Community Health Systems 2015 Annual Report Download - page 144

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments has been estimated by the Company using available market information
as of December 31, 2015 and December 31, 2014, and valuation methodologies considered appropriate. The
estimates presented are not necessarily indicative of amounts the Company could realize in a current market
exchange (in millions):
December 31,
2015 2014
Carrying Estimated Fair Carrying Estimated Fair
Amount Value Amount Value
Assets:
Cash and cash equivalents .... $ 184 $ 184 $ 509 $ 509
Available-for-sale securities . . 271 271 280 280
Trading securities .......... 61 61 55 55
Liabilities:
Contingent Value Right ...... 2 2 6 6
Credit Facility ............. 7,217 7,115 7,165 7,143
8% Senior Notes ........... 2,015 2,018 2,018 2,139
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⁄ 8 % Senior Notes ......... 1,200 1,193 1,200 1,282
2018 Senior Secured Notes . . . 1,600 1,610 1,600 1,655
2021 Senior Secured Notes . . . 1,000 997 1,000 1,041
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⁄ 8 % Senior Notes ......... 3,000 2,858 3,000 3,194
Receivables Facility and other
debt ................... 792 792 705 705
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 9. 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 from the administrative agent to the Credit Facility to determine fair values or through publicly
available subscription services such as Bloomberg 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).
Available-for-sale 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.
Contingent Value Right. Estimated fair value is based on the closing price as quoted on the public market
where the CVR is traded.
Credit Facility. Estimated fair value is based on publicly available trading activity and supported with
information from the Company’s bankers regarding relevant pricing for trading activity among the Company’s
lending institutions.
8% Senior Notes. Estimated fair value is based on the closing market price for these notes.
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⁄ 8 % Senior Notes. Estimated fair value is based on the closing market price for these notes.
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