Community Health Systems 2015 Annual Report Download - page 121

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
guidance for debt issuance costs. This ASU is effective for fiscal years beginning after December 31, 2015, with
early adoption permitted. The Company plans to adopt this ASU on January 1, 2016, which will result in the
reclassification of approximately $266 million of debt issuance costs from other long-term assets to a reduction
of the related long-term debt.
In November 2015, the FASB issued ASU 2015-17, which amended the balance sheet classification
requirements for deferred income taxes to simplify their presentation in the statement of financial position. The
ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of
financial position. This ASU is effective for fiscal years beginning after December 31, 2016, with early adoption
permitted. The Company early adopted the provisions of this ASU for the presentation and classification of its
deferred tax assets at December 31, 2015. The effect of this change primarily resulted in the current portion of
deferred income taxes at December 31, 2015 being included in the noncurrent deferred income tax liability. The
Company did not retrospectively apply the provisions of this ASU to prior periods as permitted by the standard.
Reclassification. The Company has reclassified impairment of long-lived assets to inclusion as part of
operating costs and expenses on the accompanying consolidated statements of income for the years ended
December 31, 2014 and 2013 to conform to the current year presentation, which includes the impairment as part
of operating costs and expenses. These amounts had previously been classified below income from operations on
the consolidated statements of income. The Company has concluded that the classification of such amounts in the
prior years was not material to the previously issued consolidated financial statements. This change in
classification had no effect on the Company’s net income or cash flows included in previously issued
consolidated financial statements.
2. ACCOUNTING FOR STOCK-BASED COMPENSATION
Stock-based compensation awards have been granted under the Community Health Systems, Inc. Amended
and Restated 2000 Stock Option and Award Plan, amended and restated as of March 20, 2013 (the “2000 Plan”),
and the Community Health Systems, Inc. 2009 Stock Option and Award Plan, amended and restated as of
March 19, 2014 (the “2009 Plan”).
The 2000 Plan allowed for the grant of incentive stock options intended to qualify under Section 422 of the
Internal Revenue Code (the “IRC”), as well as stock options which do not so qualify, stock appreciation rights,
restricted stock, restricted stock units, performance-based shares or units and other share awards. Prior to being
amended in 2009, the 2000 Plan also allowed for the grant of phantom stock. Persons eligible to receive grants
under the 2000 Plan include the Company’s directors, officers, employees and consultants. All options granted
under the 2000 Plan have been “nonqualified” stock options for tax purposes. Generally, vesting of these granted
options occurs in one-third increments on each of the first three anniversaries of the award date. Options granted
prior to 2005 have a 10-year contractual term, options granted in 2005 through 2007 have an eight-year
contractual term and options granted in 2008 through 2011 have a 10-year contractual term. The Company has
not granted stock option awards under the 2000 Plan since 2011. Pursuant to the amendment and restatement of
the 2000 Plan dated March 20, 2013, no further grants will be awarded under the 2000 Plan.
The 2009 Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the
IRC and for the grant of stock options which do not so qualify, stock appreciation rights, restricted stock,
restricted stock units, 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, vesting
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