Community Health Systems, Inc. Announces Fourth Quarter 2012 Results with Net Operating Revenues of $3.3 Billion

  Community Health Systems, Inc. Announces Fourth Quarter 2012 Results with
  Net Operating Revenues of $3.3 Billion

Business Wire

FRANKLIN, Tenn. -- February 21, 2013

Community Health Systems, Inc. (NYSE: CYH) (the “Company”) today announced
financial and operating results for the three months and year ended December
31, 2012.

Net operating revenues for the three months ended December 31, 2012, totaled
$3.3 billion, a 9.0 percent increase compared with $3.0 billion for the same
period in 2011. Income from continuing operations increased to $85.6 million,
or $0.69 per share (diluted), for the three months ended December 31, 2012,
compared with $55.6 million, or $0.38 per share (diluted), for the same period
in 2011. Net income attributable to Community Health Systems, Inc. common
stockholders was $0.69 per share (diluted) for the three months ended December
31, 2012, compared with $0.35 per share (diluted) for the same period in 2011.
The results for the three months ended December 31, 2012, include a $0.07 per
share (diluted) loss from the impairment of certain long-lived assets and
$0.09 per share (diluted) of expenses related primarily to the settlement of
certain legal matters. Excluding these items, both income from continuing
operations and net income attributable to Community Health Systems, Inc.
common stockholders were $0.85 per share (diluted) for the three months ended
December 31, 2012. For the three months ended December 31, 2011, excluding the
loss from early extinguishment of debt of $0.47 per share (diluted), income
from continuing operations was $0.85 per share (diluted) and net income was
$0.82 per share (diluted). Weighted-average shares outstanding (diluted) were
90.8 million for the three months ended December 31, 2012, and 88.9 million
for the three months ended December 31, 2011.

Adjusted EBITDA for the three months ended December 31, 2012, was $481.9
million compared with $463.8million for the same period in 2011, representing
a 3.9 percent increase. Excluding the legal matters referenced above, adjusted
EBITDA was $495.3 million for the three months ended December 31, 2012.
Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations, loss
from early extinguishment of debt, impairment of long-lived assets, and net
income attributable to non-controlling interests. The Company uses adjusted
EBITDA as a measure of liquidity. Net cash provided by operating activities
for the three months ended December 31, 2012, was $502.3 million compared with
$441.7 million for the same period in 2011.

The consolidated operating results for the three months ended December 31,
2012, reflect a 4.7 percent increase in total admissions and a 6.4 percent
increase in total adjusted admissions compared with the same period in 2011.
On a same-store basis, admissions increased 1.0 percent while adjusted
admissions increased 2.3 percent compared with the same period in 2011. On a
same-store basis, net operating revenues increased 5.5 percent compared with
the same period in 2011.

Net operating revenues for the year ended December 31, 2012, totaled $13.0
billion, a 9.4 percent increase compared with $11.9 billion for the same
period in 2011. Income from continuing operations increased to $346.3 million,
or $2.96 per share (diluted), for the year ended December 31, 2012, compared
with $335.9 million, or $2.87 per share (diluted), for the same period in
2011. Net income attributable to Community Health Systems, Inc. common
stockholders was $2.96 per share (diluted) for the year ended December 31,
2012, compared with $2.23 per share (diluted) for the same period in 2011. The
results for the year ended December 31, 2012, include a $0.51 per share
(diluted) net benefit from the resolution of an industry-wide governmental
settlement and a payment update relating to prior periods, $0.22 per share
(diluted) of expenses related primarily to the settlement of certain legal
matters, a $0.07 per share (diluted) loss from the impairment of long-lived
assets, and an $0.81 per share (diluted) loss from the early extinguishment of
debt. Excluding these items, both income from continuing operations and net
income attributable to Community Health Systems, Inc. common stockholders were
$3.55 per share (diluted) for the year ended December 31, 2012.

For the year ended December 31, 2011, excluding the loss from early
extinguishment of debt of $0.46 per share (diluted), income from continuing
operations was $3.33 per share (diluted) and net income was $2.69 per share
(diluted). Weighted-average shares outstanding (diluted) were 89.8 million for
the year ended December 31, 2012, and 90.7 million for the year ended December
31, 2011.

Adjusted EBITDA for the year ended December 31, 2012, was $1.978 billion
compared with $1.837 billion for the same period in 2011, representing a 7.7
percent increase. Excluding the industry-wide governmental settlement, payment
update, and expenses related to certain legal matters mentioned above,
adjusted EBITDA was $1.9 billion, representing a 5.2 percent increase from the
prior year. Net cash provided by operating activities for the year ended
December 31, 2012, was $1.28 billion compared with $1.26 billion for the same
period in 2011.

The consolidated operating results for the year ended December 31, 2012,
reflect a 4.0 percent increase in total admissions and a 6.6 percent increase
in total adjusted admissions compared with the same period in 2011. On a
same-store basis, admissions decreased 0.9 percent while adjusted admissions
increased 1.5 percent compared with the same period in 2011. On a same-store
basis, net operating revenues increased 4.6 percent compared with the same
period in 2011.

Commenting on the results, Wayne T. Smith, chairman, president and chief
executive officer of Community Health Systems, Inc. said, “Our fourth quarter
performance further extended Community Health Systems’ consistent record of
growth in 2012. Net operating revenues were up 9.0 percent and adjusted EBITDA
increased by 3.9 percent over the fourth quarter last year. For the year, net
operating revenues increased by 9.4 percent to reach $13.0 billion. On a
same-store basis, net operating revenues were up 5.5 percent and 4.6 percent
for the fourth quarter and year, respectively, reflecting our consistent
ability to improve operating results at the individual hospital level. We are
also encouraged by the more favorable volume trends in 2012 compared with the
prior year.

“Community Health Systems has continued to demonstrate success in a dynamic
and challenging healthcare environment. Our results for 2012 confirm the
strength of our operating model and our proven ability to execute our strategy
to drive efficiencies in our hospitals, recruit and retain qualified
physicians, make selective acquisitions and deliver high quality healthcare
services in a cost-effective manner. As we look ahead to 2013, we will
continue to pursue a strategy that delivers value to both our community
partners and our shareholders,” added Smith.

Included on pages 15, 16 and 17 of this press release are tables setting forth
the Company’s 2013 annual earnings guidance. The 2013 guidance is based on the
Company’s historical operating performance, current trends and other
assumptions that the Company believes are reasonable at this time.

Located in the Nashville, Tennessee, suburb of Franklin, 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
non-urban and mid-size markets throughout the country. Through its
subsidiaries, the Company currently owns, leases or operates 135 hospitals in
29 states with an aggregate of approximately 20,000 licensed beds. Its
hospitals offer a broad range of inpatient and surgical services, outpatient
treatment and skilled nursing care. In addition, through its subsidiary,
Quorum Health Resources, LLC, the Company provides management and consulting
services to non-affiliated general acute-care hospitals located throughout the
United States. Shares in Community Health Systems, Inc. are traded on the New
York Stock Exchange under the symbol “CYH.”

Community Health Systems, Inc. will hold a conference call on Friday, February
22, 2013, at 10:00 a.m. Central, 11:00 a.m. Eastern, to review financial and
operating results for the fourth quarter and year ended December 31, 2012.
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, or at www.earnings.com. 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 March 22, 2013. 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.

Forward-Looking Statements

Statements contained in this press release regarding expected operating
results, acquisition transactions or divestitures and other events are
forward-looking statements that involve risk and uncertainties. Actual future
events or results may differ materially from these statements. Readers are
referred to the documents filed by Community Health Systems, Inc. with the
Securities and Exchange Commission, including the Company’s annual report on
Form 10-K, current reports on Form 8-K and quarterly reports on Form 10-Q.
These filings identify important risk factors and other uncertainties that
could cause actual results to differ from those contained in the
forward-looking statements. 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.

                 
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Financial Highlights (a)(b)
(in thousands, except per share amounts)
(Unaudited)
                                                              
                   Three Months Ended            Year Ended
                   December 31,                  December 31,
                   2012          2011            2012             2011
                                                                  
Net operating      $ 3,276,946   $ 3,005,825     $ 13,028,985     $ 11,906,212
revenues
Adjusted EBITDA      481,872       463,767         1,977,715        1,836,650
(c)
Income from
continuing
operations (d),      85,626        55,615          346,269          335,894
(e), (f), (g),
(h), (i)
Net income
attributable to
Community Health     62,574        30,931          265,640          201,948
Systems, Inc.
stockholders
                                                                  
Basic earnings
(loss) per share
attributable to
Community Health
Systems, Inc.
common
stockholders
(k):
Continuing
operations (d),    $ 0.70        $ 0.38          $ 2.98           $ 2.89
(e), (f), (g),
(h), (i)
Discontinued        -            (0.03     )    (0.01      )    (0.65      )
operations
Net income         $ 0.70        $ 0.35         $ 2.98          $ 2.24       
                                                                  
Diluted earnings
(loss) per share
attributable to
Community Health
Systems, Inc.
common
stockholders
(k), (l):
Continuing
operations (d),    $ 0.69        $ 0.38          $ 2.96           $ 2.87
(e), (f), (g),
(h), (i)
Discontinued        -            (0.03     )    (0.01      )    (0.64      )
operations
Net income         $ 0.69        $ 0.35         $ 2.96          $ 2.23       
                                                                  
Weighted-average
number of shares
outstanding (j):
Basic                89,882        88,345          89,243           89,967
Diluted              90,828        88,914          89,807           90,666
                                                                  
Net cash
provided by        $ 502,255     $ 441,673       $ 1,280,120      $ 1,261,908
operating
activities
                                                                  
_____
For footnotes,
see pages 12, 13
and 14.
                                                                  


COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (a)(b)
(in thousands, except per share amounts)
(Unaudited)
                                                                  
                         Three Months Ended December 31,
                         2012                       2011
                                         % of Net                    % of Net

                         Amount         Operating   Amount          Operating

                                         Revenues                    Revenues
Operating revenues
(net of contractual      $ 3,761,599                 $ 3,442,514
allowances and
discounts)
Provision for bad         484,653                  436,689      
debts
Net operating revenues    3,276,946    100.0  %     3,005,825    100.0  %
                                                                     
Operating costs and
expenses:
Salaries and benefits      1,556,399     47.5   %      1,421,310     47.3   %
Supplies                   500,971       15.3   %      467,864       15.6   %
Other operating            729,761       22.2   %      622,501       20.7   %
expenses
Electronic health
records incentive          (53,142   )   -1.6   %      (23,170   )   -0.8   %
reimbursement (g)
Rent                       70,505        2.2    %      64,699        2.2    %
Depreciation and          189,196      5.8    %     171,628      5.7    %
amortization
Total operating costs     2,993,690    91.4   %     2,724,832    90.7   %
and expenses
                                                                     
Income from operations     283,256       8.6    %      280,993       9.3    %
(e), (g), (h), (i)
Interest expense, net      160,586       4.9    %      158,482       5.2    %
Loss from early            -             0.0    %      66,019        2.2    %
extinguishment of debt
Equity in earnings of
unconsolidated             (9,420    )   -0.3   %      (11,146   )   -0.4   %
affiliates
Impairment of             10,000       0.3    %     -            0.0    %
long-lived assets (f)
Income from continuing
operations before          122,090       3.7    %      67,638        2.3    %
income taxes
Provision for income      36,464       1.1    %     12,023       0.4    %
taxes
Income from continuing
operations (e), (f),      85,626       2.6    %     55,615       1.9    %
(g), (h), (i)
                                                                     
Discontinued
operations, net of
taxes:
Loss from operations       -             0.0    %      (3,223    )   -0.1   %
of entities sold
Impairment of              -             0.0    %      -             0.0    %
hospitals sold
Loss on sale, net         -            0.0    %     728          0.0    %
Loss from discontinued
operations, net of        -            0.0    %     (2,495    )   -0.1   %
taxes
Net income                 85,626        2.6    %      53,120        1.8    %
Less: Net income
attributable to           23,052       0.7    %     22,189       0.8    %
noncontrolling
interests
Net income
attributable to
Community Health         $ 62,574       1.9    %    $ 30,931       1.0    %
Systems, Inc.
stockholders
                                                                     
Basic earnings (loss)
per share attributable
to Community Health
Systems, Inc. common
stockholders (k):
Continuing operations
(e), (f), (g), (h),      $ 0.70                      $ 0.38
(i)
Discontinued              -                         (0.03     )
operations
Net income               $ 0.70                     $ 0.35      
                                                                     
Diluted earnings
(loss) per share
attributable to
Community Health
Systems, Inc. common
stockholders (k), (l):
Continuing operations
(e), (f), (g), (h),      $ 0.69                      $ 0.38
(i)
Discontinued              -                         (0.03     )
operations
Net income               $ 0.69                     $ 0.35      
                                                                     
Weighted-average
number of shares
outstanding (j):
Basic                     89,882                    88,345    
Diluted                   90,828                    88,914    
                                                                     
_____
For footnotes, see
pages 12, 13 and 14.
                                                                     

                                                                 
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (a)(b)
(in thousands, except per share amounts)
(Unaudited)
                                                                     
                       Year Ended December 31,
                       2012                         2011
                                        % of Net                     % of Net

                       Amount          Operating   Amount           Operating

                                        Revenues                     Revenues
Operating revenues
(net of contractual    $ 14,988,179                 $ 13,626,168
allowances and
discounts)
Provision for bad       1,959,194                 1,719,956     
debts
Net operating           13,028,985    100.0  %     11,906,212    100.0  %
revenues
                                                                     
Operating costs and
expenses:
Salaries and             6,103,931      46.9   %      5,577,925      46.9   %
benefits
Supplies                 1,973,491      15.1   %      1,834,106      15.4   %
Other operating          2,869,786      22.0   %      2,515,638      21.1   %
expenses
Electronic health
records incentive        (126,734   )   -1.0   %      (63,397    )   -0.5   %
reimbursement (g)
Rent                     272,829        2.1    %      254,781        2.1    %
Depreciation and        725,558       5.6    %     652,674       5.5    %
amortization
Total operating         11,818,861    90.7   %     10,771,727    90.5   %
costs and expenses
                                                                     
Income from
operations (d), (e),     1,210,124      9.3    %      1,134,485      9.5    %
(g), (h), (i)
Interest expense,        622,933        4.7    %      644,410        5.4    %
net
Loss from early
extinguishment of        115,453        0.9    %      66,019         0.5    %
debt
Equity in earnings
of unconsolidated        (42,033    )   -0.3   %      (49,491    )   -0.4   %
affiliates
Impairment of
long-lived assets       10,000        0.1    %     -             0.0    %
(f)
Income from
continuing               503,771        3.9    %      473,547        4.0    %
operations before
income taxes
Provision for income    157,502       1.2    %     137,653       1.2    %
taxes
Income from
continuing              346,269       2.7    %     335,894       2.8    %
operations (d), (e),
(f), (g), (h), (i)
                                                                     
Discontinued
operations, net of
taxes:
Loss from operations     (466       )   0.0    %      (7,769     )   -0.1   %
of entities sold
Impairment of            -              0.0    %      (47,930    )   -0.4   %
hospitals sold
Loss on sale, net       -             0.0    %     (2,572     )   0.0    %
Loss from
discontinued            (466       )   0.0    %     (58,271    )   -0.5   %
operations, net of
taxes
Net income               345,803        2.7    %      277,623        2.3    %
Less: Net income
attributable to         80,163        0.7    %     75,675        0.6    %
noncontrolling
interests
Net income
attributable to
Community Health       $ 265,640       2.0    %    $ 201,948       1.7    %
Systems, Inc.
stockholders
                                                                     
Basic earnings
(loss) per share
attributable to
Community Health
Systems, Inc. common
stockholders (k):
Continuing
operations (d), (e),   $ 2.98                       $ 2.89
(f), (g), (h), (i)
Discontinued            (0.01      )                (0.65      )
operations
Net income             $ 2.98                      $ 2.24       
                                                                     
Diluted earnings
(loss) per share
attributable to
Community Health
Systems, Inc. common
stockholders (k),
(l):
Continuing
operations (d), (e),   $ 2.96                       $ 2.87
(f), (g), (h), (i)
Discontinued            (0.01      )                (0.64      )
operations
Net income             $ 2.96                      $ 2.23       
                                                                     
Weighted-average
number of shares
outstanding (j):
Basic                   89,243                     89,967     
Diluted                 89,807                     90,666     
                                                                     
____
For footnotes, see
pages 12, 13 and 14.
                                                                     

                                                  
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(Unaudited)
                                                     
                      Three Months Ended December    Year Ended December 31,
                      31,
                      2012            2011          2012         2011
                                                                   
Net income            $  85,626        $ 53,120      $ 345,803     $ 277,623
Other comprehensive
income (loss), net
of income taxes:
Net change in fair
value of interest        17,643          24,946        46,409        55,145
rate swaps
Net change in fair
value of                 (497     )      1,732         3,012         (960    )
available-for-sale
securities
Amortization and
recognition of
unrecognized            (13,735  )     (10,106 )    (10,252 )    (7,737  )
pension cost
components
Other comprehensive     3,411         16,572      39,169      46,448  
income (loss)
Comprehensive            89,037          69,692        384,972       324,071
income
Less: Comprehensive
income attributable     23,052        22,189      80,163      75,675  
to noncontrolling
interests
Comprehensive
income attributable
to Community Health   $  65,985       $ 47,503     $ 304,809    $ 248,396 
Systems, Inc.
stockholders
                                                                   
_____
For footnotes, see
pages 12, 13 and
14.
                                                                   

                                                                                      
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (b)
($ In thousands)
(Unaudited)
                                                                                          
                 For the Three Months Ended December 31,
                 Consolidated                            Same-Store
                 2012           2011           %        2012            2011            %
                                                 Change                                   Change
Number of
hospitals (at      135             131                      131             131
end of period)
Licensed beds
(at end of         20,334          19,695                   19,662          19,695
period)
Beds in
service (at        17,265          16,832                   16,745          16,832
end of period)
Admissions         173,392         165,542       4.7  %     167,117         165,542       1.0  %
Adjusted           352,855         331,720       6.4  %     339,427         331,720       2.3  %
admissions
Patient days       756,217         732,430                  729,843         732,430
Average length     4.4             4.4                      4.4             4.4
of stay (days)
Occupancy rate
(average beds      47.6      %     47.3      %              47.4      %     47.3      %
in service)
Net operating    $ 3,276,946     $ 3,005,825     9.0  %   $ 3,172,452     $ 3,005,656     5.5  %
revenues
Net inpatient
revenues as a
% of operating
revenues           43.8      %     44.5      %              43.7      %     44.5      %
before
provision for
bad debts
Net outpatient
revenues as a
% of operating
revenues           54.3      %     53.5      %              54.5      %     53.5      %
before
provision for
bad debts
Income from
operations       $ 283,256       $ 280,993       0.8  %   $ 296,206       $ 288,893       2.5  %
(e), (g), (h),
(i)
Income from
operations as
a % of net         8.6       %     9.3       %              9.3       %     9.6       %
operating
revenues
Depreciation
and              $ 189,196       $ 171,628                $ 185,179       $ 171,628
amortization
Equity in
earnings of      $ (9,420    )   $ (11,146   )            $ (9,419    )   $ (11,146   )
unconsolidated
affiliates
Liquidity
Data:
Adjusted         $ 481,872       $ 463,767       3.9  %
EBITDA (c)
Adjusted
EBITDA as a %
of net             14.7      %     15.4      %
operating
revenues
Net cash
provided by      $ 502,255       $ 441,673
operating
activities
Net cash
provided by
operating
activities as      15.3      %     14.7      %
a % of net
operating
revenues
                                                                                          
_____
For footnotes,
see pages 12,
13 and 14.
                                                                                          

                                                                                         
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (b)
($ In thousands)
(Unaudited)
                                                                                              
                 For the Year Ended December 31,
                 Consolidated                               Same-Store
                 2012            2011            %        2012             2011             %
                                                   Change                                     Change
Number of
hospitals (at      135              131                       131              131
end of period)
Licensed beds
(at end of         20,334           19,695                    19,662           19,695
period)
Beds in
service (at        17,265           16,832                    16,745           16,832
end of period)
Admissions         701,837          675,050        4.0  %     668,679          675,050        -0.9 %
Adjusted           1,418,472        1,330,988      6.6  %     1,351,043        1,330,988      1.5  %
admissions
Patient days       3,058,931        2,970,044                 2,902,418        2,970,044
Average length     4.4              4.4                       4.3              4.4
of stay (days)
Occupancy rate
(average beds      48.6       %     49.1       %              48.3       %     49.1       %
in service)
Net operating    $ 13,028,985     $ 11,906,212     9.4  %   $ 12,438,580     $ 11,893,095     4.6  %
revenues
Net inpatient
revenues as a
% of operating
revenues           44.7       %     46.1       %              44.2       %     46.1       %
before
provision for
bad debts
Net outpatient
revenues as a
% of operating
revenues           53.4       %     51.9       %              53.9       %     51.9       %
before
provision for
bad debts
Income from
operations       $ 1,210,124      $ 1,134,485      6.7  %   $ 1,198,243      $ 1,164,545      2.9  %
(d), (e), (g),
(h), (i)
Income from
operations as
a % of net         9.3        %     9.5        %              9.6        %     9.8        %
operating
revenues
Depreciation
and              $ 725,558        $ 652,674                 $ 703,236        $ 652,674
amortization
Equity in
earnings of      $ (42,033    )   $ (49,491    )            $ (42,210    )   $ (49,491    )
unconsolidated
affiliates
Liquidity
Data:
Adjusted         $ 1,977,715      $ 1,836,650      7.7  %
EBITDA (c)
Adjusted
EBITDA as a %
of net             15.2       %     15.4       %
operating
revenues
Net cash
provided by      $ 1,280,120      $ 1,261,908
operating
activities
Net cash
provided by
operating
activities as      9.8        %     10.6       %
a % of net
operating
revenues
                                                                                              
_____
For footnotes,
see pages 12,
13 and 14.
                                                                                              

                                                            
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
                                                                
                                               December 31,     December 31,
                                               2012             2011
ASSETS
Current assets
  Cash and cash equivalents                    $ 387,813        $ 129,865
  Patient accounts receivable, net of
  allowance for doubtful accounts of             2,067,379        1,834,167
  $2,201,875 and $1,891,334 at December 31,
  2012 and December 31, 2011, respectively
  Supplies                                       368,172          346,611
  Prepaid income taxes                           49,888           101,389
  Deferred income taxes                          117,045          89,797
  Prepaid expenses and taxes                     126,561          112,613
  Other current assets                          302,284        231,647    
  Total current assets                          3,419,142      2,846,089  
Property and equipment                           10,145,408       9,369,528
  Less accumulated depreciation and             (2,993,535 )    (2,513,552 )
  amortization
  Property and equipment, net                   7,151,873      6,855,976  
Goodwill                                        4,408,138      4,264,845  
Other assets, net                               1,627,182      1,241,930  
Total assets                                   $ 16,606,335    $ 15,208,840 
                                                                
LIABILITIES AND EQUITY
Current liabilities
  Current maturities of long-term debt         $ 89,911         $ 63,706
  Accounts payable                               825,914          748,997
  Accrued interest                               110,702          110,121
  Accrued liabilities                           1,116,693      988,315    
  Total current liabilities                     2,143,220      1,911,139  
Long-term debt                                  9,451,394      8,782,798  
Deferred income taxes                           808,489        704,725    
Other long-term liabilities                     1,039,045      949,990    
Total liabilities                               13,442,148     12,348,652 
Redeemable noncontrolling interests in          367,666        395,743    
equity of consolidated subsidiaries
                                                                
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; 92,925,715
  shares issued and 91,950,166 shares            929              915
  outstanding at December 31, 2012 and
  91,547,079 shares issued and 90,571,530
  shares outstanding at December 31, 2011
  Additional paid-in capital                     1,138,274        1,086,008
  Treasury stock, at cost, 975,549 shares at     (6,678     )     (6,678     )
  December 31, 2012 and December 31, 2011
  Accumulated other comprehensive loss           (145,310   )     (184,479   )
  Retained earnings                             1,743,992      1,501,330  
  Total Community Health Systems, Inc.           2,731,207        2,397,096
  stockholders’ equity
Noncontrolling interests in equity of           65,314         67,349     
consolidated subsidiaries
Total equity                                    2,796,521      2,464,445  
Total liabilities and equity                   $ 16,606,335    $ 15,208,840 
                                                                             
_____
For footnotes, see pages 12, 13 and 14.
                                                                             

                                                             
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
                                                                
                                               Year Ended
                                               December 31,
                                               2012             2011
Cash flows from operating activities
Net income                                     $ 345,803        $ 277,623
Adjustments to reconcile net income to net       
cash provided by operating activities:
Depreciation and amortization                   725,558          657,665
Deferred income taxes                            53,407           107,032
Stock-based compensation expense                 40,896           42,542
Loss on sale, net                                -                2,572
Impairment of hospitals sold                     -                47,930
Impairment of long-lived assets                  10,000           -
Loss from early extinguishment of debt           115,453          66,019
Excess tax benefit relating to stock-based       (3,973     )     (5,290     )
compensation
Other non-cash expenses, net                     33,251           28,716
Changes in operating assets and liabilities,
net of effects of acquisitions and
divestitures:
Patient accounts receivable                      (204,151   )     (138,332   )
Supplies, prepaid expenses and other current     (99,799    )     (42,858    )
assets
Accounts payable, accrued liabilities and        246,301          246,110
income taxes
Other                                           17,374         (27,821    )
Net cash provided by operating activities       1,280,120      1,261,908  
                                                                
Cash flows from investing activities
Acquisitions of facilities and other related     (322,315   )     (415,360   )
equipment
Purchases of property and equipment              (768,790   )     (776,713   )
Proceeds from disposition of hospitals and       -                173,387
other ancillary operations
Proceeds from sale of property and equipment     5,897            11,160
Increase in other investments                   (297,994   )    (188,249   )
Net cash used in investing activities           (1,383,202 )    (1,195,775 )
                                                                
Cash flows from financing activities
Proceeds from exercise of stock options          20,858           18,910
Repurchase of restricted stock shares for        (9,314     )     (13,311    )
payroll tax withholding requirements
Payment of special dividend to stockholders      (22,535    )     -
Deferred financing costs                         (141,219   )     (19,352    )
Excess tax benefit relating to stock-based       3,973            5,290
compensation
Stock buy-back                                   -                (85,790    )
Proceeds from noncontrolling investors in        535              1,229
joint ventures
Redemption of noncontrolling investments in      (44,287    )     (13,022    )
joint ventures
Distributions to noncontrolling investors in     (68,344    )     (56,094    )
joint ventures
Borrowings under credit agreements               3,975,866        578,236
Issuance of long-term debt                       3,825,000        1,000,000
Proceeds from receivables facility               350,000          -
Repayments of long-term indebtedness            (7,529,503 )    (1,651,533 )
Net cash provided by (used in) financing        361,030        (235,437   )
activities
                                                                
Net change in cash and cash equivalents          257,948          (169,304   )
Cash and cash equivalents at beginning of       129,865        299,169    
period
Cash and cash equivalents at end of period     $ 387,813       $ 129,865    
                                                                             
_____
For footnotes, see pages 12, 13 and 14.
                                                                             

Footnotes to Financial Highlights, Financial Statements and Selected Operating
                                     Data

(a) The following table provides information needed to calculate income per
share, which is adjusted for income attributable to noncontrolling interests
(in thousands):

                            Three Months Ended     Year Ended
                             December 31,            December 31,
                             2012      2011         2012         2011
Income from continuing
operations attributable to
Community Health Systems,
Inc. common stockholders:
Income from continuing       $ 85,626   $ 55,615     $ 346,269     $ 335,894
operations, net of taxes
Less: Income from
continuing operations
attributable to               23,052    22,189     80,163      75,675  
noncontrolling interests,
net of taxes
Income from continuing
operations attributable to
Community Health Systems,    $ 62,574   $ 33,426    $ 266,106    $ 260,219 
Inc. common stockholders -
basic and diluted
                                                                   
Loss from discontinued
operations attributable to
Community Health Systems,
Inc. common stockholders:
Loss from discontinued       $ -        $ (2,495 )   $ (466    )   $ (58,271 )
operations, net of taxes
Less: Loss from
discontinued operations
attributable to               -         -          -           -       
noncontrolling interests,
net of taxes
Loss from discontinued
operations attributable to
Community Health Systems,    $ -        $ (2,495 )   $ (466    )   $ (58,271 )
Inc. common stockholders -
basic and diluted
                                                                   

(b) Continuing operating results exclude discontinued operations for the three
months and year ended December 31, 2012 and 2011. Both financial and
statistical results exclude entities in discontinued operations for all
periods presented.

(c) EBITDA 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,
gain/loss from early extinguishment of debt, impairment of long-lived assets,
and net income attributable to noncontrolling interests. 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 included this measure 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 is the basis for a key component in the determination of the Company’s
compliance with some of the covenants under the Company’s senior secured
credit facility, as well as 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 thousands):

                  Three Months Ended           Year Ended
                   December 31,                  December 31,
                   2012          2011           2012           2011
Adjusted EBITDA    $ 481,872      $ 463,767      $ 1,977,715     $ 1,836,650
Interest             (160,586 )     (158,482 )     (622,933  )     (644,410  )
expense, net
Provision for        (36,464  )     (12,023  )     (157,502  )     (137,653  )
income taxes
Loss from
operations of        -              (3,223   )     (466      )     (7,769    )
entities sold,
net of taxes
Other non-cash       18,529         24,837         70,174          70,959
expenses, net
Changes in
operating assets
and liabilities,    198,904      126,797      13,132        144,131   
net of effects
of acquisitions
and divestitures
Net cash
provided by        $ 502,255     $ 441,673     $ 1,280,120    $ 1,261,908 
operating
activities
                                                                             

Footnotes to Financial Highlights, Financial Statements and Selected Operating
                               Data (Continued)

(d) Included in non-same-store income from operations and income from
continuing operations for the year ended December 31, 2012, is approximately
$105million of net operating revenues and approximately $7 million of related
expenses from an industry-wide settlement with the United States Department of
Health and Human Services and Centers for Medicare and Medicaid Services based
on a claim that acute-care hospitals in the U.S. were underpaid from the
Medicare inpatient prospective payment system in federal fiscal years 1999
through 2011. These amounts have been updated from our original estimates for
immaterial adjustments made throughout the year. The underpayments resulted
from calculations related to the rural floor budget neutrality adjustments
implemented in connection with the Balanced Budget Act of 1997. In addition,
included in net income attributable to noncontrolling interests is
approximately $3 million related to this settlement. Also included is an
unfavorable adjustment to net operating revenue of approximately $21 million
related to the revised Supplemental Security Income ratios for federal fiscal
years 2006 through 2009 utilized for calculating Medicare Disproportionate
Share Hospital reimbursements. These adjustments resulted in an after-tax
benefit to net income of $0.51 per share (diluted).

(e) Included in non-same-store income from operations and income from
continuing operations for the three months and year ended December 31, 2012,
are pretax charges of $13.4 million and $32.3 million, respectively, for the
settlement of certain legal matters and other regulatory matters. These items
resulted in an after-tax charge to net income of $0.09 per share (diluted) and
$0.22 per share (diluted) for the three months and year ended December 31,
2012, respectively.

(f) Included in income from continuing operations for the three months and
year ended December 31, 2012, is a $10.0 million pretax charge, resulting in
an after-tax charge to net income of $0.07 per share (diluted), related to the
impairment of three small hospitals.

(g) Included in income from operations and income from continuing operations
for the three months and year ended December 31, 2012, is the Electronic
Health Records incentive reimbursement, which represents reimbursement from
Medicare and Medicaid related to certain of the Company’s hospitals and
Medicare and Medicaid for certain employed physicians. Total costs and
expenses related to the implementation of electronic health records were
approximately $25.9million and $72.9 million, including depreciation and
amortization of approximately $14.9 million and $40.0 million for the three
months and year ended December 31, 2012, respectively. Total costs and
expenses related to the implementation of electronic health records were
approximately $14.9 million and $29.9 million for the three months and year
ended December 31, 2011, respectively. Total costs and expenses included
depreciation and amortization of approximately $6.0 million for both the three
months and year ended December 31, 2011.

(h) Included in non-same-store income from operations and income from
continuing operations are pretax legal and other costs, offset by insurance
recoveries beginning in June 2012, related to the Tenet Healthcare Corporation
(“Tenet”) lawsuit, governmental investigation and shareholder lawsuits of $2.5
million and $3.1 million for the three months ended December 31, 2012 and
2011, respectively, and $5.5 million and $15.3 million for the years ended
December 31, 2012 and 2011, respectively.

(i) Included in non-same-store income from operations and income from
continuing operations are pretax charges related to acquisition costs (other
than Tenet) of $0.9 million and $4.5 million for the three months ended
December 31, 2012 and 2011, respectively, and $10.0 million and $12.5 million
for the years ended December 31, 2012 and 2011, respectively.

(j) The following table sets forth components reconciling the basic
weighted-average number of shares to the diluted weighted-average number of
shares (in thousands):

                                     Three Months Ended  Year Ended
                                          December 31,         December 31,
                                          2012      2011      2012    2011
        Weighted-average number of        89,882     88,345    89,243   89,967
        shares outstanding - basic
        Add effect of dilutive
        securities:
        Stock awards and options          946        569       564      699
        Weighted-average number of        90,828     88,914    89,807   90,666
        shares outstanding - diluted
                                                                        

(k) Total per share amounts may not add due to rounding.

(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:

                                Three Months Ended     Year Ended
                                 December 31,            December 31,
                                 2012          2011     2012          2011
                                 (per share - diluted)   (per share - diluted)
                                                                        
Income from continuing           $    0.69      $ 0.38   $  2.96        $ 2.87
operations, as reported
Adjustments:
Loss from early extinguishment        -           0.47      0.81          0.46
of debt
Impairment of long-lived              0.07        -         0.07          -
assets
Net benefit from industry-wide
governmental settlement and           -           -         (0.51  )
payment update
Settlement of certain legal
matters and other regulatory         0.09       -        0.22        -
items
Income from continuing
operations, excluding            $    0.85      $ 0.85   $  3.55       $ 3.33
adjustments
                                                                          

                                Three Months Ended     Year Ended
                                 December 31,            December 31,
                                 2012          2011     2012          2011
                                 (per share - diluted)   (per share - diluted)
                                                                        
Net income, as reported          $    0.69      $ 0.35   $  2.96        $ 2.23
Adjustments:
Loss from early extinguishment        -           0.47      0.81          0.46
of debt
Impairment of long-lived              0.07        -         0.07          -
assets
Net benefit from industry-wide
governmental settlement and           -           -         (0.51  )
payment update
Settlement of certain legal
matters and other regulatory         0.09       -        0.22        -
items
Net income, excluding            $    0.85      $ 0.82   $  3.55       $ 2.69
adjustments
                                                                          

                           Regulation FD Disclosure

The following tables set forth selected information concerning the Company’s
projected consolidated operating results for the year ending December 31,
2013. These projections are based on the Company’s historical operating
performance, current trends and other assumptions that the Company believes
are reasonable at this time. The 2013 guidance should be considered in
conjunction with the assumptions included herein. See page 17 for a list of
factors that could affect the future results of the Company or the healthcare
industry generally.

The following is provided as guidance to analysts and investors:

                                   2013 Projection Range
      Net operating revenues less
      provision for bad debts (in       $   13,300      to      $   13,800
      millions)
      Adjusted EBITDA (in millions)     $   1,975        to       $   2,050
      Income from continuing
      operations per share -            $   3.50         to       $   3.90
      diluted
      Same-store hospital annual            0.5%         to           2.0%
      adjusted admissions growth
      Weighted-average diluted              91           to           93
      shares (in millions)
                                                                  
      Income from continuing
      operations per share -
      diluted
            First quarter ending        $   0.82                  $   0.92
            March 31, 2013
                                                                  
            • For the quarter ending March 31, 2013, HITECH incentive
            reimbursement is projected to be 0.7% to 0.8% of the first quarter
            net operating revenues, which is lower than the 1.1% to 1.2% of
            net operating revenues projected for the full year.
            

The following assumptions were used in developing the 2013 guidance provided
above:

  *The Company’s projection excludes any future loss on early extinguishment
    of debt, impairment loss, the resolution of government investigations or
    other significant legal settlements, and other significant gains or losses
    that neither relate to the ordinary course of our business nor reflect our
    underlying business performance.
  *For 2012, Adjusted EBITDA excluding the net benefit from the resolution of
    the industry-wide governmental settlement and payment update relating to
    prior periods was $1.901 billion.
  *Included in the Company’s 2013 projection are anticipated
    sequester-related and other potential Medicare reimbursement cuts
    primarily occurring sometime after April 1, 2013, of 0.3% to 0.8% of net
    operating revenues.
  *Expressed as a percentage of net operating revenues, Health Information
    Technology (HITECH) electronic health records incentive reimbursement for
    2013 is projected to be approximately 1.1% to 1.2%. Electronic health
    records-related total costs and expenses for 2013, expressed as a
    percentage of net operating revenues, are projected to be approximately
    0.5% to 0.6%, including depreciation and amortization, expressed as a
    percentage of net operating revenues, of approximately 0.3% to 0.4%.
  *2013 projection includes three to four targeted hospital acquisitions.
  *Projected 2013 same-store hospital annual adjusted admissions growth does
    not take into account service closures and other unusual events.
  *Expressed as a percentage of net operating revenues, depreciation and
    amortization is projected to be approximately 5.7% to 5.9% for 2013, an
    increase over 2012 caused primarily by the investments being made in
    electronic health records; however, this is a fixed cost and the
    percentages may vary as revenue varies. Such amounts exclude the possible
    impact of any future hospital fixed asset impairments.
  *2013 projection includes an estimate of $0.05 to $0.07 per share (diluted)
    of acquisition costs that are required to be expensed.
  *Interest expense, expressed as a percentage of net operating revenues, is
    projected to be approximately 4.5% to 4.7%; 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 75% to 85% of
    total debt during 2013.
  *Expressed as a percentage of net operating revenues, equity in earnings of
    unconsolidated affiliates is projected to be approximately 0.3% to 0.4%
    for 2013.
  *Expressed as a percentage of net operating revenues, net income
    attributable to noncontrolling interests is projected to be approximately
    0.5% to 0.7% for 2013.
  *Expressed as a percentage of income from continuing operations before
    income taxes, provision for income tax is projected to be approximately
    31.5% to 33.5% for 2013.
  *Capital expenditures are projected as follows (in millions):

                      2013
             
                      Guidance
      Total           $800  to  $900
                                  

  *Net cash provided by operating activities is projected as follows (in
    millions):

                      2013
             
                      Guidance
      Total           $1,225  to  $1,300
                                    

  *Projected weighted average shares outstanding include an estimated
    dilutive impact from “in-the-money” stock options of approximately 1
    million to 2 million shares.

The projections set forth in this press release constitute forward-looking
statements within the meaning of Section 27A of the Securities Act, Section
21E of the Exchange Act and the Private Securities Litigation Reform Act of
1995. 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 are 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 and effect of adopted and potential federal and state
    healthcare legislation;
  *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;
  *increases in the amount and risk of collectability of patient accounts
    receivable;
  *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 health
    care 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;
  *our ability to successfully acquire additional hospitals or complete
    divestitures;
  *our ability to successfully integrate any acquired hospitals or to
    recognize expected synergies from such acquisitions;
  *our ability to obtain adequate levels of general and professional
    liability insurance;
  *timeliness of reimbursement payments received under government programs;
    and
  *the other risk factors set forth in our public filings with the Securities
    and Exchange Commission.

The consolidated operating results for the three and twelve months ended
December 31, 2012, are not necessarily indicative of the results that may be
experienced for any such future period or for any future year.

The Company cautions that the projections for calendar year 2013 set forth in
this press release are given as of the date hereof based on currently
available information. The Company is not undertaking any obligation to update
these projections as conditions change or other information becomes available.

Contact:

Community Health Systems, Inc.
W. Larry Cash, 615-465-7000
Executive Vice President and Chief Financial Officer