Community Health Systems, Inc. (NYSE: CYH) (the “Company”) today
announced financial and operating results for the three months and
year ended December 31, 2024.
The following highlights the financial and operating results for
the three months ended December 31, 2024.
- Net operating revenues totaled $3.265 billion.
- Net loss attributable to Community Health Systems, Inc.
stockholders was $(70) million, or $(0.53) per share (diluted),
compared to net income of $46 million, or $0.35 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 $(0.42) per share (diluted), compared to $(0.41) per share
(diluted) for the same period in 2023.
- Adjusted EBITDA was $428 million.
- Net cash provided by operating activities was $216 million
for the three months ended December 31, 2024, compared to $90
million for the same period in 2023.
- On a same-store basis, admissions increased 3.4 percent and
adjusted admissions increased 3.1 percent, compared to the same
period in 2023.
Commenting on the results, Tim L. Hingtgen, chief executive
officer of Community Health Systems, Inc., said, “We continue to
make meaningful progress in key strategic areas, and we were
especially pleased with demand for our services and strong
same-store volume growth. As we look forward to 2025, we remain
confident in our portfolio, optimistic about our future
opportunities, and grateful to our clinicians and support teams who
consistently deliver high-quality care for their patients.”
Three Months Ended December 31, 2024
Net operating revenues for the three months ended December 31,
2024, totaled $3.265 billion, a 2.6 percent increase compared to
$3.181 billion for the same period in 2023. On a same-store basis,
net operating revenues increased 6.5 percent for the three months
ended December 31, 2024, compared to the same period in 2023. Net
operating revenues for the three months ended December 31, 2024,
reflect a 5.6 percent decrease in admissions and a 5.7 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 3.1 percent for the three months
ended December 31, 2024, compared to the same period in 2023.
Net loss attributable to Community Health Systems, Inc.
stockholders was $(70) million, or $(0.53) per share (diluted), for
the three months ended December 31, 2024, compared to net income of
$46 million, or $0.35 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 $(0.42) per share (diluted) for the
three months ended December 31, 2024, compared to $(0.41) per share
(diluted) for the same period in 2023.
Adjusted EBITDA for the three months ended December 31, 2024,
was $428 million compared to $386 million for the same period in
2023.
The amount of net loss attributable to Community Health Systems,
Inc. stockholders for the three months ended December 31, 2024,
compared to the amount of net income for the same period in 2023,
is primarily attributable to period-over-period changes in
impairment and (gain) loss on the sale of businesses and gain from
early extinguishment of debt, partially offset by the factors that
contributed to the increase in Adjusted EBITDA. The increase in
Adjusted EBITDA for the three months ended December 31, 2024,
compared to the same period in 2023, was driven by higher
same-store volumes, increased reimbursement rates, favorable
changes in payor mix, a higher net benefit from supplemental
reimbursement programs and reduced expense for contract labor,
partially offset by declines in acuity and non-patient revenue,
increased patient claim denials and increased costs for outsourced
medical specialists.
Year Ended December 31, 2024
Net operating revenues for the year ended December 31, 2024,
totaled $12.634 billion, a 1.2 percent increase compared to $12.490
billion for the same period in 2023. On a same-store basis, net
operating revenues increased 5.5 percent for the year ended
December 31, 2024, compared to the same period in 2023. Net
operating revenues for the year ended December 31, 2024, reflect a
3.2 percent decrease in admissions and a 3.4 percent decrease in
adjusted admissions, compared to the same period in 2023. On a
same-store basis, admissions increased 3.2 percent and adjusted
admissions increased 2.7 percent for the year ended December 31,
2024, compared to the same period in 2023.
Net loss attributable to Community Health Systems, Inc.
stockholders was $(516) million, or $(3.90) per share (diluted),
for the year ended December 31, 2024, compared to $(133) million,
or $(1.02) 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 $(1.03) per share (diluted) for the year
ended December 31, 2024, compared to $(1.39) per share (diluted)
for the same period in 2023.
Adjusted EBITDA for the year ended December 31, 2024, was $1.540
billion compared to $1.453 billion for the same period in 2023.
The increase in net loss attributable to Community Health
Systems, Inc. stockholders for the year ended December 31, 2024,
compared to the same period in 2023, is primarily attributable to
period-over-period changes in impairment and (gain) loss on the
sale of businesses as well as gain from early extinguishment of
debt and a change in estimate to increase the professional
liability claims accrual incurred during the year ended December
31, 2024, partially offset by a decrease in the provision for
income taxes and the factors that contributed to the increase in
Adjusted EBITDA. The increase in Adjusted EBITDA for the year ended
December 31, 2024, compared to the same period in 2023, was driven
by higher same-store volumes, increased reimbursement rates,
favorable changes in payor mix, a higher net benefit from
supplemental reimbursement programs, reduced expense for contract
labor and reductions in supplies expense, partially offset by lower
acuity, increased patient claim denials and increased costs for
outsourced medical specialists.
Other
During 2024, the Company completed two hospital divestitures,
one of which was completed on August 1, 2024, and one of which was
completed on October 1, 2024. In addition, during 2025 through the
date of this press release, the Company divested its 50% interest
in a hospital which was completed on February 1, 2025.
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 in 2024 and 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 as well as a change in estimate
to increase such accrual recorded during the third quarter of 2024,
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) 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 loss
attributable to Community Health Systems, Inc. stockholders per
share (diluted), a non-GAAP financial measure, to reflect the
impact on net (loss) income 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) income
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 2025 annual earnings
guidance. The 2025 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 38 distinct markets across 15
states. As of February 18, 2025, the Company’s subsidiaries own or
lease 75 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
Wednesday, February 19, 2025 at 10:00 a.m. Central, 11:00 a.m.
Eastern, to review financial and operating results for the fourth
quarter and year ended December 31, 2024. Investors will have the
opportunity to listen to a live internet broadcast of the
conference call by clicking on the Investor Presentations and
Webcasts link of the Company’s Investor Relations website at
www.chs.net/investor-relations. 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)
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net operating revenues
$
3,265
$
3,181
$
12,634
$
12,490
Net (loss) income (f)
(28
)
85
(362
)
16
Net (loss) income attributable to
Community Health Systems, Inc. stockholders
(70
)
46
(516
)
(133
)
Adjusted EBITDA (c)
428
386
1,540
1,453
Net cash provided by operating
activities
216
90
480
210
(Loss) earnings per share attributable to
Community Health Systems, Inc. stockholders:
Basic (f)
$
(0.53
)
$
0.35
$
(3.90
)
$
(1.02
)
Diluted (e), (f)
(0.53
)
0.35
(3.90
)
(1.02
)
Weighted-average number of shares
outstanding (d):
Basic
132
131
132
130
Diluted
132
132
132
130
__________
For footnotes, see pages 13, 14 and
15.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated
Statements of (Loss) Income (a)(b)
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended December
31,
2024
2023
% of Net
% of Net
Operating
Operating
Amount
Revenues
Amount
Revenues
Net operating revenues
$
3,265
100.0
%
$
3,181
100.0
%
Operating expenses:
Salaries and benefits
1,363
41.8
%
1,374
43.2
%
Supplies
507
15.5
%
509
16.0
%
Other operating expenses
905
27.7
%
849
26.7
%
Lease cost and rent
75
2.3
%
79
2.5
%
Depreciation and amortization
129
4.0
%
121
3.8
%
Impairment and (gain) loss on sale of
businesses, net (f)
7
0.2
%
(78
)
(2.5
)
%
Total operating expenses
2,986
91.5
%
2,854
89.7
%
Income from operations (f)
279
8.5
%
327
10.3
%
Interest expense, net
218
6.6
%
209
6.6
%
Gain from early extinguishment of debt
-
-
%
(72
)
(2.3
)
%
Equity in earnings of unconsolidated
affiliates
(3
)
(0.1
)
%
(3
)
(0.1
)
%
Income before income taxes
64
2.0
%
193
6.1
%
Provision for income taxes
92
2.9
%
108
3.4
%
Net (loss) income (f)
(28
)
(0.9
)
%
85
2.7
%
Less: Net income attributable to
noncontrolling interests
42
1.2
%
39
1.3
%
Net (loss) income attributable to
Community Health Systems, Inc. stockholders
$
(70
)
(2.1
)
%
$
46
1.4
%
(Loss) earnings per share attributable to
Community Health Systems, Inc. stockholders:
Basic (f)
$
(0.53
)
$
0.35
Diluted (e), (f)
$
(0.53
)
$
0.35
Weighted-average number of shares
outstanding (d):
Basic
132
131
Diluted
132
132
__________
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)
Year Ended December
31,
2024
2023
% of Net
% of Net
Operating
Operating
Amount
Revenues
Amount
Revenues
Net operating revenues
$
12,634
100.0
%
$
12,490
100.0
%
Operating expenses:
Salaries and benefits
5,418
42.9
%
5,415
43.4
%
Supplies
1,946
15.4
%
1,993
16.0
%
Other operating expenses
3,642
28.8
%
3,388
27.0
%
Lease cost and rent
299
2.4
%
319
2.6
%
Depreciation and amortization
486
3.8
%
505
4.0
%
Impairment and (gain) loss on sale of
businesses, net (f)
301
2.4
%
(87
)
(0.7
)
%
Total operating expenses
12,092
95.7
%
11,533
92.3
%
Income from operations (f)
542
4.3
%
957
7.7
%
Interest expense, net
860
6.8
%
830
6.7
%
Gain from early extinguishment of debt
(25
)
(0.2
)
%
(72
)
(0.6
)
%
Equity in earnings of unconsolidated
affiliates
(10
)
(0.1
)
%
(8
)
(0.1
)
%
(Loss) income before income taxes
(283
)
(2.2
)
%
207
1.7
%
Provision for income taxes
79
0.7
%
191
1.6
%
Net (loss) income (f)
(362
)
(2.9
)
%
16
0.1
%
Less: Net income attributable to
noncontrolling interests
154
1.2
%
149
1.2
%
Net loss attributable to Community Health
Systems, Inc. stockholders
$
(516
)
(4.1
)
%
$
(133
)
(1.1
)
%
Loss per share attributable to Community
Health Systems, Inc. stockholders:
Basic (f)
$
(3.90
)
$
(1.02
)
Diluted (e), (f)
$
(3.90
)
$
(1.02
)
Weighted-average number of shares
outstanding (d):
Basic
132
130
Diluted
132
130
__________
For footnotes, see pages 13, 14 and
15.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated
Statements of Comprehensive (Loss) Income
(In millions)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net (loss) income
$
(28
)
$
85
$
(362
)
$
16
Other comprehensive (loss) income, net of
income taxes:
Net change in fair value of
available-for-sale debt securities, net of tax
(4
)
7
-
6
Amortization and recognition of
unrecognized pension cost components, net of tax
3
1
4
1
Other comprehensive (loss) income
(1
)
8
4
7
Comprehensive (loss) income
(29
)
93
(358
)
23
Less: Comprehensive income attributable to
noncontrolling interests
42
39
154
149
Comprehensive (loss) income attributable
to Community Health Systems, Inc. stockholders
$
(71
)
$
54
$
(512
)
$
(126
)
__________
For footnotes, see pages 13, 14 and
15.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Selected Operating Data
(a)
(Dollars in millions)
(Unaudited)
Three Months Ended December
31,
Consolidated
Same-Store
2024
2023
% Change
2024
2023
% Change
Number of hospitals (at end of period)
(h)
76
78
75
75
Licensed beds (at end of period)
11,403
11,902
11,195
10,899
Beds in service (at end of period)
9,641
10,234
9,641
9,727
Admissions
104,644
110,874
-5.6
%
104,644
101,223
3.4
%
Adjusted admissions
238,581
252,875
-5.7
%
238,517
231,305
3.1
%
Patient days
448,101
503,631
448,103
453,550
Average length of stay (days)
4.3
4.5
4.3
4.5
Occupancy rate (average beds in
service)
50.5
%
53.5
%
50.5
%
50.7
%
Net operating revenues
$
3,265
$
3,181
2.6
%
$
3,231
$
3,033
6.5
%
Net inpatient revenues as a % of net
operating revenues
48.3
%
46.0
%
48.1
%
45.3
%
Net outpatient revenues as a % of net
operating revenues
51.7
%
54.0
%
51.9
%
54.7
%
Income from operations (f)
$
279
$
327
-14.7
%
Income from operations as a % of net
operating revenues
8.5
%
10.3
%
Depreciation and amortization
$
129
$
121
Net (loss) income attributable to
Community Health Systems, Inc. stockholders
$
(70
)
$
46
-252.2
%
Net (loss) income attributable to
Community Health Systems, Inc. stockholders as a % of net operating
revenues
-2.1
%
1.4
%
Adjusted EBITDA (c)
$
428
$
386
10.9
%
Adjusted EBITDA as a % of net operating
revenues
13.1
%
12.1
%
Net cash provided by operating
activities
$
216
$
90
140.0
%
__________
For footnotes, see pages 13, 14 and
15.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Selected Operating Data
(a)
(Dollars in millions)
(Unaudited)
Year Ended December
31,
Consolidated
Same-Store
2024
2023
% Change
2024
2023
% Change
Number of hospitals (at end of period)
(h)
76
78
75
75
Licensed beds (at end of period)
11,403
11,902
11,195
10,899
Beds in service (at end of period)
9,641
10,234
9,641
9,727
Admissions
422,040
435,913
-3.2
%
412,226
399,383
3.2
%
Adjusted admissions
958,531
992,552
-3.4
%
937,404
912,530
2.7
%
Patient days
1,853,387
1,957,536
1,802,121
1,788,074
Average length of stay (days)
4.4
4.5
4.4
4.5
Occupancy rate (average beds in
service)
52.5
%
52.4
%
51.1
%
50.4
%
Net operating revenues
$
12,634
$
12,490
1.2
%
$
12,426
$
11,773
5.5
%
Net inpatient revenues as a % of net
operating revenues
47.8
%
46.6
%
47.6
%
46.2
%
Net outpatient revenues as a % of net
operating revenues
52.2
%
53.4
%
52.4
%
53.8
%
Income from operations (f)
$
542
$
957
-43.4
%
Income from operations as a % of net
operating revenues
4.3
%
7.7
%
Depreciation and amortization
$
486
$
505
Net loss attributable to Community Health
Systems, Inc. stockholders
$
(516
)
$
(133
)
-288.0
%
Net loss attributable to Community Health
Systems, Inc. stockholders as a % of net operating revenues
-4.1
%
-1.1
%
Adjusted EBITDA (c)
$
1,540
$
1,453
6.0
%
Adjusted EBITDA as a % of net operating
revenues
12.2
%
11.6
%
Net cash provided by operating
activities
$
480
$
210
128.6
%
__________
For footnotes, see pages 13, 14 and
15.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In millions, except share
data)
(Unaudited)
December 31, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
$
37
$
38
Patient accounts receivable
2,286
2,231
Supplies
331
328
Prepaid income taxes
53
76
Prepaid expenses and taxes
236
260
Other current assets
358
275
Total current assets
3,301
3,208
Property and equipment:
Land and improvements
427
474
Buildings and improvements
5,658
5,951
Equipment and fixtures
3,075
3,086
Property and equipment
9,160
9,511
Less accumulated depreciation and
amortization
(4,384
)
(4,304
)
Property and equipment, net
4,776
5,207
Goodwill
3,789
3,958
Deferred income taxes
13
29
Other assets, net of accumulated
amortization of $1,501 and $1,518 at December 31, 2024 and 2023,
respectively
2,175
2,053
Total assets
$
14,054
$
14,455
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities
Current maturities of long-term debt
$
20
$
21
Current operating lease liabilities
115
124
Accounts payable
913
912
Accrued liabilities:
Employee compensation
596
571
Accrued interest
222
160
Other
479
354
Total current liabilities
2,345
2,142
Long-term debt (g)
11,432
11,466
Deferred income taxes
231
369
Long-term operating lease liabilities
535
563
Other long-term liabilities
828
739
Total liabilities
15,371
15,279
Redeemable noncontrolling interests in
equity of consolidated subsidiaries
359
323
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; 138,919,641 shares issued and
outstanding at December 31, 2024, and 136,774,911 shares issued and
outstanding at December 31, 2023
1
1
Additional paid-in capital
2,175
2,185
Accumulated other comprehensive loss
(10
)
(14
)
Accumulated deficit
(4,080
)
(3,564
)
Total Community Health Systems, Inc.
stockholders’ deficit
(1,914
)
(1,392
)
Noncontrolling interests in equity of
consolidated subsidiaries
238
245
Total stockholders’ deficit
(1,676
)
(1,147
)
Total liabilities and stockholders’
deficit
$
14,054
$
14,455
__________
For footnotes, see pages 13, 14 and
15.
COMMUNITY HEALTH SYSTEMS, INC.
AND SUBSIDIARIES
Condensed Consolidated
Statements of Cash Flows
(In millions)
(Unaudited)
Year Ended December
31,
2024
2023
Cash flows from operating activities
Net (loss) income
$
(362
)
$
16
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
486
505
Deferred income taxes
(116
)
35
Stock-based compensation expense
17
22
Impairment and (gain) loss on sale of
businesses, net (f)
301
(87
)
Gain from early extinguishment of debt
(25
)
(72
)
Other non-cash expenses, net
188
181
Changes in operating assets and
liabilities, net of effects of
acquisitions and divestitures:
Patient accounts receivable
(66
)
(193
)
Supplies, prepaid expenses and other
current assets
(75
)
(82
)
Accounts payable, accrued liabilities and
income taxes
137
(50
)
Other
(5
)
(65
)
Net cash provided by operating
activities
480
210
Cash flows from investing activities
Acquisitions of facilities and other
related businesses
(25
)
(38
)
Purchases of property and equipment
(360
)
(467
)
Proceeds from disposition of hospitals and
other ancillary operations
174
432
Proceeds from sale of property and
equipment
5
28
Purchases of available-for-sale debt
securities and equity securities
(81
)
(137
)
Proceeds from sales of available-for-sale
debt securities and equity securities
80
232
Purchases of investments in unconsolidated
affiliates
(9
)
(11
)
Increase in other investments
(59
)
(65
)
Net cash used in investing activities
(275
)
(26
)
Cash flows from financing activities
Repurchase of restricted stock shares for
payroll tax withholding requirements
(1
)
(4
)
Deferred financing costs and other
debt-related costs
(9
)
(3
)
Proceeds from noncontrolling investors in
joint ventures
1
5
Redemption of noncontrolling investments
in joint ventures
(3
)
(1
)
Distributions to noncontrolling investors
in joint ventures
(155
)
(141
)
Other borrowings
25
39
Issuance of long-term debt
1,236
989
Proceeds from ABL Facility
3,763
3,176
Repayments of long-term indebtedness
(5,063
)
(4,324
)
Net cash used in financing activities
(206
)
(264
)
Net change in cash and cash
equivalents
(1
)
(80
)
Cash and cash equivalents at beginning of
period
38
118
Cash and cash equivalents at end of
period
$
37
$
38
__________
For footnotes, see pages 13, 14 and
15.
Footnotes to Financial Highlights, Financial
Statements and Selected Operating Data
(a)
Both financial and statistical results
include the operating results of divested or closed businesses for
the periods prior to the consummation of the respective divestiture
or closing. 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 in 2024 and 2023. There were no discontinued
operations reported for the periods presented.
(b)
The following table provides information
needed to calculate net (loss) income attributable to Community
Health Systems, Inc. stockholders, which is adjusted for income
attributable to noncontrolling interests (in millions):
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net (loss) income attributable to
Community Health Systems, Inc. stockholders:
Net (loss) income
$
(28
)
$
85
$
(362
)
$
16
Less: Income attributable to
noncontrolling interests, net of taxes
42
39
154
149
Net (loss) income attributable to
Community Health Systems, Inc. stockholders — basic and diluted
$
(70
)
$
46
$
(516
)
$
(133
)
(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, expense from third-party consulting costs
associated with significant process and systems redesign across
multiple functions (the “Business Transformation Costs”) as part of
the Company’s previously disclosed multi-year initiative to
modernize and consolidate technology platforms and associated
processes, 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 as well as a change in
estimate to increase such accrual recorded during the third quarter
of 2024, and the gain on sale by HealthTrust of a majority interest
in CoreTrust completed during the fourth quarter of 2022. 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.
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.
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) income attributable to Community
Health Systems, Inc. stockholders from our condensed consolidated
financial statements (in millions):
Three Months Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net (loss) income attributable to
Community Health
Systems, Inc. stockholders
$
(70
)
$
46
$
(516
)
$
(133
)
Adjustments:
Provision for income taxes
92
108
79
191
Depreciation and amortization
129
121
486
505
Net income attributable to noncontrolling
interests
42
39
154
149
Interest expense, net
218
209
860
830
Gain from early extinguishment of debt
-
(72
)
(25
)
(72
)
Impairment and (gain) loss on sale of
businesses, net
7
(78
)
301
(87
)
Expense from government and other legal
matters and related costs
-
3
-
36
Expense from business transformation
costs
10
9
52
22
Expense related to employee termination
benefits and other restructuring charges
-
1
-
12
Change in estimate for professional claims
liability
-
-
149
-
Adjusted EBITDA
$
428
$
386
$
1,540
$
1,453
(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
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Weighted-average number of shares
outstanding - basic
132
131
132
130
Add effect of dilutive securities:
Stock awards and options
-
1
-
-
Weighted-average number of shares
outstanding - diluted
132
132
132
130
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 months ended
December 31, 2024 and the years ended December 31, 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 2,141,387 shares
during the three months ended December 31, 2024, and an increase of
1,333,424 shares and 422,487 shares during the years ended December
31, 2024 and 2023, respectively.
(e)
The following supplemental table
reconciles net (loss) income attributable to Community Health
Systems, Inc. stockholders, as reported, on a per share (diluted)
basis, to net loss attributable to Community Health Systems, Inc.
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
loss attributable to Community Health Systems, Inc. stockholders
per share (diluted) presents useful information to investors by
highlighting the impact on net (loss) income attributable to
Community Health Systems, Inc. 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
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Net (loss) income per share (diluted), as
reported
$
(0.53
)
$
0.35
$
(3.90
)
$
(1.02
)
Adjustments:
Gain from early extinguishment of debt
-
(0.47
)
(0.20
)
(0.47
)
Impairment and (gain) loss on sale of
businesses, net
0.05
(0.37
)
1.89
(0.33
)
Expense from government and other legal
matters and related costs
-
0.02
-
0.22
Expense from business transformation
costs
0.06
0.05
0.31
0.13
Expense related to employee termination
benefits and other restructuring charges
-
-
-
0.07
Change in estimate for professional claims
liability
-
-
0.88
-
Net loss per share (diluted), excluding
adjustments
$
(0.42
)
$
(0.41
)
$
(1.03
)
$
(1.39
)
(f)
Both income from operations and net (loss)
income included a net non-cash impairment expense of $7 million and
income of $78 million for the three months ended December 31, 2024
and 2023, respectively, and a net non-cash impairment expense of
$301 million and income of $87 million for the years ended December
31, 2024 and 2023, respectively. The impairment expense for 2024
was primarily from impairment expense to reduce the carrying value
of several assets that were idled, disposed of or held-for-sale and
partially offset by gains on the sale of certain businesses during
the period. The income for 2023 was primarily from gains and losses
on the sale of certain businesses during the period and impairment
charges to reduce the value of certain long-lived assets at
businesses the Company identified for sale. These gains, losses and
impairment charges do not have an impact on the calculation of the
Company’s financial covenants under the ABL Facility.
(g)
The maximum aggregate principal amount
under the ABL Facility is $1.0 billion, subject to borrowing base
capacity. At December 31, 2024, the Company had outstanding
borrowings of $341 million and approximately $491 million of
additional borrowing capacity (after taking into consideration $66
million of outstanding letters of credit) under the ABL
Facility.
(h)
Effective December 31, 2024, the number of
hospitals reflected in the chart above was updated to separately
distinguish facilities providing inpatient, acute-care services
other than on the primary hospital campus. The number of hospitals
presented for the prior-year comparative periods has been updated
to conform with the aforementioned change.
Regulation FD Disclosure
Set forth below is selected information concerning the Company’s
projected consolidated operating results for the year ending
December 31, 2025. These projections are based on the Company’s
historical operating performance, current trends and other
assumptions that the Company believes are reasonable at this time.
This 2025 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:
2025 Projection Range
Net operating revenues (in millions)
$
12,200
to
$
12,600
Adjusted EBITDA (in millions)
$
1,450
to
$
1,600
Net loss per share - diluted
$
(0.55
)
to
$
0.00
Weighted-average diluted shares (in
millions)
134
to
134
The following assumptions were used in developing the 2025
guidance provided above:
- The Company’s projections include the effect on net operating
revenues and Adjusted EBITDA of completing divestitures for which
definitive agreements have been executed and exclude the following:
- The impact of any future divestitures for which definitive
agreement(s) have not yet been executed;
- Effect of debt refinancing activities, including gains and
losses from early extinguishment of debt;
- Impairment of goodwill and long-lived assets;
- Gains or losses and the associated tax impacts resulting from
the sales of businesses;
- Effects of certain state Medicaid supplemental reimbursement
programs that are pending approval by CMS;
- Employee termination benefits and restructuring costs;
- Resolution of government investigations or other significant
legal settlements;
- Costs incurred in connection with divestitures;
- Expense for third-party consulting costs associated with
significant process and systems redesign across multiple functions
as part of the Company’s previously disclosed business
transformation initiative; 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 3.5% for 2025.
Additionally, this is a fixed cost and the percentages may vary
based on changes in net operating revenues. Such amounts exclude
the possible impact of any future hospital fixed asset
impairments.
- Interest expense is estimated to be between $840 million and
$860 million while cash paid for interest, which excludes the
amortization of deferred financing costs, is expected to be $800
million to $810 million. Total fixed rate debt is expected to
average approximately 97% of total debt during 2025.
- Expressed as a percentage of net operating revenues, net income
attributable to noncontrolling interests of approximately 1.2% to
1.3% for 2025.
- Expressed as a percentage of net operating revenues, provision
for income taxes of approximately 1.0% to 1.1% for 2025.
A reconciliation of the Company’s projected 2025 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):
Year Ending
December 31, 2025
Low
High
Net loss attributable to Community Health
Systems, Inc.
stockholders (1)
$
(74
)
$
-
Adjustments:
Depreciation and amortization
425
445
Interest expense, net
840
860
Provision for income taxes
119
140
Net income attributable to noncontrolling
interests
140
155
Adjusted EBITDA (1)
$
1,450
$
1,600
(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.
- Capital expenditures are projected as follows (in
millions):
2025
Guidance
Total
$
350
to
$
400
- Net cash provided by operating activities, including estimated
cash payments for income taxes of $150 million to $200 million, are
projected as follows (in millions):
2025
Guidance
Total
$
600
to
$
700
- Diluted weighted-average shares outstanding are projected to be
approximately 134 million for 2025.
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:
- general economic and business conditions, both nationally and
in the regions in which we operate, including the impact in recent
periods of challenging macroeconomic conditions and inflationary
pressures, the current high interest rate environment, and current
geopolitical instability, as well as the potential impact on us of
political, financial, credit and capital conditions;
- the impact of current and future healthcare public policy
developments and possible changes to federal, state or local laws,
regulations and policies affecting the healthcare industry,
including changes affecting the structure of or funding for the
Medicare and Medicaid programs;
- changes by the federal and state governments to state Medicaid
programs, including the extent and nature of structural and funding
changes and manner in which any such changes are implemented, and
other developments that affect the administration of health
insurance exchanges or alter or reduce the provision of, or payment
for, healthcare to state residents through legislation, regulation
or otherwise;
- changes related to health insurance enrollment, including those
affecting the beneficiary enrollment process and the stability of
health insurance exchanges, and the expiration of the temporarily
enhanced subsidies available for individuals to purchase coverage
through Affordable Care Act marketplaces;
- 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;
- judicial developments impacting the Company or the healthcare
industry, including the potential impact of the recent decisions of
the U.S. Supreme Court regarding the actions of federal
agencies;
- potential adverse impact of known and unknown legal, regulatory
and governmental proceedings and other loss contingencies,
including governmental investigations and audits, and federal and
state false claims act litigation;
- our ability 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, methodologies or
rates paid by federal or state healthcare programs or commercial
payors;
- security breaches, cyber-attacks, loss of data, other
cybersecurity threats or incidents, including those experienced
with respect to our information systems or the information systems
of third parties with whom we conduct business, and any actual or
perceived failures to comply with legal requirements governing the
privacy and security of health information or other regulated,
sensitive or confidential information, or legal requirements
regarding data privacy or data protection;
- the development, adoption and use of emerging technologies,
including artificial intelligence and machine learning;
- 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;
- the effects related to the sequestration spending reductions
pursuant to the Budget Control Act of 2011 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 and increased reimbursement denials
by insurers;
- the impact of competitive labor market conditions, including in
connection with our ability to hire and retain qualified nurses,
physicians, other medical personnel and key management, and
increased labor expenses arising from inflation and/or competition
for such positions;
- the inability of third parties with whom we contract to provide
hospital-based physicians and the effectiveness of our efforts to
mitigate such non-performance including through acquisitions of
outsourced medical specialist businesses, engagement with new or
replacement providers, employment of physicians and re-negotiation
or assumption of existing contracts;
- any failure to obtain medical supplies or pharmaceuticals at
favorable prices;
- liabilities and other claims asserted against us, including
self-insured professional liability claims;
- competition;
- 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;
- any failure of key business functions, including our ability to
realize the intended benefits of a new core enterprise resource
planning system and the redesigned and consolidated processes which
are supported by such system;
- 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
and/or outpatient facilities, or to realize expected benefits from
acquisitions such as increased growth in patient service
revenues;
- the impact of severe weather conditions and climate change, as
well as 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, cyber liability and
directors’ and officers’ liability insurance;
- timeliness of reimbursement payments received under government
programs;
- effects related to pandemics, epidemics, outbreaks of
infectious diseases or other public health crises;
- any failure to comply with our obligations under license or
technology agreements;
- challenging economic conditions in non-urban communities in
which we operate;
- 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 risk factors set forth in our Annual Report on Form 10-K
for the year ended December 31, 2023, filed with the Securities and
Exchange Commission (the “SEC”) on February 21, 2024 and other
public filings with the SEC.
The consolidated operating results for the three months and year
ended December 31, 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 2025 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250218626334/en/
Investor Contact:
Kevin Hammons President and Chief Financial Officer (615)
465-7000
Community Health Systems (NYSE:CYH)
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