Community Health Systems 2015 Annual Report Download - page 86

The loss from early extinguishment of debt of $73 million was recognized during the year ended December 31,
2014 after the repayment of the outstanding term loans under the Credit Facility. The loss from early
extinguishment of debt of $1 million was recognized during the year ended December 31, 2013 after the
repayment of $207 million of the term loans due 2014.
Equity in earnings of unconsolidated affiliates, as a percentage of net operating revenues, remained consistent
at 0.3% for the years ended December 31, 2014 and 2013.
The net results of the above mentioned changes resulted in income from continuing operations before income
taxes decreasing $4 million from $346 million in 2013 to $342 million in 2014.
Provision for income taxes from continuing operations decreased from $104 million in 2013 to $82 million in
2014 due to the decrease in income from continuing operations before income taxes. Our effective tax rates were
23.8% and 30.0% for the years ended December 31, 2014 and 2013, respectively. The decrease in our effective
tax rate for the year ended December 31, 2014 is primarily impacted by the decrease in income from continuing
operations before income taxes after adjusting for the increase in net income attributable to noncontrolling
interests, which is not tax effected in the consolidated statement of income.
Income from continuing operations, as a percentage of net operating revenues, decreased from 1.9% in 2013 to
1.4% in 2014.
Discontinued operations for these periods include the results of operations of certain hospitals owned or leased
by us as of December 31, 2014 and 2013, which were classified as being held for sale or sold during 2014. The
operation of these hospitals resulted in a loss, net of taxes, of $7 million included in discontinued operations
during the year ended December 31, 2014, compared to a loss, net of taxes, of $21 million included in
discontinued operations during the year ended December 31, 2013. Overall, discontinued operations during the
year ended December 31, 2014, consisted of a loss, net of taxes, of $57 million, compared to a loss, net of taxes,
of $25 million during the year ended December 31, 2013.
Net income, as a percentage of net operating revenues, decreased from 1.7% in 2013 to 1.1% in 2014.
Net income attributable to noncontrolling interests, as a percentage of net operating revenues, remained
consistent at 0.6% for the years ended December 31, 2014 and 2013.
Net income attributable to Community Health Systems, Inc. was $92 million in 2014 compared to
$141 million in 2013, a decrease of 34.8%. The decrease in net income attributable to Community Health
Systems, Inc. is primarily due to an increase in depreciation and amortization, as a percentage of net operating
revenues, loss from early extinguishment of debt, impairment of long-lived assets, and discontinued operations as
discussed above.
Liquidity and Capital Resources
2015 Compared to 2014
Net cash provided by operating activities decreased $694 million, from approximately $1.6 billion for the year
ended December 31, 2014 to approximately $921 million for the year ended December 31, 2015. The decrease in
cash provided by operating activities was primarily the result of higher cash outflows for compensation
liabilities, which was impacted by having an additional payroll period in 2015 compared to 2014 (27 pay periods
compared to 26 pay periods), an increase in cash outflow related to the timing of payments on accounts payable,
an increase in cash payments for legal settlements that were accrued in the prior year, an increase in interest paid
based on the timing of scheduled interest payments, a reduction in tax refunds received in excess of taxes paid,
and a decrease in the amount of cash received for HITECH incentive reimbursement. These decreases in cash
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