COMMUNITY HEALTH SYSTEMS INC (CYH)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read this discussion together with our condensed consolidated financial statements and the accompanying notes included herein.

Throughout this Quarterly Report on Form 10-Q, or Form 10-Q, we refer to Community Health Systems, Inc., or the Parent Company, and its consolidated subsidiaries in a simplified manner and on a collective basis, using words like “we,” “our,” “us” and the “Company.” This drafting style is suggested by the Securities and Exchange Commission, or SEC, and is not meant to indicate that the publicly-traded Parent Company or any particular subsidiary of the Parent Company owns or operates any asset, business or property. The hospitals, operations and businesses described in this filing are owned and operated by distinct and indirect subsidiaries of Community Health Systems, Inc.

We are one of the nation’s largest healthcare companies. Our affiliates are leading providers of healthcare services, developing and operating healthcare delivery systems in 32 distinct markets across 12 states. As of June 30, 2026, our subsidiaries own or lease 60 affiliated hospitals, with more than 8,000 beds, and operate more than 800 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers. We generate revenues by providing a broad range of general and specialized hospital healthcare services and outpatient services to patients in the communities in which we are located. For the hospitals and other sites of care that we own and operate, we are paid for our services by governmental agencies, private insurers and directly by the patients we serve.

Acquisition and Divestiture Activity

During the six months ended June 30, 2026, we paid approximately $53 million to acquire the operating assets and related businesses of certain physician practices and clinics, as well as controlling interests in two ambulatory surgery centers. The purchase price for these transactions will primarily be allocated to working capital, goodwill and noncontrolling interests.

During the six months ended June 30, 2026, as reflected in the table below, we completed the divestiture of four hospitals in Arkansas, three hospitals in Pennsylvania, one hospital in Alabama, and sold our 80% ownership interest in one hospital in Tennessee. These hospitals represented annual net operating revenues in 2025 of approximately $1.6 billion and we received total net proceeds of approximately $1.2 billion in connection with these dispositions.

The following table provides a summary of hospitals that we divested (or, in the cases of Merit Health Biloxi and Merit Health Madison, in which we sold our 50% ownership interest, and in the cases of Tennova Healthcare - Clarksville and Cedar Park Regional Medical Center, in which we sold our 80% ownership interest) during the six months ended June 30, 2026 and the year ended December 31, 2025.

We may give consideration to divesting certain additional hospitals and non-hospital businesses. Generally, these hospitals and non-hospital businesses are not in one of our strategically beneficial service areas, are less complementary to our business strategy and/or have lower operating margins. In addition, we continue to receive interest from potential acquirers for certain of our hospitals and non-hospital businesses. As such, we may sell additional hospitals and/or non-hospital businesses if we consider any such

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disposition to be in our best interests. We expect proceeds from any such divestitures to be used for general corporate purposes (including potential debt repayments and/or debt repurchases) and capital expenditures.

Overview of Operating Results

Net operating revenues decreased from $3.133 billion for the three months ended June 30, 2025 to $2.825 billion for the three months ended June 30, 2026. On a same-store basis, net operating revenues for the three months ended June 30, 2026 increased $65 million compared to the same period in 2025.

We had net income of $104 million during the three months ended June 30, 2026, compared to $320 million for the same period in 2025. Net income for the three months ended June 30, 2026 included the following:

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an after-tax charge of $4 million for loss from early extinguishment of debt,

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an after-tax charge of $2 million for employee terminations and other restructuring charges, and

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an after-tax benefit of $101 million resulting primarily from a gain from the divestiture of one hospital, partially offset by (i) a net impairment charge to adjust the carrying value of long-lived assets at a hospital that was divested at a sales price below carrying value, and (ii) an impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Net income for the three months ended June 30, 2025 included the following:

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an after-tax benefit of $139 million for gain from early extinguishment of debt, and

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an after-tax benefit of $151 million resulting from a gain related to the divestiture of two hospitals, partially offset by a loss on the divestiture of our ownership interest in a hospital and the impairment of certain long-lived assets that were idled, or disposed as well as divestiture related costs.

Consolidated inpatient admissions for the three months ended June 30, 2026, decreased 11.4%, compared to the same period in 2025. Consolidated adjusted admissions for the three months ended June 30, 2026, decreased 11.7%, compared to the same period in 2025. Same-store inpatient admissions for the three months ended June 30, 2026, increased 1.9%, compared to the same period in 2025, and same-store adjusted admissions for the three months ended June 30, 2026, increased 2.9%, compared to the same period in 2025.

Net operating revenues decreased from $6.292 billion for the six months ended June 30, 2025 to $5.790 billion for the six months ended June 30, 2026. On a same-store basis, net operating revenues for the six months ended June 30, 2026 increased $135 million compared to the same period in 2025.

We had net income of $79 million during the six months ended June 30, 2026, compared to $345 million for the same period in 2025. Net income for the six months ended June 30, 2026 included the following:

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an after-tax charge of $11 million for loss from early extinguishment of debt,

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an after-tax charge of $2 million for employee terminations and other restructuring charges, and

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an after-tax benefit of $115 million resulting primarily from gains from the divestiture of one hospital and the divestiture of a controlling interest in another hospital, partially offset by (i) a net impairment charge to adjust the carrying value of long-lived assets at hospitals that were divested at a sales price below carrying value, and (ii) an impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

Net income for the six months ended June 30, 2025 included the following:

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an after-tax benefit of $139 million for gain from early extinguishment of debt, and

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an after-tax charge of $7 million for expenses related to costs associated with our multi-year initiative to modernize and consolidate technology platforms and associated processes, and

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an after-tax benefit of $148 million resulting from a gain related to the divestiture of four hospitals, partially offset by losses on the divestiture of our ownership interest in two separate hospitals and the impairment of certain long-lived assets that were idled or disposed as well as divestiture related costs.

Both consolidated inpatient admissions and adjusted admissions decreased 11.1% for the six months ended June 30, 2026, compared to the same period in 2025. Same-store inpatient admissions for the six months ended June 30, 2026, were flat, compared to the same period in 2025, and same-store adjusted admissions for the six months ended June 30, 2026, increased 1.0%, compared to the same period in 2025.

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Self-pay revenues represented approximately 1.4% and 0.6% for the three months ended June 30, 2026 and 2025, respectively, and 1.2% and 0.6% for the six months ended June 30, 2026 and 2025, respectively. The amount of foregone revenue related to providing charity care services as a percentage of net operating revenues was approximately 18.3% and 10.7% for the three months ended June 30, 2026 and 2025, respectively, and 14.9% and 10.2% for the six months ended June 30, 2026 and 2025, respectively. Direct and indirect costs incurred in providing charity care services as a percentage of net operating revenues was approximately 1.8% and 1.1% for the three months ended June 30, 2026 and 2025, respectively, and 1.5% and 1.1% for the six months ended June 30, 2026 and 2025, respectively.

Overview of Legislative and Other Governmental Developments

The healthcare industry is subject to changing political, regulatory, economic and other influences that may affect our business and is heavily regulated. Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid policies, policies affecting the size of the uninsured population and enforcement and interpretation of fraud and abuse laws. The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, has increased regulatory uncertainty and the likelihood of ongoing significant policy changes. President Trump has issued several executive orders that impact or may impact the healthcare industry, including orders focused on price transparency and tariffs, and an executive order that establishe

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read this discussion together with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in this Form 10-K.

Executive Overview

We are one of the nation’s largest healthcare companies. Our affiliates are leading providers of healthcare services, developing and operating healthcare delivery systems in 36 distinct markets across 14 states. As of December 31, 2025, our subsidiaries own or lease 69 affiliated hospitals, with more than 10,000 beds, and operate more than 1,000 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers. We generate revenues by providing a broad range of general and specialized hospital healthcare services and outpatient services to patients in the communities in which we are located. For the hospitals and other sites of care that we own and operate, we are paid for our services by governmental agencies, private insurers and directly by the patients we serve.

Acquisition, Divestiture and Closure Activity

During the year ended December 31, 2025, we paid approximately $1 million to acquire the operating assets and related businesses of certain physician practices, clinics, ambulatory surgery centers and other ancillary businesses that operate within the communities served by our hospitals. The purchase price for these transactions was primarily allocated to property and equipment, intangible assets, working capital, noncontrolling interests and goodwill.

During 2025, we completed the divestiture of four hospitals and the sale of a majority interest in three hospitals. These hospitals represented annual net operating revenues in 2024 of approximately $792 million and we received total net proceeds of over $1.0 billion in connection with these dispositions. In addition, on December 1, 2025, we completed a transaction pursuant to which Laboratory Corporation of America Holdings acquired select assets and assumed certain leases of the ambulatory outreach business of the Company’s subsidiaries across 13 states, including certain patient service centers and in-office phlebotomy locations, for a total purchase price paid to us at the closing of approximately $194 million of cash, before transaction expenses.

During 2024, we completed the divestiture of two hospitals. These hospitals represented annual net operating revenues in 2023 of approximately $198 million and we received total net proceeds of approximately $174 million in connection with these dispositions. These total net proceeds do not include additional cash consideration which has been, and may continue to be, received in connection with the sale of Tennova Healthcare – Cleveland that was completed on August 1, 2024, beyond the approximately $160 million of cash received at closing. In this regard, during the three months ended December 31, 2025, we received additional cash consideration of approximately $91 million as a result of modifications to applicable supplemental reimbursement programs as more specifically provided in the asset purchase agreement underlying the transaction. Additional cash consideration may be received in one or more future periods, or a portion of the consideration previously received may be returned by us to the buyer, subject to periodic reconciliations as set forth in the asset purchase agreement underlying the transaction.

During 2023, we completed the divestiture of eight hospitals and the sale of a majority interest in one hospital. These hospitals represented annual net operating revenues in 2022 of approximately $594 million and we received total net proceeds of approximately $518 million in connection with these dispositions, inclusive of approximately $85 million received at a preliminary closing on December 30, 2022 in connection with the disposition of Greenbrier Valley Medical Center.

The following table provides a summary of hospitals that we divested (or, in the cases of Lutheran Rehabilitation Hospital, in which we sold a majority ownership interest, Merit Health Biloxi and Merit Health Madison, in which we divested our 50% ownership interest, and in the case of Cedar Park Regional Medical Center, in which we divested our 80% ownership interest) during the years ended December 31, 2025, 2024 and 2023:

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In addition to hospitals divested in 2025, we completed the disposition of four hospitals subsequent to December 31, 2025, as follows:

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On October 24, 2025, we entered into a definitive agreement to sell Regional Hospital of Scranton (186 licensed beds) and Moses Taylor Hospital (122 licensed beds) in Scranton, Pennsylvania, as well as Wilkes-Barre General Hospital (369 licensed beds) in Wilkes-Barre, Pennsylvania, and certain related businesses to affiliates of Tenor Health Foundation. These dispositions were completed on February 1, 2026. Consideration received for the sale of these hospitals included $33 million of cash received by us at closing (which amount is subject to post-closing adjustment) plus a $15 million promissory note from the buyer. Additional cash consideration may be received by us in one or more future periods contingent upon collections of certain patient accounts receivable during the 90-day period following the closing effective date.

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On October 30, 2025, we entered into a definitive agreement to sell our 80% ownership interests in two joint ventures which respectively own and operate Tennova Healthcare - Clarksville (270 licensed beds) and certain ancillary businesses located in Clarksville, Tennessee, to subsidiaries of Vanderbilt University Medical Center, or VUMC. This disposition was completed effective February 1, 2026. We received proceeds from this sale of approximately $623 million of cash, after giving effect to estimated working capital and before certain transaction expenses (subject to a post-closing working capital adjustment). In addition, contemporaneous with the closing of the transaction, in connection with the balance of certain amounts due to the joint ventures from us and in accordance with the terms of the purchase agreement, we distributed approximately $23 million of cash to VUMC for their share of amounts owed to the joint ventures by us. Prior to this transaction, VUMC held a minority interest in the joint ventures, and purchased the remaining interests in the joint ventures through this transaction. For additional information about this transaction, see the Current Reports on Form 8-K filed by us with the SEC on October 30, 2025 and February 2, 2026.

In addition on January 20, 2026, we entered into a definitive agreement pursuant to which The Health Care Authority of the City of Huntsville (d/b/a Huntsville Hospital Health System) agreed to acquire substantially all of the assets, and assume certain liabilities, from us related to Crestwood Medical Center (180 licensed beds) in Huntsville, Alabama, and ancillary businesses for $450 million of cash, subject to adjustment for net working capital and any finance leases assumed. There can be no assurance that this transaction will be completed, or if this transaction is completed, the ultimate timing of the completion of this transaction. For additional information about this transaction, see the Current Report on Form 8-K filed by us with the SEC on January 20, 2026.

We may give consideration to divesting certain additional hospitals and non-hospital businesses. Generally, these hospitals and non-hospital businesses are not in one of our strategically beneficial service areas, are less complementary to our business strategy and/or have lower operating margins. In addition, we continue to receive interest from potential acquirers for certain of our hospitals and non-hospital businesses. As such, we may sell additional hospitals and/or non-hospital businesses if we consider any such disposition to be in our best interests. We expect proceeds from any such divestitures to be used for general corporate purposes (including potential debt repayments and/or debt repurchases) and capital expenditures.

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Overview of Operating Results

Net operating revenues decreased from approximately $12.6 billion for the year ended December 31, 2024 to approximately $12.5 billion for the year ended December 31, 2025. On a same-store basis, net operating revenues for the year ended December 31, 2025 increased $541 million, compared to the same period in 2024.

We had net income of $676 million during the year ended December 31, 2025, compared to net loss of $(362) million for the year ended December 31, 2024. Net income for the year ended December 31, 2025 included the following:

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an after-tax benefit of $107 million for gain from early extinguishment of debt,

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an after-tax charge of $7 million for expense related to costs associated with our multi-year initiative to modernize and consolidate technology platforms and associated processes, and

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an after-tax benefit of $249 million resulting from a gain related to the divestiture of four hospitals and laboratory outreach business and additional cash consideration received from a prior year divestiture, partially offset by losses on the divestiture of our ownership interest in three separate hospitals and the impairment of certain long-lived assets that were idled or disposed as well as divestiture related costs.

In addition, net income during the year ended December 31, 2025, was positively impacted by an income tax benefit of approximately $163 million recognized during the three months ended September 30, 2025, resulting from a

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