(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Results of Operations and Financial Condition

Regulation FD Disclosure

Financial Statements and Exhibits

Exhibit

Number

Description

By:   /s/ Wayne T. Smith

 Wayne T. Smith

 Chairman of the Board and Chief Executive Officer

 (principal executive officer)

By:   /s/ Thomas J. Aaron

 Thomas J. Aaron

 Executive Vice President and Chief Financial Officer

 (principal financial officer)

By:   /s/ Kevin J. Hammons

 Kevin J. Hammons

 Senior Vice President, Assistant Chief Financial Officer,

 Chief Accounting Officer and Treasurer

 (principal accounting officer)

Exhibit Number

99.1

Thomas J. Aaron

Executive Vice President

and Chief Financial Officer

(615) 465-7000

Net operating revenues totaled $3.302 billion.

Net loss attributable to Community Health Systems, Inc. common stockholders was $(167) million, or $(1.47) per share (diluted), compared with net loss of $(110) million, or $(0.97) per share (diluted), for the same period in 2018. Excluding the adjusting items as presented in the table in footnote (e) on page 15, net loss attributable to Community Health Systems, Inc. common stockholders was $(0.47) per share (diluted), compared with net loss of $(0.01) per share (diluted) for the same period in 2018.

Adjusted EBITDA was $402 million.

Net cash provided by operating activities was $132 million, compared with net cash used in operating activities of $(12) million for the same period in 2018.

On a same-store basis, admissions increased 2.3 percent and adjusted admissions increased 1.8 percent, compared with the same period in 2018.

Valuation Allowance Recorded for Promissory Note

Change in Estimate for Professional Liability Claims Accrual

Net operating revenues

Net loss (f), (g)

Net loss attributable to Community Health Systems, Inc. stockholders

Adjusted EBITDA (c)

Net cash provided by (used in) operating activities

Basic (f), (g)

Diluted (e), (f), (g)

Weighted-average number of shares outstanding (d):

Basic

Diluted

Net operating revenues

Operating costs and expenses:

Salaries and benefits

Supplies

Other operating expenses

Government and other legal settlements and related costs (g)

Electronic health records incentive reimbursement

Lease cost and rent

Depreciation and amortization

Impairment and (gain) loss on sale of businesses, net (f)

Total operating costs and expenses

Income from operations (f), (g)

Interest expense, net

Loss (gain) from early extinguishment of debt

Equity in earnings of unconsolidated affiliates

Loss before income taxes

Benefit from income taxes

Net loss (f), (g)

Less: Net income attributable to noncontrolling interests

Net loss attributable to Community Health Systems, Inc. stockholders

Loss per share attributable to Community Health Systems, Inc. common stockholders:

Basic (f), (g)

Diluted (e), (f), (g)

Weighted-average number of shares outstanding (d):

Basic

Diluted

Net operating revenues

Operating costs and expenses:

Salaries and benefits

Supplies

Other operating expenses

Government and other legal settlements and related costs (g)

Electronic health records incentive reimbursement

Lease cost and rent

Depreciation and amortization

Impairment and (gain) loss on sale of businesses, net (f)

Total operating costs and expenses

Income from operations (f), (g)

Interest expense, net

Loss (gain) from early extinguishment of debt

Equity in earnings of unconsolidated affiliates

Loss before income taxes

Provision for (benefit from) income taxes

Net loss (f), (g)

Less: Net income attributable to noncontrolling interests

Net loss attributable to Community Health Systems, Inc. stockholders

Loss per share attributable to Community Health Systems, Inc. common stockholders:

Basic (f), (g)

Diluted (e), (f), (g)

Weighted-average number of shares outstanding (d):

Basic

Diluted

Net loss

Other comprehensive income (loss), net of income taxes:

Net change in fair value of interest rate swaps, net of tax

Net change in fair value of available-for-sale securities, net of tax

Amortization and recognition of unrecognized pension cost components, net of tax

Other comprehensive income

Comprehensive loss

Less: Comprehensive income attributable to noncontrolling interests

Comprehensive loss attributable to Community Health Systems, Inc. stockholders

Number of hospitals (at end of period)

Licensed beds (at end of period)

Beds in service (at end of period)

Admissions

Adjusted admissions

Patient days

Average length of stay (days)

Occupancy rate (average beds in service)

Net operating revenues

Net inpatient revenues as a % of net operating revenues

Net outpatient revenues as a % of net operating revenues

Income from operations (f), (g)

Income from operations as a % of net operating revenues

Depreciation and amortization

Equity in earnings of unconsolidated affiliates

Net loss attributable to Community Health Systems, Inc. stockholders

Net loss attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues

Adjusted EBITDA (c)

Adjusted EBITDA as a % of net operating revenues

Net cash provided by (used in) operating activities

Number of hospitals (at end of period)

Licensed beds (at end of period)

Beds in service (at end of period)

Admissions

Adjusted admissions

Patient days

Average length of stay (days)

Occupancy rate (average beds in service)

Net operating revenues

Net inpatient revenues as a % of net operating revenues

Net outpatient revenues as a % of net operating revenues

Income from operations (f), (g)

Income from operations as a % of net operating revenues

Depreciation and amortization

Equity in earnings of unconsolidated affiliates

Net loss attributable to Community Health Systems, Inc. stockholders

Net loss attributable to Community Health Systems, Inc. stockholders as a % of net operating revenues

Adjusted EBITDA (c)

Adjusted EBITDA as a % of net operating revenues

Net cash provided by operating activities

ASSETS

Current assets

Cash and cash equivalents

Patient accounts receivable

Supplies

Prepaid income taxes

Prepaid expenses and taxes

Other current assets

Total current assets

Property and equipment

Less accumulated depreciation and amortization

Property and equipment, net

Goodwill

Deferred income taxes

Other assets, net (i)

Total assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

Current maturities of long-term debt

Current operating lease liabilities (i)

Accounts payable

Accrued liabilities:

Employee compensation

Accrued interest

Other

Total current liabilities

Long-term debt (h)

Deferred income taxes

Long-term operating lease liabilities (i)

Other long-term liabilities

Total liabilities

Redeemable noncontrolling interests in equity of consolidated subsidiaries

STOCKHOLDERS’ DEFICIT

Community Health Systems, Inc. stockholders’ deficit:

Preferred stock, $.01 par value per share, 100,000,000 shares authorized; none issued

Common stock, $.01 par value per share, 300,000,000 shares authorized; 118,051,975 shares issued and outstanding at June 30, 2019, and 116,248,376 shares issued and outstanding at December 31, 2018

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

Total Community Health Systems, Inc. stockholders’ deficit

Noncontrolling interests in equity of consolidated subsidiaries

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Cash flows from operating activities

Net loss

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Government and other legal settlements and related costs (g)

Stock-based compensation expense

Impairment and (gain) loss on sale of businesses, net (f)

Loss (gain) from early extinguishment of debt

Other non-cash expenses, net

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

Patient accounts receivable

Supplies, prepaid expenses and other current assets

Accounts payable, accrued liabilities and income taxes

Other

Net cash provided by operating activities

Cash flows from investing activities

Acquisitions of facilities and other related businesses

Purchases of property and equipment

Proceeds from disposition of hospitals and other ancillary operations

Proceeds from sale of property and equipment

Purchases of available-for-sale securities and equity securities

Proceeds from sales of available-for-sale securities and equity securities

Increase in other investments

Net cash used in investing activities

Cash flows from financing activities

Repurchase of restricted stock shares for payroll tax withholding requirements

Deferred financing costs and other debt-related costs

Proceeds from noncontrolling investors in joint ventures

Redemption of noncontrolling investments in joint ventures

Distributions to noncontrolling investors in joint ventures

Borrowings under credit agreements

Issuance of long-term debt

Proceeds from ABL facility

Repayments of long-term indebtedness

Net cash used in financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Both financial and statistical results include the operating results of divested hospitals through the effective closing date of each respective divestiture. Same-store operating results and statistical information exclude the results of the hospitals divested or closed in 2018 and during the six months ended June 30, 2019. There were no discontinued operations reported for 2018 and the six months ended June 30, 2019.

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

Net loss attributable to Community Health Systems, Inc. common stockholders:

Net loss

Less: Income attributable to noncontrolling interests, net of taxes

Net loss attributable to Community Health Systems, Inc. common stockholders — basic and diluted

EBITDA is a non-GAAP financial measure which consists of net loss attributable to Community Health Systems, Inc. before interest, income taxes, and depreciation and amortization. Adjusted EBITDA, also a non-GAAP financial measure, is EBITDA adjusted to add back net income attributable to noncontrolling interests and to exclude the effect of discontinued operations, loss (gain) from early extinguishment of debt, impairment and (gain) loss on sale of businesses, expense incurred related to the sale of a majority ownership interest in the Company’s home care division, expense (income) related to government and other legal settlements and related costs, expense related to employee termination benefits and other restructuring charges, expense (income) from settlement and fair value adjustments on the CVR agreement liability related to the HMA legal proceedings and related legal expenses, the overall impact of the change in estimate related to net patient revenue recorded in the fourth quarter of 2017 resulting from the increase in contractual allowances and the provision for bad debts, the impact of a change in estimate to increase the professional liability claims accrual recorded during the second quarter of 2019 with respect to claims incurred in 2016 and prior years, and expense related to the valuation allowance recorded in the second quarter of 2019 to reserve the outstanding balance of a promissory note received from the buyer in connection with the sale of two of the Company’s hospitals in 2017. During the six months ended June 30, 2019, the Company experienced a significant increase in the amounts paid to settle outstanding professional liability claims, compared to the same period in the prior year and to previous actuarially determined estimates. This increase in claims paid related to claims incurred in 2016 and prior years and was primarily related to divested hospitals. The settlement of these claims at amounts greater than the previously determined actuarial estimates resulted in the Company recording a $70 million change in estimate during the three months ended June 30, 2019. Additionally, the expense related to the valuation allowance was recorded by the Company in the second quarter of 2019 following the filing of Chapter 11 bankruptcy proceedings by the buyer of these hospitals based on management’s assessment of the buyer’s ability to make payments under the promissory note in these bankruptcy court proceedings. The Company has included these adjustments in the calculation of Adjusted EBITDA based on our belief that the increase in the amounts paid to settle outstanding professional liability claims as well as the anticipated inability of such buyer to make payments under the promissory note were outside of the ordinary course of the Company’s operations and not reflective of the Company’s underlying results of operations in light of the intended purpose of Adjusted EBITDA in assessing the Company’s operational performance and comparing the Company’s performance between periods. The Company has from time to time sold noncontrolling interests in certain of its subsidiaries or acquired subsidiaries with existing noncontrolling interest ownership positions. The Company believes that it is useful to present Adjusted EBITDA because it adds back the portion of EBITDA attributable to these third-party interests and clarifies for investors the Company’s portion of EBITDA generated by continuing operations. The Company reports Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by management to assess the operating performance of the Company’s hospital operations and to make decisions on the allocation of resources. Adjusted EBITDA is also used to evaluate the performance of the Company’s executive management team and is one of the primary targets used to determine short-term cash incentive compensation. In addition, management utilizes Adjusted EBITDA in assessing the Company’s consolidated results of operations and operational performance and in comparing the Company’s results of operations between periods. The Company believes it is useful to provide investors and other users of the Company’s financial statements this performance measure to align with how management assesses the Company’s results of operations. Adjusted EBITDA also is comparable to a similar metric called Consolidated EBITDA, as defined in the Company’s senior secured credit facility, which is a key component in the determination of the Company’s compliance with some of the covenants under the Company’s senior secured credit facility (including the Company’s ability to service debt and incur capital expenditures), and is used to determine the interest rate and commitment fee payable under the senior secured credit facility (although Adjusted EBITDA does not include all of the adjustments described in the senior secured credit facility).

Net loss attributable to Community Health Systems, Inc. stockholders

Adjustments:

(Benefit from) provision for income taxes

Depreciation and amortization

Net income attributable to noncontrolling interests

Interest expense, net

Loss (gain) from early extinguishment of debt

Impairment and (gain) loss on sale of businesses, net

Expense from government and other legal settlements and related costs

Expense from settlement and fair value adjustments and legal expenses related to cases covered by the CVR

Expense related to employee termination benefits and other restructuring charges

Valuation allowance recorded for promissory note

Change in estimate for professional liability claims accrual

Adjusted EBITDA

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

Weighted-average number of shares outstanding—basic

Add effect of dilutive securities:

Stock awards and options

Weighted-average number of shares outstanding—diluted

The following supplemental table reconciles net loss attributable to Community Health Systems, Inc. common stockholders, as reported, on a per share (diluted) basis, to net (loss) income attributable to Community Health Systems, Inc. common stockholders per share (diluted) with the adjustments described herein (total per share amounts may not add due to rounding). The Company believes that the presentation of non-GAAP adjusted net (loss) income attributable to Community Health Systems, Inc. common stockholders per share (diluted) presents useful information to investors by highlighting the impact on net (loss) income attributable to Community Health Systems, Inc. common stockholders per share (diluted) of selected items used in calculating Adjusted EBITDA which may not reflect the Company’s underlying operating performance and assisting in comparing the Company’s results of operations between periods.

Net loss, as reported

Adjustments:

Loss (gain) from early extinguishment of debt

Impairment and (gain) loss on sale of businesses, net

Expense from government and other legal settlements and related costs

Expense from settlement and fair value adjustments and legal expenses related to cases covered by the CVR

Expense related to employee termination benefits and other restructuring charges

Valuation allowance recorded for promissory note

Change in estimate for professional liability claims accrual

Net (loss) income, excluding adjustments

Both income from operations and net loss for the three and six months ended June 30, 2019, included non-cash expense of approximately $33 million and $71 million, respectively, related to impairment charges to reduce the value of long-lived assets, including allocated goodwill, at hospitals that the Company has identified for sale or has sold, and at certain underperforming hospitals. These impairment charges do not have an impact on the calculation of the Company’s financial covenants under the Company’s Credit Facility. Both income from operations and net loss for the three and six months ended June 30, 2018, included non-cash expense of approximately $174 million and $202 million, respectively, primarily from impairment charges to reduce the value of long-lived assets, including allocated goodwill, at hospitals that the Company has identified for sale or has sold, and at certain under-performing hospitals.

The $(0.03) per share (diluted) and $(0.06) per share (diluted) of expense for “Government and other legal settlements and related costs” for the three and six months ended June 30, 2019, respectively, is the net impact of several lawsuits settled in principle during the related periods, and related legal expenses. The $(0.01) per share (diluted) and $(0.05) per share (diluted) of expense for “Government and other legal settlements and related costs” for the three and six months ended June 30, 2018, respectively, is the net impact of several lawsuits settled in principle during the related periods, and related legal expenses.

For the 12-month period ended June 30, 2019, the first lien net debt to consolidated EBITDA leverage ratio financial covenant under the Company’s Credit Facility limited the ratio of first lien net debt to consolidated EBITDA, as defined, to less than or equal to 5.25 to 1.00. We were in compliance with all such covenants at June 30, 2019, with a first lien net debt to consolidated EBITDA leverage ratio of approximately 4.96 to 1.00.

On January 1, 2019, the Company adopted the new lease accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the FASB Accounting Standards Codification (“ASC”) as topic 842 (“ASC 842”). The lease standard in ASC 842 requires lessees to recognize most leases on their balance sheet with a right-of-use asset and a corresponding lease liability and classified as either finance or operating leases, which will impact the manner and timing of expense recognition of such leases over the lease term. Immaterial leases and leases with an initial lease term 12 months or less are excluded from recognition on the balance sheet.

Net operating revenues (in millions)

Adjusted EBITDA (in millions)

Net loss per share – diluted

Same-store hospital annual adjusted admissions growth

Weighted-average diluted shares

The 2019 projections include the impact of completed divestitures and the planned divestitures subject to definitive agreements which are expected to close in 2019.

The Company’s projections exclude the following:

Effect of debt refinancing activities, including gains and losses from early extinguishment of debt;

Impairment of goodwill and long-lived assets;

Gains or losses from the sales of businesses;

Employee termination benefits and restructuring costs;

Resolution of government investigations or other significant legal settlements;

Costs incurred in connection with divestitures; and

Other significant gains or losses that neither relate to the ordinary course of business nor reflect the Company’s underlying business performance.

Same-store hospital annual adjusted admissions growth of 0.5% to 1.5% for 2019, which does not take into account service closures and weather-related or other unusual events.

Expressed as a percentage of net operating revenues, depreciation and amortization of approximately 4.7% for 2019. Additionally, this is a fixed cost and the percentages may change as revenue varies. Such amounts exclude the possible impact of any future hospital fixed asset impairments.

Interest expense, expressed as a percentage of net operating revenues, of approximately 8.0%; however, this percentage may vary as revenue varies. Interest expense has been adjusted to reflect the repayment of debt with proceeds from the divestitures noted above, based on the expected timing of those divestitures. Total fixed rate debt, including swaps, is expected to average approximately 95% to 99% of total debt during 2019.

Expressed as a percentage of net operating revenues, net income attributable to noncontrolling interests of approximately 0.6% to 0.7% for 2019.

Expressed as a percentage of net operating revenues, provision for income taxes of approximately 1.1% to 1.2% for 2019.

Net loss attributable to Community Health Systems, Inc. stockholders (1)

Adjustments:

Depreciation and amortization

Interest expense, net

Provision for income taxes

Net income attributable to noncontrolling interests

Adjusted EBITDA (1)

The Company does not include in this reconciliation the impact of certain items not included in the Company’s forecast set forth above that would be included in a reconciliation of historical net loss attributable to Community Health Systems, Inc. stockholders to Adjusted EBITDA such as, but not limited to, (gains) losses from early extinguishment of debt, impairment and (gain) loss on sale of businesses, and expense (income) related to government and other legal settlements and related costs, in light of the fact that such items are not determinable, and/or the inherent difficulty in quantifying such projected amounts, on a forward-looking basis.

Capital expenditures are projected as follows (in millions):

Total

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

Total

Diluted weighted-average shares outstanding are projected to be approximately 114.0 million to 114.5 million for 2019.

general economic and business conditions, both nationally and in the regions in which we operate;

the impact of current or future federal and state health reform initiatives, including, without limitation, the Affordable Care Act, and the potential for the Affordable Care Act to be repealed or found unconstitutional or for additional changes to the law, its implementation or its interpretation (including through executive orders and court challenges);

the extent to which states support increases, decreases or changes in Medicaid programs, implement health insurance exchanges or alter the provision of healthcare to state residents through regulation or otherwise;

the future and long-term viability of health insurance exchanges and potential changes to the beneficiary enrollment process;

risks associated with our substantial indebtedness, leverage and debt service obligations, and the fact that a substantial portion of our indebtedness will mature and become due in the near future, including our ability to refinance such indebtedness on acceptable terms or to incur additional indebtedness;

demographic changes;

changes in, or the failure to comply with, federal, state or local laws or governmental regulations affecting our business;

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 provider arrangements with payors and the terms of these arrangements, which may be further affected by the increasing consolidation of health insurers and managed care companies and vertical integration efforts involving payors and healthcare providers;

changes in, or the failure to comply with, contract terms with payors and changes in reimbursement rates paid by federal or state healthcare programs or commercial payors;

any potential additional impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets;

changes in inpatient or outpatient Medicare and Medicaid payment levels and methodologies;

the effects related to the continued implementation of the sequestration spending reductions and the potential for future deficit reduction legislation;

increases in the amount and risk of collectability of patient accounts receivable, including decreases in collectability which may result from, among other things, self-pay growth and difficulties in recovering payments for which patients are responsible, including co-pays and deductibles;

the efforts of insurers, healthcare providers, large employer groups and others to contain healthcare costs, including the trend toward value-based purchasing;

increases in wages as a result of inflation or competition for highly technical positions and rising supply and drug costs due to market pressure from pharmaceutical companies and new product releases;

liabilities and other claims asserted against us, including self-insured malpractice claims;

competition;

our ability to attract and retain, at reasonable employment costs, qualified personnel, key management, physicians, nurses and other healthcare workers;

trends toward treatment of patients in less acute or specialty healthcare settings, including ambulatory surgery centers or specialty hospitals;

changes in medical or other technology;

changes in U.S. generally accepted accounting principles;

the availability and terms of capital to fund any additional acquisitions or replacement facilities or other capital expenditures;

our ability to successfully make acquisitions or complete divestitures, including the disposition of hospitals and non-hospital businesses pursuant to our portfolio rationalization and deleveraging strategy, our ability to complete any such acquisitions or divestitures on desired terms or at all, the timing of the completion of any such acquisitions or divestitures, and our ability to realize the intended benefits from any such acquisitions or divestitures;

the impact that changes in our relationships with joint venture or syndication partners could have on effectively operating our hospitals or ancillary services or in advancing strategic opportunities;

our ability to successfully integrate any acquired hospitals, or to recognize expected synergies from acquisitions;

the impact of seasonal severe weather conditions, including the timing and amount of insurance recoveries in relation to severe weather events;

our ability to obtain adequate levels of insurance, including general liability, professional liability, and directors and officers liability insurance;

timeliness of reimbursement payments received under government programs;

effects related to outbreaks of infectious diseases;

the impact of prior or potential future cyber-attacks or security breaches;

any failure to comply with the terms of the Corporate Integrity Agreement;

the concentration of our revenue in a small number of states;

our ability to realize anticipated cost savings and other benefits from our current strategic and operational cost savings initiatives;

changes in interpretations, assumptions and expectations regarding the Tax Cuts and Jobs Act; and

the other risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on February 20, 2019, and our other public filings with the Securities and Exchange Commission.