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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-19 · 543 added, 465 removed, 1607 unchanged (39% of the section changed)

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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 may be received in connection with the sale of Tennova Healthcare – Cleveland that was completed on August 1, 2024 (beyond the approximately $160 million in cash received at closing), which additional payments are contingent upon potential modifications to supplemental reimbursement programs as more specifically provided in the asset purchase agreement underlying the transaction.

Such modifications are not complete as of December 31, 2024 and an estimate of consideration that may be received by the Company in 2025 has therefore not been recognized.

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.

During 2022, we completed the divestiture of one hospital.

This hospital represented annual net operating revenues in 2021 of approximately $18 million, and we received total net proceeds of less than $1 million in connection with this disposition.

The following table provides a summary of hospitals that we divested (or, in the case of Lutheran Rehabilitation Hospital, in which the Company sold a majority interest) during the years ended December 31, 2024, 2023 and 2022:

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:

Effective Date

2025 Divestitures:

Merit Health Biloxi

Memorial Health System

February 1, 2025

ShorePoint Health - Port Charlotte

Port Charlotte, FL

March 1, 2025

ShorePoint Health - Punta Gorda

Punta Gorda, FL

March 1, 2025

Lake Norman Regional Medical Center

Duke University Health System, Inc.

Mooresville, NC

April 1, 2025

Merit Health Madison

University of Mississippi Medical Center

Cedar Park Regional Medical Center

Ascension Health

Cedar Park, TX

June 30, 2025

Northwest Health Physicians' Specialty Hospital

Washington Regional Medical Center

Fayetteville, AR

December 1, 2025

2024 Divestitures:

Tennova Healthcare - Cleveland

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December 1, 2023

2022 Divestiture:

AllianceHealth Seminole

SSM Health Care of Oklahoma, Inc.

During the three months ended September 30, 2022, we completed the closure of Shorepoint Health Venice hospital (312 licensed beds) in Venice, Florida.

We recorded an impairment charge of approximately $29 million during the year ended December 31, 2022, to adjust the fair value of the long-lived assets of this hospital, including property and equipment and capitalized software costs, based on their estimated fair value.

During the three months ended September 30, 2022, the provision of inpatient services and substantially all outpatient services ceased at First Hospital Wyoming Valley (psychiatric hospital) (149 licensed beds) in Wilkes-Barre, Pennsylvania, resulting in the closure of this facility being substantially complete at September 30, 2022.

We completed the closure of First Hospital Wyoming Valley during the three months ended December 31, 2022.

We recorded an impairment charge of approximately $15 million during the year ended December 31, 2022, to adjust the fair value of the long-lived assets of this hospital, including property and equipment and capitalized software costs, based on their estimated fair value.

Effective December 31, 2022, the lease for AllianceHealth Clinton (56 licensed beds) in Clinton, Oklahoma expired and was not renewed.

We recorded an impairment charge of approximately $1 million during the year ended December 31, 2022 in conjunction with exiting the lease to operate this hospital.

On November 7, 2024, we entered into a definitive agreement to sell our 50% interest in Merit Health Biloxi (153 licensed beds) in Biloxi, Mississippi, to an affiliate of Memorial Hospital of Gulfport, which had a preexisting 50% ownership interest in Merit Health Biloxi.

This divestiture was completed on February 1, 2025.

In addition to hospitals divested as reflected above, we have entered into definitive agreements to sell four hospitals as noted below where the divestiture has not yet been completed.

As previously disclosed in a Current Report on Form 8-K, on November 22, 2024, we entered into a definitive agreement to sell ShorePoint Health Port Charlotte (254 licensed beds) in Port Charlotte, Florida, certain assets of ShorePoint Health Punta Gorda (208 licensed beds) in Punta Gorda, Florida, and certain ancillary businesses related to such facilities to subsidiaries of Adventist Health System Sunbelt Healthcare Corporation.

Due to the effects of Hurricane Helene and Hurricane Milton, the Punta Gorda hospital has indefinitely suspended inpatient operations.

As previously disclosed in a Current Report on Form 8-K, on December 11, 2024, we entered into a definitive agreement to sell Lake Norman Regional Medical Center (123 licensed beds) in Mooresville, North Carolina, and related businesses, to Duke University Health System, Inc.

Finally, on January 29, 2025, we entered into a definitive agreement to sell our 50% interest in Merit Health Madison (67 licensed beds) in Canton, Mississippi, to an affiliate of the University of Mississippi Medical Center, which currently has a 50% ownership interest in Merit Health Madison.

There can be no assurance that these transactions will be completed, or if these transactions are completed, the ultimate timing of the completion of these transactions.

Moreover, 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 services areas, are less complementary to our business strategy and/or have lower operating margins.

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

• 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.

• 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.

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Overview of Operating Results

Net operating revenues increased from approximately $12.5 billion for the year ended December 31, 2023 to approximately $12.6 billion for the year ended December 31, 2024.

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 loss of $(362) million during the year ended December 31, 2024, compared to net income of $16 million for the year ended December 31, 2023.

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:

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

• 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

• 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 decrease in valuation allowances stemming from increased interest deductibility and increased bonus depreciation in connection with the federal budget legislation which was enacted on July 4, 2025.

Net loss for the year ended December 31, 2024 included the following:

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• an after-tax charge of $40 million for expense related to costs associated with our multi-year initiative to modernize and consolidate technology platforms and associated processes,

• an after-tax charge of $250 million resulting from the impairment of long-lived assets that were idled, disposed or held-for-sale, a loss on the sale of one hospital and a gain on the sale of one hospital,

• an after-tax charge of $116 million for a change in estimate for professional liability claims accrual.

Net income for the year ended December 31, 2023 included the following:

• an after-tax charge of $28 million for expense related to government and other legal matters and related costs,

• an after-tax benefit of $61 million for gain from early extinguishment of debt,

• an after-tax charge of $17 million for expense related to costs associated with our multi-year initiative to modernize and consolidate technology platforms and associated processes,

• an after-tax benefit of $42 million resulting from gains on the sale of five hospitals and the sale of a majority interest in one hospital, offset by losses on the sale of three hospitals and impairment of long-lived assets that were idled, disposed or held-for-sale, and

• an after-tax charge of $10 million for restructuring charges related to the closure of businesses as well as service line closures and consolidations at certain hospitals.

Consolidated inpatient admissions for the year ended December 31, 2025, decreased 5.4%, compared to the year ended December 31, 2024, and consolidated adjusted admissions for the year ended December 31, 2025, decreased 6.3%, compared to the year ended December 31, 2024.

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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.

Regulatory uncertainty has increased as a result of recent decisions issued by the U.S.

Supreme Court that affect review of federal agency actions, including Loper Bright Enterprises v.

Raimondo , and the outcome of the 2024 federal elections.

Supreme Court decisions increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts and expand the timeline in which a plaintiff can sue regulators.

These decisions are expected to significantly impact government agency regulation, particularly within the heavily regulated healthcare industry, in part through an increase in legal challenges to healthcare regulations and agency guidance and decisions.

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.

These recent Supreme Court decisions may also result in inconsistent judicial interpretations and delays in and other impacts to agency rulemaking and legislative processes.

The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, also increases regulatory uncertainty and the potential for significant policy changes.

In recent years, the U.S.

Congress and certain state legislatures have introduced and passed a large number of proposals and legislation affecting the healthcare system, including laws intended to increase access to health insurance and reduce healthcare costs and government spending.

For example, the Affordable Care Act, affects how healthcare services are covered, delivered and reimbursed, and expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms.

However, changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected or may affect the number of individuals that elect or are able to obtain public or private health insurance and the scope of such coverage, if obtained.

For example, COVID-19 relief legislation temporarily enhanced subsidies available for individuals to purchase coverage through Affordable Care Act marketplaces.

Subsequent legislation extended these enhanced subsidies through 2025, but further extension is uncertain, and expiration of the enhanced subsidies may significantly increase the uninsured rate.

Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable Care Act consumer protections, which could increase rates of uninsured and underinsured individuals and destabilize insurance markets.

Of critical importance to us is the potential impact of any changes specific to the Medicaid program, including changes resulting from legislative and administrative actions at the federal and state levels, particularly those related to funding and expansion provisions of the Affordable Care Act.

The states with the greatest reductions in the number of uninsured adult residents have expanded Medicaid under the Affordable Care Act.

Of the 15 states in which we operated hospitals as of December 31, 2024, nine states have taken action to expand their Medicaid programs.

At this time, the other six states have opted out of Medicaid expansion, including Florida, Alabama, Tennessee, Mississippi and Texas, where we operated a significant number of hospitals at December 31,

Changes to federal funding formulas for Medicaid could have a particularly significant impact in states that expanded Medicaid, especially if federal contributions for Medicaid expansion populations decrease and states are unable to offset the reductions.

Further, some states have trigger laws that would end their Medicaid expansion or require other changes if federal funding is reduced.

CMS administrators may also make changes to Medicaid payment models and may grant states additional flexibilities in the administration of Medicaid programs, including by allowing additional states to condition Medicaid enrollment on work or other community engagement or to impose other eligibility or coverage restrictions.

There is a trend across the healthcare industry toward value-based purchasing.

CMS adjusts Medicare reimbursement for hospitals and other providers based on quality measures and administers various ACOs and alternative payment model demonstration projects.

Other recent reform initiatives and proposals at the federal and state levels include those focused on price transparency, and limiting out-of-network billing.

For example, the No Surprises Act imposes various requirements on providers and health plans intended to prevent “surprise” medical bills.

Throughout the acute phase of the COVID-19 pandemic that began in 2020, federal and state governments passed legislation, promulgated regulations and took other administrative actions intended to assist healthcare providers in providing care to COVID-19 and other patients during the public health emergency and to provide financial relief.

The public health emergency declared by HHS in response to the pandemic expired in May 2023.

We received pandemic relief fund payments through various federal, state and local programs of approximately $161 million during the year ended December 31, 2022.

Approximately $173 million was recognized as pandemic relief funds within the consolidated statements of (loss) income during the year ended December 31, 2022.

We did not receive or recognize any significant level of payments or benefits under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, or other COVID-19 related stimulus and relief legislation during the years ended December 31, 2024 and 2023, and we do not expect to receive or recognize any significant level of payments or benefit under the CARES Act and other existing legislation related to COVID-19 in future periods.

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 established a presidential advisory commission tasked with restructuring government agencies and reducing government expenditures, although this commission was disbanded in mid-2025.

Other actions by the presidential administration have resulted in holds on or cancellations of congressionally authorized spending as well as interruptions in the distribution of government funds.

In addition, the presidential administration has significant influence on healthcare policy changes through government agency regulation.

In March 2025, HHS announced a significant agency restructuring that will reduce the HHS workforce and consolidate divisions of the agency.

HHS also announced a change in its policy on public participation in rulemaking that may negatively affect the ability of industry participants to receive advance notice of and offer feedback on some policy changes.

Regulatory uncertainty has also increased as a result of recent decisions issued by the U.S.

Supreme Court that affect review of federal agency actions, including

Loper Bright Enterprises v.

These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions and result in inconsistent judicial interpretations and delays in and other impacts to agency rulemaking and legislative processes.

Moreover, evolving interpretations or enforcement of applicable laws and regulations could require us to make changes in our facilities or operations or require us to incur other costs to comply.

For example, in May 2025, CMS rescinded EMTALA guidance issued to hospitals by the prior presidential administration regarding the preemption of state laws restricting abortion.

Hospitals may face conflicting interpretations as to the requirements imposed by EMTALA in relation to state laws that address access to abortion or other reproductive health services.

In the last two decades, the U.S.

For example, the Affordable Care Act expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms, but changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected or may affect the number of individuals that elect or are able to obtain public or private health insurance and the scope of such coverage, if obtained.

COVID-19 relief legislation, as modified by subsequent legislation, temporarily enhanced subsidies available for individuals to purchase coverage through Affordable Care Act marketplaces through 2025, but these enhanced subsidies expired at the end of 2025.

Their expiration may significantly increase the number of people who are uninsured.

Further, CMS issued a final rule in June 2025 that standardizes and shortens the open enrollment period for individual market coverage, both on and off the Affordable Care Act marketplaces, and requires stricter income-verification measures, among other changes.

This rule is currently the subject of legal challenges.

Moreover, the 2025 Reconciliation Law includes healthcare policy changes that are expected to decrease access to health insurance.

Among other provisions, the 2025 Reconciliation Law makes changes to Affordable Care Act marketplace insurance, including effectively ending automatic renewals of coverage by requiring pre-enrollment verification of eligibility and restricting subsidized marketplace coverage and Medicare and Medicaid eligibility based on immigration status.

Any of these developments could increase rates of uninsured and underinsured individuals and destabilize insurance markets.

Federal actions may impact funding for, or the structure of, the Medicaid program and may shape provider reimbursement rates, eligibility and coverage policies and other aspects of the state Medicaid programs in a manner that could materially and adversely affect us.

For example, the 2025 Reconciliation Law includes policy changes that are expected to result in Medicaid spending reductions and changes in administration of state Medicaid programs.

The law limits eligibility for Medicaid, including by imposing work or community engagement requirements for adults in Medicaid expansion states, and limits some Medicaid financing mechanisms, including through restrictions intended to reduce the federal matching funds received by state Medicaid programs.

Reductions in federal matching funds and increased state obligations and administrative burden could have significant effects, such as resulting in state limitations on eligibility or coverage or changes to Medicaid expansion programs, particularly if states are unable to offset reductions.

The effects of the 2025 Reconciliation Law could be particularly significant in states that expanded Medicaid under the Affordable Care Act, especially if a significant number of individuals formerly covered under Medicaid expansion lose Medicaid eligibility but do not obtain other health insurance coverage.

Of the 14 states in which we operated hospitals as of December 31, 2025, eight states have taken action to expand their Medicaid programs.

The other six states in which we operated hospitals as of December 31, 2025 have opted out of Medicaid expansion, including Florida, Alabama, Tennessee, Mississippi and Texas, in which states we operated a significant number of hospitals as of December 31, 2025.

Although we are unable to fully assess the magnitude of the future impact of the 2025 Reconciliation Law, we expect the law to adversely impact our revenue and financial results as well as increase the amount of our self-pay patients, including as a result of this legislation’s limitations on Medicaid eligibility and reductions in federal Medicaid funding as noted above.

Future Medicaid reform proposals may result in further reductions to Medicaid expenditures and involve additional administrative changes.

For example, some members of Congress and the presidential administration have raised, and Congress may in the future adopt, other proposals intended to reduce Medicaid expenditures such as restructuring the Medicaid program to give states a “block grant” or fixed amount of overall funding for their respective Medicaid programs or to impose spending caps such as per Medicaid beneficiary limits on federal contributions.

Any future changes that reduce federal funding for Medicaid expansion populations could trigger laws in some states that would end those states’ Medicaid expansion or require other changes to the program.

In addition to changes related to federal funding, CMS administrators may make changes to Medicaid payment models and may impose new restrictions or grant states additional flexibilities in the administration of Medicaid programs.

The federal deficit and other federal and state budgetary pressures have affected government healthcare program expenditures, and we anticipate these effects will continue.

For example, the payment reductions required by the Budget Control Act of 2011 and subsequent legislation are currently set to continue through the first eight months of federal fiscal year 2032.

It is possible that future deficit reduction legislation will impose additional spending reductions.

For example, the 2025 Reconciliation Law is expected to decrease federal healthcare spending, particularly with respect to Medicaid, and is generally expected to have significant impact on state budgets, which may result in state-level changes such as reductions to the scope of covered services or tax increases.

It is possible that future legislation will impose or otherwise result in additional spending reductions.

The 2025 Reconciliation Law authorized the Rural Health Transformation, or RHT, Program, which is intended to strengthen and modernize healthcare in rural communities.

Through the RHT Program, $50 billion in federal grants will be distributed over five years, with $10 billion available in each of federal fiscal years 2026 through 2030, which may partially offset Medicaid spending reductions expected as a result of the 2025 Reconciliation Law as described herein, although the magnitude of such grants will be far less than the anticipated Medicaid spending reductions.

In December 2025, CMS announced that all 50 states will receive awards under the RHT Program.

Providers may be granted subcontracts or subawards and providers could receive payments for healthcare items and services, subject to funding policies and limitations.

All funds must be spent before October 1, 2032.

Reimbursement by government programs may be affected by broad shifts in payment policy.

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Supreme Court decision and to achieve budget neutrality, CMS reduced payment rates for non-drug services under the outpatient PPS for calendar year 2023, and lump sum payments were distributed to affected 340B providers as the remedy for calendar years 2018 through 2022.

Moreover, in order to comply with budget neutrality requirements, HHS finalized a corresponding offset in future non-drug item and service payments for all outpatient PPS providers (except new providers) that will reduce the outpatient PPS conversion factor by 0.5% annually.

This adjustment will start in calendar year 2026 and continue for approximately 16 years.

This reduction to payment rates adversely affected our results for the years ended December 31, 2023 and 2024, and the reduction to the outpatient PPS conversion factor as noted above is anticipated to adversely impact our results beginning in 2026.

In addition, future payment adjustments may apply to hospitals reimbursed under the inpatient PPS as a result of a 2024 court decision that vacated a low wage index policy CMS adopted in 2020.

Under the policy, CMS increased the wage index values for hospitals with low wage index, thereby increasing their reimbursement, and offset these increases by decreasing reimbursement for all other hospitals.

CMS addressed the impact of the court decision prospectively in its final rule updating inpatient hospital payment rates and policies for federal fiscal year 2025, removing the upward reimbursement adjustment for the low-wage hospitals and the related budget neutrality factor that decreased reimbursement for all other hospitals.

However, it is not yet clear whether, when, or how the agency will address the impact of the low wage policy in federal fiscal years 2020 through 2024.

This reduction to payment rates adversely affected our results for the nine months ended September 30, 2025.

This 0.5% reduction began in calendar year 2026 and was expected to continue for approximately 16 years, but CMS has indicated that it may accelerate this timeline by implementing a larger reduction beginning in calendar year 2027.

We anticipate that the reduction to the outpatient PPS conversion factor will adversely impact our results.

Sources of Revenue

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Included in Managed Care and other third-party payors is net operating revenues from insurance companies with which we have insurance provider contracts, insurance companies for which we do not have insurance provider contracts, workers’ compensation carriers and non-patient service revenue, such as gain (loss) on investments, rental income and cafeteria sales.

We generally expect the portion of revenues received from the Medicare, Medicare Managed Care and Medicaid programs to increase over the long-term due to the general aging of the population and other factors.

There has been a trend toward increased enrollment in Medicare Managed Care and Medicaid managed care programs, which may adversely affect our net operating revenues.

We generally expect the portion of revenues received from the Medicare and Medicare Managed Care programs to increase over the long-term due to the general aging of the population and other factors.

The general trend toward increased enrollment in Medicare Managed Care and Medicaid managed care programs, which has slowed or reversed in some cases in recent years, may adversely affect our net operating revenues.

We may also be impacted by regulatory requirements imposed on insurers, such as minimum medical-loss ratios and specific benefit requirements.

Furthermore, in the normal course of business, managed care programs, insurance companies and employers actively negotiate the amounts paid to hospitals.

Our relationships with payors may be impacted by price transparency initiatives and out-of-network billing restrictions, including those in the No Surprises Act.

Our relationships with payors may be impacted by policy developments such as price transparency initiatives and out-of-network billing restrictions, including those in the No Surprises Act.

There can be no assurance that we will retain our existing reimbursement arrangements or that third-party payors will not attempt to further reduce the rates they pay for our services.

The revenues we receive and our relationships with payors are also expected to be impacted by the 2025 Reconciliation Law, which includes healthcare policy changes that are expected to decrease access to health insurance and result in significant cuts to federal healthcare spending.

Net operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems and provisions of cost-based reimbursement and other payment methods.

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These rates are indexed for inflation annually, although increases have historically been less than actual inflation.

CMS has published the final rule establishing payment rates for federal fiscal year 2025 (which began October 1, 2024) for hospital inpatient acute care services reimbursed under the prospective system, increasing payment rates by approximately 2.9%.

In its final rule establishing payment rates for federal fiscal year 2026 (which began October 1, 2025) for hospital inpatient acute care services reimbursed under the prospective system, CMS increased payment rates by approximately 2.6%.

This increase reflects a market basket increase of 3.3%, reduced by a 0.7 percentage point productivity adjustment.

Hospitals that do not submit required patient quality data are subject to a reduction in payments.

Hospitals that do not submit required patient quality data are subject to payment reductions.

We are complying with this data submission requirement.

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These programs are funded with a combination of state and federal resources, including, in certain instances, fees or taxes levied on the providers.

The programs are generally authorized by CMS for a specified period of time and require CMS’s approval to be extended.

We are unable to predict whether or on what terms CMS will extend the supplemental programs in the states in which we operate.

Under these supplemental programs, we recognize revenue and related expenses in the period in which amounts are estimable

and payment is reasonably assured.

In addition, as noted above, the 2025 Reconciliation Law includes several changes to Medicaid financing mechanisms, including limitations on provider taxes and SDP arrangements.

It is difficult to predict the ultimate impact of the legislation on these supplemental programs or whether or on what terms CMS will extend the supplemental programs in the states in which we operate.

Under these supplemental programs, we recognize revenue and related expenses in the period in which amounts are estimable and payment is reasonably assured.

Reimbursement under these programs is reflected in net operating revenues and included as Medicaid revenue in the table above, and fees, taxes or other program related costs are reflected in other operating expenses.

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Gain from early extinguishment of debt

Gain from CoreTrust Transaction

Equity in earnings of unconsolidated affiliates

(Loss) income before income taxes

Income (loss) before income taxes

Provision for income taxes

Net (loss) income

Net income (loss)

Net income attributable to noncontrolling interests

Net (loss) income attributable to Community Health Systems,

Net income (loss) attributable to Community Health Systems,

Year Ended December 31,

Percentage increase (decrease) from prior year:

Percentage (decrease) increase from prior year:

Net operating revenues

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Average length of stay (d)

Net (loss) income attributable to Community Health Systems,

Net income (loss) attributable to Community Health Systems,

Same-store percentage increase from prior year (e):

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Adjusted admissions (c)

(a) Operating expenses include salaries and benefits, supplies, other operating expenses, and lease cost and rent, net of the reduction in operating expenses resulting from the recognition of pandemic relief funds.

(a) Operating expenses include salaries and benefits, supplies, other operating expenses, and lease cost and rent.

(b) Admissions represents the number of patients admitted for inpatient treatment.

Adjusted admissions is computed by multiplying admissions by gross patient revenues and then dividing that number by gross inpatient revenues.

We computed adjusted admissions by multiplying admissions by gross patient revenues and then dividing that number by gross inpatient revenues.

(d) Average length of stay represents the average number of days inpatients stay in our hospitals.

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Net operating revenues decreased by 1.2% to approximately $12.5 billion for the year ended December 31, 2025, from approximately $12.6 billion for the year ended December 31, 2024.

Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $541 million, or 4.6%, during the year ended December 31, 2025, compared to the same period in 2024.

On a period-over-period basis, the increase in same-store net operating revenues was primarily attributable to increased reimbursement rates, higher supplemental reimbursement program revenue and favorable changes in payor mix, partially offset by lower acuity.

Non-same-store net operating revenues decreased $690 million during the year ended December 31, 2025, compared to the same period in 2024, with the decrease attributable primarily to the divestiture of hospitals during 2025 and 2024, partially offset by an increase in non-patient revenue resulting primarily from the receipt of $28 million during the three months ended September 30, 2025 for the settlement of a legal matter.

On a consolidated basis, inpatient admissions decreased by 5.4% and adjusted admissions decreased by 6.3% during the year ended December 31, 2025, compared to the same period in 2024.

On a same-store

basis, net operating revenues per adjusted admission increased 4.0%, while inpatient admissions increased by 1.5% and adjusted admissions increased by 0.6% for the year ended December 31, 2025, compared to the same period in 2024.

Operating expenses, as a percentage of net operating revenues, decreased from 95.7% during the year ended December 31, 2024 to 88.1% during the year ended December 31, 2025.

Operating expenses, excluding depreciation and amortization and impairment and (gain) loss on sale of businesses, as a percentage of net operating revenues, decreased from 89.5% for the year ended December 31, 2024 to 88.0% for the year ended December 31, 2025.

Salaries and benefits increased as a percentage of net operating revenues from 42.9% for the year ended December 31, 2024 to 43.3% for the year ended December 31, 2025, primarily due to an increased hiring commensurate with lower utilization of contract labor.

Supplies, as a percentage of net operating revenues, decreased from 15.4% for the year ended December 31, 2024 to 14.9% for the year ended December 31, 2025, primarily due to changes in the mix of services and the benefit of cost savings initiatives.

Other operating expenses, as a percentage of net operating revenues, decreased from 28.8% for the year ended December 31, 2024 to 27.6% for the year ended December 31, 2025, primarily due to a change in estimate for the professional liability claims accrual recorded in 2024 partially offset by higher medical specialist fees and increased supplemental reimbursement program expense.

Lease cost and rent, as a percentage of net operating revenues, decreased from 2.4% for the year ended December 31, 2024 to 2.2% for the year ended December 31, 2025.

Depreciation and amortization, as a percentage of net operating revenues, decreased to 3.4% for the year ended December 31, 2025 from 3.8% for the year ended December 31, 2024 primarily due to a reduction in the amortization of capitalized internal-use software and the impact of hospital divestitures in 2025 and 2024.

Impairment and (gain) loss on sale of businesses, net was a net gain of $406 million for the year ended December 31, 2025, compared to expense of $301 million for the same period in 2024.

The gain in 2025 and expense in 2024 related primarily to divestiture activity during each respective period as discussed more specifically under “Acquisition, Divestiture and Closure Activity” herein.

Interest expense, net, increased by $10 million to $870 million for the year ended December 31, 2025 compared to $860 million for the same period in 2024.

This was primarily due to our refinancing activity during 2025 and 2024.

Gain from early extinguishment of debt of $97 million was recognized during the year ended December 31, 2025, compared to $25 million in the same period in 2024, as a result of the refinancing and extinguishment of certain of our outstanding notes as discussed further in “Liquidity and Capital Resources.”

Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, remained consistent at 0.1% for the years ended December 31, 2025 and 2024.

The net results of the above-mentioned changes resulted in income (loss) before income taxes changing by $1.0 billion to an income of $724 million for the year ended December 31, 2025 from a loss of $(283) million for the same period in 2024.

Our provision for income taxes for the years ended December 31, 2025 and 2024 was $48 million and $79 million, respectively, and the effective tax rates were 6.6% and (27.9)% for the years ended December 31, 2025 and 2024, respectively.

The change in the provision for income taxes for the year ended December 31, 2025, compared to the same period in 2024, was primarily due to higher pre-tax income in 2025 compared to 2024 and a decrease in valuation allowances stemming from increased interest deductibility and increased bonus depreciation as a result of the 2025 Reconciliation Law which resulted in an income tax benefit of approximately $163 million recognized by us during the year ended December 31, 2025.

Net income (loss), as a percentage of net operating revenues, was income of 5.4% for the year ended December 31, 2025, compared to loss of (2.9)% for the same period in 2024.

Net income attributable to noncontrolling interests, as a percentage of net operating revenues, was 1.3% for the year ended December 31, 2025, compared to 1.2% for the same period in 2024.

Net income (loss) attributable to Community Health Systems, Inc.

was income of $509 million for the year ended December 31, 2025, compared to a loss of $(516) million for the same period in 2024.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Net operating revenues increased by 1.2% to approximately $12.6 billion for the year ended December 31, 2024, from approximately $12.5 billion for the year ended December 31, 2023.

Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $653 million, or 5.5%, during the year ended December 31, 2024, compared to the same period in 2023.

On a period-over-period basis, the increase in same-store net operating revenues was primarily attributable to higher inpatient and outpatient volumes, increased reimbursement rates, favorable changes in payor mix and higher revenues from supplemental reimbursement programs, partially offset by lower acuity and increased patient claim denials.

supplemental reimbursement programs, partially offset by lower acuity and increased patient claim denials.

Non-same-store net operating revenues decreased $509 million during the year ended December 31, 2024, compared to the same period in 2023, with the decrease attributable primarily to the divestiture of hospitals during 2024 and 2023.

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Depreciation and amortization, as a percentage of net operating revenues, decreased to 3.8% for the year ended December 31, 2024 from 4.0% for the year ended December 31, 2023 primarily due to an increase in net operating revenues and a reduction in the amortization of capitalized internal-use software.

Impairment and (gain) loss on sale of businesses, net was expense of $301 million for the year ended December 31, 2024, compared to a gain of $87 million for the same period in 2023.

Impairment and (gain) loss on sale of businesses, net was expense of $301 million for the year ended December 31, 2024, compared to income of $87 million for the same period in 2023.

The expense in 2024 and the gain in 2023 related primarily to divestiture activity during each respective period as discussed more specifically under “Acquisition, Divestiture and Closure Activity” herein.

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was $(516) million for the year ended December 31, 2024, compared to $(133) million for the same period in 2023.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Net operating revenues increased by 2.3% to approximately $12.5 billion for the year ended December 31, 2023, from approximately $12.2 billion for the year ended December 31, 2022.

Net operating revenues on a same-store basis from hospitals that were operated throughout both periods increased $552 million, or 4.8%, during the year ended December 31, 2023, compared to the same period in 2022.

On a period-over-period basis, the increase in net operating revenues was primarily attributable to higher inpatient and outpatient volumes, increased reimbursement rates, higher acuity and an increase in non-patient revenue, partially offset by unfavorable changes in payor mix.

Non-same-store net operating revenues decreased $273 million during the year ended December 31, 2023, compared to the same period in 2022, with the decrease attributable primarily to the divestiture of hospitals during 2023 and 2022.

On a consolidated basis, inpatient admissions increased by 0.3% and adjusted admissions increased by 1.7% during the year ended December 31, 2023, compared to the same period in 2022.

On a same-store basis, net operating revenues per adjusted admission decreased 0.5%, while inpatient admissions increased by 3.5% and adjusted admissions increased by 5.3% for the year ended December 31, 2023, compared to the same period in 2022.

Operating expenses, as a percentage of net operating revenues, decreased from 93.3% during the year ended December 31, 2022 to 92.3% during the year ended December 31, 2023.

Operating expenses, excluding depreciation and amortization and impairment and (gain) loss on sale of businesses, as a percentage of net operating revenues, increased from 88.3% for the year ended December 31, 2022 to 89.0% for the year ended December 31, 2023.

Salaries and benefits decreased as a percentage of net operating revenues from 43.6% for the year ended December 31, 2022 to 43.4% for the year ended December 31, 2023, primarily due to an increase in net operating revenues, partially offset by increased hiring commensurate with lower utilization of contract labor.

Supplies, as a percentage of net operating revenues, decreased from 16.2% for the year ended December 31, 2022 to 16.0% for the year ended December 31, 2023.

Other operating expenses, as a percentage of net operating revenues, decreased from 27.3% for the year ended December 31, 2022 to 27.0% for the year ended December 31, 2023, primarily due to an increase in net operating revenues and lower utilization of and rates paid for contract labor, partially offset by higher costs for professional liability insurance and higher rates paid for outsourced medical specialists.

Lease cost and rent, as a percentage of net operating revenues, remained consistent at 2.6% for the years ended December 31, 2023 and 2022.

Pandemic relief funds, as a percentage of net operating revenues, were 0.0% for the year ended December 31, 2023, compared to (1.4)% for the same period in 2022.

Depreciation and amortization, as a percentage of net operating revenues, decreased to 4.0% for the year ended December 31, 2023 from 4.4% for the year ended December 31, 2022.

Impairment and (gain) loss on sale of businesses, net was a gain of $87 million for the year ended December 31, 2023, compared to expense of $71 million for the same period in 2022.

The gain in 2023 and the expense in 2022 related primarily to divestiture activity during each respective period as discussed more specifically under “Acquisition, Divestiture and Closure Activity” herein.

Interest expense, net, decreased by $28 million to $830 million for the year ended December 31, 2023 compared to $858 million for the same period in 2022.

This was primarily due to our refinancing activity during 2023 and 2022.

Gain from early extinguishment of debt of $72 million was recognized during the year ended December 31, 2023, compared to a gain from early extinguishment of debt of $253 million in the same period in 2022, as a result of our refinancing activity during 2023 and 2022.

There was no gain from the CoreTrust Transaction during the year ended December 31, 2023.

Gain from the CoreTrust Transaction of $119 million was recognized during the year ended December 31, 2022.

Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, remained consistent at 0.1% for the years ended December 31, 2023 and 2022.

The net results of the above-mentioned changes resulted in income before income taxes decreasing $142 million to $207 million for the year ended December 31, 2023 from $349 million for the same period in 2022.

Our provision for income taxes for the years ended December 31, 2023 and 2022 was $191 million and $170 million, respectively, and the effective tax rates were 92.3% and 48.7% for the years ended December 31, 2023 and 2022, respectively.

The increase in the provision for income taxes for the year ended December 31, 2023, compared to the same period in 2022, was primarily due to non-deductible goodwill related to divested hospitals in 2023 compared to 2022.

The difference in our effective tax rate for the year ended

December 31, 2023, compared to the same period in 2022, was due to the aforementioned increase in the provision for income taxes and the decrease in income before taxes.

Net income, as a percentage of net operating revenues, was 0.1% for the year ended December 31, 2023, compared to 1.5% for the same period in 2022.

Net income attributable to noncontrolling interests, as a percentage of net operating revenues, was 1.2% for the year ended December 31, 2023, compared to 1.1% for the same period in 2022.

Net (loss) income attributable to Community Health Systems, Inc.

was net loss of $(133) million for the year ended December 31, 2023, compared to net income of $46 million for the same period in 2022.

Liquidity and Capital Resources

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Net cash provided by operating activities was approximately $543 million for the year ended December 31, 2025, compared to $480 million for the year ended December 31, 2024.

The increase in cash provided by operating activities is primarily due to increased collections of patient accounts receivable and lower cash paid for interest, partially offset by increased income tax payments.

Total cash paid for interest decreased to approximately $741 million for the year ended December 31, 2024, from approximately $801 million for the year ended December 31, 2023.

The increase in cash provided by operating activities is primarily due to lower professional liability claim payments and increased non-patient revenues, partially offset by increased cash paid for interest and taxes.

Total cash paid for interest increased to approximately $804 million for the year ended December 31, 2025, from approximately $741 million for the year ended December 31, 2024.

Cash paid for income taxes, net of refunds received, resulted in a net payment of $249 million and $171 million during the years ended December 31, 2025 and 2024, respectively.

Our net cash used in investing activities was approximately $275 million for the year ended December 31, 2024, compared to approximately $26 million for the year ended December 31, 2023, an increase of approximately $249 million.

The increase in net cash used in investing activities during the year ended December 31, 2024, compared to the prior year, was impacted by a decrease of $258 million in cash proceeds from dispositions of hospitals and other ancillary operations and a decrease of $96 million in cash from the net impact of the purchases and sales of available-for-sale debt and equity securities, partially offset by a decrease of $107 million in cash used for the purchase of property and equipment.

Our net cash used in financing activities was $206 million for the year ended December 31, 2024, compared to $264 million for the year ended December 31, 2023, a decrease of $58 million.

During the years ended December 31, 2025 and 2024, approximately $169 million and $17 million, respectively, of cash paid for income taxes related to the gains on hospitals divested during the periods.

Our net cash provided by investing activities was approximately $847 million for the year ended December 31, 2025, compared to cash used in investing activities of approximately $275 million for the year ended December 31, 2024, a change of approximately $1.122 billion.

The change during the year ended December 31, 2025, compared to the prior year, was impacted by an increase of $1.080 billion in cash proceeds from dispositions of hospitals and other ancillary operations, partially offset by a decrease of $15 million in cash from the net impact of the purchases and sales of available-for-sale debt and equity securities.

Our net cash used in financing activities was $1.167 billion for the year ended December 31, 2025, compared to $206 million for the year ended December 31, 2024, an increase of $961 million.

This was primarily due to the net impact of our debt borrowings and repayments during the year ended December 31, 2025, compared to the same period in 2024.

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Net cash provided by operating activities was approximately $480 million for the year ended December 31, 2024, compared to $210 million for the year ended December 31, 2023.

The decrease in cash provided by operating activities is partially the result of the payment of accumulated benefits under the Company’s supplemental executive retirement plan, or SERP.

Because securities are held in a rabbi trust to be used for the payment of SERP benefits, the aforementioned cash outflow is offset by inflows from sales of investments, which are reflected as a cash inflow from investing activities as noted below.

Total cash paid for interest decreased to approximately $741 million for the year ended December 31, 2024, from approximately $801 million for the year ended December 31, 2023.

Cash paid for income taxes, net of refunds received, resulted in a net payment of $171 million and $91 million during the years ended December 31, 2024 and 2023, respectively.

Our net cash used in investing activities was approximately $26 million for the year ended December 31, 2023, compared to approximately $259 million for the year ended December 31, 2022, a decrease of approximately $233 million.

The decrease in net cash used in investing activities during the year ended December 31, 2023, compared to the prior year, was primarily impacted by an increase of $99 million in cash from the net impact of the purchases and sales of available-for-sale debt and equity securities, including securities sold to pay SERP benefits as noted above, an increase of $343 million in cash proceeds from dispositions of hospitals and other ancillary operations, a decrease of $8 million in cash used to purchase investments in unconsolidated affiliates, an increase of $29 million in cash paid for acquisitions of facilities and other related businesses, an increase of $52 million in cash used for the purchase of property and equipment, an increase of $5 million in cash used to purchase other investments, a decrease of $10 million in cash proceeds from the sale of property and equipment, and a decrease resulting from $121 million in cash representing our share of proceeds from the CoreTrust Transaction distributed during the year ended December 31, 2022, compared to the year ended December 31, 2023.

During the years ended December 31, 2024 and 2023, approximately $17 million and $47 million, respectively, of cash paid for income taxes related to the gains on hospitals divested during the periods.

Our net cash used in financing activities was $206 million for the year ended December 31, 2024, compared to $264 million for the year ended December 31, 2023, a decrease of $58 million.

This was primarily due to the net effect of our debt repayments, refinancing activities, and cash paid for deferred financing costs and other debt-related costs during the year ended December 31, 2023, compared to the same period in 2022.

Net working capital was approximately $956 million and $1.1 billion at December 31, 2024 and December 31, 2023, respectively.

Net working capital decreased by approximately $110 million between December 31, 2023 and December 31, 2024.

The decrease is primarily due to decreases in prepaid expenses and taxes and prepaid income taxes and increases in accrued interest, accrued liabilities for employee compensation and other current liabilities during the year ended December 31, 2024, partially offset by increases in patient accounts receivable and other current assets and decreases in current operating lease liabilities.

This was primarily due to the net impact of our debt borrowings and repayments during the year ended December 31, 2024, compared to the same period in 2023.

Net working capital was approximately $1.0 billion and $956 million at December 31, 2025 and December 31, 2024, respectively.

Net working capital increased by approximately $70 million between December 31, 2024 and December 31, 2025.

The increase is primarily due to increases in cash and other current assets and decreases in accounts payable, accrued liabilities for employee compensation and other during the year ended December 31, 2025, partially offset by decreases in patient accounts receivable, prepaid expenses and prepaid income taxes.

In addition to cash flows from operations, available sources of capital include amounts available under the asset-based loan (ABL) credit agreement, or the ABL Credit Agreement, as amended and restated on June 5, 2024, and anticipated access to public and private debt markets as well as proceeds from the disposition of hospitals or other investments such as our minority equity interests in various businesses, as applicable.

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The maximum aggregate amount under the ABL Facility is $1.0 billion, subject to borrowing base capacity.

At December 31, 2024, we had outstanding borrowings of $341 million and approximately $491 million of additional borrowing capacity (after taking into consideration $66 million of outstanding letters of credit) under the ABL Facility.

Letters of credit were reduced during the year ended December 31, 2024 by $15 million, primarily in relation to a professional liability claim that was settled and funded during the year ended December 31, 2024.

At December 31, 2025, we had no outstanding borrowings and approximately $786 million of additional borrowing capacity (after

taking into consideration $34 million of outstanding letters of credit) under the ABL Facility.

Letters of credit were reduced during the year ended December 31, 2025 by $32 million, primarily due to a reduction in collateral for an insurance-related bond.

Principal amounts outstanding under the ABL Facility, if any, will be due and payable in full on June 5, 2029.

2025 Financing Activity

On May 9, 2025, CHS completed the offering of $700 million aggregate principal amount of 10.750% Senior Secured Notes due June 15, 2033, or the 10¾% Senior Secured Notes due 2033, to a multi-asset investment manager through a privately negotiated agreement.

The 10¾% Senior Secured Notes due 2033 bear interest at a rate of 10.750% per year payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2025.

Proceeds from issuance of the 10¾% Senior Secured Notes due 2033, together with cash on hand, were used to redeem all of our outstanding 8% Senior Secured Notes due 2027 and to pay related fees and expenses.

In addition, approximately $584 million principal amount of the 6⅞% Senior Unsecured Notes due 2028 were redeemed in May 2025 via a tender offer using cash on-hand of approximately $438 million.

Upon completion of the tender offer, approximately $42 million principal amount of the 6⅞% Senior Unsecured Notes due 2028 remained outstanding.

For additional information regarding the sale of the 10¾% Senior Secured Notes due 2033, the redemption of the 8% Senior Secured Notes due 2027, and the tender offer, see the Current Reports on Form 8-K filed by the Company with the SEC on April 23, 2025, May 7, 2025, and May 9, 2025.

On August 12, 2025, CHS completed an offering of $1.790 billion principal amount of 9.750% Senior Secured Notes due 2034, or the 9¾% Senior Secured Notes due 2034.

The proceeds from the issuance of the 9¾% Senior Secured Notes due 2034 were used to redeem $1.743 billion principal amount of our 5.625% Senior Secured Notes due 2027, or approximately 99% of the total outstanding principal amount, that were validly tendered and accepted for purchase pursuant to a tender offer that launched on July 28, 2025, and was completed on August 25, 2025, and to pay related fees and expenses.

Upon completion of the tender offer, approximately $14 million principal amount of the 5.625% Senior Secured Notes due 2027 remained outstanding.

The 9¾% Senior Secured Notes due 2034 bear interest at a rate of 9.750% per year payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026.

The 9¾% Senior Secured Notes due 2034 are unconditionally guaranteed on a senior-priority secured basis by us and each of the current and future domestic subsidiaries that provide guarantees under the ABL Facility.

For additional information regarding the sale of the 9¾% Senior Secured Notes due 2034, the redemption of the 5.625% Senior Secured Notes due 2027, and the tender offer, see the Current Reports on Form 8-K filed by us with the SEC on July 29, 2025 and August 12, 2025.

During the three months ended December 31, 2025, the Company exercised a special call provision to redeem 10% or approximately $223 million in principal amount of our 10.875% Senior Secured Notes due 2032 at a redemption price of 103% of the principal amount, plus accrued and unpaid interest.

In addition, on February 2, 2026, the Company exercised the same special call provision to redeem an additional 10% or approximately $223 million in principal amount of the 10.875% Senior Secured Notes due 2032, at a redemption price of 103% of the principal amount, plus accrued and unpaid interest.

Moreover, during the three months ended December 31, 2025, we redeemed all $14 million in outstanding principal amount of the remaining 5.625% Senior Secured Notes due 2027.

During the year ended December 31, 2025, a pre-tax gain from early extinguishment of debt of approximately $97 million was recognized associated with these 2025 financing activities discussed above.

2024 Financing Activity

On June 5, 2024, CHS completed the offering of an additional $1.225 billion aggregate principal amount of its outstanding 10.875% Senior Secured Notes due 2032, or the Tack-On Notes, at an issue price of 102.000%, plus accrued and unpaid interest from December 22, 2023 to the closing date (which equaled approximately $60 million).

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An immaterial pre-tax and after-tax loss from early extinguishment resulted from these repurchases.

2023 Financing Activity

On December 22, 2023, we completed a private offering of $1.000 billion aggregate principal amount of 10⅞% Senior Secured Notes due January 15, 2032, or the 10⅞% Senior Secured Notes due 2032.

The proceeds of the offering were used, together with cash on hand, to redeem $985 million aggregate principal amount of 8% Senior Secured Notes due 2026 via a tender offer, which was funded on December 28, 2023, and to pay related fees and expenses.

The 10⅞% Senior Secured Notes due 2032 bear interest at a rate of 10.875% per year payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2024.

During the year ended December 31, 2023, we extinguished a portion of certain series of our outstanding notes through a combination of open market and privately negotiated repurchases, as follows (in millions):

Principal Amount

6% Senior Secured Notes due 2029

6⅞% Junior-Priority Secured Notes due 2029

6⅛% Junior-Priority Secured Notes due 2030

Total principal amount of debt extinguished

A pre-tax gain from early extinguishment of debt of approximately $72 million was recognized associated with these financing activities during the year ended December 31, 2023.

Additional Liquidity Information

For information regarding our amended and restated asset-based loan (ABL) credit agreement and our other outstanding indebtedness, see Note 6 of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

For information regarding our amended and restated asset-based loan (ABL) credit agreement and our other outstanding indebtedness, see Note 6 - Long Term Debt of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

Our ability to meet the restricted covenants and financial ratios and tests in the ABL Facility and the indentures governing our outstanding notes can be affected by events beyond our control, and we cannot assure you that we will meet those tests.

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Upon the occurrence of an event of default under the ABL Facility or indentures that govern our outstanding notes, all amounts outstanding under the ABL Facility and the indentures that govern our outstanding notes may become immediately due and payable and all commitments under the ABL Facility to extend further credit may be terminated.

As of December 31, 2024, approximately $20 million of our outstanding debt of approximately $11.5 billion is due within the next 12 months and approximately 97% of our outstanding debt has a fixed rate of interest.

As of December 31, 2025, approximately $16 million of our outstanding debt of approximately $10.4 billion is due within the next 12 months and all of our outstanding debt has a fixed rate of interest.

Our debt as a percentage of total capitalization was 113% at December 31, 2025, compared to 117% at December 31, 2024.

Net proceeds from divestitures, if any, are expected to be used for general corporate purposes (including potential debt repayments and/or debt repurchases) and capital expenditures.

Challenging economic conditions may negatively impact our service mix, revenue mix, payor mix and patient volumes, as well as our ability to collect outstanding receivables.

Any material increase in our billing cycles or deterioration in the collectability of our accounts receivable would adversely affect our cash flows and results of operations and may require an increased level of working capital.

We believe that our current levels of cash, internally generated cash flows and current levels of availability for additional borrowing under the ABL Facility, our anticipated continued access to the capital markets, and the use of proceeds from any potential future dispositions as noted above, will be sufficient to finance acquisitions, capital expenditures, working capital requirements, and any debt repurchases or other debt repayments we may elect to make or be required to make through the next 12 months and the foreseeable future thereafter.

However, the then current macroeconomic conditions, financial and capital market conditions, and the then current interest rate environment may adversely impact our ability to refinance our indebtedness or otherwise access capital on favorable terms, or at all.

As noted above, during the years ended December 31, 2024 and 2023, we extinguished a portion of certain series of our outstanding notes through open market and privately negotiated repurchases, and we may elect from time to time to continue to purchase our outstanding debt in open market purchases, privately negotiated transactions or otherwise.

However, ongoing negative economic conditions (including in relation to inflationary pressures, elevated interest rate levels and impacts from the imposition of, or changes in, tariffs) have resulted in, and may continue to result in, significant disruptions of financial and capital markets, which could reduce our ability to access capital and negatively affect our liquidity in the future.

As noted above, during the years ended December 31, 2025 and 2024, we extinguished a portion of certain series of our outstanding notes through open market repurchases, privately negotiated transactions, tender offers, and redemptions.

We may elect from time to time to continue to purchase our outstanding debt through open market purchases, privately negotiated transactions, tender offers, redemptions or otherwise.

Any such debt repurchases will depend upon prevailing market conditions, our liquidity requirements, contractual restrictions, applicable securities laws requirements, and other factors.

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Other investments include, among other things, purchases of investments in unconsolidated affiliates which are expected to be incurred within the next 24 months.

Cash expenditures for purchases of facilities and other related businesses were approximately $25 million in 2024, $38 million in 2023 and $9 million in 2022.

Our expenditures for the years ended December 31, 2024, 2023 and 2022, were primarily related to physician practices, clinics, ambulatory surgery centers and other ancillary businesses.

Cash expenditures for purchases of facilities and other related businesses were approximately $1 million in 2025, $25 million in 2024 and $38 million in 2023, which were primarily related to expenditures for physician practices, clinics and other ancillary businesses.

Capital expenditures relate primarily to expansion and renovation of existing facilities, construction of additional access points such as freestanding emergency departments and ambulatory surgery centers, investments in higher acuity service lines and information technology infrastructure, as well as routine expenditures for equipment, minor renovations and other upgrades.

Capital expenditures for the year ended December 31, 2025 totaled $335 million compared to $360 million in 2024 and $467 million in 2023.

Included in the capital expenditures for the year ended December 31, 2022, were costs to construct replacement hospitals totaling $17 million, primarily related to the construction of a replacement facility in Fort Wayne, Indiana.

Pursuant to a hospital purchase agreement from our March 1, 2016 acquisition of Northwest Health - Starke, formerly known as Starke Hospital, we committed to make an investment of up to $15 million toward the construction of a replacement facility in Knox, Indiana.

Construction is required to be completed within five years of the date we enter into a new lease with Starke County, Indiana, the hospital lessor, or in the event we do not enter into a new lease with Starke County, construction shall be completed by September 30, 2026.

We have not entered into a new lease with the lessor for Northwest Health - Starke.

Construction is required to be completed by the earlier of (i) five years after we enter into a new lease (or amendment to the existing lease) with Starke County, Indiana, or (ii) September 30, 2026.

We have not entered into a new lease (or amendment to the existing lease) with Starke County, Indiana.

In addition to the commitment to spend up to $15 million toward the construction of a replacement facility in Knox, Indiana, other off-balance sheet arrangements consist of letters of credit issued on the ABL Facility, primarily in support of potential insurance-related claims and specified outstanding bonds of approximately $34 million as well as approximately $5 million representing the maximum potential amount of future payments under physician recruiting guarantee commitments in excess of the liability recorded at December 31, 2025.

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Reimbursement, Legislative and Regulatory Changes

Ongoing legislative and regulatory efforts and judicial interpretations could reduce or otherwise adversely affect the payments we receive from Medicare and Medicaid and other payors.

Within the statutory framework of the Medicare and Medicaid programs, there are substantial areas subject to administrative rulings, interpretations and discretion that are at times subject to court challenges, which may further affect payments made under those programs.

We expect legal challenges to healthcare regulations and agency guidance, including those related to Medicare and Medicaid payment policies, to increase as a result of recent U.S.

Ongoing presidential actions, legislative and regulatory efforts and judicial interpretations could reduce or otherwise adversely affect the amount of payments we receive from Medicare and Medicaid and other payors, including through lapses in appropriations and holds on or cancellations of congressionally authorized spending.

As noted above, the 2025 Reconciliation Law includes healthcare policy changes that are expected to decrease access to health insurance and result in significant cuts to federal healthcare spending.

There is uncertainty regarding the implementation and ultimate impact of the law, but it may adversely affect our revenues.

In addition, within the statutory framework of the Medicare and Medicaid programs, there are substantial areas subject to administrative rulings, interpretations and discretion that may affect payments made under those programs.

It is unclear how the restructuring efforts within HHS or broader governmental deregulatory initiatives will impact administration of or payment under the Medicare and Medicaid programs.

Legal challenges to healthcare regulations and agency guidance, including those related to Medicare and Medicaid payment policies, may also adversely affect payments, and we expect legal challenges to increase as a result of recent U.S.

Supreme Court decisions as noted above.

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Additionally, there may be a continued rise in managed care programs and further restructuring of the financing and delivery of healthcare in the United States.

These events could adversely impact our future financial results.

We cannot estimate the impact of Medicare and Medicaid reimbursement changes that have been enacted or otherwise determined or that are currently or may in the future be under consideration.

We cannot predict whether additional reimbursement reductions will be made or whether any such changes or other restructuring of the financing and delivery of healthcare would have a material adverse effect on our business, financial conditions, results of operations, cash flow, capital resources and liquidity.

Any of these events could adversely impact our future financial results.

cannot estimate the impact of Medicare and Medicaid reimbursement changes that have been enacted or otherwise determined or that are currently or may in the future be under consideration.

Moreover, we cannot predict whether additional reimbursement reductions, including as a result of the factors described above, will be made or whether any such changes or other restructuring of the financing and delivery of healthcare would have a material adverse effect on our business, financial conditions, results of operations, cash flow, capital resources and liquidity.

Critical Accounting Policies

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We believe that our critical accounting policies are limited to those described below.

The following information should be read in conjunction with our significant accounting policies included in Note 1 of the Notes to the Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

The following information should be read in conjunction with our significant accounting policies included in Note 1 - Basis of Presentation and Significant Accounting Policies of the Notes to the Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

Revenue Recognition

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Explicit price concessions are recorded for contractual allowances that are calculated and recorded through a combination of internally- and externally-developed data collection and analysis tools to automate the monthly estimation of required contractual allowances.

Within these automated systems, payors’ historical paid claims data and

contracted amounts are utilized to calculate the contractual allowances.

Within these automated systems, payors’ historical paid claims data and contracted amounts are utilized to calculate the contractual allowances.

This data is updated on a monthly basis.

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Due to the complexities involved in these estimates, actual payments we receive could be different from the amounts we estimate and record.

If the actual contractual reimbursement percentage under government programs and managed care contracts differed by 1% at December 31, 2024 from our estimated reimbursement percentage, net loss for the year ended December 31, 2024 would have changed by approximately $100 million, and net accounts receivable at December 31, 2024 would have changed by $128 million.

If the actual contractual reimbursement percentage under government programs and managed care contracts differed by 1% at December 31, 2025 from our estimated reimbursement percentage, net income for the year ended December 31, 2025 would have changed by approximately $97 million, and net patient accounts receivable at December 31, 2025 would have changed by $126 million.

Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties.

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Substantially all of our accounts receivable are related to providing healthcare services to patients at our hospitals and affiliated businesses.

Collection of these accounts receivable is our primary source of cash and is critical to our operating performance.

Collection of these patient accounts receivable is our primary source of cash and is critical to our operating performance.

Our primary collection risks relate to uninsured patients and outstanding patient balances for which the primary insurance payor has paid some but not all of the outstanding balance, with the remaining outstanding balance (generally deductibles and co-payments) owed by the patient.

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Insurance coverage is not verified in advance of procedures for walk-in and emergency room patients.

We estimate any adjustments to the transaction price for implicit price concessions by reserving a percentage of all self-pay accounts receivable without regard to aging category, based on collection history, adjusted for expected recoveries and any anticipated changes in trends.

Our ability to estimate the transaction price and any implicit price concessions is not impacted by not utilizing an aging of our net accounts receivable as we believe that substantially all of the risk exists at the point in time such accounts are identified as self-pay.

We estimate any adjustments to the transaction price for implicit price concessions by reserving a percentage of all self-pay patient accounts receivable without regard to aging category, based on collection history, adjusted for expected recoveries and any anticipated changes in trends.

Our ability to estimate the transaction price and any implicit price concessions is not impacted by not utilizing an aging of our net patient accounts receivable as we believe that substantially all of the risk exists at the point in time such accounts are

identified as self-pay.

The percentage used to reserve for all self-pay accounts is based on our collection history.

We believe that we collect substantially all of our third-party insured receivables, which include receivables from governmental agencies.

Patient accounts receivable can be impacted by the effectiveness of our collection efforts and, as described in our significant accounting policies included in Note 1 of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K, numerous factors may affect the net realizable value of accounts receivable.

If the actual collection percentage differed by 1% at December 31, 2024 from our estimated collection percentage as a result of a change in expected recoveries, net loss for the year ended December 31, 2024 would have changed by $38 million, and net accounts receivable at December 31, 2024 would have changed by $49 million.

Patient accounts receivable can be impacted by the effectiveness of our collection efforts and, as described in our significant accounting policies included in Note 1 - Basis of Presentation and Significant Accounting Policies of the Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K, numerous factors may affect the net realizable value of patient accounts receivable.

If the actual collection percentage differed by 1% at December 31, 2025 from our estimated collection percentage as a result of a change in expected recoveries, net income for the year ended December 31, 2025 would have changed by $35 million, and net patient accounts receivable at December 31, 2025 would have changed by $45 million.

We also continually review our overall reserve adequacy by monitoring historical cash collections as a percentage of trailing net operating revenues, as well as by analyzing current period net operating revenues and admissions by payor classification, days revenue outstanding, the composition of self-pay receivables between pure self-pay patients and the patient responsibility portion of third-party insured receivables and the impact of recent acquisitions and dispositions.

Our policy is to write-off gross accounts receivable if the balance is under $10 or when such amounts are placed with outside collection agencies.

Our policy is to write-off gross patient accounts receivable if the balance is under $10 or when such amounts are placed with outside collection agencies.

We believe this policy accurately reflects our ongoing collection efforts and is consistent with industry practices.

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We expect to collect less than 4%, net of estimated collection fees, of the amounts being pursued by outside collection agencies.

As these amounts have been written-off, they are not included in our accounts receivable.

As these amounts have been written-off, they are not included in our patient accounts receivable.

Collections on amounts previously written-off are recognized as a recovery of net operating revenues when received.

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All of the following information is derived from our hospitals, excluding clinics, unless otherwise noted.

Patient accounts receivable from our hospitals represent approximately 98% of our total consolidated accounts receivable.

Patient accounts receivable from our hospitals represent approximately 98% of our total consolidated patient accounts receivable.

Days revenue outstanding, adjusted for the impact of receivables for state Medicaid supplemental payment programs and divested facilities, was 54 days and 55 days at December 31, 2025 and 2024, respectively.

Total gross accounts receivable (prior to allowance for contractual adjustments and implicit price concessions) was approximately $17.3 billion and $16.8 billion at December 31, 2024 and 2023, respectively.

The approximate percentage of total gross accounts receivable (prior to allowance for contractual adjustments and implicit price concessions) summarized by payor and aging categories is as follows:

Total gross patient accounts receivable (prior to allowance for contractual adjustments and implicit price concessions) was approximately $16.9 billion and $17.3 billion as of December 31, 2025 and 2024, respectively.

The approximate percentage of total gross patient accounts receivable (prior to allowance for contractual adjustments and implicit price concessions) summarized by payor and aging categories is as follows:

At December 31, 2025:

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Managed Care and other third-party payors

The approximate percentage of total gross accounts receivable (prior to allowances for contractual adjustments and implicit price concessions) summarized by payor type is as follows:

The approximate percentage of total gross patient accounts receivable (prior to allowances for contractual adjustments and implicit price concessions) summarized by payor type is as follows:

Insured receivables

Self-pay receivables

The combined total at our hospitals and clinics for the estimated implicit price concessions for self-pay accounts receivable and allowances for other self-pay discounts and contractuals, as a percentage of gross self-pay receivables, was approximately 90% and 91% at December 31, 2024 and 2023, respectively.

The combined total at our hospitals and clinics for the estimated implicit price concessions for self-pay patient accounts receivable and allowances for other self-pay discounts and contractuals, as a percentage of gross self-pay receivables, was approximately 90% at both December 31, 2025 and 2024.

If the receivables that have been written-off, but where collections are still being pursued by outside collection agencies, were included in both the allowances and gross self-pay receivables specified above, the percentage of combined allowances to total self-pay receivables would have been 93% at both December 31, 2025 and 2024.

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Since we believe that the amount and timing of our future claims payments are reliably determinable, we discount the amount we accrue for losses resulting from professional liability claims.

The net present value of the projected payments was discounted using weighted-average risk free rates of 3.7% in both 2024 and 2023, and 3.8% in 2022.

The net present value of the projected payments was discounted using weighted-average risk free rates of 3.5% in 2025 and 3.7% in both 2024 and 2023.

This liability is adjusted for new claims information in the period such information becomes known to us.

Professional liability expense includes the losses resulting from professional liability claims and loss adjustment expense, as well as excess insurance premiums, and is presented within other operating expenses or, for increased losses specifically attributable to certain divestitures, within impairment and (gain) loss on sales of businesses, net in the accompanying consolidated statements of income (loss).

Our processes for obtaining and analyzing claims and incident data are standardized across all of our businesses and have been consistent for many years.

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In addition, we routinely monitor current key statistics and volume indicators in our assessment of utilizing historical trends.

The average lag period between claim occurrence and payment of a final settlement is between three and four years, although the facts and circumstances of individual claims could result in the timing of such payments being different from this average.

The average lag period between claim occurrence and payment of a final settlement is between three and four years, although the facts and circumstances of individual claims could result in

the timing of such payments being different from this average.

Since claims are paid promptly after settlement with the claimant is reached, settled claims represent approximately 4% or less of the total liability at the end of any period.

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Significant assumptions are made on the basis of the aforementioned information in estimating reserves for incurred but not reported claims.

A 1% change in assumptions for either severity or frequency at December 31, 2024 would have increased or decreased the reserve by approximately $5 million to $10 million.

A 1% change in assumptions for either severity or frequency as of December 31, 2025 would have increased or decreased the reserve by approximately $5 million to $10 million.

Based on these analyses, we periodically review and determine our estimate of the professional liability claims.

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Liability for insured claims (1)

Expense (income) related to:

Expense related to:

Current accident year

Prior accident years

Expense (income) from discounting

Expense from discounting

Total incurred loss and loss expense (2)

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In the ordinary course of business, our expense with respect to professional liability claims, which is actuarially determined, is limited to amounts not covered by third-party insurance policies, which typically provide coverage for professional liability claims.

During the year ended December 31, 2022, we experienced an increase in the amounts paid or expected to be paid to settle outstanding professional liability claims related to divested locations, compared to the same period in the prior year and to previous actuarially determined estimates.

This resulted in a change in estimate of $15 million during the year ended December 31, 2022.

During the year ended December 31, 2023, we experienced an increase in the amounts paid or expected to be paid to settle outstanding professional liability claims, compared to the same period in the prior year and to previous actuarially determined estimates due to adverse claim developments.

During the year ended December 31, 2024, in connection with our periodic review of the professional liability claims accrual, we, with input from our third-party actuary, considered recent increases in the amounts paid to resolve outstanding professional liability claims arising in prior periods as well as recent increases in individual claim accruals for unresolved prior period claims.

The emergence in the period of adverse developments, including from social inflationary pressures, impacted the actuarially determined estimate for the resolution of professional liability claims and resulted in an upward revision to the professional liability claims accrual estimate in the amount of $149 million during the year ended December 31, 2024, the majority of which increase in estimate related to divested locations.

During the years ended December 31, 2024, in connection with our periodic review of the professional liability claims accrual, we, with input from our third-party actuary, considered recent increases in the amounts paid to resolve outstanding professional liability claims arising in prior periods as well as recent increases in individual claim accruals for unresolved prior period claims.

increase in estimate related to divested locations.

There were no other significant changes in our estimate of the reserve for professional liability claims during the years ended December 31, 2025, 2024 and 2023.

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The $75 million in integrated occurrence coverage will also apply to claims reported between June 1, 2020 and June 1, 2025 for events that occurred prior to June 1, 2020 but which were not previously known or reported.

For certain policy years prior to June 1, 2014, if the first aggregate layer of excess coverage becomes fully utilized, then the self-insured retention will

increase to $10 million per claim for any subsequent claims in that policy year until our total aggregate coverage is met.

For certain policy years prior to June 1, 2014, if the first aggregate layer of excess coverage becomes fully utilized, then the self-insured retention will increase to $10 million per claim for any subsequent claims in that policy year until our total aggregate coverage is met.

Beginning June 1, 2018, this drop-down provision in the excess policies attaches over the $15 million per claim self-insured retention.

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A total of $9 million of interest and penalties is included in the amount of liability for uncertain tax positions at December 31, 2025.

It is our policy to recognize interest and penalties related to unrecognized benefits in our consolidated statements of (loss) income as income tax expense.

It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities;

however, we do not anticipate the change will have a material impact on our consolidated results of operations or consolidated financial position.

Our income tax return for the 2018 tax year has been effectively settled with the Internal Revenue Service in 2024.

The settlement was not material to our consolidated results of operations or consolidated financial position.

Our income tax return for the 2021 and 2022 tax years are under examination by the Internal Revenue Service.

It is our policy to recognize interest and penalties related to unrecognized benefits in our consolidated statements of income (loss) as income tax expense.

Our income tax returns for the 2021 and 2022 tax years are under examination by the Internal Revenue Service.

We believe the result of this examination will not be material to our consolidated results of operations or consolidated financial position.

We have extended the federal statute of limitations through December 31, 2026 for Community Health Systems, Inc.

for the tax periods ended December 31, 2021 and 2022.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures.” This ASU establishes new requirements for the categorization and disaggregation of information in the rate reconciliation as well as for disaggregation of income taxes paid.

Additionally, this ASU modifies and eliminates certain existing requirements for indefinitely reinvested foreign earnings and unrecognized tax benefits.

This ASU is effective for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025.

The amendments in this ASU should be applied on a prospective basis and early adoption is permitted.

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350):

Targeted Improvements to the Accounting for Internal-Use Software.” This ASU modifies the criteria for when software costs may be capitalized by eliminating consideration of software project development stages and by enhancing guidance for the “probable-to-complete” threshold.

This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods.

Early adoption of this ASU is permitted.

We are currently evaluating the impact that adoption of this ASU will have on our consolidated financial statements.

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These factors include, among other things:

• general economic and business conditions, both nationally and in the regions in which we operate, including the impact in recent periods of challenging macroeconomic conditions and inflationary pressures, the current high interest rate environment, and current geopolitical instability, as well as the potential impact on us of political, financial, credit and capital conditions;

• the impact of current and future healthcare public policy developments and possible changes to federal, state or local laws, regulations and policies affecting the healthcare industry, including changes affecting the structure of or funding for the Medicare and Medicaid programs;

• general economic and business conditions, both nationally and in the regions in which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, the current interest rate environment, current geopolitical instability, impacts from the imposition of, or changes in tariffs, as well as the impact on us of financial, credit, capital, political, and legislative conditions, including any federal government shutdowns;

• the impact of current and future healthcare public policy developments and the implementation of new, and possible changes to existing, federal, state or local laws, regulations and policies affecting the healthcare industry, including changes affecting the structure of or funding for the Medicare and Medicaid programs and changes in the structure and administration of federal and state agencies and programs;

• changes by the federal and state governments to state Medicaid programs, including the extent and nature of structural and funding changes and manner in which any such changes are implemented, and other developments that affect the administration of health insurance exchanges or alter or reduce the provision of, or payment for, healthcare to state residents through legislation, regulation or otherwise;

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• any potential impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets;

• the effects related to the sequestration spending reductions pursuant to the Budget Control Act of 2011 and the potential for future deficit reduction legislation;

• the effects related to the sequestration spending reductions pursuant to the Budget Control Act of 2011 and the potential for spending reductions under future legislation, including as may be required under the Pay-As-You-Go Act of 2010;

• increases in the amount and risk of collectability of patient accounts receivable, including decreases in collectability which may result from, among other things, self-pay growth and difficulties in recovering payments for which patients are responsible, including co-pays and deductibles;

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• our ability to obtain adequate levels of insurance, including general liability, professional liability, cyber liability and directors’ and officers’ liability insurance;

• timeliness of reimbursement payments received under government programs;

• any lapse in appropriations, and any hold on or cancellation of congressionally authorized spending or interruptions in the distribution of government funds, and the timeliness of reimbursement payments received under government programs;

• effects related to pandemics, epidemics, outbreaks of infectious diseases or other public health crises;

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Trading securities are reported at fair value with unrealized gains and losses included in earnings.

There was no comprehensive income or loss resulting from unrealized gains or losses on marketable securities during the year ended December 31, 2024.

There was $5 million of comprehensive income resulting from the net unrealized gains on marketable securities during the year ended December 31, 2025.

We are exposed to market risk related to market illiquidity.

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We are also exposed to market risk related to changes in interest rates, primarily as a result of the ABL Facility, which bears interest based on floating rates.

At December 31, 2024, we had outstanding borrowings of $341 million under the ABL Facility.

At December 31, 2025, we had no outstanding borrowings under the ABL Facility.

The estimated fair value of our long-term debt, excluding finance leases, was approximately $10.0 billion at December 31, 2025.

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Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Statements of (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022

Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022

Consolidated Statements of Income (Loss) for the Years Ended December 31, 2025, 2024 and 2023

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024 and 2023

Consolidated Balance Sheets as of December 31, 2025 and 2024

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We have audited the accompanying consolidated balance sheets of Community Health Systems, Inc.

and subsidiaries (the “Companyˮ) as of December 31, 2024 and 2023, the related consolidated statements of (loss) income, comprehensive (loss) income, stockholders’ deficit, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statementsˮ).

and subsidiaries (the “Companyˮ) as of December 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ deficit, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statementsˮ).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 , in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Patient Accounts Receivable — Refer to Note 1 to the financial statements

Patient Accounts Receivable — Refer to Note 1 - Basis of Presentation and Significant Accounting Policies to the financial statements

Critical Audit Matter Description

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• We evaluated the appropriateness of the industry, economic, and Company factors that were used in determining the net realizable value of self-pay accounts receivable.

Professional Liability Claims — Refer to Note 16 to the financial statements

Professional Liability Claims — Refer to Note 16 - Commitments and Contingencies to the financial statements

Critical Audit Matter Description

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AND SUBSIDIARIES

CONSOLIDATED STATEME NTS OF (LOSS) INCOME

CONSOLIDATED STATEME NTS OF INCOME (LOSS)

Year Ended December 31,

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Lease cost and rent

Pandemic relief funds

Depreciation and amortization

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Gain from early extinguishment of debt

Gain from CoreTrust Transaction

Equity in earnings of unconsolidated affiliates

(Loss) income before income taxes

Income (loss) before income taxes

Provision for income taxes

Net (loss) income

Net income (loss)

Net income attributable to noncontrolling interests

Net (loss) income attributable to Community Health

Net income (loss) attributable to Community Health

Systems, Inc.

(Loss) earnings per share attributable to Community Health Systems,

Earnings (loss) per share attributable to Community Health Systems,

stockholders:

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year Ended December 31,

(In millions)

Net (loss) income

Net income (loss)

Other comprehensive income (loss), net of income taxes:

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December 31, 2025, 2024 and 2023, respectively

Other comprehensive income (loss)

Comprehensive (loss) income

Other comprehensive income

Comprehensive income (loss)

Comprehensive income attributable to noncontrolling interests

Comprehensive (loss) income attributable to Community Health Systems,

Comprehensive income (loss) attributable to Community Health Systems,

See accompanying notes to the consolidated financial statements.

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Prepaid income taxes

Prepaid expenses and taxes

Prepaid expenses

Other current assets

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Purchase of subsidiary shares from noncontrolling interests

Other reclassifications of noncontrolling interests

Noncontrolling interests in acquired entity

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Other reclassifications of noncontrolling interests

Disposition of less-than-wholly owned hospital

Noncontrolling interests in acquired entity

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vested shares

Issuance of common stock in connection with the exercise

of stock options

Stock-based compensation

Balance, December 31, 2024

Comprehensive income (loss)

Comprehensive income

Contributions from noncontrolling interests

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Purchase of subsidiary shares from noncontrolling interests

Other reclassifications of noncontrolling interests

Disposition of less-than-wholly owned hospital

Noncontrolling interests in acquired entity

Adjustment to redemption value of redeemable

noncontrolling interests

Cancellation of restricted stock for tax withholdings on

vested shares

Issuance of common stock in connection with the exercise

of stock options

Stock-based compensation

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Cash flows from operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by

operating activities:

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Gain from early extinguishment of debt

Gain from CoreTrust Transaction

Other non-cash expenses, net

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Purchases of investments in unconsolidated affiliates

Distribution of CoreTrust Transaction proceeds

Increase in other investments

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

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At December 31, 2025, the Company’s 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.

Effective December 31, 2024, the count of affiliated hospitals was updated to separately distinguish facilities providing inpatient, acute-care services other than on the primary hospital campus.

Throughout these notes to the consolidated financial statements, Community Health Systems, Inc.

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The hospitals, operations and businesses described in this filing are owned and operated, and management services provided, by distinct and indirect subsidiaries of Community Health Systems, Inc.

At December 31, 2024 , Indiana, Alabama, Texas and Florida represent the only areas of significant geographic concentration.

At December 31, 2025 , Indiana, Alabama, Texas, Florida and Tennessee represent the only areas of significant geographic concentration.

Net operating revenues generated by the Company’s hospitals in Indiana, as a percentage of consolidated net operating revenues, were 16.8 % in 2025 , 16.7 % in 2024 , and 17.1 % in 2023 .

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Net operating revenues generated by the Company’s hospitals in Florida, as a percentage of consolidated net operating revenues, were 8.2 % in 2025 , 9.6 % in 2024 , and 11.1 % in 2023 .

Net operating revenues generated by the Company’s hospitals in Tennessee, as a percentage of consolidated net operating revenues, were 8.3 % in 2025 , 7.7 % in 2024 , and 7.7 % in 2023 .

Use of Estimates .

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Noncontrolling interests in less-than-wholly-owned consolidated subsidiaries of the Parent Company are presented as a component of total equity in the consolidated balance sheets to distinguish between the interests of the Parent Company and the interests of the noncontrolling owners.

Revenues, expenses and income from these subsidiaries are included in the consolidated amounts as presented in the consolidated statements of (loss) income, along with a net income measure that separately presents the amounts attributable to the controlling interests and the amounts attributable to the noncontrolling interests for each of the periods presented.

Revenues, expenses and income from these subsidiaries are included in the consolidated amounts as presented in the consolidated statements of income (loss), along with a net income measure that separately presents the amounts attributable to the controlling interests and the amounts attributable to the noncontrolling interests for each of the periods presented.

Noncontrolling interests that are redeemable or may become redeemable at a fixed or determinable price at the option of the holder or upon the occurrence of an event outside of the control of the Company are presented in mezzanine equity in the consolidated balance sheets.

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Included in these corporate office costs is stock-based compensation of $ 11 million, $ 17 million and $ 22 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The increase in corporate office costs during the year ended December 31, 2024 , compared to the same period in 2023, is primarily due to the impact of certain non-recurring adjustments.

The decrease in corporate office costs during the year ended December 31, 2025, compared to the same period in 2024, i s primarily due to the impact of certain non-recurring adjustments recorded in 2024.

Cash Equivalents .

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Supplies, principally medical supplies, are stated at the lower of cost (first-in, first-out basis) or market.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Marketable Securities.

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Trading securities are reported at fair value with unrealized gains and losses included in earnings.

Other comprehensive income (loss), net of tax, included unrealized gains of $ 6 million and an unrealized loss of $ 17 million during the years ended December 31, 2023 and 2022, respectively.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

comprehensive income or loss resulting from unrealized gains and losses on marketable securities for the year ended December 31, 2024 .

Other comprehensive income (loss), net of tax, included unrealized gains of $ 5 million and $ 6 million during the years ended December 31, 2025 and 2023, respectively.

There was no comprehensive income or loss resulting from unrealized gains and losses on marketable securities for the year ended December 31, 2024.

Property and Equipment .

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Purchases of property and equipment and internal-use software accrued in accounts payable and not yet paid were $ 109 million and $ 129 million at December 31, 2025 and 2024 , respectively.

The Company also leases certain facilities and equipment under finance leases (see Note 9).

Such assets are amortized on a straight-line basis over the lesser of the term of the lease or the remaining useful lives of the applicable assets.

The Company also leases certain facilities and equipment under finance leases (see Note 9) Such assets are amortized on a straight-line basis over the lesser of the term of the lease or the remaining useful lives of the applicable assets.

During the year ended December 31, 2025 , the Company had non-cash investing activity of $ 1 million related to certain facility and equipment additions that were financed through finance leases and other debt.

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For third-party payors including Medicare, Medicare Managed Care, Medicaid and Managed Care, the net realizable value is based on the estimated contractual reimbursement percentage, which is based on current contract prices or historical paid claims data by payor.

For self-pay accounts receivable, which includes patients who are uninsured and the patient responsibility portion for patients with insurance, the net realizable value is determined using estimates of historical collection experience without regard to aging category.

For self-pay patient accounts receivable, which includes patients who are uninsured and the patient responsibility portion for patients with insurance, the net realizable value is determined using estimates of historical collection experience without regard to aging category.

These estimates are adjusted for estimated conversions of patient responsibility portions, expected recoveries and any anticipated changes in trends.

Patient accounts receivable can be impacted by the effectiveness of the Company’s collection efforts.

Additionally, significant changes in payor mix, business office operations, economic conditions or trends in federal and state governmental healthcare coverage could affect the net realizable value of accounts receivable.

The Company also continually reviews the net realizable value of accounts receivable by monitoring historical cash collections as a percentage of trailing net operating revenues, as well as by analyzing current period net operating revenues and admissions by payor classification, days revenue outstanding, the composition of self-pay receivables between pure self-pay patients and the patient responsibility portion of third-party insured receivables, the impact of recent acquisitions and dispositions and the impact of current macroeconomic conditions and other events.

Additionally, significant changes in payor mix, business office operations, economic conditions or trends in federal and state governmental healthcare coverage and related policies could affect the net realizable value of patient accounts receivable.

The Company also continually reviews the net realizable value of patient accounts receivable by monitoring historical cash collections as a percentage of trailing net operating revenues, as well as by analyzing current period net operating revenues and admissions by payor classification, days revenue outstanding, the composition of self-pay receivables between pure self-pay patients and the patient responsibility portion of third-party insured receivables, the impact of recent acquisitions and dispositions and the impact of current macroeconomic conditions and other events.

Final settlements for some payors and programs are subject to adjustment based on administrative review and audit by third parties.

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The Company determines amounts that qualify for charity care based on the patient’s household income relative to the federal poverty level guidelines, as established by the federal government.

The Company made certain updates to its policy during the year ended December 31, 2025 in a manner which increased the number of accounts qualifying for charity care.

This resulted in an increase in expenses related to charity care services during the year ended December 31, 2025, compared to the same period in 2024 as referenced below.

These charity care services are estimated to be $ 1.5 billion, $ 1.2 billion and $ 1.3 billion for the years ended December 31, 2025, 2024 and 2023 , respectively, representing the value (at the Company’s standard charges) of these charity care services that are excluded from net operating revenues.

1 unchanged sentence

The estimated cost of these charity care services was determined using a ratio of cost to gross charges and applying that ratio to the gross charges associated with providing care to charity patients for the period.

Leases are recorded in the consolidated balance sheets through recognition of a liability for the discounted present value of future fixed lease payments and a corresponding ROU asset.

The ROU asset recorded at commencement of the lease represents the right to use the underlying asset over the lease term in exchange for the lease payments.

Leases with an initial term of 12 months or less that do not have an option to purchase the underlying asset that is deemed reasonably certain to be exercised are not recorded in the consolidated balance sheets;

rather, rent expense for these leases is recognized on a straight-line basis over the lease term, or when

COMMUNITY HEALTH SYSTEMS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

incurred if a month-to-month lease.

Leases are recorded in the consolidated balance sheets through recognition of a liability for the discounted present value of future fixed lease payments and a corresponding ROU asset.

The ROU asset recorded at commencement of the lease represents the right to use the underlying asset over the lease term in exchange for the lease payments.

rather, rent expense for these leases is recognized on a straight-line basis over the lease term, or when incurred if a month-to-month lease.

When readily determinable, the Company uses the interest rate implicit in a lease to determine the present value of future lease payments.

11 unchanged sentences

Because of the economic diversity of the Company’s facilities and non-governmental third-party payors, Medicare represents the only significant concentration of credit risk from payors.

Accounts receivable, net of contractual allowances, from Medicare was $ 175 million and $ 194 million at December 31, 2024 and 2023, respectively, repre senting 5 % and 6 % of consol idated net accounts receivable at December 31, 2024 and 2023 , respectively.

Patient a ccounts receivable, net of contractual allowances, from Medicare was $ 147 million and $ 175 million at December 31, 2025 and 2024, respectively, repre senting 5 % of consol idated net patient accounts receivable at both December 31, 2025 and 2024 .

Accounting for the Impairment or Disposal of Long-Lived Assets.

During the year ended December 31, 2024, the Company recorded a net expense of approximately $ 301 million, comprised of (i) an approximate $ 263 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed of or which were previously classified as held-for-sale, (ii) an approximate $ 34 million impairment charge recorded to reduce the carrying value of a hospital that was deemed held-for-sale based on the difference between carrying value of the hospital disposal group compared to the estimated fair value less costs to sell, and (iii) an approximate $ 8 million impairment charge to adjust the carrying value of long-lived assets at a hospital that was sold at a sales price below carrying value, partially offset by a gain of approximately $ 4 million related to the sale of one hospital.

During the year ended December 31, 2025 , the Company recorded a net gain of approximately $ 406 million, comprised of (i) a gain of approximately $ 387 million related to the divestiture of four hospitals and the Company ’s laboratory outreach business, and (ii) additional cash consideration received of approximately $ 91 million, partially offset by (i) an approximately $ 34 million impairment charge to adjust the carrying value of long-lived assets at three hospitals that were divested at a price below carrying value, and (ii) an approximately $ 38 million impairment charge recorded to reduce the carrying value of several assets that were idled or disposed.

During the year ended December 31, 2025 , approximately $ 451 million of goodwill was allocated from the hospital operations reporting unit associated with the disposal groups for which impairment charges or a gain on sale was recorded during the period.

During the year ended December 31, 2023, the Company recorded a net gain of approximately $ 87 million, comprised of a gain of $ 145 million related to the sale of five hospitals and the sale of a majority interest in one hospital, offset by (i) an approximate $ 49 million impairment charge to adjust the carrying value of long-lived assets at three hospitals that were sold at a sales price below carrying value, and (ii) an approximate $ 9 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed of or held-for-sale.

During the year ended December 31, 2024 , the Company recorded a net expense of approximately $ 301 million, comprised of (i) an approximate $ 263 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed of or which were previously classified as held-for-sale, (ii) an approximate $ 34 million impairment charge recorded to reduce the carrying value of a hospital that was deemed held-for-sale based on the difference between carrying value of the hospital disposal group compared to the estimated fair value less costs to sell, and (iii) an approximate $ 8 million impairment charge to adjust the carrying value of long-lived assets at a hospital that was sold at a sales price below carrying value, partially offset by a gain of approximately $ 4 million related to the sale of one hospital.

During the year ended December 31, 2024 , approximately $ 111 million of goodwill was allocated from the hospital operations reporting unit associated with the disposal groups for which impairment charges or a gain on sale was recorded during the period.

The Company will continue to evaluate the potential for impairment of the long-lived assets of hospitals and other held-and-used businesses as well as evaluate offers for potential sales, as applicable.

Based on such analysis, additional impairment charges may be recorded in the future.

Income Taxes.

The Company accounts for income taxes under the asset and liability method, in which deferred income tax assets and liabilities are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities.

The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of (loss) income during the period in which the tax rate change becomes law.

Other Comprehensive Loss .

Other comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of income (loss) during the period in which the tax rate change becomes law.

Other Comprehensive Income (Loss) .

Other comprehensive income (loss) is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Supplier Finance Program.

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The Company has not pledged assets as security or provided guarantees as part of this program.

The Company’s outstanding payment obligations under the supplier finance program, which are included in accounts payabl e in the Company’s consolidated balance sheets, totaled $ 3 million, $ 3 million and $ 9 million at December 31, 2024, 2023 and 2022 , respectively.

Payment obligations under the program average approximately $ 25 million to $ 35 million per quarter and are timely settled such that the inflows into the program approximate the outflows in each period presented.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company’s outstanding payment obligations under the supplier finance program, which are included in accounts pa yabl e in the Company’s consolidated balance sheets, totaled $ 2 million and $ 3 million at December 31, 2025 and 2024, respectively.

Payment obligations under the program average approximately $ 20 million to $ 30 million per quar ter and are timely settled such that the inflows into the program approximate the outflows in each period presented.

Segment Reporting .

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The Company operates a single operating segment represented by hospital operations (which includes the Company’s acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services).

COVID-19 Pandemic.

Various stimulus laws, including the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and the American Rescue Plan Act of 2021, among others, authorized significant funding to be distributed to eligible healthcare providers through the Public Health and Social Services Emergency Fund (the “PHSSEF”).

PHSSEF payments were intended to compensate healthcare providers for lost revenues and incremental expenses incurred in response to the COVID-19 pandemic and are not required to be repaid, provided that recipients attest to and comply with certain terms and conditions, including audit and reporting requirements.

Various state and local programs also exist to provide relief, either independently or through distribution of monies received via the CARES Act and other enacted federal legislation.

The Company received pandemic relief fund payments through various federal, state and local programs of approximately $ 161 million during the year ended December 31, 2022.

Approximately $ 173 million was recognized as pandemic relief funds within the consolidated statements of (loss) income during the year ended December 31, 2022.

The Company did not receive or recognize any significant level of payments or benefits under the CARES Act or other COVID-19 related stimulus and relief legislation during the years ended December 31, 2024 and 2023.

New Accounting Pronouncements .

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures.” This ASU establishes new requirements for the categorization and disaggregation of information in the rate reconciliation as well as for disaggregation of income taxes paid.

Additionally, this ASU modifies and eliminates certain existing requirements for indefinitely reinvested foreign earnings and unrecognized tax benefits.

This ASU is effective for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025.

The amendments in this ASU should be applied on a prospective basis and early adoption is permitted.

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Topic 350):

This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods.

Early adoption of this ASU is permitted.

The Company is currently evaluating the impact that adoption of this ASU will have on its consolidated financial statements.

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At December 31, 2025 , 11,614,859 shares of unissued common stock were reserved for future grants under the 2009 Plan.

The following table reflects the impact of total compensation expense related to stock-based equity plans on the reported operating results for the respective periods (in millions):

Year Ended December 31,

Effect on income (loss) before income taxes

Effect on net income (loss)

During the year ended December 31, 2025, a reversal of approximately $ 4 million of stock-based compensation expense was recorded for restricted stock awards and stock options that were forfeited and cancelled.

The Company routinely evaluates its assumption for forfeitures or cancellations and adjusts its estimate to account for employee departures, including retirement, in accordance with the terms of the 2009 Plan.

COMMUNITY HEALTH SYSTEMS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table reflects the impact of total compensation expense related to stock-based equity plans on the reported operating results for the respective periods (in millions):

Year Ended December 31,

Effect on (loss) income before income taxes

Effect on net (loss) income

At December 31, 2025 , $ 12 million of unrecognized stock-based compensation expense related to outstanding unvested stock options, restricted stock and RSUs (the terms of which are summarized below) was expected to be recognized over a weighted-average period of 20 months.

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Expected volatility

84.3 % - 87.5 %

Expected dividends

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Risk-free interest rate

1.5 % - 1.6 %

In determining the expected term, the Company examined concentrations of option holdings and historical patterns of option exercises and forfeitures, as well as forward-looking factors, in an effort to determine if there were any discernible employee populations.

From this analysis, in determining the expected term for the years ended December 31, 2025, 2024 and 2023, the Company identified one population, consisting of persons receiving grants of stock options.

Additionally, in determining the expected term for the year ended December 31, 2022, two populations were identified, one consisting of certain senior executives who have since retired as executive officers, and the other consisting of substantially all other recipients.

The computation of expected term was performed using the simplified method for all stock options granted in the periods presented.

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In determining expected volatility, the Company also reviewed the market-based implied volatility of actively traded options of its common stock and determined that historical volatility utilized to estimate the expected volatility rate did not differ significantly from the implied volatility.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Options outstanding and exercisable under the 2009 Plan as of December 31, 2025, and changes during each of the years in the three-year period prior to December 31, 2025, were as follows (in millions, except share and per share data):

7 unchanged sentences

Exercisable at December 31, 2025

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023 , was $ 2.27 , $ 2.19 and $ 4.61 , respectively.

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This amount changes based on the market value of the Company’s common stock.

The aggregate intrinsic value of options exercised during the years ended December 31, 2025 and 2023 was less than $ 1 million.

There were no stock option exercises during the year ended December 31, 2024.

The aggregate intrinsic value of options exercised during the years ended December 31, 2023 and 2022 w as less than $ 1 million for both years.

Th e aggregate intrinsic value of options vested and expected to vest approximates that of the outstanding options.

The aggregate intrinsic value of options vested and expected to vest approximates that of the outstanding options.

The Company has also awarded restricted stock under the 2009 Plan to employees of certain subsidiaries.

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Restricted stock awards subject to performance objectives that have not yet been satisfied are not considered outstanding for purposes of determining diluted earnings per share unless the performance objectives have been satisfied on the basis of results through the end of each respective reporting period.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Restricted stock outstanding under the 2009 Plan as of December 31, 2025, and changes during each of the years in the three-year period prior to December 31, 2025, were as follows:

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The March 2025, 2024 and 2023 grants each had a grant date fair value of approximately $ 180,000 .

In addition to the grants set forth above, on March 1, 2024 and 2023, the Chairman of the Board of Directors was awarded an additional grant of 92,334 RSUs and 43,089 RSUs, respectively, each with a grant date fair value of approximately $ 265,000, as additional compensation for serving as Chairman of the Board of Directors.

Pursuant to the Company’s non-management director compensation program, on June 1, 2024, a new non-management director, who was elected to the Board of Directors at the Annual Meeting of the Company’s stockholders on May 7, 2024, received a grant of 62,718 RSUs (the same number of RSUs granted to the other non-management directors on March 1, 2024), which had a grant date fair value of approximately $ 248,000 .

Vesting of RSUs granted to non-management directors occurs in one-third increments on each of the first three anniversaries of the award date or upon the director’s earlier cessation of service on the Board of Directors, other than for cause.

Each non-management director may elect, prior to the beginning of the calendar year in which the award is granted, to defer the receipt of shares of the Company’s common stock issuable upon vesting until either his or her (i) separation from service with the Company or (ii) attainment of an age specified in advance by the non-management director.

A total of five directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on March 1, 2024 to a future date and the new non-management director elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on June 1, 2024 to a future date.

A total of four directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on March 1, 2023 to a future date, and a total of three directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on March 1, 2022 to a future date.

COMMUNITY HEALTH SYSTEMS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

compensation for serving as Chairman of the Board of Directors.

Pursuant to the Company’s non-management director compensation program, on June 1, 2024, a new non-management director, who was elected to the Board of Directors at the Annual Meeting of the Company’s stockholders on May 7, 2024 (the “2024 Annual Meeting”) , received a grant of 62,718 RSUs (the same number of RSUs granted to the other non-management directors on March 1, 2024).

Due to the higher closing price of the Company’s common stock on June 1, 2024 compared to March 1, 2024, the grant date fair value of the June 1, 2024 award was approximately $ 248,000 .

A total of seven directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on March 1, 2025 to a future date.

A total of five directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on March 1, 2024 to a future date, and the non-management director who was elected to the Board of Directors at the 2024 Annual Meeting elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on June 1, 2024 to a future date.

A total of four directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted on March 1, 2023 to a future date.

RSUs outstanding under the 2009 Plan as of December 31, 2025, and changes during each of the years in the three-year period prior to December 31, 2025, were as follows:

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Goodwill is not recognized in an asset acquisition.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During the years ended December 31, 2025, 2024 and 2023 , one or more subsidiaries of the Company paid approximately $ 1 million, $ 25 million and $ 38 million, respectively, to acquire the operating assets and related businesses of certain physician practices, clinics, ambulatory surgery centers, urgent care centers and other ancillary businesses that operate within the communities served by the Company’s affiliated hospitals.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table provides a summary of hospitals that the Company divested (or, in the case of Lutheran Rehabilitation Hospital, in which the Company sold a majority interest) during the years ended December 31, 2024, 2023 and 2022 .

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

Effective Date

2025 Divestitures:

Merit Health Biloxi

Memorial Health System

February 1, 2025

ShorePoint Health - Port Charlotte

Port Charlotte, FL

March 1, 2025

ShorePoint Health - Punta Gorda

Punta Gorda, FL

March 1, 2025

Lake Norman Regional Medical Center

Duke University Health System, Inc.

Mooresville, NC

April 1, 2025

Merit Health Madison

University of Mississippi Medical Center

Cedar Park Regional Medical Center

Ascension Health

Cedar Park, TX

June 30, 2025

Northwest Health Physicians’ Specialty Hospital

Washington Regional Medical Center

Fayetteville, AR

December 1, 2025

2024 Divestitures:

Tennova Healthcare - Cleveland

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December 1, 2023

2022 Divestitures:

AllianceHealth Seminole

SSM Health Care of Oklahoma, Inc.

Effective August 1, 2024, the Company completed the sale of Tennova Healthcare – Cleveland to Hamilton Health Care Systems, Inc.

In addition to the base purchase price of approximately $ 160 million which was received at a preliminary closing on July 31, 2024, the Company is entitled to receive additional cash consideration contingent upon potential modifications to supplemental reimbursement programs as more specifically provided in the asset purchase agreement underlying the transaction.

Such modifications are not complete as of December 31, 2024 and an estimate of consideration that may be received by the Company in 2025 has not been recognized.

On November 7, 2024, a subsidiary of the Company entered into a definitive agreement to sell its 50 % interest in Merit Health Biloxi ( 153 licensed beds) in Biloxi, Mississippi, to an affiliate of Memorial Hospital of Gulfport, which had a preexisting 50 % ownership interest in Merit Health Biloxi.

Modifications to the applicable supplemental reimbursement programs were approved as of June 30, 2025, and a third party was engaged during the three months ended September 30, 2025 to calculate the additional consideration due to the Company.

In connection therewith, the Company received additional cash consideration of approximately $ 91 million in October 2025 under the terms of the asset purchase agreement.

Such amount qualified for recognition as impairment (gain) loss on sale of businesses in the Company’s consolidated statements of income (loss) during the three months ending December 31, 2025.

Additional cash consideration may be received in one or more future periods, or a portion of the consideration previously received may be returned by the Company to the buyer, subject to periodic reconciliations as set forth in the asset purchase agreement.

On December 1, 2025, the Company completed the transaction contemplated by that certain asset purchase agreement dated as of July 22, 2025, as amended, 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.

The total purchase price paid to the Company at the closing of this transaction was $ 194 million, before certain transaction expenses.

On October 24, 2025, the Company 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 hospitals did not meet the criteria for classification as held-for-sale as of December 31, 2025.

This disposition was completed on February 1, 2026, as further described in Note 17.

On November 22, 2024, the Company entered into a definitive agreement to sell ShorePoint Health Port Charlotte ( 254 licensed beds) in Port Charlotte, Florida, certain assets of ShorePoint Health Punta Gorda ( 208 licensed beds) in Punta Gorda, Florida, and certain ancillary businesses related to such facilities to subsidiaries of Adventist Health System Sunbelt Healthcare Corporation.

Due to the effects of Hurricane Helene and Hurricane Milton, the Punta Gorda hospital has indefinitely suspended inpatient operations.

On December 11, 2024, the Company entered into a definitive agreement to sell Lake Norman Regional Medical Center ( 123 licensed beds) in Mooresville, North Carolina, and related businesses, to Duke University Health System, Inc.

The hospitals for which definitive agreements had been reached but for which the sale was not complete, were classified as held-for-sale at December 31, 2024.

On October 30, 2025, the Company entered into a definitive agreement to sell its 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 (“VUMC”) for $ 600 million, subject to adjustment based on the closing net working capital and the closing balance of amounts due to the joint ventures from the Company.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

previously held a minority ownership interest in these joint ventures and purchased the remaining ownership interests through this transaction.

This hospital was classified as held-for-sale as of December 31, 2025.

This disposition was completed on February 1, 2026, as further described in Note 17.

The following table discloses amounts included in the consolidated balance sheet for hospitals classified as held-for-sale as of December 31, 2025 and 2024 (in millions).

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Accrued liabilities

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During the three months ended September 30, 2022, the Company completed the closure of ShorePoint Health Venice hospital ( 312 licensed beds) in Venice, Florida.

The Company recorded an impairment charge of approximately $ 29 million during the year ended December 31, 2022, to adjust the fair value of the long-lived assets of this hospital, including property and equipment and capitalized software costs, based on their estimated fair value.

During the three months ended September 30, 2022, the provision of inpatient services and substantially all outpatient services ceased at First Hospital Wyoming Valley (psychiatric hospital) ( 149 licensed beds) in Wilkes-Barre, Pennsylvania, resulting in the closure of this facility being substantially complete as of September 30, 2022.

The Company completed the closure of First Hospital Wyoming Valley during the three months ended December 31, 2022.

The Company recorded an impairment charge of approximately $ 15 million during the year ended December 31, 2022, to adjust the fair value of the long-lived assets of this hospital, including property and equipment and capitalized software costs, based on their estimated fair value.

On December 31, 2022, the lease for AllianceHealth Clinton ( 56 licensed beds) in Clinton, Oklahoma, expired and was not renewed.

The Company recorded an impairment charge of approximately $ 1 million during the year ended December 31, 2022 in conjunction with exiting the lease to operate this hospital.

GOODWILL AND OTHER INTANGIBLE ASSETS

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Accumulated impairment losses

Goodwill allocated to hospitals divested or held-for-sale reflects the net activity of changing the classification of entities as held-and-used or held-for-sale during the year ended December 31, 2024.

Goodwill is allocated to each identified reporting unit, which is defined as an operating segment or one level below the operating segment (referred to as a component of the entity).

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Intangible Assets

During the years ended December 31, 2024 and 2023, the Company acquired goodwill as well as definite-lived intangible assets for the acquisition of assembled workforces.

No intangible assets other than goodwill were acquired during the year ended December 31, 2025.

During the year ended December 31, 2024, the Company acquired goodwill as well as definite-lived intangible assets for the acquisition of assembled workforces.

The gross carrying amount of the Company’s other intangible assets subject to amortization was $ 27 million and $ 28 million at December 31, 2025 and 2024 , respectively, and the net carrying amount was $ 7 million and $ 15 million at December 31, 2025 and 2024 , respectively.

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The Company’s intangible assets include an assembled workforce and various contract-based intangible assets related to operating licenses, management contracts, or non-compete agreements entered into in connection with prior acquisitions.

The weighted-average remaining amortization period for the intangible assets subject to amortization is approximately two years.

The weighted-average remaining amortization period for the intangible assets subject to amortization is approximately one year.

There are no expected residual values related to these intangible assets.

Amortization expense on these intangible assets was $ 8 million, $ 9 million and $ 5 million during the years ended December 31, 2025, 2024 and 2023, respectively .

Amortization expense on intangible assets is estimated to be $ 9 milli on, $ 5 million and $ 1 million in 2025, 2026 and 2027, respectively.

The gross carrying amount of capitalized software for internal use was approximately $ 982 million and $ 959 million at December 31, 2024 and 2023 , respectively, and the net carrying amount was approximately $ 119 million and $ 144 million at December 31, 2024 and 2023 , respectively.

Amortization expense on intangible assets is estimated to be $ 6 million and $ 1 million in 2026 and 2027.

The gross carrying amount of capitalized software for internal use was approximately $ 960 million and $ 982 million a t December 31, 2025 and 2024 , respectively, and the net carrying amount was approximately $ 102 million and $ 119 million at December 31, 2025 and 2024 , respectively.

The estimated amortization period for capitalized internal-use software is generally three years .

There is no expected residual value for capitalized internal-use software.

At December 31, 2024 , there were approximately $ 90 million of capitalized costs for internal-use software that is currently in the development stage and will begin amortization once the software project is complete and ready for its intended use.

At December 31, 2025, there were approximatel y $ 40 million of capitalized costs for internal-use software that is currently in the development stage and will begin amortization once the soft ware project is complete and ready for its intended use.

Amortization expense on capitalized internal-use software was $ 62 million, $ 80 million and $ 80 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Amortization expense on capitalized internal-use software is estimated to be $ 48 million in 2026, $ 29 million in 2027, $ 15 million in 2028, $ 8 million in 2029, $ 2 million in 2030 and less than $ 1 million thereafter.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The provision for income taxes consists of the following (in millions):

1 unchanged sentence

Total provision for income taxes for income

The following table reconciles the differences between the statutory federal income tax rate and the effective tax rate for the year ended December 31, 2025 (dollars in millions):

Year Ended December 31, 2025

Provision for income taxes at statutory federal rate

State income taxes, net of federal income tax

Nontaxable or Nondeductible Items

Net income attributable to noncontrolling interests

Nondeductible goodwill

Permanent differences

Change in valuation allowance

Work opportunity tax credits

Change in uncertain tax position

Provision for income taxes and effective

tax rate for income

(1) State taxes in Alabama and Texas comprise the majority (greater than 50%) of the tax effect in this category.

COMMUNITY HEALTH SYSTEMS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table reconciles the differences between the statutory federal income tax rate and the effective tax rate (dollars in millions):

As previously disclosed for the years ended December 31, 2024 and December 31, 2023, prior to the adoption of ASU 2023-09, the following table reconciles the differences between the statutory federal income tax rate to the effective income tax rate (dollars in millions):

Year Ended December 31,

Provision for income taxes at statutory

State income taxes, net of federal income tax benefit

Provision for income taxes at statutory federal rate

State income taxes, net of federal income tax

Net income attributable to noncontrolling interests

6 unchanged sentences

Provision to return

Provision for income taxes and

effective tax rate for income

Provision for income taxes and effective

tax rate for income

The Company’s effective tax rates were 6.6 %, ( 27.9 )% and 92.3 % for the years ended December 31, 2025, 2024 and 2023, respectively.

The change in the Company’s effective tax rate for the year ended December 31, 2025, when compared to the year ended December 31, 2024, was primarily due to the tax effects of the federal budget reconciliation legislation, which was enacted on July 4, 2025 and the effects of which were recorded during the year ended December 31, 2025 .

A decrease in valuation allowances stemming from increased interest deductibility and increased bonus depreciation resulted in an income tax benefit of approximately $ 163 million during the year ended December 31, 2025 .

This income tax benefit reduced the effective tax rate by 22.5 % for the year ended December 31, 2025.

The decrease in the Company’s effective tax rate for the year ended December 31, 2024, when compared to the year ended December 31, 2023, was primarily due to a decrease in non-deductible goodwill related to divested hospitals and a decrease in (loss) income before income taxes in 2024 compared to 2023.

The decrease in the Company’s effective tax rate for the year ended December 31, 2023, when compared to the year ended December 31, 2022, was primarily due to non-deductible goodwill related to hospitals divested in 2023 and a decrease in income before taxes.

COMMUNITY HEALTH SYSTEMS, INC.

10 unchanged sentences

Long-term debt and interest

Accounts receivable

Patient accounts receivable

IRC Section 163(j) interest limitation

6 unchanged sentences

Deferred compensation

IRC Section 481(a) adjustments

Valuation allowance

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However, for financial reporting purposes, there is no corresponding amortization allowed with respect to such purchased goodwill.

The valuation allowance for federal and state jurisdictions where the Company concluded that the associated deferred tax assets would not be realized increased by $ 144 million and $ 91 million, respectively, for the year ended December 31, 2024 , and increased by $ 88 million and $ 66 million, respectively, for the year ended December 31, 2023.

The valuation allowance for federal and state jurisdictions where the Company concluded that the associated deferred tax assets would not be realized decreased by $ 158 million and $ 17 million, respectively, for the year ended December 31, 2025 , and increased by $ 144 million and $ 91 million, respectively, for the year ended December 31, 2024.

The total amount of unrecognized benefit that would affect the effective tax rate, if recognized, was $ 45 million as of December 31, 2025 .

A total of $ 9 million of interest and penalties is included in the amount of the liability for uncertain tax positions at December 31, 2025.

It is the Company’s policy to recognize interest and penalties related to unrecognized benefits in its consolidated statements of (loss) income as income tax expense.

It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities;

however, the Company does not anticipate the change will have a material impact on the Company’s consolidated results of operations or consolidated financial position.

It is the Company’s policy to recognize interest and penalties related to unrecognized benefits in its consolidated statements of income (loss) as income tax expense.

COMMUNITY HEALTH SYSTEMS, INC.

7 unchanged sentences

Unrecognized tax benefit, end of year

The Company’s income tax return for the 2018 tax year has been effectively settled with the Internal Revenue Service in 2024.

The Company’s income tax return for the 2018 tax year was effectively settled with the Internal Revenue Service in 2024.

The settlement was not material to the Company’s consolidated results of operations or consolidated financial position.

1 unchanged sentence

The Company believes the result of this examination will not be material to its consolidated results of operations or consolidated financial position.

Cash paid for income taxes, net of refunds received, was $ 171 million, $ 91 million and $ 6 million during the years ended December 31, 2024, 2023 and 2022 , respectively.

The Company has extended the federal statute of limitations through December 31, 2026 for Community Health Systems, Inc.

for the tax periods ended December 31, 2021 and 2022.

Cash paid for income taxes, net of refunds received, were as follows (in millions):

Total cash paid for income taxes, net of refunds received

During the year ended December 31, 2025, the Company purchased $ 50 million of solar tax credits at a discounted amount of $ 47 million.

Such solar tax credits are considered federal estimated income tax payments.

The $ 3 million discount is recorded as a federal income tax benefit for the year ended December 31, 2025.

The state of Alabama was the only jurisdiction that exceeded 5 percent of the total cash paid for income taxes, net of refunds received, which was $ 14 million for the year ended December 31, 2025.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, cash paid for income taxes, net of refunds received, was $ 171 million and $ 91 million, respectively.

During the years ended December 31, 2025, 2024 and 2023 , approximately $ 169 million, $ 17 million and $ 47 million, respectively, of cash paid for taxes related to gains on hospitals divested during the periods.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

LONG-TERM DEBT

2 unchanged sentences

5⅝% Senior Secured Notes due 2027

6⅞ % Senior Notes due 2028

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10⅞ % Senior Secured Notes due 2032

10¾ % Senior Secured Notes due 2033

9¾ % Senior Secured Notes due 2034

6⅞ % Junior-Priority Secured Notes due 2029

4 unchanged sentences

Total long-term debt

8% Senior Secured Notes due 2027

On November 19, 2019, CHS/Community Health Systems, Inc.

(“CHS”) issued approximately $ 700 million aggregate principal amount of the 8% Senior Secured Notes due December 15, 2027 (the “8% Senior Secured Notes due 2027”) in connection with the 2019 Exchange Offer.

No cash proceeds were received from the 2019 Exchange Offer.

The 8% Senior Secured Notes due 2027 bear interest at a rate of 8.000 % per annum, payable semi-annually in arrears on June 15 and December 15 of each year.

Interest on the 8% Senior Secured Notes due 2027 accrues from the initial issuance date of the 8% Senior Secured Notes due 2027.

Interest is calculated on the basis of a 360-day year comprised of 12 30-day months.

The 8% Senior Secured Notes due 2027 are scheduled to mature on December 15, 2027.

The 8% Senior Secured Notes due 2027 are unconditionally guaranteed on a senior-priority secured basis by the Company and each of CHS’ current and future domestic subsidiaries that provide guarantees under the ABL Facility, any capital market debt securities of CHS (including CHS᾿ outstanding senior notes) and certain other long-term debt of CHS.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The 8% Senior Secured Notes due 2027 and the related guarantees are secured by shared (i) first-priority liens on the Non-ABL Priority Collateral and (ii) second-priority liens on the ABL Priority Collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 8% Senior Secured Notes due 2027.

CHS may redeem some or all of the 8% Senior Secured Notes due 2027 at any time on or after December 15, 2022 upon not less than 15 nor more than 60 days’ notice, at the following redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the period set forth below:

Redemption Price

December 15, 2024 to December 14, 2027

5⅝% Senior Secured Notes due 2027

On December 28, 2020 , CHS completed a private offering of $ 1.9 billion aggregate principal amount of 5⅝% Senior Secured Notes due March 15, 2027 (the “5⅝% Senior Secured Notes due 2027”).

The proceeds of the offering were used to repurchase approximately $ 2.579 billion of the outstanding principal amount of 6¼% Senior Secured Notes due 2023 that were validly tendered and accepted for purchase pursuant to the early tender deadline of a tender offer that launched on December 11, 2020, and to pay related fees.

The remaining principal value of 6¼% Senior Secured Notes due 2023 that were not validly tendered as of the early tender deadline were redeemed or repurchased via the completion of the tender offer on January 11, 2021 or redemption on January, 28, 2021.

The 5⅝% Senior Secured Notes due 2027, which mature on March 15, 2027 , bear interest at a rate of 5⅝% per year payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2021.

The 5⅝% Senior Secured Notes due 2027 are unconditionally guaranteed on a senior-priority secured basis by the Company and each of CHS’ current and future domestic subsidiaries that provide guarantees under the ABL Facility, any capital market debt securities of CHS (including CHS’ outstanding senior notes) and certain other long-term debt of CHS.

The 5⅝% Senior Secured Notes due 2027 and the related guarantees are secured by shared (i) first-priority liens on the Non-ABL Priority Collateral and (ii) second-priority liens on the ABL Priority Collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 5⅝% Senior Secured Notes due 2027.

At any time and from time to time on or after December 15, 2023, CHS may redeem the 5⅝% Senior Secured Notes due 2027 in whole or in part, upon not less than 15 no more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 5⅝% Senior Secured Notes due 2027 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the 12 month period beginning on December 15 of the years indicated below:

Redemption Price

December 15, 2024 to December 14, 2025

December 15, 2025 to December 14, 2027

During the year ended December 31, 2024 , the Company extinguished approximately $ 143 million principal value of the 5⅝ % Senior Secured Notes due 2027 through open market repurchases utilizing cash on hand.

6⅞% Senior Notes due 2028

On November 19, 2019, CHS issued approximately $ 1.7 billion aggregate principal amount of the 6⅞% Senior Notes due April 1, 2028 (“the 6⅞% Senior Notes due 2028”) in connection with the 2019 Exchange Offer.

On November 19, 2019, CHS/Community Health Systems, Inc., a wholly-owned subsidiary of Community Health Systems, Inc., (“CHS”) issued approximately $ 1.7 billion aggregate principal amount of the 6⅞% Senior Notes due April 1, 2028 (“the 6⅞% Senior Notes due 2028”) in connection with the 2019 Exchange Offer.

No cash proceeds were received in the 2019 Exchange Offer.

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The 6⅞% Senior Notes due 2028 are unconditionally guaranteed on a senior-priority unsecured basis by the Company and each of the CHS current and future domestic subsidiaries that provide guarantees under the ABL Facility, any capital market debt securities of CHS (including CHS᾿ outstanding senior notes) and certain other long-term debt of CHS.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

CHS may redeem some or all of the 6⅞% Senior Notes due 2028 at any time on or after April 1, 2023 upon not less than 15 nor more than 60 days’ notice, at the following redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the periods set forth below:

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A gain from early extinguishment of debt of approximately $ 205 million was recognized associated with this exchange.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During the year ended December 31, 2020, the Company extinguished $ 226 million in principal of the 6⅞% Senior Notes due 2028 through open market repurchases and approximately $ 7 million via a tender offer that commenced on October 30, 2020 and expired on November 30, 2020 .

During the year ended December 31, 2025, CHS completed a tender offer in May 2025 for its outstanding 6⅞ % Senior Unsecured Notes due 2028, pursuant to which the Company purchased $ 584 million in aggregate principal amount, or approximately 93 %, of these outstanding notes, that was funded using cash on hand.

Upon completion of the tender offer, approximately $ 42 million principal amount of the 6⅞% Senior Unsecured Notes due 2028 remained outstanding.

6% Senior Secured Notes due 2029

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January 15, 2026 to January14, 2029

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

5¼% Senior Secured Notes due 2030

3 unchanged sentences

The 5¼% Senior Secured Notes due 2030 are unconditionally guaranteed on a senior-priority secured basis by each of CHS’ current and future domestic subsidiaries that provide guarantees under the ABL Facility, any capital market debt securities of CHS (including CHS’ outstanding senior notes) and certain other long-term debt of CHS.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The 5¼% Senior Secured Notes due 2030 and the related guarantees are secured by shared (i) first-priority liens on the Non-ABL Priority Collateral and (ii) second-priority liens on the ABL Priority Collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 5¼% Senior Secured Notes due 2030.

14 unchanged sentences

CHS is entitled, at its option, to redeem all or a portion of the 4¾ % Senior Secured Notes due 2031 at any time prior to February 15, 2026 , upon not less than 15 nor more than 60 days’ notice, at a price equal to 100 % of the principal amount of the 4¾% Senior Secured Notes due 2031 redeemed plus accrued and unpaid interest, if any, plus a “make-whole” premium, as described in the indenture governing the 4¾% Senior Secured Notes due 2031 .

The Company may redeem up to 40 % of the aggregate principal amount of the 4¾ % Senior Secured Notes due 2031 at a ny time prior to February 15, 2026, but not more than once during each 12 month period , CHS may redeem up to 10 % of the original aggregate principal amount of the 4¾ % Senior Secured Notes due 2031 at a redemption price equal to 103 % of the principal amount of the 4¾ % Senior Secured Notes due 2031 to be redeemed, plus accrued and unpaid interest, if any.

At any time and from time to time on or after February 15, 2026 , CHS may redeem the 4¾ % Senior Secured Notes due 2031 in whole or in part, upon not less than 15 nor more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 4¾% Senior Secured Notes due 2031 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the 12 month period beginning on February 15 of the years indicated below:

COMMUNITY HEALTH SYSTEMS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A ny time prior to February 15, 2026, but not more than once during each 12 month period , CHS may redeem up to 10 % of the original aggregate principal amount of the 4¾ % Senior Secured Notes due 2031 at a redemption price equal to 103 % of the principal amount of the 4¾ % Senior Secured Notes due 2031 to be redeemed, plus accrued and unpaid interest, if any.

At any time and from time to time on or after February 15, 2026 , CHS may redeem the 4 ¾% Senior Secured Notes due 2031 in whole or in part, upon not less than 15 nor more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 4¾% Senior Secured Notes due 2031 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the 12 month period beginning on February 15 of the years indicated below:

Redemption Price

16 unchanged sentences

February 15, 2029 to January 14, 2032

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

On June 5, 2024, CHS completed the offering of an additional $ 1.225 billion aggregate principal amount of its outstanding 10.875 % Senior Secured Notes due 2032 (the “Tack-On Notes”) at an issue price of 102.000 %, plus accrued and unpaid interest from December 22, 2023 to the closing date (which equaled approximately $ 60 million).

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Approximately $ 98 million of the proceeds from the Tack-On Notes, was also used to extinguish $ 130 million principal value of the Company’s 6⅞ % Senior Notes due 2028 in a privately negotiated transaction.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

During the three months ended December 31, 2025, the Company exercised a special call provision to redeem 10 % or approximately $ 223 million, in principal amount of the 10.875 % Senior Secured Notes due 2032 , at a redemption price of 103 % of the principal amount, plus accrued and unpaid interest.

10¾% Senior Secured Notes due 2033

On May 9, 2025 , CHS completed the offering of $ 700 million aggregate principal amount 10.750 % Senior Secured Notes due June 15, 2033 (the “ 10¾ % Senior Secured Notes due 2033”).

The Company used the proceeds from issuance of the 10¾ % Senior Secured Notes due 2033, together with cash on hand, to redeem all of its 8 % Senior Secured Notes due 2027 and to pay related fees and expenses.

The 10¾ % Senior Secured Notes due 2033 bear interest at a rate of 10.750 % per year payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2025.

The 10¾ % Senior Secured Notes due 2033 are unconditionally guaranteed on a senior-priority secured basis by the Company and each of the current and future domestic subsidiaries that provide guarantees under the ABL Facility (as defined below), any capital market debt securities of CHS (including CHS’ outstanding senior notes) and certain other long-term debt of CHS.

The 10¾ % Senior Secured Notes due 2033 and the related guarantees are secured by shared (i) first-priority liens on the collateral that also secures on a first-priority basis CHS’ senior-priority secured notes and (ii) second-priority liens on the collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 10¾ % Senior Secured Notes due 2033.

CHS is entitled, at its option, to redeem all or a portion of the 10¾ % Senior Secured Notes due 2033 at any time prior to June 15, 2030, upon not less than 10 nor more than 60 days’ notice, at a price equal to 100 % of the principal amount of the 10¾ % Senior Secured Notes due 2033 redeemed plus accrued and unpaid interest, if any, plus a “make-whole” premium, as described in the indenture governing the 10¾ % Senior Secured Notes due 2033.

CHS may redeem up to 35 % of the aggregate principal amount of the 10¾ % Senior Secured Notes due 2033 at any time prior to June 15, 2030 using the net proceeds from certain equity offerings at a redemption price of 103.000 % of the principal amount of the 10¾ % Senior Secured Notes due 2033 redeemed, plus accrued and unpaid interest, if any.

At any time and from time to time on or after June 15, 2030, CHS may redeem the 10¾% Senior Secured Notes due 2033 in whole or in part, upon not less than 10 nor more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 10¾ % Senior Secured Notes due 2033 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the twelve-month period beginning on June 15 of the years indicated below:

Redemption Price

June 15, 2030 to June 14, 2031

June 15, 2031 to June 14, 2032

June 15, 2032 to June 14, 2033

9¾% Senior Secured Notes due 2034

On August 12, 2025 , CHS completed an offering of $ 1.790 billion principal amount of 9.750 % Senior Secured Notes due 2034 (the “ 9¾ % Senior Secured Notes due 2034”).

The Company used the proceeds from the issuance of the 9¾ % Senior Secured Notes due 2034to redeem $ 1.743 billion principal amount of its 5.625 % Senior Secured Notes due 2027, or approximately 99 % of the total outstanding principal amount, that were validly tendered and accepted for purchase pursuant to a tender offer that launched on July 28, 2025, and was completed on August 25, 2025, and to pay related fees and expenses.

Upon completion of the tender offer, approximately $ 14 million principal amount of the 5.625 % Senior Secured Notes due 2027 remained outstanding.

The 9¾ % Senior Secured Notes due 2034 bear interest at a rate of 9.750 % per year payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026.

The 9¾ % Senior Secured Notes due 2034 are unconditionally guaranteed on a senior-priority secured basis by the Company and each of the current and future domestic subsidiaries that provide guarantees under the ABL Facility, any capital market debt securities of CHS (including CHS’ outstanding senior notes) and certain other long-term debt of CHS.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The 9¾ % Senior Secured Notes due 2034 and the related guarantees are secured by shared (i) first-priority liens on the collateral that also secures on a first-priority basis CHS’ senior-priority secured notes and (ii) second-priority liens on the collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 9¾ % Senior Secured Notes due 2034.

CHS is entitled, at its option, to redeem all or a portion of the 9¾ % Senior Secured Notes due 2034 at any time prior to August 15, 2028, upon not less than 10 nor more than 60 days’ notice, at a price equal to 100 % of the principal amount of the 9¾ % Senior Secured Notes due 2034 redeemed plus accrued and unpaid interest, if any, plus a “make-whole” premium, as described in the indenture governing the 9¾ % Senior Secured Notes due 2034.

CHS may redeem up to 40 % of the aggregate principal amount of the 9¾ % Senior Secured Notes due 2034 at any time prior to August 15, 2028 using the net proceeds from certain equity offerings at a redemption price of 109.750 % of the principal amount of the 9¾ % Senior Secured Notes due 2034 redeemed, plus accrued and unpaid interest, if any.

In addition, any time prior to August 15, 2028, but not more than once during each 12 month period, CHS may redeem up to 10 % of the original aggregate principal amount of the 9¾ % Senior Secured Notes due 2034 at a redemption price equal to 103 % of the principal amount of the 9¾ % Senior Secured Notes due 2034 to be redeemed, plus accrued and unpaid interest, if any.

At any time and from time to time on or after August 15, 2028, CHS may redeem the 9¾ % Senior Secured Notes due 2034 in whole or in part, upon not less than 10 nor more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 9¾ % Senior Secured Notes due 2034 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the twelve-month period beginning on August 15 of the years indicated below:

Redemption Price

August 15, 2028 to August 14, 2029

August 15, 2029 to August 14, 2030

August 15, 2030 to August 14, 2034

6⅞% Junior-Priority Secured Notes due 2029

8 unchanged sentences

April 15, 2026 to April 14, 2029

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

6⅛% Junior-Priority Secured Notes due 2030

4 unchanged sentences

The 6⅛% Junior-Priority Secured Notes due 2030 and the related guarantees are secured by shared (i) second-priority liens on the Non-ABL Priority Collateral and (ii) third-priority liens on the ABL Priority Collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 6⅛% Junior-Priority Secured Notes due 2030.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Junior-Priority Secured Notes due 2030 redeemed plus accrued and unpaid interest, if any, plus a “make-whole” premium, as described in the indenture governing the 6⅛% Junior-Priority Secured Notes due 2030.

CHS is entitled, at its option, to redeem all or a portion of the 6⅛% Junior-Priority Secured Notes due 2030 at any time prior to April 1, 2025 , upon not less than 15 nor more than 60 days’ notice, at a price equal to 100 % of the principal amount of the 6⅛% Junior-Priority Secured Notes due 2030 redeemed plus accrued and unpaid interest, if any, plus a “make-whole” premium, as described in the indenture governing the 6⅛% Junior-Priority Secured Notes due 2030.

At any time and from time to time on or after April 1, 2025 , CHS may redeem the 6⅛ % Junior-Priority Secured Notes due 2030 in whole or in part, upon not less than 15 nor more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 6⅛% Junior-Priority Secured Notes due 2030 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the 12 month period beginning on April 1 of the years indicated below:

3 unchanged sentences

April 1, 2027 to March 31, 2030

During the years ended December 31, 2024, 2023 and 2022, the Company extinguished a portion of certain series of its outstanding notes through open market repurchases, and privately negotiated repurchases with a limited number of holders, as follows (in millions):

During the years ended December 31, 2025, 2024 and 2023, the Company extinguished a portion of certain series of its outstanding notes through open market repurchases, privately negotiated transactions, tender offers, and redemptions, as follows (in millions):

5⅝ % Senior Secured Notes due 2027

1 unchanged sentence

6 % Senior Secured Notes due 2029

4¾ % Senior Secured Notes due 2031

6⅞ % Junior-Priority Secured Notes due 2029

6⅛ % Junior-Priority Secured Notes due 2030

10⅞ % Senior Secured Notes due 2032

Total principal amount of debt extinguished

Financing and repayment transactions discussed above, including open market and privately negotiated repurchases, resulted in a pre-tax and after-tax gain from early extinguishment of debt of $ 25 million and $ 27 million, respectively, for the year ended December 31, 2024 , a pre-tax and after-tax gain from early extinguishment of debt of $ 72 million and $ 61 million, respectively, for the year ended December 31, 2023 , a pre-tax and after-tax loss from early extinguishment of $ 253 million and $ 208 million, respectively, for the year ended December 31, 2022.

Financing and repayment transactions discussed above, including open market repurchases and privately negotiated transactions, resulted in a pre-tax and after-tax gain from early extinguishment of debt of $ 97 million and $ 107 million, respectively, for the year ended December 31, 2025 , a pre-tax and after-tax gain from early extinguishment of debt of $ 25 million and $ 27 million, respectively, for the year ended December 31, 2024 , a pre-tax and after-tax loss from early extinguishment of $ 72 million and $ 61 million, respectively, for the year ended December 31, 2023.

COMMUNITY HEALTH SYSTEMS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

On June 5, 2024, the Company and CHS entered into an amendment and restatement agreement (the “Amendment”) to refinance and replace the amended and restated asset-based loan (“ABL”) credit agreement (the “ABL Credit Agreement” and, as amended by the Amendment, the “Amended and Restated ABL Credit Agreement”), dated as of November 22, 2021, with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other agents party thereto.

Pursuant to the Amended and Restated ABL Credit Agreement, the lenders have extended to CHS a revolving asset-based loan facility (the “ABL Facility”) in the maximum aggregate principal amount of $ 1.0 billion, subject to borrowing base capacity.

On June 5, 2024, the Company and CHS entered into the Second Amendment and Restatement Agreement (the “Amendment”) to refinance and replace the amended and restated asset-based loan (“ABL”) credit agreement (the “ABL Credit Agreement” and, as amended by the Amendment, the “Amended and Restated ABL Credit Agreement”), dated as of November 22, 2021, with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other agents party thereto.

Pursuant to the Amended and Restated ABL Credit Agreement, the lenders have extended to CHS a revolving asset-based loan facility in the maximum aggregate principal amount of $ 1.0 billion, subject to borrowing base capacity (the “ABL Facility”).

The ABL Facility includes borrowing capacity available for letters of credit of $ 200 million.

CHS and all domestic subsidiaries of CHS that guarantee CHS’ other outstanding senior and senior secured indebtedness guarantee the obligations of CHS under the ABL Facility.

Subject to certain exceptions, all obligations under the ABL Facility and the related guarantees are secured by a perfected first-priority security interest in substantially all of the receivables, deposit, collection and other accounts and contract rights, books, records and other instruments related to the foregoing of the Company, CHS and the guarantors, as well as a perfected junior-priority security interest in substantially all of the other assets of the Company, CHS and the guarantors, subject to customary exceptions and intercreditor arrangements.

At December 31, 2024, the Company had outstanding borrowings of $ 341 million and approximately $ 491 million of additional borrowing capacity (after taking into consideration the $ 66 million of outstanding letters of credit) under the ABL Facility.

Subject to certain exceptions, all obligations under the ABL Facility and the related guarantees are secured by a perfected first-priority security interest in substantially all of the receivables, deposit, collection and other accounts and contract rights, books, records and other instruments related to the foregoing of the Company, CHS and the guarantors, as well as a perfected junior-priority third lien security interest in substantially all of the other assets of the Company, CHS and the guarantors, subject to customary exceptions and intercreditor arrangements.

At December 31, 2025 , the Company had no outstanding borrowings and approximately $ 786 million of additional borrowing capacity (after taking into consideration the $ 34 million of outstanding letters of credit) under the ABL Facility.

The issued letters of credit were primarily in support of potential insurance-related claims and certain bonds.

Letters of credit were reduced during the year ended December 31, 2024 by $ 15 million, primarily in relation to a professional liability claim that was settled and funded during the year ended December 31, 2024.

Letters of credit were reduced during the year ended December 31, 2025 by $ 32 million, primarily due to a reduction in collateral for an insurance-related bond.

Borrowings under the ABL Facility bear interest at a rate per annum equal to an applicable percentage, plus, at the borrower’s option, either (a) a base rate or (b) the Federal Reserve’s secured overnight financing rate (“SOFR”).

1 unchanged sentence

The applicable commitment fee rate under the ABL Facility is determined based on average utilization as a percentage of the maximum commitment amount under the ABL Facility at a rate per annum of either 0.25 % or 0.375 % times the unused portion of the ABL Facility.

Principal amounts outstanding under the ABL Facility will be due and payable in full on June 5, 2029.

Principal amounts outstanding under the ABL Facility, if any, will be due and payable in full on June 5, 2029.

The ABL Facility includes a 91-day springing maturity applicable if more than $ 350 million in the aggregate principal amount of the 5⅝% Senior Secured Notes due 2027 or any indebtedness incurred to refinance the foregoing are scheduled to mature or similarly become due on a date prior to June 5, 2029.

1 unchanged sentence

The ABL Facility contains customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the Company’s ability, subject to certain exceptions, to, among other things (1) declare dividends, make distributions or redeem or repurchase capital stock, (2) prepay, redeem or repurchase other debt, (3) incur liens or grant negative pledges, (4) make loans and investments and enter into acquisitions and joint ventures, (5) incur additional indebtedness or provide certain guarantees, (6) engage in mergers, acquisitions and asset sales, (7) conduct transactions with affiliates, (8) alter the nature of the Company’s, CHS’ or the guarantors’ businesses, (9) grant certain guarantees with respect to physician practices, (10) engage in sale and leaseback transactions or (11) change the Company’s fiscal year.

The Company is also required to comply with a consolidated fixed coverage ratio, upon certain triggering events described below, and various affirmative covenants.

The consolidated fixed coverage ratio is calculated as the ratio of (x) consolidated EBITDA (as defined in the ABL Facility) less capital expenditures to (y) the sum of consolidated interest expense (as defined in the ABL Facility), scheduled principal payments, income taxes and restricted payments made in cash or in permitted investments.

The Company is also required to comply with a consolidated fixed charge coverage ratio, upon certain triggering events described below, and various affirmative covenants.

The consolidated fixed charge coverage ratio is calculated as the ratio of (x) consolidated EBITDA (as defined in the ABL Facility) less capital expenditures to (y) the sum of consolidated interest expense (as defined in the ABL Facility), scheduled principal payments, income taxes and restricted payments made in cash or in permitted investments.

For purposes of calculating the consolidated fixed charge coverage ratio, the calculation of consolidated EBITDA as defined in the ABL Facility is a trailing 12-month calculation that begins with the Company’s consolidated net income, with certain adjustments for interest, taxes, depreciation and amortization, net income attributable to noncontrolling interests, stock compensation expense, restructuring costs, and the financial impact of other non-cash or non-recurring items recorded during any such 12-month period.

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Deferred debt issuance costs

Unamortized note discount

Total long-term debt

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5⅝% Senior Secured Notes due 2027

6⅞% Senior Notes due 2028

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10⅞% Senior Secured Notes due 2032

10¾% Senior Secured Notes due 2033

9¾% Senior Secured Notes due 2034

6⅞% Junior-Priority Secured Notes due 2029

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ABL Facility and other debt

The carrying value of the Company’s long-term debt in the above table is presented net of unamortized deferred debt issuance costs.

The estimated fair value is determined using the methodologies discussed below in accordance with accounting standards related to the determination of fair value based on the U.S.

GAAP fair value hierarchy as discussed in Note 8.

The estimated fair value

COMMUNITY HEALTH SYSTEMS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

for financial instruments with a fair value that does not equal its carrying value is considered a Level 1 valuation.

The carrying value of the Company’s long-term debt in the above table is presented net of unamortized deferred debt issuance costs.

The estimated fair value is determined using the methodologies discussed below in accordance with accounting standards related to the determination of fair value based on the U.S.

GAAP fair value hierarchy as discussed in Note 8 - Fair Value.

The estimated fair value for financial instruments with a fair value that does not equal its carrying value is considered a Level 1 valuation.

The Company utilizes the market approach and obtains indicative pricing through publicly available subscription services such as Bloomberg to determine fair values where relevant.

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There were no transfers between levels during the years ended December 31, 2025 or 2024.

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table sets forth, by level within the fair value hierarchy, the financial assets recorded at fair value on a recurring basis at December 31, 2025 and 2024 (in millions):

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Trading securities

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

December 31, 2024

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EMPLOYEE BENEFIT PLANS

The Company maintains various benefit plans, including defined contribution plans, defined benefit plans and deferred compensation plans, for which certain of the Company’s subsidiaries are the plan sponsors.

The Company maintains various benefit plans, including defined contribution plans, a defined benefit plan and deferred compensation plans, for which certain of the Company’s subsidiaries are the plan sponsors.

The CHS/Community Health Systems, Inc.

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Standard 401(k) Plan.

Total expense to the Company under the 401(k) plans was $ 73 million, $ 64 million and $ 70 million for the years ended December 31, 2024, 2023 and 2022 , respectively, and is recorded in salaries and benefits expense in the consolidated statements of (loss) income.

Total expense to the Company under the 401(k) plans was $ 66 million, $ 73 million and $ 64 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is recorded in salaries and benefits expense in the consolidated statements of income (loss).

The Company maintains unfunded deferred compensation plans that allow participants to defer receipt of a portion of their compensation.

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Benefits expense under the Pension Plan was $ 4 million for the year ended December 31, 2024, inclusive of the aforementioned settlement charge.

Benefits expense under the Pension Plan was less than $ 1 million for each of the years ended December 31, 2023 and 2022.

Benefits expense under the Pension Plan was less than $ 1 million for the year ended December 31, 2023.

STOCKHOLDERS’ DEFICIT

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Year Ended December 31,

Net (loss) income attributable to Community Health Systems,

Net income (loss) attributable to Community Health Systems,

Transfers to the noncontrolling interests:

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stockholders’ deficit

from net (loss) income attributable to Community Health Systems,

from net income (loss) attributable to Community Health Systems,

stockholders and transfers to noncontrolling interests

EARNINGS PER SHARE

The following table sets forth the components of the denominator for the computation of basic and diluted (loss) earnings per share for net (loss) income attributable to Community Health Systems, Inc.

The following table sets forth the components of the denominator for the computation of basic and diluted earnings (loss) per share for net income (loss) attributable to Community Health Systems, Inc.

stockholders:

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The Company generated a net loss attributable to Community Health Systems, Inc.

stockholders for the years ended December 31, 2024 and 2023, so the effect of dilutive securities is not considered because their effect would be antidilutive.

If the Company had generated net income, the effect of stock awards and options on the diluted shares calculation would have been an increase of 1,333,424 shares and 422,487 shares during the years ended December 31, 2024 and 2023, respectively.

stockholders during the years ended December 31, 2024 and 2023, so the effect of dilutive securities is not considered because their effect would be antidilutive.

If the Company had generated net income, the effect of stock awards and options on the diluted shares calculation would have been an increase of 1,333,424 sha res and 422,487 shares during the years ended December 31, 2024 and 2023, respectively.

Year Ended December 31,

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(“HealthTrust”), a group purchasing organization in which the Company is a noncontrolling partner.

Effective October 1, 2022, HealthTrust completed the sale of a majority interest in CoreTrust Holdings, LLC (“CoreTrust”) to a third party.

Proceeds for the sale of interest in CoreTrust were distributed to members of HealthTrust and the Company received approximately $ 121 million in connection with such distribution during the year ended December 31, 2022.

A gain of approximately $ 119 million was recognized associated with this transaction as included in the line item “Gain from CoreTrust Transaction” within the consolidated statements of (loss) income.

As of December 31, 2024 , the Company had a 12.6 % ownership interest in HealthTrust.

As of December 31, 2025 , the Company had an 11.7 % ownership interest in HealthTrust.

The Company’s investment in all of its unconsolidated affiliates was $ 138 million and $ 152 million at December 31, 2025 and 2024, respectively, and is included in other assets, net in the accompanying consolidated balance sheets.

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Resources are allocated and financial performance is assessed on a consolidated basis.

T he individual serving as the Company’s CODM changed effective October 1, 2025, in connection with the appointment of Kevin J.

Hammons as the Company’s interim Chief Executive Officer on such date (Mr.

Hammons was subsequently appointed Chief Executive Officer effective on December 10, 2025).

The CODM does not review assets at a different level or category than the amounts disclosed in the consolidated balance sheets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company’s CODM uses net (loss) income, as presented in the consolidated statements of (loss) income, to assess performance and allocate resources.

Net (loss) income is used in the annual budgeting process as well as throughout the period when projecting or forecasting quarterly and full-year performance.

The CODM uses net income (loss), as presented in the consolidated statements of income (loss), to assess performance and allocate resources.

Net income (loss) is used in the annual budgeting process as well as throughout the period when projecting or forecasting quarterly and full-year performance.

The CODM considers budget-to-actual and actual versus prior period (prior month, prior year, etc.) variances on a periodic basis as a means of assessing performance.

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Salaries and benefits

Contract labor

Medical specialist fees

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Gain from early extinguishment of debt

Gain from CoreTrust Transaction

Equity in earnings of unconsolidated affiliates

Provision for income taxes

Net (loss) income

Other segment items include various purchased services and other operating expenses including, for example, lease cost and rent expense, repairs and maintenance, utilities, professional liability claims expense and software maintenance fees.

Net income (loss)

Other segment items include various purchased services and other operating expenses including, for example, lease cost and rent expense, contract labor, repairs and maintenance, utilities, professional liability claims expense and software maintenance fees.

COMPREHENSIVE LOSS

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Other comprehensive income

before reclassifications

(loss) before reclassifications

Amounts reclassified from

Net current-period other

comprehensive income

comprehensive income (loss)

Balance at December 31, 2025

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Balance at December 31, 2023

Other comprehensive (loss)

income before reclassifications

Other comprehensive income

before reclassifications

Amounts reclassified from

Net current-period other

comprehensive (loss) income

comprehensive income

Balance at December 31, 2024

There were no significant reclassifications to net (loss) income out of AOCL for the years ended December 31, 2024 and 2023 .

There were no significant reclassifications to net income (loss) out of AOCL for the years ended December 31, 2025 and 2024 .

COMMITMENTS AND CONTINGENCIES

Construction and Other Capital Commitments.

Pursuant to a hospital purchase agreement from the Company’s March 1, 2016 acquisition of Northwest Health – Starke, formerly known as Starke Hospital, the Company is committed to make an investment of up to $ 15 million toward the construction of a replacement facility in Knox, Indiana.

Under the terms of such agreement, the construction of the replacement facility for Northwest Health - Starke is required to be completed within five years of the date the Company entered into a new lease with Starke County, Indiana, the hospital lessor, or in the event the Company does not enter into a new lease with Starke County, construction shall be completed by September 30, 2026 .

The Company has not entered into a new lease with the lessor for Northwest Health - Starke.

Construction is required to be completed by the earlier of (i) five years after the Company enters into a new lease (or amendment to the existing lease) with Starke County, Indiana, or (ii) September 30, 2026 .

The Company has not entered into a new lease (or amendment to the existing lease) with Starke County, Indiana.

Physician Recruiting Commitments.

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Since the Company believes that the amount and timing of its future claims payments are reliably determinable, it discounts the amount that is accrued for losses resulting from professional liability claims.

The net present value of the projected payments was discounted using a weighted-average risk-free rate of approximately 3.7 % in both 2024 and 2023 , and 3.8 % in 2022 .

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The net present value of the projected payments was discounted using a weighted-average risk-free rate of approximately 3.5 % in 2025 , and 3.7 % in both 2024 and 2023 .

This liability is adjusted for new claims information in the period such information becomes known.

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The current portion of the liability for professional and general liability claims was $ 157 million and $ 145 million at December 31, 2025 and 2024, respectively, and is included in other accrued liabilities in the accompanying consolidated balance sheets, with the long-term portion recorded in other long-term liabilities.

Professional liability

COMMUNITY HEALTH SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

expense includes the losses resulting from professional liability claims and loss adjustment expense, as well as excess insurance premiums, and is presented within other operating expenses in the accompanying consolidated statements of (loss) income.

The Company’s processes for obtaining and analyzing claims and incident data are standardized across all of its businesses and have been consistent for many years.

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However, due to the subjective nature of this estimate and the impact that previously unforeseen shifts in actual claim experience can have, future estimates of professional liability could be adversely impacted when actual paid losses develop unexpectedly based on assumptions and settlement events that were not previously known or anticipated.

During the year ended December 31, 2022, the Company experienced an increase in the amounts paid or expected to be paid to settle outstanding professional liability claims related to divested locations, compared to the same period in the prior year and to previous actuarially determined estimates.

This resulted in a change in estimate of $ 15 million during the year ended December 31, 2022.

During the year ended December 31, 2023, the Company experienced an increase in the amounts paid or expected to be paid to settle outstanding professional liability claims, compared to the same period in the prior year and to previous actuarially determined estimates due to adverse claim developments.

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The Company has evaluated all material events occurring subsequent to the balance sheet date for events requiring disclosure or recognition in the consolidated financial statements.

On January 29, 2025, subsidiaries of the Company entered into a definitive agreement for the sale of its 50 % interest in Merit Health Madison ( 67 licensed beds) in Canton, Mississippi, to an affiliate of the University of Mississippi Medical Center, which currently has a 50 % ownership interest in Merit Health Madison.

On February 1, 2025, a subsidiary of the Company completed the sale of its 50 % interest in Merit Health Biloxi ( 153 licensed beds) in Biloxi, Mississippi, to an affiliate of Memorial Hospital of Gulfport, which had a preexisting 50 % ownership interest in Merit Health Biloxi, pursuant to a definitive agreement entered into on November 7, 2024.

The net proceeds from this sale of approximately $ 17 million, were received at a preliminary closing on January 31, 2025.

On January 20, 2026, the Company 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 the Company 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.

On February 1, 2026, a subsidiary of the Company completed the sale of its 80 % interest 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 VUMC, pursuant to a definitive agreement entered into on October 30, 2025.

The Company 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 the Company and in accordance with the terms of the purchase agreement, subsidiaries of the Company distributed approximately $ 23 million of cash to VUMC for their share of amounts owed to the joint ventures by the Company.

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.

On February 1, 2026, subsidiaries of the Company completed the sale of 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, pursuant to a definitive agreement entered into on October 24, 2025.

The Company received cash proceeds from the sale of these hospitals of approximately $ 33 million plus a $ 15 million promissory note from the buyer.

Additional cash consideration may be received in one or more future periods by the Company contingent upon collections of certain patient accounts receivable during the 90-day period following the closing effective date.

COMMUNITY HEALTH SYSTEMS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

On February 2, 2026, the Company exercised a special call provision to redeem 10 % or approximately $ 223 million, in principal amount of the 10.875 % Senior Secured Notes due 2032 , at a redemption price of 103 % of the principal amount, plus accrued and unpaid interest (this redemption was in addition to the Company ’ s exercise of this special call provision to redeem 10 % or approximately $ 223 million, in principal amount of the 10.875 % Senior Secured Notes due 2032 during the three months ended December 31, 2025, as disclosed above in Note 6 - Long Term Debt) .

CONDENSED FINA NCIAL INFORMATION OF PARENT COMPANY

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Parent Company Only

Condensed Statements of (Loss) Income

Condensed Statements of Income (Loss)

(In millions)

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Interest expense, net

(Gain) loss from early extinguishment of debt

Equity in loss (earnings) of unconsolidated affiliates

(Loss) income before income taxes

Provision for (benefit from) income taxes

Net (loss) income

Gain from early extinguishment of debt

Equity in (earnings) loss of unconsolidated affiliates

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

Net income attributable to noncontrolling interests

Net (loss) income attributable to Community Health Systems, Inc.

Net income (loss) attributable to Community Health Systems, Inc.

See note to condensed financial statements of Parent Company.

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Parent Company Only

Condensed Statements of Comprehensive (Loss) Income

Condensed Statements of Comprehensive Income (Loss)

(In millions)

Year Ended December 31,

(In millions)

Net (loss) income

Net income (loss)

Equity in other comprehensive (loss) income of affiliates,

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components, net of tax

Other comprehensive income (loss)

Comprehensive (loss) income

Other comprehensive income

Comprehensive income (loss)

Comprehensive income attributable to noncontrolling interests

Comprehensive (loss) income attributable to Community Health Systems,

Comprehensive income (loss) attributable to Community Health Systems,

See note to condensed financial statements of Parent Company.

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Cash flows from financing activities:

Repurchase of restricted stock shares for payroll tax withholding

Repurchase of restricted stock shares for payroll tax

withholding requirements

Changes in intercompany balances with affiliates, net

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis