Annual Report to Stockholders 2012

COMMUNIT YHEALTH SYSTEMS, INC.

Located in the Nashville, Tennessee, suburb of Franklin, CommunityHealth Systems, Inc. is one of the largest publicly-traded hospitalcompanies in the United States and a leading operator of general acutecare hospitals in non-urban and mid-size markets throughout thecountry. Through its subsidiaries, the Company currently owns, leasesor operates 135 hospitals in 29 states with an aggregate of approximately20,000 licensed beds. (as of March 1, 2013). Its hospitals offer a broadrange of inpatient and surgical services, outpatient treatment and skillednursing care. In addition, through its subsidiary, Quorum HealthResources, LLC, the Company provides management and consultingservices to non-affiliated general acute care hospitals located throughoutthe United States.

Shares in Community Health Systems, Inc. are traded on the New YorkStock Exchange under the symbol “CYH.”

Hospital Locations

AlabamaBirmingham,Trinity Medical CenterCentre, Cherokee Medical CenterDothan, Flowers HospitalEnterprise, Medical Center EnterpriseFoley, South Baldwin Regional

Medical CenterFort Payne, DeKalb Regional Medical CenterGadsden, Gadsden Regional Medical CenterGreenville, LV Stabler Memorial HospitalHuntsville, Crestwood Medical Center

AlaskaPalmer, Mat-Su Regional Medical Center

ArizonaBullhead City, Western Arizona Regional

Medical CenterOro Valley, Northwest Medical Center

Oro ValleyPayson, Payson Regional Medical CenterTucson, Northwest Medical Center

ArkansasNorthwest Health System

Bentonville, Northwest Medical Center-Bentonville

Johnson, Northwest Medical Center-Willow Creek Women’s Hospital

Siloam Springs, Siloam SpringsRegional Hospital

Springdale, Northwest Medical Center-Springdale

El Dorado, Medical Center ofSouth Arkansas

Forrest City, Forrest City Medical CenterHelena, Helena Regional Medical CenterNewport, Harris Hospital

CaliforniaBarstow, Barstow Community HospitalFallbrook, Fallbrook HospitalWatsonville, Watsonville Community Hospital

FloridaCrestview, North Okaloosa Medical CenterLake Wales, Lake Wales Medical Center

GeorgiaAugusta, Trinity Hospital of AugustaBlue Ridge, Fannin Regional Hospital

IllinoisAnna, Union County HospitalBlue Island, MetroSouth Medical CenterGalesburg, Galesburg Cottage HospitalGranite City, Gateway Regional

Medical CenterMarion, Heartland Regional Medical CenterMt. Vernon, Crossroads Community HospitalRed Bud, Red Bud Regional HospitalWaukegan, Vista Medical Center EastWaukegan, Vista Medical Center West

IndianaLutheran Health Network

Bluffton, Bluffton RegionalMedical Center

Fort Wayne, Dupont HospitalFort Wayne, Lutheran HospitalFort Wayne,The Orthopaedic HospitalFort Wayne, Lutheran

Rehabilitation HospitalFort Wayne, St. Joseph’s HospitalPeru, Dukes Memorial HospitalWarsaw, Kosciusko Community Hospital

Valparaiso, Porter Hospital

KentuckyFulton, Parkway Regional HospitalJackson, Kentucky River Medical CenterLouisa, Three Rivers Medical Center

LouisianaLake Charles, Women & Children's HospitalLeesville, Byrd Regional HospitalRuston, Northern Louisiana Medical Center

MississippiHattiesburg, Wesley Medical CenterVicksburg, River Region Health System

MissouriKirksville, Northeast Regional Medical CenterMoberly, Moberly Regional Medical Center

NevadaMesquite, Mesa View Regional Hospital

New JerseySalem, Memorial Hospital of Salem County

NewMexicoCarlsbad, Carlsbad Medical CenterDeming, Mimbres Memorial HospitalHobbs, Lea Regional Medical CenterLas Cruces, Mountain View Regional

Medical CenterLas Vegas, Alta Vista Regional HospitalRoswell, Eastern New Mexico

Medical Center

North CarolinaWilliamston, Martin General Hospital

OhioValleycare Health System of Ohio

Warren,Trumbull Memorial HospitalWarren, Hillside Rehabilitation HospitalYoungstown, Northside Medical Center

Massilon, Affinity Medical Center

OklahomaOklahoma City, Deaconess HospitalPonca City, Ponca City Medical CenterWoodward, Woodward Regional Hospital

OregonSpringfield, McKenzie-Willamette

Medical Center

PennsylvaniaCommonwealth Health

Berwick, Berwick HospitalNanticoke, Special Care HospitalPeckville, Mid-Valley HospitalScranton, Moses Taylor HospitalScranton, Regional Hospital of ScrantonTunkhannock,Tyler Memorial HospitalWilkes-Barre, First HospitalWilkes-Barre, Wilkes-Barre

General Hospital

10 11 12

$13.5

$11.5

$9.5

$7.5

$5.5

$3.5

OperatingRevenues(in billions)

140

120

100

80

60

40

Hospitals

$3.25

$2.75

$2.25

$1.75

$1.25

$0.75

Earnings Per Sharefrom ContinuingOperations (diluted)

10 11 12

10 11 12

Coatesville, Brandywine HospitalEaston, Easton HospitalLock Haven, Lock Haven HospitalPhiladelphia, Chestnut Hill HospitalPhoenixville, Phoenixville HospitalPottstown, Pottstown Medical CenterSunbury, Sunbury Community HospitalWest Grove, Jennersville Regional HospitalYork, Memorial Hospital

South CarolinaBennettsville, Marlboro Park HospitalCheraw, Chesterfield General HospitalFlorence, Carolinas Hospital

System-FlorenceLancaster, Springs Memorial HospitalMullins, Carolinas Hospital System-MarionSpartanburg, Mary Black Memorial Hospital

TennesseeBrownsville, Haywood Park

Community HospitalClarksville, Gateway Medical CenterCleveland, SkyRidge Medical CenterDyersburg, Dyersburg Regional

Medical CenterJackson, Regional Hospital of JacksonLexington, Henderson County

Community HospitalMartin, Volunteer Community HospitalMcKenzie, McKenzie Regional HospitalMorristown, Lakeway Regional HospitalSelmer, McNairy Regional HospitalShelbyville, Heritage Medical Center

TexasAbilene, Abilene Regional Medical CenterAlpine, Big Bend Regional Medical CenterBig Spring, Scenic Mountain Medical CenterBrownwood, Brownwood Regional

Medical CenterCedar Park, Cedar Park Regional

Medical CenterCollege Station, College Station

Medical CenterCorsicana, Navarro Regional Hospital

Granbury, Lake Granbury Medical CenterHillsboro, Hill Regional HospitalJourdanton, South Texas Regional

Medical CenterLaredo, Laredo Medical CenterLongview, Longview Regional Medical CenterLufkin, Woodland Heights Medical CenterSan Angelo, San Angelo Community

Medical CenterTomball, Tomball Regional HospitalVictoria, DeTar Healthcare SystemWeatherford, Weatherford Regional

Medical Center

UtahTooele, Mountain West Medical Center

VirginiaEmporia, Southern Virginia Regional

Medical CenterFranklin, Southampton Memorial HospitalPetersburg, Southside Regional

Medical Center

WashingtonRockwood Health System

Spokane, Deaconess HospitalSpokane Valley, Valley Hospital

West VirginiaBluefield, Bluefield Regional Medical CenterOak Hill, Plateau Medical CenterRonceverte, Greenbrier Valley Medical Center

WyomingEvanston, Evanston Regional Hospital

Hospitals are owned or leased and operated bysubsidiaries of Community Health Systems, Inc.Community Health Systems, Inc. does not haveany employees.

Year Ended December 31,2012 2011

Operating ResultsNet operating revenues $ 13,028,985 $ 11,906,212Income from continuing operations $ 346,269 $ 335,894Income per share from continuing operations

Diluted $ 2.96 $ 2.87Weighted average number of shares outstanding:

Diluted 89,807 90,666

As of December 31,2012 2011

Balance Sheet DataWorking capital $ 1,275,922 $ 934,950Total assets 16,606,335 15,208,840Long-term debt 9,451,394 8,782,798Stockholders’ equity 2,731,207 2,397,096

For The Year Ended December 31,Consolidated Same-Store

2012 2011 % Change 2012 2011 % ChangeSelected Operating DataNumber of hospitals (at end of period) 135 131 131 131Licensed beds (at end of period) 20,334 19,695 19,662 19,695Beds in service (at end of period) 17,265 16,832 16,745 16,832Admissions 701,837 675,050 4.0% 668,679 675,050 -0.9%Adjusted admissions 1,418,472 1,330,988 6.6% 1,351,043 1,330,988 1.5%Patient days 3,058,931 2,970,044 2,902,418 2,970,044Average length of stay (days) 4.4 4.4 4.3 4.4Occupancy rate (average beds in service) 48.6% 49.1% 48.3% 49.1%Net operating revenues $ 13,028,985 $ 11,906,212 9.4% $ 12,438,580 $ 11,893,095 4.6%Net inpatient revenues as a % of

total net operating revenuesbefore provision for bad debts 44.7% 46.1% 44.2% 46.1%

Net outpatient revenues as a % oftotal net operating revenuesbefore provision for bad debts 53.4% 51.9% 53.9% 51.9%

Income from operations $ 1,210,124 $ 1,134,485 6.7% $ 1,198,243 $ 1,164,545 2.9%Income from operations as a

% of net operating revenues 9.3% 9.5% 9.6% 9.8%Depreciation and amortization $ 725,558 $ 652,674 $ 703,236 $ 652,674Equity in earnings of

unconsolidated affiliates $ (42,033) $ (49,491) $ (42,210) $ (49,491)

Liquidity Data:Adjusted EBITDA $ 1,977,715 $ 1,836,650 7.7%Adjusted EBITDA as a % of net

operating revenues 15.2% 15.4%Net cash provided by operating activities $ 1,280,120 $ 1,261,908Net cash provided by operating activities

as a % of net operating revenues 9.8% 10.6%

Financial Highlights(In thousands, except per share amounts)

There are many ways to measure the performance ofa company. Whatever metric is applied, 2012 was asuccessful year for Community Health Systems, Inc.and our stockholders. Our financial results were strong.Our long track record of year-over-year growth continued.Most exciting was our work to advance clinical quality,safety and the patient experience in 135 affiliatedhospitals across the country.

Our success is fundamentally rooted in the outstandingclinical care provided in each of our hospitals. Our skilledmedical staffs, nurses and other caregivers underscore thisrigorous commitment to quality in millions of positivepatient encounters annually, including over 700,000inpatient admissions and more than 3.1 millionemergency department visits in 2012.

Fifty of our affiliated hospitals were named TopPerformers on Key Quality MeasuresTM by The JointCommission, the nation’s largest accrediting agency forhealthcare organizations. This public recognition ofexemplary performance was earned by only 18 percent ofthe more than 3,400 eligible and accredited hospitals inthe U.S. in 2012 and is based on evidence-based clinicalprocesses that improve care for certain medical conditions.

We value the trust of the patients and communities weserve and have intensified our efforts to create inherentlysafe hospital environments. In 2011, we applied for andreceived listing status for our patient safety organizationby the Health and Human Services Agency forHealthcare Research and Quality. In 2012, we utilizedindustry-leading performance techniques in a strenuouseffort to reduce errors and prevent serious safety events.Our imperative to improve the safety of the care providedis an ongoing effort that will never cease.

Balancing disciplined deployment of our resources withthe unique needs of our hospitals, we continued to makesignificant capital investments. We invested $769 millionin capital improvements to enhance our facilities, bringsophisticated medical technology and clinical information

systems to our communities, expand healthcare servicesand create a more coordinated and comfortable patientexperience. We opened three brand new, state-of-the-artreplacement hospitals in Arkansas, California and Indiana.

Physician recruitment has always been a hallmark of oursuccess and critically important to our communities. Thiswas true again in 2012 as we recruited 2,125 physicians,an increase of 14 percent over the previous year. We grewour clinical capacity even more by adding 115 mid-levellicensed healthcare practitioners. Recruiting medicalprofessionals is essential to our hospitals; retaining themis equally important. Our focus on practice developmentand ongoing support facilitates long-term, productiverelationships. As a result, our retention rate and physiciansatisfaction levels are consistently strong.

Our hospitals generate even more tangible benefit throughthe expenditure of millions of dollars to employ localresidents, provide charity care for those who can’t affordhealth services and through taxes paid to support theircommunities.

We are proud of our accomplishments especially becausewe operate in challenging times. Federal policy andother governmental dynamics continue to affect allaspects of the healthcare industry. Hospital operatorsare functioning under the constant pressure of loweredreimbursement rates even as regulatory requirements andthe corresponding cost of compliance become morestringent and expensive.

In 2012, the U.S. Supreme Court’s landmark decisionupholding the Patient Protection and Affordable CareAct brought some clarity about the implementation ofreforms, but there were also new uncertainties as stateswere empowered to make their own decisions aboutwhether to expand Medicaid programs and establishhealth insurance exchanges. Regardless, millions ofcurrently uninsured Americans will soon gain access tohealth coverage and the healthcare system.

Letter to Stockholders:

We have been preparing for this influx of newly insuredpatients, developing the necessary infrastructure acrossour entire system. We also have established integratedhealthcare delivery networks in markets where we havea significant presence, including Arkansas, Indiana,Ohio, Pennsylvania and Washington. While eachhospital is independently licensed and operated, theyare collaborating with one another and with physiciansin their communities to deliver a comprehensive,coordinated healthcare experience for patients. Integratednetworks strengthen our competitive position and createalignments that will increase quality, reduce waste, makehealthcare more affordable and, ultimately, lead to greatervalue for patients.

As an organization, we have built lasting success on anabsolute ability to execute growth strategies. With theacquisition of four additional hospitals in 2012, wenow operate 135-affiliated hospitals nationwide.Theassimilation of other recent acquisitions has acceleratedtheir ability to achieve operational improvements. Lookingahead, we see significant opportunities for furtherexpansion, but we will continue to be selective in ourapproach, looking for hospitals that meet our operatingobjectives and show the most potential for growth.

In all of our hospitals we are implementing strategies toincrease clinical programs, build market share and reduceoutmigration. Our core purpose will always be to makehigh-quality affordable health services available in localcommunities so patients can find the care they needclose to home.

Our operating model and ability to adjust to dynamicmarket conditions is reflected in our financial results.2012 was another solid year. Consolidated revenuesreached $13.0 billion, a 9.4 percent increase over 2011.Income from continuing operations was $346.3 million,up from $335.9 million in the prior year. Net incomefrom continuing operations for the year was $2.96 pershare (diluted) compared with $2.87 per share (diluted)in 2011. Excluding the loss on early extinguishment of

debt, our net income from continuing operations was$418.1 million and earnings per share were $3.77(diluted) in 2012.

Cash flow from 2012 operations was $1.28 billioncompared with $1.26 billion in 2011. And we shared thatsuccess with stockholders by paying a special one-timedividend of $0.25 per share at the end of the year, our firstdividend since becoming a public company in 2000.Theopportunity to provide a return on our stockholders’investment reflects a solid financial position and reinforcesour confidence in the company’s future.

On a same-store basis, net operating revenues increased4.6 percent over 2011. We were encouraged by morefavorable volume trends in our hospitals in 2012,especially during the second half of the year.

Our company is well positioned for the transformativeperiod ahead. Community Health Systems is a healthyand prosperous organization that is defined by a relentlesscommitment to quality care, the impressive caliber of ourhuman resources, the synergies and scale made possible bythe sheer size of our organization and our demonstratedability to produce sustainable results in every aspect ofour business.

I would like to thank the extraordinary physicians,hospital employees and local administrators who, with thesupport of our exceptional management team and boardof directors, have made our past success possible and ourfuture promising.

I also thank you, our stockholders, for your continuedconfidence and support.

Sincerely,

Wayne T. SmithChairman of the Board, President and Chief Executive Officer

Community Health Systems is well positionedfor the transformative period ahead.

W A Y N E T . S M I T H

This Annual Report contains forward looking statements made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. Importantfactors that could cause our actual results to differ materially from the results contemplated by the forward looking statements are contained in our Annual Report on Form 10-Kfiled with the Securities and Exchange Commission (the “SEC”) and included with this Annual Report and in subsequent filings with the SEC.

Board of Directors

WayneT. SmithChairman of the BoardPresident andChief Executive Officer

W.Larry CashExecutive Vice President andChief Financial Officer

John A.Clerico (1) (2)

Co-founder and ChairmanChartMark Investments, Inc.

James S. Ely III (1)

Founder and Chief Executive OfficerPriority Capital Management LLC

John A. Fry (1) (3)

PresidentDrexel University

WilliamNorris Jennings,M.D. (3)

Former Managing PartnerSouthend Medical Clinic

Julia B.North (2) (3)

Former President – Consumer ServicesBellSouth Telecommunications

H.MitchellWatson, Jr. (2)

Former President and Chief Executive OfficerROLM Company

(1) Member of the Audit andCompliance Committee

(2) Member of the Compensation Committee(3) Member of the Governance

and Nominating Committee

Officers

WayneT. SmithChairman of the BoardPresident andChief Executive Officer

W.Larry CashExecutive Vice President andChief Financial Officer

Rachel A. SeifertExecutive Vice President,Secretary and General Counsel

William S.HusseyPresident – Division IV Operations

David L.MillerPresident – Division I Operations

Thomas D.MillerPresident – Division V Operations

MichaelT. PortacciPresident – Division II Operations

Martin D. SmithPresident – Division III Operations

T.Mark BufordSenior Vice President – Internal Audit

LarryM.CarltonSenior Vice President –Revenue Management

KennethD.HawkinsSenior Vice President –Acquisitions and Development

Barbara R. Paul,M.D.Senior Vice President andChief Medical Officer

Martin G. SchweinhartSenior Vice President – Operations

J.Gary SeaySenior Vice President andChief Information Officer

LynnT. Simon,M.D.Senior Vice President andChief Quality Officer

Andrea E. BosshartVice President – Corporate ComplianceOfficer and Privacy Officer

JamesW.DoucetteVice President and Treasurer

Ben C. FordhamVice President and Chief Litigation Counsel

Tomi J.GalinVice President – Corporate Communications

Kevin J.HammonsVice President, Corporate Controller andChief Accounting Officer

Robert A.HorrarVice President – Administration and HumanResources

Robert O.HorrarVice President – Division II Operations

Debra S. LandersVice President and Chief Marketing Officer

MichaelM.LyndVice President – Financial Services

TimG.MarletteVice President - Materials Management

Ronald J. ShaferVice President – Physician Practice Services

Board of Directors and Officers / Community Health Systems, Inc.

Corporate OfficeCommunity Health Systems, Inc.4000 Meridian BoulevardFranklin, TN 37067(615) 465-7000www.chs.net

Form 10-K/Investor ContactA copy of the Company’s AnnualReport on Form 10-K, filed withthe Securities and ExchangeCommission, may be obtainedfrom the Company at no charge.Requests for the Annual Reporton Form 10-K and other investorinformation should be directedto Investor Relations at theCompany’s corporate officeor at www.chs.net.

Registrar andTransfer AgentRegistrar and Transfer Company10 Commerce DriveCranford, NJ 07016 - 3572800-456-0596

Independent AuditorsDeloitte & Touche LLPNashville, TN

Annual Stockholders’MeetingThe annual meeting ofstockholders will be held onTuesday, May 21, 2013, at8:00 a.m. local time at The St.Regis Hotel, 2 East 55th Street,New York, NY

Common Stock InformationThe Company’s common stocktrades on the New York StockExchange under the symbolCYH. As of March 22, 2013,Community Health Systems hadapproximately 45 stockholders ofrecord and 28,100 beneficialholders of its common stock.

The following table sets forth thehigh and low sales priceinformation as reported by theNew York Stock Exchangeduring the period indicated.

Stock Price

2012 High LowFirst Quarter $25.74 $16.37Second Quarter $28.79 $20.71Third Quarter $29.59 $22.51Fourth Quarter $32.70 $26.33

2011 High LowFirst Quarter $42.50 $34.62Second Quarter $41.09 $22.33Third Quarter $27.63 $15.91Fourth Quarter $21.92 $14.61

Corporate Information / Community Health Systems, Inc.

Community Health Systems, Inc.4000 Meridian BoulevardFranklin, Tennessee 37067

(615) 465-7000www.chs.net