Supplemental Condensed Consolidating Financial Information

12 Months Ended

Dec. 31, 2011

Supplemental Financial Information [Abstract]

Supplemental Condensed Consolidating Financial Information

18. Supplemental Condensed Consolidating Financial Information

In 2007, CHS issued the 8  ⁷/8% Senior Notes in the aggregate principal amount of approximately $3.0 billion. In 2011, CHS issued the 8% Senior Notes in the aggregate principal amount of $1.0 billion, the proceeds from which were used to purchase $1.0 billion of the 8  ⁷/8% Senior Notes. These 8  ⁷/8% Senior Notes and 8% Senior 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.

Both the 8 ⁷ /8% Senior Notes and the 8% Senior Notes are guaranteed on a joint and several basis, with limited exceptions considered customary for such guarantees, including the release of the guarantee when a subsidiary’s assets used in operations are sold. 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 one another; 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 December 31, 2011.

Condensed Consolidating Statement of Income

Year Ended December 31, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	7,904,497		$	5,721,671		$	—		$	13,626,168
Operating costs and expenses:
Salaries and benefits		—			—			3,065,753			2,512,172			—			5,577,925
Provision for bad debts		—			—			1,003,252			716,704			—			1,719,956
Supplies		—			—			1,058,807			775,299			—			1,834,106
Other operating expenses		—			—			1,486,113			1,029,525			—			2,515,638
Electronic health records incentive reimbursement		—			—			(42,312	)		(21,085	)		—			(63,397	)
Rent		—			—			124,823			129,958			—			254,781
Depreciation and amortization		—			—			393,549			259,125			—			652,674
Total operating costs and expenses		—			—			7,089,985			5,401,698			—			12,491,683
Income from operations		—			—			814,512			319,973			—			1,134,485
Interest expense, net		—			87,095			495,258			62,057			—			644,410
Loss (gain) from early extinguishment of debt		—			66,019			—			—			—			66,019
Equity in earnings of unconsolidated affiliates		(201,948	)		(275,175	)		(101,101	)		—			528,733			(49,491	)
Income from continuing operations before income taxes		201,948			122,061			420,355			257,916			(528,733	)		473,547
Provision for (benefit from) income taxes		—			(79,887	)		151,748			65,792			—			137,653
Income from continuing operations		201,948			201,948			268,607			192,124			(528,733	)		335,894
Discontinued operations, net of taxes:
(Loss) income from operations of entities sold		—			—			—			(7,769	)		—			(7,769	)
Impairment of hospitals sold		—			—			—			(47,930	)		—			(47,930	)
Loss on sale, net		—			—			—			(2,572	)		—			(2,572	)
(Loss) income from discontinued operations, net of taxes		—			—			—			(58,271	)		—			(58,271	)
Net income		201,948			201,948			268,607			133,853			(528,733	)		277,623
Less: Net income attributable to noncontrolling interests		—			—			—			75,675			—			75,675
Net income attributable to Community Health Systems, Inc.	$	201,948		$	201,948		$	268,607		$	58,178		$	(528,733	)	$	201,948

Condensed Consolidating Statement of Income

Year Ended December 31, 2010

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	7,271,078		$	5,352,196		$	—		$	12,623,274
Operating costs and expenses:
Salaries and benefits		—			—			2,792,543			2,301,224			—			5,093,767
Provision for bad debts		—			—			901,580			629,272			—			1,530,852
Supplies		—			—			989,241			748,847			—			1,738,088
Other operating expenses		—			—			1,295,527			1,000,536			—			2,296,063
Electronic health records incentive reimbursement		—			—			—			—			—			—
Rent		—			—			118,215			130,248			—			248,463
Depreciation and amortization		—			—			348,037			246,960			—			594,997
Total operating costs and expenses		—			—			6,445,143			5,057,087			—			11,502,230
Income from operations		—			—			825,935			295,109			—			1,121,044
Interest expense, net		—			113,464			477,418			56,711			—			647,593
Loss (gain) from early extinguishment of debt		—			—			—			—			—			—
Equity in earnings of unconsolidated affiliates		(279,983	)		(312,730	)		(142,174	)		—			689,444			(45,443	)
Income from continuing operations before income taxes		279,983			199,266			490,691			238,398			(689,444	)		518,894
Provision for (benefit from) income taxes		—			(80,717	)		180,574			63,824			—			163,681
Income from continuing operations		279,983			279,983			310,117			174,574			(689,444	)		355,213
Discontinued operations, net of taxes:
(Loss) income from operations of entities sold		—			—			—			(6,772	)		—			(6,772	)
Impairment of hospitals sold		—			—			—			—			—			—
Loss on sale, net		—			—			—			—			—			—
(Loss) income from discontinued operations, net of taxes		—			—			—			(6,772	)		—			(6,772	)
Net income		279,983			279,983			310,117			167,802			(689,444	)		348,441
Less: Net income attributable to noncontrolling interests		—			—			—			68,458			—			68,458
Net income attributable to Community Health Systems, Inc.	$	279,983		$	279,983		$	310,117		$	99,344		$	(689,444	)	$	279,983

Condensed Consolidating Statement of Income

Year Ended December 31, 2009

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net operating revenues	$	—		$	—		$	6,763,647		$	4,978,807		$	—		$	11,742,454
Operating costs and expenses:
Salaries and benefits		—			—			2,630,349			2,070,882			—			4,701,231
Provision for bad debts		—			—			841,342			567,611			—			1,408,953
Supplies		—			—			933,730			716,049			—			1,649,779
Other operating expenses		—			—			1,169,896			959,185			—			2,129,081
Electronic health records incentive reimbursement		—			—			—			—			—			—
Rent		—			—			113,407			124,129			—			237,536
Depreciation and amortization		—			—			324,018			227,025			—			551,043
Total operating costs and expenses		—			—			6,012,742			4,664,881			—			10,677,623
Income from operations		—			—			750,905			313,926			—			1,064,831
Interest expense, net		—			110,507			479,458			53,643			—			643,608
Loss (gain) from early extinguishment of debt		—			(2,385	)		—			—			—			(2,385	)
Equity in earnings of unconsolidated affiliates		(243,150	)		(259,270	)		(157,491	)		—			623,380			(36,531	)
Impairment of long-lived and other assets		—			—			12,477			—			—			12,477
Income from continuing operations before income taxes		243,150			151,148			416,461			260,283			(623,380	)		447,662
Provision for (benefit from) income taxes		—			(92,002	)		159,921			73,932			—			141,851
Income from continuing operations		243,150			243,150			256,540			186,351			(623,380	)		305,811
Discontinued operations, net of taxes:
(Loss) income from operations of entities sold		—			—			(50	)		1,021			—			971
Impairment of hospitals sold		—			—			—			—			—			—
Loss on sale, net		—			—			—			(405	)		—			(405	)
(Loss) income from discontinued operations, net of taxes		—			—			(50	)		616			—			566
Net income		243,150			243,150			256,490			186,967			(623,380	)		306,377
Less: Net income attributable to noncontrolling interests		—			—			—			63,227			—			63,227
Net income attributable to Community Health Systems, Inc.	$	243,150		$	243,150		$	256,490		$	123,740		$	(623,380	)	$	243,150

Condensed Consolidating Balance Sheet

December 31, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	—		$	14,536		$	115,329	$	—		$	129,865
Patient accounts receivable, net of allowance for doubtful accounts		—			—			1,088,121			746,046		—			1,834,167
Supplies		—			—			215,203			131,408		—			346,611
Deferred income taxes		89,797			—			—			—		—			89,797
Prepaid expenses and taxes		101,389			117			83,983			28,513		—			214,002
Other current assets		—			10,235			141,192			80,220		—			231,647
Total current assets		191,186			10,352			1,543,035			1,101,516		—			2,846,089
Intercompany receivable		1,160,785			9,294,295			1,741,928			1,672,003		(13,869,011	)		—
Property and equipment, net		—			—			4,395,498			2,460,478		—			6,855,976
Goodwill		—			—			2,412,517			1,852,328		—			4,264,845
Other assets, net of accumulated amortization		—			99,521			523,645			618,764		—			1,241,930
Net investment in subsidiaries		1,758,458			6,413,757			2,450,625			—		(10,622,840	)		—
Total assets	$	3,110,429		$	15,817,925		$	13,067,248		$	7,705,089	$	(24,491,851	)	$	15,208,840
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	49,954		$	9,625		$	4,127	$	—		$	63,706
Accounts payable		—			345			511,145			237,507		—			748,997
Deferred income taxes		—			—			—			—		—			—
Accrued interest		—			109,984			131			6		—			110,121
Accrued liabilities		7,580			567			662,746			317,422		—			988,315
Total current liabilities		7,580			160,850			1,183,647			559,062		—			1,911,139
Long-term debt		—			8,707,805			49,184			25,809		—			8,782,798
Intercompany payable		—			4,936,587			9,290,461			6,229,469		(20,456,517	)		—
Deferred income taxes		704,725			—			—			—		—			704,725
Other long-term liabilities		1,028			254,228			433,119			261,615		—			949,990
Total liabilities		713,333			14,059,470			10,956,411			7,075,955		(20,456,517	)		12,348,652
Redeemable noncontrolling interests in equity of consolidated subsidiaries		—			—			—			395,743		—			395,743
Equity:
Community Health Systems, Inc. stockholders’ equity:
Preferred stock		—			—			—			—		—			—
Common stock		915			—			1			2		(3	)		915
Additional paid-in capital		1,086,008			701,399			769,841			59,941		(1,531,181	)		1,086,008
Treasury stock, at cost		(6,678	)		—			—			—		—			(6,678	)
Accumulated other comprehensive (loss) income		(184,479	)		(184,479	)		(21,687	)		—		206,166			(184,479	)
Retained earnings		1,501,330			1,241,535			1,362,682			106,099		(2,710,316	)		1,501,330
Total Community Health Systems, Inc. stockholders’ equity		2,397,096			1,758,455			2,110,837			166,042		(4,035,334	)		2,397,096
Noncontrolling interests in equity of consolidated subsidiaries		—			—			—			67,349		—			67,349
Total equity		2,397,096			1,758,455			2,110,837			233,391		(4,035,334	)		2,464,445
Total liabilities and equity	$	3,110,429		$	15,817,925		$	13,067,248		$	7,705,089	$	(24,491,851	)	$	15,208,840

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	$	—		$	—		$	213,117		$	86,052	$	—		$	299,169
Patient accounts receivable, net of allowance for doubtful accounts		—			—			969,928			744,614		—			1,714,542
Supplies		—			—			193,902			135,212		—			329,114
Deferred income taxes		115,819			—			—			—		—			115,819
Prepaid expenses and taxes		118,464			116			88,647			11,991		—			219,218
Other current assets		—			41			137,113			56,177		—			193,331
Total current assets		234,283			157			1,602,707			1,034,046		—			2,871,193
Intercompany receivable		1,079,294			9,002,158			1,424,734			1,370,494		(12,876,680	)		—
Property and equipment, net		—			—			3,889,651			2,434,786		—			6,324,437
Goodwill		—			—			2,331,452			1,818,795		—			4,150,247
Other assets, net of accumulated amortization		—			131,352			438,131			782,763		—			1,352,246
Net investment in subsidiaries		1,510,063			5,267,860			1,944,795			—		(8,722,718	)		—
Total assets	$	2,823,640		$	14,401,527		$	11,631,470		$	7,440,884	$	(21,599,398	)	$	14,698,123
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—		$	49,953		$	11,070		$	2,116	$	—		$	63,139
Accounts payable		—			—			361,088			165,250		—			526,338
Deferred income taxes		8,882			—			—			—		—			8,882
Accrued interest		—			146,297			116			2		—			146,415
Accrued liabilities		7,595			567			567,101			322,003		—			897,266
Total current liabilities		16,477			196,817			939,375			489,371		—			1,642,040
Long-term debt		—			8,734,473			44,831			29,078		—			8,808,382
Intercompany payable		—			3,619,651			8,424,670			6,086,227		(18,130,548	)		—
Deferred income taxes		608,177			—			—			—		—			608,177
Other long-term liabilities		9,522			340,526			371,667			279,960		—			1,001,675
Total liabilities		634,176			12,891,467			9,780,543			6,884,636		(18,130,548	)		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			685,921			39,693		(1,366,297	)		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			1,177,995			68,169		(2,346,468	)		1,299,382
Total Community Health Systems, Inc. stockholders’ equity		2,189,464			1,510,060			1,850,927			107,864		(3,468,851	)		2,189,464
Noncontrolling interests in equity of consolidated subsidiaries		—			—			—			60,913		—			60,913
Total equity		2,189,464			1,510,060			1,850,927			168,777		(3,468,851	)		2,250,377
Total liabilities and equity	$	2,823,640		$	14,401,527		$	11,631,470		$	7,440,885	$	(21,599,399	)	$	14,698,123

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2011

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net cash (used in) provided by operating activities	$	(41,780	)	$	(111,011	)	$	840,582		$	574,117		$	—		$	1,261,908
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(370,243	)		(45,117	)		—			(415,360	)
Purchases of property and equipment		—			—			(440,754	)		(335,959	)		—			(776,713	)
Proceeds from disposition of hospitals and other ancillary operations		—			—			—			173,387			—			173,387
Proceeds from sale of property and equipment		—			—			2,283			8,877			—			11,160
Increase in other investments		—			(10,000	)		(129,852	)		(48,397	)		—			(188,249	)
Net cash used in investing activities		—			(10,000	)		(938,566	)		(247,209	)		—			(1,195,775	)
Cash flows from financing activities:
Proceeds from exercise of stock options		18,910			—			—			—			—			18,910
Repurchase of restricted stock shares for payroll tax withholding requirements		(13,311	)		—			—			—			—			(13,311	)
Deferred financing costs		—			(19,352	)		—			—			—			(19,352	)
Excess tax benefit (income tax payable increase) relating to stock-based compensation		5,290			—			—			—			—			5,290
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		—			—			—			(13,022	)		—			(13,022	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(56,094	)		—			(56,094	)
Changes in intercompany balances with affiliates, net		116,681			209,066			(95,945	)		(229,802	)		—			—
Borrowings under credit agreement		—			560,000			18,236			2,145			(2,145	)		578,236
Issuance of long-term debt		—			1,000,000			—			—			—			1,000,000
Repayments of long-term indebtedness		—			(1,628,703	)		(22,888	)		(2,087	)		2,145			(1,651,533	)
Net cash provided by (used in) financing activities		41,780			121,011			(100,597	)		(297,631	)		—			(235,437	)
Net change in cash and cash equivalents		—			—			(198,581	)		29,277			—			(169,304	)
Cash and cash equivalents at beginning of period		—			—			213,117			86,052			—			299,169
Cash and cash equivalents at end of period	$	—		$	—		$	14,536		$	115,329		$	—		$	129,865

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2010

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations		Consolidated
	(In thousands)
Net cash (used in) provided by operating activities	$	(154,101	)	$	(87,018	)	$	782,993		$	646,856		$	—	$	1,188,730
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(204,773	)		(43,478	)		—		(248,251	)
Purchases of property and equipment		—			—			(342,735	)		(324,643	)		—		(667,378	)
Proceeds from disposition of hospitals and other ancillary operations		—			—			—			—			—		—
Proceeds from sale of property and equipment		—			—			8,140			261			—		8,401
Increase in other investments		—			—			(112,587	)		(24,495	)		—		(137,082	)
Net cash used in investing activities		—			—			(651,955	)		(392,355	)		—		(1,044,310	)
Cash flows from financing activities:
Proceeds from exercise of stock options		56,916			—			—			—			—		56,916
Repurchase of restricted stock shares for payroll tax withholding requirements		—			—			—			—			—		—
Deferred financing costs		—			(13,260	)		—			—			—		(13,260	)
Excess tax benefit (income tax payable increase) relating to stock-based compensation		10,219			—			—			—			—		10,219
Stock buy-back		(113,961	)		—			—			—			—		(113,961	)
Proceeds from noncontrolling investors in joint ventures		—			—			—			7,201			—		7,201
Redemption of noncontrolling investments in joint ventures		—			—			—			(7,318	)		—		(7,318	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(68,113	)		—		(68,113	)
Changes in intercompany balances with affiliates, net		200,927			144,788			(142,864	)		(202,851	)		—		—
Borrowings under credit agreement					—			—			—			—		—
Issuance of long-term debt		—			—			—			—			—		—
Repayments of long-term indebtedness		—			(44,510	)		(13,507	)		(3,459	)		—		(61,476	)
Net cash provided by (used in) financing activities		154,101			87,018			(156,371	)		(274,540	)		—		(189,792	)
Net change in cash and cash equivalents		—			—			(25,333	)		(20,039	)		—		(45,372	)
Cash and cash equivalents at beginning of period		—			—			238,450			106,091			—		344,541
Cash and cash equivalents at end of period	$	—		$	—		$	213,117		$	86,052		$	—	$	299,169

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2009

	Parent Guarantor			Issuer			Other Guarantors			Non- Guarantors			Eliminations			Consolidated
	(In thousands)
Net cash (used in) provided by operating activities	$	(62,883	)	$	(88,486	)	$	671,528		$	556,270		$	—		$	1,076,429
Cash flows from investing activities:
Acquisitions of facilities and other related equipment		—			—			(199,363	)		(64,410	)		—			(263,773	)
Purchases of property and equipment		—			—			(368,408	)		(208,480	)		—			(576,888	)
Proceeds from disposition of hospitals and other ancillary operations		—			—			—			89,514			—			89,514
Proceeds from sale of property and equipment		—			—			824			3,195			—			4,019
Increase in other investments		—			—			(115,799	)		(4,255	)		—			(120,054	)
Net cash used in investing activities		—			—			(682,746	)		(184,436	)		—			(867,182	)
Cash flows from financing activities:
Proceeds from exercise of stock options		12,759			—			—			—			—			12,759
Repurchase of restricted stock shares for payroll tax withholding requirements		—			—			—			—			—			—
Deferred financing costs		—			(82	)		—			—			—			(82	)
Excess tax benefit (income tax payable increase) relating to stock-based compensation		(3,472	)		—			—			—			—			(3,472	)
Stock buy-back		—			—			—			—			—			—
Proceeds from noncontrolling investors in joint ventures		—			—			—			29,838			—			29,838
Redemption of noncontrolling investments in joint ventures		—			—			—			(7,268	)		—			(7,268	)
Distributions to noncontrolling investors in joint ventures		—			—			—			(58,963	)		—			(58,963	)
Changes in intercompany balances with affiliates, net		53,596			135,518			100,944			(290,058	)		—			—
Borrowings under credit agreement		—			200,000			4,045			2,570			(6,615	)		200,000
Issuance of long-term debt		—			—			—			—			—			—
Repayments of long-term indebtedness		—			(246,950	)		(13,853	)		(3,985	)		6,615			(258,173	)
Net cash provided by (used in) financing activities		62,883			88,486			91,136			(327,866	)		—			(85,361	)
Net change in cash and cash equivalents		—			—			79,918			43,968			—			123,886
Cash and cash equivalents at beginning of period		—			—			158,532			62,123			—			220,655
Cash and cash equivalents at end of period	$	—		$	—		$	238,450		$	106,091		$	—		$	344,541