Community Health Systems, Inc. Announces Second Quarter 2009 Results with Net Operating Revenues of $3.0 Billion

FRANKLIN, Tenn.--(Business Wire)--
Community Health Systems, Inc. (NYSE: CYH) today announced financial and
operating results for the second quarter and six months ended June 30, 2009.

Net operating revenues for the three months ended June 30, 2009, totaled $3.017
billion, a 12.9 percent increase compared with $2.673 billion for the same
period in 2008. Income from continuing operations increased to $74.5 million, or
$0.66 per share (diluted), on 91.1 million weighted average shares outstanding
for the three months ended June 30, 2009, compared with $55.4 million, or $0.50
per share (diluted), on 95.5 million weighted average shares outstanding for the
same period in 2008. Net income increased 24.1 percent to $59.4 million, or
$0.65 per share (diluted), for the three months ended June 30, 2009, compared
with $47.9 million, or $0.50 per share (diluted), for the same period in 2008.

Adjusted EBITDA for the three months ended June 30, 2009, was $415.6 million,
compared with $362.5 million for the same period in 2008, representing a 14.7
percent increase. Adjusted EBITDA is EBITDA adjusted to exclude discontinued
operations, gain/loss from early extinguishment of debt and net income
attributable to noncontrolling interests. The Company uses adjusted EBITDA as a
measure of liquidity. Net cash provided by operating activities for the three
months ended June 30, 2009, was $285.0 million, compared with $361.7 million for
the same period in 2008.

The consolidated financial results for the three months ended June 30, 2009,
reflect a 5.8 percent increase in total admissions compared with the three
months ended June 30, 2008. This increase was due primarily to acquisitions
during the past twelve months. On a same-store basis, admissions decreased 0.4
percent and adjusted admissions increased 1.7 percent, compared with the same
period in 2008. On a same-store basis, net operating revenues increased 6.7
percent, compared with the same period in 2008.

Net operating revenues for the six months ended June 30, 2009, totaled $5.930
billion, a 10.1 percent increase compared with $5.384 billion for the same
period in 2008. Income from continuing operations increased to $145.3 million,
or $1.29 per share (diluted), on 90.7 million weighted average shares
outstanding for the six months ended June 30, 2009, compared with $112.6
million, or $1.02 per share (diluted), on 95.1 million weighted average shares
outstanding for the same period in 2008. Net income was $118.4 million, or $1.31
per share (diluted), for the six months ended June 30, 2009, compared with
$108.0 million, or $1.14 per share (diluted), for the same period in 2008.

Adjusted EBITDA for the six months ended June 30, 2009, was $819.1 million,
compared with $737.9 million for the same period in 2008, representing an 11.0
percent increase. Net cash provided by operating activities for the six months
ended June 30, 2009, was $544.4 million, compared with $416.8 million for the
same period of 2008.

The consolidated financial results for the six months ended June 30, 2009,
reflect a 1.7 percent increase in total admissions compared with the six months
ended June 30, 2008. This increase was due primarily to acquisitions during the
past twelve months. On a same-store basis, admissions decreased 2.7 percent and
adjusted admissions decreased 0.4 percent, compared with the same period in
2008. On a same-store basis, net operating revenues increased 5.5 percent,
compared with the same period in 2008.

On April 1, 2009, subsidiaries of the Company acquired the remaining 50 percent
interest in the Medical Center of South Arkansas, located in El Dorado,
Arkansas. Previously, the Company owned a noncontrolling interest in the
hospital and did not consolidate its operations.

On May 1, 2009, subsidiaries of the Company acquired the assets of Wyoming
Valley Health Care System located in Wilkes-Barre, Pennsylvania. This system
included Wilkes-Barre General Hospital, a 392-bed full-service acute care
hospital, and First Hospital Wyoming Valley, a behavioral health facility
located in Kingston, Pennsylvania, as well as other outpatient and ancillary
services.

Commenting on the results, Wayne T. Smith, chairman, president and chief
executive officer of Community Health Systems, Inc., said, "Community Health
Systems continued to deliver a solid operating performance for the second
quarter of 2009, in spite of the challenging economic environment. Our ability
to drive revenues and demonstrate efficient expense management reflects
consistent execution of our strategy. While the expected economic trends
indicate that overall hospital industry volumes will remain under pressure for
the remainder of 2009, we believe our proven operating model will favorably
support our business through this uncertain environment. Our geographically
diverse hospital portfolio also provides us with a competitive advantage with
less exposure to more economically depressed markets.

"We see considerable opportunities to realize additional operating synergies at
our more recently acquired hospitals," Smith added. "We have demonstrated our
ability to deliver improved operating results through our efforts to implement
best practices in all of our facilities across the country. We have a very
conservative operating strategy and are mindful of the critical need to manage
our costs. With our proven track record, we are highly focused on continued
improvement from our facilities with the most opportunity for growth."

Included on pages 12, 13 and 14 of this press release are tables setting forth
the Company`s updated 2009 guidance. This guidance reaffirms the Company`s
previous annual earnings guidance provided on April 23, 2009, as modified to
reflect certain changes as detailed in the guidance assumptions on pages 12, 13
and 14.

Located in the Nashville, Tennessee, suburb of Franklin, Community Health
Systems, Inc. is the largest publicly-traded hospital company in the United
States and a leading operator of general acute care hospitals in non-urban and
mid-size markets throughout the country. Through its subsidiaries, the Company
currently owns, leases or operates 122 hospitals in 29 states with an aggregate
of approximately 18,000 licensed beds. Its hospitals offer a broad range of
inpatient and surgical services, outpatient treatment and skilled nursing care.
In addition, through its QHR subsidiary, the Company provides management and
consulting services to over 150 independent non-affiliated general acute care
hospitals located throughout the United States. Shares in Community Health
Systems, Inc. are traded on the New York Stock Exchange under the symbol "CYH."

Community Health Systems, Inc. will hold a conference call to discuss this press
release on Friday, July 31, 2009, at 10:30 a.m. Central, 11:30 a.m. Eastern.
Investors will have the opportunity to listen to a live internet broadcast of
the conference call by clicking on the Investor Relations link of the Company`s
website at www.chs.net, or at www.earnings.com. To listen to the live call,
please go to the website at least fifteen minutes early to register, download,
and install any necessary audio software. For those who cannot listen to the
live broadcast, a replay will be available shortly after the call and will
continue through August 31, 2009. A copy of the Company`s Form 8-K (including
this press release) and conference call slide show is available on the Company`s
website at www.chs.net.

Statements contained in this news release regarding expected operating results,
acquisition transactions or divestitures and other events are forward-looking
statements that involve risk and uncertainties.Actual future events or results
may differ materially from these statements.Readers are referred to the
documents filed by Community Health Systems, Inc. with the Securities and
Exchange Commission, including the Company`s annual report on Form 10-K, current
reports on Form 8-K and quarterly reports on Form 10-Q. These filings identify
important risk factors and other uncertainties that could cause actual results
to differ from those contained in the forward-looking statements.The Company
undertakes no obligation to revise or update any forward-looking statements, or
to make any other forward-looking statements, whether as a result of new
information, future events or otherwise.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Financial Highlights (a)(b)(c)(d)
($ in thousands, except per share amounts)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Net operating revenues $ 3,016,961 $ 2,673,153 $ 5,929,710 $ 5,383,508
Adjusted EBITDA (e) $ 415,633 $ 362,488 $ 819,149 $ 737,943
Income from continuing operations (f)(g)(h) $ 74,498 $ 55,393 $ 145,318 $ 112,648
Net income attributable to Community Health Systems, Inc. $ 59,435 $ 47,893 $ 118,350 $ 108,020

Income from continuing operations attributable to Community Health Systems, Inc. common stockholders per share:
Basic (a) $ 0.66 $ 0.51 $ 1.30 $ 1.03
Diluted (a) $ 0.66 $ 0.50 $ 1.29 $ 1.02
Net income attributable to Community Health Systems, Inc. common stockholders per share:
Basic $ 0.66 $ 0.51 $ 1.31 $ 1.15
Diluted $ 0.65 $ 0.50 $ 1.31 $ 1.14
Weighted-average number of shares outstanding:
Basic (i) 90,359 94,192 90,170 94,017
Diluted (i) 91,071 95,513 90,666 95,128

Net cash provided by operating activities $ 284,980 $ 361,650 $ 544,407 $ 416,783

_____

For footnotes, see pages 10 and 11.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (a)(b)(c)(d)
($ in thousands, except per share amounts)
(Unaudited)

Three Months Ended
June 30,
2009 2008
Amount % of Net Amount % of Net
Operating Operating
Revenue Revenue
Net operating revenues $ 3,016,961 100.0 % $ 2,673,153 100.0 %

Operating costs and expenses:
Salaries and benefits 1,201,680 39.8 % 1,078,165 40.3 %
Provision for bad debts 362,462 12.0 % 285,593 10.7 %
Supplies 419,956 13.9 % 375,324 14.0 %
Other operating expenses 567,813 18.9 % 523,828 19.6 %
Rent 61,200 2.0 % 58,254 2.2 %
Depreciation and amortization 142,447 4.7 % 123,544 4.7 %
Total operating costs and expenses 2,755,558 91.3 % 2,444,708 91.5 %

Income from operations (h) 261,403 8.7 % 228,445 8.5 %
Interest expense, net 161,473 5.4 % 153,361 5.7 %
Loss from early extinguishment of debt 6 0.0 % - 0.0 %
Equity in earnings of unconsolidated affiliates (11,783 ) -0.4 % (10,499 ) -0.4 %
Income from continuing operations before income taxes 111,707 3.7 % 85,583 3.2 %
Provision for income taxes 37,209 1.2 % 30,190 1.1 %
Income from continuing operations (h) 74,498 2.5 % 55,393 2.1 %

Discontinued operations, net of taxes (d):
Loss from operations of hospitals sold (g) (508 ) 0.0 % (240 ) 0.0 %
Loss on sale of hospitals, net - 0.0 % (9 ) 0.0 %
Loss from discontinued operations (508 ) 0.0 % (249 ) 0.0 %
Net income 73,990 2.5 % 55,144 2.1 %
Less: Net income attributable to noncontrolling interests (a) 14,555 0.5 % 7,251 0.3 %
Net income attributable to Community Health Systems, Inc. $ 59,435 2.0 % $ 47,893 1.8 %

Income from continuing operations attributable to Community Health Systems, Inc. common stockholders per share (a):
Basic $0.66 $0.51
Diluted $0.66 $0.50
Discontinued operations attributable to Community Health Systems, Inc. common stockholders per share (a):
Basic ($0.01 ) $0.00
Diluted ($0.01 ) $0.00
Net income attributable to Community Health Systems, Inc. common stockholders per share (a)(j):
Basic $0.66 $0.51
Diluted $0.65 $0.50
Weighted-average number of shares outstanding (i):
Basic 90,359 94,192
Diluted 91,071 95,513

_____

For footnotes, see pages 10 and 11.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (a)(b)(c)(d)
($ in thousands, except per share amounts)
(Unaudited)

Six Months Ended
June 30,
2009 2008
Amount % of Net Amount % of Net
Operating Operating
Revenue Revenue
Net operating revenues $ 5,929,710 100.0 % $ 5,383,508 100.0 %

Operating costs and expenses:
Salaries and benefits 2,375,120 40.1 % 2,165,250 40.2 %
Provision for bad debts 700,230 11.8 % 577,666 10.7 %
Supplies 825,593 13.9 % 759,307 14.1 %
Other operating expenses 1,112,790 18.8 % 1,049,394 19.5 %
Rent 121,528 2.0 % 117,331 2.2 %
Depreciation and amortization 278,008 4.7 % 244,850 4.6 %
Total operating costs and expenses 5,413,269 91.3 % 4,913,798 91.3 %

Income from operations (h) 516,441 8.7 % 469,710 8.7 %
Interest expense, net 325,386 5.4 % 318,063 5.9 %
(Gain) loss from early extinguishment of debt (f) (2,406 ) 0.0 % 1,328 0.0 %
Equity in earnings of unconsolidated affiliates (24,700 ) -0.4 % (23,383 ) -0.4 %
Income from continuing operations before income taxes 218,161 3.7 % 173,702 3.2 %
Provision for income taxes 72,843 1.2 % 61,054 1.1 %
Income from continuing operations (h)(f) 145,318 2.5 % 112,648 2.1 %

Discontinued operations, net of taxes (d):
Income from operations of hospitals sold and hospitals held for sale (g) 1,977 0.0 % 1,624 0.0 %
(Loss) gain on sale of hospitals, net (405 ) 0.0 % 9,608 0.2 %
Income from discontinued operations 1,572 0.0 % 11,232 0.2 %
Net income 146,890 2.5 % 123,880 2.3 %
Less: Net income attributable to noncontrolling interests (a) 28,540 0.5 % 15,860 0.3 %
Net income attributable to Community Health Systems, Inc. $ 118,350 2.0 % $ 108,020 2.0 %

Income from continuing operations attributable to Community Health Systems, Inc. common stockholders per share (a):
Basic $1.30 $1.03
Diluted $1.29 $1.02
Discontinued operations attributable to Community Health Systems, Inc. common stockholders per share (a):
Basic $0.01 $0.12
Diluted $0.01 $0.12
Net income attributable to Community Health Systems, Inc. common stockholders per share (a)(j):
Basic $1.31 $1.15
Diluted $1.31 $1.14
Weighted-average number of shares outstanding (i):
Basic 90,170 94,017
Diluted 90,666 95,128

_____

For footnotes, see pages 10 and 11.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (b)(c)
($ in thousands)
(Unaudited)

For the Three Months Ended June 30,
Consolidated Same-Store
2009 2008 % Change 2009 2008 % Change
Number of hospitals (at end of period) 122 117 117 117
Licensed beds (at end of period) 18,130 17,285 16,855 17,285
Beds in service (at end of period) 16,077 14,748 14,733 14,748
Admissions 173,494 164,008 5.8 % 163,273 164,008 -0.4 %
Adjusted admissions 321,383 298,301 7.7 % 303,489 298,300 1.7 %
Patient days 731,059 691,011 5.8 % 681,164 691,011 -1.4 %
Average length of stay (days) 4.2 4.2 4.2 4.2
Occupancy rate (average beds in service) 51.1 % 51.6 % 50.9 % 51.6 %
Net operating revenues $ 3,016,961 $ 2,673,153 12.9 % $ 2,850,807 $ 2,672,610 6.7 %
Net inpatient revenue as a % of total net operating revenues 49.4 % 49.5 % 48.9 % 49.6 %
Net outpatient revenue as a % of total net operating revenues 48.2 % 48.1 % 48.7 % 48.1 %
Income from operations (h) $ 261,403 $ 228,445 14.4 % $ 263,341 $ 227,216 15.9 %
Income from operations as a % of net operating revenues 8.7 % 8.5 % 9.2 % 8.5 %
Depreciation and amortization $ 142,447 $ 123,544 $ 136,387 $ 123,544
Equity in earnings of unconsolidated affiliates $ (11,783 ) $ (10,499 ) $ (11,783 ) $ (10,710 )
Liquidity Data:
Adjusted EBITDA (e) $ 415,633 $ 362,488 14.7 %
Adjusted EBITDA as a % of net operating revenues 13.8 % 13.6 %
Net cash provided by operating activities $ 284,980 $ 361,650
Net cash provided by operating activities as a % of net operating revenues 9.4 % 13.5 %

_____
* Continuing operating results and statistical data exclude discontinued operations for all periods presented.

_____

For footnotes, see pages 10 and 11.

* Continuing operating results and statistical data exclude discontinued
operations for all periods presented.

_____

For footnotes, see pages 10 and 11.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Selected Operating Data (b)(c)
($ in thousands)
(Unaudited)

For the Six Months Ended June 30,
Consolidated Same-Store
2009 2008 % Change 2009 2008 % Change
Number of hospitals (at end of period) 122 117 117 117
Licensed beds (at end of period) 18,130 17,285 16,855 17,285
Beds in service (at end of period) 16,077 14,748 14,733 14,748
Admissions 345,814 340,093 1.7 % 330,911 340,093 -2.7 %
Adjusted admissions 630,845 607,530 3.8 % 605,032 607,524 -0.4 %
Patient days 1,472,947 1,458,401 1.0 % 1,401,624 1,458,401 -3.9 %
Average length of stay (days) 4.3 4.3 4.2 4.3
Occupancy rate (average beds in service) 52.5 % 54.5 % 52.7 % 54.5 %
Net operating revenues $ 5,929,710 $ 5,383,508 10.1 % $ 5,676,368 $ 5,382,839 5.5 %
Net inpatient revenue as a % of total net operating revenues 50.1 % 50.5 % 49.7 % 50.5 %
Net outpatient revenue as a % of total net operating revenues 47.6 % 47.1 % 48.0 % 47.1 %
Income from operations (f)(h) $ 516,441 $ 469,710 9.9 % $ 523,279 $ 468,543 11.7 %
Income from operations as a % of net operating revenues 8.7 % 8.7 % 9.2 % 8.7 %
Depreciation and amortization $ 278,008 $ 244,850 $ 270,170 $ 244,850
Equity in earnings of unconsolidated affiliates $ (24,700 ) $ (23,383 ) $ (24,700 ) $ (23,594 )
Liquidity Data:
Adjusted EBITDA (e) $ 819,149 $ 737,943 11.0 %
Adjusted EBITDA as a % of net operating revenues 13.8 % 13.7 %
Net cash provided by operating activities $ 544,407 $ 416,783
Net cash provided by operating activities as a % of net operating revenues 9.2 % 7.7 %

_____
* Continuing operating results and statistical data exclude discontinued operations for all periods presented.

_____

For footnotes, see pages 10 and 11.

* Continuing operating results and statistical data exclude discontinued
operations for all periods presented.

_____

For footnotes, see pages 10 and 11.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (a)
(in thousands, except share data)
(Unaudited)

June 30, December 31,
2009 2008
ASSETS
Current assets
Cash and cash equivalents $ 268,825 $ 220,655
Patient accounts receivable, net of allowance for doubtful accounts of $1,274,698 and $1,111,131 at June 30, 2009, and December 31, 2008, respectively 1,657,923 1,625,470
Supplies 286,594 275,696
Prepaid income taxes - 92,710
Deferred income taxes 91,875 91,875
Prepaid expenses and taxes 94,598 73,792
Other current assets 199,616 224,852
Total current assets 2,599,431 2,605,050
Property and equipment 7,505,415 7,110,357
Less accumulated depreciation and amortization (1,429,270 ) (1,215,952 )
Property and equipment, net 6,076,145 5,894,405
Goodwill 4,187,968 4,166,091
Other assets, net 1,008,478 1,152,708
Total assets $ 13,872,022 $ 13,818,254

LIABILITIES
Current liabilities
Current maturities of long-term debt $ 56,734 $ 33,904
Accounts payable 505,966 532,595
Current income taxes payable 25,920 -
Deferred income taxes 6,740 6,740
Accrued interest 143,581 153,234
Accrued liabilities 721,313 782,944
Total current liabilities 1,460,254 1,509,417
Long-term debt 8,883,810 8,938,185
Deferred income taxes 461,098 460,793
Other long-term liabilities 825,473 888,557
Total liabilities 11,630,635 11,796,952

Redeemable noncontrolling interests in equity of consolidated subsidiaries (a) 323,994 320,171

EQUITY
Community Health Systems, Inc. stockholders' equity
Preferred stock, $.01 par value per share, 100,000,000 shares authorized; none issued - -
Common stock, $.01 par value per share, 300,000,000 shares authorized; 93,702,225 shares issued and 92,726,676 shares outstanding at June 30, 2009, and 92,483,166 shares issued and 91,507,617 shares outstanding at December 31, 2008 937 925
Additional paid-in capital 1,168,125 1,151,119
Treasury stock, at cost, 975,549 shares at June 30, 2009 and December 31, 2008 (6,678 ) (6,678 )
Accumulated other comprehensive loss (220,565 ) (295,575 )
Retained earnings 894,599 776,249
Total Community Health Systems, Inc. stockholders' equity 1,836,418 1,626,040
Noncontrolling interests in equity of consolidated subsidiaries (a) 80,975 75,091
Total equity 1,917,393 1,701,131
Total liabilities and equity $ 13,872,022 $ 13,818,254

_____

For footnotes, see pages 10 and 11.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

Six Months Ended
June 30,
2009 2008

Cash flows from operating activities
Net income attributable to Community Health Systems, Inc. $ 118,350 $ 108,020
Plus: Net income attributable to noncontrolling interests 28,540 15,860
Net income 146,890 123,880
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 278,340 244,850
Stock-based compensation expense 24,805 26,681
Loss (gain) on sale of hospitals and partnership interest, net 405 (13,211 )
Excess tax benefits relating to stock-based compensation 3,389 947
(Gain) loss on early extinguishment of debt (2,406 ) 1,328
Other non-cash expenses, net (6,472 ) 2,041
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Patient accounts receivable 8,937 (74,786 )
Supplies, prepaid expenses and other current assets 5,198 13,570
Accounts payable, accrued liabilities and income taxes 72,042 83,869
Other 13,279 7,614
Net cash provided by operating activities 544,407 416,783

Cash flows from investing activities
Acquisitions of facilities and other related equipment (210,904 ) (6,646 )
Purchases of property and equipment (267,275 ) (275,605 )
Proceeds from disposition of hospitals and other ancillary operations 89,909 365,913
Proceeds from sale of property and equipment 355 12,889
Increase in other non-operating assets (74,506 ) (144,380 )
Net cash used in investing activities (462,421 ) (47,829 )

Cash flows from financing activities
Proceeds from exercise of stock options 3,445 1,357
Excess tax benefits relating to stock-based compensation (3,389 ) (947 )
Deferred financing costs (207 ) (2,444 )
Stock buy-back - (10,194 )
Proceeds from noncontrolling investors in joint ventures 26,314 11,214
Redemption of noncontrolling investments in joint ventures (1,631 ) (53,485 )
Distributions to noncontrolling investors in joint ventures (22,166 ) (14,916 )
Borrowings under credit agreement 200,000 22,657
Repayments of long-term indebtedness (236,182 ) (190,998 )
Net cash used in financing activities (33,816 ) (237,756 )

Net change in cash and cash equivalents 48,170 131,198
Cash and cash equivalents at beginning of period 220,655 132,874
Cash and cash equivalents at end of period $ 268,825 $ 264,072

Footnotes to Financial Statements

(a) On January 1, 2009, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 160, "Noncontrolling Interests in Consolidated Financial
Statements - an amendment of ARB No. 51", the provisions of which, among other
things, requires that minority interests be renamed noncontrolling interests and
that a company present a consolidated net income measure that includes the
amounts attributable to both the controlling and noncontrolling interests for
all periods presented. The following table provides information needed to
recalculate income per share adjusted for noncontrolling interests.

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Income from continuing operations attributable to Community Health Systems, Inc. common stockholders:
Income from continuing operations, net of tax $ 74,498 $ 55,393 $ 145,318 $ 112,648
Less: Income from continuing operations attributable to noncontrolling interests, net of taxes 14,555 7,447 28,185 15,602
Income from continuing operations attributable to Community Health Systems, Inc. common stockholders - basic and diluted $ 59,943 $ 47,946 $ 117,133 $ 97,046
(Loss) income from discontinued operations attributable to Community Health Systems, Inc. common stockholders:
(Loss) income from discontinued operations, net of tax $ (508 ) $ (249 ) $ 1,572 $ 11,232
Less: Income (loss) from discontinued operations attributable to noncontrolling interests, net of taxes - (196 ) 355 258
(Loss) income from discontinued operations attributable to Community Health Systems, Inc. common stockholders - basic and diluted $ (508 ) $ (53 ) $ 1,217 $ 10,974

For the balance sheet presentation, SFAS No. 160 requires that minority
interests be renamed noncontrolling interests and that a company present such
noncontrolling interests as a component of equity for all periods presented,
except for the redeemable noncontrolling interests, which are presented as a
component of mezzanine equity.

(b) Continuing operating results exclude discontinued operations for all periods
presented.

(c) On March 31, 2009, the Company completed the settlement of all pending
litigation that resulted in the conveyance by two of the Company`s indirect
subsidiaries of their 80% partnership interest in the partnership that owns
Presbyterian Hospital of Denton located in Denton, Texas, to the minority
partner of that partnership for approximately $100 million. For 2008, the
Denton, Texas, hospital had net operating revenues of approximately $150 million
with an EBITDA margin in the double digits. This hospital is included in
discontinued operations for all periods presented.

(d) During the second quarter 2009, the Company made the decision to retain a
hospital and related businesses previously classified as being held for sale.
Results of operations, assets and liabilities and cash flows for this retained
hospital and related businesses are reported as continuing operations for all
periods presented.

(e) EBITDA consists of net income attributable to Community Health Systems, Inc.
before interest, income taxes, and depreciation and amortization. Adjusted
EBITDA is EBITDA adjusted to exclude discontinued operations, gain/loss from
early extinguishment of debt and net income attributable to noncontrolling
interests. The Company has from time to time sold noncontrolling interests in
certain of its subsidiaries or acquired subsidiaries with existing
noncontrolling interest ownership positions. The Company believes that it is
useful to present adjusted EBITDA because it excludes the portion of EBITDA
attributable to these third party interests and clarifies for investors the
Company`s portion of EBITDA generated by continuing operations. The Company uses
adjusted EBITDA as a measure of liquidity. The Company has included this measure
because it believes it provides investors with additional information about the
Company`s ability to incur and service debt and make capital expenditures.
Adjusted EBITDA is the basis for a key component in the determination of the
Company`s compliance with some of the covenants under the Company`s senior
secured credit facility, as well as to determine the interest rate and
commitment fee payable under the senior secured credit facility.

Adjusted EBITDA is not a measurement of financial performance or liquidity under
U.S. generally accepted accounting principles. It should not be considered in
isolation or as a substitute for net income, operating income, cash flows from
operating, investing or financing activities, or any other measure calculated in
accordance with U.S. generally accepted accounting principles. The items
excluded from adjusted EBITDA are significant components in understanding and
evaluating financial performance and liquidity. This calculation of adjusted
EBITDA may not be comparable to similarly titled measures reported by other
companies.

The following table reconciles adjusted EBITDA, as defined, to net cash provided
by operating activities as derived directly from the condensed consolidated
financial statements for the three months and six months ended June 30, 2009 and
2008 (in thousands):

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Adjusted EBITDA $ 415,633 $ 362,488 $ 819,149 $ 737,943
Interest expense, net (161,473 ) (153,361 ) (325,386 ) (318,063 )
Provision for income taxes (37,209 ) (30,190 ) (72,843 ) (61,054 )
Income from operations of hospitals sold and hospitals held for sale, net of taxes (508 ) (240 ) 1,977 1,624
Other non-cash expenses, net 13,923 12,527 22,054 26,066
Net changes in operating assets and liabilities, net of effects of acquisitions 54,614 170,426 99,456 30,267
Net cash provided by operating activities $ 284,980 $ 361,650 $ 544,407 $ 416,783

(f) Included in income from continuing operations for the six months ended June
30, 2009, is a gain from early extinguishment of debt of $2.4 million with an
after-tax impact of $1.5 million related to the repurchases on the open market
and cancellation of $121.5 million of Senior Notes and the early payment of
$110.4 million of term loans under the Company`s Credit Facility. Included in
income from continuing operations for the six months ended June 30, 2008, is a
loss from early extinguishment of debt of $1.3 million with an after-tax impact
of $0.9 million related to the repurchases on the open market and cancellation
of $62.7 million of Senior Notes and a pre-tax gain of $5.7 million with an
after-tax impact of $3.5 million from the sale of some excess land previously
held by the Company.

(g) Included in discontinued operations are the following:

* Presbyterian Hospital of Denton (255 licensed beds) located in Denton, Texas,
which was conveyed to the noncontrolling partner on March 31, 2009; and,
* Russell County Medical Center (78 licensed beds) located in Lebanon, Virginia,
nine hospitals with an aggregate total of 1,058 licensed beds located in
Alabama, Arkansas, Missouri, Oregon and Tennessee, and one hospital located in
the Republic of Ireland (122 licensed beds), all of which were sold during the
first quarter of 2008.

(h) Included in income from operations and income from continuing operations for
the three months and six months ended June 30, 2009, are the following
non-same-store charges, respectively:

* A pre-tax charge of $2.0 million and $3.0 million, respectively, related to
acquisition costs required to be expensed pursuant to revised business
combination accounting rules that became effective January 1, 2009; and
* A pre-tax charge of $2.8 million and $5.0 million, respectively, for system
conversion costs related to conversion of Triad`s former IT systems to the
Company`s IT system.

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

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Weighted-average number of shares outstanding - basic 90,359 94,192 90,170 94,017
Add effect of dilutive securities:
Stock awards and options 712 1,321 496 1,111
Weighted-average number of shares outstanding - diluted 91,071 95,513 90,666 95,128

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

Regulation FD Disclosure

The following table sets forth selected information concerning the Company`s
updated projected consolidated operating results for the year ending December
31, 2009. These projections are based on the Company`s historical operating
performance, current trends and other assumptions that the Company believes are
reasonable at this time. This guidance reaffirms the Company`s previous annual
earnings guidance provided on April 23, 2009, as modified to reflect certain
changes as detailed in the guidance assumptions below. See page 14 for a list of
factors that could affect the future results of the Company or the healthcare
industry generally.

The following is provided as guidance to analysts and investors:

Updated 2009
Projection

Range
Net operating revenues (in millions) $ 11,800 to $ 12,000
Adjusted EBITDA (in millions) $ 1,635 to $ 1,665
Income from continuing operations per share - diluted $ 2.50 to $ 2.65
Same hospitals annual admissions/adjusted admissions growth -1.0 % to 1.0 %
Weighted-average diluted shares (in millions) 91.0 to 93.0
Acquisitions of new hospitals 2

Income from continuing operations per share - diluted
3rd quarter ending September 30, 2009 $ 0.58 to $ 0.64

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

* The two acquisitions projected for 2009 have been completed.
* Continuing operations include the hospital previously classified as being held
for sale.
* Projected 2009 same hospital annual admissions/adjusted admissions growth does
not consider unanticipated service closures and other unusual events.
* The Company`s guidance does not take into account any resolution of the New
Mexico qui tam case (U.S. ex rel. Baker vs. Community Health Systems, Inc.) in
which it is alleged that the Company and three of the Company`s New Mexico
hospitals have caused the State of New Mexico to submit improper claims for
federal funds in violation of the Federal False Claims Act. The Company is
vigorously defending this litigation.
* Expressed as a percentage of net operating revenues, the provision for bad
debts is projected to be approximately 11.8% to 12.5% for 2009. These
percentages may vary depending on changes in payor mix.
* Expressed as a percent of net operating revenues, depreciation and
amortization is projected to be approximately 4.6% to 4.8% for 2009; however,
this is a fixed cost and the percentages may vary as revenue varies.
* 2009 projection assumes an estimate of $0.04 to $0.05 per share (diluted) of
acquisition costs will be expensed pursuant to revised business combination
accounting rules that became effective January 1, 2009.

* For the purpose of providing interest expense guidance, the Company assumes
that the borrowing rate under the Company`s $7.215 billion Senior Secured Credit
Facility for 2009 will remain relatively stable with the rates existing at year
end 2008, particularly since the Company is a party to interest rate swap
agreements in an amount equal to approximately 85% of our outstanding debt which
limits the effect of changes in interest rates. Based on these assumptions,
expressed as a percentage of net operating revenues, interest expense is
projected to be approximately 5.4% to 5.6% for 2009; however, these percentages
will vary as revenue and interest rates vary.
* Expressed as a percentage of net operating revenues, net income attributable
to noncontrolling interests is projected to be approximately 0.4% to 0.6% for
2009.
* On December 13, 2006, the Company announced a new open market repurchase
program for up to five million shares of the Company`s common stock not to
exceed $200 million in purchases. This repurchase program will conclude at the
earlier of three years or when the maximum number of shares has been repurchased
or the maximum dollar amount has been reached. Through July 30, 2009, 4.8
million shares have been purchased under this repurchase plan. No additional
share purchases have been assumed for 2009. From January 1, 2009 through July
30, 2009, the Company repurchased on the open market and cancelled $126.5
million of principal amount of its Senior Notes and paid off and retired $110.4
million of principal amount of its Term Loans under the Company`s Credit
Facility. It is currently assumed that approximately $25 million of principal
amount of additional Senior Note repurchases will be completed during the
remainder of 2009.
* Expressed as a percentage of income from continuing operations before income
taxes, provision for income tax is projected to be approximately 31.5% to 33.5%
for 2009. The adoption of SFAS No. 160 and the related presentation of
noncontrolling interests outside of income from continuing operations caused the
effective tax rate to be lower than previously projected. The income tax
projection includes possible additional unrecognized tax benefits and tax
revaluations that may be recognized prior to the end of 2009.
* Capital expenditures are projected as follows (in millions):

2009
Guidance

Total $ 600 to $ 650

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

2009
Guidance

Total $ 950 to $1,000

* Included in the above guidance are estimated 2.5% to 3.0% increases in
Medicare inpatient reimbursement effective October 1, 2008, and Medicare
outpatient reimbursement effective January 1, 2009. Moreover, the guidance
reflects 0% to 1% increase in Medicare inpatient reimbursement at October 1,
2009. This guidance reflects no new significant changes in Medicaid
reimbursements for 2009 and does not reflect any state Medicaid legislation that
has not been enacted or is not known to date. This guidance does not reflect any
state discount programs not implemented to date. The 2009 guidance does include
a reduction in net operating revenues of 0.10% of calendar year 2009 net
operating revenues for the estimated impact of the implementation of an
outpatient prospective payment system under the TRICARE/CHAMPUS program, which
became effective on May 1, 2009.

The projections set forth in this report constitute forward-looking statements
within the meaning of Section 27A of the Securities Act, Section 21E of the
Exchange Act and the Private Securities Litigation Reform Act of 1995. Although
the Company believes that these forward-looking statements are based on
reasonable assumptions, these assumptions are inherently subject to significant
economic and competitive uncertainties and contingencies, which are difficult or
impossible to predict accurately and are beyond the control of the Company.
Accordingly, the Company cannot give any assurance that its expectations will in
fact occur and cautions that actual results may differ materially from those in
the forward-looking statements. A number of factors could affect the future
results of the Company or the healthcare industry generally and could cause the
Company`s expected results to differ materially from those expressed in this
filing.

These factors include, among other things:

* general economic and business conditions, both nationally and in the regions
in which we operate;
* legislative proposals for healthcare reform and universal access to healthcare
coverage;
* risks associated with our substantial indebtedness, leverage, and debt service
obligations;
* demographic changes;
* changes in, or the failure to comply with, governmental regulations;
* potential adverse impact of known and unknown government investigations and
Federal and State False Claims Act litigation;
* our ability, where appropriate, to enter into and maintain managed care
provider arrangements and the terms of these arrangements;
* changes in, or the failure to comply with, managed care contracts could result
in disputes and changes in reimbursement that could be applied retroactively;
* changes in inpatient or outpatient Medicare and Medicaid payment levels;
* increases in the amount and risk of collectability of patient accounts
receivable;
* increases in wages as a result of inflation or competition for highly
technical positions and rising supply costs due to market pressure from
pharmaceutical companies and new product releases;
* liabilities and other claims asserted against us, including self-insured
malpractice claims;
* competition;
* our ability to attract and retain, without significant employment costs,
qualified personnel, key management, physicians, nurses and other health care
workers;
* trends toward treatment of patients in less acute or specialty healthcare
settings, including ambulatory surgery centers or specialty hospitals;
* changes in medical or other technology;
* changes in U.S. generally accepted accounting principles;
* the availability and terms of capital to fund additional acquisitions or
replacement facilities;
* our ability to successfully acquire additional hospitals and complete the sale
of hospitals held for sale;
* our ability to successfully integrate any acquired hospitals or to recognize
expected synergies from such acquisitions;
* our ability to obtain adequate levels of general and professional liability
insurance;
* timeliness of reimbursement payments received under government programs; and
* the other risk factors set forth in our public filings with the Securities and
Exchange Commission.

The consolidated operating results for the quarter and six months ended June 30,
2009, are not necessarily indicative of the results that may be experienced for
any such future period or for any future year, including 2009.

The Company cautions that the projections for calendar year 2009 set forth in
this press release are given as of the date hereof based on currently available
information. The Company is not undertaking any obligation to update these
projections as conditions change or other information becomes available.

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

Copyright Business Wire 2009

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