COMMUNITY HEALTH SYSTEMS INC Fair Value Disclosure
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments has been estimated by the Company using available market information at December 31, 2025 and 2024, and valuation methodologies considered appropriate. The estimates presented in the table below are not necessarily indicative of amounts the Company could realize in a current market exchange (in millions):
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December 31, 2025 |
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December 31, 2024 |
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Carrying |
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Estimated |
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Carrying |
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Estimated |
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Amount |
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Value |
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Amount |
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Value |
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Assets: |
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Cash and cash equivalents |
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$ |
260 |
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|
$ |
260 |
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$ |
37 |
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$ |
37 |
|
Investments in equity securities |
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|
79 |
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|
|
79 |
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|
|
69 |
|
|
|
69 |
|
Available-for-sale debt securities |
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226 |
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|
|
226 |
|
|
|
192 |
|
|
|
192 |
|
Trading securities |
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|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
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Liabilities: |
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8% Senior Secured Notes due 2027 |
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— |
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|
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— |
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|
|
696 |
|
|
|
700 |
|
5⅝% Senior Secured Notes due 2027 |
|
|
— |
|
|
|
— |
|
|
|
1,722 |
|
|
|
1,686 |
|
6⅞% Senior Notes due 2028 |
|
|
42 |
|
|
|
35 |
|
|
|
622 |
|
|
|
457 |
|
6% Senior Secured Notes due 2029 |
|
|
630 |
|
|
|
644 |
|
|
|
626 |
|
|
|
577 |
|
5¼% Senior Secured Notes due 2030 |
|
|
1,479 |
|
|
|
1,442 |
|
|
|
1,468 |
|
|
|
1,261 |
|
4¾% Senior Secured Notes due 2031 |
|
|
1,055 |
|
|
|
942 |
|
|
|
1,054 |
|
|
|
822 |
|
10⅞% Senior Secured Notes due 2032 |
|
|
1,992 |
|
|
|
2,188 |
|
|
|
2,212 |
|
|
|
2,299 |
|
10¾% Senior Secured Notes due 2033 |
|
|
698 |
|
|
|
741 |
|
|
|
— |
|
|
|
— |
|
9¾% Senior Secured Notes due 2034 |
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1,762 |
|
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|
1,881 |
|
|
|
— |
|
|
|
— |
|
6⅞% Junior-Priority Secured Notes due 2029 |
|
|
1,189 |
|
|
|
1,108 |
|
|
|
1,175 |
|
|
|
940 |
|
6⅛% Junior-Priority Secured Notes due 2030 |
|
|
1,183 |
|
|
|
985 |
|
|
|
1,175 |
|
|
|
842 |
|
ABL Facility and other debt |
|
|
21 |
|
|
|
21 |
|
|
|
359 |
|
|
|
359 |
|
The carrying value of the Company’s long-term debt in the above table is presented net of unamortized deferred debt issuance costs. The estimated fair value is determined using the methodologies discussed below in accordance with accounting standards related to the determination of fair value based on the U.S. GAAP fair value hierarchy as discussed in Note 8 - Fair Value. The estimated fair value for financial instruments with a fair value that does not equal its carrying value is considered a Level 1 valuation. The Company utilizes the market approach and obtains indicative pricing through publicly available subscription services such as Bloomberg to determine fair values where relevant.
Cash and cash equivalents. The carrying amount approximates fair value due to the short-term maturity of these instruments (less than three months).
Investments in equity securities. Estimated fair value is based on closing price as quoted in public markets.
Available-for-sale debt securities. Estimated fair value is based on closing price as quoted in public markets or other various valuation techniques.
Trading securities. Estimated fair value is based on closing price as quoted in public markets.
Senior Notes, Senior Secured Notes and Junior-Priority Secured Notes. Estimated fair value is based on the closing market price for these notes.
ABL Facility and other debt. The carrying amount of the ABL Facility and all other debt approximates fair value due to the nature of these obligations.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 18, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.