CYH Announces Fourth Quarter and Year-End 2020 Results

COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES FOURTH QUARTER

AND YEAR ENDED DECEMBER 31, 2020 RESULTS AND 2021 GUIDANCE

FRANKLIN, Tenn. (February 17, 2021)

Community Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three months and year ended December 31, 2020.

The following highlights the financial and operating results for the three months ended December 31, 2020.

Net operating revenues for the three months ended

December 31, 2020, totaled $3.119 billion, a 5.1 percent decrease compared with $3.286 billion for the same period in 2019.

Net income attributable to Community Health Systems, Inc. common stockholders was $311 million, or $2.57 per share (diluted), for the

three months ended December 31, 2020, compared with net loss of $(373) million, or $(3.27) per share (diluted), for the same period in 2019. Excluding the adjusting items as presented in the table in footnote (e) on page 17, net income

attributable to Community Health Systems, Inc. common stockholders was $0.96 per share (diluted) for the three months ended December 31, 2020, compared to $0.40 per share (diluted) for the same period in 2019. Payments received by the Company

through the Public Health and Social Services Emergency Fund (the PHSSEF ), 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 $115 million, or $0.95 on a per share (diluted) basis, for the three months ended December 31, 2020. Weighted-average shares outstanding (diluted) were 121 million and 114 million

for the three months ended December 31, 2020 and 2019, respectively.

CYH Announces Fourth Quarter and Year-End 2020 Results

Adjusted EBITDA for the three months ended December 31, 2020, was $614 million

compared with $447 million for the same period in 2019. Payments received through the PHSSEF had a positive impact on Adjusted EBITDA for the three months ended December 31, 2020 in the amount of $153 million.

The consolidated operating results for the three months ended December 31, 2020, reflect a 12.9 percent decrease in admissions and a

17.8 percent decrease in adjusted admissions, compared with the same period in 2019. On a same-store basis, admissions decreased 3.4 percent and adjusted admissions decreased 9.5 percent for the three months ended December 31,

2020, compared with the same period in 2019. While volumes for the current year have not returned to pre-pandemic levels, they have improved from their lows in March and April 2020. On a same-store basis, net

operating revenues increased 4.5 percent for the three months ended December 31, 2020, compared with the same period in 2019, primarily reflecting COVID-19 pandemic-induced changes in the mix of

services provided and payor mix compared to the prior period.

Net operating revenues for the year ended December 31, 2020, totaled

$11.789 billion, a 10.8 percent decrease compared with $13.210 billion for the same period in 2019.

attributable to Community Health Systems, Inc. common stockholders was $511 million, or $4.39 per share (diluted), for the year ended December 31, 2020, compared with net loss of $(675) million, or $(5.93) per share (diluted), for the same

period in 2019. Excluding the adjusting items as presented in the table in footnote (e) on page 17, net income attributable to Community Health Systems, Inc. common stockholders was $0.45 per share (diluted), for the year ended

December 31, 2020, compared to net loss of $(0.89) per share (diluted) for the same period in 2019. The change in tax valuation allowance (which was one of the above mentioned adjusting items) had a positive impact of $240 million, or

$2.06 per share (diluted), on net income attributable to Community Health Systems, Inc. common stockholders, and arose from discrete tax benefits related to the release of federal and state valuation allowances on IRC Section 163(j) interest

carryforwards as a result of an increase to the deductible interest expense allowed for 2019 and 2020 under the Coronavirus Aid, Relief and Economic Security Act (the CARES Act ) that was enacted during the year ended December 31,

2020. In addition, payments received by the Company through the PHSSEF, 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 $452 million, or $3.88 on a per share (diluted) basis, for the year ended December 31, 2020. Weighted-average shares outstanding (diluted) were 117 million and 114 million for the year ended

December 31, 2020 and 2019, respectively.

Adjusted EBITDA for the year ended December 31, 2020, was $1.809 billion

compared with $1.628 billion for the same period in 2019. Payments received through the PHSSEF had a positive impact on Adjusted EBITDA for the year ended December 31, 2020 in the amount of $601 million.

The consolidated operating results for the year ended December 31, 2020, reflect a 15.7 percent decrease in admissions and a

19.4 percent decrease in adjusted admissions, compared with the same period in 2019. On a same-store basis, admissions decreased 8.0 percent and adjusted admissions decreased 12.5 percent for the year ended December 31, 2020,

compared with the same period in 2019. On a same-store basis, net operating revenues decreased 3.4 percent for the year ended December 31, 2020, compared with the same period in 2019.

Commenting on the results, Tim L. Hingtgen, chief executive officer of Community Health Systems, Inc., said, Throughout the COVID-19 pandemic, I have been incredibly proud of everyone across our entire organization. Our caregivers and medical staffs have ensured that their communities have access to essential, high-quality health

services. Our management teams have adapted to constantly changing dynamics and effectively executed our cost management efforts. As a result, we ended the year with strong financial results, momentum around our key strategic initiatives, and

optimism about the future of our Company. We look forward to what lies ahead, as we believe we are well-positioned for growth and long-term success that will deliver value for all of our stakeholders.

CYH Announces Fourth Quarter and Year-End 2020 Results

Financing Transactions:

The Company recognized a net, pre-tax gain from early extinguishment of debt of approximately

$207 million for the three months ended December 31, 2020 as a result of the following financing transactions:

For the year ended December 31, 2020, there

was a net pre-tax gain from early extinguishment of debt of approximately $317 million.

The COVID-19 pandemic adversely affected the Company s operations and financial

results for the year ended December 31, 2020 resulting in decreases in net operating revenues driven primarily by declines in patient volumes, as noted above, and increases in expenses related to supply chain and other expenditures.

As a result of the COVID-19 pandemic, 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 and the Consolidated Appropriations Act, 2021

(the CAA ), which was enacted on December 27, 2020. Together, the CARES Act, PPPHCE Act and the CAA includes $178 billion in funding to be distributed to eligible providers through the PHSSEF. In addition, the CARES Act provided

for an expansion of the Medicare Accelerated and Advance Payment Program. Various other state and local programs also exist to provide relief, either independently or through distribution of monies received via the CARES Act. The Company has been a

beneficiary of these stimulus measures.

During the year ended December 31, 2020, the Company received approximately

$705 million in payments through the PHSSEF and various state and local programs, net of amounts that have been or will be repaid to the U.S. Department of Health and Human Services ( HHS ) and various state and local agencies either

voluntarily or in relation to entities that were previously divested. PHSSEF payments are intended to compensate healthcare providers for lost revenues and incremental expenses, as defined by 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.

CYH Announces Fourth Quarter and Year-End 2020 Results

The Company recognized approximately $153 million and $601 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 and year ended December 31, 2020, respectively. During the three months ended December 31, 2020, 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, the CAA,

Post-Payment Notice of Reporting Requirements issued by HHS in October 2020, November 2020, and January 2021, responses to frequently asked questions as published by HHS, as well as expenses incurred attributable to the coronavirus during such

period and the Company s results of operations during such period as compared to the Company s budget. 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 December 31, 2020, are reflected within accrued liabilities-other in the condensed consolidated balance sheet, and such unrecognized amounts 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.

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 December 31, 2020

and approximately $77 million of amounts previously received was repaid to the Centers for Medicare and Medicaid Services ( CMS ) or assumed by buyers during the year ended December 31, 2020 related to divested entities.

Effective October 8, 2020, CMS is no longer accepting new applications for accelerated payments. Accordingly, 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. As of December 31, 2020, approximately $425 million of Medicare accelerated payments are reflected within accrued liabilities-other in the condensed

consolidated balance sheet while the remaining approximately $656 million are included within other long-term liabilities.

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, the PPPHCE Act, the CAA or any future stimulus measures.

CYH Announces Fourth Quarter and Year-End 2020 Results

Divestitures and hospital closures:

The Company completed the following divestitures during the year ended December 31, 2020:

In addition to these 13 divestitures, the Company terminated a lease and permanently ceased operations for one hospital effective September 30, 2020.

Additionally, the Company has completed the divestiture of four hospitals during 2021 (including the divestiture of three hospitals which were completed on January 1, 2021, in respect of which the Company received proceeds at preliminary

closings on December 31, 2020). The Company has entered into a definitive agreement to sell one additional hospital, the sale of which is expected to be completed in 2021. There can be no assurance that this potential divestiture subject to a

definitive agreement will be completed, or if it is completed, the ultimate timing of the completion of this divestiture. 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 or are anticipated to be completed in 2021, as noted above), the Company continues to receive interest from potential acquirers for certain of its

hospitals, and may, from time to time, consider selling additional hospitals following the completion of the Company s formal portfolio rationalization strategy if the Company considers any such dispositions to be in its best interests.

Financial and statistical data for 2019 and 2020 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 acquired in 2019, a hospital opened in 2020 and the hospitals divested or closed in

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 (gain) loss 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 income (loss) attributable to Community Health Systems, Inc. stockholders, see footnote (c) to the Financial