Community Health Systems 2015 Annual Report Download - page 153

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
and 2014, respectively, in a non-qualified plan trust generally designated to pay benefits of the deferred
compensation plans, consisting of trading securities of $61 million and $55 million as of December 31, 2015 and
2014, respectively, and company-owned life insurance contracts of $136 million and $127 million as of
December 31, 2015 and 2014, respectively.
The Company provides an unfunded Supplemental Executive Retirement Plan (“SERP”) for certain members
of its executive management. The Company uses a December 31 measurement date for the benefit obligations
and a January 1 measurement date for its net periodic costs for the SERP. Variances from actuarially assumed
rates will result in increases or decreases in benefit obligations and net periodic cost in future periods. Benefits
expense under the SERP was $12 million, $11 million and $14 million for the years ended December 31, 2015,
2014 and 2013, respectively. The accrued benefit liability for the SERP totaled $131 million at December 31,
2015 and $121 million at December 31, 2014, and is included in other long-term liabilities on the consolidated
balance sheets. The weighted-average assumptions used in determining net periodic cost for the year ended
December 31, 2015 was a discount rate of 3.2% and annual salary increase of 3.0%. The Company had available-
for-sale securities in a rabbi trust generally designated to pay benefits of the SERP in the amounts of $95 million
and $96 million at December 31, 2015 and 2014, respectively. These amounts are included in other assets, net on
the consolidated balance sheets.
The Company maintains the CHS/Community Health Systems, Inc. Retirement Income Plan (“Pension Plan”),
which is a defined benefit, non-contributory pension plan that covers certain employees at three of its hospitals.
The Pension Plan provides benefits to covered individuals satisfying certain age and service requirements.
Employer contributions to the Pension Plan are in accordance with the minimum funding requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Company expects to make no contribution
to the Pension Plan in 2016. The Company uses a December 31 measurement date for the benefit obligations and
a January 1 measurement date for its net periodic costs for the Pension Plan. Variances from actuarially assumed
rates will result in increases or decreases in benefit obligations, net periodic cost and funding requirements in
future periods. Benefits expense under the Pension Plan was less than $1 million for each of the years ended
December 31, 2015, 2014 and 2013, respectively. The accrued benefit liability for the Pension Plan totaled
$13 million at December 31, 2015 and $15 million at December 31, 2014, and is included in other long-term
liabilities on the consolidated balance sheets. The weighted-average assumptions used for determining the net
periodic cost for the year ended December 31, 2015 was a discount rate of 4.0% and the expected long-term rate
of return on assets of 7.0%.
12. STOCKHOLDERS’ EQUITY
Authorized capital shares of the Company include 400,000,000 shares of capital stock consisting of
300,000,000 shares of common stock and 100,000,000 shares of preferred stock. Each of the aforementioned
classes of capital stock has a par value of $0.01 per share. Shares of preferred stock, none of which were
outstanding as of December 31, 2015, may be issued in one or more series having such rights, preferences and
other provisions as determined by the Board of Directors without approval by the holders of common stock.
On November 6, 2015, the Company adopted a new open market repurchase program for up to
10,000,000 shares of our common stock, not to exceed $300 million in repurchases. The repurchase program will
expire on the earlier of November 5, 2018, when the maximum number of shares has been repurchased, or when
the maximum dollar amount has been expended. During the year ended December 31, 2015, the Company
repurchased and retired 532,188 shares at a weighted-average price of $27.31 per share.
On December 10, 2014, the Company adopted an open market repurchase program for up to 5,000,000 shares
of the Company’s common stock, not to exceed $150 million in repurchases. This repurchase program expired on
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