📄 Extracted Text (8,663 words)
Deutsche Bank
Markets Research
Rating
Buy
North America
United States
Reuters
Health Care
Health Care Facilities
and Services
Bloomberg
HCA.N HCA US
Exchange
NYS
Ticker
HCA
Price at 3 Feb 2013 (USD)
Price Target
52-week range
Q4 surgery/mix recovering; 2014 /
ACA outlook conservative
Reiterate Buy: HCA's results demonstrate best in breed
Q4 operating metrics were not given at time of early Jan. +ve pre-anncmt.
Actual results highlight a recovery in surgical trends, which boosted
pricing/mix and helped drive solid Q4 EBITDA growth (+6.7% YoY) despite
weaker inpt medical trends and a tough vol comp. HCA provided initial ACA
guidance, but mgmt may revisit assumptions on key ACA variables mid-year
given how fluid the roll-out is. For 2014, ACA initially guided —$100M
(+1.5%)
EBITDA benefit underpinned by 7%-9% reduction in uninsured and slight offset
by pricing/vol impact for exchange mix. Given strong organic growth trends in
recent Qs, we believe 2014 EBITDA guidance should prove conservative.
Q4 CC takeaways (results review in body of note)
'(1) Volume/pricing metrics: surgery the bigger story. Weak SS inpt admits
(1.8%)
reflect tough comp, lower flu trends and —50 bps from 2-midnight rule.
Importantly, HCA does not see 2-midnight rule having material financial
impact. The bigger vol story in Q4 (and last 3 Qs) is surgeries; Q4 surg vol
(+1.4%) and strength in higher-acuity areas (cardio, ortho, neuro) helped
drive
pricing (RPAA) +4.8% YoY. The ratio of inpt surg / inpt admit rose to 30%
(from
—29% avg past 2 yrs) and ratio is 200-300 bps below peak. A sustained
rebound in surgical mix could be an upside risk to guidance.
'(2) 2014 guidance assumes 1%-4% EBITDA growth. Underlying assumptions
(ex. ACA) include 1-2% adj. admit (vol) growth, 2-3% RPAA (pricing) growth
and flat margins. Given 2H'13 RPAA growth (+4%) and recovery in surg, RPAA
seems conservative. Guidance assumes adj. vols improve vs. 2013 flat. The
key headwinds built-into guidance: $120M lower YoY HITECH and $55M
higher YoY stock comp which impact growth by 300 bps vs. DBe orig est 200
bps. We believe guidance implies 2%-5% base growth ex headwinds and ACA.
EFTA01462482
'(3) ACA commentary: a reasonable starting point. HCA framed ACA impact as
a L-T positive, but key variables remain very fluid this year including: (1)
enrollment for exchange and Medicaid; (2) net new lives; (3) networks and
plan
selection of exchange products. HCA assumes 7-9% reduction of uninsured
(reasonable) but offset somewhat due to leakage and pricing (conservative).
Updated estimates: modest adjustments to reflect HITECH, slower ACA ramp
2014 EBITDA / EPS are $7.05B / $3.92 from $7.145B / $4.17. We come out
above guidance ($6.60B-$6.85B EBITDA / $3.45-$3.75 EPS ) due to underlying
growth and ACA. Our model now reflects higher S/O, slightly lower HITECH
benefit, slightly lower ACA ramp but slightly better rate/mix.
Valuation and risks: PT remains at $58 or 7.5x 2015 EV/EBITDA
Our target multiple is in-line with group's L-T average of 6.5x-7.5x. Key
risks:
implementation of PPACA, payer mix changes, Medicare/Medicaid cuts.
Forecasts And Ratios
Year End Dec 31
FY EPS (USD)
EV/EBITDA
Adjusted EBITDA
Source: Deutsche Bank estimates, company data
1 Includes the impact of FAS123R requiring the expensing of stock options.
Deutsche Bank Securities Inc.
Deutsche Bank does and seeks to do business with companies covered in its
research reports. Thus, investors should
be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should
consider this report as only a single factor in making their investment
decision. DISCLOSURES AND ANALYST
CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013.
2013A
3.42
7.2
6,574
2014E
3.92
7.1
7,048
2015E
4.77
6.2
7,749
Darren Lehrich
Research Anal st
Joshua Kalenderian
Research Associate
EFTA01462483
Dana Nentin, CFA
Research Associate
Price/price relative
10
20
30
40
50
60
3/11 9/11 3/12 9/12 3/13 9/13
HCA Holdings, Inc.
S&P 500 INDEX (Rebased)
Performance (%)
lm 3m 12m
Absolute -0.6 2.4 26.8
S&P 500 INDEX
Source: Deutsche Bank
-4.9 -1.1 15.1
48.46
58.00
51.41 - 35.21
Company
HCA Holdings, Inc.
Date
4 February 2014
Results
EFTA01462484
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Model updated:04 February 2014
Running the numbers
North America
United States
Health
HCA Holdings, Inc.
Reuters: HCA.N
Buy
Price (3 Feb 13)
Target Price
52 Week range
Market Cap (m)
Company Profile
HCA operates the largest private health care system in the
U.S. through a network of acute care hospitals, outpatient
facilities, clinics and other patient care delivery settings.
HCA's operations
freestanding surgery centers across 20 states throughout
the U.S. and England.
include 162 hospitals and 112
USD 48.46
USD 58.00
USDm 22,292
EURm 16,491
Fiscal year end 31-Dec
Financial Summary
DB EPS (USD)
Care Facilities and Services
Bloomberg: HCA US
Reported EPS (USD)
DPS (USD)
BVPS (USD)
Valuation Metrics
Price/Sales (x)
P/E (DB) (x)
P/E (Reported) (x)
P/BV (x)
FCF yield (%)
Dividend yield (%)
EV/Sales
2010 2011 2012
2.76
2.76
0.00
-27.27
0.7
17.2
EFTA01462485
17.2
nm
8.7
0.0
1.7
10.8
2.85
4.97
0.00
-16.65
0.5
9.5
5.4
nm
18.9
0.0
1.4
USD 35.21 - 51.41 EV/EBITDA 8.2 6.7
EV/EBIT
8.9
Income Statement (USDm)
Sales
Pre-tax profit
Net income
3.74
3.49
0.00
-21.03
0.4
7.5
8.0
nm
18.2
0.0
1.3
6.4
8.6
2013
3.42
3.37
0.00
-15.00
0.5
11.8
11.9
nm
9.5
0.0
1.4
7.2
9.9
EFTA01462486
EBITDA 5,868 6,061
EBIT 4,447 4,596
3,561
2,465
2,231
1,207
Cash Flow (USDm)
Cash flow from operations
Net Capex
Free cash flow
Equity raised/(bought back)
Dividends paid
Price Performance
10
20
30
40
50
60
Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13
HCA Holdings, Inc.
Margin Trends
14
15
17
18
20
21
10
11
Growth & Profitability
10
12
0
2
4
6
8
10
Solvency
0.2
0.4
0.6
0.8
1
0
10 11 12 13 14E 15E
Net debt/equity (LHS)
Darren Lehrich
+1 212 250-2629
Page 2
EFTA01462487
Net interest cover (RHS)
[email protected]
Deutsche Bank Securities Inc.
0
1
2
3
4
11
12
13 14E 15E
Sales growth (LHS)
ROE (RHS)
12
EBITDA Margin
13 14E 15E
EBIT Margin
S&P 500 INDEX (Rebased)
Net inc/(dec) in borrowings
Net cash flow
Change in working capital
Balance Sheet (USDm)
Cash and cash equivalents
Property, plant & equipment
Other assets
Total assets
3,085
-1,288
1,797
0
2,533
99
-199
411
3,933
-1,398
2,535
1,003
-1,589
-129
373
Goodwill 2,693 5,251
9,396
8,440
Other liabilities
Total liabilities
Other investing/financing cash flows -4,231 -1,987
-38
28,035 29,682 33,013 34,182
6,531
4,852
EFTA01462488
2,894
1,605
4,175
-1,832
2,343
0
1,724
-3,735
332
2014E 2015E
3.92
3.92
0.00
-11.14
0.6
12.4
12.4
nm
8.5
0.0
1.4
7.1
9.5
4.77
4.77
0.00
-6.21
0.6
10.2
10.2
nm
10.5
0.0
1.2
6.2
8.2
6,574
4,821
2,946
1,556
3,680
-1,910
1,770
-500
36,586 38,655
7,048
5,236
3,440
1,802
7,749
5,812
EFTA01462489
4,105
2,228
4,088
-2,200
1,888
0
-3,663
705
-4,272
414
5,903
8,895
-1,000
-494
394
-3
808
5,903
9,252
4,580
-2,200
2,380
0
0 000 00
-692
-869
-291
-2,000
-512
-132
-77
676
11,352 12,834 13,185 13,619 14,006 14,270
5,539
8,646
5,903
9,614
Debt 28,225 27,052 28,930 28,376
6,421
6,860
7,486
Total shareholders' equity
Net debt
Key Company Metrics
Sales growth (%)
DB EPS growth (%)
Payout ratio (%)
EBITDA Margin (%)
EBIT Margin (%)
ROE (%)
Net debt/equity (%)
EFTA01462490
Net interest cover (x)
DuPont Analysis
EBIT margin (%)
x Asset turnover (x)
x Financial cost ratio (x)
x Tax and other effects (x)
= ROA (post tax) (%)
x Financial leverage (x)
= ROE (%)
annual growth (%)
x NTA/share (avg) (x)
= Reported EPS
annual growth (%)
Source: Company data, Deutsche Bank estimates
-10,794
-7,014
27,814 26,679
4.7
13.1
0.0
20.9
15.9
nm
nm
2.1
15.9
1.2
0.5
0.5
5.0
-2.3
-11.5
-5.4
-23.9
2.76
13.2
23,852 26,898 28,075 28,831 29,969 30,463
27,376 25,376
6,194
5,858
6,460
34,646 33,912 36,416 34,234 33,570 31,836
-8,341 -5,403 -3,601 -1,373
28,225
27,962 26,568 24,700
5.9
3.3
0.0
20.4
15.5
nm
EFTA01462491
nm
2.3
15.5
1.2
0.6
1.0
9.7
-2.5
-24.4
-111.6
-20.3
4.97
80.1
11.2
31.0
0.0
19.8
14.7
nm
nm
2.7
14.7
1.2
0.6
0.5
5.8
-3.1
-17.9
26.7
-19.5
3.49
-29.7
3.5
-8.5
0.0
19.2
14.1
nm
nm
2.6
14.1
1.2
0.6
0.5
5.5
-3.4
-18.8
-4.7
-18.0
3.37
7.0
EFTA01462492
14.6
0.0
19.3
14.3
nm
nm
2.9
14.3
1.2
0.7
0.5
6.1
-4.9
-29.9
-59.4
-13.1
3.92
5.7
21.8
0.0
20.0
15.0
nm
nm
3.4
15.0
1.3
0.7
0.5
7.4
-7.5
-55.5
-85.7
-8.6
4.77
-3.6 16.3 21.8
EFTA01462493
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Q4'2013 Earnings Review
Key points
• Solid results despite challenging volume backdrop. Q4 EBITDA was
previewed earlier in January, so the real news in Q4 results was more
detail on operating metrics and HCA's outlook. In the context of a very
weak volume environment, HCA's Q4 EBITDA growth (+6.7% YoY) is very
respectable and reflects strong expense management and improving
pricing/mix.
• We are particularly encouraged by HCA's recent quarterly surgical trends
(see Figure 3). While Q4 same-store inpatient admissions and adjusted
admissions dipped 1.8% and 1.0% YoY, respectively, HCA's Q4 SS
surgeries improved +1.4% YoY (+1.6% outpatient surgery / +0.9%
inpatient surgery) and helped drive revenue per adjusted admissions
(RPAA) pricing growth of +4.8% YoY. This marks the third consecutive
quarter of improving surgeries, and we believe any sustained trend in
surgical volume could represent an upside risk to 2014 guidance. DB's
Hospital Volume survey has picked up recent strength in surgeries, too.
• 2014 guidance seems like a reasonable, but conservative starting point.
HCA guided for EBITDA of $6.6-$6.85 billion (vs. consensus of $6.82
billion). Guidance reflects SS revenue growth of 3%-5% (vol 1-2% /
pricing/mix 2-3%), flat margins and —300 bps of EBITDA growth
headwinds from lower HITECH and higher stock-based comp. ACA adds
—1.5% to growth (at the mid-point) or —$100M. Organic/base growth
works out to be —2% to —5% growth adjusting for the headwinds and
ACA.
• Framework for ACA impact still evolving, with lots of moving parts to
HCA's key assumptions. HCA's 2014 outlook assumes ACA benefit of 12%
of EBITDA ($65M-$135M), although it is back-half (Q3/Q4) weighted.
HCA said it would re-visit its key assumptions by mid-year at the earliest,
but its high-level base case is for 7-9% reduction in uninsured, but
partially
offset by declines in pricing/volume from exchange mix. The key variables
that HCA is tracking for its reform model are: (1) enrollment figures for
exchanges and Medicaid expansion; (2) the proportion of enrollment that
is net newly insured; (3) health plan selection (metallic), network design
and network participation for the exchanges; and (4) out-of-network
activity. Our sense is that the offsets built into HCA's model could prove
conservative given the strength of its networks (i.e. less impact from
narrow network if its access points such as ED are more convenient).
Given the slow ramp of exchange enrollment in key markets (FL / TX) and
HCA's lower exposure to Medicaid expansion states, we believe 7-9%
reduction of uninsured patient mix seems like a reasonable starting point.
• Reiterate Buy rating / $58 price target. We see HCA as a best-in-class
operator with strong assets, a flexible balance sheet and a good track
record for opportunistic capital deployment.
HCA's Q4 EBITDA growth
(+6.7% YoY) is very
EFTA01462494
respectable and reflects
strong expense management
and improving pricing/mix
We believe any sustained
trend in surgical volume could
represent an upside risk to
2014 guidance
Adjusting for certain nonoperating
headwinds and
ACA, HCA's 2014 guidance
assumes organic/base growth
of —2% to —5% growth
HCA's 2014 outlook assumes
ACA benefit of 1-2% of
EBITDA ($65M-$135M),
although it is back-half
(Q3/Q4) weighted
Deutsche Bank Securities Inc.
Page 3
EFTA01462495
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Figure 1: 4013 Earnings Variance table
HCA Holdings, Inc.
Quarterly Variance Report
($ in MMs)
4013 Income Statement
Cash revenue
YoY % growth
Adjusted EBITDA
YoY % growth
HITECH payments
Diluted EPS, excl. one-time charges
YoY % growth
4Q13 Margin Analysis
Adjusted EBITDA margin
Salaries and benefits ratio
Supplies ratio
Other operating expenses ratio
Bad debt ratio
4013 Revenue Metrics
SS revenue growth
SS admissions growth
SS adjusted admissions growth
SS rev per adjusted admission growth
Source: Deutsche Bank, company research, Thomson Reuters
DB Estimate Consensus Actual Variance (1)
$8,889
$8,822
$1,685
5.4% 4.6%
$1,647
4.9% 2.5%
(60)
$0.89
$0.86
-3.0% -7.1%
NA
$8,836
$1,714
0.2%
4.8% 16 bps
4.1%
6.7% 418 bps
(50)
$0.92
0.4% 746 bps
DB Estimate Consensus Actual Variance
19.0% 18.7% 19.4% 73 bps
EFTA01462496
45.7%
17.8%
18.3%
11.1%
NA 44.9% -84 bps
NA 17.7% -8 bps
NA 18.6% 24 bps
NA 11.3% 23 bps
DB Estimate Consensus Actual Variance
3.5%
0.5%
1.0%
2.5%
NA
NA
NA
Notes:
(1). Variance is calculated Actual vs. Consensus, unless Consensus is NA
3.8%
-1.8%
25 bps
-230 bps
NA -1.0% -200 bps
4.8% 230 bps
-16.7%
8.0%
Results review in brief
Revenue trends
Q4 revenues were $8.836 billion vs. $8.822 billion / DBe $8.889 billion. Q4
revenue growth was +4.8% yoy, with SS growth +3.8% driven by SS adj.
admit of -1.0%, SS inpatient admissions -1.8%, and better SS revenue per adj.
admit of +4.8% yoy (vs. 03'2013 +3.4%). Pricing growth was driven by acuity
(+3%) and payor mix. HCA indicated that Q4 admissions declines were driven
primarily by a reduction in pulmonary admissions due to the lighter flu
season
(-9% yoy), and short-stay admissions due to implementation of the twomidnight
rule (Medicare -12% yoy; other payors -4% yoy). Mgt noted that
Medicare one-day stays accounted for 50 bps of total admissions declines as a
result of the two-midnight rule.
Page 4
Deutsche Bank Securities Inc.
EFTA01462497
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Figure 2: Same-store trends (yoy % change)
HCA, Inc.
Same-Store Trends (Y/Y % change)
2010 2011 1Q12 2Q12 3Q12 4Q12 2012 1Q13 2Q13 3Q13 4Q13 2013
Revenue
Net revenue*
Volume:
Admissions
Adjusted admissions
Inpatient surgeries
Outpatient surgeries
Total surgeries
ER Visits
Rate:
Revenue/adjusted admission*
2.0% 3.3% 5.1% 3.8% 3.3% 5.5% 4.5% 0.1% 3.9% 4.5% 3.8% 3.1%
0.1% 2.3% 3.2% 2.5% 2.1% 4.3% 3.0% 0.1% 1.3% 0.7% -1.8% 0.1%
1.4% 3.0% 4.8% 3.9% 2.6% 5.0% 4.1% -0.7% 1.1% 1.1% -1.0% 0.1%
-1.4% -1.7% 1.5% -0.7% -2.2% 0.9% -0.1% -2.6% 0.2% 2.9% 0.9% 0.3%
-1.2% -0.6% 2.7% 0.3% -0.8% 1.8% 0.9% -4.3% 0.0% 0.4% 1.6% -0.5%
-1.3% -1.0% 2.3% -0.1% -1.3% 1.4% 0.5% -3.6% 0.1% 1.3% 1.4% -0.2%
2.1% 6.2% 5.3% 8.8% 7.4% 12.7% 8.6% 3.8% 0.8% 0.9% -2.4% 0.7%
0.6% 0.3% 0.3% -0.1% 0.7% 0.5% 0.3% 0.8% 2.9% 3.4% 4.8% 3.0%
*1Q12 SS revenue and revenue/adjusted admission includes a $188M one-time
favorable impact from Medicare settlement; ex-items SS net rev +2.8% and rev/-
aa -2
Source: Company reports
Source: Deutsche Bank, Company reports
Surgical trends. Q4 surgical trends were solid, with total SS surgeries up
+1.4% split between SS inpatient surgeries +0.9% and SS outpatient surgeries
+1.6%. These trends led to a greater ratio SS inpatient surgeries to total SS
inpatient admissions at 29.8% (vs. 29% in the prior yr period), an important
driver of the increased pricing (+4.8%) and acuity (+3%) in the qtr. Prior
to the
downturn this ratio had been running closer to 32%-33%, and it has picked up
in recent quarters after reaching a low of -28%. On the CC, mgt attributed
these trends to (1) recent investments in the surgical departments (e.g.
"O.R.
of Choice" initiative), offset by (2) a slow-down in ER volumes vs.
historical
trends. HCA remains optimistic about the surgical front in 2014.
Figure 3: Surgical trends (yoy % change)
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
EFTA01462498
0.0%
1.0%
2.0%
3.0%
4.0%
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
4Q13
Inpatient surgeries
Outpatient surgeries
Source: Deutsche Bank, Company reports
Total surgeries
Deutsche Bank Securities Inc.
Page 5
EFTA01462499
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Figure 4: SS inpatient surgeries as a % of SS inpatient admissions
33.1%
25.0%
26.0%
27.0%
28.0%
29.0%
30.0%
31.0%
32.0%
33.0%
34.0%
33.4%
32.0% 31.9%
31.3%
29.9%
29.4%
28.7%
28.8%
28.6%
28.1%
29.3%
29.8% 29.8%
2006 2007 2008 2009 2010 2011 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
Inpatient surgeries as a % of admissions
Source: Deutsche Bank, Company reports
EBITDA & margin trends. Adjusted EBITDA was $1.714 billion (+6.7% yoy) vs.
Street $1.647 billion (+2.5% yoy) and DBe $1.685 billion (+4.9% yoy) On 1/12
HCA previewed its 2013 EBITDA at $65-$75 above the high-end of its
previously established guidance range of $6.25 billion to $6.5 billion which
put
implied Q4 EBITDA —1.71 billion, so Q4 was in-line with preview. Adjusted
EBITDA margin was 19.4% vs. consensus 18.7% / DBe 19.0%. HCA continues
to manage costs well, especially in the context of a softer volume
environment.
Figure 5: Margin trends
HCA, Inc.
Margin Performance
2010 2011 1Q12 2Q12 3Q12 4Q12 2012
Operating expense ratios (% of cash revenue):
Salaries and benefits
Supplies
Provision for doubtful accounts
Other operating expenses
Consolidated operating margin data:
Adjusted EBITDA ($MMs)1
Adjusted EBITDA margin (% of cash revenue)
EFTA01462500
Adjusted EBITDA less HITECH ($MMs)1
YoY % growth:
Adjusted EBITDA 1
Adjusted EBITDA margin, bps change
Adjusted EBITDA less HITECH 1
Adjusted EBITDA less HITECH margin, bps change
Source: Deutsche Bank, Company reports
1Q13 2Q13 3Q13 4Q13 2013
44.5% 45.3% 44.4% 45.7% 46.9% 45.8% 45.7% 46.4% 45.5% 46.3% 44.9% 45.8%
17.7% 17.4% 16.9% 17.5% 17.1% 17.8% 17.3% 17.5% 17.4% 17.2% 17.7% 17.5%
8.6% 8.7% 8.6% 11.4% 9.3% 11.6% 10.2%
17.8% 18.4% 17.8% 18.4% 18.7% 18.4% 18.3% 18.0% 17.8% 18.5% 18.6% 18.2%
$5,868.0 $6,061.0 $1,823.0 $1,569.0 $1,533.0 $1,606.0 $6,531.0 $1,568.0
$1,689.0 $1,603.0 $1,714.0 $6,574.0
20.9% 20.4% 21.7% 19.3% 19.0% 19.0% 19.8% 18.6% 20.0% 19.0% 19.4% 19.2%
Adjusted EBITDA less HITECH margin (% of cash revenue)
$5,851.0 $1,768.0 $1,499.0 $1,402.0 $1,526.0 $6,195.0 $1,529.0 $1,637.0
$1,528.0 $1,664.0 $6,358.0
19.7% 21.0% 18.5% 17.4% 18.1% 18.8% 18.1% 19.4% 18.1% 18.8% 18.6%
7.2% 3.3% 14.7% 10.5% 8.6% -2.0% 7 8% -14.0% 7.6% 4.6% 6.7% 0.7%
(51)
49
N/A N/A
N/A N/A
(1) EBITDA after equity in earnings of affiliates, but before minority
interest.
22
(25)
(44)
(205)
(64)
(95)
(311)
(292)
65
89
(6)
68
36
74
8.2% 10.8% 10.1% 11.3% 10.1%
(55)
N/A 8.5% 3.0% 0.5% 5.9% -13.5% 9.2% 9.0% 9.0% 2.6%
N/A (57) (136) (146)
(16)
Balance Sheet and Cash Flow trends. Q4 cash flow from operations (CFFO)
was $1.226 billion -2.9% yoy, with Q4'2012 $1.263 billion. Capex was $596
million or 6.7% of net revenues vs. Q4'2012 of $594 million or 7.0% of net
revenues. HCA repurchased $500 million of shares outstanding in Q4.
Page 6
Deutsche Bank Securities Inc.
EFTA01462501
EFTA01462502
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Figure 6: Balance sheet & Cash flow analysis ($ in MM, except per share data)
HCA, Inc.
Balance Sheet and Cash Flow Analysis
($ in MMs, except per share data)
2010
Cash flows from operating activities (CFFO):
Net income
Depreciation and amortization
Changes in working capital
Other
Net cash provided by operating activities (CFFO):
Capital expenditures:
Capital expenditures (excluding acquisitions)
Acquisitions and proceeds from asset sales, net
Capital expenditures as % of net revenue
Free cash flow:
Free cash flow (excluding acquisition capex)
Free cash flow, net of non-controlling interest
Balance sheet data:
Cash at end of period
Net debt at end of period
Net leverage
DSO
2011 1Q12 2012 3Q12 4Q12 2012
$1,573 $2,842
1,421
(199)
290
3,085
1,465
(129)
3,933
$639 $485 $455 $427 $2,006
417
420
(245) 1,125 1,098
797 1,460
(1,325) (1,679)
(196) (1,401)
417
(1,384) (543) (996)
425 1,679
(740) (3,663)
779 1,151 4,153
655 1,263 4,175
(335) (449) (484)
(111)
EFTA01462503
(22)
(17)
(594) (1,862)
(78) (228)
4.7% 5.7% 4.0% 5.5% 6.0% 7.0% 5.6%
$1,760 $2,254
$1,394 $1,877
$411
4.7x
45.1
$373
4.4x
48.9
$462 $1,011 $171 $669 $2,313
$363 $917
$471 $518 $472 $705 $705
4.0x
4.3x
4.3x
48.3 44.6 47.1 44.6 44.6
1Q13 2Q13 3Q13
$438 $537 $467
424
425
(1,294) (1,041)
1,172
740
893
814
(404)
(21)
(492)
29
443
(984)
974
900
(451)
(440)
4Q13 2013
$554 $1,996
461 1,753
(953) (4,272)
1,164 4,203
1,226 3,680
(596) (1,943)
(16) (448)
4.8% 5.8% 5.3% 6.7% 5.7%
$76 $556 $1,912
$336 $322 $449
$242 $208 $347
EFTA01462504
$594 $462 $484
4.5x
4.3x
4.3x
48.3
47.2
48.1
$630 $1,737
$500 $1,297
$414 $414
$27,814 $26,679 $27,431 $26,523 $26,461 $28,225 $28,225 $28,014 $27,738
$27,893 $27,962 $27,962
4.4x 4.1x
4.3x 4.3x
48.1 48.1
Source: Deutsche Bank, Company reports
Guidance. HCA issued 2014 guidance as follows: revenue $35.50—$36.50
billion, adjusted EBITDA $6.60-$6.85 billion, adjusted EPS $3.45—$3.75, capex
approx. $2.2 billion. 2014 guidance includes a benefit to adjusted EBITDA
from
PPACA of approx. 1%-2%, which implies $65—$135 million benefit. HCA
expects 2013 adj. admits to range from +1% to +2% and rev/ adj. admits +2%
to+3%. Guidance also includes HITECH incentive payments $110-$130 million
and HITECH related expenses of $110-$130 million. We believe guidance was
very conservatively established, but not unexpected. EBITDA guidance
represents growth of flat to +4% and relative to consensus EBTIDA of $6.82
billion we believe HCA's outlook provides a reasonable start. Recall HCA
finished 2013 with EBITDA —1% above the top-end of its original guidance
range.
Figure 7: HCA 2014 Guidance vs. DBe and Consensus
Guidance DB Estimate Consensus
2014
Revenues
Adjusted EBITDA
PPACA Benefit*
Adjusted EPS
Capex
$35.506 - $36.50B $36.586B
$6.60B - $6.85B $7.048B
$66M - $137M $150M - $200M
$3.45 - $3.75
Approx. $2.2B
$3.92
$2.2B
$36.138B
$6.821B
NA
$3.78
$2.06
*HCA guidance for 2014 PPACA benefit approx. 1% - 2% of adjusted EBITDA
Source: Deutsche Bank, company reports, Thomson Reuters
EFTA01462505
Deutsche Bank Securities Inc.
Page 7
EFTA01462506
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Figure 8: 2014 EBITDA Bridge ($ in MM)
Base EBITDA Bridge
2013 Adjusted EBITDA Reported
Net HITECH impact
Increase in stock-based comp
ACA benefit
2014 Organic EBITDA Growth (1)
Low Mid High
$6,574 $6,574 $6,574
($120) ($120) ($120)
($55)
$66
($55)
$102
($55)
$137
2014 Adjusted EBITDA Guidance $6,600 $6,725 $6,850
$135 $225 $314
Note: (1) Adjusted for headwinds / ACA.
Source: Deutsche Bank, Company reports
Health Care Reform Framework. HCA noted that the framework for its ACA
analysis is still evolving, but highlighted 4 key variables that drove their
estimated 2014 net benefit from health care reform of 1%-2% of adjusted
EBITDA:
(1) Health Insurance Exchange (HIX) enrollment and Medicaid lives.
Management indicated that its model builds from the latest reported
base of HIX enrollees (-3M as indicated by CMS on Jan 24th). It also
takes into consideration HCA's exposure to states expanding Medicaid
in 2014 (CA, CO, KY, and NV).
(2) The portion of HIX and Medicaid enrollees that was previously
uninsured vs. insured;
(3) HCA's HIX network participation, network design, and plan
selection. HCA disclosed that 97% of its facilities participate in an HIX
product, with 64% of its facilities having access to the lowest priced
Bronze plan and 54% having access to the lowest priced Silver plan;
and
(4) out-of-network treatment and reimbursement levels; HCA assumes
it will not capture a portion of the population gaining coverage as a
result of business getting directed away from its network
HCA said it would re-visit its key assumptions by mid-year at the earliest,
but
its high-level base case is for 7-9% reduction in uninsured, partially
offset by
declines in pricing/volume from exchange mix. Our sense is that the offsets
built into HCA's model could prove conservative given the strength of its
networks (i.e. less impact from narrow network if its access points such as
ED
EFTA01462507
are more convenient). Given the slow ramp of exchange enrollment in key
markets (FL / TX) and HCA's lower exposure to Medicaid expansion states, we
believe 7-9% reduction of uninsured patient mix seems like a reasonable
starting point
As a % of 2013 Adj EBITDA
Low Mid High
-1.8% -1.8% -1.8%
-0.8% -0.8% -0.8%
1.0% 1.5% 2.1%
0.4% 2.3% 4.2%
2.1% 3.4% 4.8%
New estimates. We are making modest adjustments to our estimates to reflect
lower HITECH and slower ACA ramp. 2014 EBITDA and EPS move to $7.056 /
$3.92 from $7.1456 / $4.17, putting us above HCA guidance ranges
($6.606$6.856
EBITDA / $3.45-$3.75 EPS ) due to underlying growth and ACA. Our
model now reflects higher S/O (+1% higher), slightly lower HITECH benefit
Page 8
Deutsche Bank Securities Inc.
EFTA01462508
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
(—$50M lower), and slightly lower ACA ramp (—$100M lower) offset by slightly
better rate/mix due to recent strength in acuity mix +3% vs. prior +2.5%.
Deutsche Bank Securities Inc.
Page 9
EFTA01462509
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Figure 9: HCA model summary
HCA Holdings, Inc. - Earnings Model Summary
Fiscal Year Ends December 31
($ in MMs, except per share data)
2008
Income statement summary
Revenues before provision for doubful accounts
$28,374
Cash revenue (net revenue less provision for doubtful accounts) $24,965
HITECH meaningful use incentive payments
Adjusted EBITDA
Adjusted EBITDA less HITECH
Non-controlling interest (NCI) expense
EBITDA less NCI, net of HITECH (DB uses for valuation)
Operating EPS, excluding extraordinary items
Growth rates - YOY % change:
Net revenue
Cash revenue
Adjusted EBITDA
Operating EPS
Margin analysis:
Adjusted EBITDA margin as % of net revenue
Adjusted EBITDA margin as % of cash revenue
Adjusted EBITDA margin less HITECH as % of cash revenue
Revenue model summary
Number of hospitals, end of period
Number of beds, end of period
Admissions
YOY % growth
Equivalent admissions
YOY % growth
Revenue per equivalent admission
YOY % growth
Same-facility YoY % change:
Same-store revenues
Same-store admissions
Same-store equivalent admissions
Same-store revenue per equivalent admission
Balance sheet summary
Assets:
Cash and equivalents
Total debt
Net debt
Leverage statistics:
Net debt to adjusted EBITDA
Adj. EBITDA / Interest
Cash flow summary
EFTA01462510
Cash flow from operations (excluding non-controlling interests)
Capital expenditures
Capex as % of revenue
Non-controlling interests
Free cash flow (CFFO - capex - non-controlling interests)
Free cash flow margin
Revenue Mix Summary
Inpatient mix
Outpatient mix
Payer mix (% of total revenue):
Medicare
Managed Medicare
Medicaid
Managed Medicaid
Managed care and other discounted
Uninsured
Source: Deutsche Bank, company reports
N/A
$4,574
$4,574
$229
$4,345
$1.56
5.6%
5.2%
2009
$30,052
$26,776
N/A
$5,472
$5,472
$321
$5,151
$2.44
5.9%
7.3%
-0.4% 19.6%
2010
$30,683
$28,035
N/A
$5,868
$5,868
$366
$5,502
$2.76
2.1%
4.7%
7.2%
-22.9% 56.2% 13.1%
16.1% 18.2% 19.1%
EFTA01462511
18.3% 20.4% 20.9%
N/A
N/A
158
38,504
155
38,839
1.0%
2011
$32,506
$29,682
$210
$6,061
$5,851
$377
$5,474
$2.85
2012
$36,783
$33,013
$336
$6,531
$6,195
$401
$5,794
$3.74
5.9% 13.2%
5.9% 11.2%
3.3%
3.3%
N/A
156
38,827
-0.1%
1.2%
18.6%
20.4%
19.7%
163
41,594
4.2%
2013
$38,040
$34,182
$216
$6,574
$6,358
$440
$5,918
$3.42
7.8%
EFTA01462512
31.0%
3.4%
3.5%
0.7%
-8.5%
17.8% 17.3%
19.8% 19.2%
18.8% 18.6%
162
41,804
7.4%
165
42,896
0.2%
2014E
$40,587
$36,586
$120
$7,048
$6,928
$494
$6,434
$3.92
6.7%
7.0%
7.2%
2015E
$42,646
$38,655
$100
$7,749
$7,649
$512
$7,137
$4.77
5.1%
5.7%
9.9%
14.6% 21.8%
17.4% 18.2%
19.3% 20.0%
18.9% 19.8%
165
42,896
2.3%
165
42,896
1,541,800 1,556,500 1,554,400 1,620,400 1,740,700 1,744,100 1,784,863
1,798,250
-0.7%
0.7%
EFTA01462513
2,363,600 2,439,000 2,468,400 2,595,900 2,832,100 2,844,700 2,947,377
3,014,025
0.5%
3.2%
$12,006
5.2%
7.0%
0.9%
1.9%
5.1%
2008
$465
26,989
$26,524
5.8x
2.3x
$1,990
($1,600)
5.6%
$229
$161
0.6%
$12,322
2.6%
6.0%
1.2%
3.4%
2.6%
2009
$312
25,670
$25,358
4.6x
2.8x
$2,747
($1,317)
$1,109
3.7%
$12,360
0.3%
2.0%
0.1%
1.4%
0.6%
2010
$411
28,225
$27,814
4.7x
2.8x
$3,085
EFTA01462514
($1,325)
4.4% 4.3%
$321
$366
$1,394
4.5%
62.6% 62.2% 62.3%
37.4% 37.8% 37.7%
23.0% 23.0% 24.0%
6.0%
5.0%
3.0%
7.0%
6.0%
4.0%
8.0%
53.0% 52.0% 53.0%
10.0%
6.0%
5.2%
$12,522
1.3%
3.3%
2.3%
3.0%
0.3%
2011
$373
27,052
$26,679
4.4x
3.0x
$3,933
($1,679)
5.2%
$377
$1,877
5.8%
63.0%
37.0%
7.0%
6.0%
4.0%
23.5%
7.5%
5.7%
3.9%
51.2%
8.2%
9.1%
$12,987
EFTA01462515
3.7%
4.5%
3.0%
4.1%
0.3%
2012
$705
28,930
$28,225
4.3x
3.6x
$4,175
($1,862)
5.1%
$401
$1,912
5.2%
0.4%
$13,371
3.0%
3.1%
0.1%
0.1%
3.0%
2013
$414
28,376
$27,962
4.3x
3.6x
$3,680
($1,943)
5.1%
$440
$1,297
61.8% 62.2%
38.2% 37.8%
22.5% 22.5%
8.0%
4.0%
4.1%
51.8% 51.8%
9.5%
9.5%
3.6%
$13,772
3.0%
4.8%
0.5%
1.8%
3.0%
EFTA01462516
2014E
$808
27,376
$26,568
3.9x
3.9x
$4,088
($2,200)
5.4%
$494
$1,394
3.4% 3.4%
2.3%
$14,151
2.8%
5.0%
0.7%
2.2%
2.8%
2015E
$676
25,376
$24,700
3.5x
4.5x
$4,580
($2,200)
5.2%
$512
$1,868
4.4%
15.4% 14.5%
8.9%
8.0%
4.0%
4.1%
22.5% 22.5%
8.0%
4.0%
4.1%
51.8% 51.8%
9.5%
9.5%
9.1%
8.0%
4.0%
4.1%
Page 10
Deutsche Bank Securities Inc.
EFTA01462517
4 February 2014
HCA Holdings, Inc.
Health
Care Facilities and Services
Deutsche Bank Securities Inc
Page 11
Figure 10: Income Statement
HCA Holdings, Inc.
Consolidated Income Statements
Fiscal Year ending Dcember 31
(Dollars in millions, except per share amounts and equivalent admissions
statistics)
2008
2009
Revenues before provision for doubful accounts
Provision for doubtful accounts
Net revenue (cash revenue)
YoY % growth
Expenses:
Salaries and benefits
Supplies
Other operating expenses
HITECH meaningful use incentive payments
Equity in earnings of affiliates
Depreciation and amortization
Interest expense
Losses (gains) on sales of facilities
Insurance subsidiary losses (gains) and impairments
Total expenses
Income before income taxes
Provision for income taxes
Net income from continuing operations
Net income attributable to noncontrolling interests
$28,374
3,409
$24,965
5.2%
11,440
4,620
4,554
N/A
(223)
1,416
2,021
(97)
64
23,795
$1,170
268
$902
229
EFTA01462518
$673
$30,052
3,276
$26,776
7.3%
11,958
4,868
4,724
N/A
(246)
1,425
1,987
15
43
24,774
$2,002
627
$1,375
321
$1,054
2010
$30,683
2,648
$28,035
4.7%
12,484
4,961
5,004
N/A
(282)
1,421
2,097
(4)
123
25,804
$2,231
658
$1,573
366
$1,207
2011
$32,506
2,824
$29,682
5.9%
13,440
5,179
5,470
($210)
(258)
1,465
EFTA01462519
2,037
(142)
(860)
26,121
$3,561
719
$2,842
377
$2,465
2012
$36,783
3,770
$33,013
11.2%
15,089
5,717
6,048
($336)
(36)
1,679
1,798
(15)
175
30,119
$2,894
888
$2,006
401
$1,605
1Q13
2Q13
3Q13
955
4Q13
1,126
2013
$9,194 $9,473 $9,411 $9,962 $38,040
754 1,023
3,858
$8,440 $8,450 $8,456 $8,836 $34,182
0.4% 4.2% 4.9% 4.8% 3.5%
3,917 3,848
1,479 1,470
1,523 1,507
($39)
(8)
424
472
16
17
201
EFTA01462520
$438
94
$344
($52)
(12)
425
462
0
(4)
7,801 7,644
$639
$537
114
$423
$806
269
3,916
1,457
1,564
($75)
(9)
443
458
1
0
7,755
$701
234
$467
102
$365
3,965 15,646
1,564
1,643
0
461
456
(3)
0
246
5,970
6,237
($50) ($216)
(29)
1,753
1,848
14
13
8,036 31,236
$800 $2,946
950
EFTA01462521
$554 $1,996
130
440
$424 $1,556
1Q14E 2014E 3Q14E 4Q14E 2014E
$9,873 $10,179 $10,073 $10,462 $40,587
800
1,079
992 1,130
4,001
$9,073 $9,100 $9,081 $9,332 $36,586
7.5% 7.7% 7.4% 5.6% 7.0%
4,186
1,604
1,634
($15)
(8)
442
455
0
0
8,296
$777
258
$519
122
$396
4,145 4,181 4,154 16,665
1,587 1,559 1,635
1,629 1,672 1,715
($35)
(13)
($35)
(9)
449
451
0
0
295
$592
123
$469
457
447
0
0
$809
269
($35)
(11)
465
EFTA01462522
443
0
0
6,385
6,649
($120)
(41)
1,813
1,795
8,213 8,272 8,365 33,146
$886
$967 $3,440
322
$540
123
$418
$646 $2,296
126
494
$520 $1,802
1,144
1015E 2015E 3015E 4015E 2015E
$10,374 $10,695 $10,584 $10,993 $42,646
789
1,080
989
1,133 3,991
$9,585 $9,615 $9,594 $9,860 $38,655
5.6% 5.7% 5.7% 5.7% 5.7%
4,376
1,681
1,703
($20)
(9)
473
437
8,642
$630
127
$503
4,333
1,664
1,699
($20)
(13)
480
430
8,573
$944 $1,042
314
346
EFTA01462523
$695
127
$568
4,371
1,635
1,743
($25)
(10)
488
423
8,626
$647
127
$519
4,343 17,424
1,713 6,692
1,788 6,934
($35)
(12)
496 1,937
417 1,708
0 00000
0 00000
8,710 34,551
$969 $1,150 $4,105
322
131
383 1,365
$768 $2,740
512
Income (loss) from discontinued operations 00000 0 0000 000 00 00000
Net income attributable to HCA Holdings, Inc.
Earnings per share:
Diluted earnings per share, adjusted for one-time item $1.56
YoY % growth
Diluted earnings per share
Diluted sharecount (in thousands)
Income statement ratios:
Salaries and benefits (as % of net revenue)
Supplies (as % of net revenue)
Other operating expenses (as % of net revenue)
Provision for doubtful accounts (as % of revenue before doub
Equity in earnings of affiliates (as % of net revenue)
Depreciation and amortization (as % of net revenue)
Interest expense (as % of net revenue)
Net income attributable to noncontrolling interests (as % of
Income taxes (as % of income before taxes)
Margin analysis:
Adjusted EBITDA
YoY % growth
Adjusted EBITDA margin (% of revenue before bad deb
EFTA01462524
Adjusted EBITDA margin (% of cash revenue)
Adjusted EBITDA less noncontrolling interests
Adjusted EBITDA less HITECH
EBIT
EBIT margin (% of net revenue)
Net margin (% of net revenue)
$2.44
-22.9%
$1.56
430,982
45.8%
18.5%
18.2%
12.0%
432,227
$2.76
56.2% 13.1%
$2.44
$2.76
437,347
44.7% 44.5%
18.2% 17.7%
17.6% 17.8%
-0.9% -0.9%
5.7%
5.3%
1.2%
22.9%
Income taxes (as % of income before taxes - noncontrolling 28.5%
$4,574
$2.85
3.3%
$4.97
495,943
$3.74
31.0%
$3.49
459,403
45.3% 45.7%
17.4% 17.3%
18.4% 18.3%
10.9% 8.6% 8.7% 10.2%
4.9% 5.1%
$0.79 $0.91 $0.79
$0.92
$0.92
$3.42
-32.6% 7.1% 0.5% 0.4% -8.5%
$0.74 $0.91 $0.79
$3.37
462,368 463,184 463,569 458,535 461,914
EFTA01462525
46.4% 45.5% 46.3% 44.9% 45.8%
17.5% 17.4% 17.2% 17.7% 17.5%
18.0% 17.8% 18.5% 18.6% 18.2%
8.2% 10.8% 10.1% 11.3% 10.1%
5.0% 5.0% 5.2% 5.2% 5.1%
$0.87
$0.87
$1.02
$0.91 $1.12 $3.92
9.2% 11.8% 15.0% 21.4% 14.6%
$1.02
$0.91 $1.12 $3.92
457,002 459,002 461,002 463,002 460,002
$1.08 $1.22
$1.11
$1.11
$1.36
$1.36
$4.77
24.8% 19.3% 22.7% 21.1% 21.8%
$1.08 $1.22
$4.77
464,502 466,002 467,502 469,002 466,752
46.1% 45.5% 46.0% 44.5% 45.6% 45.7% 45.1% 45.6% 44.0% 45.1%
17.7% 17.4% 17.2% 17.5% 17.5% 17.5% 17.3% 17.0% 17.4% 17.3%
18.0% 17.9% 18.4% 18.4% 18.2% 17.8% 17.7% 18.2% 18.1% 17.9%
8.1% 10.6% 9.8% 10.8%
9.9%
7.6% 10.1% 9.3% 10.3%
4.9% 4.9% 5.0% 5.0% 5.0% 4.9% 5.0% 5.1% 5.0%
1.4%
31.3% 29.5%
37.3% 35.3%
$5,472
-0.4% 19.6%
16.1% 18.2%
18.3%
$4,345
Adjusted EBITDA margin less HITECH (% of cash revenue less HITECH)
$3,158
12.6%
2.7%
Cash revenue analysis:
Net revenue - provision for doubtful accounts = cash revenue $24,965
YoY % growth
Salaries and benefits (% of cash revenue)
Supplies (% of cash revenue)
Other operating expenses (% of cash revenue)
Per equivalent admission analysis:
Equivalent admissions (consolidated)
YoY % growth
EFTA01462526
Cash revenue per equivalent admission
YoY % growth
Salaries and benefits per equivalent admission
YoY % growth
Supplies per equivalent admission
YoY % growth
Other operating expenses per equivalent admission
YoY % growth
Controllable costs per equivalent admission
YoY % growth
Uncompensated care analysis:
Charity and discounts
Uncompensated care ratio
Source: Deutsche Bank, Company reports
5 2%
45.8%
18.5%
18.2%
$5,868
7.2%
20.4% 20.9%
$5,151
$5,502
$4,047
$4,447
15.1% 15.9%
3.9%
$26,776
7.3%
$28,035
4.7%
44.7% 44.5%
18.2% 17.7%
17.6% 17.8%
3.2%
1.2%
4.3%
31.5%
33.3% 33.3% 33.3% 33.3% 33.2%
$1,674 $1,786 $1,713 $1,875 $7,048
6.7% 5.8% 6.9% 9.4% 7.2%
$1,551 $1,663 $1,590 $1,749 $6,554
$1,659 $1,751 $1,678 $1,840 $6,928
$1,232 $1,337 $1,256 $1,410 $5,236
1.3% 1.3% 1.3% 1.3%
33.3% 33.3% 33.3% 33.3%
9.4%
-1.0% -0.9% -0.1% -0.1% -0.1% -0.1% 0.0% -0.1% -0.1% -0.1% -0.1% -0.1% -0.1%
-0.1% -0.1% -0.1% -0.1% -0.1%
5.1%
8.1% 7.4% 7.5% 6.9% 5.4% 5.6% 5.5% 5.4% 5.2% 5.4% 5.0% 5.0% 4.9% 4.7% 4.9%
EFTA01462527
4.6% 4.5% 4.4% 4.2% 4.4%
0.9%
1.3%
1.3% 1.2%
20.2% 30.7%
22.6% 35.6%
$6,061
3.3%
19.1% 18.6%
20.4%
$5,684
$5,851
19.7%
$4,596
$6,531
7.8%
17.8%
$6,130
$6,195
15.5% 14.7%
8.3% 4.9%
$29,682
5.9%
$33,013
11.2%
45.3% 45.7%
17.4% 17.3%
18.4% 18.3%
2,363,600 2,439,000 2,468,400 2,595,900 2,832,100
0.5%
5.2%
$10,562
4.7%
$4,840
6.3%
$1,955
4.6%
$1,927
6.9%
$8,721
6.0%
3,600
21.9%
$10,978
3.9%
$4,903
1.3%
$1,996
2.1%
$1,937
0.5%
EFTA01462528
$8,836
1.3%
5,086
$11,358
3.5%
$5,058
3.2%
$2,010
0.7%
$2,027
4.7%
$9,095
2.9%
6,978
23.8% 25.6%
$11,434
0.7%
$5,177
2.4%
$1,995
-0.7%
$2,107
3.9%
$9,280
2.0%
8,390
27.4%
9.1%
$11,657
1.9%
$5,328
2.9%
$2,019
1.2%
$2,136
1.3%
$9,482
2.2%
10,071
29.5%
1.1% 1.3% 1.2% 1.5% 1.3%
33.4% 33.4% 30.8% 32.2%
36.9% 38.9% 39.1% 36.7% 37.9%
$1,568 $1,689 $1,603 $1,714 $6,574
-14.0% 7.6% 4.6% 6.7% 0.7%
17.1% 17.8% 17.0% 17.2% 17.3% 17.0% 17.5% 17.0% 17.9% 17.4%
19.8% 18.6% 20.0% 19.0% 19.4% 19.2% 18.4% 19.6% 18.9% 20.1% 19.3%
$1,474 $1,575 $1,501 $1,584 $6,134
$1,529 $1,637 $1,528 $1,664 $6,358
18.8% 18.1% 19.4% 18.1% 18.8% 18.6% 18.3% 19.2% 18.5% 19.7% 18.9%
$4,852
EFTA01462529
$1,144 $1,264 $1,160 $1,253 $4,821
13.6% 15.0% 13.7% 14.2% 14.1%
4.1% 5.0% 4.3% 4.8% 4.6%
$8,440 $8,450 $8,456 $8,836 $34,182
0.4% 4.2% 4.9% 4.8% 3.5%
46.4% 45.5% 46.3% 44.9% 45.8%
17.5% 17.4% 17.2% 17.7% 17.5%
18.0% 17.8% 18.5% 18.6% 18.2%
708,000 708,700 711,800 716,200 2,844,700
-0.4% 1.1% 0.9% 0.2% 0.4%
$11,921 $11,923 $11,880 $12,337 $12,016
0.9% 3.0% 3.9% 4.6% 3.1%
$5,532 $5,430 $5,502 $5,536 $5,500
5.3% 2.6% 2.6% 2.4% 3.2%
$2,089 $2,074 $2,047 $2,184 $2,099
4.7% 2.2% 5.0% 4.0% 4.0%
$2,151 $2,126 $2,197 $2,294 $2,192
2.5% -0.2% 2.6% 5.7% 2.7%
$9,773 $9,630 $9,746 $10,014 $9,791
4.5% 1.9% 3.1% 3.5% 3.3%
2852
29.9% 31.2%
2815 N/A N/A N/A
N/AN/A
N/A
1.4% 1.4% 1.4% 1.4%
5.0%
1.3%
33.3%
39.5% 38.6% 39.2% 38.2% 38.8% 38.4% 37.9% 38.3% 37.5% 38.0%
$1,854 $1,952 $1,880 $2,063 $7,749
10.8% 9.3% 9.8% 10.0% 9.9%
17.9% 18.3% 17.8% 18.8% 18.2%
19.3% 20.3%
19.6% 20.9% 20.0%
$1,727 $1,825 $1,753 $1,932 $7,237
$1,834 $1,932 $1,855 $2,028 $7,649
19.1% 20.1% 19.3% 20.6% 19.8%
$1,381 $1,472 $1,392 $1,567 $5,812
13.6% 14.7% 13.8% 15.1% 14.3% 14.4% 15.3% 14.5% 15.9% 15.0%
4.4% 5.2% 4.6% 5.6% 4.9% 5.2% 5.9% 5.4% 6.5% 5.8%
$9,073 $9,100 $9,081 $9,332 $36,586
7.5% 7.7% 7.4% 5.6% 7.0%
$9,585 $9,615 $9,594 $9,860 $38,655
5.6% 5.7% 5.7% 5.7% 5.7%
46.1% 45.5% 46.0% 44.5% 45.6% 45.7% 45.1% 45.6% 44.0% 45.1%
17.7% 17.4% 17.2% 17.5% 17.5% 17.5% 17.3% 17.0% 17.4% 17.3%
18.0% 17.9% 18.4% 18.4% 18.2% 17.8% 17.7% 18.2% 18.1% 17.9%
738,141 739,312 739,665 730,259 2,947,377
4.3% 4.3% 3.9% 2.0% 3.6%
$12,292 $12,308 $12,277 $12,779 $12,413
EFTA01462530
3.1% 3.2% 3.3% 3.6% 3.3%
$5,657 $5,593 $5,639 $5,675 $5,654
2.3% 3.0% 2.5% 2.5%
$2,173 $2,147 $2,108 $2,238 $2,166
4.0% 3.5% 3.0% 2.5%
$2,200 $2,190 $2,247
2.3% 3.0% 2.3% 1.8%
2.8%
3.2%
$2,334 $2,256
2.9%
$10,029 $9,930 $9,994 $10,247 $10,076
2.6% 3.1% 2.5% 2.3% 2.9%
N/A N/A N/A N/A N/A
N/A
N/AN/A
N/AN/A
754,832 756,030 756,390 746,772 3,014,025
2.3% 2.3% 2.3% 2.3% 2.3%
$12,699 $12,718 $12,685 $13,204 $12,825
3.3% 3.3% 3.3% 3.3% 3.3%
$5,784 $5,718 $5,766 $5,802 $5,781
2.3% 2.3% 2.3% 2.3%
$2,244 $2,234 $2,292 $2,381 $2,301
2.0% 2.0% 2.0% 2.0%
2.2%
$2,227 $2,200 $2,161 $2,294 $2,220
2.5% 2.5% 2.5% 2.5%
2.5%
2.0%
$10,255 $10,153 $10,219 $10,477 $10,302
2.2% 2.2% 2.2% 2.2% 2.2%
N/A N/A N/A N/A N/A
N/AN/A
N/AN/A
N/A
$637 $2,228
($100)
(44)
EFTA01462531
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Appendix 1
Important Disclosures
Additional information available upon request
Disclosure checklist
Company Ticker
HCA.N
HCA Holdings, Inc.
Recent price*
48.46 (USD) 3 Feb 14
Important Disclosures Required by U.S. Regulators
Disclosures marked with an asterisk may also be required by at least one
jurisdiction in addition to the United States.
See Important Disclosures Required by Non-US Regulators and Explanatory
Notes.
7. Deutsche Bank and/or its affiliate(s) has received compensation from this
company for the provision of investment
banking or financial advisory services within the past year.
8. Deutsche Bank and/or its affiliate(s) expects to receive, or intends to
seek, compensation for investment banking
services from this company in the next three months.
14. Deutsche Bank and/or its affiliate(s) has received non-investment
banking related compensation from this company
within the past year.
15. This company has been a client of Deutsche Bank Securities Inc. within
the past year, during which time it received
non-investment banking securities-related services.
Important Disclosures Required by Non-U.S. Regulators
Please also refer to disclosures in the Important Disclosures Required by US
Regulators and the Explanatory Notes.
7. Deutsche Bank and/or its affiliate(s) has received compensation from this
company for the provision of investment
banking or financial advisory services within the past year.
17. Deutsche Bank and or/its affiliate(s) has a significant Non-Equity
financial interest (this can include Bonds,
Convertible Bonds, Credit Derivatives and Traded Loans) where the aggregate
net exposure to the following
issuer(s), or issuer(s) group, is more than 25m Euros.
For disclosures pertaining to recommendations or estimates made on
securities other than the primary subject of this
research, please see the most recently published company report or visit our
global disclosure look-up page on our
website at http://gm.db.com/ger/disclosure/Disclosure.eqsr?ricCode=HCA.N
Analyst Certification
The views expressed in this report accurately reflect the personal views of
the undersigned lead analyst(s) about the
subject issuer and the securities of the issuer. In addition, the
undersigned lead analyst(s) has not and will not receive
EFTA01462532
any compensation for providing a specific recommendation or view in this
report. Darren Lehrich
Disclosure
7,8,14,15,17
*Prices are sourced from local exchanges via Reuters, Bloomberg and other
vendors. Data is sourced from Deutsche Bank and subject companies
Page 12
Deutsche Bank Securities Inc.
EFTA01462533
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Historical recommendations and target price: HCA Holdings, Inc. (HCA.N)
(as of 2/3/2014)
60.00
14
50.00
12
40.00
12
30.00
5 6
34
20.00
10.00
0.00
Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13
Dec 13
Date
1.
2.
3.
4.
5.
6.
7.
04/19/2011:
05/05/2011:
09/13/2011:
10/05/2011:
11/01/2011:
12/07/2011:
02/06/2012:
Equity rating key
Buy: Based on a current 12- month view of total
share-holder return (TSR = percentage change in
share price from current price to projected target price
plus pro-jected dividend yield ) , we recommend that
investors buy the stock.
Sell: Based on a current 12-month view of total shareholder
return, we recommend that investors sell the
stock
Hold: We take a neutral view on the stock 12-months
out and, based on this time horizon, do not
recommend either a Buy or Sell.
Notes:
1. Newly issued research recommendations and
target prices always supersede previously published
research.
EFTA01462534
2. Ratings definitions prior to 27 January, 2007 were:
Buy: Expected total return (including dividends)
of 10% or more over a 12-month period
Hold: Expected total
dividends) between -10% and 10% over a 12month
period
Sell: Expected total return (including dividends)
of -10% or worse over a 12-month period
return (including
Upgrade to Buy, Target Price Change USD41.00
Buy, Target Price Change USD42.00
Buy, Target Price Change USD33.00
8.
9.
10.
12.
13.
14.
02/23/2012:
05/04/2012:
11/07/2012:
Downgrade to Hold, Target Price Change USD23.00 11. 01/30/2013:
Hold, Target Price Change USD25.00
Hold, Target Price Change USD26.00
Hold, Target Price Change USD32.00
05/02/2013:
10/07/2013:
01/08/2014:
Upgrade to Buy, USD32.00
Buy, Target Price Change USD33.00
Buy, Target Price Change USD40.00
Buy, Target Price Change USD44.00
Buy, Target Price Change USD46.00
Buy, Target Price Change USD56.00
Buy, Target Price Change USD58.00
Equity rating dispersion and banking relationships
50 %
100
150
200
250
300
350
400
450
500
50
0
Buy
Hold
48 %
EFTA01462535
56 %
42 %
3 %33 %
Sell
Companies Covered Cos. w/ Banking Relationship
North American Universe
78
9
Buy
Hold
Sell
Not Rated
Suspended Rating
*New Recommendation Structure
as of September 9,2002
10
11
13
Previous Recommendations
Strong Buy
Buy
Market Perform
Underperform
Not Rated
Suspended Rating
Current Recommendations
Deutsche Bank Securities Inc.
Page 13
Security Price
EFTA01462536
4 February 2014
Health
Care Facilities and Services
HCA Holdings, Inc.
Regulatory Disclosures
1. Important Additional Conflict Disclosures
Aside from within this report, important conflict disclosures can also be
found at https://gm.db.com/equities under the
"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to
review this information before investing.
2. Short-Term Trade Ideas
Deutsche Bank equity research analysts sometimes have shorter-term trade
ideas (known as SOLAR ideas) that are
consistent or inconsistent with Deutsche Bank's existing longer term
ratings. These trade ideas can be found at the
SOLAR link at http://gm.db.com.
3. Country-Specific Disclosures
Australia and New Zealand: This research, and any access to it, is intended
only for "wholesale clients" within the
meaning of the Australian Corporations Act and New Zealand Financial
Advisors Act respectively.
Brazil: The views expressed above accurately reflect personal views of the
authors about the subject company(ies) and
its(their) securities, including in relation to Deutsche Bank. The
compensation of the equity research analyst(s) is
indirectly affected by revenues deriving from the business and financial
transactions of Deutsche Bank. In cases where
at least one Brazil based analyst (identified by a phone number starting
with +55 country code) has taken part in the
preparation of this research report, the Brazil based analyst whose name
appears first assumes primary responsibility for
its content from a Brazilian regulatory perspective and for its compliance
with CVM Instruction # 483.
EU countries:
Disclosures
relating to our obligations
under MiFiD
can be found at
http://www.globalmarkets.db.com/riskdisclosures.
Japan: Disclosures under the Financial Instruments and Exchange Law: Company
name - Deutsche Securities Inc.
Registration number - Registered as a financial instruments dealer by the
Head of the Kanto Local Finance Bureau
(Kinsho) No. 117. Member of associations: JSDA, Type II Financial
Instruments Firms Association, The Financial Futures
Association of Japan, Japan Investment Advisers Association. Commissions and
risks involved in stock transactions - for
stock transactions, we charge stock commissions and consumption tax by
multiplying the transaction amount by the
commission rate agreed with each customer. Stock transactions can lead to
losses as a result of shar
ℹ️ Document Details
SHA-256
1a5bf83c9f5271ab050d41f013debe4a7dae03f531e47cd62ecb8f7c14d98984
Bates Number
EFTA01462482
Dataset
DataSet-10
Document Type
document
Pages
60
Comments 0