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The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes.

Key Takeaway: Community Health Systems, Inc. (CHS) completed the sale of select assets from its ambulatory outreach business to Laboratory Corporation of America Holdings for approximately $194 million. This transaction, finalized on December 1, 2025, did not affect continued operations as defined under Financial Accounting Standards Board guidelines. The company prepared unaudited pro forma financial statements to reflect the transaction's impact on its financial position and results of operations. These statements provide historical context and illustrate expected adjustments due to the transaction.

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COMMUNITY HEALTH SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On July 22, 2025, CHS/Community Health Systems, Inc. ( CHS ), a wholly-owned subsidiary of Community Health Systems, Inc. (the Company ), entered into a definitive asset purchase agreement, as amended (the Purchase Agreement ), with Laboratory Corporation of America Holdings (the Purchaser ), providing for the sale of select assets and assume certain leases of CHS's ambulatory outreach business (collectively, the Ambulatory Outreach Business ) across 13 states, including certain patient service centers and in-office phlebotomy locations (the transactions contemplated by the Purchase Agreement, the Transaction ). On December 1, 2025, the Transaction was completed pursuant to the terms of the Purchase Agreement. The purchase price paid to the Company was approximately $194 million cash, before certain transaction expenses.
The Company has determined that the operations of the Ambulatory Outreach Business that were divested in the Transaction do not meet the definition of discontinued operations pursuant to Financial Accountings Standards Board Accounting Standards Codification 205 (ASC 205), Presentation of Financial Statements.
The accompanying unaudited pro forma condensed consolidated balance sheet of the Company is presented as if the Transaction had occurred as of September 30, 2025. The estimated gain on sale in connection with the Transaction is reflected in the unaudited pro forma condensed balance sheet within accumulated deficit.
The accompanying unaudited pro forma condensed consolidated statement of income for the nine months ended September 30, 2025 and the statement of loss for the year ended December 31, 2024 (the Pro Forma Periods ) includes certain pro forma adjustments to illustrate the estimated effect of the Company's disposition, as if the Transaction had occurred on January 1, 2024. The amounts included in the historical columns represent the Company's historical balance sheet and statement of income (loss) for the Pro Forma Periods presented.
The accompanying unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by generally accepted accounting principles of the United States ( GAAP ). Pro forma financial information is intended to provide information about the continuing impact of a transaction by showing how a specific transaction might have affected historical financial statements. Pro forma financial information illustrates only the isolated and objectively measurable (based on historically determined amounts) effects of a particular transaction, and excludes effects based on judgmental estimates of how historical management practices and operating decisions may or may not have changed as a result of the transaction. Therefore, pro forma financial information does not include information about the possible or expected impact of current actions taken by management in response to the Transaction, as if management's actions were carried out in previous reporting periods.
The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes. These assumptions and adjustments are based on information presently available. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements are based on the historical financial statements of the Company for each period presented and in the opinion of the Company's management, all adjustments and disclosures necessary for a fair presentation of the pro forma data have been made. These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations or financial condition that would have been achieved had events reflected been completed as of the dates indicated, and may not be useful in predicting the impact of the Transaction on the future financial condition and results of operations of the Company due to a variety of factors. These unaudited pro forma condensed consolidated financial statements and the notes thereto should be read in conjunction with the Company's financial statements for the year ended December 31, 2024, included in the Company's Annual Report on Form 10-K filed on February 19, 2025.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(In millions)
September 30, 2025
Pro Forma
As Reported Adjustments Pro Forma
ASSETS
Current assets
Cash and cash equivalents $ 123 $ 152 a $ 275
Patient accounts receivable 2,159 - 2,159
Supplies 325 - 325
Prepaid expenses and taxes 266 - 266
Other current assets 325 19 a 344
Total current assets 3,198 171 3,369
Property and equipment 9,064 - 9,064
Less accumulated depreciation and amortization (4,444 ) - (4,444 )
Property and equipment, net 4,620 - 4,620
Goodwill 3,540 - 3,540
Deferred income taxes 75 - 75
Other assets, net 1,806 (64 ) b 1,742
Total assets $ 13,239 $ 107 $ 13,346
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current maturities of long-term debt $ 16 $ - $ 16
Current operating lease liabilities 110 - 110
Accounts payable 894 - 894
Income tax payable 3 27 b 30
Accrued liabilities:
Employee compensation 468 - 468
Accrued interest 209 - 209
Other 478 - 478
Total current liabilities 2,178 27 2,205
Long-term debt 10,589 - 10,589
Deferred income taxes 30 - 30
Long-term operating lease liabilities 527 - 527
Other long-term liabilities 866 - 866
Total liabilities 14,190 27 14,217
Redeemable noncontrolling interests in equity of consolidated subsidiaries 323 - 323
STOCKHOLDERS ' DEFICIT
Community Health Systems, Inc. stockholders' deficit:
Preferred stock - - -
Common stock 1 - 1
Additional paid-in capital 2,183 - 2,183
Accumulated other comprehensive loss (5 ) - (5 )
Accumulated deficit (3,681 ) 80 d (3,601 )
Total Community Health Systems, Inc. stockholders' deficit (1,502 ) 80 (1,422 )
Noncontrolling interests in equity of consolidated subsidiaries 228 - 228
Total stockholders ' deficit (1,274 ) 80 (1,194 )
Total liabilities and stockholders ' deficit $ 13,239 $ 107 $ 13,346
Unaudited Pro Forma Condensed Consolidated Statement of Income
(In millions, except per share amounts)
Nine Months Ended September 30, 2025
Pro Forma
As Reported Adjustments Pro Forma
Net operating revenues $ 9,379 $ (68 ) e $ 9,311
Operating costs and expenses:
Salaries and benefits 4,056 (21 ) e 4,035
Supplies 1,418 (12 ) e 1,406
Other operating expenses 2,583 (11 ) e 2,572
Lease cost and rent 209 (1 ) e 208
Depreciation and amortization 317 - 317
Impairment and (gain) loss on sale of businesses, net (242 ) - (242 )
Total operating costs and expenses 8,341 (45 ) e 8,296
Income from operations 1,038 (23 ) 1,015
Interest expense, net 649 - 649
Gain from early extinguishment of debt (105 ) - (105 )
Equity in earnings of unconsolidated affiliates (9 ) - (9 )
Income before income taxes 503 (23 ) 480
(Benefit from) provision for income taxes (13 ) 5 c (8 )
Net income 516 (28 ) 488
Less: Net income attributable to noncontrolling interests 117 - 117
Net income attributable to Community Health Systems,
Inc. stockholders $ 399 $ (28 ) $ 371
Earnings per share attributable to Community
Health Systems, Inc. stockholders:
Basic $ 2.99 $ 2.79
Diluted $ 2.97 $ 2.75
Weighted-average number of shares outstanding:
Basic 133 133
Diluted 135 135
Unaudited Pro Forma Condensed Consolidated Statement of Loss
(In millions, except per share amounts)
Year Ended December 31, 2024
Pro Forma
As Reported Adjustments Pro Forma
Net operating revenues $ 12,634 $ (92 ) e $ 12,542
Operating costs and expenses:
Salaries and benefits 5,418 (30 ) e 5,388
Supplies 1,946 (17 ) e 1,929
Other operating expenses 3,642 (13 ) e 3,629
Lease cost and rent 299 (1 ) e 298
Depreciation and amortization 486 - 486
Impairment and (gain) loss on sale of businesses, net 301 (107 ) d 194
Total operating costs and expenses 12,092 (168 ) 11,924
Income from operations 542 76 618
Interest expense, net 860 - 860
Gain from early extinguishment of debt (25 ) - (25 )
Equity in earnings of unconsolidated affiliates (10 ) - (10 )
Loss before income taxes (283 ) 76 (207 )
Provision for income taxes 79 34 c, d 113
Net loss attributable to Community Health Systems, (362 ) 42 (320 )
Less: Net income attributable to noncontrolling interests 154 - 154
Net loss attributable to Community Health Systems,
Inc. stockholders $ (516 ) $ 42 $ (474 )
Loss per share attributable to Community
Health Systems, Inc. stockholders:
Basic $ (3.90 ) $ (3.59 )
Diluted $ (3.90 ) $ (3.59 )
Weighted-average number of shares outstanding:
Basic 132 132
Diluted 132 132
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following items resulted in adjustments in the unaudited pro forma condensed consolidated financial information:
a)Adjustment represents consideration received from the sale of the Ambulatory Outreach Business of approximately $194 million, less transaction expenses. Approximately $19 million of consideration received is held in escrow and is reflected as a receivable within the condensed consolidated balance sheet.
b)Adjustments represent the elimination of assets and liabilities held for sale attributable to the Ambulatory Outreach Business.
c)Adjustments represent the impact to income taxes associated with the sale of the Ambulatory Outreach Business. The income tax expense for the nine months ended September 30, 2025 relates to the elimination of revenues, costs and expenses set forth in Note (e). For the twelve months ended December 31, 2024, income tax expense of approximately $7 million related to the elimination of revenues, costs and expenses set forth in Note (e) plus income tax expense of approximately $27 million related to the sale. The estimated tax effect of pro forma adjustments is calculated at the statutory rate for the respective period adjusted for discrete impacts including changes in valuation allowances.
d)Adjustments reflect a $107 million pre-tax gain ($80 million after tax) on sale of the Ambulatory Outreach Business calculated as follows:
Consideration received $ 194
Less: Carrying value of the Ambulatory Outreach Business (64 )
Less: Transaction expenses (23 )
Pro forma gain before income taxes 107
Provision for income taxes (27 )
Pro forma net gain on sale of the Ambulatory Outreach Business $ 80
e)Adjustments reflect the elimination of revenues, costs and expenses directly attributable to the Ambulatory Outreach Business. Adjustments do not include certain general corporate overhead costs previously allocated to the Ambulatory Outreach Business that will have a continuing effect on the Company post-closing.

Frequently Asked Questions

What was the transaction value for the asset sale?

The transaction value was approximately $194 million in cash.

When was the transaction completed?

The transaction was completed on December 1, 2025.

What is the purpose of the pro forma financial statements?

Pro forma statements show the potential impacts of a transaction on financials.

Are the pro forma financial statements audited?

No, they are unaudited and are for illustrative purposes only.

How does the acquisition affect stockholders' deficit?

The acquisition adjusted the accumulated deficit by $80 million.

Last updated: Dec 2, 2025