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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ________

Commission file number 001-15925

COMMUNITY HEALTH SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Delaware	13-3893191
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

4000 Meridian Boulevard Franklin, Tennessee	37067 (Zip Code)
(Address of principal executive offices)

615-465-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CYH	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☑	Smaller reporting company ☐

Non-accelerated filer ☐		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 16, 2026, there were 140,916,712 shares outstanding of the Registrant’s Common Stock, $0.01 par value.

Community Health Systems, Inc.

Form 10-Q

For the Three Months Ended March 31, 2026



Part I.	Financial Information		Page

	Item 1.	Financial Statements:

		Condensed Consolidated Statements of Loss – Three Months Ended March 31, 2026 and March 31, 2025 (Unaudited)	2

		Condensed Consolidated Statements of Comprehensive Loss – Three Months Ended March 31, 2026 and March 31, 2025 (Unaudited)	3

		Condensed Consolidated Balance Sheets – March 31, 2026 and December 31, 2025 (Unaudited)	4

		Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2026 and March 31, 2025 (Unaudited)	5

		Notes to Condensed Consolidated Financial Statements (Unaudited)	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38

	Item 4.	Controls and Procedures	38

Part II.	Other Information		39

	Item 1.	Legal Proceedings	39

	Item 1A.	Risk Factors	40

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

	Item 3.	Defaults Upon Senior Securities	40

	Item 4.	Mine Safety Disclosures	40

	Item 5.	Other Information	40

	Item 6.	Exhibits	41

Signatures			42

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(In millions, except share and per share data)

(Unaudited)


	Three Months Ended
	March 31,
	2026			2025
Net operating revenues	$	2,965		$	3,159
Operating expenses:
Salaries and benefits		1,322			1,372
Supplies		441			489
Other operating expenses		828			865
Lease cost and rent		69			68
Depreciation and amortization		114			105
Impairment and (gain) loss on sale of businesses, net		(90	)		(24	)
Total operating expenses		2,684			2,875
Income from operations		281			284
Interest expense, net		213			219
Loss from early extinguishment of debt		8			—
Equity in earnings of unconsolidated affiliates		(4	)		(2	)
Income before income taxes		64			67
Provision for income taxes		89			42
Net (loss) income		(25	)		25
Less: Net income attributable to noncontrolling interests		33			38
Net loss attributable to Community Health Systems, Inc. stockholders	$	(58	)	$	(13	)
Loss per share attributable to Community Health Systems, Inc. stockholders:
Basic	$	(0.43	)	$	(0.10	)
Diluted	$	(0.43	)	$	(0.10	)
Weighted-average number of shares outstanding:
Basic		134,417,158			132,876,691
Diluted		134,417,158			132,876,691

See accompanying notes to the condensed consolidated financial statements.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In millions)

(Unaudited)


	Three Months Ended
	March 31,
	2026			2025
Net (loss) income	$	(25	)	$	25
Other comprehensive (loss) income, net of income taxes:
Net change in fair value of available-for-sale debt securities, net of tax		(1	)		3
Other comprehensive (loss) income		(1	)		3
Comprehensive (loss) income		(26	)		28
Less: Comprehensive income attributable to noncontrolling interests		33			38
Comprehensive loss attributable to Community Health Systems, Inc. stockholders	$	(59	)	$	(10	)

See accompanying notes to the condensed consolidated financial statements.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)


	March 31, 2026			December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	712		$	260
Patient accounts receivable		2,139			2,077
Supplies		275			322
Prepaid income taxes		—			13
Prepaid expenses		226			181
Other current assets		421			381
Total current assets		3,773			3,234
Property and equipment		8,088			8,912
Less accumulated depreciation and amortization		(3,887	)		(4,409	)
Property and equipment, net		4,201			4,503
Goodwill		3,130			3,316
Deferred income taxes		29			50
Other assets, net		2,047			2,101
Total assets	$	13,180		$	13,204
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current maturities of long-term debt	$	29		$	16
Current operating lease liabilities		97			110
Accounts payable		790			842
Income tax payable		53			—
Accrued liabilities:
Employee compensation		465			569
Accrued interest		178			238
Other		955			433
Total current liabilities		2,567			2,208
Long-term debt		10,127			10,380
Deferred income taxes		25			25
Long-term operating lease liabilities		504			537
Other long-term liabilities		922			891
Total liabilities		14,145			14,041
Redeemable noncontrolling interests in equity of consolidated subsidiaries		260			322
STOCKHOLDERS’ DEFICIT
Community Health Systems, Inc. stockholders’ deficit:
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued		—			—
Common stock, $0.01 par value per share, 300,000,000 shares authorized; 140,916,712 shares issued and outstanding at March 31, 2026, and 138,626,917 shares issued and outstanding at December 31, 2025		1			1
Additional paid-in capital		2,183			2,185
Accumulated other comprehensive loss		(10	)		(9	)
Accumulated deficit		(3,628	)		(3,571	)
Total Community Health Systems, Inc. stockholders’ deficit		(1,454	)		(1,394	)
Noncontrolling interests in equity of consolidated subsidiaries		229			235
Total stockholders’ deficit		(1,225	)		(1,159	)
Total liabilities and stockholders’ deficit	$	13,180		$	13,204

See accompanying notes to the condensed consolidated financial statements.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Three Months Ended
	March 31,
	2026			2025
Cash flows from operating activities:
Net (loss) income	$	(25	)	$	25
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		114			105
Deferred income taxes		—			(26	)
Stock-based compensation expense		3			4
Impairment and (gain) loss on sale of businesses, net		(90	)		(24	)
Loss from early extinguishment of debt		8			—
Other non-cash expenses, net		40			45
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Patient accounts receivable		(141	)		(48	)
Supplies, prepaid expenses and other current assets		(97	)		(10	)
Accounts payable, accrued liabilities and income taxes		(128	)		103
Other		19			(54	)
Net cash (used in) provided by operating activities		(297	)		120
Cash flows from investing activities:
Acquisitions of facilities and other related businesses		(5	)		—
Purchases of property and equipment		(76	)		(85	)
Proceeds from disposition of hospitals and other ancillary operations		1,108			563
Purchases of available-for-sale debt securities and equity securities		(42	)		(22	)
Proceeds from sales of available-for-sale debt securities and equity securities		45			23
Increase in other investments		(7	)		(35	)
Net cash provided by investing activities		1,023			444
Cash flows from financing activities:
Repurchase of restricted stock shares for payroll tax withholding requirements		(2	)		(1	)
Deferred financing costs and other debt-related costs		(7	)		—
Distributions to noncontrolling investors in joint ventures		(57	)		(35	)
Other borrowings		20			15
Proceeds from ABL Facility		123			939
Repayments of long-term indebtedness		(351	)		(1,088	)
Net cash used in financing activities		(274	)		(170	)
Net change in cash and cash equivalents		452			394
Cash and cash equivalents at beginning of period		260			37
Cash and cash equivalents at end of period	$	712		$	431
Supplemental disclosure of cash flow information:
Interest payments	$	(261	)	$	(229	)
Income tax refunds, net	$	—		$	80

See accompanying notes to the condensed consolidated financial statements.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The unaudited condensed consolidated financial statements of Community Health Systems, Inc. (the “Parent Company”) and its subsidiaries (together with the Parent Company, the “Company”) as of March 31, 2026 and December 31, 2025 and for the three- month periods ended March 31, 2026 and 2025, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. All intercompany transactions and balances have been eliminated. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2026. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates under different assumptions or conditions.

Certain information and disclosures normally included in the notes to the consolidated financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2025, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026 (“2025 Form 10-K”).

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

Substantially all of the Company’s operating expenses are “cost of revenue” items. Operating expenses that could be classified as general and administrative by the Company include the Company’s corporate office costs at its Franklin, Tennessee office, which were $48 million and $69 million for the three months ended March 31, 2026 and 2025, respectively.

Throughout these notes to the unaudited condensed consolidated financial statements, Community Health Systems, Inc. and its consolidated subsidiaries are referred to on a collective basis as the “Company.” This drafting style is not meant to indicate that the publicly-traded Parent Company or any particular subsidiary of the Parent Company owns or operates any asset, business, or property. The hospitals, operations and businesses described in this filing are owned and operated, and management services provided, by distinct and indirect subsidiaries of Community Health Systems, Inc.

Reclassifications. Certain prior period amounts have been reclassified to conform to the current period presentation within these notes to the condensed consolidated financial statements.

Revenue Recognition.

Net Operating Revenues

Net operating revenues are recorded at the transaction price estimated by the Company to reflect the total consideration due from patients and third-party payors in exchange for providing goods and services in patient care. These services are considered to be a single performance obligation and have a duration of less than one year. Revenues are recorded as these goods and services are provided. The transaction price, which involves significant estimates, is determined based on the Company’s standard charges for the goods and services provided, with a reduction recorded for price concessions related to third party contractual arrangements as well as patient discounts and other patient price concessions. During each of the three-month periods ended March 31, 2026 and 2025, the impact of changes to the inputs used to determine the transaction price was considered immaterial.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

Currently, several states utilize supplemental reimbursement programs for the purpose of providing reimbursement to providers that is not specifically tied to an individual’s care, some of which offsets a portion of the cost of providing care to Medicaid and indigent patients. The 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 the Centers for Medicare & Medicaid Services (“CMS”) for a specified period of time and require CMS’s approval to be extended. Under these supplemental programs, the Company recognizes 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. Taxes or other program-related costs are reflected in other operating expenses.

The Company’s net operating revenues for the three months ended March 31, 2026 and 2025 have been presented in the following table based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in millions):


	Three Months Ended
	March 31,
	2026		2025
Medicare	$	513	$	591
Medicare Managed Care		574		603
Medicaid		497		477
Managed Care and other third-party payors		1,349		1,468
Self-pay		32		20
Total	$	2,965	$	3,159

Patient Accounts Receivable

Patient accounts receivable are recorded at net realizable value based on certain assumptions determined by each payor. 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 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 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. As a result of these final settlements, the Company has recorded amounts due to third-party payors of $112 million and $130 million as of March 31, 2026 and December 31, 2025, respectively, and these amounts are included in accrued liabilities-other in the accompanying condensed consolidated balance sheets. Amounts due from third-party payors were $193 million and $154 million as of March 31, 2026 and December 31, 2025, respectively, and are included in other current assets in the accompanying condensed consolidated balance sheets. Substantially all Medicare and Medicaid cost reports are final settled through 2022.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

Charity Care

In the ordinary course of business, the Company renders services to patients who are financially unable to pay for hospital care. The Company’s policy is to not pursue collections for such amounts; therefore, the related charges for those patients who are financially unable to pay and that otherwise do not qualify for reimbursement from a governmental program are not reported in net operating revenues, and are thus classified as charity care. 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 charity care services during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

These charity care services are estimated to be approximately $344 million and $308 million for the three months ended March 31, 2026 and 2025, respectively, representing the value (at the Company’s standard charges) of these charity care services that are excluded from net operating revenues. The estimated cost incurred by the Company to provide these charity care services to patients who are unable to pay was approximately $34 million for both of the three-month periods ended March 31, 2026 and 2025. 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.

Accounting for the Impairment or Disposal of Long-Lived Assets. During the three months ended March 31, 2026, the Company recorded a net gain of approximately $90 million, comprised of a gain of approximately $230 million related to the divestiture of its controlling interest in a hospital, partially offset by (i) an approximately $88 million net impairment charge to adjust the carrying value of long-lived assets at hospitals that were divested at a price below carrying value, and (ii) a $52 million impairment charge recorded to reduce the carrying value of a hospital that was deemed held-for-sale based on the difference between the carrying value of the hospital disposal group compared to the estimated fair value less costs to sell. During the three months ended March 31, 2026, approximately $284 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 three months ended March 31, 2025, the Company recorded a net gain of approximately $24 million, comprised of a gain of approximately $50 million related to the sale of two hospitals, partially offset by (i) an approximately $10 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, (ii) an approximately $11 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, and (iii) an approximately $5 million impairment charge recorded to reduce the carrying value of several assets that were idled, disposed or held-for-sale.

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.

New Accounting Pronouncements. In September 2025, the Financial Accounting Standards Board issued Accounting Standards Update (“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. The Company is currently evaluating the impact that adoption of this ASU will have on its condensed consolidated financial statements.

The Company has evaluated all other recently issued, but not yet effective, ASUs and does not expect the eventual adoption of such ASUs to have a material impact on its consolidated financial position or results of operations.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

2. ACCOUNTING FOR STOCK-BASED COMPENSATION

Stock-based compensation awards have been granted under the Community Health Systems, Inc. Amended and Restated 2009 Stock Option and Award Plan, which was most recently amended and restated as of March 12, 2025 and most recently approved by the Company’s stockholders at the annual meeting of stockholders held on May 13, 2025 (the “2009 Plan”).

The 2009 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code and for the grant of stock options which do not so qualify, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance-based shares or units and other share awards. Persons eligible to receive grants under the 2009 Plan include the Company’s directors, officers, employees and consultants. To date, all options granted under the 2009 Plan have been “nonqualified” stock options for tax purposes. Generally, these options vest in one-third increments on each of the first three anniversaries of the option grant date and expire on the tenth anniversary of the option grant date. The exercise price of all options granted under the 2009 Plan is equal to the fair value of the Company’s common stock on the option grant date. As of March 31, 2026, 7,661,779 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):


	Three Months Ended
	March 31,
	2026			2025
Effect on income before income taxes	$	(3	)	$	(4	)
Effect on net (loss) income	$	(2	)	$	(3	)

At March 31, 2026, $22 million of unrecognized stock-based compensation expense related to outstanding unvested stock options, restricted stock and restricted stock units (the terms of which are summarized below) was expected to be recognized over a weighted-average period of 28 months. Of that amount, $3 million relates to outstanding unvested stock options expected to be recognized over a weighted-average period of 28 months and $19 million relates to outstanding unvested restricted stock and RSUs expected to be recognized over a weighted-average period of 28 months. There were no modifications to awards during the three months ended March 31, 2026 and 2025.

The fair value of stock options was estimated using the Black Scholes option pricing model with the following assumptions and weighted-average fair values during the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026	2025
Expected volatility	81.7%	88.7%
Expected dividends	—	—
Expected term	6 years	6 years
Risk-free interest rate	3.6%	4.0%

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 both of the three-month periods ended March 31, 2026 and 2025, the Company identified one population, consisting of persons receiving grants of stock options. The computation of expected term was performed using the simplified method for all stock options granted in the periods presented. The simplified method was used as a result of the Company determining that historical exercise data does not provide a reasonable basis for the expected term of its grants, due primarily to the limited number of stock option exercises that have occurred.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. The pre-vesting forfeiture rate is based on historical rates and forward-looking factors for each population identified. The Company adjusts the estimated forfeiture rate to its actual experience.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

The expected volatility rate was estimated based on historical volatility. 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.

Options outstanding and exercisable under the 2009 Plan as of March 31, 2026, and changes during the three-month period following December 31, 2025, were as follows (in millions, except share and per share data):


					Weighted-	Aggregate
			Weighted-		Average	Intrinsic
			Average		Remaining	Value as of
			Exercise		Contractual	March 31,
	Shares		Price		Term	2026
Outstanding at December 31, 2025		3,797,750	$	5.86
Granted		796,000		3.46
Exercised		—		—
Forfeited and cancelled		—		—
Outstanding at March 31, 2026		4,593,750	$	5.45	6.8 years	$	—
Exercisable at March 31, 2026		3,195,072	$	6.41	5.7 years	$	—

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2026 and 2025 was $2.48 and $2.27, respectively. The aggregate intrinsic value (calculated as the number of in-the-money stock options multiplied by the difference between the Company’s closing stock price on the last trading day of the reporting period ($2.94) and the exercise price of the respective stock options) in the table above represents the amount that would have been received by the option holders had all option holders exercised their options on March 31, 2026. This amount changes based on the market value of the Company’s common stock. No stock options were exercised during the three months ended March 31, 2026 and 2025. 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. With respect to time-based vesting restricted stock that has been awarded under the 2009 Plan, the restrictions on these shares have generally lapsed in one-third increments on each of the first three anniversaries of the award date. In addition, certain of the restricted stock awards granted to the Company’s senior executives have contained performance objectives required to be met in addition to any time-based vesting requirements. If the applicable performance objectives are not attained, these awards will be forfeited in their entirety. For performance-based awards, the performance objectives are measured cumulatively over a three-year period. If the applicable target performance objective is met at the end of the three-year period, then the restricted stock award subject to such performance objective will vest in full on the third anniversary of the award date. Additionally, for these performance-based awards, based on the level of achievement for the applicable performance objective within the parameters specified in the award agreement, the number of shares to be issued in connection with the vesting of the award may be adjusted to decrease or increase the number of shares specified in the original award. Notwithstanding the above-mentioned performance objectives and vesting requirements, the restrictions with respect to restricted stock granted under the 2009 Plan may lapse earlier in the event of death, disability, change in control of the Company or, other than for performance-based awards, termination of employment by the Company for any reason other than for cause of the holder of the restricted stock. On March 1, 2026, restricted stock awards subject to performance objectives granted on March 1, 2023 vested based on the Company’s cumulative performance compared to performance objectives for the 2023 through 2025 performance period, which were set prior to the date of grant. Such awards vested at 86.8% of the number of shares originally granted to the Company’s then-serving chief financial officer based on the performance objectives applicable to the then-serving chief financial officer, and at 100% of the number of shares originally granted to other senior executives based on the performance objectives applicable to such other senior executives. In addition, such awards granted on March 1, 2023 to the Company’s then-serving chief executive officer were forfeited and cancelled in connection with his retirement as chief executive officer, effective September 30, 2025. 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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

Restricted stock outstanding under the 2009 Plan as of March 31, 2026, and changes during the three-month period following December 31, 2025, were as follows:


				Weighted-
				Average Grant
	Shares			Date Fair Value
Unvested at December 31, 2025		4,760,747		$	3.68
Granted		2,650,000			3.46
Vested		(1,828,564	)		4.77
Forfeited		(118,765	)		3.94
Unvested at March 31, 2026		5,463,418			3.20

RSUs have been granted to the Company’s non-management directors under the 2009 Plan. Each of the Company’s then-serving non-management directors received grants under the 2009 Plan of 52,023 RSUs and 59,801 RSUs with a grant date of March 1, 2026 and 2025, respectively. Both the March 2026 and 2025 grants had a grant date fair value of approximately $180,000. 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 Company’s 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 six directors elected to defer the receipt of shares of the Company’s common stock for the RSUs granted on March 1, 2026 to a future date. A total of seven directors elected to defer the receipt of shares of the Company’s common stock upon vesting of the RSUs granted in 2025 to a future date.

RSUs outstanding under the 2009 Plan as of March 31, 2026, and changes during the three-month period following December 31, 2025, were as follows:


				Weighted-
				Average Grant
	Shares			Date Fair Value
Outstanding at December 31, 2025		2,069,837		$	3.90
Granted		676,299			3.46
Vested		(334,232	)		3.59
Forfeited		—			—
Unvested at March 31, 2026		2,411,904			3.82

3. ACQUISITIONS AND DIVESTITURES

Acquisitions

The Company accounts for all transactions that represent business combinations using the acquisition method of accounting, where the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquired entity are recognized and measured at their fair values on the date the Company obtains control in the acquiree. Such fair values that are not finalized for reporting periods following the acquisition date are estimated and recorded as provisional amounts. Adjustments to these provisional amounts during the measurement period (defined as the date through which all information required to identify and measure the consideration transferred, the assets acquired, the liabilities assumed and any noncontrolling interests has been obtained, limited to one year from the acquisition date) are recorded when identified. Goodwill is determined as the excess of the fair value of the consideration conveyed in the acquisition over the fair value of the net assets acquired.

The Company accounts for asset acquisitions pursuant to a cost accumulation model. Direct transaction costs are recognized as part of the cost of an acquisition. The Company also evaluates which elements of a transaction should be accounted for as part of an asset acquisition and which should be accounted for separately. The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

During the three months ended March 31, 2026, one or more subsidiaries of the Company paid approximately $5 million to acquire the operating assets and related businesses of certain physician practices and clinics, as well as a controlling interest in an ambulatory surgery center. The purchase price for these transactions will primarily be allocated to working capital, goodwill and noncontrolling interests.

Divestitures

During the three months ended March 31, 2026, as reflected in the table below, the Company completed the divestiture of three hospitals in Pennsylvania, and sold its 80% ownership interest in one hospital in Tennessee. The following table provides a summary of hospitals that the Company divested (or, in the cases of Merit Health Biloxi and Merit Health Madison, in which the Company sold its 50% ownership interest, and in the cases of Tennova Healthcare - Clarksville and Cedar Park Regional Medical Center, in which the Company sold its 80% ownership interest) during the three months ended March 31, 2026 and the year ended December 31, 2025:


			Licensed
Hospital	Buyer	City, State	Beds	Effective Date
2026 Divestitures:
Tennova Healthcare - Clarksville	Vanderbilt University Medical Center	Clarksville, Tennessee	270	February 1, 2026
Wilkes-Barre General Hospital	Tenor Health Foundation	Wilkes-Barre, Pennsylvania	369	February 1, 2026
Regional Hospital of Scranton	Tenor Health Foundation	Scranton, Pennsylvania	186	February 1, 2026
Moses Taylor Hospital	Tenor Health Foundation	Scranton, Pennsylvania	122	February 1, 2026

2025 Divestitures:
Merit Health Biloxi	Memorial Health System	Biloxi, Mississippi	153	February 1, 2025
ShorePoint Health - Port Charlotte	AdventHealth	Port Charlotte, Florida	254	March 1, 2025
ShorePoint Health - Punta Gorda	AdventHealth	Punta Gorda, Florida	208	March 1, 2025
Lake Norman Regional Medical Center	Duke University Health System, Inc.	Mooresville, North Carolina	123	April 1, 2025
Merit Health Madison	University of Mississippi Medical Center	Canton, Mississippi	67	May 1, 2025
Cedar Park Regional Medical Center	Ascension Health	Cedar Park, Texas	126	June 30, 2025
Northwest Health Physicians' Specialty Hospital	Washington Regional Medical Center	Fayetteville, Arkansas	20	December 1, 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 the associated outpatient centers and practices. This disposition was completed on April 1, 2026, as further described in Note 14. Proceeds from this disposition were received at a preliminary closing on March 31, 2026, and are recorded in other accrued liabilities in the condensed consolidated balance sheets. This hospital was classified as held-for-sale as of March 31, 2026.

On March 5, 2026, the Company entered into a definitive agreement pursuant to which Freeman-Oak Hill Health System (d/b/a Freeman Health System) agreed to acquire substantially all of the assets, and assume certain liabilities, from the Company related to Northwest Medical Center – Bentonville (128 licensed beds) in Bentonville, Arkansas, Northwest Medical Center – Springdale (222 licensed beds) in Springdale, Arkansas, Northwest Medical Center – Willow Creek Women’s Hospital (64 licensed beds) in Johnson, Arkansas, and Siloam Springs Regional Hospital (73 licensed beds) in Siloam Springs, Arkansas, and the associated outpatient centers and practices. These hospitals were classified as held-for-sale as of March 31, 2026.

The following table discloses amounts included in the condensed consolidated balance sheets for the hospitals classified as held-for-sale as of March 31, 2026 and December 31, 2025 (in millions). Other current assets primarily includes patient accounts receivable and prepaid expenses while Other assets, net, primarily includes the net property and equipment and goodwill for the hospitals held-for-sale. No divestitures or potential divestitures meet the criteria for reporting as a discontinued operation as of March 31, 2026 or December 31, 2025.


	March 31, 2026			December 31, 2025
Other current assets	$	35		$	58
Other assets, net		430			378
Accrued liabilities		(88	)		(11	)

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

4. GOODWILL

The changes in the carrying amount of goodwill for the three months ended March 31, 2026 are as follows (in millions):


Balance, at December 31, 2025
Goodwill	$	6,130
Accumulated impairment losses		(2,814	)
		3,316
Goodwill acquired as part of acquisitions		—
Goodwill allocated to hospitals divested or held-for-sale (as applicable)		(186	)
Balance, at March 31, 2026
Goodwill		5,944
Accumulated impairment losses		(2,814	)
	$	3,130

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). Management has determined that the Company’s operating segment meets the criteria to be classified as a reporting unit.

Goodwill is evaluated for impairment annually and when an event occurs or circumstances change that, more likely than not, reduce the fair value of the reporting unit below its carrying value. The Company performed its last annual goodwill impairment evaluation during the fourth quarter of 2025 using an October 31, 2025 measurement date, which indicated no impairment.

The determination of fair value in the Company’s goodwill impairment analysis is based on an estimate of fair value for the reporting unit utilizing known and estimated inputs at the evaluation date. Some of those inputs include, but are not limited to, the most recent price of the Company’s common stock and fair value of long-term debt, the Company’s recent financial results, estimates of future revenue and expense growth, estimated market multiples, expected capital expenditures, income tax rates, costs of invested capital and a discount rate.

Future estimates of fair value could be adversely affected if the actual outcome of one or more of the assumptions described above changes materially in the future, including as a result of any decline in the Company’s stock price and the fair value of its long-term debt, an increase in the volatility of the Company’s stock price and the fair value of its long-term debt, lower-than-expected hospital volumes and/or net operating revenues, higher market interest rates, increased operating costs or other adverse impacts on the Company’s financial results. Such changes impacting the calculation of fair value could result in a material impairment charge in the future.

5. INCOME TAXES

The total amount of unrecognized benefit that would affect the effective tax rate, if recognized, was $46 million at March 31, 2026. A total of $10 million of interest and penalties is included in the amount of the liability for uncertain tax positions at March 31, 2026. It is the Company’s policy to recognize interest and penalties related to unrecognized benefits in its condensed consolidated statements of loss as income tax expense.

The Company’s income tax returns for the 2021 and 2022 tax years are under examination by the Internal Revenue Service. The Company believes the result of this examination will not be material to its consolidated results of operations or consolidated financial position. The Company has extended the federal statute of limitations through March 31, 2028 for Community Health Systems, Inc. for the tax periods ended December 31, 2021 and 2022.

The Company’s provision for income taxes was $89 million and $42 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s effective tax rates were 139.1% and 62.7% for the three months ended March 31, 2026 and 2025, respectively. The increase in the provision for income taxes and the change in the effective tax rate for the three months ended March 31, 2026, compared to the same period in 2025 was primarily due to an increase in non-deductible goodwill related to divested hospitals.

Cash paid for income taxes, net of refunds received, resulted in a net refund of less than $1 million and $80 million during the three months ended March 31, 2026 and 2025, respectively.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

6. LONG-TERM DEBT

Long-term debt, net of unamortized debt issuance costs and discounts or premiums, as applicable, consists of the following (in millions):


	March 31,			December 31,
	2026			2025
6⅞% Senior Notes due 2028		42			42
6% Senior Secured Notes due 2029		644			644
5¼% Senior Secured Notes due 2030		1,535			1,535
4¾% Senior Secured Notes due 2031		1,058			1,058
10⅞% Senior Secured Notes due 2032		1,780			2,003
10¾% Senior Secured Notes due 2033		700			700
9¾% Senior Secured Notes due 2034		1,790			1,790
6⅞% Junior-Priority Secured Notes due 2029		1,244			1,244
6⅛% Junior-Priority Secured Notes due 2030		1,227			1,227
ABL Facility		—			—
Finance lease and financing obligations		299			345
Other		42			25
Less: Unamortized deferred debt issuance costs		(205	)		(217	)
Total debt		10,156			10,396
Less: Current maturities		(29	)		(16	)
Total long-term debt	$	10,127		$	10,380

On February 2, 2026, the Company exercised a special call provision to redeem 10% of the original principal amount, or approximately $223 million, of the 10.875% Senior Secured Notes due 2032, at a redemption price of 103% of the principal amount, plus accrued and unpaid interest. A pre-tax loss from early extinguishment of debt of approximately $8 million was recognized associated with this redemption.

On June 5, 2024, the Company and CHS/Community Health Systems, Inc. (“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 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. Principal amounts outstanding under the ABL Facility will be due and payable in full on June 5, 2029.

At March 31, 2026, the Company had no outstanding borrowings and approximately $824 million of additional borrowing capacity (after taking into consideration the $32 million of outstanding letters of credit) under the ABL Facility. Letters of credit were reduced during the three months ended March 31, 2026 by $2 million, primarily due to a reduction in collateral for a construction-related bond. The issued letters of credit were primarily in support of potential insurance-related claims and certain bonds.

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

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

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. The consolidated fixed charge coverage ratio is a required covenant only in periods where the total borrowings outstanding under the ABL Facility reduce the amount available in the facility to less than the greater of (i) $95 million or (ii) 10% of the calculated borrowing base. As a result, in the event the Company has less than $95 million available under the ABL Facility, the Company would need to comply with the consolidated fixed charge coverage ratio. At March 31, 2026, the Company is not subject to the consolidated fixed charge coverage ratio as such triggering event had not occurred during the twelve months ended March 31, 2026.

The Company paid interest of $261 million and $229 million on borrowings during the three months ended March 31, 2026 and 2025, respectively.

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments has been estimated by the Company using available market information as of March 31, 2026 and December 31, 2025, and valuation methodologies considered appropriate. The estimates presented in the table below are not necessarily indicative of amounts the Company could realize in a current market exchange (in millions):


	March 31, 2026				December 31, 2025
	Carrying		Estimated Fair		Carrying		Estimated Fair
	Amount		Value		Amount		Value
Assets:
Cash and cash equivalents	$	712	$	712	$	260	$	260
Investments in equity securities		80		80		79		79
Available-for-sale debt securities		238		238		226		226
Trading securities		5		5		5		5
Liabilities:
6⅞% Senior Notes due 2028		42		41		42		35
6% Senior Secured Notes due 2029		631		638		630		644
5¼% Senior Secured Notes due 2030		1,482		1,448		1,479		1,442
4¾% Senior Secured Notes due 2031		1,055		978		1,055		942
10⅞% Senior Secured Notes due 2032		1,771		1,914		1,992		2,188
10¾% Senior Secured Notes due 2033		698		751		698		741
9¾% Senior Secured Notes due 2034		1,763		1,860		1,762		1,881
6⅞% Junior-Priority Secured Notes due 2029		1,193		1,198		1,189		1,108
6⅛% Junior-Priority Secured Notes due 2030		1,186		1,068		1,183		985
ABL Facility and other debt		38		38		21		21

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.

Cash and cash equivalents. The carrying amount approximates fair value due to the short-term maturity of these instruments (less than three months).

Investments in equity securities. Estimated fair value is based on closing price as quoted in public markets.

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

Available-for-sale debt securities. Estimated fair value is based on closing price as quoted in public markets or other various valuation techniques.

Trading securities. Estimated fair value is based on closing price as quoted in public markets.

Senior Notes, Senior Secured Notes and Junior-Priority Secured Notes. Estimated fair value is based on the closing market price for these notes.

ABL Facility and other debt. The carrying amount of the ABL Facility and all other debt approximates fair value due to the nature of these obligations.

8. FAIR VALUE

Fair Value Hierarchy

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company utilizes the U.S. GAAP fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumption about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The inputs used to measure fair value are classified into the following fair value hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 includes values determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting the Company’s own assumptions.

In instances where the determination of the fair value hierarchy measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment of factors specific to the asset or liability. Transfers between levels within the fair value hierarchy are recognized by the Company on the date of the change in circumstances that requires such transfer. There were no transfers between levels during the three months ended March 31, 2026 and 2025.

The following table sets forth, by level within the fair value hierarchy, the financial assets and liabilities recorded at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 (in millions):


	March 31, 2026		Level 1		Level 2		Level 3
Investments in equity securities	$	80	$	80	$	—	$	—
Available-for-sale debt securities		238		—		238		—
Trading securities		5		—		5		—
Total assets	$	323	$	80	$	243	$	—


	December 31, 2025		Level 1		Level 2		Level 3
Investments in equity securities	$	79	$	79	$	—	$	—
Available-for-sale debt securities		226		—		226		—
Trading securities		5		—		5		—
Total assets	$	310	$	79	$	231	$	—

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

Investments in equity securities classified as Level 1 are measured using quoted market prices. Level 2 available-for-sale debt securities and trading securities primarily consist of bonds and notes issued by the United States government and its agencies and domestic and foreign corporations. The estimated fair values of these securities are determined using various valuation techniques, including a multi-dimensional relational model that incorporates standard observable inputs and assumptions such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids/offers and other pertinent reference data.

9. LEASES

The Company utilizes operating and finance leases for the use of certain hospitals, medical office buildings, and medical equipment. The components of lease cost and rent expense for the three months ended March 31, 2026 and 2025 are as follows (in millions):


	Three Months Ended March 31,
Lease Cost	2026			2025
Operating lease cost:
Operating lease cost	$	41		$	44
Short-term rent expense		18			19
Variable lease cost		11			6
Sublease income		(1	)		(1	)
Total operating lease cost	$	69		$	68
Finance lease cost:
Amortization of right-of-use assets	$	2		$	2
Interest on finance lease liabilities		3			3
Total finance lease cost	$	5		$	5

Supplemental balance sheet information related to leases is as follows (in millions):


	Balance Sheet Classification	March 31, 2026			December 31, 2025
Operating Leases:
Operating lease right-of-use assets	Other assets, net	$	569		$	617

Finance Leases:
Finance lease right-of-use assets	Property and equipment
	Land and improvements	$	—		$	—
	Buildings and improvements		237			237
	Equipment and fixtures		5			5
	Property and equipment		242			242
	Less: Accumulated depreciation and amortization		(71	)		(69	)
	Property and equipment, net	$	171		$	173

Current finance lease liabilities	Current maturities of long-term debt	$	3		$	2
Long-term finance lease liabilities	Long-term debt		199			201

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

Supplemental cash flow information related to leases for the three months ended March 31, 2026 and 2025 is as follows (in millions):


	Three Months Ended March 31,
Cash flow information	2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	42	$	41
Operating cash flows from finance leases		3		3
Financing cash flows from finance leases		1		1
Right-of-use assets obtained in exchange for new finance lease liabilities		—		—
Right-of-use assets obtained in exchange for new operating lease liabilities		23		39

_______________________________

(1)

Included in the change in other operating assets and liabilities in the condensed consolidated statements of cash flows.

10. STOCKHOLDERS’ DEFICIT

Authorized capital shares of the Company include 400,000,000 shares of capital stock consisting of 300,000,000 shares of common stock and 100,000,000 shares of preferred stock. Each of the aforementioned classes of capital stock has a par value of $0.01 per share. Shares of preferred stock, none of which were outstanding as of March 31, 2026, may be issued in one or more series having such rights, preferences and other provisions as determined by the Board of Directors without approval by the holders of common stock.

The Company is a holding company, which operates through its subsidiaries. The ABL Facility and the indentures governing each series of the Company’s outstanding notes contain various covenants under which the assets of the subsidiaries of the Company are subject to certain restrictions relating to, among other matters, dividends and distributions, as referenced in the paragraph below.

The ABL Facility and the indentures governing each series of the Company’s outstanding notes restrict the Company’s subsidiaries from, among other matters, paying dividends and making distributions to the Company, which thereby limits the Company’s ability to pay dividends and/or repurchase stock. As of March 31, 2026, under the most restrictive test in these agreements (and subject to certain exceptions), the Company has approximately $300 million of capacity to pay permitted dividends and/or repurchase shares of stock or make other restricted payments.

The schedule below presents the reconciliation of the carrying amount of total equity, equity attributable to the Company’s stockholders, and equity attributable to noncontrolling interests as of March 31, 2026, and during the three-month period following December 31, 2025 (in millions).


				Community Health Systems, Inc. Stockholders
	Redeemable Noncontrolling Interest			Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Noncontrolling Interest			Total Stockholders’ Deficit
Balance, December 31, 2025	$	322		$	1	$	2,185		$	(9	)	$	(3,571	)	$	235		$	(1,159	)
Comprehensive income (loss)		11			—		—			(1	)		(57	)		22			(36	)
Contributions from noncontrolling interests																—			—
Distributions to noncontrolling interests		(33	)		—		—			—			—			(24	)		(24	)
Disposition of less-than-wholly owned entity		(41	)		—		—			—			—			(4	)		(4	)
Adjustment to redemption value of redeemable noncontrolling interests		1			—		(3	)		—			—			—			(3	)
Cancellation of restricted stock for tax withholdings on vested shares		—			—		(2	)		—			—			—			(2	)
Stock-based compensation		—			—		3			—			—			—			3
Balance, March 31, 2026	$	260		$	1		2,183			(10	)		(3,628	)		229			(1,225	)

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) – (continued)

The following schedule presents the reconciliation of the carrying amount of total equity, equity attributable to the Company’s stockholders, and equity attributable to the noncontrolling interests as of March 31, 2025, and during the three-month period following December 31, 2024 (in millions):


				Community Health Systems, Inc. Stockholders
	Redeemable Noncontrolling Interest			Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Noncontrolling Interest			Total Stockholders’ Deficit
Balance, December 31, 2024	$	359		$	1	$	2,175		$	(10	)	$	(4,080	)	$	238		$	(1,676	)
Comprehensive income (loss)		13			—		—			3			(13	)		25			15
Distributions to noncontrolling interests		(10	)		—		—			—			—			(25	)		(25	)
Disposition of less-than-wholly owned entity		—			—		—			—			—			(8	)		(8	)
Adjustment to redemption value of redeemable noncontrolling interests		2			—		(2	)		—			—			—			(2	)
Cancellation of restricted stock for tax withholdings on vested shares		—			—		(1	)		—			—			—			(1	)
Stock-based compensation		—			—		4			—			—			—			4
Balance, March 31, 2025	$	364		$	1	$	2,176		$	(7	)	$	(4,093	)	$	230

COMMUNITY HEALTH SYSTEMS INC 10-Q