CYH Announces Third Quarter 2020 Results

Investor Contact: Kevin Hammons

Executive Vice President

and Chief Financial Officer

COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES

THIRD QUARTER 2020 RESULTS

FRANKLIN, Tenn. (October 27, 2020) Community

Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three and nine months ended September 30, 2020.

The following highlights the financial and operating results for the three months ended September 30, 2020.

Net operating revenues for the three months ended

September 30, 2020, totaled $3.126 billion, a 3.7 percent decrease compared with $3.246 billion for the same period in 2019.

Net income attributable to Community Health Systems, Inc. common stockholders was $112 million, or $0.97 per share (diluted), for the

three months ended September 30, 2020, compared with net loss of $(17) million, or $(0.15) 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 $0.18 per share (diluted), for the three months ended September 30, 2020, compared to net loss of $(0.29) per share (diluted) for the same period in 2019. Weighted-average

shares outstanding (diluted) were 116 million and 114 million for the three months ended September 30, 2020 and 2019, respectively.

Adjusted EBITDA for the three months ended September 30, 2020, was $431 million compared with $388 million for the same period

Payments received by the Company through the Public Health and Social Services Emergency Fund (the PHSSEF ), as more

specifically described below, had no net impact on net income attributable to Community Health Systems, Inc. common stockholders or Adjusted EBITDA for the three months ended September 30, 2020.

CYH Announces Third Quarter 2020 Results

The consolidated operating results for the three months ended September 30, 2020,

reflect a 13.0 percent decrease in admissions and an 18.0 percent decrease in adjusted admissions, compared with the same period in 2019. On a same-store basis, admissions decreased 6.2 percent and adjusted admissions decreased

11.5 percent for the three months ended September 30, 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 2.9 percent for the three months ended September 30, 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 nine months ended September 30, 2020, totaled $8.670 billion, a 12.6 percent decrease

compared with $9.925 billion for the same period in 2019.

Net income attributable to Community Health Systems, Inc. common

stockholders was $200 million, or $1.74 per share (diluted), for the nine months ended September 30, 2020, compared with net loss of $(302) million, or $(2.66) 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 loss attributable to Community Health Systems, Inc. common stockholders was $(0.55) per share (diluted), for the nine months ended September 30, 2020, compared to $(1.29) per share

(diluted) for the same period in 2019. The change in tax valuation allowance (which was one of the aforementioned adjusting items) had a positive impact of $240 million, or $2.09 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 nine months ended September 30, 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 $337 million, or $2.93 on a

per share (diluted) basis, for the nine months ended September 30, 2020. Weighted-average shares outstanding (diluted) were 115 million and 114 million for the nine months ended September 30, 2020 and 2019, respectively.

Adjusted EBITDA for the nine months ended September 30, 2020, was $1.194 billion compared with $1.181 billion for the same

period in 2019. Payments received through the PHSSEF had a positive impact on Adjusted EBITDA for the nine months ended September 30, 2020 in the amount of $448 million.

The consolidated operating results for the nine months ended September 30, 2020, reflect a 16.6 percent decrease in admissions and a

20.0 percent decrease in adjusted admissions, compared with the same period in 2019. On a same-store basis, admissions decreased 9.8 percent and adjusted admissions decreased 13.5 percent for the nine months ended September 30,

2020, compared with the same period in 2019. On a same-store basis, net operating revenues decreased 6.3 percent for the nine months ended September 30, 2020, compared with the same period in 2019.

No debt was issued during the three months ended September 30, 2020 and approximately $261 million principal amount of notes were

extinguished through open market repurchases, resulting in a pre-tax gain from early extinguishment of debt of approximately $115 million for the three months ended September 30, 2020. For the nine

months ended September 30, 2020, there was a net pre-tax gain from early extinguishment of debt of approximately $111 million.

CYH Announces Third Quarter 2020 Results

Commenting on the results, Wayne T. Smith, chairman and chief executive officer of Community

Health Systems, Inc., said, Our results in the third quarter reflect strong progress on strategic activities taking place across the organization and the ability of our markets to effectively meet the challenge of a global pandemic. Our

hospital leaders and frontline caregivers have done a tremendous job of caring for patients with COVID-19 and for patients with other healthcare needs. We are especially pleased with efforts to quickly resume

certain services that were restricted during shelter-in-place orders earlier in the year as well as our favorable results during the third quarter. While we have

directed our attention and resources to managing through the pandemic, we have also remained focused on the completion of our divestiture work, investments to support growth in our markets, and margin improvement programs. These strategic activities

continue to generate positive results and we remain optimistic about our opportunities for even more progress moving forward.

The COVID-19 pandemic continues to adversely affect the Company s operations

and financial results for the current year due to 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.

Consistent with the disclosures in the Company s earnings releases filed on April 28, 2020 and July 28, 2020, the Company is

not providing guidance in this earnings release. In this regard, the Company is not able to fully quantify the impact that the COVID-19 pandemic will have on its financial results during the remainder of 2020,

but expects developments related to the COVID-19 pandemic, including the CARES Act and PPPHCE Act as further discussed below, to materially affect the Company s financial performance.

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, and the Paycheck Protection Program and Health Care Enhancement Act (the PPPHCE Act ), which was enacted on April 24, 2020. Together, the CARES Act and the PPPHCE Act

include $175 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, although no additional net relief funds were recognized into income or

otherwise impacted the Company s results of operations during the three months ended September 30, 2020.

During the nine months

ended September 30, 2020, the Company received approximately $719 million in payments through the PHSSEF and various state and local programs, including approximately $155 million in such payments received during the three months

ended September 30, 2020, net of amounts that have or will be repaid to the U.S. Department of Health and Human Services ( HHS ) related to entities that are

held-for-sale or 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 Third Quarter 2020 Results

The Company previously recognized approximately $448 million of the PHSSEF payments

eligible to be claimed as a reduction in operating costs and expenses during the six months ended June 30, 2020. On September 19, 2020, HHS issued a Post-Payment Notice of Reporting Requirements (the September 19, 2020 Notice )

which revised previous guidance and, among various changes, substantially altered the definition of lost revenues eligible to be claimed in a manner less favorable to recipients of PHSSEF funds. During the three months ended September 30, 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

September 19, 2020 Notice, the Company s results of operations during such period and receipt of additional payments during such period. Taking into account these countervailing factors, the Company believes that the amount previously

recognized of approximately $448 million remains an appropriate estimate as of September 30, 2020. However, if the facts and circumstances that serve as the basis of the Company s estimate as of September 30, 2020 had been

applied to the estimate as of June 30, 2020, taking into account the September 19, 2020 Notice, a lesser amount would have been recognized as a reduction to operating costs and expenses on such date. 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 as of September 30, 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 met.

On October 22, 2020, HHS issued an updated Post-Payment Notice of Reporting Requirements and a Reporting Requirements Policy Update

(together, the October 22, 2020 Notice ) which, among other changes, effectively reinstates the definition of lost revenues that was the basis for the $448 million of pandemic relief funds recognized during the three and six months

ended June 30, 2020. Accounting principles generally accepted in the United States of America ( U.S. GAAP ) do not permit amounts recognized as of September 30, 2020 to be updated on the basis of new information in the

October 22, 2020 Notice. The Company s evaluation of the October 22, 2020 Notice is ongoing and the amount by which the approximately $271 million of PHSSEF and other unrecognized relief payments as of September 30, 2020 may

be recognized as a result of the October 22, 2020 Notice is not yet known. However, based on the more favorable definition of lost revenues, the October 22, 2020 Notice is expected to result in the recognition of additional pandemic relief

funds in future periods, as compared to the September 19, 2020 Notice.

As evidenced by the issuance of the October 22, 2020

Notice, 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 September 30, 2020 and approximately $22 million of amounts previously received was repaid to the Centers for Medicare

and Medicaid Services ( CMS ) or assumed by buyers during the three months ended September 30, 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. As of September 30, 2020, the program required

CMS to begin recouping payments 120 days after receipt by the provider although no payments were recouped during the three or nine months ended September 30, 2020. Effective October 1, 2020, the program was amended such that 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 (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

CYH Announces Third Quarter 2020 Results

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 September 30, 2020,

approximately $1.1 billion of Medicare accelerated payments are reflected within accrued liabilities-other in the condensed consolidated balance sheet. If the program requirements enacted on October 1, 2020, had been effective as of

September 30, 2020, the Company estimates that approximately $873 million of the amount outstanding would be classified as a long-term liability.

The PHSSEF payments received to date as noted above and which the Company may receive in the future under the CARES Act and the PPPHCE Act,

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