HCA: Hospital Operator Prices IPO Above Range

| About: HCA Holdings, (HCA)

HCA Holdings (NYSE:HCA), a U.S-based non-governmental hospital operator, priced its IPO on March 9th, 2011, above the expected range at $30 per share, with a first-day return of 3.4%.

Business Overview (from prospectus)

We are the largest non-governmental hospital operator in the U.S. and a leading comprehensive, integrated provider of health care and related services. We provide these services through a network of acute care hospitals, outpatient facilities, clinics and other patient care delivery settings. As of December 31, 2010, we operated a diversified portfolio of 164 hospitals (with approximately 41,000 beds) and 106 freestanding surgery centers across 20 states throughout the U.S. and in England. As a result of our efforts to establish significant market share in large and growing urban markets with attractive demographic and economic profiles, we currently have a substantial market presence in 14 of the top 25 fastest growing markets with populations greater than 500,000 in the U.S. and currently maintain the first or second position, based on inpatient admissions, in many of our key markets. We believe our ability to successfully position and grow our assets in attractive markets and execute our operating plan has contributed to the strength of our financial performance over the last several years. For the year ended December 31, 2010, we generated revenues of $30.683 billion, net income attributable to HCA Holdings, Inc. of $1.207 billion and Adjusted EBITDA of $5.868 billion.

Offering: 126.2 million shares (36.3 million from selling stockholders) at $30 per share. Net proceeds from the offering will be used for debt repayment.

Lead Underwriters: BofA Merrill Lynch (NYSE:BAC), Citi (NYSE:C), J.P. Morgan (NYSE:JPM)

Financial Highlights:

Revenues increased 2.1% to $30.683 billion for 2010 from $30.052 billion for 2009...Salaries and benefits, as a percentage of revenues, were 40.7% in 2010 and 39.8% in 2009...Supply costs per equivalent admission increased 0.7% in 2010 compared to 2009...Other operating expenses, as a percentage of cash revenues, increased to 17.9% in 2010 from 17.6% in 2009...Net income attributable to HCA Holdings, Inc. totaled $1.207 billion for the year ended December 31, 2010 compared to $1.054 billion for the year ended December 31, 2009...


Generally, other hospitals in the local communities served by most of our hospitals provide services similar to those offered by our hospitals. Additionally, in recent years the number of freestanding ASCs and diagnostic centers (including facilities owned by physicians) in the geographic areas in which we operate has increased significantly. As a result, most of our hospitals operate in a highly competitive environment. In some cases, competing hospitals are more established than our hospitals. Some competing hospitals are owned by tax-supported government agencies and many others are owned by not-for-profit entities that may be supported by endowments, charitable contributions and/or tax revenues and are exempt from sales, property and income taxes. Such exemptions and support are not available to our hospitals. In certain localities there are large teaching hospitals that provide highly specialized facilities, equipment and services which may not be available at most of our hospitals. We face increasing competition from specialty hospitals, some of which are physician-owned, and both our own and unaffiliated freestanding ASCs for market share in high margin services.

Additional Resources: