Crestwood sale brings $459M to Community Health (NYSE: CYH)
Rhea-AI Filing Summary
Community Health Systems, Inc. has completed the sale of substantially all assets of the 180-bed Crestwood Medical Center in Huntsville, Alabama, and related outpatient sites to Huntsville Hospital Health System for $459 million in cash, before certain transaction expenses and subject to a working capital adjustment. The company estimates a pre-tax gain of $185 million, or $138 million after tax, on the divestiture. Pro forma for the sale, 2025 net operating revenues decrease from $12,485 million to $12,158 million, and the net loss attributable to stockholders widens from $509 million to $610 million, reflecting removal of Crestwood’s results and the gain on sale flowing through accumulated deficit rather than recurring income.
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Insights
$459M Crestwood sale boosts cash and records a sizable one-time gain.
Community Health Systems received $459 million in cash, less $9 million of transaction expenses, for Crestwood Medical Center and related assets. This materially increases cash on the pro forma balance sheet, with cash and equivalents rising from $260 million to $710 million.
The company records an estimated pre-tax gain of $185 million and after-tax gain of $138 million, driven by consideration received versus the facility’s carrying value and allocated goodwill. Long-lived assets, goodwill, and certain lease and noncontrolling interest balances are reduced as the divested operations are removed.
Pro forma 2025 net operating revenues decline by $327 million to reflect the loss of Crestwood’s contribution, and the net loss attributable to stockholders increases by $101 million. The gain is captured in accumulated deficit rather than recurring income, highlighting that this is a non-recurring balance sheet event rather than an improvement in underlying profitability.
8-K Event Classification
Key Figures
Key Terms
unaudited pro forma condensed consolidated financial statements financial
ASC 205 financial
accumulated deficit financial
redeemable noncontrolling interests financial
impairment and (gain) loss on sale of businesses, net financial
gain from early extinguishment of debt financial
FAQ
What transaction did Community Health Systems (CYH) complete in Huntsville?
How much cash did Community Health Systems (CYH) receive from the Crestwood sale?
What gain does Community Health Systems (CYH) expect from the Crestwood divestiture?
How does the Crestwood sale affect Community Health Systems’ (CYH) pro forma 2025 results?
Does Community Health Systems (CYH) treat the Crestwood divestiture as discontinued operations?
What key pro forma balance sheet changes follow the Crestwood sale for CYH?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 2026 ( |
(Exact name of Registrant as Specified in Its Charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
Item 2.01 Completion of Acquisition or Disposition of Assets.
On April 1, 2026, CHS/Community Health Systems, Inc. (“CHS”), a wholly-owned subsidiary of Community Health Systems, Inc. (the “Company”), completed the transaction contemplated by that certain Asset Purchase Agreement dated as of January 20, 2026 (the “Purchase Agreement”), with The Health Care Authority of the City of Huntsville, d/b/a Huntsville Hospital Health System (the “Purchaser”), the entry into which Purchase Agreement was previously disclosed on a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”) on January 20, 2026. Pursuant to the Purchase Agreement, at the closing, Purchaser acquired substantially all of the assets and assumed certain liabilities from certain subsidiaries of CHS related to Crestwood Medical Center in Huntsville, Alabama, and its associated outpatient centers and practices (the transactions contemplated by the Purchase Agreement, the “Transaction”). The purchase price paid to CHS in connection with the closing of the Transaction, after giving effect to estimated working capital and before certain transaction expenses, was $459 million in cash (subject to a post-closing working capital adjustment).
The foregoing summary of the Transaction and the terms and conditions of the Purchase Agreement is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, which is attached hereto as Exhibit 2.1 and incorporated by reference herein. The representations, warranties, and covenants contained in the Purchase Agreement were made solely for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Purchase Agreement, may have been qualified in the Purchase Agreement by confidential disclosure schedules (which disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representation, warranties and covenants set forth in the Purchase Agreement), may be subject to limitations and contractual risk allocation mechanisms agreed upon by the parties to the Purchase Agreement, and may be subject to standards of materiality that differ from what an investor may view as material, and thus should not be relied upon as necessarily reflecting the actual state of facts or conditions.
The Transaction constituted a significant disposition for purposes of Item 2.01 of Form 8-K. Accordingly, the pro forma information required by Item 9.01 of Form 8-K is included as Exhibit 99.1 to this Current Report on Form 8-K.
Item 8.01 Other Events.
On April 1, 2026, the Company issued a press release announcing the completion of the Transaction, a copy of which press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma financial information
The following unaudited pro forma financial information of the Company in connection with the Transaction is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference:
(d) Exhibits
Exhibit Number |
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Description |
2.1 |
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Asset Purchase Agreement dated as of January 20, 2026, by and between CHS/Community Health Systems, Inc. and The Health Care Authority of the City of Huntsville d/b/a Huntsville Hospital Health System.* (incorporated by reference to Exhibit 2.1 to Community Health Systems, Inc.'s Current Report on Form 8-K filed on January 20, 2026 (No. 001-15925)) |
99.1 |
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Community Health Systems, Inc. Unaudited Pro Forma Condensed Consolidated Financial Statements |
99.2 |
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Press Release of Community Health Systems, Inc. dated April 1, 2026 |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such omitted schedules and exhibits to the SEC upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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COMMUNITY HEALTH SYSTEMS, INC. |
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Date: |
April 1, 2026 |
By: |
/s/ Kevin J. Hammons |
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Kevin J. Hammons |
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Exhibit Number
99.1
COMMUNITY HEALTH SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On January 20, 2026, CHS/Community Health Systems, Inc. (“CHS”), a wholly-owned subsidiary of Community Health Systems, Inc. (the “Company”), entered into a definitive asset purchase agreement (the “Purchase Agreement”), with The Health Care Authority of the City of Huntsville, d/b/a Huntsville Hospital Health System (the “Purchaser”), the entry into which Purchase Agreement was previously disclosed on a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”) on January 20, 2026. On April 1, 2026, the Transaction (as defined below) was completed pursuant to the Purchase Agreement. At the closing, Purchaser acquired substantially all of the assets and assumed certain liabilities from certain subsidiaries of CHS related to Crestwood Medical Center in Huntsville, Alabama, and its associated outpatient centers and practices (collectively, the “Facility”) (the transactions contemplated by the Purchase Agreement, the “Transaction”). The purchase price paid to CHS in connection with the closing of the Transaction, after giving effect to estimated working capital and before certain transaction expenses, was $459 million in cash (subject to a post-closing working capital adjustment).
The Company has determined that the operations of the Facility that was divested in the Transaction do not meet the definition of discontinued operations pursuant to Financial Accountings Standards Board Accounting Standards Codification 205 (ASC 205), “Presentation of Financial Statements.”
The accompanying unaudited pro forma condensed consolidated balance sheet of the Company is presented as if the Transaction had occurred as of December 31, 2025. The estimated gain on sale in connection with the Transaction is reflected in the unaudited pro forma condensed balance sheet within accumulated deficit.
The accompanying unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2025 (the “Pro Forma Period”) includes certain pro forma adjustments to illustrate the estimated effect of the Company’s disposition, as if the Transaction had occurred on January 1, 2025. The amounts included in the historical columns represent the Company’s historical balance sheet and statement of income for the Pro Forma Periods presented.
The accompanying unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by generally accepted accounting principles of the United States (“GAAP”). Pro forma financial information is intended to provide information about the continuing impact of a transaction by showing how a specific transaction might have affected historical financial statements. Pro forma financial information illustrates only the isolated and objectively measurable (based on historically determined amounts) effects of a particular transaction, and excludes effects based on judgmental estimates of how historical management practices and operating decisions may or may not have changed as a result of the transaction. Therefore, pro forma financial information does not include information about the possible or expected impact of current actions taken by management in response to the Transaction, as if management’s actions were carried out in previous reporting periods.
The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes. These assumptions and adjustments are based on information presently available. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements are based on the historical financial statements of the Company for each period presented and in the opinion of the Company’s management, all adjustments and disclosures necessary for a fair presentation of the pro forma data have been made. These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations or financial condition that would have been achieved had events reflected been completed as of the dates indicated, and may not be useful in predicting the impact of the Transaction on the future financial condition and results of operations of the Company due to a variety of factors. These unaudited pro forma condensed consolidated financial statements and the notes thereto should be read in conjunction with the Company’s financial statements for the year ended December 31, 2025, included in the Annual Report on Form 10-K filed by the Company with the SEC on February 19, 2026.
Unaudited Pro Forma Condensed Consolidated Balance Sheet |
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(In millions) |
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December 31, 2025 |
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Pro Forma |
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As Reported |
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Adjustments |
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Pro Forma |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
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260 |
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$ |
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450 |
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a |
$ |
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710 |
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Patient accounts receivable |
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2,077 |
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- |
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2,077 |
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Supplies |
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322 |
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(10 |
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b |
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312 |
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Prepaid income taxes |
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13 |
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(13 |
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c |
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- |
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Prepaid expenses and taxes |
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181 |
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(1 |
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b |
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180 |
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Other current assets |
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381 |
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- |
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381 |
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Total current assets |
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3,234 |
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426 |
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3,660 |
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Property and equipment |
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8,912 |
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(253 |
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b |
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8,659 |
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Less accumulated depreciation and amortization |
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(4,409 |
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122 |
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b |
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(4,287 |
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Property and equipment, net |
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4,503 |
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(131 |
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4,372 |
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Goodwill |
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3,316 |
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(129 |
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b |
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3,187 |
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Deferred income taxes |
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50 |
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- |
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50 |
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Other assets, net |
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2,101 |
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(27 |
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b |
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2,074 |
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Total assets |
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$ |
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13,204 |
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$ |
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139 |
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$ |
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13,343 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities |
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Current maturities of long-term debt |
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$ |
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16 |
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$ |
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- |
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$ |
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16 |
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Current operating lease liabilities |
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110 |
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(5 |
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b |
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105 |
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Accounts payable |
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842 |
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- |
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842 |
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Income tax payable |
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- |
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34 |
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c |
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34 |
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Accrued liabilities: |
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Employee compensation |
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569 |
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(4 |
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b |
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565 |
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Accrued interest |
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238 |
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- |
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238 |
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Other |
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433 |
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- |
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433 |
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Total current liabilities |
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2,208 |
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25 |
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2,233 |
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Long-term debt |
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10,380 |
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- |
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10,380 |
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Deferred income taxes |
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25 |
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- |
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25 |
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Long-term operating lease liabilities |
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537 |
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(20 |
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b |
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517 |
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Other long-term liabilities |
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891 |
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- |
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891 |
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Total liabilities |
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14,041 |
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5 |
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14,046 |
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Redeemable noncontrolling interests in equity of consolidated subsidiaries |
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322 |
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(4 |
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b |
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318 |
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STOCKHOLDERS’ DEFICIT |
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Community Health Systems, Inc. stockholders’ deficit: |
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Preferred stock |
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- |
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- |
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- |
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Common stock |
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1 |
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- |
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1 |
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Additional paid-in capital |
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2,185 |
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- |
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2,185 |
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Accumulated other comprehensive loss |
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(9 |
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- |
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(9 |
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Accumulated deficit |
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(3,571 |
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138 |
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d |
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(3,433 |
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Total Community Health Systems, Inc. stockholders’ deficit |
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(1,394 |
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138 |
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(1,256 |
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Noncontrolling interests in equity of consolidated subsidiaries |
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235 |
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- |
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235 |
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Total stockholders’ deficit |
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(1,159 |
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138 |
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(1,021 |
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Total liabilities and stockholders’ deficit |
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$ |
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13,204 |
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$ |
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139 |
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$ |
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13,343 |
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Unaudited Pro Forma Condensed Consolidated Statement of Income |
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(In millions, except per share amounts) |
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Year Ended December 31, 2025 |
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Pro Forma |
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As Reported |
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Adjustments |
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Pro Forma |
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Net operating revenues |
$ |
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12,485 |
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$ |
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(327 |
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e |
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$ |
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12,158 |
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Operating costs and expenses: |
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Salaries and benefits |
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5,412 |
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(123 |
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e |
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5,289 |
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Supplies |
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1,864 |
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(63 |
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e |
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1,801 |
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Other operating expenses |
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3,424 |
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(88 |
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e |
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3,336 |
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Lease cost and rent |
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277 |
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(11 |
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e |
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266 |
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Depreciation and amortization |
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426 |
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(13 |
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e |
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413 |
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Impairment and (gain) loss on sale of businesses, net |
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(406 |
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(185 |
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d |
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(591 |
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Total operating costs and expenses |
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10,997 |
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(483 |
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10,514 |
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Income from operations |
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1,488 |
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156 |
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1,644 |
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Interest expense, net |
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870 |
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- |
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870 |
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Gain from early extinguishment of debt |
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(97 |
) |
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- |
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(97 |
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Equity in earnings of unconsolidated affiliates |
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(9 |
) |
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- |
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(9 |
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Loss before income taxes |
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724 |
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156 |
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880 |
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Provision for income taxes |
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48 |
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54 |
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c, d |
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102 |
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Net loss attributable to Community Health Systems, |
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676 |
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102 |
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778 |
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Less: Net income attributable to noncontrolling interests |
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167 |
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1 |
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e |
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168 |
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Net loss attributable to Community Health Systems, |
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Inc. stockholders |
$ |
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509 |
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$ |
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101 |
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$ |
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610 |
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Loss per share attributable to Community |
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Health Systems, Inc. stockholders: |
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Basic |
$ |
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3.81 |
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$ |
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4.57 |
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Diluted |
$ |
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3.77 |
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$ |
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4.52 |
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Weighted-average number of shares outstanding: |
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Basic |
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134 |
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134 |
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Diluted |
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135 |
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135 |
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following items resulted in adjustments in the unaudited pro forma condensed consolidated financial information:
Consideration received |
$ |
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459 |
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Less: Transaction expenses |
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(9 |
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Less: Carrying value of the Facility |
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(136 |
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Less: Goodwill allocated to sale of the Facility |
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(129 |
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Pro forma gain before income taxes |
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185 |
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Provision for income taxes |
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(47 |
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Pro forma net gain on sale of the Facility |
$ |
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138 |
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Exhibit 99.2
Community Health Systems Completes Divestiture of Huntsville, Alabama, Hospital to Huntsville Hospital Health System
FRANKLIN, Tenn. (April 1, 2026) -- Community Health Systems, Inc. (NYSE: CYH) announced today that a subsidiary of the Company has completed the divestiture of substantially all of the assets of 180-bed Crestwood Medical Center in Huntsville, Alabama, and its associated outpatient centers and practices, to Huntsville Hospital Health System for $459 million, before certain transaction expenses. The entry into the definitive agreement for this transaction was announced on January 20, 2026, and the closing was effective April 1, 2026.
This transaction is among the additional potential divestitures discussed on the Company’s fourth quarter and end of year 2025 earnings call and in subsequent public appearances.
Leerink Partners acted as exclusive financial advisor to the Company for the transaction.
About Community Health Systems, Inc.
Community Health Systems, Inc. is one of the nation’s largest healthcare companies. The Company’s affiliates are leading providers of healthcare services, developing and operating healthcare delivery systems in 33 distinct markets across 13 states. The Company’s subsidiaries own or lease 64 affiliated hospitals with more than 9,000 beds and operate more than 900 sites of care, including physician practices, urgent care centers, freestanding emergency departments, occupational medicine clinics, imaging centers, cancer centers and ambulatory surgery centers. The Company’s headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol “CYH.” More information about the Company can be found on its website at www.chs.net.
Media Contact:
Tomi Galin
Executive Vice President, Corporate Communications, Marketing and Public Affairs
(615) 628-6607
Investor Contacts:
Kevin Hammons
Chief Executive Officer
(615) 465-7000
Anton Hie
Vice President – Investor Relations
(615) 465-7012
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