Community Health Systems 2015 Annual Report Download - page 129

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
small groups of assets that were recurring in nature qualified for reporting as discontinued operations, a disposal
of a component of an entity or a group of components of an entity will be required to be reported in discontinued
operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s
operations and financial results. A business or nonprofit activity that, on acquisition, meets the criteria to be
classified as held for sale will still be a discontinued operation. Additional disclosures will be required for
significant components of the entity that are disposed of or are held for sale but do not qualify as discontinued
operations. This ASU is effective for fiscal years beginning after December 15, 2014 and is to be applied on a
prospective basis for disposals or components initially classified as held for sale after that date. The Company
adopted this ASU on January 1, 2015 and the adoption resulted in divestitures occurring subsequent to the date of
adoption being included in continuing operations for the year ended December 31, 2015. The financial results for
divestitures or hospitals held for sale at December 31, 2014, prior to the Company’s adoption of ASU 2014-08,
are summarized below.
Effective July 31, 2015, one or more subsidiaries of the Company sold certain assets used in the operation of
Payson Regional Medical Center (44 licensed beds) in Payson, Arizona (“Payson”) to Banner Health for
approximately $20 million in cash. The Company previously operated Payson under the terms of an operating
lease with Mogollon Health Alliance, Inc., an Arizona nonprofit corporation, that expired on July 31, 2015. The
lease termination and sale closed effective July 31, 2015. Pursuant to the Company’s adoption of ASU 2014-08,
this divestiture does not meet the requirement for presentation in discontinued operations. Income from
continuing operations for the year ended December 31, 2015 includes an impairment charge of approximately
$6 million related to the write-off of the allocated reporting unit goodwill for this hospital.
During the three months ended June 30, 2015, one or more subsidiaries of the Company finalized an
agreement to terminate the lease and cease operations of Fallbrook Hospital (47 licensed beds) in Fallbrook,
California. In agreeing to terminate the lease, the Company received approximately $3 million in cash from the
Fallbrook Healthcare District, as the landlord, as consideration for certain operating assets of the hospital.
Effective April 1, 2015, one or more subsidiaries of the Company sold Chesterfield General Hospital
(59 licensed beds) in Cheraw, South Carolina and Marlboro Park Hospital (102 licensed beds) in Bennettsville,
South Carolina and related outpatient services to M/C Healthcare, LLC for approximately $4 million in cash.
Effective March 1, 2015 one or more subsidiaries of the Company sold Dallas Regional Medical Center
(202 licensed beds) in Mesquite, Texas to Prime Healthcare Services, Inc. (“Prime”) for approximately $25
million in cash.
Effective March 1, 2015 one or more subsidiaries of the Company sold Riverview Regional Medical Center
(281 licensed beds) in Gadsden, Alabama to Prime for approximately $25 million in cash. This hospital was
required to be divested by the Federal Trade Commission as a condition of its approval of the HMA merger.
Effective February 1, 2015, one or more subsidiaries of the Company sold Harris Hospital (133 licensed beds)
in Newport, Arkansas and related healthcare services to White County Medical Center in Searcy, Arkansas for
approximately $5 million in cash.
Effective January 1, 2015, one or more subsidiaries of the Company sold Carolina Pines Regional Medical
Center (116 licensed beds) in Hartsville, South Carolina and related outpatient services to Capella Healthcare for
approximately $74 million in cash, which was received at the closing on December 31, 2014. This hospital was
required to be divested by the Federal Trade Commission as a condition of its approval of the HMA merger.
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