CYH Announces Third Quarter 2021 Results

COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES

THIRD QUARTER 2021 RESULTS

FRANKLIN, Tenn. (October 27, 2021)

Community Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three and nine months ended September 30, 2021.

The following highlights the financial and operating results for the three months ended September 30, 2021.

revenues for the three months ended September 30, 2021, totaled $3.115 billion, a 0.4 percent decrease compared with $3.126 billion for the same period in 2020.

Net income attributable to Community Health Systems, Inc. common stockholders was $111 million, or $0.85 per share

(diluted), for the three months ended September 30, 2021, compared with $112 million, or $0.97 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 $0.69 per share (diluted) for the three months ended September 30, 2021, compared to $0.18 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 or Provider Relief Fund ) and state and local pandemic relief programs, collectively referred to as pandemic relief funds, and 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 $14 million, or $0.11 on a per share

(diluted) basis, for the three months ended September 30, 2021. No pandemic relief funds were recognized for the three months ended September 30, 2020. Weighted-average shares outstanding (diluted) were 131 million and

116 million for the three months ended September 30, 2021 and 2020, respectively.

Adjusted EBITDA for the three

months ended September 30, 2021, was $482 million compared with $431 million for the same period in 2020. Pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $19 million for the three months ended

September 30, 2021. No pandemic relief funds were recognized for the three months ended September 30, 2020.

CYH Announces Third Quarter 2021 Results

The consolidated operating results for the three months ended

September 30, 2021, reflect a 5.5 percent decrease in admissions and a 3.4 percent decrease in adjusted admissions, compared with the same period in 2020. On a same-store basis, admissions increased 2.8 percent and adjusted

admissions increased 4.7 percent for the three months ended September 30, 2021, compared with the same period in 2020. On a same-store basis, net operating revenues increased 7.1 percent for the three months ended September 30,

2021, compared with the same period in 2020.

Net operating revenues for the nine months ended September 30, 2021,

totaled $9.135 billion, a 5.4 percent increase compared with $8.670 billion for the same period in 2020.

Net income attributable to Community Health Systems, Inc. common stockholders was $52 million, or $0.40 per share

(diluted), for the nine months ended September 30, 2021, compared with $200 million, or $1.74 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 $1.29 per share (diluted) for the nine months ended September 30, 2021, compared to net loss of $(0.55) per share (diluted) for the same period in 2020. Pandemic

relief funds had a positive impact on net income attributable to Community Health Systems, Inc. common stockholders (both on a consolidated and adjusted basis) of approximately $77 million, or $0.59 on a per share (diluted) basis, and

approximately $337 million, or $2.93 on a per share (diluted) basis, for the nine months ended September 30, 2021 and 2020, respectively. Weighted-average shares outstanding (diluted) were 130 million and 115 million for the nine

months ended September 30, 2021 and 2020, respectively.

Adjusted EBITDA for the nine months ended September 30,

2021, was $1.429 billion compared with $1.194 billion for the same period in 2020. Pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $102 million and $448 million for the nine months ended

September 30, 2021 and 2020, respectively.

The consolidated operating results for the nine months ended

September 30, 2021, reflect a 5.5 percent decrease in admissions and a 2.4 percent decrease in adjusted admissions, compared with the same period in 2020. On a same-store basis, admissions increased 4.3 percent and adjusted

admissions increased 7.3 percent for the nine months ended September 30, 2021, compared with the same period in 2020. On a same-store basis, net operating revenues increased 14.8 percent for the nine months ended September 30,

2021, compared with the same period in 2020.

Commenting on the results, Tim L. Hingtgen, chief executive officer of

Community Health Systems, Inc., said, During the third quarter, we experienced the largest number of COVID-19 cases to date. We are grateful to our medical staffs, clinical support teams and hospital

leaders who again ensured exceptional care for their patients during this latest surge. We are also pleased with our results this quarter, especially as we balanced the demands of caring for COVID-19 patients

while remaining focused on our growth strategies, key investments and operational improvement plans, which we believe will continue to drive positive results in the future.

CYH Announces Third Quarter 2021 Results

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 September 30, 2021, net of amounts that have been repaid to the respective federal, state or local agency, the

Company received approximately $709 million in payments through the PHSSEF and various state and local programs on a cumulative basis since their enactment. Of the net amount received to-date,

approximately $705 million was received during the year ended December 31, 2020, and the remainder was received during the nine months ended September 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 $19 million and $102 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 nine months ended September 30, 2021, respectively. Amounts recognized are denoted by the caption pandemic relief funds in the

condensed consolidated statements of income. During the nine months ended September 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 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 and otherwise have not been

refunded to the U.S. Department of Health and Human Services ( HHS ) or the various state and local agencies as of September 30, 2021, are reflected within accrued liabilities-other in the condensed consolidated balance sheet. Such

unrecognized amounts may either be returned to HHS or the respective state or local agency, as applicable, or may be recognized 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.

In October 2021, the Company submitted a combined

application for Phase 4 of the Provider Relief Fund ( PRF Stage 4 ) and amounts appropriated by the ARPA for providers serving rural healthcare patients ( ARP Rural ). No amounts have been received by the Company for the PRF

Stage 4 or ARP Rural programs as of the date of this press release, and the Company is not able to predict the extent to which it may receive amounts pursuant to such programs, if any.

CYH Announces Third 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 nine months ended September 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 September 30, 2021, approximately $249 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

nine months ended September 30, 2021, and year ended December 31, 2020, respectively. As of September 30, 2021, approximately $814 million of Medicare accelerated payments are reflected within accrued liabilities-other in the

condensed consolidated balance sheet. The outstanding balance of Medicare accelerated payments of $814 million as of September 30, 2021 was repaid in full to CMS in October 2021, prior to the date of this press release, through a combination of

recoupments via Medicare remittances and lump-sum 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 or amounts which the Company may recognize or receive in the future under the CARES Act and other enacted stimulus legislation or any future stimulus measures.

Sale of Investments in Unconsolidated Affiliates:

On July 30, 2021, the Company sold its unconsolidated minority equity interests in Macon Healthcare, LLC, a joint venture

with certain subsidiaries of HCA Healthcare, Inc. representing two hospitals in Macon, Georgia, in which the Company held a 38% interest. The Company received $110 million in cash in connection with the sale of its equity interests and, as a

result, recognized a pre-tax gain of approximately $26 million on the sale of investments in unconsolidated affiliates during the three and nine months ended September 30, 2021.

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 Third 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, gain on sale of investments in unconsolidated affiliates,

(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 attributable to Community

Health Systems, Inc. stockholders, see footnote (c) to the Financial Highlights, Financial Statements and Selected Operating Data below.

Additionally, this press release presents adjusted net income (loss) attributable to Community Health Systems, Inc. common