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

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Community Health Systems, Inc. Announces Third Quarter 2012 Results with Net Operating Revenues of $3.2 Billion

FRANKLIN, Tenn.--(BUSINESS WIRE)-- Community Health Systems, Inc. (NYS: CYH) (the "Company") today announced financial and operating results for the three and nine months ended September 30, 2012.


Net operating revenues for the three months ended September 30, 2012, totaled $3.2 billion, a 9.0 percent increase compared with $2.9 billion for the same period in 2011. Income from continuing operations decreased to $58.8 million, or $0.49 per share (diluted), for the three months ended September 30, 2012, compared with $95.8 million, or $0.86 per share (diluted), for the same period in 2011. Net income attributable to Community Health Systems, Inc. common stockholders was $0.49 per share (diluted) for the three months ended September 30, 2012, compared with $0.83 per share (diluted) for the same period in 2011. The results for the three months ended September 30, 2012, include a $0.37 per share (diluted) loss from the early extinguishment of debt. Excluding this item, both income from continuing operations and net income attributable to Community Health Systems, Inc. common stockholders were $0.86 per share (diluted) for the three months ended September 30, 2012. Weighted-average shares outstanding (diluted) were 90.0 million for the three months ended September 30, 2012, and 89.9 million for the three months ended September 30, 2011.

Adjusted EBITDA for the three months ended September 30, 2012, was $477.3 million compared with $453.5 million for the same period in 2011, representing a 5.2 percent increase. Adjusted EBITDA is EBITDA adjusted to exclude discontinued operations, loss from early extinguishment of debt and net income attributable to non-controlling interests. The Company uses adjusted EBITDA as a measure of liquidity. Net cash provided by operating activities for the three months ended September 30, 2012, was $294.9 million compared with $235.6 million for the same period in 2011.

The consolidated operating results for the three months ended September 30, 2012, reflect a 5.0 percent increase in total admissions and a 6.3 percent increase in total adjusted admissions compared with the same period in 2011. On a same-store basis, admissions decreased 0.3 percent while adjusted admissions increased 0.8 percent compared with the same period in 2011. On a same-store basis, net operating revenues increased 4.0 percent compared with the same period in 2011.

Net operating revenues for the nine months ended September 30, 2012, totaled $9.8 billion, a 9.6 percent increase compared with $8.9 billion for the same period in 2011. Income from continuing operations decreased to $260.6 million, or $2.27 per share (diluted), for the nine months ended September 30, 2012, compared with $280.3 million, or $2.49 per share (diluted), for the same period in 2011. Net income attributable to Community Health Systems, Inc. common stockholders was $2.27 per share (diluted) for the nine months ended September 30, 2012, compared with $1.87 per share (diluted) for the same period in 2011. The results for the nine months ended September 30, 2012, include a $0.48 per share (diluted) net benefit from the resolution of an industry wide governmental settlement and a payment update relating to prior periods, a $0.10 per share (diluted) charge to establish reserves for certain legal matters, and a $0.81 per share (diluted) loss from the early extinguishment of debt. Excluding these previously mentioned items, both income from continuing operations and net income attributable to Community Health Systems, Inc. common stockholders were $2.70 per share (diluted) for the nine months ended September 30, 2012. Weighted-average shares outstanding (diluted) were 89.5 million for the nine months ended September 30, 2012, and 91.3 million for the nine months ended September 30, 2011.

Adjusted EBITDA for the nine months ended September 30, 2012, was $1.5 billion compared with $1.4 billion for the same period in 2011, representing a 9.0 percent increase. Net cash provided by operating activities for the nine months ended September 30, 2012, was $777.9 million compared with $820.2 million for the same period in 2011.

The consolidated operating results for the nine months ended September 30, 2012, reflect a 3.7 percent increase in total admissions and a 6.7 percent increase in total adjusted admissions compared with the same period in 2011. On a same-store basis, admissions decreased 1.6 percent while adjusted admissions increased 1.3 percent compared with the same period in 2011. On a same-store basis, net operating revenues increased 4.3 percent compared with the same period in 2011.

Commenting on the results, Wayne T. Smith, chairman, president and chief executive officer of Community Health Systems, Inc. said, "Community Health Systems delivered another strong financial and operating performance in the third quarter of 2012. Operating revenue increased nine percent and adjusted EBITDA increased five percent over the prior year period. We continue to demonstrate favorable results on a same-store basis with revenues up four percent and volume trends stabilizing. Our standardized business platform has enabled us to reduce costs, recruit qualified physicians and improve local hospital services.

"We are also pleased that over the last several months we have extended almost all of our long-term debt. We have laddered our maturities to 2017, 2018, 2019 and 2020," added Smith.

Included on pages 14, 15 and 16 of this press release are tables setting forth the Company's updated 2012 annual earnings guidance.

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

Community Health Systems, Inc. will hold a conference call on Wednesday, October 31, 2012, at 11:00 a.m. Central, 12:00 p.m. Eastern, to review financial and operating results for the third quarter ended September 30, 2012. Investors will have the opportunity to listen to a live internet broadcast of the conference call by clicking on the Investor Relations link of the Company's website at www.chs.net, or at www.earnings.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will continue to be available through November 30, 2012. Copies of the Company's current report on Form 8-K (including this press release) and conference call slide show will be available on the Company's website at www.chs.net.

Forward-Looking Statements

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

 
 
 
 
 

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

 
 Three Months Ended Nine Months Ended
September 30,September 30,
2012 20112012 2011
 
Net operating revenues$3,212,030$2,945,477$9,752,039$8,900,387
Adjusted EBITDA (c)477,254453,5121,495,8431,372,883
Income from continuing operations (d), (e), (f), (g), (h)58,75895,800260,643280,279
Net income attributable to Community Health Systems, Inc. stockholders44,23374,304203,066171,017
 

Basic earnings (loss) per share attributable to Community Health Systems, Inc. common stockholders (j):

Continuing operations (d), (e), (f), (g), (h)$0.50$0.87$2.29$2.51
Discontinued operations - (0.04) (0.01) (0.62)
Net income$0.50$0.83 $2.28 $1.89 
 

Diluted earnings (loss) per share attributable to Community Health Systems, Inc. common stockholders (j):

Continuing operations (d), (e), (f), (g), (h)$0.49$0.86$2.27$2.49
Discontinued operations - (0.04) (0.01) (0.61)
Net income$0.49$0.83 $2.27 $1.87 
 
Weighted-average number of shares outstanding (i):
Basic89,26089,41289,02890,514
Diluted90,00989,85889,46591,256
 
Net cash provided by operating activities$294,938$235,550$777,865$820,235
 

_____

For footnotes, see pages 12 and 13.

 
 
 
 
 
 

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

 
 Three Months Ended September 30,
2012 2011
Amount 

% of Net

Operating

Revenues

Amount 

% of Net

Operating

Revenues

Operating revenues (net of contractual allowances and discounts)$3,696,661$3,395,773
Provision for bad debts 484,631   450,296  
Net operating revenues 3,212,030 100.0% 2,945,477 100.0%
 
Operating costs and expenses:
Salaries and benefits1,525,11147.5%1,393,15147.3%
Supplies484,21215.1%459,14615.6%
Other operating expenses694,85721.6%623,60821.2%
Electronic health records incentive reimbursement (f)(30,622)-1.0%(40,227)-1.4%
Rent68,6372.1%64,4812.2%
Depreciation and amortization 182,207 5.7% 161,515 5.5%
Total operating costs and expenses 2,924,402 91.0% 2,661,674 90.4%
 
Income from operations (f), (g), (h)287,6289.0%283,8039.6%
Interest expense, net158,5655.0%159,4805.4%
Loss from early extinguishment of debt52,0241.6%-0.0%
Equity in earnings of unconsolidated affiliates (7,419)-0.2% (8,194)-0.3%

Income from continuing operations before income taxes

84,4582.6%132,5174.5%
Provision for income taxes 25,700 0.8% 36,717 1.2%
Income from continuing operations (f), (g), (h) 58,758 1.8% 95,800 3.3%
 
Discontinued operations, net of taxes:
Loss from operations of entities sold-0.0%(3,103)-0.2%
Impairment of hospitals sold-0.0%-0.0%
Loss on sale, net - 0.0% (66)0.0%
Loss from discontinued operations, net of taxes - 0.0% (3,169)-0.2%
Net income58,7581.8%92,6313.1%
Less: Net income attributable to noncontrolling interests 14,525 0.4% 18,327 0.6%
Net income attributable to Community Health Systems, Inc. stockholders$44,233 1.4%$74,304 2.5%
 

Basic earnings (loss) per share attributable to Community Health Systems, Inc. common stockholders (j):

Continuing operations (f), (g), (h)$0.50$0.87
Discontinued operations -  (0.04)
Net income$0.50 $0.83 
 

Diluted earnings (loss) per share attributable to Community Health Systems, Inc. common stockholders (j):

Continuing operations (f), (g), (h)$0.49$0.86
Discontinued operations -  (0.04)
Net income$0.49 $0.83 
 

Weighted-average number of shares outstanding (i):

Basic 89,260  89,412 
Diluted 90,009  89,858 
 

_____

For footnotes, see pages 12 and 13.

 
 
 
 
 
 

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

 
 Nine Months Ended September 30,
2012 2011
Amount 

% of Net

Operating

Revenues

Amount 

% of Net

Operating

Revenues

Operating revenues (net of contractual allowances and discounts)$11,226,580$10,183,654
Provision for bad debts 1,474,541   1,283,267  
Net operating revenues 9,752,039 100.0% 8,900,387 100.0%
 
Operating costs and expenses: Read Full Story

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