Community Health Systems 2015 Annual Report Download - page 24

Year Ended December 31, (Decrease)
2015 2014 Increase
(Dollars in millions)
Same-Store Data(9)
Admissions(3) ................................ 929,213 946,531 (1.8)%
Adjusted admissions(4) ......................... 2,015,496 2,009,847 0.3 %
Patient days(5) ................................ 4,119,165 4,195,141
Average length of stay (days)(6) .................. 4.4 4.4
Occupancy rate (beds in service)(7) ................ 43.5 % 43.9 %
Net operating revenues .......................... $ 19,432 $ 18,973 2.4 %
Income from operations ......................... $ 1,775 $ 1,663 6.7 %
Income from operations as a % of net operating
revenues ................................... 9.1% 8.8%
Depreciation and amortization .................... $ 1,160 $ 1,205
Equity in earnings of unconsolidated affiliates ....... $ 63 $ 48
(1) Licensed beds are the number of beds for which the appropriate state agency licenses a facility regardless of
whether the beds are actually available for patient use.
(2) Beds in service are the number of beds that are readily available for patient use.
(3) Admissions represent the number of patients admitted for inpatient treatment.
(4) Adjusted admissions is a general measure of combined inpatient and outpatient volume. We computed
adjusted admissions by multiplying admissions by gross patient revenues and then dividing that number by
gross inpatient revenues.
(5) Patient days represent the total number of days of care provided to inpatients.
(6) Average length of stay (days) represents the average number of days inpatients stay in our hospitals.
(7) We calculated occupancy rate percentages by dividing the average daily number of inpatients by the
weighted-average number of beds in service.
(8) EBITDA, a non-GAAP financial measure, consists of net income attributable to Community Health Systems,
Inc. before interest, income taxes, depreciation and amortization. Adjusted EBITDA, also a non-GAAP
financial measure, is EBITDA adjusted to exclude discontinued operations, loss from early extinguishment of
debt, impairment of long-lived assets, net income attributable to noncontrolling interests, acquisition and
integration expenses from the acquisition of HMA, expenses incurred related to the planned spin-off of
Quorum Health Corporation, expenses related to government legal settlements and related costs, and
(income) expense from fair value adjustments related to the HMA legal proceedings accounted for at fair
value, underlying the CVR agreement, and related legal expenses. We have from time to time sold
noncontrolling interests in certain of our subsidiaries or acquired subsidiaries with existing noncontrolling
interest ownership positions. We believe that it is useful to present adjusted EBITDA because it excludes the
portion of EBITDA attributable to these third-party interests and clarifies for investors our portion of
EBITDA generated by continuing operations. We use adjusted EBITDA as a measure of liquidity. We have
also presented adjusted EBITDA because we believe it provides investors with additional information about
our ability to incur and service debt and make capital expenditures. Adjusted EBITDA also aligns with a
similar metric as defined in our senior secured credit facility, which is a key component in the determination
of our compliance with some of the covenants under our senior secured credit facility, and is used to
determine the interest rate and commitment fee payable under the senior secured credit facility (although
adjusted EBITDA does not include all of the adjustments described in the senior secured credit facility).
Adjusted EBITDA is not a measurement of financial performance or liquidity under U.S. generally accepted
accounting principles, or GAAP. It should not be considered in isolation or as a substitute for net income,
operating income, cash flows from operating, investing or financing activities, or any other measure
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