footnote (e) on page 15, net loss attributable to Community Health Systems, Inc. stockholders was $(0.31) per share (diluted) for the six months ended June 30, 2024, compared to $(0.65) per share (diluted) for the same period in 2023.

Adjusted EBITDA for the six months ended June 30, 2024, was $765 million compared to $707 million for the same period in 2023.

The decrease in net loss attributable to Community Health Systems, Inc. stockholders for the six months ended June 30, 2024, compared to the same period in 2023, is attributable, in part, to certain non-operating items, including a gain from early extinguishment of debt, as further discussed below, and period-over-period changes in impairment and (gain) loss on the sale of businesses, as well as a lower provision for income taxes. In addition, higher same-store volumes, increased reimbursement rates, a higher net benefit from supplemental reimbursement programs, reduced expense for contract labor and reductions in supplies expense contributed to a decrease in net loss attributable to Community Health Systems, Inc. stockholders and an increase in Adjusted EBITDA for the six months ended June 30, 2024, compared to the same period in 2023.

Financing Activity

During the three months ended June 30, 2024, the Company completed a tack-on offering of $1.225 billion principal amount of its 10.875% Senior Secured Notes due 2032, which were originally issued in December 2023, and used the net proceeds to redeem all $1.116 billion of the remaining 8.000% Senior Secured Notes due 2026, to fund senior note repurchases in the amount of approximately $98 million for the extinguishment of $130 million principal amount of the 6⅞% Senior Notes due 2028, pay related fees and expenses, and for general corporate purposes. Together, these transactions resulted in the recognition of a net pre-tax gain from early extinguishment of debt of approximately $26 million during the three months ended June 30, 2024. In addition, during the three months ended June 30, 2024, the Company amended and restated its revolving asset-based loan facility to, among other things, extend the maturity to June 5, 2029.

Other

During 2024, through the date of this press release, the Company has not completed any hospital divestitures.

Financial and statistical data presented in this press release includes the operating results of divested or closed businesses for the periods prior to the consummation of the respective divestiture or closure. Same-store operating results and statistical information include operating results of businesses operated in the comparable current year and prior year periods and exclude businesses divested or closed in 2023.

Information About Non-GAAP Financial Measures

This press release presents Adjusted EBITDA, a non-GAAP financial measure, which is EBITDA adjusted to add back net income attributable to noncontrolling interests and to exclude loss (gain) from early extinguishment of debt, impairment and (gain) loss on sale of businesses, expense related to the Business Transformation Costs (as defined in footnote (c) to the Financial Highlights, Financial Statements and Selected Operating Data below), expense related to government and other legal matters and related costs, expense related to employee termination benefits and other restructuring charges, the impact of a change in estimate to increase the professional liability claims accrual recorded during the fourth quarter of 2022 with respect to claims incurred in prior years related to divested locations and the gain on sale by HealthTrust Purchasing Group, L.P. ("HealthTrust") of a majority interest in CoreTrust Holdings, LLC ("CoreTrust") completed during the fourth quarter of 2022. For information regarding why the Company believes Adjusted EBITDA provides useful information to investors, and for a reconciliation of Adjusted EBITDA to net loss attributable to Community Health Systems, Inc. stockholders, see footnote (c) to the Financial Highlights, Financial Statements and Selected Operating Data below.

Additionally, this press release presents adjusted net loss attributable to Community Health Systems, Inc. stockholders per share (diluted), a non-GAAP financial measure, to reflect the impact on net loss attributable to Community Health Systems, Inc. stockholders per share (diluted) from the selected items used in the calculation of Adjusted EBITDA. For information regarding why the Company believes this non-GAAP financial measure provides useful information to investors, and for a reconciliation of this non-GAAP financial measure to net loss attributable to Community Health Systems, Inc. stockholders per share (diluted), see footnote (e) to the Financial Highlights, Financial Statements and Selected Operating Data below.

The non-GAAP financial measures set forth above are not measurements of financial performance under U.S. GAAP, and should not be considered in isolation or as a substitute for any financial measure calculated in accordance with U.S. GAAP. Additionally, the calculation of these non-GAAP financial measures may not be comparable to similarly titled measures disclosed by other companies.

Included on pages 16, 17, 18, 19 and 20 of this press release are tables setting forth the Company's 2024 updated annual earnings guidance. The 2024 guidance is based on the Company's historical operating performance, current trends and other assumptions the Company believes are reasonable at this time as more specifically discussed below.

About Community Health Systems, Inc.

Community Health Systems, Inc. is one of the nation's largest healthcare companies. The Company's affiliates are leading providers of healthcare services, developing and operating healthcare delivery systems in 40 distinct markets across 15 states. As of July 24, 2024, the Company's subsidiaries own or lease 71 affiliated hospitals with more than 11,000 beds and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers.

The Company's headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol "CYH." More information about the Company can be found on its website at www.chs.net.

Community Health Systems, Inc. will hold a conference call on Thursday, July 25, 2024 at 10:00 a.m. Central, 11:00 a.m. Eastern, to review financial and operating results for the second quarter ended June 30, 2024. Investors will have the opportunity to listen to a live internet broadcast of the conference call by clicking on the Investor Relations link of the Company's website at www.chs.net. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will continue to be available for approximately 30 days. Copies of this press release and conference call slide show, as well as the Company's Current Report on Form 8-K (including this press release), will be available on the Company's website at www.chs.net.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Financial Highlights (a)(b)

(In millions, except per share amounts)

(Unaudited)

For footnotes, see pages 13, 14 and 15.

For footnotes, see pages 13, 14 and 15.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Loss (a)(b)

(In millions, except per share amounts)

(Unaudited)

For footnotes, see pages 13, 14 and 15.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(In millions)

(Unaudited)

For footnotes, see pages 13, 14 and 15.

For footnotes, see pages 13, 14 and 15.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Selected Operating Data (a)

(Dollars in millions)

(Unaudited)

For footnotes, see pages 13, 14 and 15.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except share data)

(Unaudited)

For footnotes, see pages 13, 14 and 15.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

For footnotes, see pages 13, 14 and 15.

Footnotes to Financial Highlights, Financial Statements and Selected Operating Data

Footnotes to Financial Highlights, Financial Statements and Selected Operating Data (Continued)

The Company believes it is useful to provide investors and other users of the Company's financial statements this performance measure to align with how management assesses the Company's results of operations. Adjusted EBITDA also is comparable to a similar metric called Consolidated EBITDA, as defined in the Company's asset-based loan facility (the "ABL Facility") and the Company's existing note indentures, which is a key component in the determination of the Company's compliance with certain covenants under the ABL Facility and such note indentures (including the Company's ability to service debt and incur capital expenditures), and is used to determine the interest rate and commitment fee payable under the ABL Facility (although Adjusted EBITDA does not include all of the adjustments described in the ABL Facility). Adjusted EBITDA includes the Adjusted EBITDA attributable to hospitals that were divested during the course of such year, but in each case solely to the extent relating to the period prior to the consummation of the applicable divestiture.

Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP. It should not be considered in isolation or as a substitute for net income, operating income, or any other performance measure calculated in accordance with U.S. GAAP. The items excluded from Adjusted EBITDA are significant components in understanding and evaluating financial performance. The Company believes such adjustments are appropriate as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. Additionally, this calculation of Adjusted EBITDA may not be comparable to similarly titled measures disclosed by other companies.

The following table reflects the reconciliation of Adjusted EBITDA, as defined, to net loss attributable to Community Health Systems, Inc. stockholders as derived directly from the condensed consolidated financial statements (in millions):

Footnotes to Financial Highlights, Financial Statements and Selected Operating Data (Continued)

The Company generated a net loss attributable to Community Health Systems, Inc. stockholders for the three and six months ended June 30, 2024 and 2023, so the effect of dilutive securities is not considered because their effect would be antidilutive. If the Company had generated net income, the effect of stock awards and options on the diluted shares calculation would have been an increase of 864,816 shares and 202,182 shares during the three months ended June 30, 2024 and 2023, respectively, and 654,307 shares and 335,188 shares during the six months ended June 30, 2024 and 2023, respectively.

Regulation FD Disclosure

Set forth below is selected information concerning the Company's projected consolidated operating results for the year ending December 31, 2024. These projections update selected guidance provided on February 20, 2024, and are based on the Company's historical operating performance, current trends and other assumptions that the Company believes are reasonable at this time. This 2024 guidance should be considered in conjunction with the assumptions included herein. See pages 18, 19 and 20 for a list of factors that could affect the future results of the Company or the healthcare industry generally. The following is provided as guidance to analysts and investors:

The following assumptions were used in developing the 2024 guidance provided above:

Other assumptions used in the above guidance:

A reconciliation of the Company's projected 2024 Adjusted EBITDA, a forward-looking non-GAAP financial measure, to the Company's projected net loss attributable to Community Health Systems, Inc. stockholders, the most directly comparable GAAP financial measure, is shown below (in millions):

(1) The Company does not include in this reconciliation the impact of certain items not included in the Company's forecast set forth above that would be included in a reconciliation of historical net loss attributable to Community Health Systems, Inc. stockholders to Adjusted EBITDA such as, but not limited to, losses (gains) from early extinguishment of debt, impairment and (gain) loss on sale of businesses and expense from government and other legal matters and related costs, in light of the fact that such items are not determinable, and/or the inherent difficulty in quantifying such projected amounts, on a forward-looking basis.

Forward-Looking Statements

This press release 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 press release other than statements of historical fact, including statements regarding projections, expected operating results, and other events that depend upon or refer to future events or conditions or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "thinks," and similar expressions, are forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to significant 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. A number of factors could affect the future results of the Company or the healthcare industry generally and could cause the Company's expected results to differ materially from those expressed in this press release.

These factors include, among other things:

The consolidated operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be experienced for any future periods. The Company cautions that the projections for calendar year 2024 set forth in this press release are given as of the date hereof based on currently available information. The Company undertakes no obligation to revise or update any forward-looking statements (including such guidance), or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.