COMMUNITY HEALTH SYSTEMS INC

Previous wording

During the six months ended June 30, 2026, we paid approximately $53 million to acquire the operating assets and related businesses of certain physician practices and clinics, as well as controlling interests in two ambulatory surgery centers. The purchase price for these transactions will primarily be allocated to working capital, goodwill and noncontrolling interests.

Current wording

During the nine months ended September 30, 2026, we paid approximately $54 million to acquire the operating assets and related businesses of certain physician practices and clinics, as well as controlling interests in two ambulatory surgery centers. The purchase price for these transactions will primarily be allocated to working capital, goodwill and noncontrolling interests.

Previous wording

During the six months ended June 30, 2026, as reflected in the table below, we completed the divestiture of four hospitals in Arkansas, three hospitals in Pennsylvania, one hospital in Alabama, and sold our 80% ownership interest in one hospital in Tennessee. These hospitals represented annual net operating revenues in 2025 of approximately $1.6 billion and we received total net proceeds of approximately $1.2 billion in connection with these dispositions.

Current wording

During the nine months ended September 30, 2026, as reflected in the table below, we completed the divestiture of four hospitals in Arkansas, three hospitals in Pennsylvania, one hospital in Alabama, and sold our 80% ownership interest in one hospital in Tennessee. These hospitals represented annual net operating revenues in 2025 of approximately $1.6 billion and we received total net proceeds of approximately $1.2 billion in connection with these dispositions.

Previous wording

The following table provides a summary of hospitals that we divested (or, in the cases of Merit Health Biloxi and Merit Health Madison, in which we sold our 50% ownership interest, and in the cases of Tennova Healthcare - Clarksville and Cedar Park Regional Medical Center, in which we sold our 80% ownership interest) during the six months ended June 30, 2026 and the year ended December 31, 2025.

Current wording

The following table provides a summary of hospitals that we divested (or, in the cases of Merit Health Biloxi and Merit Health Madison, in which we sold our 50% ownership interest, and in the cases of Tennova Healthcare - Clarksville and Cedar Park Regional Medical Center, in which we sold our 80% ownership interest) during the nine months ended September 30, 2026 and the year ended December 31, 2025.

Previous wording

an after-tax benefit of $101 million resulting primarily from a gain from the divestiture of one hospital, partially offset by (i) a net impairment charge to adjust the carrying value of long-lived assets at a hospital that was divested at a sales price below carrying value, and (ii) an impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Current wording

an after-tax charge of $11 million resulting primarily from an impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Previous wording

an after-tax charge of $4 million for loss from early extinguishment of debt,

Current wording

an after-tax charge of $26 million for loss from early extinguishment of debt, and

Previous wording

an after-tax benefit of $151 million resulting from a gain related to the divestiture of two hospitals, partially offset by a loss on the divestiture of our ownership interest in a hospital and the impairment of certain long-lived assets that were idled, or disposed as well as divestiture related costs.

Current wording

an after-tax charge of $16 million resulting from the impairment of certain long-lived assets that were idled, or disposed.

Previous wording

Consolidated inpatient admissions for the three months ended June 30, 2026, decreased 11.4%, compared to the same period in 2025. Consolidated adjusted admissions for the three months ended June 30, 2026, decreased 11.7%, compared to the same period in 2025. Same-store inpatient admissions for the three months ended June 30, 2026, increased 1.9%, compared to the same period in 2025, and same-store adjusted admissions for the three months ended June 30, 2026, increased 2.9%, compared to the same period in 2025.

Current wording

Consolidated inpatient admissions for the three months ended September 30, 2026, decreased 12.3%, compared to the same period in 2025. Consolidated adjusted admissions for the three months ended September 30, 2026, decreased 11.9%, compared to the same period in 2025. Same-store inpatient admissions for the three months ended September 30, 2026, increased 2.2%, compared to the same period in 2025, and same-store adjusted admissions for the three months ended September 30, 2026, increased 3.6%, compared to the same period in 2025.

Previous wording

We had net income of $104 million during the three months ended June 30, 2026, compared to $320 million for the same period in 2025. Net income for the three months ended June 30, 2026 included the following:

Current wording

We had net income of $28 million during the nine months ended September 30, 2026, compared to $516 million for the same period in 2025. Net income for the nine months ended September 30, 2026 included the following:

Previous wording

an after-tax benefit of $115 million resulting primarily from gains from the divestiture of one hospital and the divestiture of a controlling interest in another hospital, partially offset by (i) a net impairment charge to adjust the carrying value of long-lived assets at hospitals that were divested at a sales price below carrying value, and (ii) an impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Current wording

an after-tax benefit of $105 million resulting primarily from gains from the divestiture of one hospital and the divestiture of a controlling interest in another hospital, partially offset by (i) a net impairment charge to adjust the carrying value of long-lived assets at hospitals that were divested at a sales price below carrying value and (ii) an impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Previous wording

an after-tax benefit of $139 million for gain from early extinguishment of debt, and

Current wording

an after-tax benefit of $113 million for gain from early extinguishment of debt,

Previous wording

an after-tax benefit of $148 million resulting from a gain related to the divestiture of four hospitals, partially offset by losses on the divestiture of our ownership interest in two separate hospitals and the impairment of certain long-lived assets that were idled or disposed as well as divestiture related costs.

Current wording

an after-tax benefit of $132 million resulting from a gain related to the divestiture of four hospitals, partially offset by losses on the divestiture of our ownership interest in two separate hospitals and the impairment of certain long-lived assets that were idled or disposed as well as divestiture related costs.

Previous wording

Both consolidated inpatient admissions and adjusted admissions decreased 11.1% for the six months ended June 30, 2026, compared to the same period in 2025. Same-store inpatient admissions for the six months ended June 30, 2026, were flat, compared to the same period in 2025, and same-store adjusted admissions for the six months ended June 30, 2026, increased 1.0%, compared to the same period in 2025.

Current wording

Consolidated inpatient admissions for the nine months ended September 30, 2026, decreased 11.5%, compared to the same period in 2025. Consolidated adjusted admissions for the nine months ended September 30, 2026, decreased 11.4%, compared to the same period in 2025. Same-store inpatient admissions for the nine months ended September 30, 2026, increased 0.7%, compared to the same period in 2025, and same-store adjusted admissions for the nine months ended September 30, 2026, increased 1.9%, compared to the same period in 2025.

Previous wording

Self-pay revenues represented approximately 1.4% and 0.6% for the three months ended June 30, 2026 and 2025, respectively, and 1.2% and 0.6% for the six months ended June 30, 2026 and 2025, respectively. The amount of foregone revenue related to providing charity care services as a percentage of net operating revenues was approximately 18.3% and 10.7% for the three months ended June 30, 2026 and 2025, respectively, and 14.9% and 10.2% for the six months ended June 30, 2026 and 2025, respectively. Direct and indirect costs incurred in providing charity care services as a percentage of net operating revenues was approximately 1.8% and 1.1% for the three months ended June 30, 2026 and 2025, respectively, and 1.5% and 1.1% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

Self-pay revenues represented approximately 1.7% and 0.8% of net operating revenues for the three months ended September 30, 2026 and 2025, respectively, and 1.4% and 0.7% for the nine months ended September 30, 2026 and 2025, respectively. The amount of foregone revenue related to providing charity care services as a percentage of net operating revenues was approximately 21.2% and 13.6% for the three months ended September 30, 2026 and 2025, respectively, and 16.9% and 11.3% for the nine months ended September 30, 2026 and 2025, respectively. Direct and indirect costs incurred in providing charity care services as a percentage of net operating revenues were approximately 2.1% and 1.4% for the three months ended September 30, 2026 and 2025, respectively, and 1.7% and 1.2% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The healthcare industry is subject to changing political, regulatory, economic and other influences that may affect our business and is heavily regulated. Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid policies, policies affecting the size of the uninsured population and enforcement and interpretation of fraud and abuse laws. The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, has increased regulatory uncertainty and the likelihood of ongoing significant policy changes. President Trump has issued several executive orders that impact or may impact the healthcare industry, including orders focused on price transparency and tariffs, and an executive order that established a presidential advisory commission tasked with restructuring government agencies and reducing government expenditures, although this commission was disbanded in mid-2025. Other actions by the presidential administration have resulted in holds on or cancellations of congressionally authorized spending as well as interruptions in the distribution of government funds. In addition, the presidential administration has significant influence on healthcare policy changes through government agency regulation. In March 2025, the Department of Health and Human Services, or HHS, announced a significant agency restructuring that will reduce the HHS workforce and consolidate divisions of the agency. HHS also announced a change in its policy on public participation in rulemaking that may negatively affect the ability of industry participants to receive advance notice of and offer feedback on some policy changes. Regulatory uncertainty has also increased as a result of recent decisions issued by the U.S. Supreme Court that affect review of federal agency actions, including Loper Bright Enterprises v. Raimondo. These U.S. Supreme Court decisions increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts and expand the timeline in which a plaintiff can sue regulators. These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions and result in inconsistent judicial interpretations and delays in and other impacts to agency rulemaking and legislative processes. Moreover, evolving interpretations or enforcement of applicable laws and regulations could require us to make changes in our facilities or operations or require us to incur other costs to comply. For example, in May 2025, CMS rescinded Emergency Medical Treatment and Active Labor Act, or EMTALA, guidance issued to hospitals by the prior presidential administration regarding the preemption of state laws restricting abortion. Hospitals may face conflicting interpretations as to the requirements imposed by EMTALA in relation to state laws that address access to abortion or other reproductive health servic…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The healthcare industry is subject to changing political, regulatory, economic and other influences that may affect our business and is heavily regulated. Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid policies, policies affecting the size of the uninsured population and enforcement and interpretation of fraud and abuse laws. The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, has increased regulatory uncertainty and the likelihood of ongoing significant policy changes. President Trump has issued several executive orders that impact or may impact the healthcare industry, including orders focused on price transparency and tariffs, and an executive order that established a presidential advisory commission tasked with restructuring government agencies and reducing government expenditures, although this commission was disbanded in mid-2025. Other actions by the presidential administration have resulted in holds on or cancellations of congressionally authorized spending as well as interruptions in the distribution of government funds. In addition, the presidential administration has significant influence on healthcare policy changes through government agency regulation. In March 2025, the Department of Health and Human Services, or HHS, announced a significant agency restructuring that will reduce the HHS workforce and consolidate divisions of the agency. HHS also announced a change in its policy on public participation in rulemaking that may negatively affect the ability of industry participants to receive advance notice of and offer feedback on some policy changes. Regulatory uncertainty has also increased as a result of recent decisions issued by the U.S. Supreme Court that affect review of federal agency actions, including Loper Bright Enterprises v. Raimondo. These U.S. Supreme Court decisions increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts and expand the timeline in which a plaintiff can sue regulators. These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions and result in inconsistent judicial interpretations and delays in and other impacts to agency rulemaking and legislative processes. Moreover, evolving interpretations or enforcement of applicable laws and regulations could require us to make changes in our facilities or operations or require us to incur other costs to comply. For example, in May 2025, the Centers for Medicare & Medicaid Services, or CMS, rescinded Emergency Medical Treatment and Active Labor Act, or EMTALA, guidance issued to hospitals by the prior presidential administration regarding the preemption of state laws restricting abortion. Hospitals may face conflicting interpretations as to the requirements imposed by EMTALA in relation to state laws that address acce…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In the last two decades, the U.S. Congress and certain state legislatures have introduced and passed a large number of proposals and legislation affecting the healthcare system, including laws intended to increase access to health insurance and reduce healthcare costs and government spending and increase or, more recently, decrease access to health insurance. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively, the Affordable Care Act, expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms, but changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected or may affect the number of individuals that elect or are able to obtain public or private health insurance and the scope of such coverage, if obtained. For example, COVID-19 relief legislation, as modified by subsequent legislation, temporarily enhanced subsidies available for individuals to purchase coverage through Affordable Care Act marketplaces through 2025, but these enhanced subsidies expired at the end of 2025, increasing coverage costs for many individuals. Further, CMS issued final rules in 2025 and 2026 affecting individual market coverage that include changes such as expanding eligibility for high-deductible, low-premium plans and allowing for non-network plans to be offered on federally-facilitated marketplaces. These rules are currently the subject of legal challenges. Moreover, the federal budget reconciliation legislation enacted on July 4, 2025, or the 2025 Reconciliation Law, includes healthcare policy changes that are expected to decrease access to health insurance. Among other provisions, the 2025 Reconciliation Law makes changes to Affordable Care Act marketplace insurance, including effectively ending automatic renewals of coverage by requiring pre-enrollment verification of eligibility and restricting subsidized marketplace coverage and Medicare and Medicaid eligibility based on immigration status. Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable Care Act consumer protections. Any of these developments could increase rates of uninsured and underinsured individuals and destabilize insurance markets.

Current wording

In the last two decades, the U.S. Congress and certain state legislatures have introduced and passed a large number of proposals and legislation affecting the healthcare system, including laws intended to increase access to health insurance and reduce healthcare costs and government spending and increase or, more recently, decrease access to health insurance. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively, the Affordable Care Act, expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms, but changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected or may affect the number of individuals that elect or are able to obtain public or private health insurance and the scope of such coverage, if obtained. For example, COVID-19 relief legislation, as modified by subsequent legislation, temporarily enhanced subsidies available for individuals to purchase coverage through Affordable Care Act marketplaces through 2025, but these enhanced subsidies expired at the end of 2025, increasing coverage costs for many individuals. Further, CMS issued final rules in 2025 and 2026 affecting individual market coverage that include changes such as expanding eligibility for high-deductible, low-premium plans and allowing for non-network plans to be offered on federally-facilitated marketplaces. These rules are currently the subject of legal challenges. Moreover, the federal budget reconciliation legislation enacted on July 4, 2025, or the 2025 Reconciliation Law, includes healthcare policy changes that are expected to decrease access to health insurance. Among other provisions, the 2025 Reconciliation Law makes changes to Affordable Care Act marketplace insurance, including effectively ending automatic renewals of coverage by requiring pre-enrollment verification of eligibility and restricting subsidized marketplace coverage and Medicare and Medicaid eligibility based on immigration status. Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable

Previous wording

The number of people with Affordable Care Act marketplace coverage has decreased since 2025 and may continue to decrease, including as a result of changes in federal policy such as the expiration of enhanced subsidies for individuals to purchase coverage through the Affordable Care Act marketplaces at the end of 2025 as noted above and enrollment integrity efforts. Although we are unable to fully assess the impact of these developments, we believe that the decrease in Affordable Care Act marketplace coverage adversely impacted our financial results during the three months ended June 30, 2026, and may continue to adversely impact our financial results.

Current wording

The number of people with Affordable Care Act marketplace coverage has decreased since 2025 and may continue to decrease, including as a result of changes in federal policy such as the expiration of enhanced subsidies for individuals to purchase coverage through the Affordable Care Act marketplaces at the end of 2025 as noted above and enrollment integrity efforts. Although we are unable to fully assess the impact of these developments, we believe that the decrease in Affordable Care Act marketplace coverage adversely impacted our financial results during the three and nine months ended September 30, 2026, and may continue to adversely impact our financial results.

Previous wording

Of critical importance to us is the potential impact of any changes specific to the Medicaid program, including changes resulting from legislative and administrative actions at the federal and state levels. Federal actions may impact funding for, or the structure of, the Medicaid program and may shape provider reimbursement rates, eligibility and coverage policies and other aspects of the state Medicaid programs in a manner that could materially and adversely affect us. For example, the 2025 Reconciliation Law includes policy changes that have resulted in and are expected to continue to result in Medicaid spending reductions and changes in administration of state Medicaid programs. The law limits eligibility for Medicaid, including by imposing work or community engagement requirements for adults in Medicaid expansion states, and limits some Medicaid financing mechanisms, including through restrictions intended to reduce the federal matching funds received by state Medicaid programs. Reductions in federal matching funds and increased state obligations and administrative burden could have significant effects, such as resulting in state limitations on eligibility or coverage or changes to Medicaid expansion programs, particularly if states are unable to offset reductions. The effects of the 2025 Reconciliation Law could be particularly significant in states that expanded Medicaid under the Affordable Care Act, especially if a significant number of individuals formerly covered under Medicaid expansion lose Medicaid eligibility but do not obtain other health insurance coverage. Of the 12 states in which we operated hospitals as of June 30, 2026, six states have taken action to expand their Medicaid programs. The other six states in which we operated hospitals as of June 30, 2026, have opted out of Medicaid expansion, including Florida, Alabama, Tennessee, Mississippi and Texas, in which states we operated a significant number of hospitals as of June 30, 2026. Although we are unable to fully assess the magnitude of the future impact of the 2025 Reconciliation Law, we expect the law to adversely impact our revenue and financial results as well as increase the amount of our self-pay patients, including as a result of this legislation’s limitations on Medicaid eligibility and reductions in federal Medicaid funding as noted above.

Current wording

Of critical importance to us is the potential impact of any changes specific to the Medicaid program, including changes resulting from legislative and administrative actions at the federal and state levels. Federal actions may impact funding for, or the structure of, the Medicaid program and may shape provider reimbursement rates, eligibility and coverage policies and other aspects of the state Medicaid programs in a manner that could materially and adversely affect us. For example, the 2025 Reconciliation Law includes policy changes that have resulted in and are expected to continue to result in Medicaid spending reductions and changes in the structure and administration of state Medicaid programs. The law limits eligibility for Medicaid, including by imposing work or community engagement requirements for adults in Medicaid expansion states, and limits some Medicaid financing mechanisms, including through restrictions intended to reduce the federal matching funds received by state Medicaid programs. Reductions in federal matching funds and increased state obligations and administrative burden could have significant effects, such as resulting in state limitations on eligibility or coverage or changes to Medicaid expansion programs, particularly if states are unable to offset reductions. The effects of the 2025 Reconciliation Law could be particularly significant in states that expanded Medicaid under the Affordable Care Act, especially if a significant number of individuals formerly covered under Medicaid expansion lose Medicaid eligibility but do not obtain other health insurance coverage. Of the 12 states in which we operated hospitals as of September 30, 2026, six states have taken action to expand their Medicaid programs. The other six states in which we operated hospitals as of September 30, 2026 (Florida, Georgia, Alabama, Tennessee, Mississippi and Texas) have opted out of Medicaid expansion. Although we are unable to fully assess the magnitude of the future impact of the 2025 Reconciliation Law, we expect the law to adversely impact our revenue and financial results as well as increase the amount of our self-pay patients, including as a result of this legislation’s limitations on Medicaid eligibility and reductions in federal Medicaid funding as noted above.

Previous wording

The 2025 Reconciliation Law authorized the Rural Health Transformation, or RHT, Program, which is intended to strengthen and modernize healthcare in rural communities. Through the RHT Program, $50 billion in federal grants will be distributed over five years, with $10 billion available in each of federal fiscal years 2026 through 2030, which may partially offset Medicaid spending reductions expected as a result of the 2025 Reconciliation Law as described herein, although the magnitude of such grants will be far less than the anticipated Medicaid spending reductions. In December 2025, CMS announced that all 50 states will receive awards under the RHT Program. Providers may be granted subcontracts or subawards, and providers could receive payments for healthcare items and services, subject to funding policies and limitations. All funds must be spent before October 1, 2032. We are actively evaluating and pursuing various funding opportunities in each state in which we operate. No funds have been obligated to or received by us during the three and six months ended June 30, 2026.

Current wording

The 2025 Reconciliation Law authorized the Rural Health Transformation, or RHT, Program, which is intended to strengthen and modernize healthcare in rural communities. Through the RHT Program, $50 billion in federal grants will be distributed over five years, with $10 billion available in each of federal fiscal years 2026 through 2030, which may partially offset Medicaid spending reductions expected as a result of the 2025 Reconciliation Law as described herein, although the magnitude of such grants will be far less than the anticipated Medicaid spending reductions. In December 2025, CMS announced that all 50 states will receive awards under the RHT Program. Providers may be granted subcontracts or subawards, and providers could receive payments for healthcare items and services, subject to funding policies and limitations. All funds must be spent before October 1, 2032.

Previous wording

Reimbursement by government programs may be affected by broad shifts in payment policy. For example, recent changes related to the 340B Drug Pricing Program have implications for all hospitals reimbursed under the outpatient prospective payment system, or PPS, including those, like ours, that do not participate in the program. In 2018, CMS implemented a payment policy that reduced Medicare payments for 340B hospitals for most drugs obtained at 340B-discounted rates and that resulted in increased payments for non-340B hospitals. In June 2022, the U.S. Supreme Court, in American Hospital Association v. Becerra, invalidated past payment cuts for hospitals participating in the 340B Drug Pricing Program. In light of the U.S. Supreme Court decision and to achieve budget neutrality, CMS reduced payment rates for non-drug services under the outpatient PPS for calendar year 2023, and lump sum payments were distributed to affected 340B providers as the remedy for calendar years 2018 through 2022. This reduction to payment rates adversely affected our results for the three and six months ended June 30, 2026. Moreover, in order to comply with budget neutrality requirements, HHS finalized a corresponding offset in future non-drug item and service payments for all outpatient PPS providers (except new providers) that will reduce the outpatient PPS conversion factor by 0.5% annually until the past invalidated payments are offset. This annual 0.5% reduction began in calendar year 2026 and was expected to continue for approximately 16 years, but CMS has indicated that it may accelerate this timeline by implementing a larger reduction beginning in calendar year 2027. We anticipate that the reduction to the outpatient PPS conversion factor will adversely impact our results.

Current wording

Reimbursement by government programs may be affected by broad shifts in payment policy. For example, recent changes related to the 340B Drug Pricing Program have implications for all hospitals reimbursed under the outpatient prospective payment system, or PPS, including those, like ours, that do not participate in the program. In 2018, CMS implemented a payment policy that reduced Medicare payments for 340B hospitals for most drugs obtained at 340B-discounted rates and that resulted in increased payments for non-340B hospitals. In June 2022, the U.S. Supreme Court, in American Hospital Association v. Becerra, invalidated past payment cuts for hospitals participating in the 340B Drug Pricing Program. In light of the U.S. Supreme Court decision and to achieve budget neutrality, CMS reduced payment rates for non-drug services under the outpatient PPS for calendar year 2023, and lump sum payments were distributed to affected 340B providers as the remedy for calendar years 2018 through 2022. This reduction to payment rates adversely affected our results for the three and nine months ended September 30, 2026. Moreover, in order to comply with budget neutrality requirements, HHS finalized a corresponding offset in future non-drug item and service payments for all outpatient PPS providers (except new providers) that will reduce the outpatient PPS conversion factor by 0.5% annually until the past invalidated payments are offset. This annual 0.5% reduction began in calendar year 2026 and was expected to continue for approximately 16 years, but CMS has proposed significantly accelerating this timeline by implementing a larger reduction beginning in calendar year 2027. CMS also proposed redistributing funds resulting from proposed 340B drug payment adjustments in a manner that would increase the conversion factor for all hospitals paid under the outpatient PPS, which may increase our payment rates.

Previous wording

Net operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems and provisions of cost-based reimbursement and other payment methods. In addition, we are reimbursed by non-governmental payors using a variety of payment methodologies. Amounts we receive for the treatment of patients covered by Medicare, Medicaid and non-governmental payors are generally less than our standard billing rates. We account for the differences between the estimated program reimbursement rates and our standard billing rates as contractual allowance adjustments, which we deduct from gross revenues to arrive at net operating revenues. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties. We account for adjustments to previous program reimbursement estimates as contractual allowance adjustments and report them in the periods that such adjustments become known. Contractual allowance adjustments related to final settlements and previous program reimbursement estimates impacted net operating revenues by an insignificant amount in both of the three- and six-month periods ended June 30, 2026 and 2025.

Current wording

Net operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems and provisions of cost-based reimbursement and other payment methods. In addition, we are reimbursed by non-governmental payors using a variety of payment methodologies. Amounts we receive for the treatment of patients covered by Medicare, Medicaid and non-governmental payors are generally less than our standard billing rates. We account for the differences between the estimated program reimbursement rates and our standard billing rates as contractual allowance adjustments, which we deduct from gross revenues to arrive at net operating revenues. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties. We account for adjustments to previous program reimbursement estimates as contractual allowance adjustments and report them in the periods that such adjustments become known. Contractual allowance adjustments related to final settlements and previous program reimbursement estimates impacted net operating revenues by an insignificant amount in both of the three- and nine-month periods ended September 30, 2026 and 2025.

Previous wording

The payment rates under the Medicare program for hospital inpatient and outpatient acute care services are based on prospective payment systems, which depend upon a patient’s diagnosis or the clinical complexity of services provided to a patient, among other factors. These rates are indexed for inflation annually, although increases have historically been less than actual inflation. In its final rule establishing payment rates for federal fiscal year 2026 (which began October 1, 2025) for hospital inpatient acute care services reimbursed under the prospective system, CMS increased payment rates by approximately 2.6%. This increase reflects a market basket increase of 3.3%, reduced by a 0.7 percentage point productivity adjustment. Hospitals that do not submit required patient quality data are subject to payment reductions. We are complying with this data submission requirement. Payments may also be affected by various other adjustments, including those that depend on patient-specific or hospital specific factors. For example, the “two midnight rule” establishes admission and medical review criteria for inpatient services limiting when services to Medicare beneficiaries are payable as inpatient hospital services. Reductions in the rate of increase or overall reductions in Medicare reimbursement may cause a decline in the growth of our net operating revenues.

Current wording

The payment rates under the Medicare program for hospital inpatient and outpatient acute care services are based on prospective payment systems, which depend upon a patient’s diagnosis or the clinical complexity of services provided to a patient, among other factors. These rates are indexed for inflation annually, although increases have historically been less than actual inflation. In its final rule establishing payment rates for federal fiscal year 2027 (which began October 1, 2026) for hospital inpatient acute care services reimbursed under the prospective system, CMS increased payment rates by approximately 2.3%. This increase reflects a market basket increase of 3.2%, reduced by a 0.9 percentage point productivity adjustment. Hospitals that do not submit required patient quality data are subject to payment reductions. We are complying with this data submission requirement. Payments may also be affected by various other adjustments, including those that depend on patient-specific or hospital specific factors. For example, the “two midnight rule” establishes admission and medical review criteria for inpatient services limiting when services to Medicare beneficiaries are payable as inpatient hospital services. Reductions in the rate of increase or overall reductions in Medicare reimbursement may cause a decline in the growth of our net operating revenues.

Previous wording

Payment rates under the Medicaid program vary by state. In addition to the base payment rates for specific claims for services rendered to Medicaid enrollees, several states utilize supplemental reimbursement programs to make separate payments that are not specifically tied to an individual’s care, some of which offset a portion of the cost of providing care to Medicaid and indigent patients. These programs are funded with a combination of state and federal resources, including, in certain instances, fees or taxes levied on the providers. The programs are generally authorized by CMS for a specified period of time and require CMS’s approval to be extended. In addition, as noted above, the 2025 Reconciliation Law includes several changes to Medicaid financing mechanisms, including limitations on provider taxes and state directed payment arrangements. It is difficult to predict the ultimate impact of the legislation on these supplemental programs or whether or on what terms CMS will extend the supplemental programs in the states in which we operate. Under these supplemental programs, we recognize revenue and related expenses in the period in which amounts are estimable and payment is reasonably assured. Reimbursement under these programs is reflected in net operating revenues and included as Medicaid revenue in the table above, and fees, taxes or other program related costs are reflected in other operating expenses.

Current wording

Payment rates under the Medicaid program vary by state. In addition to the base payment rates for specific claims for services rendered to Medicaid enrollees, several states utilize supplemental reimbursement programs to make separate payments that are not specifically tied to an individual’s care, some of which offset a portion of the cost of providing care to Medicaid and indigent patients. These programs are funded with a combination of state and federal resources, including, in certain instances, fees or taxes levied on the providers. The programs are generally authorized by CMS for a specified period of time and require CMS’s approval to be extended. In addition, as noted above, the 2025 Reconciliation Law includes several changes to Medicaid financing mechanisms, including limitations on provider taxes and state directed payment arrangements. The 2025 Reconciliation Law also imposes budget neutrality requirements for demonstration projects that operate under a waiver authorized by Section 1115 of the Social Security Act, some of which authorize supplemental payment programs. It is difficult to predict the ultimate impact of the legislation on these supplemental programs or whether or on what terms CMS will extend the supplemental programs in the states in which we operate. Under these supplemental programs, we recognize revenue and related expenses in the period in which amounts are estimable and payment is reasonably assured. Reimbursement under these programs is reflected in net operating revenues and included as Medicaid revenue in the table above, and fees, taxes or other program related costs are reflected in other operating expenses.

Previous wording

Admissions represents the number of patients admitted for inpatient treatment.

Current wording

Admissions represent the number of patients admitted for inpatient treatment.

Previous wording

Net operating revenues decreased to $2.825 billion for the three months ended June 30, 2026, compared to $3.133 billion for the same period in 2025. Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $65 million, or 2.4%, during the three months ended June 30, 2026, compared to the same period in 2025. On a period-over-period basis, the increase in same-store net operating revenues was primarily attributable to increased volumes and reimbursement rates and higher supplemental reimbursement program revenue, partially offset by an unfavorable change in payor mix. Non-same-store net operating revenues decreased $373 million during the three months ended June 30, 2026, compared to the same period in 2025, due to the divestiture of hospitals in 2026 and 2025. On a consolidated basis, inpatient admissions decreased by 11.4% and adjusted admissions decreased by 11.7% during the three months ended June 30, 2026, compared to the same period in 2025. On a same-store basis, net operating revenues per adjusted admission decreased 0.5%, while inpatient admissions increased by 1.9% and adjusted admissions increased by 2.9% for the three months ended June 30, 2026, compared to the same period in 2025.

Current wording

Net operating revenues decreased to $2.757 billion for the three months ended September 30, 2026, compared to $3.087 billion for the same period in 2025. Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $100 million, or 3.8%, during the three months ended September 30, 2026, compared to the same period in 2025. On a period-over-period basis, the increase in same-store net operating revenues was primarily attributable to increased volumes and reimbursement rates, partially offset by an unfavorable change in payor mix. Non-same-store net operating revenues decreased $430 million during the three months ended September 30, 2026, compared to the same period in 2025, primarily due to (i) the divestiture of hospitals in 2026 and 2025 and (ii) higher non-patient revenue in 2025 resulting from the receipt of $28 million for the settlement of a legal matter. On a consolidated basis, inpatient admissions decreased by 12.3% and adjusted admissions decreased by 11.9% during the three months ended September 30, 2026, compared to the same period in 2025. On a same-store basis, net operating revenues per adjusted admission increased 0.2%, while inpatient admissions increased by 2.2% and adjusted admissions increased by 3.6% for the three months ended September 30, 2026, compared to the same period in 2025.

Previous wording

Total operating expenses, as a percentage of net operating revenues, increased from 87.4% during the six months ended June 30, 2025 to 88.4% during the six months ended June 30, 2026. Operating expenses, excluding depreciation and amortization and impairment and (gain) loss on sale of businesses, as a percentage of net operating revenues, increased from 88.2% for the six months ended June 30, 2025 to 89.1% for the six months ended June 30, 2026. Salaries and benefits, as a percentage of net operating revenues, increased from 42.9% for the six months ended June 30, 2025 to 44.1% for the six months ended June 30, 2026, primarily due to increased hiring commensurate with lower utilization of contract labor, inflationary wage increases and the decrease in net operating revenues. Supplies, as a percentage of net operating revenues, decreased from 15.2% for the six months ended June 30, 2025 to 14.6% for the six months ended June 30, 2026, primarily due to changes in the mix of services and the benefit of cost savings initiatives, partially offset by the decrease in net operating revenues. Other operating expenses, as a percentage of net operating revenues, increased from 27.8% for the six months ended June 30, 2025 to 28.1% for the six months ended June 30, 2026, primarily due to the decrease in net operating revenues, increased supplemental reimbursement program expense and higher medical specialist fees, partially offset by lower contract labor and professional liability expenses. Lease cost and rent, as a percentage of net operating revenues, remained consistent at 2.3% for both of the six-month periods ended June 30, 2026 and 2025.

Current wording

Total operating expenses, as a percentage of net operating revenues, increased from 92.1% during the three months ended September 30, 2025 to 94.7% during the three months ended September 30, 2026. Operating expenses, excluding depreciation and amortization and impairment and (gain) loss on sale of businesses, as a percentage of net operating revenues, increased from 87.9% for the three months ended September 30, 2025 to 90.4% for the three months ended September 30, 2026. Salaries and benefits, as a percentage of net operating revenues, increased from 43.9% for the three months ended September 30, 2025 to 44.1% for the three months ended September 30, 2026. Supplies, as a percentage of net operating revenues, decreased from 14.9% for the three months ended September 30, 2025 to 14.8% for the three months ended September 30, 2026. Other operating expenses, as a percentage of net operating revenues, increased from 26.9% for the three months ended September 30, 2025 to 29.3% for the three months ended September 30, 2026, primarily due to the decrease in net operating revenues, increased supplemental reimbursement program expense and higher medical specialist fees. Lease cost and rent, as a percentage of net operating revenues, remained consistent at 2.2% for both of the three-month periods ended September 30, 2026 and 2025.

Previous wording

Depreciation and amortization, as a percentage of net operating revenues, increased from 3.4% for the three months ended June 30, 2025 to 3.8% for the three months ended June 30, 2026, primarily due to the decrease in net operating revenues.

Current wording

Depreciation and amortization, as a percentage of net operating revenues, increased from 3.5% for the three months ended September 30, 2025 to 3.8% for the three months ended September 30, 2026, primarily due to the decrease in net operating revenues.

Previous wording

Impairment and (gain) loss on sale of businesses, net was income of $172 million for the three months ended June 30, 2026, compared to $239 million for the same period in 2025. The income recognized during the three months ended June 30, 2026 was comprised of a gain of approximately $184 million related primarily to the divestiture of one hospital, partially offset by (i) an approximately $5 million net impairment charge to adjust the carrying value of long-lived assets at a hospital that was divested at a sales price below carrying value, and (ii) an approximately $7 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale. The income recognized during the three months ended June 30, 2025 was comprised of a gain of approximately $241 million related to the divestiture of two hospitals, partially offset by an approximately $2 million impairment charge to adjust the carrying value of long-lived assets at a hospital that was divested at a sales price below carrying value.

Current wording

Impairment and (gain) loss on sale of businesses, net was expense of $14 million for the three months ended September 30, 2026, compared to expense of $21 million for the same period in 2025. The expense recognized during the three months ended September 30, 2026 was comprised of (i) an approximately $2 million net impairment charge to adjust the carrying value of long-lived assets at a hospital that was divested at a sales price below carrying value and (ii) an approximately $12 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale. The expense recognized during the three months ended September 30, 2025 resulted from impairment charges recorded to reduce the carrying value of several assets that were idled or disposed.

Previous wording

Interest expense, net, decreased $8 million to $206 million for the three months ended June 30, 2026 from $214 million for the three months ended June 30, 2025.

Current wording

Interest expense, net, decreased $15 million to $201 million for the three months ended September 30, 2026 from $216 million for the three months ended September 30, 2025. This was primarily due to the redemption of certain outstanding notes in 2026.

Previous wording

Loss from early extinguishment of debt of $5 million was recognized during the three months ended June 30, 2026, as a result of the repurchase of certain of our outstanding notes as discussed further in “Liquidity and Capital Resources.” There was a gain of $138 million from early extinguishment of debt during the three months ended June 30, 2025.

Current wording

There was no loss from early extinguishment of debt during the three months ended September 30, 2026. Loss from early extinguishment of debt of $33 million was recognized during the three months ended September 30, 2025, as a result of certain financing transactions.

Previous wording

The net results of the above-mentioned changes resulted in income before income taxes decreasing $261 million to $244 million for the six months ended June 30, 2026, compared to $505 million for the same period in 2025.

Current wording

The net results of the above-mentioned changes resulted in loss before income taxes increasing $51 million to $(53) million for the three months ended September 30, 2026, compared to $(2) million for the same period in 2025.

Previous wording

Our provision for income taxes for the three months ended June 30, 2026 and 2025 was $76 million and $118 million, respectively, and the effective tax rates were 42.2% and 26.9% for the three months ended June 30, 2026 and 2025, respectively. The decrease in the provision for income taxes and the change in our effective tax rate for the three months ended June 30, 2026, compared to the same period in 2025 was primarily due to a decrease in income before income taxes, a decrease in non-deductible goodwill related to divested hospitals, and the tax effects of the federal budget reconciliation legislation which was enacted on July 4, 2025.

Current wording

Our benefit from income taxes for the three months ended September 30, 2026 and 2025 was $(3) million and $(173) million, respectively, and the effective tax rates were 5.7% and 8,650.0% for the three months ended September 30, 2026 and 2025, respectively. The decrease in the benefit for income taxes and the change in our effective tax rate for the three months ended September 30, 2026, compared to the same period in 2025 was primarily due to the recognition of the tax effects of the 2025 Reconciliation Law during the three months ended September 30, 2025. In particular, a decrease in valuation allowances stemming from increased interest deductibility and increased bonus depreciation resulted in an income tax benefit of approximately $163 million during the three months ended September 30, 2025, which did not recur during the three months ended September 30, 2026.

Previous wording

Net income attributable to noncontrolling interests as a percentage of net operating revenues was 1.2% for both of the three-month periods ended June 30, 2026 and 2025.

Current wording

Net income attributable to noncontrolling interests as a percentage of net operating revenues was 1.3% for both of the three-month periods ended September 30, 2026 and 2025.

Previous wording

Net income attributable to Community Health Systems, Inc. stockholders was $70 million for the three months ended June 30, 2026, compared to $282 million for the same period in 2025.

Current wording

Net (loss) income attributable to Community Health Systems, Inc. stockholders was $(86) million for the three months ended September 30, 2026, compared to $130 million for the same period in 2025.

Previous wording

Net operating revenues decreased to $5.790 billion for the six months ended June 30, 2026, compared to $6.292 billion for the same period in 2025. Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $135 million, or 2.5%, during the six months ended June 30, 2026, compared to the same period in 2025. On a period-over-period basis, the increase in same-store net operating revenues was primarily attributable to increased reimbursement rates and supplemental reimbursement program revenue partially offset by an unfavorable change in payor mix. Non-same-store net operating revenues decreased $637 million during the six months ended June 30, 2026, compared to the same period in 2025, due to the divestiture of hospitals in 2026 and 2025. On a consolidated basis, both inpatient admissions and adjusted admissions decreased by 11.1% during the six months ended June 30, 2026, compared to the same period in 2025. On a same-store basis, net operating revenues per adjusted admission increased 1.5%, while inpatient admissions were flat, and adjusted admissions increased by 1.0% for the six months ended June 30, 2026, compared to the same period in 2025.

Current wording

Net operating revenues decreased to $8.547 billion for the nine months ended September 30, 2026, compared to $9.379 billion for the same period in 2025. Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $234 million, or 2.9%, during the nine months ended September 30, 2026, compared to the same period in 2025. On a period-over-period basis, the increase in same-store net operating revenues was primarily attributable to increased reimbursement rates, non-patient revenue and supplemental reimbursement program revenue, partially offset by an unfavorable change in payor mix. Non-same-store net operating revenues decreased $1.066 billion during the nine months ended September 30, 2026, compared to the same period in 2025, primarily due to (i) the divestiture of hospitals in 2026 and 2025 and (ii) higher non-patient operating revenue in 2025 resulting from the receipt of $28 million for the settlement of a legal matter. On a consolidated basis, inpatient admissions decreased by 11.5% and adjusted admissions decreased by 11.4% during the nine months ended September 30, 2026, compared to the same period in 2025. On a same-store basis, net operating revenues per adjusted admission increased 1.0%, while inpatient admissions increased by 0.7% and adjusted admissions increased by 1.9% for the nine months ended September 30, 2026, compared to the same period in 2025.

Previous wording

Total operating expenses, as a percentage of net operating revenues, increased from 83.7% during the three months ended June 30, 2025 to 86.2% during the three months ended June 30, 2026. Operating expenses, excluding depreciation and amortization and impairment and (gain) loss on sale of businesses, as a percentage of net operating revenues, increased from 87.9% for the three months ended June 30, 2025 to 88.5% for the three months ended June 30, 2026. Salaries and benefits, as a percentage of net operating revenues, increased from 42.4% for the three months ended June 30, 2025 to 43.8% for the three months ended June 30, 2026, primarily due to increased hiring commensurate with lower utilization of contract labor, inflationary wage increases and the decrease in net operating revenues. Supplies, as a percentage of net operating revenues, decreased from 15.0% for the three months ended June 30, 2025 to 14.2% for the three months ended June 30, 2026, primarily due to changes in the mix of services and the benefit of cost savings initiatives, partially offset by the decrease in net operating revenues. Other operating expenses, as a percentage of net operating revenues, increased from 28.1% for the three months ended June 30, 2025 to 28.3% for the three months ended June 30, 2026, primarily due to the decrease in net operating revenues and higher medical specialist fees, partially offset by lower contract labor and professional liability expenses. Lease cost and rent, as a percentage of net operating revenues, decreased from 2.4% for the three months ended June 30, 2025 to 2.2% for the three months ended June 30, 2026.

Current wording

Total operating expenses, as a percentage of net operating revenues, increased from 88.9% during the nine months ended September 30, 2025 to 90.5% during the nine months ended September 30, 2026. Operating expenses, excluding depreciation and amortization and impairment and (gain) loss on sale of businesses, as a percentage of net operating revenues, increased from 88.1% for the nine months ended September 30, 2025 to 89.6% for the nine months ended September 30, 2026. Salaries and benefits, as a percentage of net operating revenues, increased from 43.2% for the nine months ended September 30, 2025 to 44.2% for the nine months ended September 30, 2026, primarily due to increased hiring commensurate with lower utilization of contract labor, inflationary wage increases and the decrease in net operating revenues. Supplies, as a percentage of net operating revenues, decreased from 15.1% for the nine months ended September 30, 2025 to 14.6% for the nine months ended September 30, 2026, primarily due to changes in the mix of services and the benefit of cost savings initiatives, partially offset by the decrease in net operating revenues. Other operating expenses, as a percentage of net operating revenues, increased from 27.6% for the nine months ended September 30, 2025 to 28.5% for the nine months ended September 30, 2026, primarily due to the decrease in net operating revenues, increased supplemental reimbursement program expense and higher medical specialist fees, partially offset by lower contract labor. Lease cost and rent, as a percentage of net operating revenues, increased from 2.2% for the nine months ended September 30, 2025 to 2.3% for the nine months ended September 30, 2026.

Previous wording

Depreciation and amortization, as a percentage of net operating revenues, increased from 3.4% for the six months ended June 30, 2025 to 3.8% for the six months ended June 30, 2026, primarily due to the decrease in net operating revenues and the placement of additional assets into service in the current year compared to the prior year.

Current wording

Depreciation and amortization, as a percentage of net operating revenues, increased from 3.4% for the nine months ended September 30, 2025 to 3.8% for the nine months ended September 30, 2026, primarily due to the decrease in net operating revenues and the placement of additional assets into service in the current year compared to the prior year.

Previous wording

Impairment and (gain) loss on sale of businesses, net was income of $262 million for the six months ended June 30, 2026, compared to $263 million for the same period in 2025. The income recognized during the six months ended June 30, 2026 was comprised of a gain of approximately $400 million related to the divestiture of one hospital and the divestiture of a controlling interest in another hospital, partially offset by (i) an approximately $131 million net impairment charge to adjust the carrying value of long-lived assets at hospitals that were divested at a sales price below carrying value, and (ii) an approximately $7 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale. The income recognized during the six months ended June 30, 2025 was comprised of a gain of approximately $291 million related to the divestiture of four hospitals, partially offset by (i) an approximately $23 million impairment charge to adjust the carrying value of long-lived assets at two hospitals that were divested at a price below carrying value, and (ii) an approximately $5 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Current wording

Impairment and (gain) loss on sale of businesses, net was income of $248 million for the nine months ended September 30, 2026, compared to $242 million for the same period in 2025. The income recognized during the nine months ended September 30, 2026 was comprised of a gain of approximately $400 million related to the divestiture of one hospital and the divestiture of a controlling interest in another hospital, partially offset by (i) an approximately $134 million net impairment charge to adjust the carrying value of long-lived assets at hospitals that were divested at a sales price below carrying value and (ii) an approximately $18 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale. The income recognized during the nine months ended September 30, 2025 was comprised of a gain of approximately $288 million related to the divestiture of four hospitals, partially offset by (i) an approximately $31 million impairment charge to adjust the carrying value of long-lived assets at two hospitals that were divested at a price below carrying value and (ii) an approximately $15 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Previous wording

Interest expense, net, decreased $13 million to $419 million for the six months ended June 30, 2026 from $432 million for the six months ended June 30, 2025.

Current wording

Interest expense, net, decreased $29 million to $620 million for the nine months ended September 30, 2026 from $649 million for the nine months ended September 30, 2025. This was primarily due to the redemption of certain outstanding notes in 2026.

Previous wording

Loss from early extinguishment of debt of $12 million was recognized during the six months ended June 30, 2026, compared to a gain from early extinguishment of $138 million for the same period in 2025, as a result of the refinancing and extinguishment of certain of our outstanding notes as discussed further in “Liquidity and Capital Resources.”

Current wording

Loss from early extinguishment of debt of $12 million was recognized during the nine months ended September 30, 2026, as a result of the refinancing and extinguishment of certain of our outstanding notes as discussed further in “Liquidity and Capital Resources”, compared to a gain from early extinguishment of $105 million for the same period in 2025.

Previous wording

Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, remained consistent at 0.1% for both of the six-month periods ended June 30, 2026 and 2025.

Current wording

Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, remained consistent at 0.1% for both of the nine-month periods ended September 30, 2026 and 2025.