CYH Announces Second Quarter 2021 Results

COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES

SECOND QUARTER 2021 RESULTS

FRANKLIN, Tenn. (July 28, 2021) Community Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results

for the three and six months ended June 30, 2021.

The following highlights the financial and operating results for the three months

ended June 30, 2021.

Net operating revenues for the three months ended

June 30, 2021, totaled $3.007 billion, a 19.4 percent increase compared with $2.519 billion for the same period in 2020.

Net income attributable to Community Health Systems, Inc. common stockholders was $6 million, or $0.04 per share (diluted), for the three

months ended June 30, 2021, compared with $70 million, or $0.61 per share (diluted), for the same period in 2020. 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 $0.23 per share (diluted) for the three months ended June 30, 2021, compared to $0.85 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 had a positive impact on net income attributable to Community Health Systems, Inc. common stockholders (both on a consolidated and adjusted basis)

of approximately $333 million, or $2.89 on a per share (diluted) basis, for the three months ended June 30, 2020. Weighted-average shares outstanding (diluted) were 131 million and 115 million for the three months ended

June 30, 2021 and 2020, respectively.

Adjusted EBITDA for the three months ended June 30, 2021, was $453 million compared

with $454 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 $1 million and $448 million for

the three months ended June 30, 2021 and 2020, respectively.

CYH Announces Second Quarter 2021 Results

The consolidated operating results for the three months ended June 30, 2021, reflect a

4.8 percent increase in admissions and a 15.7 percent increase in adjusted admissions, compared with the same period in 2020. On a same-store basis, admissions increased 17.0 percent and adjusted admissions increased 28.5 percent

for the three months ended June 30, 2021, compared with the same period in 2020. On a same-store basis, net operating revenues increased 30.2 percent for the three months ended June 30, 2021, compared with the same period in 2020,

primarily reflecting recovery from COVID-19 pandemic-induced reductions in volume in 2020.

operating revenues for the six months ended June 30, 2021, totaled $6.020 billion, an 8.6 percent increase compared with $5.544 billion for the same period in 2020.

Net loss attributable to Community Health Systems, Inc. common stockholders was $(58) million, or $(0.46) per share (diluted), for the six

months ended June 30, 2021, compared with net income of $87 million, or $0.76 per share (diluted), for the same period in 2020. 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 $0.60 per share (diluted) for the six months ended June 30, 2021, compared to net loss of $(0.73) per share (diluted) for the same period in 2020. Payments received by the

Company through 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 $63 million, or $0.50 on a per share (diluted) basis, and approximately $333 million, or $2.90 on a per share (diluted) basis, for the six months ended June 30, 2021 and 2020, respectively.

Weighted-average shares outstanding (diluted) were 126 million and 115 million for the six months ended June 30, 2021 and 2020, respectively.

Adjusted EBITDA for the six months ended June 30, 2021, was $948 million compared with $763 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 $83 million and $448 million for the six months ended June 30, 2021 and

The consolidated operating results for the six months ended June 30, 2021, reflect a 5.5 percent decrease

in admissions and a 2.0 percent decrease in adjusted admissions, compared with the same period in 2020. On a same-store basis, admissions increased 5.1 percent and adjusted admissions increased 8.7 percent for the six months ended

June 30, 2021, compared with the same period in 2020. On a same-store basis, net operating revenues increased 19.2 percent for the six months ended June 30, 2021, compared with the same period in 2020, reflecting recovery from COVID-19 pandemic-induced reductions in volume in 2020.

Commenting on the results, Tim L. Hingtgen,

chief executive officer of Community Health Systems, Inc., said, As COVID-19 cases declined during the second quarter, we experienced a solid rebound of non-COVID-19 patient volume. Our strong results in the period were driven by ongoing initiatives to attract new patients, along with efforts to re-engage and retain

patients who have previously utilized our healthcare systems. As we continue to position the Company for long-term success, we believe our recent capital investments and other strategic programs are supporting growth, while cost management and

margin improvement programs are also adding value. Looking forward to the second half of the year, we remain focused on supporting our clinicians and caregivers and providing high-quality health services for the patients and communities we

Financing Transaction:

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

$8 million for the three months ended June 30, 2021, primarily as a result of completing a private offering on May 19, 2021 of $1.440 billion aggregate principal amount of 61 8% Junior-Priority Secured Notes due 2030. The proceeds of this offering, together with cash on hand, were used to redeem the remaining principal amount of the 81 8% Junior-Priority Secured Notes due 2024 of approximately $1.348 billion and to pay related fees and expenses.

CYH Announces Second Quarter 2021 Results

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 and six months ended June 30, 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 Coronavirus Aid, Relief

and Economic Security Act (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.

Through June 30, 2021, the Company received approximately $712 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 six months ended June 30, 2021. PHSSEF

payments are intended to compensate healthcare providers for lost revenues and incremental expenses 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, not using funds received from the PHSSEF to reimburse eligible expenses or lost revenues that other sources have or may be obligated to reimburse, and

audit and reporting requirements.

The Company recognized approximately $1 million and $83 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 and six months ended June 30, 2021, respectively. During the six months ended June 30, 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 the U.S. Department of Health and Human

Services ( HHS ) or state and local agencies as of June 30, 2021, are reflected within accrued liabilities-other in the condensed consolidated balance sheet. Such unrecognized amounts may either be returned to 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. In June 2021, HHS issued guidance that set forth deadlines for using and reporting on the use of PHSSEF funds, depending on the dates on which the funds were received. 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.

CYH Announces Second Quarter 2021 Results

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 and six months ended June 30, 2021. 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.

In April 2021, Centers for Medicare & Medicaid Services ( CMS ) began

recouping Medicare accelerated payments previously received by the Company. As of June 30, 2021, approximately $116 million has been recouped from the Company by CMS subject to the aforementioned payment terms. Additionally, approximately

$18 million and $77 million of amounts previously received were repaid by the Company to CMS or assumed by buyers related to hospitals the Company divested during the six months ended June 30, 2021, and year ended December 31,

2020, respectively. As of June 30, 2021, approximately $680 million of Medicare accelerated payments are reflected within accrued liabilities-other in the condensed consolidated balance sheet while the remaining approximately

$267 million are included within other long-term liabilities.

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 potential 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.

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 or, if applicable, its unconsolidated equity interests in 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.

CYH Announces Second Quarter 2021 Results

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