Supplemental Condensed Consolidating Financial Information

9 Months Ended

Sep. 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 September 30, 2011.

Condensed Consolidating Balance Sheet

September 30, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—		$	163,693		$	102,619	$	—		$	266,312
Patient accounts receivable, net of allowance for doubtful accounts		—			—			1,015,730			757,395		—			1,773,125
Supplies		—			—			207,562			128,900		—			336,462
Deferred income taxes		115,819			—			—			—		—			115,819
Prepaid expenses and taxes		—			156			88,033			30,884		—			119,073
Other current assets		—			10,000			139,327			76,410		—			225,737
Total current assets		115,819			10,156			1,614,345			1,096,208		—			2,836,528
Intercompany receivable		1,168,828			9,347,366			1,634,809			1,672,003		(13,823,006	)		—
Property and equipment, net		—			—			4,148,382			2,425,558		—			6,573,940
Goodwill		—			—			2,381,712			1,851,201		—			4,232,913
Other assets, net of accumulated amortization		—			110,799			483,044			610,698		—			1,204,541
Net investment in subsidiaries		1,710,955			6,065,149			2,467,348			—		(10,243,452	)		—
Total assets	$	2,995,602		$	15,533,470		$	12,729,640		$	7,655,668	$	(24,066,458	)	$	14,847,922
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	49,954		$	7,907		$	3,205	$	—		$	61,066
Accounts payable		—			24			448,540			187,763		—			636,327
Current income tax payable		17,705			—			—			—		—			17,705
Deferred income taxes		8,882			—			—			—		—			8,882
Accrued interest		—			83,872			110			2		—			83,984
Accrued liabilities		7,580			567			607,283			279,766		—			895,196
Total current liabilities		34,167			134,417			1,063,840			470,736		—			1,703,160
Long-term debt		—			8,696,988			46,081			25,608		—			8,768,677
Intercompany payable		—			4,697,847			9,206,345			6,072,049		(19,976,241	)		—
Deferred income taxes		608,177			—			—			—		—			608,177
Other long-term liabilities		5,255			293,266			391,206			285,436		—			975,163
Total liabilities		647,599			13,822,518			10,707,472			6,853,829		(19,976,241	)		12,055,177
Redeemable noncontrolling interests in equity of consolidated subsidiaries		—			—			—			383,745		—			383,745
Equity:
Community Health Systems, Inc. stockholders’ equity:
Preferred stock		—			—			—			—		—			—
Common stock		918			—			1			2		(3	)		918
Additional paid-in capital		1,084,415			690,233			734,808			128,911		(1,553,952	)		1,084,415
Treasury stock, at cost		(6,678	)		—			—			—		—			(6,678	)
Accumulated other comprehensive (loss) income		(201,051	)		(201,051	)		(13,313	)		—		214,364			(201,051	)
Retained earnings		1,470,399			1,221,770			1,300,672			228,184		(2,750,626	)		1,470,399
Total Community Health Systems, Inc. stockholders’ equity		2,348,003			1,710,952			2,022,168			357,097		(4,090,217	)		2,348,003
Noncontrolling interests in equity of consolidated subsidiaries		—			—			—			60,997		—			60,997
Total equity		2,348,003			1,710,952			2,022,168			418,094		(4,090,217	)		2,409,000
Total liabilities and equity	$	2,995,602		$	15,533,470		$	12,729,640		$	7,655,668	$	(24,066,458	)	$	14,847,922

Condensed Consolidating Balance Sheet

December 31, 2010

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—		$	212,992		$	86,177	$	—		$	299,169
Patient accounts receivable, net of allowance for doubtful accounts		—			—			968,290			746,252		—			1,714,542
Supplies		—			—			195,131			133,983		—			329,114
Deferred income taxes		115,819			—			—			—		—			115,819
Prepaid expenses and taxes		118,464			116			88,749			11,889		—			219,218
Other current assets		—			41			139,628			53,662		—			193,331
Total current assets		234,283			157			1,604,790			1,031,963		—			2,871,193
Intercompany receivable		1,079,295			9,002,158			1,418,776			1,370,494		(12,870,723	)		—
Property and equipment, net		—			—			3,880,653			2,443,784		—			6,324,437
Goodwill		—			—			2,331,452			1,818,795		—			4,150,247
Other assets, net of accumulated amortization		—			131,352			466,289			754,605		—			1,352,246
Net investment in subsidiaries		1,510,062			5,315,935			2,055,423			—		(8,881,420	)		—
Total assets	$	2,823,640		$	14,449,602		$	11,757,383		$	7,419,641	$	(21,752,143	)	$	14,698,123
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	49,953		$	11,069		$	2,117	$	—		$	63,139
Accounts payable		—			—			362,357			163,981		—			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			568,845			320,259		—			897,266
Total current liabilities		16,477			196,817			942,387			486,359		—			1,642,040
Long-term debt		—			8,734,473			44,831			29,078		—			8,808,382
Intercompany payable		—			3,667,726			8,554,015			5,903,193		(18,124,934	)		—
Deferred income taxes		608,177			—			—			—		—			608,177
Other long-term liabilities		9,522			340,526			372,236			279,391		—			1,001,675
Total liabilities		634,176			12,939,542			9,913,469			6,698,021		(18,124,934	)		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			683,340			100,550		(1,424,573	)		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			1,173,563			172,683		(2,446,550	)		1,299,382
Total Community Health Systems, Inc. stockholders’ equity		2,189,464			1,510,060			1,843,914			273,235		(3,627,209	)		2,189,464
Noncontrolling interests in equity of consolidated subsidiaries		—			—			—			60,913		—			60,913
Total equity		2,189,464			1,510,060			1,843,914			334,148		(3,627,209	)		2,250,377
Total liabilities and equity	$	2,823,640		$	14,449,602		$	11,757,383		$	7,419,641	$	(21,752,143	)	$	14,698,123

Condensed Consolidating Statement of Income

Three Months Ended September 30, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	1,990,666		$	1,445,334		$	—		$	3,436,000
Operating costs and expenses:
Salaries and benefits		—			—			765,198			627,953			—			1,393,151
Provision for bad debts		—			—			262,124			188,172			—			450,296
Supplies		—			—			263,255			195,891			—			459,146
Other operating expenses		—			—			362,132			261,476			—			623,608
Rent		—			—			30,665			33,816			—			64,481
Depreciation and amortization		—			—			97,821			63,694			—			161,515
Total operating costs and expenses		—			—			1,781,195			1,371,002			—			3,152,197
Income from operations		—			—			209,471			74,332			—			283,803
Interest expense, net		—			15,484			133,859			10,137			—			159,480
Equity in earnings of unconsolidated affiliates		(74,304	)		(68,064	)		(40,407	)		—			174,581			(8,194	)
Income from continuing operations before income taxes		74,304			52,580			116,019			64,195			(174,581	)		132,517
Provision for (benefit from) income taxes		—			(21,724	)		41,883			16,558			—			36,717
Income from continuing operations		74,304			74,304			74,136			47,637			(174,581	)		95,800
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			(5,437	)		2,334			—			(3,103	)
Impairment of hospitals sold and held for sale		—			—			—			—			—			—
Loss on sale		—			—			—			(66	)		—			(66	)
Loss from discontinued operations, net of taxes		—			—			(5,437	)		2,268			—			(3,169	)
Net income		74,304			74,304			68,699			49,905			(174,581	)		92,631
Less: Net income attributable to noncontrolling interests		—			—			—			18,327			—			18,327
Net income attributable to Community Health Systems, Inc.	$	74,304		$	74,304		$	68,699		$	31,578		$	(174,581	)	$	74,304

Condensed Consolidating Statement of Income

Three Months Ended September 30, 2010

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors		Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	1,816,782		$	1,343,041	$	—		$	3,159,823
Operating costs and expenses:
Salaries and benefits		—			—			686,701			580,402		—			1,267,103
Provision for bad debts		—			—			225,631			161,881		—			387,512
Supplies		—			—			245,593			188,846		—			434,439
Other operating expenses		—			—			317,299			259,350		—			576,649
Rent		—			—			29,416			32,757		—			62,173
Depreciation and amortization		—			—			86,787			60,502		—			147,289
Total operating costs and expenses		—			—			1,591,427			1,283,738		—			2,875,165
Income from operations		—			—			225,355			59,303		—			284,658
Interest expense, net		—			30,632			123,648			8,588		—			162,868
Equity in earnings of unconsolidated affiliates		(70,401	)		(78,900	)		(37,584	)		—		177,347			(9,538	)
Income from continuing operations before income taxes		70,401			48,268			139,291			50,715		(177,347	)		131,328
Provision for (benefit from) income taxes		—			(22,133	)		51,259			14,193		—			43,319
Income from continuing operations		70,401			70,401			88,032			36,522		(177,347	)		88,009
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			(9,132	)		5,977		—			(3,155	)
Impairment of hospitals sold and held for sale		—			—			—			—		—			—
Loss on sale		—			—			—			—		—			—
Loss from discontinued operations, net of taxes		—			—			(9,132	)		5,977		—			(3,155	)
Net income		70,401			70,401			78,900			42,499		(177,347	)		84,854
Less: Net income attributable to noncontrolling interests		—			—			—			14,453		—			14,453
Net income attributable to Community Health Systems, Inc.	$	70,401		$	70,401		$	78,900		$	28,046	$	(177,347	)	$	70,401

Condensed Consolidating Statement of Income

Nine Months Ended September 30, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	5,923,622		$	4,300,259		$	—		$	10,223,881
Operating costs and expenses:
Salaries and benefits		—			—			2,275,499			1,881,115			—			4,156,614
Provision for bad debts		—			—			761,557			521,710			—			1,283,267
Supplies		—			—			789,166			577,076			—			1,366,242
Other operating expenses		—			—			1,100,935			792,203			—			1,893,138
Rent		—			—			92,272			97,810			—			190,082
Depreciation and amortization		—			—			287,240			193,806			—			481,046
Total operating costs and expenses		—			—			5,306,669			4,063,720			—			9,370,389
Income from operations		—			—			616,953			236,539			—			853,492
Interest expense, net		—			65,799			378,598			41,531			—			485,928
Equity in earnings of unconsolidated affiliates		(171,017	)		(182,668	)		(118,116	)		—			433,456			(38,345	)
Income from continuing operations before income taxes		171,017			116,869			356,471			195,008			(433,456	)		405,909
Provision for (benefit from) income taxes		—			(54,148	)		128,686			51,092			—			125,630
Income from continuing operations		171,017			171,017			227,785			143,916			(433,456	)		280,279
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			(1,278	)		(3,268	)		—			(4,546	)
Impairment of hospitals sold and held for sale		—			—			(47,930	)		—			—			(47,930	)
Loss on sale		—			—			—			(3,300	)		—			(3,300	)
Loss from discontinued operations, net of taxes		—			—			(49,208	)		(6,568	)		—			(55,776	)
Net income		171,017			171,017			178,577			137,348			(433,456	)		224,503
Less: Net income attributable to noncontrolling interests		—			—			—			53,486			—			53,486
Net income attributable to Community Health Systems, Inc.	$	171,017		$	171,017		$	178,577		$	83,862		$	(433,456	)	$	171,017

Condensed Consolidating Statement of Income

Nine Months Ended September 30, 2010

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	5,362,911		$	3,946,170		$	—		$	9,309,081
Operating costs and expenses:
Salaries and benefits		—			—			2,028,716			1,716,627			—			3,745,343
Provision for bad debts		—			—			668,161			452,854			—			1,121,015
Supplies		—			—			728,225			558,900			—			1,287,125
Other operating expenses		—			—			930,729			762,501			—			1,693,230
Rent		—			—			87,669			97,412			—			185,081
Depreciation and amortization		—			—			257,392			183,579			—			440,971
Total operating costs and expenses		—			—			4,700,892			3,771,873			—			8,472,765
Income from operations		—			—			662,019			174,297			—			836,316
Interest expense, net		—			88,079			358,942			36,029			—			483,050
Equity in earnings of unconsolidated affiliates		(210,473	)		(245,197	)		(88,435	)		—			510,997			(33,108	)
Income from continuing operations before income taxes		210,473			157,118			391,512			138,268			(510,997	)		386,374
Provision for (benefit from) income taxes		—			(53,355	)		144,076			34,908			—			125,629
Income from continuing operations		210,473			210,473			247,436			103,360			(510,997	)		260,745
Discontinued operations, net of taxes:
Income (loss) from operations of entities sold and held for sale		—			—			(2,901	)		(1,652	)		—			(4,553	)
Impairment of hospitals sold and held for sale		—			—			—			—			—			—
Loss on sale		—			—			—			—			—			—
Loss from discontinued operations, net of taxes		—			—			(2,901	)		(1,652	)		—			(4,553	)
Net income		210,473			210,473			244,535			101,708			(510,997	)		256,192
Less: Net income attributable to noncontrolling interests		—			—			—			45,719			—			45,719
Net income attributable to Community Health Systems, Inc.	$	210,473		$	210,473		$	244,535		$	55,989		$	(510,997	)	$	210,473

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(23,970	)	$	(120,269	)	$	595,670		$	368,804		$	—	$	820,235
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(163,397	)		(46,054	)		—		(209,451	)
Purchases of property and equipment		—			—			(295,298	)		(237,547	)		—		(532,845	)
Proceeds from disposition of hospitals and other ancillary operations		—			—			—			172,578			—		172,578
Proceeds from sale of property and equipment		—			—			1,269			7,982			—		9,251
Increase in other non-operating assets		—			—			(90,009	)		(40,971	)		—		(130,980	)
Net cash used in investing activities		—			—			(547,435	)		(144,012	)		—		(691,447	)
Cash flows from financing activities:
Proceeds from exercise of stock options		18,880			—			—			—			—		18,880
Deferred financing costs		—			(100	)		—			—			—		(100	)
Excess tax benefit relating to stock-based compensation		4,616			—			—			—			—		4,616
Stock buy-back		(85,790	)		—			—			—			—		(85,790	)
Proceeds from noncontrolling investors in joint ventures		—			—			—			1,229			—		1,229
Redemption of noncontrolling investments in joint ventures		—			—			—			(4,784	)		—		(4,784	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(49,928	)		—		(49,928	)
Changes in intercompany balances with affiliates, net		86,264			157,854			(90,312	)		(153,806	)		—		—
Borrowings under credit agreement		—			83,000			—			—			—		83,000
Repayments of long-term indebtedness		—			(120,485	)		(7,222	)		(1,061	)		—		(128,768	)
Net cash provided by (used in) financing activities		23,970			120,269			(97,534	)		(208,350	)		—		(161,645	)
Net change in cash and cash equivalents		—			—			(49,299	)		16,442			—		(32,857	)
Cash and cash equivalents at beginning of period		—			—			212,992			86,177			—		299,169
Cash and cash equivalents at end of period	$	—		$	—		$	163,693		$	102,619		$	—	$	266,312

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2010

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash (used in) provided by operating activities	$	(150,750	)	$	(101,498	)	$	804,039		$	346,586		$	—	$	898,377
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(39,140	)		(28,401	)		—		(67,541	)
Purchases of property and equipment		—			—			(211,023	)		(170,830	)		—		(381,853	)
Proceeds from disposition of hospitals and other ancillary operations		—			—			—			—			—		—
Proceeds from sale of property and equipment		—			—			2,398			447			—		2,845
Increase in other non-operating assets		—			—			(64,177	)		(34,325	)		—		(98,502	)
Net cash used in investing activities		—			—			(311,942	)		(233,109	)		—		(545,051	)
Cash flows from financing activities:
Proceeds from exercise of stock options		53,839			—			—			—			—		53,839
Deferred financing costs		—			—			—			—			—		—
Excess tax benefit relating to stock-based compensation		10,109			—			—			—			—		10,109
Stock buy-back		(107,932	)		—			—			—			—		(107,932	)
Proceeds from noncontrolling investors in joint ventures		—			—			—			5,155			—		5,155
Redemption of noncontrolling investments in joint ventures		—			—			—			(2,467	)		—		(2,467	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(41,870	)		—		(41,870	)
Changes in intercompany balances with affiliates, net		194,734			134,102			(246,860	)		(81,976	)		—		—
Borrowings under credit agreement		—			—			—			—			—		—
Repayments of long-term indebtedness		—			(32,604	)		(12,788	)		(1,560	)		—		(46,952	)
Net cash provided by (used in) financing activities		150,750			101,498			(259,648	)		(122,718	)		—		(130,118	)
Net change in cash and cash equivalents		—			—			232,449			(9,241	)		—		223,208
Cash and cash equivalents at beginning of period		—			—			238,709			105,832			—		344,541
Cash and cash equivalents at end of period	$	—		$	—		$	471,158		$	96,591		$	—	$	567,749