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August 02, 2016 01:00 AM

CHS posts $1.43 billion loss on massive write-down of assets

Dave Barkholz
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    Community Health Systems posted an eye-popping $1.43 billion loss from continuing operations in the second quarter as the hospital giant took a noncash write-down of goodwill of its assets, the company announced Tuesday.

    The $1.43 billion, or $12.90 per share, loss compared with a profit of $117 million, or $1.01 per share, for the same period last year.

    The write-down was made to better reflect the diminished value of hospitals and assets that CHS had previously bought or held, the company said.

    The charges are $1.4 billion to reduce the goodwill of hospitals that CHS is keeping; $169 million for hospitals that the company is trying to sell; and $70 million for certain underperforming hospitals, CHS said.

    Franklin, Tenn.-based CHS is selling 10 hospitals and could divest another 20 hospitals over the next 16 months, CHS CFO Larry Cash told investors in May. The company expects net proceeds of $530 million from the 10 hospitals.

    CHS is scheduled to discuss its second-quarter results during an earnings call with analysts at 11 a.m. ET Wednesday.

    The second-quarter results reflected a partial month of financials from Quorum Health Corp., a group of 38 rural hospitals that was spun off April 29 into a separate company.

    Revenue in the second quarter fell 6% to $4.59 billion from $4.88 billion in the prior-year quarter.

    Adjusted EBITDA and net cash from operations also plunged.

    Adjusted EBITDA in the quarter was $563 million compared with $769 million in the prior-year quarter. Net cash from operating activities slumped to $338 million in the quarter from $565 million in the year-ago quarter.

    Hospital admissions fell 9% and decreased 2% on a same-hospital basis.

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      • Transformation
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      • Regional News
        • Midwest
        • Northeast
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        • West
      • Digital Edition (Web Version)
    • Opinion
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      • From the Editor
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        • Nominate/Eligibility
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        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
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        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
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      • Hospital Financials
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