Community Health Systems, Inc.

Thank you. Please go ahead.

Thank you, Mike. Good morning and welcome to Community Health System's first quarter 2021 conference call. Joining me on the call today are Tim Henschen, Chief Executive Officer, Dr. Lynn Simon, President of Clinical Operations and Chief Medical Officer, and Kevin Hammonds, President and Chief Financial Officer. Before I turn the call over to Tim, I'd like to remind everyone that this conference call may contain certain forward-looking statements. including all statements that do not relate solely to historical or current facts. These forward-looking statements are subject to a number of known and unknown risks, which is described in the headings such as risk factors in our annual report on Form 10-K and other reports filed with or furnished to the Securities and Exchange Commission. As a consequence, actual results may differ significantly from those expressed in any forward-looking statements in today's discussion. We do not intend to update any of these forward-looking statements. Yesterday afternoon, we issued a press release with our financial statements and definitions and calculations of adjusted EBITDA and adjusted EPS. For those of you listening to the live broadcast of this conference call, a supplemental slide presentation has been posted to our website. We will refer to those slides during this earnings call. All calculations we will discuss also exclude gain or loss from early extinguishment of debt, impairment expense as well as gains or losses on the sale of businesses, expense from government and other legal settlements and related costs, expense from settlement and legal expenses related to cases covered by the CVR, and change in tax valuation allowance. With that said, I'd like to turn the call over to Tim Henschen, Chief Executive Officer. Thank you, Ross.

Good morning, everyone, and welcome to our first quarter 2021 conference call. We achieved strong operational and financial results in the first quarter during what was a milestone period for the healthcare industry as we marked the one-year anniversary of the onset of the COVID pandemic. A year into this experience, we are still managing through extraordinary circumstances and adapting to constant change. During the first part of the quarter, especially in January, COVID surges continue to impact volume in many of our markets. In February, and certainly by March, COVID cases subsided and other volumes began to notably improve. We provided care for approximately 9,500 inpatient COVID admissions in the first quarter. This compares to approximately 8,000 COVID admissions during the third quarter and another 14,000 COVID admissions during the fourth quarter of 2020. We finished the first quarter with good operational momentum, progress in many strategic initiatives, which I will discuss in a minute, and a sense of optimism that as vaccination rates increase and COVID cases decline, we'll continue to move to a more normal operating environment. In the first quarter, on the top line, same-store net revenue growth increased 9.8%. On a year-over-year basis, net revenue growth was driven by higher acuity and an easier comp due to COVID-related government restrictions on elective procedures that started in March of 2020, which impacted volumes in net revenues last year. This quarter, admissions and surgeries were negatively impacted by the high COVID case counts that we experienced in January, as well as severe snowstorms that hit much of the South in the middle of February. During the month of March, we were very pleased with our strong volume recovery, further closing the gap to our pre-pandemic run rates. We believe the rollout of the COVID vaccine also impacted demand during the quarter, while some patients waited for their turn to receive the vaccine prior to returning for elective scheduled healthcare services. Throughout the pandemic period, we have been actively encouraging patients who have been reluctant to seek healthcare to return for any needed checkups, screenings, postponed procedures, and other deferred care. For the full quarter, year-over-year same-store admissions were down 4.9%, adjusted admissions were down 7.2%, and surgeries were essentially flat. ER visits continued to lag other volume metrics with same-store ER visits down 17%. Our expense management initiatives remain on track and effective, with more progress demonstrated during the first quarter. Adjusted EBITDA was $495 million, which increased 60% compared to the prior year. Adjusted EBITDA margin of 16.4% improved 620 basis points year-over-year. During the quarter, $82 million of pandemic relief funds were recognized, If we exclude the pandemic relief funds from the quarter's results, adjusted EBITDA was $413 million with an adjusted EBITDA margin of 13.7%. Since comparative results are affected when looking at the first quarter of 2020 because of the government restrictions on elective procedures that took effect then, more helpful perspective can be found in a comparison to the first quarter of 2019. Excluding pandemic relief funds, first quarter 2021 adjusted EBITDA of $413 million increased 6% compared to the first quarter of 2019, despite operating 21 fewer hospitals as a result of our portfolio rationalization program. We believe this clearly demonstrates our progress so far and the underlying strength and growth potential of our go-forward portfolio. We continue to fuel the portfolio with attractive capital investments based upon defined growth strategies, and of course, through the determination and hard work of our hospital leadership teams across the country. The results of the quarter demonstrate that the transformation of the company that started a few years ago is progressing, and we are excited about all of the opportunities in front of us as we look toward the future. In the medium term, we continue to target 15% plus adjusted EBITDA margin, positive annual free cash flow generation, and reducing our leverage below six times. During the last quarter, we did lower our leverage, and we made a number of other improvements across our capital structure, which Kevin will highlight later. Now I'd like to spend a minute on strategic initiatives and the opportunities in front of us, especially as our divestitures have been completed and we are completely focused on our core portfolio. We have been making investments in these markets over time to enhance our competitive position and to drive long-term growth. Our company's growth objective is to advance opportunities for both inpatient and outpatient care development based upon each market's unique characteristics and opportunities. On the inpatient side, we've recently opened two new hospitals in Indiana and Arizona, and both are performing quite well. Another new hospital will open in Fort Wayne later this year and one additional de novo campus in Tucson early next year. And over the past three years, we've added nearly 300 new beds to the core portfolio, along with more than 50 new surgical and procedural suites to meet increased demand and to drive higher acuity. We have also added several new service lines at hospitals throughout our portfolio. On the outpatient side, we recently completed a comprehensive study of several key markets to identify our best investment opportunities in ambulatory access and services. including more primary care, specialty care, and urgent care locations, as well as freestanding ERs and ambulatory surgery centers. In terms of progress, we opened our 14th freestanding ER during the first quarter, with two more locations scheduled to open this year. We have also added two additional ASCs to the portfolio so far this year, and we will add a de novo center in our Knoxville market this summer. Adding all of this together, we continue to manage a very robust development pipeline of opportunities that we believe align well with our inpatient services, expands our outpatient access more broadly across our market, and then improves our overall market position. We continue to think strategically about capital investments and how they can drive high impact, high growth returns as we deliberately build out and advance our networks. We are also investing in what we call connected care strategies. We have been regularly sharing progress updates on our proprietary transfer center operations since 2017. We continue to see impressive results from this initiative, and we are leveraging the visibility it provides into areas where facility expansion, physician recruitment, or service line enhancements will enable us to provide care for even more patients within a region. We are also implementing proprietary patient access centers, which initially provide centralized scheduling services for our primary care practices. We are seeing good initial results, including volume improvement, with nearly 600 providers now being served by these centralized scheduling centers. Over time, our goal is to use these scheduling hubs to enable outbound patient outreach to close gaps in care and to provide other services to ensure that patients can more easily navigate the healthcare system, and receive the services they need. We believe all of our investments are generating the intended results and positioning us for greater success in the long run. I'm extremely proud of the progress we've made in so many areas thanks to the strong leadership of our local market executives, the support of our corporate team, and most importantly, the incredible care provided by the physicians, nurses, and other clinicians who continue to put their patients first by providing safe, high quality care in their community. They continue to earn our respect and admiration every single day. With that, let me turn the call over to Kevin. Thank you and good morning everyone.