Community Health Systems, Inc. Announces First Quarter 2013 Results with Net Operating Revenues of $3.3 Billion

  Community Health Systems, Inc. Announces First Quarter 2013 Results with Net
  Operating Revenues of $3.3 Billion

Business Wire

FRANKLIN, Tenn. -- April 29, 2013

Community Health Systems, Inc. (NYSE: CYH) (the “Company”) today announced
financial and operating results for the three months ended March 31, 2013.

Net operating revenues for the three months ended March 31, 2013, totaled
$3.312 billion, a 0.4 percent increase compared with $3.297 billion for the
same period in 2012. Income from continuing operations decreased to
$96.3million, or $0.86 per share (diluted), for the three months ended March
31, 2013, compared with $99.7 million, or $0.85 per share (diluted), for the
same period in 2012. Net income attributable to Community Health Systems, Inc.
common stockholders was $0.86 per share (diluted) for the three months ended
March 31, 2013, compared with $0.85 per share (diluted) for the same period in
2012. The results for the three months ended March 31, 2013, include a $0.01
per share (diluted) loss from the early extinguishment of debt. Excluding this
loss, both income from continuing operations and net income attributable to
Community Health Systems, Inc. common stockholders were $0.87 per share
(diluted) for the three months ended March 31, 2013. Excluding a $0.48 per
share (diluted) net benefit from the resolution of an industry-wide
governmental settlement and a payment update relating to prior periods, a
$0.10 per share (diluted) charge to establish reserves for certain legal
matters, and a $0.44 per share (diluted) loss from the early extinguishment of
debt, both income from continuing operations and net income attributable to
Community Health Systems, Inc. common stockholders were $0.91 per share
(diluted) for the three months ended March 31, 2012. Weighted-average shares
outstanding (diluted) were 92.0 million for the three months ended March 31,
2013, and 88.9 million for the three months ended March 31, 2012.

Adjusted EBITDA for the three months ended March 31, 2013, was $493.8 million
compared with $535.5 million for the same period in 2012, representing a 7.8
percent decrease. Excluding the items referenced above for the prior year
period, adjusted EBITDA was $477.6 million for the three months ended March
31, 2012. Adjusted EBITDA is EBITDA adjusted to exclude discontinued
operations, loss from early extinguishment of debt, 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 March 31, 2013, was $57.2 million compared with $187.3
million for the same period in 2012.

The consolidated operating results for the three months ended March 31, 2013,
reflect a 4.4 percent decrease in total admissions and a 3.5 percent decrease
in total adjusted admissions compared with the same period in 2012. On a
same-store basis, admissions decreased 5.9 percent while adjusted admissions
decreased 5.2 percent compared with the same period in 2012. Seasonality
effects caused by the loss of one day from the 2012 leap year and the movement
of holidays on the calendar during the three months ended March 31, 2013,
resulted in approximately half of the decrease in adjusted admissions. On a
same-store basis, net operating revenues increased 1.4 percent compared with
the same period in 2012.

Commenting on the results, Wayne T. Smith, chairman, president and chief
executive officer of Community Health Systems, Inc. said, “Our results for the
first quarter reflect the current dynamic market conditions and a more
challenging operating environment for healthcare providers. Our ability to
adjust to these volatile conditions and realize improvement in revenues on a
same store basis reflects the strength of our operating model across all of
our markets. We have also focused on managing our cost structure in line with
current and expected volume trends.

“As we navigate through this transformative period for our industry, we look
forward to the growth opportunities ahead for Community Health Systems in 2013
as the fundamental aspects of healthcare reform begin to take shape. We
believe hospitals will ultimately benefit from the insurance coverage
expansion and the potential volume improvement. Further, we are well
positioned for success in this new environment with a strong and diverse
geographic footprint, a solid infrastructure and a proven ability to deliver
sustainable results.”

Smith added, “We have continued to identify unique opportunities for
collaboration in order to develop solutions that meet the demands of the
changing healthcare landscape. We recently announced a strategic alliance with
Cleveland Clinic, a nationally recognized multi-specialty academic center, to
enhance the quality of patient care, improve access to healthcare services,
reduce costs and drive operational excellence. This alliance offers favorable
synergies at both the clinical and operational level that will ultimately
create greater value for the services provided to our patients. We look
forward to working with Cleveland Clinic to enhance our market share and
further differentiate ourselves in the communities we serve.”

Included on pages 12, 13 and 14 of this press release are tables setting forth
the Company’s updated 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 Tuesday, April
30, 2013, at 9:00 a.m. Central, 10:00 a.m. Eastern, to review financial and
operating results for the first quarter ended March 31, 2013. 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 May 30, 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
                                                 March 31,
                                                 2013            2012
                                                                 
Net operating revenues                           $ 3,311,750     $ 3,297,035
Adjusted EBITDA (c)                                493,829         535,495
Income from continuing operations (d), (e),        96,323          99,718
(f), (g)
Net income attributable to Community Health        79,174          75,474
Systems, Inc. stockholders
                                                                 
Basic earnings (loss) per share attributable
to Community
Health Systems, Inc. common stockholders
(i):
Continuing operations (d), (e), (f), (g)         $ 0.87          $ 0.86
Discontinued operations                           -              (0.01     )
Net income                                       $ 0.87          $ 0.85      
                                                                 
Diluted earnings (loss) per share
attributable to Community
Health Systems, Inc. common stockholders
(i):
Continuing operations (d), (e), (f), (g)         $ 0.86          $ 0.85
Discontinued operations                           -              (0.01     )
Net income                                       $ 0.86          $ 0.85      
                                                                 
Weighted-average number of shares
outstanding (h):
Basic                                              91,003          88,675
Diluted                                            91,999          88,853
                                                                 
Net cash provided by operating activities        $ 57,154        $ 187,310

_____

For footnotes, see pages 10 and 11.

                      
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (a)(b)

(In thousands, except per share amounts)

(Unaudited)
                         
                         Three Months Ended March 31,
                         2013                       2012
                                         % of Net                    % of Net
                         Amount         Operating   Amount         Operating
                                         Revenues                    Revenues
Operating revenues
(net of contractual      $ 3,799,864                 $ 3,783,491
allowances and
discounts)
Provision for bad         488,114                  486,456      
debts
Net operating             3,311,750    100.0  %     3,297,035    100.0  %
revenues
                                                                     
Operating costs and
expenses:
Salaries and               1,577,148     47.6   %      1,524,975     46.3   %
benefits
Supplies                   497,841       15.0   %      498,579       15.1   %
Other operating            707,974       21.4   %      708,943       21.5   %
expenses
Electronic health
records incentive          (20,916   )   -0.6   %      (26,168   )   -0.8   %
reimbursement (d)
Rent                       71,554        2.2    %      67,224        2.0    %
Depreciation and          192,158      5.8    %     174,354      5.3    %
amortization
Total operating           3,025,759    91.4   %     2,947,907    89.4   %
costs and expenses
                                                                     
Income from
operations (d), (e),       285,991       8.6    %      349,128       10.6   %
(f), (g)
Interest expense,          156,350       4.8    %      152,175       4.7    %
net
Loss from early
extinguishment of          1,295         0.0    %      63,429        1.9    %
debt
Equity in earnings
of unconsolidated         (15,680   )   -0.5   %     (12,013   )   -0.4   %
affiliates
Income from
continuing                 144,026       4.3    %      145,537       4.4    %
operations before
income taxes
Provision for income      47,703       1.4    %     45,819       1.4    %
taxes
Income from
continuing                96,323       2.9    %     99,718       3.0    %
operations (d), (e),
(f), (g)
                                                                     
Discontinued
operations, net of
taxes:
Loss from operations      -            0.0    %     (466      )   0.0    %
of entities sold
Loss from
discontinued              -            0.0    %     (466      )   0.0    %
operations, net of
taxes
Net income                 96,323        2.9    %      99,252        3.0    %
Less: Net income
attributable to           17,149       0.5    %     23,778       0.7    %
noncontrolling
interests
Net income
attributable to
Community Health         $ 79,174       2.4    %    $ 75,474       2.3    %
Systems, Inc.
stockholders
                                                                     
Basic earnings
(loss) per share
attributable to
Community Health
Systems, Inc. common
stockholders (i):
Continuing
operations (d), (e),     $ 0.87                      $ 0.86
(f), (g)
Discontinued              -                         (0.01     )
operations
Net income               $ 0.87                     $ 0.85      
                                                                     
Diluted earnings
(loss) per share
attributable to
Community Health
Systems, Inc. common
stockholders (i):
Continuing
operations (d), (e),     $ 0.86                      $ 0.85
(f), (g)
Discontinued              -                         (0.01     )
operations
Net income               $ 0.86                     $ 0.85      
                                                                     
Weighted-average
number of shares
outstanding (h):
Basic                     91,003                    88,675    
Diluted                   91,999                    88,853    
                                                                     
_____

For footnotes, see pages 10 and 11.

                                                              
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)
                                                                    
                                                  Three Months Ended March 31,

                                                  
                                                  2013              2012
                                                                    
Net income                                        $  96,323         $  99,252
Other comprehensive income, net of income
taxes:
Net change in fair value of interest rate            15,770            10,536
swaps
Net change in fair value of                          1,809             2,667
available-for-sale securities
Amortization and recognition of unrecognized        733              1,140
pension cost components
Other comprehensive income                          18,312           14,343
Comprehensive income                                 114,635           113,595
Less: Comprehensive income attributable to          17,149           23,778
noncontrolling interests
Comprehensive income attributable to              $  97,486         $  89,817
Community Health Systems, Inc. stockholders
                                                                    
____

For footnotes, see pages 10 and 11.

                                                                                              
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Selected Operating Data (b)

($ In thousands)

(Unaudited)
                                                                                                       
                   For the Three Months Ended March 31,
                   Consolidated                                  Same-Store
                   2013              2012            %          2013              2012              %
                                                       Change                                          Change
Number of
hospitals (at        135               134                           134               134
end of period)
Licensed beds
(at end of           20,341            20,217                        20,241            20,217
period)
Beds in
service (at          17,169            17,198                        17,069            17,198
end of period)
Admissions           173,956           181,888         -4.4  %       171,138           181,888         -5.9 %
Adjusted             346,253           358,815         -3.5  %       340,151           358,815         -5.2 %
admissions
Patient days         790,522           804,412                       779,684           804,412
Average length       4.5               4.4                           4.6               4.4
of stay (days)
Occupancy rate
(average beds        51.2      %       51.7      %                   51.1      %       51.7      %
in service)
Net operating      $ 3,311,750       $ 3,297,035       0.4   %     $ 3,261,067       $ 3,214,767       1.4  %
revenues
Net inpatient
revenues as a
% of operating
revenues             44.6      %       46.1      %                   44.6      %       44.9      %
before
provision for
bad debts
Net outpatient
revenues as a
% of operating
revenues             53.5      %       51.9      %                   53.5      %       53.1      %
before
provision for
bad debts
Income from
operations         $ 285,991         $ 349,128         -18.1 %     $ 290,043         $ 288,876         0.4  %
(d), (e), (f),
(g)
Income from
operations as
a % of net           8.6       %       10.6      %                   8.9       %       9.0       %
operating
revenues
Depreciation
and                $ 192,158         $ 174,354                     $ 189,993         $ 174,354
amortization
Equity in
earnings of        $ (15,680   )     $ (12,013   )                 $ (15,680   )     $ (12,013   )
unconsolidated
affiliates
Liquidity
Data:
Adjusted           $ 493,829         $ 535,495         -7.8  %
EBITDA (c)
Adjusted
EBITDA as a %
of net               14.9      %       16.2      %
operating
revenues
Net cash
provided by        $ 57,154          $ 187,310
operating
activities
Net cash
provided by
operating
activities as        1.7       %       5.7       %
a % of net
operating
revenues
                                                                                                       
_____

For footnotes, see pages 10 and 11.

                                                           
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)
                                                                
                                             March 31,          December 31,
                                             2013               2012
ASSETS
Current assets
Cash and cash equivalents                    $ 285,048          $ 387,813
Patient accounts receivable, net of
allowance for doubtful accounts of             2,215,198          2,067,379
$2,258,229 and $2,201,875 at March 31,
2013 and December 31, 2012, respectively
Supplies                                       371,055            368,172
Prepaid income taxes                           -                  49,888
Deferred income taxes                          117,045            117,045
Prepaid expenses and taxes                     142,366            126,561
Other current assets                          288,071          302,284    
Total current assets                          3,418,783        3,419,142  
Property and equipment                         10,216,916         10,145,408
Less accumulated depreciation and             (3,121,782 )      (2,993,535 )
amortization
Property and equipment, net                   7,095,134        7,151,873  
Goodwill                                      4,408,362        4,408,138  
Other assets, net                             1,674,923        1,627,182  
Total assets                                 $ 16,597,202      $ 16,606,335 
                                                                
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt         $ 113,801          $ 89,911
Accounts payable                               741,175            825,914
Income taxes payable                           5,924              -
Accrued interest                               109,939            110,702
Accrued liabilities                           1,038,081        1,116,693  
Total current liabilities                     2,008,920        2,143,220  
Long-term debt                                9,424,383        9,451,394  
Deferred income taxes                         808,489          808,489    
Other long-term liabilities                   1,039,365        1,039,045  
Total liabilities                             13,281,157       13,442,148 
Redeemable noncontrolling interests in        375,506          367,666    
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;
95,042,056 shares issued and 94,066,507        950                929
shares outstanding at March 31, 2013 and
92,925,715 shares issued and 91,950,166
shares outstanding at December 31, 2012
Additional paid-in capital                     1,187,535          1,138,274
Treasury stock, at cost, 975,549 shares        (6,678     )       (6,678     )
at March 31, 2013 and December 31, 2012
Accumulated other comprehensive loss           (126,998   )       (145,310   )
Retained earnings                             1,823,166        1,743,992  
Total Community Health Systems, Inc.           2,877,975          2,731,207
stockholders’ equity
Noncontrolling interests in equity of         62,564           65,314     
consolidated subsidiaries
Total equity                                  2,940,539        2,796,521  
Total liabilities and equity                 $ 16,597,202      $ 16,606,335 
                                                                
_____

For footnotes, see pages 10 and 11.

                                                           
COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)
                                                                
                                               Three Months Ended
                                               March 31,
                                               2013            2012
Cash flows from operating activities
Net income                                     $ 96,323         $ 99,252
Adjustments to reconcile net income to net       
cash provided by operating activities:
Depreciation and amortization                    192,158          174,354
Stock-based compensation expense                 9,958            10,495
Loss from early extinguishment of debt           1,295            63,429
Excess tax benefit relating to stock-based       (5,358   )       (1,004     )
compensation
Other non-cash expenses, net                     5,269            2,569
Changes in operating assets and
liabilities, net of effects of
acquisitions and divestitures:
Patient accounts receivable                      (147,805 )       (163,484   )
Supplies, prepaid expenses and other             (1,752   )       (125,111   )
current assets
Accounts payable, accrued liabilities and        (97,678  )       96,109
income taxes
Other                                           4,744          30,701     
Net cash provided by operating activities       57,154         187,310    
                                                                
Cash flows from investing activities
Acquisitions of facilities and other             (4,750   )       (248,436   )
related equipment
Purchases of property and equipment              (112,859 )       (184,903   )
Proceeds from sale of property and               714              748
equipment
Increase in other investments                   (69,483  )      (67,708    )
Net cash used in investing activities           (186,378 )      (500,299   )
                                                                
Cash flows from financing activities
Proceeds from exercise of stock options          73,429           308
Repurchase of restricted stock shares for        (14,478  )       (9,032     )
payroll tax withholding requirements
Stock buy-back                                   (18,726  )       -
Deferred financing costs                         (878     )       (24,787    )
Excess tax benefit relating to stock-based       5,358            1,004
compensation
Redemption of noncontrolling investments         (436     )       (31,096    )
in joint ventures
Distributions to noncontrolling investors        (15,291  )       (27,038    )
in joint ventures
Borrowings under credit agreements               100,893          2,704,337
Issuance of long-term debt                       -                1,025,000
Proceeds from receivables facility               300,000          300,000
Repayments of long-term indebtedness            (403,412 )      (3,626,274 )
Net cash provided by financing activities       26,459         312,422    
                                                                
Net change in cash and cash equivalents          (102,765 )       (567       )
Cash and cash equivalents at beginning of       387,813        129,865    
period
Cash and cash equivalents at end of period     $ 285,048       $ 129,298    
                                                                
_____

For footnotes, see pages 10 and 11.
                                                          

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
                                                       March 31,
                                                       2013       2012
Income from continuing operations attributable to
Community Health Systems, Inc. common
stockholders:
Income from continuing operations, net of taxes        $ 96,323     $ 99,718
Less: Income from continuing operations
attributable to noncontrolling interests, net of        17,149      23,778 
taxes
Income from continuing operations attributable to
Community Health Systems, Inc. common stockholders     $ 79,174     $ 75,940 
- basic and diluted
                                                                    
Loss from discontinued operations attributable to
Community Health Systems, Inc. common
stockholders:
Loss from discontinued operations, net of taxes        $ -          $ (466   )
Less: Loss from discontinued operations
attributable to noncontrolling interests, net of        -           -      
taxes
Loss from discontinued operations attributable to
Community Health Systems, Inc. common stockholders     $ -          $ (466   )
- basic and diluted
                                                                             

(b) Continuing operating results exclude discontinued operations for the three
months ended March 31, 2013 and 2012. 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 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
                                                   March 31,
                                                   2013          2012
Adjusted EBITDA                                    $ 493,829       $ 535,495
Interest expense, net                                (156,350)       (152,175)
Provision for income taxes                           (47,703)        (45,819)
Loss from operations of entities sold, net of        -               (466)
taxes
Other non-cash expenses, net                         9,869           12,060
Changes in operating assets and liabilities,
net of effects of acquisitions and                  (242,491)      (161,785)
divestitures
Net cash provided by operating activities          $ 57,154        $ 187,310
                                                                     

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

(d) Included in income from operations and income from continuing operations
for the three months ended March 31, 2013, 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
$19.7million, including depreciation and amortization of approximately $14.0
million, for the three months ended March 31, 2013. Total costs and expenses
related to the implementation of electronic health records were approximately
$12.7 million, including depreciation and amortization of approximately
$6.1million, for the three months ended March 31, 2012.

(e) Included in non-same-store income from operations and income from
continuing operations are pre-tax 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 $2.0
million and $1.9 million for the three months ended March 31, 2013 and 2012,
respectively.

(f) Included in non-same-store income from operations and income from
continuing operations are pre-tax charges related to acquisition costs of $0.6
million and $4.3 million for the three months ended March 31, 2013 and 2012,
respectively.

(g) The following items are included in the results for the three months ended
March 31, 2012:

Included in non-same-store income from operations and income from continuing
operations for the three months ended March 31, 2012, is approximately
$102million of net operating revenues and approximately $9 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. 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 $0.48 per share
(diluted).

Included in non-same-store income from operations and income from continuing
operations for the three months ended March 31, 2012, are pre-tax charges of
$14.0 million to establish an accrual for the settlement of certain legal
matters. These items resulted in an after-tax charge to net income of $0.10
per share (diluted) for the three months ended March 31, 2012.

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

                                                          Three Months Ended
                                                            March 31,
                                                            2013      2012
Weighted-average number of shares outstanding - basic       91,003     88,675
Add effect of dilutive securities:
Stock awards and options                                    996        178
Weighted-average number of shares outstanding - diluted     91,999     88,853
                                                                       

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

___

                           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 update previous guidance provided on February 21, 2013
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 2013 guidance should be considered in conjunction with the
assumptions included herein. See page 14 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         $ 13,300    to  $ 13,600
bad debts (in millions)
Adjusted EBITDA (in millions)                     $ 1,975      to   $ 2,025
Income from continuing operations per             $ 3.50       to   $ 3.80
share - diluted
Same-store hospital annual adjusted                 -2.0   %   to     1.0    %
admissions growth
Weighted-average diluted shares (in                 91         to     93
millions)

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 estimated sequester-related
    cuts, primarily beginning April 1, 2013, and other new reimbursement cuts
    beginning October 1, 2013, of 0.5% to 0.7% 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  $ 850
                             

  *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 and restricted shares 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 months ended March 31, 2013,
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
 
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