Supplemental Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2011

Supplemental Financial Information [Abstract]

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

19. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

     In connection with the consummation of the Triad acquisition, CHS obtained approximately $7.2 billion of senior secured financing under the Credit Facility and issued the Notes in the aggregate principal amount of approximately $3.0 billion. The Notes are senior unsecured obligations of CHS and are guaranteed on a senior basis by the Company and by certain of its existing and subsequently acquired or organized 100% owned domestic subsidiaries.

     The Notes are fully and unconditionally guaranteed on a joint and several basis. The following condensed consolidating financial statements present Community Health Systems, Inc. (as parent guarantor), CHS (as the issuer), the subsidiary guarantors, the subsidiary non-guarantors and eliminations. These condensed consolidating financial statements have been prepared and presented in accordance with SEC Regulation S-X Rule 3-10 “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”

     The accounting policies used in the preparation of this financial information are consistent with those elsewhere in the consolidated financial statements of the Company, except as noted below:

• Intercompany receivables and payables are presented gross in the supplemental consolidating balance sheets.

• Cash flows from intercompany transactions are presented in cash flows from financing activities, as changes in intercompany balances with affiliates, net.

• Income tax expense is allocated from the parent guarantor to the income producing operations (other guarantors and non-guarantors) and the issuer through stockholders’ equity. As this approach represents an allocation, the income tax expense allocation is considered non-cash for statement of cash flow purposes.

• Interest expense, net has been presented to reflect net interest expense and interest income from outstanding long-term debt and intercompany balances.

     The Company’s intercompany activity consists primarily of daily cash transfers for purposes of cash management, the allocation of certain expenses and expenditures paid for by the parent on behalf of its subsidiaries, and the push down of investment in its subsidiaries. The Company’s subsidiaries generally do not purchase services from each other; thus, the intercompany transactions do not represent revenue generating transactions. All intercompany transactions eliminate in consolidation.

     From time to time, the Company sells and/or repurchases noncontrolling interests in consolidated subsidiaries, which may change subsidiaries between guarantors and non-guarantors. Amounts for prior periods are restated to reflect the status of guarantors or non-guarantors as of June 30, 2011.

Condensed Consolidating Balance Sheet
June 30, 2011

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—		$	80,552		$	110,880	$	—		$	191,432
Patient accounts receivable, net of allowance for doubtful accounts		—			—			1,043,386			749,018		—			1,792,404
Supplies		—			—			212,873			129,395		—			342,268
Deferred income taxes		115,819			—			—			—		—			115,819
Prepaid expenses and taxes		—			17			85,760			31,681		—			117,458
Other current assets		—			—			110,501			64,608		—			175,109
Total current assets		115,819			17			1,533,072			1,085,582		—			2,734,490
Intercompany receivable		1,190,786			9,441,127			1,438,751			1,534,314		(13,604,978	)		—
Property and equipment, net		—			—			4,069,371			2,437,053		—			6,506,424
Goodwill		—			—			2,380,891			1,847,079		—			4,227,970
Other assets, net of accumulated amortization		—			117,845			594,289			644,397		—			1,356,531
Net investment in subsidiaries		1,637,169			5,856,743			2,306,109			—		(9,800,021	)		—
Total assets	$	2,943,774		$	15,415,732		$	12,322,483		$	7,548,425	$	(23,404,999	)	$	14,825,415
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	49,954		$	17,073		$	3,085	$	—		$	70,112
Accounts payable		—			40			402,806			181,078		—			583,924
Current income tax payable		349			—			—			—		—			349
Deferred income taxes		8,882			—			—			—		—			8,882
Accrued interest		—			145,034			111			1		—			145,146
Accrued liabilities		7,580			567			576,614			269,568		—			854,329
Total current liabilities		16,811			195,595			996,604			453,732		—			1,662,742
Long-term debt		—			8,709,456			46,194			25,793		—			8,781,443
Intercompany payable		—			4,575,989			8,923,510			5,979,987		(19,479,486	)		—
Deferred income taxes		608,177			—			—			—		—			608,177
Other long-term liabilities		9,765			297,525			401,585			317,194		—			1,026,069
Total liabilities		634,753			13,778,565			10,367,893			6,776,706		(19,479,486	)		12,078,431
Redeemable noncontrolling interests in equity of consolidated subsidiaries		—			—			—			376,658		—			376,658
Equity:
Community Health Systems, Inc. stockholders’ equity:
Preferred stock		—			—			—			—		—			—
Common stock		932			—			1			2		(3	)		932
Additional paid-in capital		1,119,205			663,410			709,243			120,485		(1,493,138	)		1,119,205
Treasury stock, at cost		(6,678	)		—			—			—		—			(6,678	)
Accumulated other comprehensive (loss) income		(200,533	)		(200,533	)		(10,074	)		—		210,607			(200,533	)
Retained earnings		1,396,095			1,174,290			1,255,420			213,269		(2,642,979	)		1,396,095
Total Community Health Systems, Inc. stockholders’ equity		2,309,021			1,637,167			1,954,590			333,756		(3,925,513	)		2,309,021
Noncontrolling interests in equity of consolidated subsidiaries		—			—			—			61,305		—			61,305
Total equity		2,309,021			1,637,167			1,954,590			395,061		(3,925,513	)		2,370,326
Total liabilities and equity	$	2,943,774		$	15,415,732		$	12,322,483		$	7,548,425	$	(23,404,999	)	$	14,825,415

Condensed Consolidating Balance Sheet
December 31, 2010

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—		$	212,035		$	87,134	$	—		$	299,169
Patient accounts receivable, net of allowance for doubtful accounts		—			—			971,220			743,322		—			1,714,542
Supplies		—			—			196,957			132,157		—			329,114
Deferred income taxes		115,819			—			—			—		—			115,819
Prepaid expenses and taxes		118,464			116			89,172			11,466		—			219,218
Other current assets		—			41			138,923			54,367		—			193,331
Total current assets		234,283			157			1,608,307			1,028,446		—			2,871,193
Intercompany receivable		1,079,295			9,002,158			1,145,185			1,484,130		(12,710,768	)		—
Property and equipment, net		—			—			3,816,098			2,508,339		—			6,324,437
Goodwill		—			—			2,331,452			1,818,795		—			4,150,247
Other assets, net of accumulated amortization		—			131,352			625,472			595,422		—			1,352,246
Net investment in subsidiaries		1,510,062			5,315,871			2,061,532			—		(8,887,465	)		—
Total assets	$	2,823,640		$	14,449,538		$	11,588,046		$	7,435,132	$	(21,598,233	)	$	14,698,123
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	49,953		$	11,063		$	2,123	$	—		$	63,139
Accounts payable		—			—			362,154			164,184		—			526,338
Current income tax payable		—			—			—			—		—			—
Deferred income taxes		8,882			—			—			—		—			8,882
Accrued interest		—			146,297			116			2		—			146,415
Accrued liabilities		7,595			567			569,991			319,113		—			897,266
Total current liabilities		16,477			196,817			943,324			485,422		—			1,642,040
Long-term debt		—			8,734,473			44,819			29,090		—			8,808,382
Intercompany payable		—			3,667,662			8,385,414			5,911,829		(17,964,905	)		—
Deferred income taxes		608,177			—			—			—		—			608,177
Other long-term liabilities		9,522			340,526			372,693			278,934		—			1,001,675
Total liabilities		634,176			12,939,478			9,746,250			6,705,275		(17,964,905	)		12,060,274
Redeemable noncontrolling interests in equity of consolidated subsidiaries		—			—			—			387,472		—			387,472
Equity:
Community Health Systems, Inc. stockholders’ equity:
Preferred stock		—			—			—			—		—			—
Common stock		936			—			1			2		(3	)		936
Additional paid-in capital		1,126,751			640,683			682,686			103,401		(1,426,770	)		1,126,751
Treasury stock, at cost		(6,678	)		—			—			—		—			(6,678	)
Accumulated other comprehensive (loss) income		(230,927	)		(230,927	)		(12,990	)		—		243,917			(230,927	)
Retained earnings		1,299,382			1,100,304			1,172,099			178,069		(2,450,472	)		1,299,382
Total Community Health Systems, Inc. stockholders’ equity		2,189,464			1,510,060			1,841,796			281,472		(3,633,328	)		2,189,464
Noncontrolling interests in equity of consolidated subsidiaries		—			—			—			60,913		—			60,913
Total equity		2,189,464			1,510,060			1,841,796			342,385		(3,633,328	)		2,250,377
Total liabilities and equity	$	2,823,640		$	14,449,538		$	11,588,046		$	7,435,132	$	(21,598,233	)	$	14,698,123

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2011

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	2,002,412		$	1,431,417		$	—		$	3,433,829
Operating costs and expenses:
Salaries and benefits		—			—			767,262			616,834			—			1,384,096
Provision for bad debts		—			—			259,583			173,419			—			433,002
Supplies		—			—			262,909			186,370			—			449,279
Other operating expenses		—			—			393,916			260,821			—			654,737
Rent		—			—			31,007			31,424			—			62,431
Depreciation and amortization		—			—			95,559			65,817			—			161,376
Total operating costs and expenses		—			—			1,810,236			1,334,685			—			3,144,921
Income from operations		—			—			192,176			96,732			—			288,908
Interest expense, net		—			22,212			123,347			17,671			—			163,230
Equity in earnings of unconsolidated affiliates		(35,389	)		(39,072	)		(45,752	)		—			108,196			(12,017	)
Income from continuing operations before income taxes		35,389			16,860			114,581			79,061			(108,196	)		137,695
Provision for (benefit from) income taxes		—			(18,529	)		41,364			21,986			—			44,821
Income from continuing operations		35,389			35,389			73,217			57,075			(108,196	)		92,874
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			2,813			(2,578	)		—			235
Impairment of hospitals held for sale		—			—			(39,562	)		—			—			(39,562	)
Loss on sale		—			—			—			—			—			—
Loss from discontinued operations, net of taxes		—			—			(36,749	)		(2,578	)		—			(39,327	)
Net income		35,389			35,389			36,468			54,497			(108,196	)		53,547
Less: Net income attributable to noncontrolling interests		—			—			—			18,158			—			18,158
Net income attributable to Community Health Systems, Inc.	$	35,389		$	35,389		$	36,468		$	36,339		$	(108,196	)	$	35,389

Condensed Consolidating Statement of Income
Three Months Ended June 30, 2010

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	1,770,800		$	1,309,846		$	—		$	3,080,646
Operating costs and expenses:
Salaries and benefits		—			—			663,919			567,640			—			1,231,559
Provision for bad debts		—			—			220,065			146,937			—			367,002
Supplies		—			—			242,931			187,643			—			430,574
Other operating expenses		—			—			309,698			250,264			—			559,962
Rent		—			—			28,838			32,013			—			60,851
Depreciation and amortization		—			—			86,401			63,378			—			149,779
Total operating costs and expenses		—			—			1,551,852			1,247,875			—			2,799,727
Income from operations		—			—			218,948			61,971			—			280,919
Interest expense, net		—			28,433			118,682			13,644			—			160,759
Equity in earnings of unconsolidated affiliates		(70,065	)		(82,583	)		(27,298	)		—			168,966			(10,980	)
Income from continuing operations before income taxes		70,065			54,150			127,564			48,327			(168,966	)		131,140
Provision for (benefit from) income taxes		—			(15,915	)		46,694			11,982			—			42,761
Income from continuing operations		70,065			70,065			80,870			36,345			(168,966	)		88,379
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			1,789			(3,826	)		—			(2,037	)
Impairment of hospitals held for sale		—			—			—			—			—			—
Loss on sale		—			—			—			—			—			—
Loss from discontinued operations, net of taxes		—			—			1,789			(3,826	)		—			(2,037	)
Net income		70,065			70,065			82,659			32,519			(168,966	)		86,342
Less: Net income attributable to noncontrolling interests		—			—			—			16,277			—			16,277
Net income attributable to Community Health Systems, Inc.	$	70,065		$	70,065		$	82,659		$	16,242		$	(168,966	)	$	70,065

Condensed Consolidating Statement of Income
Six Months Ended June 30, 2011

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	3,932,956		$	2,854,925		$	—		$	6,787,881
Operating costs and expenses:
Salaries and benefits		—			—			1,510,301			1,253,162			—			2,763,463
Provision for bad debts		—			—			499,434			333,537			—			832,971
Supplies		—			—			525,911			381,185			—			907,096
Other operating expenses		—			—			738,800			530,730			—			1,269,530
Rent		—			—			61,608			63,993			—			125,601
Depreciation and amortization		—			—			189,419			130,112			—			319,531
Total operating costs and expenses		—			—			3,525,473			2,692,719			—			6,218,192
Income from operations		—			—			407,483			162,206			—			569,689
Interest expense, net		—			50,315			244,740			31,393			—			326,448
Equity in earnings of unconsolidated affiliates		(96,713	)		(114,604	)		(77,710	)		—			258,876			(30,151	)
Income from continuing operations before income taxes		96,713			64,289			240,453			130,813			(258,876	)		273,392
Provision for (benefit from) income taxes		—			(32,424	)		86,803			34,534			—			88,913
Income from continuing operations		96,713			96,713			153,650			96,279			(258,876	)		184,479
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			4,158			(5,601	)		—			(1,443	)
Impairment of hospitals held for sale		—			—			(47,930	)		—			—			(47,930	)
Loss on sale		—			—			—			(3,234	)		—			(3,234	)
Loss from discontinued operations, net of taxes		—			—			(43,772	)		(8,835	)		—			(52,607	)
Net income		96,713			96,713			109,878			87,444			(258,876	)		131,872
Less: Net income attributable to noncontrolling interests		—			—			—			35,159			—			35,159
Net income attributable to Community Health Systems, Inc.	$	96,713		$	96,713		$	109,878		$	52,285		$	(258,876	)	$	96,713

Condensed Consolidating Statement of Income
Six Months Ended June 30, 2010

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	3,546,129		$	2,603,129		$	—		$	6,149,258
Operating costs and expenses:
Salaries and benefits		—			—			1,342,015			1,136,225			—			2,478,240
Provision for bad debts		—			—			442,530			290,973			—			733,503
Supplies		—			—			482,632			370,054			—			852,686
Other operating expenses		—			—			613,430			503,151			—			1,116,581
Rent		—			—			58,253			64,655			—			122,908
Depreciation and amortization		—			—			170,605			123,077			—			293,682
Total operating costs and expenses		—			—			3,109,465			2,488,135			—			5,597,600
Income from operations		—			—			436,664			114,994			—			551,658
Interest expense, net		—			57,447			235,294			27,441			—			320,182
Equity in earnings of unconsolidated affiliates		(140,072	)		(166,296	)		(50,851	)		—			333,649			(23,570	)
Income from continuing operations before income taxes		140,072			108,849			252,221			87,553			(333,649	)		255,046
Provision for (benefit from) income taxes		—			(31,223	)		92,817			20,716			—			82,310
Income from continuing operations		140,072			140,072			159,404			66,837			(333,649	)		172,736
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			6,231			(7,629	)		—			(1,398	)
Impairment of hospitals held for sale		—			—			—			—			—			—
Loss on sale		—			—			—			—			—			—
Loss from discontinued operations, net of taxes		—			—			6,231			(7,629	)		—			(1,398	)
Net income		140,072			140,072			165,635			59,208			(333,649	)		171,338
Less: Net income attributable to noncontrolling interests		—			—			—			31,266			—			31,266
Net income attributable to Community Health Systems, Inc.	$	140,072		$	140,072		$	165,635		$	27,942		$	(333,649	)	$	140,072

Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2011

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	1,490		$	(37,658	)	$	338,117		$	282,736		$	—	$	584,685
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(162,692	)		(41,572	)		—		(204,264	)
Purchases of property and equipment		—			—			(187,760	)		(163,623	)		—		(351,383	)
Proceeds from disposition of ancillary operations		—			—			—			18,464			—		18,464
Proceeds from sale of property and equipment		—			—			881			7,153			—		8,034
Increase in other non-operating assets		—			—			(58,120	)		(17,091	)		—		(75,211	)
Net cash used in investing activities		—			—			(407,691	)		(196,669	)		—		(604,360	)
Cash flows from financing activities:
Proceeds from exercise of stock options		18,831			—			—			—			—		18,831
Deferred financing costs		—			(234	)		—			—			—		(234	)
Excess tax benefit relating to stock-based compensation		4,659			—			—			—			—		4,659
Stock buy-back		(50,002	)		—			—			—			—		(50,002	)
Proceeds from noncontrolling investors in joint ventures		—			—			—			863			—		863
Redemption of noncontrolling investments in joint ventures		—			—			—			(3,303	)		—		(3,303	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(30,078	)		—		(30,078	)
Changes in intercompany balances with affiliates, net		25,022			62,908			(59,406	)		(28,524	)		—		—
Repayments of long-term indebtedness		—			(25,016	)		(2,504	)		(1,278	)		—		(28,798	)
Net cash provided by (used in) financing activities		(1,490	)		37,658			(61,910	)		(62,320	)		—		(88,062	)
Net change in cash and cash equivalents		—			—			(131,484	)		23,747			—		(107,737	)
Cash and cash equivalents at beginning of period		—			—			212,035			87,134			—		299,169
Cash and cash equivalents at end of period	$	—		$	—		$	80,551		$	110,881		$	—	$	191,432

Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2010

	Parent						Other			Non-
	Guarantor			Issuer			Guarantors			Guarantors			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(100,143	)	$	(43,029	)	$	539,874		$	145,090		$	—	$	541,792
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(389	)		(2,024	)		—		(2,413	)
Purchases of property and equipment		—			—			(169,311	)		(94,613	)		—		(263,924	)
Proceeds from disposition of ancillary operations		—			—			—			—			—		—
Proceeds from sale of property and equipment		—			—			2,151			156			—		2,307
Increase in other non-operating assets		—			—			(31,750	)		(32,508	)		—		(64,258	)
Net cash used in investing activities		—			—			(199,299	)		(128,989	)		—		(328,288	)
Cash flows from financing activities:
Proceeds from exercise of stock options		53,615			—			—			—			—		53,615
Deferred financing costs		—			—			—			—			—		—
Excess tax benefit relating to stock-based compensation		10,104			—			—			—			—		10,104
Stock buy-back		(12,242	)		—			—			—			—		(12,242	)
Proceeds from noncontrolling investors in joint ventures		—			—			—			5,155			—		5,155
Redemption of noncontrolling investments in joint ventures		—			—			—			(2,395	)		—		(2,395	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(29,371	)		—		(29,371	)
Changes in intercompany balances with affiliates, net		48,666			64,765			(73,906	)		(39,525	)		—		—
Repayments of long-term indebtedness		—			(21,736	)		(9,996	)		(2,425	)		—		(34,157	)
Net cash provided by (used in) financing activities		100,143			43,029			(83,902	)		(68,561	)		—		(9,291	)
Net change in cash and cash equivalents		—			—			256,673			(52,460	)		—		204,213
Cash and cash equivalents at beginning of period		—			—			238,495			106,046			—		344,541
Cash and cash equivalents at end of period	$	—		$	—		$	495,168		$	53,586		$	—	$	548,754