Community Health Systems 2015 Annual Report Download - page 166

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Summary of Recorded Amounts
The table below presents a reconciliation of the beginning and ending liability balances (in millions) during the
year ended December 31, 2015 with respect to the Company’s fair value determination in connection with HMA
Legal Matters that were not previously accrued by HMA, the estimated liability in connection with HMA Legal
Matters that were previously recorded by HMA as a probable contingency, and the remaining contingencies of
the Company in respect of which an accrual has been recorded. In addition, future legal fees (which are expensed
as incurred) and costs related to possible indemnification and criminal investigation matters associated with the
HMA Legal Matters have not been accrued or included in the table below. Furthermore, although not accrued,
such costs, if incurred, will be taken into account in determining the total amount of reductions applied to the
amounts owed to CVR holders.
CVR Related
Liability
at Fair Value
CVR Related Liability
for Probable
Contingencies
Other
Probable
Contingencies
Balance as of December 31,
2013 ................... $ - $ - $ 119
Assumed liabilities for HMA
contingencies ............ 284 29 16
(Income) expense ........... (16) - 100
Cash payments ............. (3) - (110)
Balance as of December 31,
2014 ................... 265 29 125
Expense (income) ........... 4 (12) 20
Cash payments ............. (8) (17) (135)
Balance as of December 31,
2015 ................... $ 261 $ - $ 10
With respect to the “Other Probable Contingencies” referenced in the chart above, in accordance with
applicable accounting guidance, the Company establishes a liability for litigation, regulatory and governmental
matters for which, based on information currently available, the Company believes that a negative outcome is
known or is probable and the amount of the loss is reasonably estimable. For all such matters (whether or not
discussed in this contingencies footnote), such amounts have been recorded in other accrued liabilities on the
consolidated balance sheet and are included in the table above in the “Other Probable Contingencies” column.
Due to the uncertainties and difficulty in predicting the ultimate resolution of these contingencies, the actual
amount could differ from the estimated amount reflected as a liability on the consolidated balance sheet.
In the aggregate, attorneys’ fees and other costs incurred but not included in the table above related to probable
contingencies, and CVR-related contingencies accounted for at fair value, totaled $9 million and $29 million for
the years ended December 31, 2015 and 2014, respectively, and are included in other operating expenses in the
accompanying consolidated statements of income.
Matters for which an Outcome Cannot be Assessed
For all of the legal matters below, the Company cannot at this time assess what the outcome may be and is
further unable to determine any estimate of loss or range of loss. Because the matters below are at a preliminary
stage and other factors, there are not sufficient facts available to make these assessments.
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