Full Press Release Details
| Exhibit Number | |
| 99.1 |
| Investor Contact: | Kevin Hammons |
| President and | |
| Chief Financial Officer | |
| (615) 465-7000 |
COMMUNITY HEALTH SYSTEMS, INC. ANNOUNCES THIRD QUARTER
ENDED SEPTEMBER 30, 2023 RESULTS
FRANKLIN, Tenn. (October 25, 2023) Community Health Systems, Inc. (NYSE: CYH) (the Company ) today announced financial and operating results for the three and nine months ended September 30, 2023.
The following highlights the financial and operating results for the three months ended September 30, 2023.
-Net operating revenues totaled $3.086 billion.
-Net loss attributable to Community Health Systems, Inc. stockholders was $(91) million, or $(0.69) per share (diluted), compared to $(42) million, or $(0.32) per share (diluted), for the same period in 2022. 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 $(0.33) per share (diluted), compared to $(0.52) per share (diluted) for the same period in 2022.
-Adjusted EBITDA was $360 million.
-Net cash provided by operating activities was $29 million for the three months ended September 30, 2023, compared to $137 million for the same period in 2022.
-On a same-store basis, admissions increased 3.7 percent and adjusted admissions increased 4.2 percent, compared to the same period in 2022.
Commenting on the results, Tim L. Hingtgen, chief executive officer of Community Health Systems, Inc., said, Strong volume growth in admissions, adjusted admissions, ER visits and clinic appointments during the quarter reflect successful execution of many of our key strategies, including investments in service lines, physician recruitment, capacity optimization programs, and the maturity of our transfer center services. Our local management teams are focused on ensuring access to health services for their communities and our healthcare workers continue to deliver high-quality care for their patients.
Three Months Ended September 30, 2023
Net operating revenues for the three months ended September 30, 2023, totaled $3.086 billion, a 2.0 percent increase compared to $3.025 billion for the same period in 2022. On a same-store basis, net operating revenues increased 5.1 percent for the three months ended September 30, 2023, compared to the same period in 2022. Net operating revenues for the three months ended September 30, 2023, reflect a 0.5 percent increase in admissions and a 0.4 percent increase in adjusted admissions, compared to the same period in 2022. On a same-store basis, admissions increased 3.7 percent and adjusted admissions increased 4.2 percent for the three months ended September 30, 2023, compared to the same period in 2022.
CYH Announces Third Quarter 2023 Results
Net loss attributable to Community Health Systems, Inc. stockholders was $(91) million, or $(0.69) per share (diluted), for the three months ended September 30, 2023, compared to $(42) million, or $(0.32) per share (diluted), for the same period in 2022. 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 $(0.33) per share (diluted) for the three months ended September 30, 2023, compared to $(0.52) per share (diluted) for the same period in 2022. During the three months ended September 30, 2023, pandemic relief funds did not materially impact net loss attributable to Community Health Systems, Inc. stockholders. During the three months ended September 30, 2022, pandemic relief funds had a positive impact on net loss attributable to Community Health Systems, Inc. stockholders (both on a consolidated and adjusted basis) of approximately $84 million, or $0.65 on a per share (diluted) basis.
Adjusted EBITDA for the three months ended September 30, 2023, was $360 million compared to $400 million for the same period in 2022. During the three months ended September 30, 2023, pandemic relief funds did not materially impact Adjusted EBITDA. During the three months ended September 30, 2022, pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $115 million.
The increase in net loss attributable to Community Health Systems, Inc. stockholders and the decrease in Adjusted EBITDA for the three months ended September 30, 2023, compared to the same period in 2022, is primarily due to unfavorable changes in payor mix, a reduction in pandemic relief funds recognized, higher costs for supplemental reimbursement programs, and increased rates for outsourced medical specialists, partially offset by stronger inpatient volumes and reduced expense for contract labor.
Nine months Ended September 30, 2023
Net operating revenues for the nine months ended September 30, 2023, totaled $9.308 billion, a 2.6 percent increase compared to $9.069 billion for the same period in 2022. On a same-store basis, net operating revenues increased 5.3 percent for the nine months ended September 30, 2023, compared to the same period in 2022. Net operating revenues for the nine months ended September 30, 2023, reflect a 0.9 percent increase in admissions and a 2.4 percent increase in adjusted admissions, compared to the same period in 2022. On a same-store basis, admissions increased 4.4 percent and adjusted admissions increased 6.1 percent for the nine months ended September 30, 2023, compared to the same period in 2022.
Net loss attributable to Community Health Systems, Inc. stockholders was $(180) million, or $(1.38) per share (diluted), for the nine months ended September 30, 2023, compared to $(369) million, or $(2.86) per share (diluted), for the same period in 2022. 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 $(0.98) per share (diluted) for the nine months ended September 30, 2023, compared to $(2.92) per share (diluted) for the same period in 2022. During the nine months ended September 30, 2023, pandemic relief funds did not materially impact net loss attributable to Community Health Systems, Inc. stockholders. During the nine months ended September 30, 2022, pandemic relief funds had a positive impact on net loss attributable to Community Health Systems, Inc. stockholders (both on a consolidated and adjusted basis) of approximately $125 million, or $0.97 on a per share (diluted) basis.
Adjusted EBITDA for the nine months ended September 30, 2023, was $1.068 billion compared to $1.062 billion for the same period in 2022. During the nine months ended September 30, 2023, pandemic relief funds did not materially impact Adjusted EBITDA. During the nine months ended September 30, 2022, pandemic relief funds had a positive impact on Adjusted EBITDA of approximately $171 million.
The decrease in net loss attributable to Community Health Systems, Inc. stockholders and the increase in Adjusted EBITDA for the nine months ended September 30, 2023, compared to the same period in 2022, is primarily due to stronger inpatient and outpatient volumes, increased reimbursement rates, higher acuity, an increase in non-patient revenue, and reduced expense for contract labor, partially offset by unfavorable changes in payor mix, a reduction in pandemic relief funds recognized, increased salaries and benefits expense, higher costs for professional liability insurance, and increased rates for outsourced medical specialists.
CYH Announces Third Quarter 2023 Results
During 2023, through the date of this press release, the Company has completed the divestiture of three hospitals and the sale of a majority interest in another hospital. On January 1, 2023, the Company completed the divestiture of one hospital (in respect of which the Company received proceeds at a preliminary closing on December 31, 2022). On April 1, 2023, the Company completed the divestiture of one hospital (in respect of which the Company received proceeds at a preliminary closing on March 31, 2023). On July 1, 2023, the Company completed the divestiture of one hospital (in respect of which the Company received proceeds at a preliminary closing on June 30, 2023). On September 1, 2023, the Company completed the sale of a majority interest in one hospital. Financial and statistical data for 2023 and 2022 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 or closed in 2022 and the nine months ended September 30, 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), gain on sale of equity interests in Macon Healthcare, LLC, expense related to government and other legal matters and related costs, income during the fourth quarter of 2021 associated with the settlement of litigation for the recovery of amounts of certain professional liability claims settled in 2020 covered by third-party insurance policies, 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 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 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 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 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.
CYH Announces Third Quarter 2023 Results
Included on pages 16, 17, 18, 19 and 20 of this press release are tables setting forth the Company's 2023 updated annual earnings guidance. The 2023 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 43 distinct markets across 15 states. As of October 25, 2023, the Company's subsidiaries own or lease 76 affiliated hospitals with over 12,000 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 Thursday, October 26, 2023, at 10:00 a.m. Central, 11:00 a.m. Eastern, to review financial and operating results for the third quarter ended September 30, 2023. Investors will have the opportunity to listen to a live internet broadcast of the conference call by clicking on the Investor Relations link of the Company's website at www.chs.net. 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.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Financial Highlights (a)(b)
(In millions, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Net operating revenues | $ | 3,086 | $ | 3,025 | $ | 9,308 | $ | 9,069 | ||||||||||||
| Net (loss) income (f) | (52 | ) | - | (70 | ) | (267 | ) | |||||||||||||
| Net loss attributable to Community Health Systems, | ||||||||||||||||||||
| Inc. stockholders | (91 | ) | (42 | ) | (180 | ) | (369 | ) | ||||||||||||
| Adjusted EBITDA (c) | 360 | 400 | 1,068 | 1,062 | ||||||||||||||||
| Net cash provided by operating activities | 29 | 137 | 120 | 291 | ||||||||||||||||
| Loss per share attributable to Community Health | ||||||||||||||||||||
| Systems, Inc. stockholders: | ||||||||||||||||||||
| Basic (f) | $ | (0.69 | ) | $ | (0.32 | ) | $ | (1.38 | ) | $ | (2.86 | ) | ||||||||
| Diluted (e), (f) | (0.69 | ) | (0.32 | ) | (1.38 | ) | (2.86 | ) | ||||||||||||
| Weighted-average number of shares outstanding (d): | ||||||||||||||||||||
| Basic | 131 | 129 | 130 | 129 | ||||||||||||||||
| Diluted | 131 | 129 | 130 | 129 |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Loss (a)(b)
(In millions, except per share amounts)
| Three Months Ended September 30, | |||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||
| % of Net | % of Net | ||||||||||||||||||
| Operating | Operating | ||||||||||||||||||
| Amount | Revenues | Amount | Revenues | ||||||||||||||||
| Net operating revenues | $ | 3,086 | 100.0 | % | $ | 3,025 | 100.0 | % | |||||||||||
| Operating costs and expenses: | |||||||||||||||||||
| Salaries and benefits | 1,338 | 43.4 | % | 1,352 | 44.7 | % | |||||||||||||
| Supplies | 489 | 15.8 | % | 492 | 16.3 | % | |||||||||||||
| Other operating expenses | 853 | 27.7 | % | 828 | 27.4 | % | |||||||||||||
| Lease cost and rent | 79 | 2.6 | % | 80 | 2.6 | % | |||||||||||||
| Pandemic relief funds | - | - | % | (115 | ) | (3.8 | ) | % | |||||||||||
| Depreciation and amortization | 128 | 4.1 | % | 137 | 4.5 | % | |||||||||||||
| Impairment and (gain) loss on sale of businesses, net (f) | 26 | 0.8 | % | 47 | 1.6 | % | |||||||||||||
| Total operating costs and expenses | 2,913 | 94.4 | % | 2,821 | 93.3 | % | |||||||||||||
| Income from operations (f) | 173 | 5.6 | % | 204 | 6.7 | % | |||||||||||||
| Interest expense, net | 208 | 6.8 | % | 217 | 7.2 | % | |||||||||||||
| Loss (gain) from early extinguishment of debt | - | - | % | (78 | ) | (2.6 | ) | % | |||||||||||
| Equity in earnings of unconsolidated affiliates | (2 | ) | (0.1 | ) | % | (5 | ) | (0.2 | ) | % | |||||||||
| (Loss) income before income taxes | (33 | ) | (1.1 | ) | % | 70 | 2.3 | % | |||||||||||
| Provision for income taxes | 19 | 0.6 | % | 70 | 2.3 | % | |||||||||||||
| Net (loss) income (f) | (52 | ) | (1.7 | ) | % | - | - | % | |||||||||||
| Less: Net income attributable to noncontrolling interests | 39 | 1.2 | % | 42 | 1.4 | % | |||||||||||||
| Net loss attributable to Community Health Systems, | |||||||||||||||||||
| Inc. stockholders | $ | (91 | ) | (2.9 | ) | % | $ | (42 | ) | (1.4 | ) | % | |||||||
| Loss per share attributable to Community | |||||||||||||||||||
| Health Systems, Inc. stockholders: | |||||||||||||||||||
| Basic (f) | $ | (0.69 | ) | $ | (0.32 | ) | |||||||||||||
| Diluted (e), (f) | $ | (0.69 | ) | $ | (0.32 | ) | |||||||||||||
| Weighted-average number of shares outstanding (d): | |||||||||||||||||||
| Basic | 131 | 129 | |||||||||||||||||
| Diluted | 131 | 129 |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Loss (a)(b)
(In millions, except per share amounts)
| Nine Months Ended September 30, | |||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||
| % of Net | % of Net | ||||||||||||||||||
| Operating | Operating | ||||||||||||||||||
| Amount | Revenues | Amount | Revenues | ||||||||||||||||
| Net operating revenues | $ | 9,308 | 100.0 | % | $ | 9,069 | 100.0 | % | |||||||||||
| Operating costs and expenses: | |||||||||||||||||||
| Salaries and benefits | 4,040 | 43.4 | % | 3,972 | 43.8 | % | |||||||||||||
| Supplies | 1,499 | 16.1 | % | 1,477 | 16.3 | % | |||||||||||||
| Other operating expenses | 2,524 | 27.1 | % | 2,511 | 27.7 | % | |||||||||||||
| Lease cost and rent | 240 | 2.6 | % | 236 | 2.6 | % | |||||||||||||
| Pandemic relief funds | - | - | % | (171 | ) | (1.9 | ) | % | |||||||||||
| Depreciation and amortization | 384 | 4.1 | % | 398 | 4.4 | % | |||||||||||||
| Impairment and (gain) loss on sale of businesses, net (f) | (9 | ) | (0.1 | ) | % | 54 | 0.6 | % | |||||||||||
| Total operating costs and expenses | 8,678 | 93.2 | % | 8,477 | 93.5 | % | |||||||||||||
| Income from operations (f) | 630 | 6.8 | % | 592 | 6.5 | % | |||||||||||||
| Interest expense, net | 621 | 6.7 | % | 652 | 7.1 | % | |||||||||||||
| Loss (gain) from early extinguishment of debt | - | - | % | (73 | ) | (0.8 | ) | % | |||||||||||
| Equity in earnings of unconsolidated affiliates | (5 | ) | (0.1 | ) | % | (11 | ) | (0.1 | ) | % | |||||||||
| Income before income taxes | 14 | 0.2 | % | 24 | 0.3 | % | |||||||||||||
| Provision for income taxes | 84 | 1.0 | % | 291 | 3.2 | % | |||||||||||||
| Net loss (f) | (70 | ) | (0.8 | ) | % | (267 | ) | (2.9 | ) | % | |||||||||
| Less: Net income attributable to noncontrolling interests | 110 | 1.1 | % | 102 | 1.2 | % | |||||||||||||
| Net loss attributable to Community Health Systems, | |||||||||||||||||||
| Inc. stockholders | $ | (180 | ) | (1.9 | ) | % | $ | (369 | ) | (4.1 | ) | % | |||||||
| Loss per share attributable to Community | |||||||||||||||||||
| Health Systems, Inc. stockholders: | |||||||||||||||||||
| Basic (f) | $ | (1.38 | ) | $ | (2.86 | ) | |||||||||||||
| Diluted (e), (f) | $ | (1.38 | ) | $ | (2.86 | ) | |||||||||||||
| Weighted-average number of shares outstanding (d): | |||||||||||||||||||
| Basic | 130 | 129 | |||||||||||||||||
| Diluted | 130 | 129 |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| Net (loss) income | $ | (52 | ) | $ | - | $ | (70 | ) | $ | (267 | ) | ||||||||
| Other comprehensive (loss) income, net of income taxes: | |||||||||||||||||||
| Net change in fair value of available-for-sale debt securities, net of tax | (3 | ) | (6 | ) | (1 | ) | (20 | ) | |||||||||||
| Amortization and recognition of unrecognized pension cost components, net of tax | - | - | - | 1 | |||||||||||||||
| Other comprehensive loss | (3 | ) | (6 | ) | (1 | ) | (19 | ) | |||||||||||
| Comprehensive loss | (55 | ) | (6 | ) | (71 | ) | (286 | ) | |||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | 39 | 42 | 110 | 102 | |||||||||||||||
| Comprehensive loss attributable to Community Health | |||||||||||||||||||
| Systems, Inc. stockholders | $ | (94 | ) | $ | (48 | ) | $ | (181 | ) | $ | (388 | ) |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (a)
(Dollars in millions)
| Three Months Ended September 30, | ||||||||||||||||||||||||
| Consolidated | Same-Store | |||||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||||||
| Number of hospitals (at end of period) | 76 | 81 | 76 | 76 | ||||||||||||||||||||
| Licensed beds (at end of period) | 12,494 | 13,309 | 12,494 | 12,443 | ||||||||||||||||||||
| Beds in service (at end of period) | 10,621 | 11,559 | 10,621 | 10,712 | ||||||||||||||||||||
| Admissions | 109,043 | 108,509 | 0.5 | % | 108,872 | 104,954 | 3.7 | % | ||||||||||||||||
| Adjusted admissions | 249,988 | 248,950 | 0.4 | % | 249,743 | 239,721 | 4.2 | % | ||||||||||||||||
| Patient days | 459,838 | 497,034 | 474,268 | 480,535 | ||||||||||||||||||||
| Average length of stay (days) | 4.3 | 4.6 | 4.4 | 4.6 | ||||||||||||||||||||
| Occupancy rate (average beds in service) | 46.8 | % | 46.7 | % | 48.4 | % | 48.7 | % | ||||||||||||||||
| Net operating revenues | $ | 3,086 | $ | 3,025 | 2.0 | % | $ | 3,081 | $ | 2,931 | 5.1 | % | ||||||||||||
| Net inpatient revenues as a % of net operating | ||||||||||||||||||||||||
| revenues | 46.5 | % | 46.3 | % | 46.5 | % | 46.4 | % | ||||||||||||||||
| Net outpatient revenues as a % of net operating | ||||||||||||||||||||||||
| revenues | 53.5 | % | 53.7 | % | 53.5 | % | 53.6 | % | ||||||||||||||||
| Income from operations (f) | $ | 173 | $ | 204 | -15.2 | % | ||||||||||||||||||
| Income from operations as a % of net operating revenues | 5.6 | % | 6.7 | % | ||||||||||||||||||||
| Depreciation and amortization | $ | 128 | $ | 137 | ||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | (2 | ) | $ | (5 | ) | ||||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders | $ | (91 | ) | $ | (42 | ) | -116.7 | % | ||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues | -2.9 | % | -1.4 | % | ||||||||||||||||||||
| Adjusted EBITDA (c) | $ | 360 | $ | 400 | -10.0 | % | ||||||||||||||||||
| Adjusted EBITDA as a % of net operating revenues | 11.7 | % | 13.2 | % | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 29 | $ | 137 | -78.8 | % |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (a)
(Dollars in millions)
| Nine Months Ended September 30, | ||||||||||||||||||||||||
| Consolidated | Same-Store | |||||||||||||||||||||||
| 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||||||||||||||
| Number of hospitals (at end of period) | 76 | 81 | 76 | 76 | ||||||||||||||||||||
| Licensed beds (at end of period) | 12,494 | 13,309 | 12,494 | 12,443 | ||||||||||||||||||||
| Beds in service (at end of period) | 10,621 | 11,559 | 10,621 | 10,712 | ||||||||||||||||||||
| Admissions | 327,466 | 324,681 | 0.9 | % | 323,679 | 309,921 | 4.4 | % | ||||||||||||||||
| Adjusted admissions | 745,207 | 727,677 | 2.4 | % | 736,684 | 694,024 | 6.1 | % | ||||||||||||||||
| Patient days | 1,453,905 | 1,546,477 | 1,449,317 | 1,478,304 | ||||||||||||||||||||
| Average length of stay (days) | 4.5 | 4.8 | 4.5 | 4.7 | ||||||||||||||||||||
| Occupancy rate (average beds in service) | 49.3 | % | 49.0 | % | 49.9 | % | 50.6 | % | ||||||||||||||||
| Net operating revenues | $ | 9,308 | $ | 9,069 | 2.6 | % | $ | 9,210 | $ | 8,750 | 5.3 | % | ||||||||||||
| Net inpatient revenues as a % of net operating | ||||||||||||||||||||||||
| revenues | 46.9 | % | 46.9 | % | 46.8 | % | 47.0 | % | ||||||||||||||||
| Net outpatient revenues as a % of net operating | ||||||||||||||||||||||||
| revenues | 53.1 | % | 53.1 | % | 53.2 | % | 53.0 | % | ||||||||||||||||
| Income from operations (f) | $ | 630 | $ | 592 | 6.4 | % | ||||||||||||||||||
| Income from operations as a % of net operating revenues | 6.8 | % | 6.5 | % | ||||||||||||||||||||
| Depreciation and amortization | $ | 384 | $ | 398 | ||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | $ | (5 | ) | $ | (11 | ) | ||||||||||||||||||
| Net loss attributable to Community | ||||||||||||||||||||||||
| Health Systems, Inc. stockholders | $ | (180 | ) | $ | (369 | ) | 51.2 | % | ||||||||||||||||
| Net loss attributable to Community | ||||||||||||||||||||||||
| Health Systems, Inc. stockholders as a % | ||||||||||||||||||||||||
| of net operating revenues | -1.9 | % | -4.1 | % | ||||||||||||||||||||
| Adjusted EBITDA (c) | $ | 1,068 | $ | 1,062 | 0.6 | % | ||||||||||||||||||
| Adjusted EBITDA as a % of net operating revenues | 11.5 | % | 11.7 | % | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 120 | $ | 291 | -58.8 | % |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions, except share data)
| September 30, 2023 | December 31, 2022 | |||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 91 | $ | 118 | ||||||
| Patient accounts receivable | 2,160 | 2,040 | ||||||||
| Supplies | 325 | 353 | ||||||||
| Prepaid income taxes | 98 | 99 | ||||||||
| Prepaid expenses and taxes | 249 | 237 | ||||||||
| Other current assets | 325 | 235 | ||||||||
| Total current assets | 3,248 | 3,082 | ||||||||
| Property and equipment | 9,367 | 9,639 | ||||||||
| Less accumulated depreciation and amortization | (4,207 | ) | (4,274 | ) | ||||||
| Property and equipment, net | 5,160 | 5,365 | ||||||||
| Goodwill | 3,943 | 4,166 | ||||||||
| Deferred income taxes | 49 | 49 | ||||||||
| Other asset, net | 2,274 | 2,007 | ||||||||
| Total assets | $ | 14,674 | $ | 14,669 | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
| Current liabilities | ||||||||||
| Current maturities of long-term debt | $ | 22 | $ | 21 | ||||||
| Current operating lease liabilities | 121 | 148 | ||||||||
| Accounts payable | 837 | 773 | ||||||||
| Accrued liabilities: | ||||||||||
| Employee compensation | 513 | 637 | ||||||||
| Accrued interest | 184 | 189 | ||||||||
| Other | 472 | 418 | ||||||||
| Total current liabilities | 2,149 | 2,186 | ||||||||
| Long-term debt (g) | 11,820 | 11,614 | ||||||||
| Deferred income taxes | 344 | 354 | ||||||||
| Long-term operating lease liabilities | 560 | 605 | ||||||||
| Other long-term liabilities | 694 | 644 | ||||||||
| Total liabilities | 15,567 | 15,403 | ||||||||
| Redeemable noncontrolling interests in equity of consolidated subsidiaries | 329 | 541 | ||||||||
| 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; 136,772,094 | ||||||||||
| shares issued and outstanding at September 30, 2023, and 134,703,717 shares | ||||||||||
| issued and outstanding at December 31, 2022 | 1 | 1 | ||||||||
| Additional paid-in capital | 2,170 | 2,084 | ||||||||
| Accumulated other comprehensive loss | (23 | ) | (21 | ) | ||||||
| Accumulated deficit | (3,611 | ) | (3,431 | ) | ||||||
| Total Community Health Systems, Inc. stockholders' deficit | (1,463 | ) | (1,367 | ) | ||||||
| Noncontrolling interests in equity of consolidated subsidiaries | 241 | 92 | ||||||||
| Total stockholders ' deficit | (1,222 | ) | (1,275 | ) | ||||||
| Total liabilities and stockholders ' deficit | $ | 14,674 | $ | 14,669 |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
| Nine Months Ended September 30, | |||||||||
| 2023 | 2022 | ||||||||
| Cash flows from operating activities | |||||||||
| Net loss | $ | (70 | ) | $ | (267 | ) | |||
| Adjustments to reconcile net loss to net cash provided by | |||||||||
| operating activities: | |||||||||
| Depreciation and amortization | 384 | 398 | |||||||
| Deferred income taxes | 22 | 290 | |||||||
| Stock-based compensation expense | 16 | 14 | |||||||
| Impairment and (gain) loss on sale of businesses, net (f) | (9 | ) | 54 | ||||||
| Loss (gain) from early extinguishment of debt | - | (73 | ) | ||||||
| Other non-cash expenses, net | 132 | 140 | |||||||
| Changes in operating assets and liabilities, net of effects of | |||||||||
| acquisitions and divestitures: | |||||||||
| Patient accounts receivable | (119 | ) | 93 | ||||||
| Supplies, prepaid expenses and other current assets | (100 | ) | (94 | ) | |||||
| Accounts payable, accrued liabilities and income taxes | (69 | ) | (90 | ) | |||||
| Other | (67 | ) | (174 | ) | |||||
| Net cash provided by operating activities | 120 | 291 | |||||||
| Cash flows from investing activities | |||||||||
| Acquisitions of facilities and other related businesses | (35 | ) | (9 | ) | |||||
| Purchases of property and equipment | (357 | ) | (284 | ) | |||||
| Proceeds from disposition of hospitals and other ancillary operations | 123 | 3 | |||||||
| Proceeds from sale of property and equipment | 27 | 30 | |||||||
| Purchases of available-for-sale debt securities and equity securities | (126 | ) | (73 | ) | |||||
| Proceeds from sales of available-for-sale debt securities and equity securities | 221 | 62 | |||||||
| Distribution of CoreTrust proceeds | - | 121 | |||||||
| Purchases of investments in unconsolidated affiliates | (8 | ) | (18 | ) | |||||
| Increase in other investments | (51 | ) | (39 | ) | |||||
| Net cash used in investing activities | (206 | ) | (207 | ) | |||||
| Cash flows from financing activities | |||||||||
| Repurchase of restricted stock shares for payroll tax withholding requirements | (4 | ) | (8 | ) | |||||
| Deferred financing costs and other debt-related costs | - | (73 | ) | ||||||
| Proceeds from noncontrolling investors in joint ventures | 4 | 10 | |||||||
| Redemption of noncontrolling investments in joint ventures | (1 | ) | (2 | ) | |||||
| Distributions to noncontrolling investors in joint ventures | (108 | ) | (105 | ) | |||||
| Other borrowings | 30 | 35 | |||||||
| Issuance of long-term debt | - | 1,535 | |||||||
| Proceeds from ABL Facility | 2,290 | - | |||||||
| Repayments of long-term indebtedness | (2,152 | ) | (1,683 | ) | |||||
| Net cash provided by (used in) financing activities | 59 | (291 | ) | ||||||
| Net change in cash and cash equivalents | (27 | ) | (207 | ) | |||||
| Cash and cash equivalents at beginning of period | 118 | 507 | |||||||
| Cash and cash equivalents at end of period | $ | 91 | $ | 300 |
For footnotes, see pages 13, 14 and 15.
CYH Announces Third Quarter 2023 Results
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 or closed in 2022 and the nine months ended September 30, 2023. There were no discontinued operations reported for 2023 and 2022.
(b)The following table provides information needed to calculate loss per share, which is adjusted for income attributable to noncontrolling interests (in millions):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. stockholders: | ||||||||||||||||||||
| Net (loss) income | $ | (52 | ) | $ | - | $ | (70 | ) | $ | (267 | ) | |||||||||
| Less: Income attributable to noncontrolling interests, net of taxes | 39 | 42 | 110 | 102 | ||||||||||||||||
| Net loss attributable to Community Health Systems, Inc. | ||||||||||||||||||||
| stockholders basic and diluted | $ | (91 | ) | $ | (42 | ) | $ | (180 | ) | $ | (369 | ) |
(c)EBITDA is a non-GAAP financial measure which consists of net loss 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, gain on sale of equity interests in Macon Healthcare, LLC, expense related to government and other legal matters and related costs, income during the fourth quarter of 2021 associated with the settlement of litigation for the recovery of amounts of certain professional liability claims settled in 2020 covered by third-party insurance policies, 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 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.
CYH Announces Third Quarter 2023 Results
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 attributable to Community Health Systems, Inc. stockholders as derived directly from the condensed consolidated financial statements (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
| Net loss attributable to Community Health | |||||||||||||||||||||
| Systems, Inc. stockholders | $ | (91 | ) | $ | (42 | ) | $ | (180 | ) | $ | (369 | ) | |||||||||
| Adjustments: | |||||||||||||||||||||
| Provision for income taxes | 19 | 70 | 84 | 291 | |||||||||||||||||
| Depreciation and amortization | 128 | 137 | 384 | 398 | |||||||||||||||||
| Net income attributable to noncontrolling interests | 39 | 42 | 110 | 102 | |||||||||||||||||
| Interest expense, net | 208 | 217 | 621 | 652 | |||||||||||||||||
| Loss (gain) from early extinguishment of debt | - | (78 | ) | - | (73 | ) | |||||||||||||||
| Impairment and (gain) loss on sale of businesses, net | 26 | 47 | (9 | ) | 54 | ||||||||||||||||
| Expense from government and other legal matters and related costs | 24 | 5 | 33 | 5 | |||||||||||||||||
| Expense from business transformation costs | 6 | - | 13 | - | |||||||||||||||||
| Expense related to employee termination benefits and other restructuring charges | 1 | 2 | 12 | 2 | |||||||||||||||||
| Adjusted EBITDA | $ | 360 | $ | 400 | $ | 1,068 | $ | 1,062 |
(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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Weighted-average number of shares outstanding - basic | 131 | 129 | 130 | 129 | ||||||||||||
| Add effect of dilutive securities: | ||||||||||||||||
| Stock awards and options | - | - | - | - | ||||||||||||
| Weighted-average number of shares outstanding - diluted | 131 | 129 | 130 | 129 |
CYH Announces Third Quarter 2023 Results
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 each of the three and nine-month periods ended September 30, 2023 and 2022, 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 224,178 shares and 565,641 shares during the three months ended September 30, 2023 and 2022, respectively, and 298,184 shares and 1,305,604 shares during the nine months ended September 30, 2023 and 2022, respectively.
(e)The following supplemental table reconciles net loss 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 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 | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net loss per share (diluted), as reported | $ | (0.69 | ) | $ | (0.32 | ) | $ | (1.38 | ) | $ | (2.86 | ) | |||
| Adjustments: | |||||||||||||||
| Loss (gain) from early extinguishment of debt | - | (0.53 | ) | - | (0.42 | ) | |||||||||
| Impairment and (gain) loss on sale of businesses, net | 0.18 | 0.28 | 0.05 | 0.33 | |||||||||||
| Expense from government and other legal matters and related costs | 0.14 | 0.03 | 0.20 | 0.03 | |||||||||||
| Expense from business transformation costs | 0.04 | - | 0.08 | - | |||||||||||
| Expense related to employee termination benefits and other restructuring charges | 0.01 | 0.01 | 0.07 | 0.01 | |||||||||||
| Net loss per share (diluted), excluding adjustments | $ | (0.33 | ) | $ | (0.52 | ) | $ | (0.98 | ) | $ | (2.92 | ) |