...Analytical Conclusion: The 'AA¡' Issuer Default Rating (IDR) reflects Novant's consistently strong operating EBITDA margins and adjusted leverage metrics that are consistent with the rating level and supported by a sizable clinical footprint and good market position across four separate markets. Over the past four audited years, Novant Health's operating EBITDA margins have averaged 13.2%, with each of its markets generally performing to or exceeding budgeted expectations. Novant Health's performance softened in 1Q19 due to a combination of factors, including expenses related to growth in infrastructure and salary and benefits around key initiatives, but the 8.7% operating EBITDA is expected to return to historical levels as the year progresses. Given market competition, capital spending at Novant Health has been robust over that time, including a major systemwide information technology installation project. Moving forward, Fitch Ratings expects capital spending to remain above depreciation...
