Executive Summary

Q4 2024 revenue of $3.265B (+2.6% y/y), Adjusted EBITDA $428M (+10.9% y/y) with margin 13.1% vs 12.1% y/y; GAAP diluted EPS was $(0.53), non-GAAP adjusted diluted EPS $(0.42) .
Strong same‑store volume growth (admissions +3.4%, adjusted admissions +3.1%), rate increases, favorable payer mix, and Medicaid supplemental programs drove EBITDA, partially offset by lower acuity, higher specialist fees, and elevated denials .
2025 guidance: revenue $12.2–$12.6B, Adjusted EBITDA $1.45–$1.60B, EPS $(0.55) to $0.00, CFO $600–$700M, capex $350–$400M; excludes unapproved state‑directed payment programs (DPP) in NM/TN that could add $100–$125M to EBITDA if approved .
Strategic divestitures expected to generate >$1B proceeds (including ~$550M from ShorePoint and Lake Norman), supporting deleveraging; net debt/EBITDA improved to 7.4x at year‑end .

What Went Well and What Went Wrong

What Went Well

Same‑store demand: “best same‑store revenue growth of the year, up 6.5%... admissions +3.4%, adjusted admissions +3.1%” with 3.3% net revenue per adjusted admission growth; EBITDA margin expanded to 13.1% .
Cost control: Contract labor fell to $36M in Q4 and $170M for 2024 (down 36% y/y); supplies expense improved to 15.5% of revenue in Q4 and 15.4% for 2024, aided by ERP insights .
Strategic portfolio actions: Signed definitive agreements to sell ShorePoint (FL) for $265M and Lake Norman (NC) for ~$280M; management expects >$1B in total proceeds at attractive double‑digit EBITDA multiples .

What Went Wrong

Lower acuity and payer denials: Case mix pressure and an “approximate doubling of denials” (majority in Medicare Advantage) created a ~$10M headwind in Q3 and continued in Q4, with ongoing adjudication delays .
Medical specialist fees: Same‑store fees rose ~12% y/y in Q4 to $170M; full‑year $640M (+10.9%), with anesthesia a particular pressure point despite insourcing initiatives .
Hurricane impacts: ShorePoint Punta Gorda remained closed; Q3 impact ~$7M and >half of Q4’s guidance delta tied to Helene/Milton; one facility remained shut into Q1 2025 .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Net Operating Revenues ($USD Billions)	$3.181	$3.090	$3.265
GAAP Diluted EPS ($)	$0.35	$(2.95)	$(0.53)
Adjusted Diluted EPS (non-GAAP) ($)	$(0.41)	$(0.30)	$(0.42)
Adjusted EBITDA ($USD Millions)	$386	$347	$428
Adjusted EBITDA Margin (%)	12.1%	11.2%	13.1%
Income from Operations (% of Revenues)	10.3%	(6.6%)	8.5%
Net (Loss) Income Attrib. to CYH (% of Revenues)	1.4%	(12.7%)	(2.1%)

Segment mix (Consolidated % of Net Operating Revenues):

Segment	Q4 2023	Q3 2024	Q4 2024
Net Inpatient Revenues (%)	46.0%	47.2%	48.3%
Net Outpatient Revenues (%)	54.0%	52.8%	51.7%

Key KPIs:

KPI (Consolidated)	Q4 2023	Q3 2024	Q4 2024
Admissions	110,874	104,593	104,644
Adjusted Admissions	252,875	240,701	238,581
Occupancy Rate	53.5%	49.8%	50.5%
Same‑Store Admissions YoY (%)	—	+2.4%	+3.4%
Same‑Store Adjusted Admissions YoY (%)	—	+2.6%	+3.1%
Same‑Store Net Operating Revenues YoY (%)	—	+5.1%	+6.5%

Non‑GAAP reconciliations and adjustments are detailed in press release footnotes (e.g., business transformation costs, legal matters, impairment, debt extinguishment), with full EBITDA and adjusted EPS reconciliations provided .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Operating Revenues ($MM)	FY 2025	N/A	$12,200–$12,600	New
Adjusted EBITDA ($MM)	FY 2025	N/A	$1,450–$1,600	New
Diluted EPS ($)	FY 2025	N/A	$(0.55) to $0.00	New
Weighted Avg Diluted Shares (MM)	FY 2025	N/A	~134	New
D&A (% of Rev)	FY 2025	N/A	~3.5%	New
Interest Expense ($MM)	FY 2025	N/A	$840–$860 (cash interest $800–$810)	New
Net Income Attrib. to NCI (% of Rev)	FY 2025	N/A	~1.2%–1.3%	New
Provision for Income Taxes (% of Rev)	FY 2025	N/A	~1.0%–1.1%	New
Capital Expenditures ($MM)	FY 2025	N/A	$350–$400	New
Net Cash from Operations ($MM)	FY 2025	N/A	$600–$700	New
Medicaid DPP Programs (NM/TN)	FY 2025	Excluded	Potential +$100–$125M EBITDA if approved	Upside potential

Notes: Guidance explicitly excludes unapproved state‑directed Medicaid programs and unexecuted divestitures .

Earnings Call Themes & Trends

Topic	Q2 2024 (7/25)	Q3 2024 (10/24)	Q4 2024 (2/19)	Trend
Medicaid DPP	Quantified as “material” but not guided; awaiting CMS	Estimated +$100–$120M annual EBITDA; retro to Jul 1 if approved	NM approved late 2024; ~$40M recognized in Q4 for 2H24; TN funding pending; 2025 guidance excludes both	Improving (execution), approval timing pending
Payer denials	Elevated MA/commercial denials; physician adviser program ramping	Denials doubled y/y; ~$10M headwind; adjudication delays	Stabilization vs Q3 but vigilance continues; appeals ongoing	Stabilizing but still a headwind
Medical specialist fees	+5–10% y/y expected; insourcing underway	~+10% y/y; anesthesia pressure; initial insourcing	Q4 same‑store +12% (~$20M above plan); broader insourcing in 2025	Worsened near‑term; medium‑term mitigation via insourcing
ERP (Project Empower)	Wave deployments; cost/supply insights	Final innings; full platform by Q1’25	Implementation complete; expected $40–$60M savings in 2025	Tailwind emerging
Divestitures/deleveraging	$1B+ proceeds target; buyers out‑of‑market	$1B plan progressing; closures expected Q4/Q1	~$550M expected (ShorePoint+Lake Norman); >$1B total; leverage improving to 7.4x	Positive
Acuity/mix	Balanced inpatient/outpatient; MA shift; commercial volumes improving	Lower inpatient surgical acuity, outpatient strength; expected recovery	Same‑store revenue +6.5%; acuity lower than plan; payer mix favorable	Mixed
Hurricanes	—	~$7M Q3 impact; Punta Gorda closed	One facility remained shut into Q1; FL system sold in Q1’25	Transitory, largely resolved via sale

Management Commentary

CEO: “We continue to make meaningful progress… strong same‑store volume growth… confident in our portfolio [and] future opportunities.” .
CFO: “Q4 Adjusted EBITDA was $428M… margin 13.1%… net benefit of ~$40M from Medicaid supplemental programs… contract labor spend down another $5M sequentially.” .
CEO on denials: “The impact of payer downgrades and denials has stabilized for us since the third quarter… we will remain vigilant…” .
CFO on 2025 bridge: “From 2024 EBITDA $1.540B… remove ~~$40M DPP and $50–$60M divestitures (~~$100M), add $75–$100M organic… to midpoint ~$1.525B; NM/TN DPP adds $100–$125M if approved.” .
CEO on strategy: expanding outpatient access (urgent care, freestanding EDs, ASCs), capacity projects in Knoxville and Baldwin County, and insourcing anesthesia in large markets .

Q&A Highlights

2025 guidance bridge and DPP scenario: midpoint implies organic growth; DPP programs (NM/TN) add $100–$125M annual EBITDA if approved; TN funding approval pending .
Specialist fees: same‑store +12% in Q4; insourcing anesthesia and other hospital‑based services to mitigate longer‑term .
Operating cash flow drivers: carryover cash from NM DPP recognized in Q4’24, ERP no longer a cash drag, $70–$75M IRS tax refund; offset by ~$40M higher cash interest timing .
Hurricanes: expected ~$10M impact in Q4; one hospital remained closed into Q1; sale of impacted FL assets completed in Q1’25 .
Divestitures: ~10x EBITDA multiples; >$1B proceeds expected to delever (net debt/EBITDA 7.4x at year‑end) .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was requested but unavailable due to data access limits at this time; therefore, we cannot provide beat/miss vs consensus for CYH’s Q4 2024. We will update the comparison when SPGI data can be retrieved [S&P Global consensus unavailable].

Key Takeaways for Investors

Q4 print showed resilient demand and margin expansion despite acuity/mix headwinds; Adjusted EBITDA and margin improved y/y to $428M and 13.1%, respectively .
Denials remain a structural headwind (especially MA), but stabilization cited vs Q3; ongoing appeals and physician adviser coverage across portfolio are mitigating factors .
Near‑term cost pressure from specialist fees (anesthesia), with company pivoting to insourcing to improve control and economics through 2025 .
2025 guidance sets a conservative base excluding DPP; approval of NM/TN programs would be a clear upside catalyst (+$100–$125M EBITDA annualized), with retro payments flowing to cash .
Divestiture proceeds (~$550M announced, >$1B total expected) and ERP efficiencies ($40–$60M 2025 savings) support deleveraging and free cash flow improvement, even before mid‑teens margin targets are reached .
Hurricane impacts largely transitory and addressed via asset sale; portfolio optimization continues to focus capital on higher‑growth markets and outpatient access points .
Watch for catalysts: CMS approvals (DPP), additional divestiture announcements/closings, specialist fee normalization via insourcing, and progress on margin expansion pathway highlighted by management .

COMMUNITY HEALTH SYSTEMS INC (CYH)·Q4 2024 Earnings Summary