[May 05, 2015] |
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Community Health Systems, Inc. Announces First Quarter 2015 Results with Net Operating Revenues of $4.911 Billion
Community Health Systems, Inc. (NYSE: CYH) (the "Company") today
announced financial and operating results for the three months ended
March 31, 2015.
The operating results of Health Management Associates, Inc. ("HMA") are
included in the Company's consolidated results and statistical data from
January 27, 2014, the date the Company completed its acquisition of HMA.
For hospitals acquired in the HMA merger, same-store operating results
and statistical data reflect the periods from January 1 through March
31, 2015 and 2014, as if such hospitals were owned during both
comparable periods. The Company has restated its prior period financial
statements and statistical results to reflect the reclassification as
discontinued operations for two hospitals that were held for sale at
December 31, 2014, of which one of the two hospitals was subsequently
sold during the three months ended March 31, 2015.
Net operating revenues for the three months ended March 31, 2015,
totaled $4.911 billion, a 17.6 percent increase compared with $4.176
billion for the same period in 2014. Income from continuing operations
attributable to Community Health Systems, Inc. common stockholders
increased to $92 million, or $0.79 per share (diluted), for the three
months ended March 31, 2015, compared with loss from continuing
operations attributable to Community Health Systems, Inc. common
stockholders of $(90) million, or $(0.84) per share (diluted), for the
same period in 2014. The results for the three months ended March 31,
2015, include $0.04 per share (diluted) of expenses related to
government legal settlements for several qui tam matters settled in
principle and related costs (other than HMA legal proceedings underlying
the contingent value rights ("CVR") agreement) and $0.04 per share
(diluted) related to loss from early extinguishment of debt; with these
expenses partially offset by $0.03 per share (diluted) of income from
fair value adjustments, net of legal expenses, related to HMA legal
proceedings underlying the CVR agreement. Excluding these items, income
from continuing operations was $0.85 per share (diluted). Net income
attributable to Community Health Systems, Inc. common stockholders was
$0.68 per share (diluted) for the three months ended March 31, 2015,
compared with a net loss of $(1.05) per share (diluted) for the same
period in 2014. Discontinued operations for the three months ended March
31, 2015, consisted of $(0.09) per share (diluted) of losses from
operations of entities sold or held for sale, $(0.01) per share
(diluted) of expenses related to the impairment of long-lived assets
held for sale, and $(0.01) per share (diluted) of losses on sale, net,
for a total after-tax loss of approximately $(13) million, or $(0.11)
per share (diluted). Weighted-average shares outstanding (diluted) were
115 million for the three months ended March 31, 2015, and 107 million
for the three months ended March 31, 2014.
Adjusted EBITDA for the three months ended March 31, 2015, was $715
million compared with $543 million for the same period in 2014,
representing a 31.7 percent increase.
The consolidated operating results for the three months ended March 31,
2015, reflect a 15.7 percent increase in total admissions, and a 17.0
percent increase in total adjusted admissions compared with the same
period in 2014. On a same-store basis, admissions increased 0.4 percent
while adjusted admissions increased 2.5 percent during the three months
ended March 31, 2015, compared with the same period in 2014. On a
same-store basis, net operating revenues increased 5.2 percent during
the three months ended March 31, 2015, compared with the same period in
2014.
Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations,
loss from early extinguishment of debt, impairment of long-lived assets,
net income attributable to noncontrolling interests, acquisition and
integration expenses from the acquisition of HMA, expenses related to
government legal settlements and related costs (other than HMA legal
proceedings underlying the CVR agreement), and income from fair value
adjustments, net of legal expenses, related to the HMA legal proceedings
underlying the CVR agreement. For information regarding why the Company
believes Adjusted EBITDA presents useful information to investors, and
for a reconciliation of Adjusted EBITDA to net cash provided by
operating activities, see footnote (f) to the Financial Highlights,
Financial Statements and Selected Operating Data below.
Commenting on the results, Wayne T. Smith, chairman and chief executive
officer of Community Health Systems, Inc., said, "We are pleased with
our financial and operating performance for the first quarter of 2015.
We are especially encouraged by improved volume in the quarter,
demonstrating the results of our strategic growth initiatives and the
incremental benefits of the Affordable Care Act. We remain optimistic
that these positive trends will continue as a result of growth in
exchange enrollment.
Smith added, "Our results for the first quarter also reflect operating
synergies gained from the HMA acquisition, and we see more opportunities
to gain efficiencies through our ongoing, focused efforts on effective
integration. We believe we have a sound strategy for success in today's
dynamic healthcare environment as we continue to apply our centralized
operating model, recruit qualified physicians, manage costs, build
integrated networks, and, above all, focus on the safety and quality of
care in our hospitals."
Included on pages 12, 13, 14 and 15 of this press release is the
Company's 2015 reaffirmed annual earnings guidance. The 2015 guidance is
based on the Company's historical operating performance, current trends
and other assumptions that the Company believes are reasonable at this
time.
Community Health Systems, Inc. is one of the largest publicly-traded
hospital companies in the United States and a leading operator of
general acute care hospitals in communities across the country. Through
its subsidiaries, the Company currently owns, leases or operates 199
affiliated hospitals in 29 states with an aggregate of approximately
30,000 licensed beds. 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 Wednesday,
May 6, 2015, at 10:00 a.m. Central, 11:00 a.m. Eastern, to review
financial and operating results for the three months ended March 31,
2015. 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.
To listen to the live call, please go to the website at least fifteen
minutes early to register, download and install any necessary audio
software. For those who cannot listen to the live broadcast, a replay
will be available shortly after the call and will continue to be
available through June 7, 2015. Copies of the Company's Current Report
on Form 8-K (including this press release) and conference call slide
show will be available on the Company's website at www.chs.net.
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COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
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Financial Highlights (a)(b)(c)(d)(e)
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(In millions, except per share amounts)
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(Unaudited)
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Three Months Ended
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March 31,
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2015
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2014
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Net operating revenues
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$
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4,911
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$
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4,176
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Adjusted EBITDA (f)
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715
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543
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Income (loss) from continuing operations (g), (h), (k)
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112
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(76
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)
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Net income (loss) attributable to Community Health Systems, Inc.
stockholders
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79
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(112
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)
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Basic earnings (loss) per share attributable to Community
Health Systems, Inc. common stockholders:
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Continuing operations (g), (h), (k)
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$
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0.80
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$
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(0.84
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)
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Discontinued operations
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(0.11
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)
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(0.21
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)
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Net income (loss)
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$
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0.69
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$
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(1.05
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)
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Diluted earnings (loss) per share attributable to Community
Health Systems, Inc. common stockholders:
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Continuing operations (g), (h), (k), (l)
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$
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0.79
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$
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(0.84
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)
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Discontinued operations
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(0.11
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)
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(0.21
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)
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Net income (loss) (l)
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$
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0.68
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$
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(1.05
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)
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Weighted-average number of shares outstanding (i):
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Basic
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114
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107
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Diluted
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115
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107
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Net cash (used in) provided by operating activities
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$
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(61
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)
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$
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65
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____ For footnotes, see pages 9, 10 and 11.
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COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
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Condensed Consolidated Statements of Income (Loss) (a)(b)(c)(d)(e)
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(In millions, except per share amounts)
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(Unaudited)
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Three Months Ended March 31,
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2015
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2014
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Amount
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% of Net Operating Revenues
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Amount
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% of Net Operating Revenues
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Operating revenues (net of contractual allowances and discounts)
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$
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5,646
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$
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4,875
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Provision for bad debts
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735
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699
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Net operating revenues
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4,911
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100.0
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%
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4,176
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100.0
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%
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Operating costs and expenses:
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Salaries and benefits
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2,257
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46.0
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%
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1,992
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47.7
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%
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Supplies
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762
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15.5
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%
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632
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15.1
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%
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Other operating expenses
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1,099
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22.4
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%
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1,019
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24.4
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%
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Government settlement and related costs (m)
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8
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0.1
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%
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-
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-
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%
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Electronic health records incentive reimbursement (g)
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(26
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)
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(0.5
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%
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(40
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)
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(1.0
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)
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%
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Rent
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116
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2.4
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%
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98
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2.4
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%
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Depreciation and amortization
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296
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6.0
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%
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255
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6.1
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%
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Amortization of software to be abandoned (k)
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-
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-
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%
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42
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1.0
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%
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Total operating costs and expenses
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4,512
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91.9
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%
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3,998
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95.7
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%
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Income from operations (g), (h), (k)
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399
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8.1
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%
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178
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4.3
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%
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Interest expense, net
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241
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4.9
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%
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224
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5.4
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%
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Loss from early extinguishment of debt
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8
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0.2
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%
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73
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1.7
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%
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Equity in earnings of unconsolidated affiliates
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(18
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)
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(0.4
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%
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(11
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)
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(0.3
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)
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%
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Impairment of long-lived assets (k)
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-
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-
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%
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24
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0.6
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%
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Income (loss) from continuing operations before income taxes
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168
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3.4
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%
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(132
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)
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(3.1
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)
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%
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Provision (benefit) for income taxes
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56
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1.1
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%
|
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(56
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)
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(1.3
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)
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%
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Income (loss) from continuing operations (g), (h), (k)
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112
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|
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2.3
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%
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(76
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)
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(1.8
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)
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%
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Discontinued operations, net of taxes:
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|
|
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Loss from operations of entities sold or held for sale
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(11
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)
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(0.3
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)
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%
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(4
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)
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(0.1
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)
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%
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Impairment of hospitals sold or held for sale
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(1
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)
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(0.0
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)
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%
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(18
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)
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(0.4
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)
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%
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Loss on sale, net
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(1
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)
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(0.0
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)
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%
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-
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-
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%
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Loss from discontinued operations, net of taxes
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(13
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)
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(0.3
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%
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(22
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)
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(0.5
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)
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%
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Net income (loss)
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99
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2.0
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%
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(98
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)
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(2.3
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)
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%
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Less: Net income attributable to noncontrolling interests
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20
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0.4
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%
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14
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|
|
0.4
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%
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Net income (loss) attributable to Community Health Systems, Inc.
stockholders
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$
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79
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|
1.6
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%
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|
$
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(112
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)
|
|
|
(2.7
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)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic earnings (loss) per share attributable to Community
Health Systems, Inc. common stockholders:
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Continuing operations (g), (h), (k)
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$
|
0.80
|
|
|
|
|
|
|
|
$
|
(0.84
|
)
|
|
|
|
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Discontinued operations
|
|
|
|
(0.11
|
)
|
|
|
|
|
|
|
|
(0.21
|
)
|
|
|
|
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Net income (loss)
|
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|
$
|
0.69
|
|
|
|
|
|
|
|
$
|
(1.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Diluted earnings (loss) per share attributable to Community
Health Systems, Inc. common stockholders:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations (g), (h), (k), (l)
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
$
|
(0.84
|
)
|
|
|
|
|
Discontinued operations
|
|
|
|
(0.11
|
)
|
|
|
|
|
|
|
|
(0.21
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)
|
|
|
|
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Net income (loss) (l)
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$
|
0.68
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|
|
|
|
|
|
|
$
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(1.05
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)
|
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|
|
|
|
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|
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Weighted-average number of shares outstanding (i):
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|
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|
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Basic
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114
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|
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|
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|
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107
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Diluted
|
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|
115
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|
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|
|
107
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____ For footnotes, see pages 9, 10 and 11.
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COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
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Condensed Consolidated Statements of Comprehensive Income (Loss)
(c)
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(In millions)
|
(Unaudited)
|
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|
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|
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Three Months Ended
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March 31,
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2015
|
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2014
|
|
|
|
|
|
|
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|
|
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Net income (loss)
|
|
|
$
|
99
|
|
|
|
$
|
(98
|
)
|
Other comprehensive (loss) income, net of income taxes:
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|
|
|
|
|
|
|
|
Net change in fair value of interest rate swaps, net of tax
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|
|
|
(9
|
)
|
|
|
|
9
|
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Net change in fair value of available-for-sale securities, net of tax
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|
|
|
1
|
|
|
|
|
-
|
|
Amortization and recognition of unrecognized pension cost
components, net of tax
|
|
|
|
1
|
|
|
|
|
-
|
|
Other comprehensive (loss) income
|
|
|
|
(7
|
)
|
|
|
|
9
|
|
Comprehensive income (loss)
|
|
|
|
92
|
|
|
|
|
(89
|
)
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
|
|
20
|
|
|
|
|
14
|
|
Comprehensive income (loss) attributable to Community Health
Systems, Inc. stockholders
|
|
|
$
|
72
|
|
|
|
$
|
(103
|
)
|
|
|
|
|
|
|
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____ For footnotes, see pages 9, 10 and 11.
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|
|
|
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
|
|
Selected Operating Data (a)(d)(j)
|
|
(Dollars in millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
Consolidated
|
|
|
Same-Store (1)
|
|
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
|
2015
|
|
|
2014
|
|
|
% Change
|
|
Number of hospitals (at end of period)
|
|
|
|
197
|
|
|
|
|
195
|
|
|
|
|
|
|
|
193
|
|
|
|
|
193
|
|
|
|
|
|
Licensed beds (at end of period)
|
|
|
|
30,256
|
|
|
|
|
29,423
|
|
|
|
|
|
|
|
29,267
|
|
|
|
|
29,336
|
|
|
|
|
|
Beds in service (at end of period)
|
|
|
|
26,498
|
|
|
|
|
25,771
|
|
|
|
|
|
|
|
25,718
|
|
|
|
|
25,710
|
|
|
|
|
|
Admissions
|
|
|
|
246,015
|
|
|
|
|
212,696
|
|
|
|
15.7
|
%
|
|
|
|
236,883
|
|
|
|
|
235,922
|
|
|
|
0.4
|
%
|
|
Adjusted admissions
|
|
|
|
509,719
|
|
|
|
|
435,613
|
|
|
|
17.0
|
%
|
|
|
|
492,194
|
|
|
|
|
480,133
|
|
|
|
2.5
|
%
|
|
Patient days
|
|
|
|
1,127,077
|
|
|
|
|
968,852
|
|
|
|
|
|
|
|
1,081,155
|
|
|
|
|
1,076,938
|
|
|
|
|
|
Average length of stay (days)
|
|
|
|
4.6
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
4.6
|
|
|
|
|
|
Occupancy rate (average beds in service)
|
|
|
|
47.1
|
%
|
|
|
|
47.9
|
%
|
|
|
|
|
|
|
46.5
|
%
|
|
|
|
46.5
|
%
|
|
|
|
|
Net operating revenues
|
|
|
$
|
4,911
|
|
|
|
$
|
4,176
|
|
|
|
17.6
|
%
|
|
|
$
|
4,781
|
|
|
|
$
|
4,544
|
|
|
|
5.2
|
%
|
|
Net inpatient revenues as a % of net patient revenues before
provision for bad debts
|
|
|
|
44.2
|
%
|
|
|
|
45.3
|
%
|
|
|
|
|
|
|
44.1
|
%
|
|
|
|
45.9
|
%
|
|
|
|
|
Net outpatient revenues as a % of net patient revenues before
provision for bad debts
|
|
|
|
55.8
|
%
|
|
|
|
54.7
|
%
|
|
|
|
|
|
|
55.9
|
%
|
|
|
|
54.1
|
%
|
|
|
|
|
Income from operations (g), (h), (k)
|
|
|
$
|
399
|
|
|
|
$
|
178
|
|
|
|
124.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Income from operations as a % of net operating revenues
|
|
|
|
8.1
|
%
|
|
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
$
|
296
|
|
|
|
$
|
297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
$
|
(18
|
)
|
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (f)
|
|
|
$
|
715
|
|
|
|
$
|
543
|
|
|
|
31.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a % of net operating revenues
|
|
|
|
14.6
|
%
|
|
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities
|
|
|
$
|
(61
|
)
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities a % of net
operating revenues
|
|
|
|
(1.2
|
%)
|
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For hospitals acquired in the HMA merger, same-store operating
results and statistical data reflect the periods from January 1
through March 31, 2015 and 2014, as if such hospitals were owned
during both comparable periods.
|
|
|
|
____ For footnotes, see pages 9, 10 and 11.
|
|
|
|
|
|
|
|
|
|
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
|
Condensed Consolidated Balance Sheets (b)
|
(In millions, except share data)
|
(Unaudited)
|
|
|
March 31, 2015
|
|
December 31, 2014
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
222
|
|
|
$
|
509
|
|
Patient accounts receivable, net of allowance for doubtful
accounts of $3,628 and $3,504 at March 31, 2015 and December 31,
2014, respectively
|
|
|
3,606
|
|
|
|
3,409
|
|
Supplies
|
|
|
561
|
|
|
|
557
|
|
Prepaid income taxes
|
|
|
-
|
|
|
|
30
|
|
Deferred income taxes
|
|
|
341
|
|
|
|
341
|
|
Prepaid expenses and taxes
|
|
|
189
|
|
|
|
192
|
|
Other current assets (including assets of hospitals held for sale
of $7 and $38 at March 31, 2015 and December 31, 2014,
respectively)
|
|
|
507
|
|
|
|
528
|
|
Total current assets
|
|
|
5,426
|
|
|
|
5,566
|
|
Property and equipment, gross
|
|
|
14,400
|
|
|
|
14,264
|
|
Less accumulated depreciation and amortization
|
|
|
(4,309
|
)
|
|
|
(4,095
|
)
|
Property and equipment, net
|
|
|
10,091
|
|
|
|
10,169
|
|
Goodwill
|
|
|
8,954
|
|
|
|
8,951
|
|
Other assets, net (including assets of hospitals held for sale
of $36 and $90 at March 31, 2015 and December 31, 2014,
respectively)
|
|
|
2,648
|
|
|
|
2,735
|
|
Total assets
|
|
$
|
27,119
|
|
|
$
|
27,421
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
$
|
229
|
|
|
$
|
235
|
|
Accounts payable
|
|
|
1,192
|
|
|
|
1,293
|
|
Income tax payable
|
|
|
13
|
|
|
|
-
|
|
Deferred income taxes
|
|
|
23
|
|
|
|
23
|
|
Accrued interest
|
|
|
157
|
|
|
|
227
|
|
Accrued liabilities (including liabilities of hospitals held for
sale of $2 and $10 at March 31, 2015 and December 31, 2014,
respectively)
|
|
|
1,547
|
|
|
|
1,811
|
|
Total current liabilities
|
|
|
3,161
|
|
|
|
3,589
|
|
Long-term debt
|
|
|
16,740
|
|
|
|
16,681
|
|
Deferred income taxes
|
|
|
844
|
|
|
|
845
|
|
Other long-term liabilities
|
|
|
1,694
|
|
|
|
1,692
|
|
Total liabilities
|
|
|
22,439
|
|
|
|
22,807
|
|
Redeemable noncontrolling interests in equity of consolidated
subsidiaries
|
|
|
520
|
|
|
|
531
|
|
EQUITY
|
|
|
|
|
|
|
Community Health Systems, Inc. stockholders' equity:
|
|
|
|
|
|
|
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; 119,000,326 shares issued and 118,024,777 shares
outstanding at March 31, 2015, and 117,701,087 shares issued and
116,725,538 shares outstanding at December 31, 2014
|
|
|
1
|
|
|
|
1
|
|
Additional paid-in capital
|
|
|
2,101
|
|
|
|
2,095
|
|
Treasury stock, at cost, 975,549 shares at March 31, 2015 and
December 31, 2014
|
|
|
(7
|
)
|
|
|
(7
|
)
|
Accumulated other comprehensive loss
|
|
|
(70
|
)
|
|
|
(63
|
)
|
Retained earnings
|
|
|
2,056
|
|
|
|
1,977
|
|
Total Community Health Systems, Inc. stockholders' equity
|
|
|
4,081
|
|
|
|
4,003
|
|
Noncontrolling interests in equity of consolidated subsidiaries
|
|
|
79
|
|
|
|
80
|
|
Total equity
|
|
|
4,160
|
|
|
|
4,083
|
|
Total liabilities and equity
|
|
$
|
27,119
|
|
|
$
|
27,421
|
|
|
|
|
|
|
|
|
____ For footnotes, see pages 9, 10 and 11.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
|
Condensed Consolidated Statements of Cash Flows (b)
|
(In millions)
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
99
|
|
|
|
$
|
(98
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
296
|
|
|
|
|
302
|
|
Government settlement and related costs (m)
|
|
|
|
8
|
|
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
|
14
|
|
|
|
|
11
|
|
Loss on sale, net
|
|
|
|
1
|
|
|
|
|
-
|
|
Impairment of long-lived assets and hospitals sold or held for sale
|
|
|
|
2
|
|
|
|
|
42
|
|
Loss from early extinguishment of debt
|
|
|
|
8
|
|
|
|
|
73
|
|
Excess tax benefit relating to stock-based compensation
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
Other non-cash expenses, net
|
|
|
|
(7
|
)
|
|
|
|
6
|
|
Changes in operating assets and liabilities, net of effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Patient accounts receivable
|
|
|
|
(202
|
)
|
|
|
|
(171
|
)
|
Supplies, prepaid expenses and other current assets
|
|
|
|
14
|
|
|
|
|
14
|
|
Accounts payable, accrued liabilities and income taxes
|
|
|
|
(284
|
)
|
|
|
|
(83
|
)
|
Other
|
|
|
|
(10
|
)
|
|
|
|
(28
|
)
|
Net cash (used in) provided by operating activities
|
|
|
|
(61
|
)
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Acquisitions of facilities and other related equipment
|
|
|
|
(13
|
)
|
|
|
|
(2,774
|
)
|
Purchases of property and equipment
|
|
|
|
(241
|
)
|
|
|
|
(181
|
)
|
Proceeds from disposition of hospitals and other ancillary operations
|
|
|
|
62
|
|
|
|
|
-
|
|
Proceeds from sale of property and equipment
|
|
|
|
3
|
|
|
|
|
-
|
|
Purchases of available-for-sale securities
|
|
|
|
(59
|
)
|
|
|
|
(78
|
)
|
Proceeds from sales of available-for-sale securities
|
|
|
|
56
|
|
|
|
|
76
|
|
Increase in other investments
|
|
|
|
(39
|
)
|
|
|
|
(99
|
)
|
Net cash used in investing activities
|
|
|
|
(231
|
)
|
|
|
|
(3,056
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options
|
|
|
|
17
|
|
|
|
|
6
|
|
Repurchase of restricted stock shares for payroll tax withholding
requirements
|
|
|
|
(20
|
)
|
|
|
|
(11
|
)
|
Deferred financing costs and other debt-related costs
|
|
|
|
(20
|
)
|
|
|
|
(269
|
)
|
Excess tax benefit relating to stock-based compensation
|
|
|
|
-
|
|
|
|
|
3
|
|
Redemption of noncontrolling investments in joint ventures
|
|
|
|
(7
|
)
|
|
|
|
(5
|
)
|
Distributions to noncontrolling investors in joint ventures
|
|
|
|
(23
|
)
|
|
|
|
(19
|
)
|
Borrowings under credit agreements
|
|
|
|
1,251
|
|
|
|
|
7,079
|
|
Issuance of long-term debt
|
|
|
|
-
|
|
|
|
|
4,000
|
|
Proceeds from receivables facility
|
|
|
|
75
|
|
|
|
|
133
|
|
Repayments of long-term indebtedness
|
|
|
|
(1,268
|
)
|
|
|
|
(7,686
|
)
|
Net cash provided by financing activities
|
|
|
|
5
|
|
|
|
|
3,231
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
|
(287
|
)
|
|
|
|
240
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
509
|
|
|
|
|
373
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
222
|
|
|
|
$
|
613
|
|
|
|
|
|
|
|
|
|
|
____ For footnotes, see pages 9, 10 and 11.
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes to Financial Highlights, Financial Statements and
Selected Operating Data
|
|
|
(a)
|
Continuing operating results exclude discontinued operations for the
three months ended March 31, 2015 and 2014. Both financial and
statistical results exclude entities in discontinued operations for
all periods presented.
|
|
|
(b)
|
The contingent value right ("CVR") entitles the holder to receive a
cash payment up to $1.00 per CVR (subject to downward adjustment but
not below zero), subject to the final resolution of certain legal
matters pertaining to HMA, as defined in the CVR agreement. If the
aggregate amount of applicable losses under the CVR agreement
exceeds a deductible of $18 million, then the amount payable in
respect of each CVR shall be reduced (but not below zero) by an
amount equal to the quotient obtained by dividing: (a) the product
of (i) all losses in excess of the deductible and (ii) 90%; by (b)
the number of CVRs outstanding on the date on which final resolution
of the existing litigation occurs. Since the HMA acquisition date of
January 27, 2014, approximately $24 million in costs have been
incurred and approximately $3 million of settlements have been
incurred related to certain HMA legal matters, which collectively
exceed the deductible of $18 million under the CVR agreement. An
estimated liability of $24 million has been recorded for certain
claims which HMA had previously recognized as probable. In addition,
CHS previously recorded an estimated fair value of the remaining
underlying claims that will be covered by the CVR of $284 million as
part of the acquisition accounting for HMA, which has been adjusted
to its estimated fair value of $256 million at March 31, 2015. In
addition, although future legal fees (which are expensed as
incurred) associated with the HMA legal matters have not been
accrued or included in the table below, such legal fees are taken
into account in determining the total amount of reductions applied
to the amounts owed to CVR holders.
|
|
|
The following table presents the impact of the recorded amounts as
described above as applied to the CVR and the $18 million deductible
and 10% co-insurance amounts (in millions):
|
|
|
|
|
|
|
As of
|
|
|
March 31,
|
|
|
2015
|
Legal and other related costs incurred to date
|
|
$
|
24
|
|
Settlements
|
|
|
3
|
|
Estimated liability for probable contingencies
|
|
|
24
|
|
Estimated liability for unresolved contingencies at fair value
|
|
|
256
|
|
Costs incurred plus certain estimated liabilities for CVR-related
matters
|
|
|
307
|
|
Less:
|
|
|
|
CHS deductible of $18 million
|
|
|
(18
|
)
|
CHS co-insurance at 10%
|
|
|
(29
|
)
|
Impact of recorded amounts under CVR agreement after giving effect
to deductible and co-insurance
|
|
$
|
260
|
|
|
|
|
|
CVRs outstanding
|
|
|
265
|
|
|
|
|
|
|
(c)
|
The effective date of the HMA acquisition was January 27, 2014.
|
|
|
(d)
|
Included in discontinued operations for the three months ended March
31, 2015, is one hospital that was required by the Federal Trade
Commission to be divested as part of its approval of the HMA
acquisition, and this hospital was sold on March 1, 2015. Management
is actively marketing several smaller hospitals included as held for
sale at March 31, 2015. In addition, the Company sold several
smaller hospitals during the three months ended March 31, 2015. The
after-tax loss for the sold or held for sale hospitals, including an
impairment charge on certain long-lived assets sold or held for
sale, is approximately $13 million for the three months ended March
31, 2015.
|
|
|
(e)
|
The following table provides information needed to calculate income
per share, which is adjusted for income attributable to
noncontrolling interests (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
Income (loss) from continuing operations attributable to Community
Health Systems, Inc. common stockholders:
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations, net of taxes
|
|
|
$
|
112
|
|
|
|
$
|
(76
|
)
|
Less: Income from continuing operations attributable to
noncontrolling interests
|
|
|
|
20
|
|
|
|
|
14
|
|
Income (loss) from continuing operations attributable to Community
Health Systems, Inc. common stockholders - basic and diluted
|
|
|
$
|
92
|
|
|
|
$
|
(90
|
)
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations attributable to Community Health
Systems, Inc. common stockholders:
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of taxes
|
|
|
$
|
(13
|
)
|
|
|
$
|
(22
|
)
|
Less: Loss from discontinued operations attributable to
noncontrolling interests
|
|
|
|
-
|
|
|
|
|
-
|
|
Loss from discontinued operations attributable to Community Health
Systems, Inc. common stockholders - basic and diluted
|
|
|
$
|
(13
|
)
|
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
Footnotes to Financial Highlights, Financial Statements and
Selected Operating Data (Continued)
|
|
(f)
|
EBITDA is a non-GAAP financial measure which consists of net income
attributable to Community Health Systems, Inc. before interest,
income taxes, and depreciation and amortization. Adjusted EBITDA is
EBITDA adjusted to exclude discontinued operations, loss from early
extinguishment of debt, impairment of long-lived assets, net income
attributable to noncontrolling interests, acquisition and
integration expenses from the acquisition of HMA, expenses related
to government legal settlements and related costs (other than HMA
legal proceedings underlying the CVR agreement), and income from
fair value adjustments, net of legal expenses, related to the HMA
legal proceedings underlying the CVR agreement. 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 excludes the portion of EBITDA
attributable to these third-party interests and clarifies for
investors the Company's portion of EBITDA generated by continuing
operations. The Company uses Adjusted EBITDA as a measure of
liquidity. The Company has also presented Adjusted EBITDA in this
release because it believes it provides investors with additional
information about the Company's ability to incur and service debt
and make capital expenditures. Adjusted EBITDA also aligns with a
similar metric as defined in the Company's senior secured credit
facility, which is a key component in the determination of the
Company's compliance with some of the covenants under the Company's
senior secured credit facility, and is used to determine the
interest rate and commitment fee payable under the senior secured
credit facility.
|
|
|
Adjusted EBITDA is not a measurement of financial performance or
liquidity under U.S. GAAP. It should not be considered in isolation
or as a substitute for net income, operating income, cash flows from
operating, investing or financing activities or any other measure
calculated in accordance with U.S. GAAP. The items excluded from
Adjusted EBITDA are significant components in understanding and
evaluating financial performance and liquidity. This calculation of
Adjusted EBITDA may not be comparable to similarly titled measures
reported by other companies.
|
|
|
The following table reconciles Adjusted EBITDA, as defined, to net
cash provided by operating activities as derived directly from the
condensed consolidated financial statements (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
Adjusted EBITDA
|
|
|
$
|
715
|
|
|
|
$
|
543
|
|
Interest expense, net
|
|
|
|
(241
|
)
|
|
|
|
(224
|
)
|
Provision for income taxes
|
|
|
|
(56
|
)
|
|
|
|
56
|
|
Loss from operations of entities sold or held for sale, net of taxes
|
|
|
|
(11
|
)
|
|
|
|
(4
|
)
|
Other non-cash expenses, net
|
|
|
|
18
|
|
|
|
|
18
|
|
Changes in operating assets and liabilities, net of effects of
acquisitions and divestitures
|
|
|
|
(486
|
)
|
|
|
|
(324
|
)
|
Net cash (used in) provided by operating activities
|
|
|
$
|
(61
|
)
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
(g)
|
Included in income from operations and income from continuing
operations for the three months ended March 31, 2015, is the
electronic health records incentive reimbursement, which represents
reimbursement from Medicare and Medicaid related to certain of the
Company's hospitals and for certain employed physicians. Total
operating costs and expenses related to the implementation of
electronic health records were approximately $5 million and $16
million for the three months ended March 31, 2015 and 2014,
respectively.
|
|
|
(h)
|
Included in non-same-store income from operations and income from
continuing operations are pre-tax charges related to acquisition
costs of $3 million and $39 million for the three months ended March
31, 2015 and 2014, respectively. These acquisition costs include
expenses related to the acquisition of HMA of less than $1 million
and $37 million for the three months ended March 31, 2015 and 2014,
respectively.
|
|
|
(i)
|
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
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
Weighted-average number of shares outstanding - basic
|
|
|
114
|
|
|
107
|
Add effect of dilutive securities:
|
|
|
|
|
|
|
Stock awards and options
|
|
|
1
|
|
|
-
|
Weighted-average number of shares outstanding - diluted
|
|
|
115
|
|
|
107
|
|
|
|
|
|
|
|
|
|
(j)
|
For hospitals acquired in the HMA merger, same-store operating
results and statistical data reflect the periods from January 1
through March 31, 2015 and 2014, as if such hospitals were owned
during both comparable periods.
|
|
|
Footnotes to Financial Highlights, Financial Statements and
Selected Operating Data (Continued)
|
|
|
(k)
|
Included in income from continuing operations for the quarter ended
March 31, 2014, is an impairment charge of approximately $24 million
for internal-use software, and an acceleration of amortization for
the quarter ended March 31, 2014, of approximately $42 million, to
adjust for its shortened remaining life which ended on July 1, 2014.
In connection with the HMA acquisition, the Company further analyzed
its intangible assets related to internal-use software used in
certain of its hospitals for patient and clinical systems, including
software required to meet criteria for meaningful use attestation
and ICD-10 compliance. This analysis resulted in management
reassessing its usage of certain software products and rationalizing
that, with the addition of the HMA hospitals in the first quarter of
2014, those software applications were going to be discontinued and
replaced with new applications that better integrate meaningful use
and ICD-10 compliance, are more cost effective and can be
implemented at a greater efficiency of scale over future
implementations.
|
|
|
(l)
|
The following supplemental tables reconcile income from continuing
operations and net income attributable to Community Health Systems,
Inc. common stockholders, as reported, on a per share (diluted)
basis, with the adjustments described herein (total per share
amounts may not add due to rounding):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(per share - diluted)
|
|
|
|
|
|
|
|
Income (loss) from continuing operations, as reported
|
|
|
$
|
0.79
|
|
|
|
$
|
(0.84
|
)
|
Adjustments:
|
|
|
|
|
|
|
Loss from early extinguishment of debt
|
|
|
|
0.04
|
|
|
|
|
0.42
|
|
Amortization of software to be abandoned
|
|
|
|
-
|
|
|
|
|
0.24
|
|
Impairment of long-lived assets
|
|
|
|
-
|
|
|
|
|
0.14
|
|
Expenses related to the acquisition and integration of HMA
|
|
|
|
-
|
|
|
|
|
0.30
|
|
Government settlement and related costs
|
|
|
|
0.04
|
|
|
|
|
-
|
|
(Income) expense from fair value adjustments, net of legal
expenses, related to cases covered by the CVR
|
|
|
|
(0.03
|
)
|
|
|
|
0.02
|
|
Income from continuing operations, excluding adjustments
|
|
|
$
|
0.85
|
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
(per share - diluted)
|
|
|
|
|
|
|
|
Net income (loss), as reported
|
|
|
$
|
0.68
|
|
|
|
$
|
(1.05
|
)
|
Adjustments:
|
|
|
|
|
|
|
Loss from early extinguishment of debt
|
|
|
|
0.04
|
|
|
|
|
0.42
|
|
Amortization of software to be abandoned
|
|
|
|
-
|
|
|
|
|
0.24
|
|
Impairment of long-lived assets
|
|
|
|
-
|
|
|
|
|
0.14
|
|
Expenses related to the acquisition and integration of HMA
|
|
|
|
-
|
|
|
|
|
0.30
|
|
Government settlement and related costs
|
|
|
|
0.04
|
|
|
|
|
-
|
|
(Income) expense from fair value adjustments, net of legal
expenses, related to cases covered by the CVR
|
|
|
|
(0.03
|
)
|
|
|
|
0.02
|
|
Net income, excluding adjustments
|
|
|
$
|
0.74
|
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
(m)
|
The $0.04 per share (diluted) of "Government settlement and related
costs" for the three months ended March 31, 2015 is related to
several qui tam lawsuits settled in principle during the three
months ended March 31, 2015.
|
|
|
Regulation FD Disclosure
Set forth below is selected information concerning the Company's
projected consolidated operating results for the year ending
December 31, 2015. These projections reaffirm selected guidance provided
on February 19, 2015, and are based on the Company's historical
operating performance, current trends and other assumptions that the
Company believes are reasonable at this time. The 2015 guidance should
be considered in conjunction with the assumptions included herein. See
pages 14 and 15 for a list of factors that could affect the future
results of the Company or the healthcare industry generally.
The following is provided as reaffirmed guidance to analysts and
investors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Projection Range
|
Net operating revenues less provision for bad debts (in millions)
|
|
|
|
|
$
|
19,600
|
|
|
to
|
|
$
|
20,600
|
|
Adjusted EBITDA (in millions)
|
|
|
|
|
$
|
3,000
|
|
|
to
|
|
$
|
3,200
|
|
Income from continuing operations per share - diluted
|
|
|
|
|
$
|
3.40
|
|
|
to
|
|
$
|
4.05
|
|
Same-store hospital annual adjusted admissions growth
|
|
|
|
|
|
0.0
|
%
|
|
to
|
|
|
2.0
|
%
|
Weighted-average diluted shares, in millions, for the full year
|
|
|
|
|
|
115
|
|
|
to
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following assumptions were used in developing the 2015 guidance
provided above:
-
The Company's projections exclude the following:
-
Payments related to the CVRs issued in connection with the HMA
acquisition, and changes in the valuation of liabilities
underlying the CVR;
-
Losses on the early extinguishment of debt;
-
Impairment of long-lived assets;
-
Resolution of government investigations or other significant legal
settlements; and
-
Other significant gains or losses that neither relate to the
ordinary course of business nor reflect the Company's underlying
business performance.
-
The Company has classified several small hospitals as held for sale,
and the operating results of these hospitals have been moved to
discontinued operations, and have also been excluded from these
projections.
-
The 2015 projections include the acquisition of MetroHealth Hospital
in Grand Rapids, Michigan, which is currently targeted to close during
the middle of 2015, and assume the completion of one additional
targeted hospital acquisition during 2015.
Other assumptions used in the above guidance:
-
Benefits to Adjusted EBITDA from Healthcare Reform in 2015 of an
additional $100 million to $175 million of net operating revenues
before government deductions.
-
Achievement of additional acquisition synergies related to the HMA
acquisition of approximately $125 million to $150 million during 2015.
-
Health Information Technology (HITECH) electronic health records
incentive reimbursement of approximately 0.7% to 0.8% of net operating
revenues for the year ended December 31, 2015, with operating expenses
related to achieving meaningful use of 0.25% to 0.35% of net operating
revenues.
-
Continuation and approval of the California hospital provider fee
program for 2015.
-
For comparison purposes, 2014 earnings per share of $3.29, included a
benefit from the reversal of a tax liability of approximately $0.08
per share (diluted) and the benefit of reduced amortization from the
abandonment of software of $0.09 per share (diluted) which the Company
does not anticipate recurring in 2015.
-
Settlement of certain claims related to the BP oil spill, for which
the Company now expects to recognize up to approximately $28 million
in the second half of 2015.
-
Same-store hospital annual adjusted admissions growth, of 0.0% to 2.0%
for 2015, which does not take into account service closures and
weather-related or other unusual events.
-
Expressed as a percentage of net operating revenues, depreciation and
amortization of approximately 6.0% to 6.2% for 2015. Additionally,
this is a fixed cost and the percentages may change as revenue varies.
Such amounts exclude the possible impact of any future hospital fixed
asset impairments and acceleration of amortization of software to be
abandoned.
-
Interest expense, expressed as a percentage of net operating revenues,
of approximately 5.1% to 5.2%; however, interest expense is a fixed
cost and percentages may vary as revenue varies. Total fixed rate
debt, including swaps, is expected to average approximately 60% to 70%
of total debt during 2015.
-
Expressed as a percentage of net operating revenues, equity in
earnings of unconsolidated affiliates of approximately 0.2% to 0.3%
for 2015.
-
Expressed as a percentage of net operating revenues, net income
attributable to noncontrolling interests of approximately 0.6% to 0.7%
for 2015.
-
Expressed as a percentage of income from continuing operations before
income taxes, provision for income tax of approximately 31.5% to 33.0%
for 2015.
-
Capital expenditures are projected as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
Guidance
|
Total
|
|
|
|
$1,050
|
|
to
|
|
$1,250
|
-
Net cash provided by operating activities, excluding cash flows
related to the CVR and settlement of legal contingencies, is projected
as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
Guidance
|
Total
|
|
|
$1,650
|
|
to
|
|
$1,850
|
|
|
|
|
|
|
|
|
Cash provided by operating activities in 2015 will be negatively
impacted by approximately $300 million, primarily from a reduction in
tax refunds, and the timing of payroll payments, compared to the
adjusted cash flows from operations of $1.822 billion in 2014.
-
Weighted average shares outstanding are projected to be approximately
115 million to 116 million for the year ended 2015 and have been
adjusted to include the estimated dilutive impact from "in-the-money"
stock options and restricted shares.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
Section 21E of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995 that involve risk and
uncertainties. All statements in this press release other than
statements of historical fact, including statements regarding
projections, expected operating results, and other events that depend
upon or refer to future events or conditions or that include words such
as "expects," "anticipates," "intends," "plans," "believes,"
"estimates," "thinks," and similar expressions, are forward-looking
statements. Although the Company believes that these forward-looking
statements are based on reasonable assumptions, these assumptions are
inherently subject to significant economic and competitive uncertainties
and contingencies, which are difficult or impossible to predict
accurately and may be beyond the control of the Company. Accordingly,
the Company cannot give any assurance that its expectations will in fact
occur and cautions that actual results may differ materially from those
in the forward-looking statements. A number of factors could affect the
future results of the Company or the healthcare industry generally and
could cause the Company's expected results to differ materially from
those expressed in this press release.
These factors include, among other things:
-
general economic and business conditions, both nationally and in the
regions in which we operate;
-
implementation, effect of, and changes to adopted and potential
federal and state healthcare reform legislation and other federal,
state or local laws or regulations affecting the healthcare industry;
-
the extent to which states support increases, decreases or changes in
Medicaid programs, implement healthcare exchanges or alter the
provision of healthcare to state residents through regulation or
otherwise;
-
risks associated with our substantial indebtedness, leverage, and debt
service obligations;
-
demographic changes;
-
changes in, or the failure to comply with, governmental regulations;
-
potential adverse impact of known and unknown government
investigations, audits, and Federal and State False Claims Act
litigation and other legal proceedings;
-
our ability, where appropriate, to enter into and maintain managed
care provider arrangements and the terms of these arrangements;
-
changes in, or the failure to comply with, managed care provider
contracts, which could result in, among other things, disputes and
changes in reimbursements, both prospectively and retroactively;
-
changes in inpatient or outpatient Medicare and Medicaid payment
levels;
-
the effects related to the continued implementation of the
sequestration spending reductions and the potential for future deficit
reduction legislation;
-
increases in the amount and risk of collectability of patient accounts
receivable;
-
the efforts of insurers, healthcare providers and others to contain
healthcare costs;
-
our ongoing ability to demonstrate meaningful use of certified
electronic health record technology and recognize income for the
related Medicare or Medicaid incentive payments;
-
increases in wages as a result of inflation or competition for highly
technical positions and rising supply costs due to market pressure
from pharmaceutical companies and new product releases;
-
liabilities and other claims asserted against us, including
self-insured malpractice claims;
-
competition;
-
our ability to attract and retain, at reasonable employment costs,
qualified personnel, key management, physicians, nurses and other
healthcare workers;
-
trends toward treatment of patients in less acute or specialty
healthcare settings, including ambulatory surgery centers or specialty
hospitals;
-
changes in medical or other technology;
-
changes in U.S. generally accepted accounting principles;
-
the availability and terms of capital to fund additional acquisitions
or replacement facilities or other capital expenditures;
-
our ability to successfully make acquisitions or complete divestitures;
-
our ability to successfully integrate any acquired hospitals,
including those of HMA, or to recognize expected synergies from
acquisitions;
-
the impact of the acquisition of HMA on third-party relationships;
-
the impact of seasonal severe weather conditions;
-
our ability to obtain adequate levels of general and professional
liability insurance;
-
timeliness of reimbursement payments received under government
programs;
-
effects related to outbreaks of infectious diseases, including Ebola;
-
impact of the external, criminal cyber-attack suffered by us in the
second quarter of 2014, including potential reputational damage, the
outcome of our investigation and any potential governmental inquiries,
the outcome of litigation filed against us in connection with this
cyber-attack, the extent of remediation costs and additional operating
or other expenses that we may continue to incur, and the impact of
future cyber-attacks or security breaches; and
-
the other risk factors set forth in our other public filings with the
Securities and Exchange Commission, including our Annual Report on
Form 10-K for the year ended December 31, 2014, filed on February 25,
2015.
The consolidated operating results for the three months ended March 31,
2015, are not necessarily indicative of the results that may be
experienced for any such future period. The Company cautions that the
projections for calendar year 2015 set forth in this press release are
given as of the date hereof based on currently available information.
The Company undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.
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