Community Health Systems (CYH) 8-K Community Health Systems, Inc. Announces First Quarter 2021 Results

Exhibit Number 99.1

Investor Contact:    Kevin Hammons

President and

Chief Financial Officer

(615) 465-7000

COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES

FIRST QUARTER 2021 RESULTS

FRANKLIN, Tenn. (April 28, 2021) – Community Health Systems, Inc. (NYSE: CYH) (the “Company”) today announced financial and operating results for the three months ended March 31, 2021.

The following highlights the financial and operating results for the three months ended March 31, 2021.

• Net operating revenues totaled $3.013 billion.

• Net loss attributable to Community Health Systems, Inc. common stockholders was $(64) million, or $(0.51) per share (diluted), compared with net income of $18 million, or $0.15 per share (diluted), for the same period in 2020. Excluding the adjusting items as presented in the table in footnote (e) on page 14, net income attributable to Community Health Systems, Inc. common stockholders was $0.36 per share (diluted), compared to net loss of $(1.59) per share (diluted) for the same period in 2020.

• Adjusted EBITDA was $495 million, including $82 million of pandemic relief funds, compared with $309 million for the same period in 2020.

• Net cash provided by operating activities was $101 million, which included repayments of Medicare accelerated payments in the amount of approximately $18 million. Net cash provided by operating activities was $57 million for the same period in 2020.

• On a same-store basis, admissions decreased 4.9 percent and adjusted admissions decreased 7.2 percent, compared with the same period in 2020.

Net operating revenues for the three months ended March 31, 2021, totaled $3.013 billion, a 0.4 percent decrease compared with $3.025 billion for the same period in 2020.

Net loss attributable to Community Health Systems, Inc. common stockholders was $(64) million, or $(0.51) per share (diluted), for the three months ended March 31, 2021, compared with net income of $18 million, or $0.15 per share (diluted), for the same period in 2020. Excluding the adjusting items as presented in the table in footnote (e) on page 14, net income attributable to Community Health Systems, Inc. common stockholders was $0.36 per share (diluted) for the three months ended March 31, 2021, compared to net loss of $(1.59) per share (diluted) for the same period in 2020. Payments received by the Company through the Public Health and Social Services Emergency Fund (the “PHSSEF”) and state and local pandemic relief programs, as more specifically described below, had a positive impact on net income attributable to Community Health Systems, Inc. common stockholders (both on a consolidated and adjusted basis) of approximately $62 million, or $0.54 on a per share (diluted) basis, for the three months ended March 31, 2021. Weighted-average shares outstanding (diluted) were 126 million and 114 million for the three months ended March 31, 2021 and 2020, respectively.

Adjusted EBITDA for the three months ended March 31, 2021, was $495 million compared with $309 million for the same period in 2020. Payments received by the Company through the PHSSEF and state and local pandemic relief programs had a positive impact on Adjusted EBITDA of approximately $82 million for the three months ended March 31, 2021.

-MORE-

CYH Announces First Quarter 2021 Results

Page 2

April 28, 2021

The consolidated operating results for the three months ended March 31, 2021, reflect a 14.0 percent decrease in admissions and a 15.8 percent decrease in adjusted admissions, compared with the same period in 2020. On a same-store basis, admissions decreased 4.9 percent and adjusted admissions decreased 7.2 percent for the three months ended March 31, 2021, compared with the same period in 2020. On a same-store basis, net operating revenues increased 9.8 percent for the three months ended March 31, 2021, compared with the same period in 2020, primarily reflecting COVID-19 pandemic-induced changes in the mix of services provided and payor mix compared to the prior period.

Commenting on the results, Tim L. Hingtgen, chief executive officer of Community Health Systems, Inc., said, “Our strong operational and financial performance in the first quarter of 2021 reflects our ability to manage through the challenges of the COVID pandemic while also advancing strategic initiatives that strengthen our organization and produce real-time, positive results. Our market leadership teams continue to adjust their operating models as COVID cases fluctuate, by managing shifts in volumes, revenue, and expenses to achieve the best possible results. At the same time, we are making targeted capital investments and leveraging enterprise-wide programs to ensure our services are both accessible to consumers and facilitate growth over time. As always, we are grateful for our front-line clinicians and other caregivers who continue to provide safe, quality, compassionate care in the most extraordinary of circumstances.”

Financing Transactions:

The Company recognized a net, pre-tax loss from early extinguishment of debt of approximately $71 million for the three months ended March 31, 2021, as a result of the following financing transactions:

• Redemption of the remaining principal amount of the 6¹⁄₄% Senior Secured Notes due 2023 of approximately $95 million using cash on hand.

• Completion of a private offering of $1.775 billion aggregate principal amount of 6⁷⁄₈% Junior-Priority Secured Notes due 2029 on February 2, 2021. The proceeds of this offering, together with cash on hand, were used to redeem the remaining principal amount of the 9⁷⁄₈% Junior-Priority Secured Notes due 2023 of approximately $1.769 billion and to pay related fees and expenses.

• Completion of a private offering of $1.095 billion aggregate principal amount of 4³⁄₄% Senior Secured Notes due 2031 on February 9, 2021. The proceeds of the offering, together with cash on hand, were used to redeem the remaining principal amount of the 8⁵⁄₈% Senior Secured Notes due 2024 of approximately $1.033 billion and to pay related fees and expenses.

• Redemption of the remaining principal amount of the 6⁷⁄₈% Senior Notes due 2022 of approximately $126 million using cash on hand.

COVID – 19 Pandemic:

COVID-19, a disease caused by a novel strain of coronavirus, materially affected the Company’s results of operations during 2020, and continued to affect the Company’s results of operations during the three months ended March 31, 2021. Federal and state governments have passed legislation, promulgated regulations and taken other administrative actions intended to assist healthcare providers in providing care to COVID-19 and other patients during the public health emergency. Sources of relief include the CARES Act, which was enacted on March 27, 2020, the Paycheck Protection Program and Health Care Enhancement Act (the “PPPHCE Act”), which was enacted on April 24, 2020, the Consolidated Appropriations Act, 2021 (the “CAA”), which was enacted on December 27, 2020, and the American Rescue Plan Act of 2021 (the “ARPA”), which was enacted on March 11, 2021. Together, these stimulus laws authorize over $178 billion in funding to be distributed to hospitals and other healthcare providers through the PHSSEF. In addition to the relief funding, the CARES Act provided for an expansion of the Medicare Accelerated and Advance Payment Program. Various state and local programs also exist to provide relief, either independently or through distribution of monies received via the CARES Act and other enacted federal legislation. The Company has been a beneficiary of these stimulus monies.

-MORE-

CYH Announces First Quarter 2021 Results

Page 3

April 28, 2021

Through March 31, 2021, the Company received approximately $708 million in payments through the PHSSEF and various state and local programs on a cumulative basis since their enactment of which approximately $705 million was received during the year ended December 31, 2020, and the balance of which was received during the three months ended March 31, 2021. PHSSEF payments are intended to compensate healthcare providers for lost revenues and incremental expenses, as defined by the U.S. Department of Health and Human Services (“HHS”), incurred in response to the COVID-19 pandemic and are not required to be repaid provided that recipients attest to and comply with certain terms and conditions, including limitations on balance billing and not using funds received from the PHSSEF to reimburse eligible expenses or lost revenues, as defined by HHS, that other sources have or may be obligated to reimburse.

The Company recognized approximately $82 million of the PHSSEF and various state and local program payments eligible to be claimed as a reduction in operating costs and expenses during the three months ended March 31, 2021. During the three months ended March 31, 2021, the Company’s estimate of the amount of payments received through the PHSSEF or state and local programs for which the Company is reasonably assured of meeting the underlying terms and conditions was updated based on, among other things, expenses incurred in the period that are attributable to the coronavirus, the Company’s results of operations during such period as compared to the Company’s 2020 budget for the same period in the prior year and the allocation of targeted distribution payments to various subsidiaries. Amounts received through the PHSSEF or state and local programs that have not been recognized as a reduction to operating costs and expenses and otherwise have not been refunded to HHS or state and local agencies as of March 31, 2021, are reflected within accrued liabilities-other in the condensed consolidated balance sheet. Such unrecognized amounts may either be returned to HHS in one or more future periods when a procedure for doing so is established by HHS or may be recognized as a reduction in operating costs and expenses in future periods if the underlying conditions for recognition are reasonably assured of having been met.

HHS’ interpretation of the underlying terms and conditions of such PHSSEF payments, including auditing and reporting requirements, continues to evolve. Additional guidance or new and amended interpretations of existing guidance on the terms and conditions of such PHSSEF payments may result in the Company’s inability to recognize certain PHSSEF payments, changes in the estimate of amounts recognized, or the derecognition of amounts previously recognized, which (in any such case) may be material.

Medicare accelerated payments of approximately $1.2 billion were received during April 2020. No additional Medicare accelerated payments have been received by the Company since such time, including during the three months ended March 31, 2021, and approximately $18 million and $77 million of amounts previously received were repaid to the Centers for Medicare & Medicaid Services (“CMS”) or assumed by buyers related to hospitals the Company divested during the three months ended March 31, 2021, and year ended December 31, 2020, respectively. The Company does not expect to receive additional Medicare accelerated payments. Payments under the Medicare Accelerated and Advance Payment Program are advances that must be repaid. Providers are required to repay accelerated payments beginning one year after the payment was issued. After such one-year period, Medicare payments owed to providers will be recouped according to the repayment terms. The repayment terms specify that for the first 11 months after repayment begins, repayment will occur through an automatic recoupment of 25% of Medicare payments otherwise owed to the provider during such time. At the end of the eleven-month period, recoupment will increase to 50% for six months. At the end of the six months (or 29 months from the receipt of the initial accelerated payment), Medicare will issue a letter for full repayment of any remaining balance, as applicable. In such event, if payment is not received within 30 days, interest will accrue at the rate of 4% per annum from the date the letter was issued and will be assessed for each full 30-day period that the balance remains unpaid. Recoupments by CMS of Medicare accelerated payments previously received by the Company began in April 2021, pursuant to the aforementioned payment terms. As of March 31, 2021, approximately $546 million of Medicare accelerated payments are reflected within accrued liabilities-other in the condensed consolidated balance sheet while the remaining approximately $517 million are included within other long-term liabilities. In April 2021, CMS began recouping Medicare accelerated payments previously received by the Company.

-MORE-

CYH Announces First Quarter 2021 Results

Page 4

April 28, 2021

The PHSSEF payments received to date as noted above and payments which the Company may receive in the future under the CARES Act and other stimulus legislation have been and may continue to be beneficial in partially mitigating the impact of the COVID-19 pandemic on the Company’s results of operations and financial position. Additionally, the federal government may consider additional stimulus and relief efforts, but the Company is unable to predict whether additional stimulus measures will be enacted or their impact, if any. The Company is unable to assess the extent to which anticipated ongoing negative impacts on the Company arising from the COVID-19 pandemic will be offset by benefits which the Company may recognize or receive in the future under the CARES Act and other enacted stimulus legislation or any future stimulus measures.

Divestitures and hospital closures:

The Company completed the divestiture of three hospitals on January 1, 2021, (in respect of which the Company received proceeds at a preliminary closing on December 31, 2020), one hospital on February 1, 2021, and one hospital on April 1, 2021. While the Company’s formal portfolio rationalization program concluded as of December 31, 2020 (inclusive of definitive agreements entered into in 2020 for the sales of hospitals which have been completed in 2021), the Company continues to receive interest from potential acquirers for certain of its hospitals, and may, from time to time, consider selling additional hospitals if the Company considers any such dispositions to be in its best interests.

Financial and statistical data for 2020 and 2021 presented in this press release includes the operating results of divested or closed hospitals for the periods prior to the consummation of the respective divestiture or hospital closing. Same-store operating results exclude the results of a hospital opened in 2020 and the hospitals divested or closed in 2020 and 2021.

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, (income) expense related to government and other legal settlements and related costs, expense incurred in the fourth quarter of 2020 related to the settlement of certain professional liability claims for which the third-party insurers’ obligation to insure the Company against the underlying loss is being litigated, expense related to employee termination benefits and other restructuring charges, expense from settlement and fair value adjustments on the CVR agreement liability related to the Health Management Associates, Inc. (“HMA”) legal proceedings and related legal expenses, the impact of changes in estimate to increase the professional liability claims accrual recorded during the second quarter of 2019 (which estimate was further revised in the third quarter of 2019 based on updated actuarial analysis) with respect to claims incurred in 2016 and prior years and expense related to the valuation allowance recorded in the second quarter of 2019 to reserve the outstanding balance of a promissory note received from the buyer in connection with the sale of two of the Company’s hospitals in 2017, as well as income from a reduction of the valuation allowance on the outstanding balance of a promissory note from the buyer of another hospital. For information regarding why the Company believes Adjusted EBITDA provides useful information to investors, and for a reconciliation of Adjusted EBITDA to net (loss) income 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 income (loss) attributable to Community Health Systems, Inc. common stockholders per share (diluted), a non-GAAP financial measure, to reflect the impact on net (loss) income attributable to Community Health Systems, Inc. common 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 income (loss) attributable to Community Health Systems, Inc. common stockholders per share (diluted), see footnote (e) to the Financial Highlights, Financial Statements and Selected Operating Data below.

-MORE-

CYH Announces First Quarter 2021 Results

Page 5

April 28, 2021

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 presented by other companies.

Included on pages 15, 16, 17 and 18 of this press release are tables setting forth the Company’s 2021 annual earnings guidance. The 2021 guidance is based on the Company’s historical operating performance, current trends and other assumptions that the Company believes are reasonable at this time as more specifically discussed below.

Community Health Systems, Inc. is one of the largest publicly traded hospital companies in the United States and a leading operator of general acute care hospitals in communities across the country. The Company, through its subsidiaries, owns, leases or operates 84 affiliated hospitals in 16 states with an aggregate of approximately 13,000 licensed beds.

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, April 29, 2021, at 10:00 a.m. Central, 11:00 a.m. Eastern, to review financial and operating results for the first quarter ended March 31, 2021. 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. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software. 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.

-MORE-

CYH Announces First Quarter 2021 Results

Page 6

April 28, 2021

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Financial Highlights (a)(b)

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2021			2020
Net operating revenues	$	3,013		$	3,025
Net (loss) income (f), (g)		(35	)		34
Net (loss) income attributable to Community Health Systems, Inc. stockholders		(64	)		18
Adjusted EBITDA (c)		495			309
Net cash provided by operating activities		101			57
(Loss) earnings per share attributable to Community Health Systems, Inc. common stockholders:
Basic (f), (g)	$	(0.51	)	$	0.15
Diluted (e), (f), (g)		(0.51	)		0.15
Weighted-average number of shares outstanding (d):
Basic		126			114
Diluted		126			114

For footnotes, see pages 12, 13 and 14.

-MORE-

CYH Announces First Quarter 2021 Results

Page 7

April 28, 2021

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of (Loss) Income (a)(b)

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2021						2020
	Amount			% of Net Operating Revenues			Amount			% of Net Operating Revenues
Net operating revenues	$	3,013			100.0	%	$	3,025			100.0	%
Operating costs and expenses:
Salaries and benefits		1,303			43.2	%		1,408			46.4	%
Supplies		491			16.3	%		498			16.5	%
Other operating expenses		738			24.5	%		737			24.4	%
Government and other legal settlements and related costs (g)		—			-	%		2			0.1	%
Lease cost and rent		78			2.6	%		81			2.7	%
Pandemic relief funds		(82	)		(2.7	)%		—			-	%
Depreciation and amortization		138			4.6	%		144			4.8	%
Impairment and (gain) loss on sale of businesses, net (f)		21			0.7	%		45			1.5	%
Total operating costs and expenses		2,687			89.2	%		2,915			96.4	%
Income from operations (f), (g)		326			10.8	%		110			3.6	%
Interest expense, net		231			7.7	%		262			8.7	%
Loss from early extinguishment of debt		71			2.3	%		4			0.1	%
Equity in earnings of unconsolidated affiliates		(10	)		(0.3	)%		(7	)		(0.3	)%
Income (loss) before income taxes		34			1.1	%		(149	)		(4.9	)%
Provision for (benefit from) income taxes		69			2.3	%		(183	)		(6.0	)%
Net (loss) income (f), (g)		(35	)		(1.2	)%		34			1.1	%
Less: Net income attributable to noncontrolling interests		29			0.9	%		16			0.5	%
Net (loss) income attributable to Community Health Systems, Inc. stockholders	$	(64	)		(2.1	)%	$	18			0.6	%
(Loss) earnings per share attributable to Community Health Systems, Inc. common stockholders:
Basic (f), (g)	$	(0.51	)				$	0.15
Diluted (e), (f), (g)	$	(0.51	)				$	0.15
Weighted-average number of shares outstanding (d):
Basic		126						114
Diluted		126						114

For footnotes, see pages 12, 13 and 14.

-MORE-

CYH Announces First Quarter 2021 Results

Page 8

April 28, 2021

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive (Loss) Income

(In millions)

(Unaudited)

	Three Months Ended March 31,
	2021			2020
Net (loss) income	$	(35	)	$	34
Other comprehensive (loss) income, net of income taxes:
Net change in fair value of available-for-sale debt securities, net of tax		(3	)		2
Other comprehensive (loss) income		(3	)		2
Comprehensive (loss) income		(38	)		36
Less: Comprehensive income attributable to noncontrolling interests		29			16
Comprehensive (loss) income attributable to Community Health Systems, Inc. stockholders	$	(67	)	$	20

For footnotes, see pages 12, 13 and 14.

-MORE-

CYH Announces First Quarter 2021 Results

Page 9

April 28, 2021

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Selected Operating Data (a)

(Dollars in millions)

(Unaudited)

	Three Months Ended March 31,
	Consolidated									Same-Store
	2021			2020			% Change			2021			2020			% Change
Number of hospitals (at end of period)		85			99						84			84
Licensed beds (at end of period)		13,563			15,620						13,545			13,588
Beds in service (at end of period)		11,991			13,757						11,973			12,130
Admissions		110,268			128,248			-14.0	%		110,113			115,767			-4.9	%
Adjusted admissions		227,366			270,156			-15.8	%		226,735			244,304			-7.2	%
Patient days		549,991			579,937						549,307			526,265
Average length of stay (days)		5.0			4.5						5.0			4.5
Occupancy rate (average beds in service)		50.8	%		46.1	%					50.9	%		47.6	%
Net operating revenues	$	3,013		$	3,025			-0.4	%	$	3,018		$	2,749			9.8	%
Net inpatient revenues as a % of net operating revenues		49.8	%		47.9	%					49.8	%		47.6	%
Net outpatient revenues as a % of net operating revenues		50.2	%		52.1	%					50.2	%		52.4	%
Income from operations (f), (g)	$	326		$	110			196.4	%
Income from operations as a % of net operating revenues		10.8	%		3.6	%
Depreciation and amortization	$	138		$	144
Equity in earnings of unconsolidated affiliates	$	(10	)	$	(7	)
Net (loss) income attributable to Community Health Systems, Inc. stockholders	$	(64	)	$	18			-455.6	%
Net (loss) income attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues		-2.1	%		0.6	%
Adjusted EBITDA (c)	$	495		$	309			60.2	%
Adjusted EBITDA as a % of net operating revenues		16.4	%		10.2	%
Net cash provided by operating activities	$	101		$	57			77.2	%

For footnotes, see pages 12, 13 and 14.

-MORE-

CYH Announces First Quarter 2021 Results

Page 10

April 28, 2021

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except share data)

(Unaudited)

	March 31, 2021			December 31, 2020
ASSETS
Current assets
Cash and cash equivalents	$	1,251		$	1,676
Patient accounts receivable		1,961			1,927
Supplies		336			335
Prepaid income taxes		50			50
Prepaid expenses and taxes		190			184
Other current assets		316			338
Total current assets		4,104			4,510
Property and equipment		9,396			9,352
Less accumulated depreciation and amortization		(4,091	)		(4,030	)
Property and equipment, net		5,305			5,322
Goodwill		4,219			4,219
Deferred income taxes		59			59
Other assets, net		1,905			1,896
Total assets	$	15,592		$	16,006
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Current maturities of long-term debt	$	20		$	123
Current operating lease liabilities		131			142
Accounts payable		730			783
Accrued liabilities:
Employee compensation		667			637
Accrued interest		159			150
Other		1,003			980
Total current liabilities		2,710			2,815
Long-term debt (h)		11,897			12,093
Deferred income taxes		96			29
Long-term operating lease liabilities		528			524
Other long-term liabilities		1,475			1,599
Total liabilities		16,706			17,060
Redeemable noncontrolling interests in equity of consolidated subsidiaries		481			484
STOCKHOLDERS’ DEFICIT
Community Health Systems, Inc. stockholders’ deficit:
Preferred stock, $.01 par value per share, 100,000,000 shares authorized; none issued		—			—
Common stock, $.01 par value per share, 300,000,000 shares authorized; 132,147,878 shares issued and outstanding at March 31, 2021, and 129,612,117 shares issued and outstanding at December 31, 2020		1			1
Additional paid-in capital		2,105			2,094
Accumulated other comprehensive loss		(16	)		(13	)
Accumulated deficit		(3,771	)		(3,707	)
Total Community Health Systems, Inc. stockholders’ deficit		(1,681	)		(1,625	)
Noncontrolling interests in equity of consolidated subsidiaries		86			87
Total stockholders’ deficit		(1,595	)		(1,538	)
Total liabilities and stockholders’ deficit	$	15,592		$	16,006

For footnotes, see pages 12, 13 and 14.

-MORE-

CYH Announces First Quarter 2021 Results

Page 11

April 28, 2021

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

	Three Months Ended March 31,
	2021			2020
Cash flows from operating activities
Net (loss) income	$	(35	)	$	34
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		138			144
Deferred income taxes		68			(184	)
Government and other legal settlements and related costs (g)		—			2
Stock-based compensation expense		8			2
Impairment and (gain) loss on sale of businesses, net (f)		21			45
Loss from early extinguishment of debt		71			4
Other non-cash expenses, net		(40	)		49
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Patient accounts receivable		(34	)		158
Supplies, prepaid expenses and other current assets		(2	)		(53	)
Repayment/derecognition of Medicare accelerated payments		(18	)		—
Accounts payable, accrued liabilities and income taxes		(23	)		(78	)
Other		(53	)		(66	)
Net cash provided by operating activities		101			57
Cash flows from investing activities
Acquisitions of facilities and other related businesses		(4	)		—
Purchases of property and equipment		(105	)		(99	)
Proceeds from disposition of hospitals and other ancillary operations		6			2
Proceeds from sale of property and equipment		2			—
Purchases of available-for-sale debt securities and equity securities		(22	)		(17	)
Proceeds from sales of available-for-sale debt securities and equity securities		26			21
Increase in other investments		(23	)		(16	)
Net cash used in investing activities		(120	)		(109	)
Cash flows from financing activities
Repurchase of restricted stock shares for payroll tax withholding requirements		(5	)		(1	)
Deferred financing costs and other debt-related costs		(220	)		(32	)
Redemption of noncontrolling investments in joint ventures		—			(2	)
Distributions to noncontrolling investors in joint ventures		(21	)		(30	)
Proceeds from sale-lease back		—			2
Other borrowings		3			14
Issuance of long-term debt		2,870			1,462
Proceeds from ABL facility		—			540
Repayments of long-term indebtedness		(3,033	)		(1,871	)
Net cash (used in) provided by financing activities		(406	)		82
Net change in cash and cash equivalents		(425	)		30
Cash and cash equivalents at beginning of period		1,676			216
Cash and cash equivalents at end of period	$	1,251		$	246

For footnotes, see pages 12, 13 and 14.

-MORE-

CYH Announces First Quarter 2021 Results

Page 12

April 28, 2021

Footnotes to Financial Highlights, Financial Statements and Selected Operating Data

(a) Both financial and statistical results include the operating results of divested or closed hospitals for the periods prior to the consummation of the respective divestiture or hospital closing. Same-store operating results and statistical information exclude the results of a hospital opened in 2020 and the hospitals divested or closed in 2020 and 2021. There were no discontinued operations reported for 2020 and 2021.

(b) The following table provides information needed to calculate (loss) earnings per share, which is adjusted for income attributable to noncontrolling interests (in millions):

	Three Months Ended March 31,
	2021			2020
Net (loss) income attributable to Community Health Systems, Inc. common stockholders:
Net (loss) income	$	(35	)	$	34
Less: Income attributable to noncontrolling interests, net of taxes		29			16
Net (loss) income attributable to Community Health Systems, Inc. common stockholders — basic and diluted	$	(64	)	$	18

(c) EBITDA is a non-GAAP financial measure which consists of net (loss) income attributable to Community Health Systems, Inc. before interest, income taxes, and depreciation and amortization. Adjusted EBITDA, also a non-GAAP financial measure, 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, (income) expense related to government and other legal settlements and related costs, expense incurred in the fourth quarter of 2020 related to the settlement of certain professional liability claims for which the third-party insurers’ obligation to insure the Company against the underlying loss is being litigated, expense related to employee termination benefits and other restructuring charges, expense from settlement and fair value adjustments on the CVR agreement liability related to the HMA legal proceedings and related legal expenses, the impact of changes in estimate to increase the professional liability claims accrual recorded during the second quarter of 2019 (which estimate was further revised in the third quarter of 2019 based on updated actuarial analysis) with respect to claims incurred in 2016 and prior years, and expense related to the valuation allowance recorded in the second quarter of 2019 to reserve the outstanding balance of a promissory note received from the buyer in connection with the sale of two of the Company’s hospitals in 2017, as well as income from a reduction of the valuation allowance on the outstanding balance of a promissory note from the buyer of another hospital. The Company has from time to time sold noncontrolling interests in certain of its subsidiaries or acquired subsidiaries with existing noncontrolling interest ownership positions. The Company believes that it is useful to present Adjusted EBITDA because it adds back the portion of EBITDA attributable to these third-party interests and clarifies for investors the Company’s portion of EBITDA generated by continuing operations. The Company reports Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by management to assess the operating performance of the Company’s hospital operations and to make decisions on the allocation of resources. Adjusted EBITDA is also used to evaluate the performance of the Company’s executive management team and is one of the primary metrics used in connection with determining short-term cash incentive compensation and the achievement of vesting criteria with respect to performance-based equity awards. In addition, management utilizes Adjusted EBITDA in assessing the Company’s consolidated results of operations and operational performance and in comparing the Company’s results of operations between periods. 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”), which is a key component in the determination of the Company’s compliance with certain covenants under the ABL Facility (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.

-MORE-

CYH Announces First Quarter 2021 Results

Page 13

April 28, 2021

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

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 presented by other companies.

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

	Three Months Ended March 31,
	2021			2020
Net (loss) income attributable to Community Health Systems, Inc. stockholders	$	(64	)	$	18
Adjustments:
Provision for (benefit from) income taxes		69			(183	)
Depreciation and amortization		138			144
Net income attributable to noncontrolling interests		29			16
Interest expense, net		231			262
Loss from early extinguishment of debt		71			4
Impairment and (gain) loss on sale of businesses, net		21			45
Expense from government and other legal settlements and related costs		—			2
Expense from settlement and legal expenses related to cases covered by the CVR		—			1
Adjusted EBITDA	$	495		$	309

(d) The following table sets forth components reconciling the basic weighted-average number of shares to the diluted weighted-average number of shares (in millions):

	Three Months Ended March 31,
	2021		2020
Weighted-average number of shares outstanding - basic		126		114
Add effect of dilutive securities:
Stock awards and options		—		—
Weighted-average number of shares outstanding - diluted		126		114

The Company generated a net loss attributable to Community Health Systems, Inc. common stockholders for the three months ended March 31, 2021, 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 2,267,756 shares during the three months ended March 31, 2021. The effect of stock awards and options on the diluted shares calculation was an increase of 77,812 shares during the three months ended March 31, 2020.

-MORE-

CYH Announces First Quarter 2021 Results

Page 14

April 28, 2021

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

(e) The following supplemental table reconciles net (loss) income attributable to Community Health Systems, Inc. common stockholders, as reported, on a per share (diluted) basis, to net income (loss) attributable to Community Health Systems, Inc. common stockholders per share (diluted) with the adjustments described herein (total per share amounts may not add due to rounding). The Company believes that the presentation of non-GAAP adjusted net income (loss) attributable to Community Health Systems, Inc. common stockholders per share (diluted) presents useful information to investors by highlighting the impact on net (loss) income attributable to Community Health Systems, Inc. common stockholders per share (diluted) of selected items used in calculating Adjusted EBITDA which may not reflect the Company’s underlying operating performance and assisting in comparing the Company’s results of operations between periods.

	Three Months Ended March 31,
	2021			2020
Net (loss) income per share (diluted), as reported	$	(0.51	)	$	0.15
Adjustments:
Loss from early extinguishment of debt		0.74			0.02
Impairment and (gain) loss on sale of businesses, net		0.13			0.31
Expense from government and other legal settlements and related costs		—			0.01
Expense from settlement and legal expenses related to cases covered by the CVR		—			0.01
Change in tax valuation allowance		—			(2.10	)
Net income (loss) per share (diluted), excluding adjustments	$	0.36		$	(1.59	)

(f) Both income from operations and net (loss) income for the three months ended March 31, 2021 and 2020, included a net non-cash expense of approximately $21 million and $45 million, respectively, primarily from impairment charges to reduce the value of certain long-lived assets at hospitals the Company has identified for sale or has sold and gains on the sale of certain hospitals during such periods. These impairment charges do not have an impact on the calculation of the Company’s financial covenants under the ABL Facility.

(g) The $0.01 per share (diluted) of expense for “Government and other legal settlements and related costs” for the three months ended March 31, 2020, is the net impact of the resolution of several lawsuits settled in principle during the related period, and related legal expenses.

(h) At March 31, 2021, the Company had no outstanding borrowings and approximately $633 million of borrowing capacity (after taking into consideration $120 million of outstanding letters of credit) under the ABL Facility, with the ability to increase borrowings up to $1.0 billion.

-MORE-

CYH Announces First Quarter 2021 Results

Page 15

April 28, 2021

Regulation FD Disclosure

Set forth below is selected information concerning the Company’s projected consolidated operating results for the year ending December 31, 2021. These projections update selected guidance provided on February 17, 2021, and are based on the Company’s historical operating performance, current trends and other assumptions that the Company believes are reasonable at this time. The 2021 guidance should be considered in conjunction with the assumptions included herein. See pages 17 and 18 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:

	2021 Projection Range
Net operating revenues (in millions)	$	11,700	to	$	12,500
Adjusted EBITDA (in millions)	$	1,650	to	$	1,800
Net income per share—diluted	$	0.25	to	$	0.60
Weighted-average diluted shares (in millions)		129.0	to		130.0

The following assumptions were used in developing the 2021 guidance provided above:

• The Company’s projections exclude the following:

• Effect of debt refinancing activities, including gains and losses from early extinguishment of debt;

• Impairment of goodwill and long-lived assets;

• Potential recognition of additional pandemic relief funds;

• The impact of any potential future divestitures;

• Gains or losses from the sales of businesses;

• Employee termination benefits and restructuring costs;

• Resolution of government investigations or other significant legal settlements;

• Costs incurred in connection with divestitures; and

• Other significant gains or losses that neither relate to the ordinary course of business nor reflect the Company’s underlying business performance.

Other assumptions used in the above guidance:

• Expressed as a percentage of net operating revenues, depreciation and amortization of approximately 4.6% for 2021. Additionally, this is a fixed cost and the percentages may change as revenue varies. Such amounts exclude the possible impact of any future hospital fixed asset impairments.

• Interest expense is estimated to be between $895 million and $905 million while cash paid for interest, which excludes the amortization of deferred financing costs, is expected to be $830 million to $840 million. Total fixed rate debt is expected to average approximately 100% of total debt during 2021.

• Expressed as a percentage of net operating revenues, net income attributable to noncontrolling interests of approximately 0.9% for 2021.

• Expressed as a percentage of net operating revenues, provision for income taxes of approximately 0.8% to 1.1% for 2021.

-MORE-

CYH Announces First Quarter 2021 Results

Page 16

April 28, 2021

A reconciliation of the Company’s projected 2021 Adjusted EBITDA, a forward-looking non-GAAP financial measure, to the Company’s projected net income attributable to Community Health Systems, Inc. stockholders, the most directly comparable GAAP financial measure, is shown below:

	Year Ending December 31, 2021
	Low		High
Net income attributable to Community Health Systems, Inc. stockholders (1)	$	32	$	78
Adjustments:
Depreciation and amortization		528		560
Interest expense, net		895		905
Provision for income taxes		89		142
Net income attributable to noncontrolling interests		106		115
Adjusted EBITDA (1)	$	1,650	$	1,800

(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 (income) related to government and other legal settlements 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.

• Capital expenditures are projected as follows (in millions):

	2021 Guidance
Total	$	400	to	$	500

• Net cash provided by operating activities, and net cash provided by operating activities adjusted to exclude anticipated repayment of Medicare accelerated payments (a non-GAAP financial measure), are projected as follows (in millions):

	2021 Guidance
Net cash provided by operating activities	$	200	to	$	300
Repayment of Medicare accelerated payments		400	to		450
Net cash provided by operating activities, excluding the repayment of Medicare accelerated payments	$	600	to	$	750

Net cash provided by operating activities excluding repayment of anticipated Medicare accelerated payments is a forward looking non-GAAP financial measure which has been reconciled to net cash provided by operating activities, the most directly comparable GAAP financial measure, in the table above. The Company believes that, in light of the fact that the Medicare accelerated payment program arose from government stimulus efforts in connection with the pandemic and the Company will not have any further obligation to make such repayments once such amounts are fully repaid, the presentation of projected net cash provided by operating activities excluding such repayments provides useful information to investors by highlighting our projected net cash provided by operating activities in 2021 absent such repayments, thereby assisting in understanding our projected financial performance for this period and comparing the Company’s financial performance between periods. This non-GAAP financial measure is not a measurement of financial performance under U.S. GAAP, and should not be considered in isolation or as a substitute for net cash provided by operating activities or any financial measure calculated in accordance with U.S. GAAP.

• Diluted weighted-average shares outstanding are projected to be approximately 129 million to 130 million for 2021.

-MORE-

CYH Announces First Quarter 2021 Results

Page 17

April 28, 2021

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:

• developments related to COVID-19, including, without limitation, related to the length and severity of the pandemic; the volume of canceled or rescheduled procedures; the volume of COVID-19 patients cared for across our health systems; the timing and availability of effective medical treatments and vaccines, including the timing and effectiveness of the ongoing rollout of currently available vaccines; the spread of potentially more contagious and/or virulent forms of the virus; measures we are taking to respond to the COVID-19 pandemic; the impact of government and administrative regulation on us; changes in net revenue due to patient volumes, payor mix and negative macroeconomic conditions; increased expenses related to labor, supply chain, capital and other expenditures; workforce disruptions; and supply shortages and disruptions;

• uncertainty regarding the implementation of the CARES Act, the PPPHCE Act, the CAA, the ARPA and any other future stimulus measures related to COVID-19, including the magnitude and timing of any future payments or benefits we may receive or realize thereunder;

• general economic and business conditions, both nationally and in the regions in which we operate, including economic and business conditions resulting from the COVID-19 pandemic;

• the impact of current or future federal and state health reform initiatives, including, without limitation, the Affordable Care Act, and the potential for the Affordable Care Act to be repealed or found unconstitutional or otherwise invalidated, or for additional changes to the law, its implementation or its interpretation (including through executive orders and court challenges);

• the extent to and manner in which states support increases, decreases or changes in Medicaid programs, implement health insurance exchanges or alter the provision of healthcare to state residents through regulation or otherwise;

• the future and long-term viability of health insurance exchanges and potential changes to the beneficiary enrollment process;

• risks associated with our substantial indebtedness, leverage and debt service obligations, including our ability to refinance such indebtedness on acceptable terms or to incur additional indebtedness, and our ability to remain in compliance with debt covenants;

• demographic changes;

• changes in, or the failure to comply with, federal, state or local laws or governmental regulations affecting our business, including any such laws or governmental regulations which are adopted in connection with the COVID-19 pandemic;

• potential adverse impact of known and unknown government investigations, audits, and federal and state false claims act litigation and other legal proceedings;

• our ability, where appropriate, to enter into and maintain provider arrangements with payors and the terms of these arrangements, which may be further affected by the increasing consolidation of health insurers and managed care companies and vertical integration efforts involving payors and healthcare providers;

• changes in, or the failure to comply with, contract terms with payors and changes in reimbursement policies or rates paid by federal or state healthcare programs or commercial payors;

• any potential impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets;

-MORE-

CYH Announces First Quarter 2021 Results

Page 18

April 28, 2021

• changes in inpatient or outpatient Medicare and Medicaid payment levels and methodologies;

• the effects related to the implementation of sequestration spending reductions pursuant to both the Budget Control Act of 2011 and the Pay-As-You-Go Act of 2010 and the potential for future deficit reduction legislation;

• increases in the amount and risk of collectability of patient accounts receivable, including decreases in collectability which may result from, among other things, self-pay growth and difficulties in recovering payments for which patients are responsible, including co-pays and deductibles;

• the efforts of insurers, healthcare providers, large employer groups and others to contain healthcare costs, including the trend toward value-based purchasing;

• increases in wages as a result of inflation or competition for highly technical positions and rising supply and drug costs due to market pressure from pharmaceutical companies and new product releases;

• liabilities and other claims asserted against us, including self-insured malpractice claims;

• competition;

• our ability to attract and retain, at reasonable employment costs, qualified personnel, key management, physicians, nurses and other healthcare workers;

• trends toward treatment of patients in less acute or specialty healthcare settings, including ambulatory surgery centers or specialty hospitals or via telehealth;

• changes in medical or other technology;

• changes in U.S. GAAP;

• the availability and terms of capital to fund any additional acquisitions or replacement facilities or other capital expenditures;

• our ability to successfully make acquisitions or complete divestitures, our ability to complete any such acquisitions or divestitures on desired terms or at all, the timing of the completion of any such acquisitions or divestitures, and our ability to realize the intended benefits from any such acquisitions or divestitures;

• the impact that changes in our relationships with joint venture or syndication partners could have on effectively operating our hospitals or ancillary services or in advancing strategic opportunities;

• our ability to successfully integrate any acquired hospitals, or to recognize expected synergies from acquisitions;

• the impact of seasonal severe weather conditions, including the timing and amount of insurance recoveries in relation to severe weather events;

• our ability to obtain adequate levels of insurance, including general liability, professional liability, and directors and officers liability insurance;

• timeliness of reimbursement payments received under government programs;

• effects related to pandemics, epidemics, or outbreaks of infectious diseases, including the novel coronavirus causing the disease known as COVID-19 as noted above;

• the impact of cyber-attacks or security breaches;

• any failure to comply with the terms of the Corporate Integrity Agreement;

• the concentration of our revenue in a small number of states;

• our ability to realize anticipated cost savings and other benefits from our current strategic and operational cost savings initiatives;

• any changes in or interpretations of income tax laws and regulations; and

• the other risk factors set forth in our Annual Report on Form10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 18, 2021, and other public filings with the Securities and Exchange Commission.

The consolidated operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be experienced for any future periods. The Company cautions that the projections for calendar year 2021 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, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

-END-