Community Health Systems, Inc.Annual Report to Stockholders 2010

Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems, Inc. is one of the largestpublicly-traded hospital companies in the United States and a leading operator of general acute care hospitals innon-urban and mid-size markets throughout the country. Through its subsidiaries, the Company currently owns,leases or operates 130 hospitals in 29 states with an aggregate of over 19,300 licensed beds (as of March 1, 2011).Its hospitals offer a broad range of inpatient and surgical services, outpatient treatment and skilled nursing care.In addition, through its subsidiary, Quorum Health Resources, LLC, the Company provides management andconsulting services to non-affiliated general acute care hospitals located throughout the United States.

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

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

Fort Payne, DeKalb Regional Medical CenterGadsden, Gadsden Regional Medical CenterGreenville, L.V. Stabler Memorial HospitalHuntsville, Crestwood Medical Center

AlaskaPalmer, Mat-Su Regional Medical Center

ArizonaBullhead City,Western Arizona RegionalMedical Center

Oro Valley, Northwest Medical CenterOro Valley

Payson, Payson Regional Medical CenterTucson, Northwest Medical Center

ArkansasBentonville, Northwest Medical Center -Bentonville

El Dorado,Medical Center of SouthArkansas

Forrest City, Forrest City Medical CenterHelena, Helena Regional Medical CenterJohnson,Willow Creek Women's HospitalNewport, Harris HospitalSiloam Springs, Siloam Springs MemorialHospital

Springdale, Northwest Medical Center -Springdale

CaliforniaBarstow, Barstow Community HospitalFallbrook, Fallbrook HospitalWatsonville,Watsonville CommunityHospital

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

GeorgiaAugusta, Trinity Hospital of AugustaBlue Ridge, Fannin Regional Hospital

IllinoisAnna, Union County HospitalGalesburg, Galesburg Cottage HospitalGranite City, Gateway Regional MedicalCenter

Marion, Heartland Regional Medical CenterMt. Vernon, Crossroads CommunityHospital

Red Bud, Red Bud Regional HospitalWaukegan, Vista Medical Center EastWaukegan, Vista Medical Center West

IndianaBluffton, Bluffton Regional Medical CenterFort Wayne, Dupont HospitalFort Wayne, Lutheran HospitalFort Wayne, Lutheran MusculoskeletalCenter

Fort Wayne, Lutheran Rehabilitation HospitalFort Wayne, St. Joseph’s HospitalPeru, Dukes Memorial HospitalValparaiso, Porter HospitalWarsaw, Kosciusko Community 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

New MexicoCarlsbad, Carlsbad Medical CenterDeming,Mimbres Memorial HospitalHobbs, Lea Regional Medical CenterLas Cruces, MountainView RegionalMedical Center

Las Vegas, Alta Vista Regional HospitalRoswell, Eastern New Mexico MedicalCenter

North CarolinaWilliamston,Martin General Hospital

OhioMassillon, Affinity Medical CenterWarren, Hillside Rehabilitation HospitalWarren,Trumbull Memorial HospitalYoungstown, Northside Medical Center

OklahomaClaremore, Claremore Regional HospitalOklahoma City, Deaconess HospitalPonca City, Ponca City Medical CenterTulsa, SouthCrest HospitalWoodward,Woodward Regional Hospital

OregonSpringfield, McKenzie-Willamette MedicalCenter

PennsylvaniaBerwick, Berwick HospitalCoatesville, Brandywine HospitalEaston, Easton HospitalLock Haven, Lock Haven HospitalPhiladelphia, Chestnut Hill HospitalPhoenixville, Phoenixville HospitalPottstown, Pottstown Memorial MedicalCenter

Sunbury, Sunbury Community HospitalWest Grove, Jennersville Regional HospitalWilkes-Barre, First Hospital Wyoming ValleyWilkes-Barre,Wilkes-Barre General Hospital

Hospital Locations

South CarolinaBennettsville, Marlboro Park HospitalCheraw, Chesterfield General HospitalFlorence, Carolinas Hospital System -Florence

Lancaster, Springs Memorial HospitalMullins, Marion Regional HospitalSpartanburg, Mary Black Memorial Hospital

TennesseeBrownsville, Haywood Park CommunityHospital

Clarksville, Gateway Medical CenterCleveland, Sky Ridge Medical CenterDyersburg, Dyersburg Regional MedicalCenter

Jackson, Regional Hospital of JacksonLexington, Henderson County CommunityHospital

Martin, 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 MedicalCenter

Cedar Park, Cedar Park Regional MedicalCenter

Cleveland, Cleveland Regional Medical CenterCollege Station,College StationMedical CenterCorsicana, Navarro Regional HospitalGranbury, Lake Granbury Medical CenterHillsboro, Hill Regional HospitalJourdanton, South Texas Regional MedicalCenter

Laredo, Laredo Medical CenterLongview, Longview Regional Medical CenterLufkin,Woodland Heights Medical CenterSan Angelo, San Angelo CommunityMedical Center

Victoria, DeTar Healthcare SystemWeatherford,Weatherford Regional MedicalCenter

UtahTooele, Mountain West Medical Center

VirginiaEmporia, Southern Virginia RegionalMedical Center

Franklin, Southampton Memorial HospitalPetersburg, Southside Regional MedicalCenter

WashingtonSpokane, Deaconess Medical CenterSpokane Valley, Valley Hospital and MedicalCenter

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.

08 09 10

$13.5

$11.5

$9.5

$7.5

$5.5

$3.5

OperatingRevenues(in billions)

140

125

110

95

80

65

50

Hospitals

$3.25

$2.75

$2.25

$1.75

$1.25

$0.75

$0.25

Earnings PerShare (diluted)

08 09 10

08 09 10

Year Ended December 31,2010 2009

Operating ResultsNet operating revenues $ 12,986,500 $ 12,107,613Income from continuing operations $ 348,441 $ 304,805Income per share from continuing operations

Diluted $ 3.01 $ 2.64Weighted average number of shares outstanding:

Diluted 92,946 91,517

As of December 31,2010 2009

Balance Sheet DataWorking capital $ 1,229,153 $ 1,217,199Total assets 14,698,123 14,021,472Long-term debt 8,808,382 8,844,638Stockholders’ equity 2,189,464 1,950,635

For The Year Ended December 31,Consolidated Same Store

2010 2009 % Change 2010 2009 % ChangeSelected Operating DataNumber of hospitals (at end of period) 130 125 125 125Licensed beds (at end of period) 19,372 18,140 18,273 18,140Beds in service (at end of period) 16,622 15,897 15,914 15,897Admissions 693,382 692,569 0.1% 675,086 692,569 -2.5%Adjusted admissions 1,308,334 1,275,888 2.5% 1,269,467 1,275,888 -0.5%Patient days 2,948,876 2,937,194 2,858,532 2,937,194Average length of stay (days) 4.3 4.2 4.2 4.2Occupancy rate (average beds in service) 50.0% 51.3% 49.8% 51.3%Net operating revenues $ 12,986,500 $ 12,107,613 7.3% $ 12,582,406 $ 12,105,938 3.9%Net inpatient revenues as a % oftotal net operating revenues 48.9% 50.1% 49.3% 50.1%

Net outpatient revenues as a % oftotal net operating revenues 48.9% 47.6% 48.6% 47.6%

Income from operations $ 1,114,928 $ 1,068,665 4.3% $ 1,139,501 $ 1,083,805 5.1%Income from operations as a% of net operating revenues 8.6% 8.8% 9.1% 9.0%

Depreciation and amortization $ 609,839 $ 566,211 $ 595,482 $ 566,219Equity in earnings ofunconsolidated affiliates $ (45,432) $ (36,521) $ (45,220) $ (36,409)

Liquidity Data:Adjusted EBITDA $ 1,770,199 $ 1,671,397 5.9%Adjusted EBITDA as a % of netoperating revenues 13.6% 13.8%

Net cash provided by operating activities $ 1,188,730 $ 1,076,429Net cash provided by operating activitiesas a % of net operating revenues 9.2% 8.9%

Financial Highlights(In thousands, except per share amounts)

Community Health Systems, Inc. celebrated its tenthanniversary as a public company during 2010. As wereflect on the past decade, we have many reasons to beproud of our Company and our accomplishments.We have enjoyed a solid record of operational excellenceand a pattern of steady growth that has positionedCommunity Health Systems, Inc. at the top of ourindustry. Our proven centralized operating platformleverages our scale and experience and continues todeliver favorable results. Above all, we have establishedstrong relationships with the communities across theUnited States that we serve, and we are especially proudof the reputation we have earned as a trusted partnerand consistent and effective health care provider.We have successfully fulfilled our mission to enhancethe level and quality of healthcare services in our localcommunities and, at the same time, delivered greatervalue for our stockholders. More importantly, throughthe investments we have made in our hospitals, ourpeople and our communities, we have positioned theCompany for continued success in the decades to come.

We are pleased that 2010 not only marked an importantanniversary milestone, but also extended our record ofdelivering solid financial and operating performance.Revenues for the year were a record $13.0 billion,surpassing the previous year’s record of $12.1 billion by7.3 percent. Income from continuing operationsincreased to $348.4 million in 2010, up 14 percent overthe prior year. We also delivered increased earnings toour shareholders as net income increased by 15.1 percentto $280 million, or $3.01 per diluted share, comparedwith $243.2 million, or $2.66 per diluted share, in 2009.

Today, more than ever, the hospital industry faces avariety of challenges across the country and many ofour communities are experiencing economic hardships.Proposed legislative changes to our national healthcaresystem continue to evolve, creating another level ofuncertainty. Our track record demonstrates thatCommunity Health Systems, Inc. has the ability tomeet these challenges head on and succeed in a dynamicenvironment. As a national hospital company withfacilities in 29 states, our geographically diverse portfoliohas provided a competitive advantage, especially in anuncertain economic environment. Our hospitals havestrong positions in each of their respective markets andno one state represents a disproportionate percentage ofour revenues or admissions. Even in difficult marketconditions, we have been able to consistently drive costefficiencies, recruit and retain qualified physicians, andimplement administrative and clinical best practices inall of our hospitals.

As we have added more hospital facilities to ourportfolio, we have also made the necessary capitalinvestments to expand and enhance the level ofhealthcare services, keep pace with technologicaladvancements and improve the patient experience.While each of our markets has unique strengths andneeds, our shared goal is to ensure we have the rightinfrastructure, technologies and clinical services for allof our hospitals. In 2010, we spent over $667 millionon major capital improvement projects, including$36 million for replacement hospital facilities.We believe our ongoing commitment to make theappropriate capital investments for organic growth hascontinued to drive market share expansion. Over time,we have demonstrated that these investments haveprovided incremental benefits for both the Companyand the communities we serve.

Letter to Stockholders:

Perhaps more than any other aspect of our businessstrategy, effective physician recruitment and retention isessential to our success. Qualified physicians play a vitalrole, particularly in local community hospitals, inproviding the right complement of healthcare serviceson a consistent basis. This, in turn, keeps patients closeto home, drives volumes in our hospitals and createsadditional revenue streams from new specialty services.Our proven ability to attract and retain qualifiedphysicians in our communities has been a strongcompetitive advantage for our organization. Last yearwas our most successful to date as we exceeded ourstated recruitment goals and added 1,852 new physiciansto our ranks, including a number of clinical specialists.At the same time, we have maintained a strongphysician retention rate as a result of our intense focuson practice development and ongoing support.

Throughout 2010, we have continued to extend ourmarket reach through selective acquisitions, adding fivenew hospitals. Our strategy has always been focused onidentifying hospital facilities with the most opportunityfor growth that meet our operating profile. We have aproven track record for the successful integration of thesefacilities with improved operating results, earning us avery favorable reputation as a trusted partner in thecommunities we serve.With the current healthcareregulatory climate, we believe there are significantopportunities for us to pursue additional acquisitions witha greater number of independent hospitals and healthsystems looking for established and operationally-focusedpartners.We can provide the experience and financialresources to support and maintain these local communityhospitals. We look forward to working togetherwith each new hospital partner as we deliver on ourcommitment to provide quality healthcare close to home.

We are proud of our performance in 2010 and evenmore proud of what Community Health Systems, Inc.represents and the significance of what our people haveaccomplished this past year. The dedication andcommitment to excellence can be seen throughout theorganization and in each and every one of our hospitals.We are fortunate to benefit from an exceptionalmanagement team and board of directors, with thesupport of an unrivaled team of dedicated physicians,nurses and hospital administrators. We are especiallyappreciative to the people who live and work in thecommunities we serve — for believing in what we standfor and in our ability to deliver results.

We are excited about the future, and remain confident inour continued success in 2011 and beyond. We close bythanking you, our fellow stockholders, for sharing thatconfidence through your investment in CommunityHealth Systems, Inc.

Sincerely,

Wayne T. SmithChairman of the Board, President andChief Executive Officer

Even in difficult market conditions, we have been able to consistently drivecost efficiencies, recruit and retain qualified physicians, and implementadministrative and clinical best practices in all of our hospitals.

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 Presidentand Chief 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 andChief Accounting Officer

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

JamesW.DoucetteVice President and Treasurer

Robert A.HorrarVice President – Administration

TimG.MarletteVice President – Materials Management

Kathie G.ThomasPresident – Home Health 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 office orat 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 17, 2011, at8:00 a.m. local time at TheSt. Regis Hotel, 2 East 55thStreet, New York, NY.

Common Stock InformationThe Company’s common stocktrades on the New York StockExchange under the symbolCYH. As of March 25, 2011,Community Health Systems hadapproximately 39 stockholders ofrecord and 32,350 beneficialholders of its common stock.To date, the Company has notpaid cash dividends on itscommon stock.

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

Stock Price

2010 High LowFirst Quarter $40.84 $31.00Second Quarter $42.30 $33.21Third Quarter $34.11 $25.63Fourth Quarter $38.00 $29.08

2009 High LowFirst Quarter $21.60 $12.96Second Quarter $28.79 $13.95Third Quarter $35.50 $24.42Fourth Quarter $38.00 $29.35

Corporate Information / Community Health Systems, Inc.

C O M M U N I T Y H E A L T H S Y S T E M S , I N C .

4000 Meridian BoulevardFranklin, Tennessee 37067

(615) 465-7000www.chs.net