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Delaware
|
|
51-0354549
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
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|
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
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Non-accelerated filer
|
☐ (Do not check if a smaller reporting company)
|
Smaller reporting company
|
☐
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Emerging growth company
|
☐
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Page No.
|
|
|
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
Item 2.
|
|
|
|
||
Item 3.
|
|
|
66
|
|
|
Item 4.
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
|
Item 1.
|
|
|
|
||
Item 1A.
|
|
|
|
||
Item 2.
|
|
|
100
|
|
|
Item 6.
|
|
|
|
||
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Patient service revenues
|
$
|
2,746,257
|
|
|
$
|
2,643,194
|
|
|
$
|
8,030,102
|
|
|
$
|
7,708,641
|
|
Less: Provision for uncollectible accounts
|
(123,760
|
)
|
|
(115,555
|
)
|
|
(352,228
|
)
|
|
(336,188
|
)
|
||||
Net patient service revenues
|
2,622,497
|
|
|
2,527,639
|
|
|
7,677,874
|
|
|
7,372,453
|
|
||||
Capitated revenues
|
1,016,365
|
|
|
872,538
|
|
|
2,956,479
|
|
|
2,660,532
|
|
||||
Other revenues
|
283,969
|
|
|
330,399
|
|
|
863,238
|
|
|
996,378
|
|
||||
Total net revenues
|
3,922,831
|
|
|
3,730,576
|
|
|
11,497,591
|
|
|
11,029,363
|
|
||||
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Patient care costs and other costs
|
2,925,975
|
|
|
2,697,629
|
|
|
8,508,706
|
|
|
7,950,987
|
|
||||
General and administrative
|
400,018
|
|
|
406,890
|
|
|
1,174,113
|
|
|
1,180,214
|
|
||||
Depreciation and amortization
|
203,283
|
|
|
181,739
|
|
|
593,527
|
|
|
531,475
|
|
||||
Provision for uncollectible accounts
|
(2,685
|
)
|
|
3,773
|
|
|
(1,381
|
)
|
|
9,856
|
|
||||
Equity investment loss (income)
|
4,852
|
|
|
(4,237
|
)
|
|
(2,697
|
)
|
|
(5,119
|
)
|
||||
Goodwill and asset impairment charges
|
601,040
|
|
|
—
|
|
|
701,523
|
|
|
253,000
|
|
||||
Gain on changes in ownership interests, net
|
(17,129
|
)
|
|
(374,374
|
)
|
|
(23,402
|
)
|
|
(404,165
|
)
|
||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
(526,827
|
)
|
|
—
|
|
||||
Total operating expenses and charges
|
4,115,354
|
|
|
2,911,420
|
|
|
10,423,562
|
|
|
9,516,248
|
|
||||
Operating (loss) income
|
(192,523
|
)
|
|
819,156
|
|
|
1,074,029
|
|
|
1,513,115
|
|
||||
Debt expense
|
(109,623
|
)
|
|
(104,581
|
)
|
|
(322,014
|
)
|
|
(310,359
|
)
|
||||
Other income, net
|
4,370
|
|
|
1,876
|
|
|
13,866
|
|
|
8,067
|
|
||||
(Loss) income before income taxes
|
(297,776
|
)
|
|
716,451
|
|
|
765,881
|
|
|
1,210,823
|
|
||||
Income tax (benefit) expense
|
(125,742
|
)
|
|
104,301
|
|
|
276,005
|
|
|
366,011
|
|
||||
Net (loss) income
|
(172,034
|
)
|
|
612,150
|
|
|
489,876
|
|
|
844,812
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(42,442
|
)
|
|
(40,818
|
)
|
|
(129,654
|
)
|
|
(122,664
|
)
|
||||
Net (loss) income attributable to DaVita Inc.
|
$
|
(214,476
|
)
|
|
$
|
571,332
|
|
|
$
|
360,222
|
|
|
$
|
722,148
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net (loss) income per share attributable to
DaVita Inc. |
$
|
(1.14
|
)
|
|
$
|
2.80
|
|
|
$
|
1.89
|
|
|
$
|
3.54
|
|
Diluted net (loss) income per share attributable to
DaVita Inc. |
$
|
(1.14
|
)
|
|
$
|
2.76
|
|
|
$
|
1.86
|
|
|
$
|
3.48
|
|
Weighted average shares for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
188,883,922
|
|
|
203,761,433
|
|
|
190,770,165
|
|
|
204,206,979
|
|
||||
Diluted
|
188,883,922
|
|
|
206,961,450
|
|
|
193,546,245
|
|
|
207,643,794
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net (loss) income
|
$
|
(172,034
|
)
|
|
$
|
612,150
|
|
|
$
|
489,876
|
|
|
$
|
844,812
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized losses on interest rate cap and swap agreements:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized losses on interest rate cap and swap agreements
|
(478
|
)
|
|
(153
|
)
|
|
(5,479
|
)
|
|
(8,238
|
)
|
||||
Reclassifications of net rate cap and swap agreements realized
losses into net (loss) income |
1,265
|
|
|
388
|
|
|
3,793
|
|
|
1,301
|
|
||||
Unrealized gains on investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains on investments
|
863
|
|
|
1,121
|
|
|
3,478
|
|
|
1,988
|
|
||||
Reclassification of net investment realized gains into net (loss) income
|
(9
|
)
|
|
(50
|
)
|
|
(221
|
)
|
|
(143
|
)
|
||||
Unrealized gains on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
29,143
|
|
|
(951
|
)
|
|
91,546
|
|
|
5,386
|
|
||||
Reclassification of foreign currency translation adjustment
realized loss into net (loss) income |
—
|
|
|
7,513
|
|
|
—
|
|
|
7,513
|
|
||||
Other comprehensive income
|
30,784
|
|
|
7,868
|
|
|
93,117
|
|
|
7,807
|
|
||||
Total comprehensive (loss) income
|
(141,250
|
)
|
|
620,018
|
|
|
582,993
|
|
|
852,619
|
|
||||
Less: Comprehensive income attributable to noncontrolling
interests |
(42,442
|
)
|
|
(40,876
|
)
|
|
(129,652
|
)
|
|
(122,871
|
)
|
||||
Comprehensive (loss) income attributable to DaVita Inc.
|
$
|
(183,692
|
)
|
|
$
|
579,142
|
|
|
$
|
453,341
|
|
|
$
|
729,748
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
846,110
|
|
|
$
|
913,187
|
|
Short-term investments
|
137,358
|
|
|
310,198
|
|
||
Accounts receivable, less allowance of $221,329
and $252,056
|
2,091,074
|
|
|
1,917,302
|
|
||
Inventories
|
154,422
|
|
|
164,858
|
|
||
Other receivables
|
599,374
|
|
|
453,483
|
|
||
Prepaid and other current assets
|
205,211
|
|
|
210,604
|
|
||
Income taxes receivable
|
—
|
|
|
10,596
|
|
||
Total current assets
|
4,033,549
|
|
|
3,980,228
|
|
||
Property and equipment, net of accumulated depreciation of $3,151,402 and $2,832,160
|
3,386,056
|
|
|
3,175,367
|
|
||
Intangible assets, net of accumulated amortization of $1,084,682 and $940,731
|
1,451,033
|
|
|
1,527,767
|
|
||
Equity method and other investments
|
545,053
|
|
|
502,389
|
|
||
Long-term investments
|
120,129
|
|
|
103,679
|
|
||
Other long-term assets
|
61,642
|
|
|
44,510
|
|
||
Goodwill
|
9,415,877
|
|
|
9,407,317
|
|
||
|
$
|
19,013,339
|
|
|
$
|
18,741,257
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Accounts payable
|
$
|
566,918
|
|
|
$
|
522,415
|
|
Other liabilities
|
928,123
|
|
|
856,847
|
|
||
Accrued compensation and benefits
|
775,280
|
|
|
815,761
|
|
||
Medical payables
|
400,259
|
|
|
336,381
|
|
||
Current portion of long-term debt
|
189,822
|
|
|
165,041
|
|
||
Income tax payable
|
14,391
|
|
|
—
|
|
||
Total current liabilities
|
2,874,793
|
|
|
2,696,445
|
|
||
Long-term debt
|
8,908,703
|
|
|
8,947,327
|
|
||
Other long-term liabilities
|
548,226
|
|
|
465,358
|
|
||
Deferred income taxes
|
685,598
|
|
|
809,128
|
|
||
Total liabilities
|
13,017,320
|
|
|
12,918,258
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Noncontrolling interests subject to put provisions
|
1,026,890
|
|
|
973,258
|
|
||
Equity:
|
|
|
|
|
|
||
Preferred stock ($0.001 par value, 5,000,000 shares authorized; none issued)
|
|
|
|
|
|
||
Common stock ($0.001 par value, 450,000,000 shares authorized; 194,788,516 and
194,554,491 shares issued and 189,231,693 and 194,554,491 shares outstanding, respectively) |
195
|
|
|
195
|
|
||
Additional paid-in capital
|
1,059,176
|
|
|
1,027,182
|
|
||
Retained earnings
|
4,070,535
|
|
|
3,710,313
|
|
||
Treasury stock (5,556,823 shares at September 30, 2017)
|
(348,801
|
)
|
|
—
|
|
||
Accumulated other comprehensive income (loss)
|
3,476
|
|
|
(89,643
|
)
|
||
Total DaVita Inc. shareholders’ equity
|
4,784,581
|
|
|
4,648,047
|
|
||
Noncontrolling interests not subject to put provisions
|
184,548
|
|
|
201,694
|
|
||
Total equity
|
4,969,129
|
|
|
4,849,741
|
|
||
|
$
|
19,013,339
|
|
|
$
|
18,741,257
|
|
|
Nine months ended
September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
489,876
|
|
|
$
|
844,812
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
593,527
|
|
|
531,475
|
|
||
Goodwill and asset impairment charges
|
701,523
|
|
|
253,000
|
|
||
Stock-based compensation expense
|
28,478
|
|
|
29,817
|
|
||
Deferred income taxes
|
(132,781
|
)
|
|
48,778
|
|
||
Equity investment income, net
|
19,071
|
|
|
16,825
|
|
||
Gain on changes in ownership interests, net
|
(23,402
|
)
|
|
(404,165
|
)
|
||
Other non-cash charges
|
41,709
|
|
|
9,163
|
|
||
Changes in operating assets and liabilities, other than from acquisitions and divestitures:
|
|
|
|
|
|||
Accounts receivable
|
(146,024
|
)
|
|
(85,660
|
)
|
||
Inventories
|
14,272
|
|
|
(13,045
|
)
|
||
Other receivables and other current assets
|
(47,173
|
)
|
|
(1,616
|
)
|
||
Other long-term assets
|
(13,831
|
)
|
|
31,081
|
|
||
Accounts payable
|
18,595
|
|
|
(45,507
|
)
|
||
Accrued compensation and benefits
|
(60,063
|
)
|
|
79,289
|
|
||
Other current liabilities
|
39,445
|
|
|
119,549
|
|
||
Income taxes
|
22,669
|
|
|
79,592
|
|
||
Other long-term liabilities
|
18,648
|
|
|
(12,126
|
)
|
||
Net cash provided by operating activities
|
1,564,539
|
|
|
1,481,262
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions of property and equipment
|
(639,829
|
)
|
|
(575,243
|
)
|
||
Acquisitions
|
(726,538
|
)
|
|
(497,331
|
)
|
||
Proceeds from asset and business sales
|
92,529
|
|
|
18,991
|
|
||
Purchase of investments available for sale
|
(9,882
|
)
|
|
(9,041
|
)
|
||
Purchase of investments held-to-maturity
|
(225,166
|
)
|
|
(976,411
|
)
|
||
Proceeds from sale of investments available for sale
|
5,822
|
|
|
8,636
|
|
||
Proceeds from investments held-to-maturity
|
398,765
|
|
|
743,941
|
|
||
Purchase of intangible assets
|
—
|
|
|
(75
|
)
|
||
Purchase of equity investments
|
(3,014
|
)
|
|
(11,629
|
)
|
||
Proceeds from sale of equity investments
|
—
|
|
|
40,920
|
|
||
Distributions received on equity investments
|
80
|
|
|
—
|
|
||
Net cash used in investing activities
|
(1,107,233
|
)
|
|
(1,257,242
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Borrowings
|
38,160,821
|
|
|
39,102,302
|
|
||
Payments on long-term debt and other financing costs
|
(38,269,284
|
)
|
|
(39,201,204
|
)
|
||
Purchase of treasury stock
|
(321,411
|
)
|
|
(620,898
|
)
|
||
Distributions to noncontrolling interests
|
(165,463
|
)
|
|
(145,072
|
)
|
||
Stock award exercises and other share issuances, net
|
15,781
|
|
|
18,515
|
|
||
Contributions from noncontrolling interests
|
51,156
|
|
|
35,524
|
|
||
Purchase of noncontrolling interests
|
(1,432
|
)
|
|
(9,727
|
)
|
||
Other
|
—
|
|
|
12,584
|
|
||
Net cash used in financing activities
|
(529,832
|
)
|
|
(807,976
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
5,449
|
|
|
(1,664
|
)
|
||
Net decrease in cash and cash equivalents
|
(67,077
|
)
|
|
(585,620
|
)
|
||
Cash and cash equivalents at beginning of the year
|
913,187
|
|
|
1,499,116
|
|
||
Cash and cash equivalents at end of the period
|
$
|
846,110
|
|
|
$
|
913,496
|
|
|
Non-
controlling interests subject to put provisions |
|
DaVita Inc. Shareholders’ Equity
|
|
Non-
controlling interests not subject to put provisions |
||||||||||||||||||||||||||||||||
|
|
|
|
Additional
paid-in capital |
|
|
|
|
|
|
|
Accumulated
other comprehensive (loss) income |
|
|
|
||||||||||||||||||||||
|
|
Common stock
|
|
|
Retained
earnings |
|
Treasury stock
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
Total
|
|
|||||||||||||||||||||||
Balance at December 31, 2015
|
$
|
864,066
|
|
|
217,120
|
|
|
$
|
217
|
|
|
$
|
1,118,326
|
|
|
$
|
4,356,835
|
|
|
(7,366
|
)
|
|
$
|
(544,772
|
)
|
|
$
|
(59,826
|
)
|
|
$
|
4,870,780
|
|
|
$
|
213,392
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
99,834
|
|
|
|
|
|
|
|
|
|
|
|
879,874
|
|
|
|
|
|
|
|
|
|
|
|
879,874
|
|
|
53,374
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(29,817
|
)
|
|
(29,817
|
)
|
|
190
|
|
||||||||
Stock purchase shares issued
|
|
|
|
438
|
|
|
1
|
|
|
23,902
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
23,903
|
|
|
|
|
||||||||
Stock unit shares issued
|
|
|
|
4
|
|
|
—
|
|
|
(19,815
|
)
|
|
|
|
|
276
|
|
|
19,815
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Stock-settled SAR shares issued
|
|
|
|
218
|
|
|
—
|
|
|
(36,685
|
)
|
|
|
|
|
513
|
|
|
36,685
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Stock-settled stock-based
compensation expense |
|
|
|
|
|
|
|
|
|
37,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,970
|
|
|
|
|
||||||||
Excess tax benefits from
stock awards exercised |
|
|
|
|
|
|
|
|
|
13,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,251
|
|
|
|
|
||||||||
Changes in noncontrolling interest
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions
|
(111,092
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(81,309
|
)
|
||||||||
Contributions
|
33,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,073
|
|
||||||||||||||||
Acquisitions and divestitures
|
28,874
|
|
|
|
|
|
|
|
|
3,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,423
|
|
|
2,585
|
|
||||||||
Partial purchases
|
(6,660
|
)
|
|
|
|
|
|
|
|
(13,105
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,105
|
)
|
|
(1,747
|
)
|
||||||||
Fair value remeasurements
|
65,855
|
|
|
|
|
|
|
|
|
(65,855
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(65,855
|
)
|
|
|
|
||||||||
Reclassifications and
expirations of puts |
(1,136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,136
|
|
||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,649
|
)
|
|
(1,072,377
|
)
|
|
|
|
|
(1,072,377
|
)
|
|
|
|
||||||||
Retirement of treasury stock
|
|
|
|
(23,226
|
)
|
|
(23
|
)
|
|
(34,230
|
)
|
|
(1,526,396
|
)
|
|
23,226
|
|
|
1,560,649
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Balance at December 31, 2016
|
$
|
973,258
|
|
|
194,554
|
|
|
$
|
195
|
|
|
$
|
1,027,182
|
|
|
$
|
3,710,313
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(89,643
|
)
|
|
$
|
4,648,047
|
|
|
$
|
201,694
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
83,000
|
|
|
|
|
|
|
|
|
|
|
|
360,222
|
|
|
|
|
|
|
|
|
|
|
|
360,222
|
|
|
46,654
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,119
|
|
|
93,119
|
|
|
(2
|
)
|
||||||||
Stock unit shares issued
|
|
|
|
114
|
|
|
—
|
|
|
(94
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(94
|
)
|
|
|
|
||||||||
Stock-settled SAR shares issued
|
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Stock-settled stock-based
compensation expense |
|
|
|
|
|
|
|
|
|
28,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,463
|
|
|
|
|
||||||||
Changes in noncontrolling interest
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions
|
(102,205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(63,258
|
)
|
||||||||
Contributions
|
40,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
10,219
|
|
||||||||
Acquisitions and divestitures
|
35,456
|
|
|
|
|
|
|
|
|
(708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(708
|
)
|
|
(8,550
|
)
|
||||||||
Partial purchases
|
(1,544
|
)
|
|
|
|
|
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195
|
|
|
(83
|
)
|
||||||||
Fair value remeasurements
|
(4,138
|
)
|
|
|
|
|
|
|
|
4,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,138
|
|
|
|
|
||||||||
Reclassifications and
expirations of puts |
2,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,126
|
)
|
||||||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,557
|
)
|
|
(348,801
|
)
|
|
|
|
|
(348,801
|
)
|
|
|
|
||||||||
Balance at September 30, 2017
|
$
|
1,026,890
|
|
|
194,789
|
|
|
$
|
195
|
|
|
$
|
1,059,176
|
|
|
$
|
4,070,535
|
|
|
(5,557
|
)
|
|
$
|
(348,801
|
)
|
|
$
|
3,476
|
|
|
$
|
4,784,581
|
|
|
$
|
184,548
|
|
1.
|
Condensed consolidated interim financial statements
|
2.
|
Earnings (loss) per share
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income attributable to DaVita Inc.
|
$
|
(214,476
|
)
|
|
$
|
571,332
|
|
|
$
|
360,222
|
|
|
$
|
722,148
|
|
|
Weighted average shares outstanding during the period
|
191,078
|
|
|
205,955
|
|
|
192,964
|
|
|
206,401
|
|
|
||||
Contingently returnable shares held in escrow from the DaVita
HealthCare Partners merger |
(2,194
|
)
|
|
(2,194
|
)
|
|
(2,194
|
)
|
|
(2,194
|
)
|
|
||||
Weighted average shares for basic earnings per share calculation
|
188,884
|
|
|
203,761
|
|
|
190,770
|
|
|
204,207
|
|
|
||||
Basic net (loss) income per share attributable to DaVita Inc.
|
$
|
(1.14
|
)
|
|
$
|
2.80
|
|
|
$
|
1.89
|
|
|
$
|
3.54
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income attributable to DaVita Inc.
|
$
|
(214,476
|
)
|
|
$
|
571,332
|
|
|
$
|
360,222
|
|
|
$
|
722,148
|
|
|
Weighted average shares outstanding during the period
|
191,078
|
|
|
205,955
|
|
|
192,964
|
|
|
206,401
|
|
|
||||
Contingently returnable shares held in escrow from the DaVita
HealthCare Partners merger |
(2,194
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Assumed incremental shares from stock plans
|
—
|
|
|
1,006
|
|
|
582
|
|
|
1,243
|
|
|
||||
Weighted average shares for diluted earnings per share calculation
|
188,884
|
|
|
206,961
|
|
|
193,546
|
|
|
207,644
|
|
|
||||
Diluted net (loss) income per share attributable to DaVita Inc.
|
$
|
(1.14
|
)
|
|
$
|
2.76
|
|
|
$
|
1.86
|
|
|
$
|
3.48
|
|
|
Anti-dilutive potential common shares excluded from calculation
|
8,510
|
|
(1)
|
2,375
|
|
(2)
|
5,239
|
|
(2)
|
2,153
|
|
(2)
|
|
(1)
|
Shares associated with stock-settled stock appreciation rights and contingently returnable shares that are excluded from the diluted denominator calculation because they are anti-dilutive due to the Company’s net loss attributable to DaVita Inc.
|
(2)
|
Shares associated with stock-settled stock appreciation rights that are excluded from the diluted denominator calculation because they are anti-dilutive under the treasury stock method.
|
3.
|
Accounts receivable
|
4.
|
Investments in debt and equity securities
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Held to
maturity |
|
Available
for sale |
|
Total
|
|
Held to
maturity |
|
Available
for sale |
|
Total
|
||||||||||||
Certificates of deposit, commercial paper and
money market funds due within one year |
$
|
136,158
|
|
|
$
|
—
|
|
|
$
|
136,158
|
|
|
$
|
256,827
|
|
|
$
|
—
|
|
|
$
|
256,827
|
|
Investments in mutual funds and common stock
|
—
|
|
|
57,089
|
|
|
57,089
|
|
|
50,000
|
|
|
47,404
|
|
|
97,404
|
|
||||||
Cash surrender value of life insurance policies
|
—
|
|
|
64,240
|
|
|
64,240
|
|
|
—
|
|
|
59,646
|
|
|
59,646
|
|
||||||
|
$
|
136,158
|
|
|
$
|
121,329
|
|
|
$
|
257,487
|
|
|
$
|
306,827
|
|
|
$
|
107,050
|
|
|
$
|
413,877
|
|
Short-term investments
|
$
|
136,158
|
|
|
$
|
1,200
|
|
|
$
|
137,358
|
|
|
$
|
306,827
|
|
|
$
|
3,371
|
|
|
$
|
310,198
|
|
Long-term investments
|
—
|
|
|
120,129
|
|
|
120,129
|
|
|
—
|
|
|
103,679
|
|
|
103,679
|
|
||||||
|
$
|
136,158
|
|
|
$
|
121,329
|
|
|
$
|
257,487
|
|
|
$
|
306,827
|
|
|
$
|
107,050
|
|
|
$
|
413,877
|
|
5.
|
Equity method and other investments
|
6.
|
Goodwill
|
|
U.S. dialysis and
related lab services
|
|
DMG
|
|
Other-ancillary
services and
strategic initiatives
|
|
Consolidated total
|
||||||||
Balance at January 1, 2016
|
$
|
5,629,183
|
|
|
$
|
3,398,264
|
|
|
$
|
267,032
|
|
|
$
|
9,294,479
|
|
Acquisitions
|
75,295
|
|
|
248,901
|
|
|
123,632
|
|
|
447,828
|
|
||||
Divestitures
|
(12,891
|
)
|
|
(2,223
|
)
|
|
(29,645
|
)
|
|
(44,759
|
)
|
||||
Goodwill impairment charges
|
—
|
|
|
(253,000
|
)
|
|
(28,415
|
)
|
|
(281,415
|
)
|
||||
Foreign currency and other adjustments
|
—
|
|
|
—
|
|
|
(8,816
|
)
|
|
(8,816
|
)
|
||||
Balance at December 31, 2016
|
$
|
5,691,587
|
|
|
$
|
3,391,942
|
|
|
$
|
323,788
|
|
|
$
|
9,407,317
|
|
Acquisitions
|
441,486
|
|
|
132,778
|
|
|
113,611
|
|
|
687,875
|
|
||||
Divestitures
|
(32,260
|
)
|
|
(29
|
)
|
|
(54
|
)
|
|
(32,343
|
)
|
||||
Goodwill impairment charges
|
—
|
|
|
(651,659
|
)
|
|
(34,696
|
)
|
|
(686,355
|
)
|
||||
Foreign currency and other adjustments
|
—
|
|
|
—
|
|
|
39,383
|
|
|
39,383
|
|
||||
Balance at September 30, 2017
|
$
|
6,100,813
|
|
|
$
|
2,873,032
|
|
|
$
|
442,032
|
|
|
$
|
9,415,877
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2017:
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
6,100,813
|
|
|
$
|
3,966,460
|
|
|
$
|
511,052
|
|
|
$
|
10,578,325
|
|
Accumulated impairment charges
|
—
|
|
|
(1,093,428
|
)
|
|
(69,020
|
)
|
|
(1,162,448
|
)
|
||||
|
$
|
6,100,813
|
|
|
$
|
2,873,032
|
|
|
$
|
442,032
|
|
|
$
|
9,415,877
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
Reporting unit
|
|
September 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||
DMG California
|
|
$
|
560,756
|
|
|
$
|
—
|
|
|
$
|
560,756
|
|
|
$
|
—
|
|
DMG Florida
|
|
26,324
|
|
|
—
|
|
|
76,270
|
|
|
91,200
|
|
||||
DMG New Mexico
|
|
13,960
|
|
|
—
|
|
|
14,633
|
|
|
—
|
|
||||
DMG Nevada
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161,800
|
|
||||
Vascular access
|
|
—
|
|
|
—
|
|
|
34,696
|
|
|
—
|
|
||||
Total
|
|
$
|
601,040
|
|
|
$
|
—
|
|
|
$
|
686,355
|
|
|
$
|
253,000
|
|
|
|
Goodwill balance
as of September 30, 2017 |
|
Carrying
amount coverage (1) |
|
Sensitivities
|
|||||||
Reporting unit
|
|
|
|
Operating
income (2) |
|
Discount
rate (3) |
|||||||
DMG California
|
|
$
|
1,888,609
|
|
|
—
|
%
|
|
(3.0
|
)%
|
|
(5.8
|
)%
|
DMG Florida
|
|
$
|
378,071
|
|
|
—
|
%
|
|
(0.9
|
)%
|
|
(3.3
|
)%
|
DMG New Mexico
|
|
$
|
56,293
|
|
|
—
|
%
|
|
(1.1
|
)%
|
|
(2.1
|
)%
|
DMG Washington
|
|
$
|
247,552
|
|
|
17.1
|
%
|
|
(1.7
|
)%
|
|
(3.4
|
)%
|
|
(1)
|
Excess of estimated fair value of the reporting unit over its carrying amount as of the latest assessment date.
|
(2)
|
Potential impact on estimated fair value of a sustained, long-term reduction of
3%
in operating income as of the latest assessment date.
|
(3)
|
Potential impact on estimated fair value of an increase in discount rates of 100 basis points as of the latest assessment date.
|
7.
|
Medical payables
|
|
For the nine
months ended
September 30, 2017
|
||
Healthcare costs payables, beginning of the period
|
$
|
214,275
|
|
Add: Components of incurred health care costs
|
|
|
|
Current year
|
1,509,433
|
|
|
Prior years
|
(12,597
|
)
|
|
Acquired balance
(1)
|
3,218
|
|
|
Total incurred health care costs
|
1,500,054
|
|
|
Less: Claims paid
|
|
|
|
Current year
|
1,226,953
|
|
|
Prior years
|
194,285
|
|
|
Total claims paid
|
1,421,238
|
|
|
Healthcare costs payables, end of the period
|
$
|
293,091
|
|
|
(1)
|
Represents healthcare cost payables acquired in the Magan Medical Clinic, Inc. (Magan) acquisition. See Note 15 to these condensed consolidated financial statements for further discussion of the Magan acquisition.
|
8.
|
Income taxes
|
9.
|
Long-term debt
|
|
September 30,
2017
|
|
December 31,
2016
|
||||
Senior secured credit facilities:
|
|
|
|
||||
Term Loan A
|
$
|
800,000
|
|
|
$
|
862,500
|
|
Term Loan B
|
3,386,250
|
|
|
3,412,500
|
|
||
Senior notes
|
4,500,000
|
|
|
4,500,000
|
|
||
Acquisition obligations and other notes payable
|
149,734
|
|
|
117,547
|
|
||
Capital lease obligations
|
330,446
|
|
|
299,682
|
|
||
Total debt principal outstanding
|
9,166,430
|
|
|
9,192,229
|
|
||
Discount and deferred financing costs
|
(67,905
|
)
|
|
(79,861
|
)
|
||
|
9,098,525
|
|
|
9,112,368
|
|
||
Less current portion
|
(189,822
|
)
|
|
(165,041
|
)
|
||
|
$
|
8,908,703
|
|
|
$
|
8,947,327
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
Derivatives designated as hedging instruments
|
|
Balance sheet location
|
|
Fair value
|
|
Balance sheet location
|
|
Fair value
|
||||
Interest rate cap agreements
|
|
Other long-term assets
|
|
$
|
962
|
|
|
Other long-term assets
|
|
$
|
9,929
|
|
|
Amount of losses
recognized in OCI on interest rate cap and swap agreements |
|
Location of losses reclassified from accumulated OCI into income
|
|
Amount of losses
reclassified from accumulated OCI into income |
||||||||||||||||||||||||||||
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|||||||||||||||||||||||||
Derivatives designated as cash flow hedges
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||||||
Interest rate swap
agreements |
$
|
—
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
(815
|
)
|
|
Debt expense
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
299
|
|
Interest rate cap
agreements |
(782
|
)
|
|
(300
|
)
|
|
(8,967
|
)
|
|
(12,674
|
)
|
|
Debt expense
|
|
2,070
|
|
|
609
|
|
|
6,208
|
|
|
1,829
|
|
||||||||
Tax benefit
|
304
|
|
|
102
|
|
|
3,488
|
|
|
5,251
|
|
|
Tax expense
|
|
(805
|
)
|
|
(246
|
)
|
|
(2,415
|
)
|
|
(827
|
)
|
||||||||
Total
|
$
|
(478
|
)
|
|
$
|
(153
|
)
|
|
$
|
(5,479
|
)
|
|
$
|
(8,238
|
)
|
|
|
|
$
|
1,265
|
|
|
$
|
388
|
|
|
$
|
3,793
|
|
|
$
|
1,301
|
|
10.
|
Contingencies
|
11.
|
Noncontrolling interests subject to put provisions and other commitments
|
12.
|
Long-term incentive compensation
|
13.
|
Share repurchases
|
|
For the three months ended
September 30, 2017
|
|
For the nine months ended
September 30, 2017
|
||||||||||||||||||||||||||||
|
Interest
rate cap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive (loss) income |
|
Interest
rate cap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive (loss) income |
||||||||||||||||
Beginning balance
|
$
|
(14,502
|
)
|
|
$
|
4,580
|
|
|
$
|
(17,386
|
)
|
|
$
|
(27,308
|
)
|
|
$
|
(12,029
|
)
|
|
$
|
2,175
|
|
|
$
|
(79,789
|
)
|
|
$
|
(89,643
|
)
|
Unrealized (losses)
gains |
(782
|
)
|
|
1,253
|
|
|
29,143
|
|
|
29,614
|
|
|
(8,967
|
)
|
|
4,682
|
|
|
91,546
|
|
|
87,261
|
|
||||||||
Related income tax
benefit (expense) |
304
|
|
|
(390
|
)
|
|
—
|
|
|
(86
|
)
|
|
3,488
|
|
|
(1,202
|
)
|
|
—
|
|
|
2,286
|
|
||||||||
|
(478
|
)
|
|
863
|
|
|
29,143
|
|
|
29,528
|
|
|
(5,479
|
)
|
|
3,480
|
|
|
91,546
|
|
|
89,547
|
|
||||||||
Reclassification
from accumulated other comprehensive income into net income |
2,070
|
|
|
(15
|
)
|
|
—
|
|
|
2,055
|
|
|
6,208
|
|
|
(362
|
)
|
|
—
|
|
|
5,846
|
|
||||||||
Related income tax (expense) benefit
|
(805
|
)
|
|
6
|
|
|
—
|
|
|
(799
|
)
|
|
(2,415
|
)
|
|
141
|
|
|
—
|
|
|
(2,274
|
)
|
||||||||
|
1,265
|
|
|
(9
|
)
|
|
—
|
|
|
1,256
|
|
|
3,793
|
|
|
(221
|
)
|
|
—
|
|
|
3,572
|
|
||||||||
Ending balance
|
$
|
(13,715
|
)
|
|
$
|
5,434
|
|
|
$
|
11,757
|
|
|
$
|
3,476
|
|
|
$
|
(13,715
|
)
|
|
$
|
5,434
|
|
|
$
|
11,757
|
|
|
$
|
3,476
|
|
|
For the three months ended
September 30, 2016
|
|
For the nine months ended
September 30, 2016
|
||||||||||||||||||||||||||||
|
Interest
rate cap and swap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive (loss) income |
|
Interest
rate cap and swap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive (loss) income |
||||||||||||||||
Beginning balance
|
$
|
(18,097
|
)
|
|
$
|
1,986
|
|
|
$
|
(43,925
|
)
|
|
$
|
(60,036
|
)
|
|
$
|
(10,925
|
)
|
|
$
|
1,361
|
|
|
$
|
(50,262
|
)
|
|
$
|
(59,826
|
)
|
Unrealized (losses)
gains |
(255
|
)
|
|
1,454
|
|
|
(951
|
)
|
|
248
|
|
|
(13,489
|
)
|
|
2,578
|
|
|
5,386
|
|
|
(5,525
|
)
|
||||||||
Related income tax
benefit (expense) |
102
|
|
|
(391
|
)
|
|
—
|
|
|
(289
|
)
|
|
5,251
|
|
|
(797
|
)
|
|
—
|
|
|
4,454
|
|
||||||||
|
(153
|
)
|
|
1,063
|
|
|
(951
|
)
|
|
(41
|
)
|
|
(8,238
|
)
|
|
1,781
|
|
|
5,386
|
|
|
(1,071
|
)
|
||||||||
Reclassification
from accumulated other comprehensive income into net income |
634
|
|
|
(81
|
)
|
|
7,513
|
|
|
8,066
|
|
|
2,128
|
|
|
(233
|
)
|
|
7,513
|
|
|
9,408
|
|
||||||||
Related income tax
(expense) benefit |
(246
|
)
|
|
31
|
|
|
—
|
|
|
(215
|
)
|
|
(827
|
)
|
|
90
|
|
|
—
|
|
|
(737
|
)
|
||||||||
|
388
|
|
|
(50
|
)
|
|
7,513
|
|
|
7,851
|
|
|
1,301
|
|
|
(143
|
)
|
|
7,513
|
|
|
8,671
|
|
||||||||
Ending balance
|
$
|
(17,862
|
)
|
|
$
|
2,999
|
|
|
$
|
(37,363
|
)
|
|
$
|
(52,226
|
)
|
|
$
|
(17,862
|
)
|
|
$
|
2,999
|
|
|
$
|
(37,363
|
)
|
|
$
|
(52,226
|
)
|
15.
|
Acquisitions and divestitures
|
Current assets
|
$
|
24,525
|
|
Property and equipment
|
36,295
|
|
|
Amortizable intangible and other long-term assets
|
11,547
|
|
|
Goodwill
|
298,358
|
|
|
Current liabilities
|
(8,684
|
)
|
|
Long-term liabilities
|
(478
|
)
|
|
|
$
|
361,563
|
|
Current assets
|
$
|
11,548
|
|
Property and equipment
|
28,384
|
|
|
Amortizable intangible and other long-term assets
|
18,403
|
|
|
Non-amortizable intangibles
|
31,983
|
|
|
Goodwill
|
389,517
|
|
|
Current liabilities
|
(20,628
|
)
|
|
Long-term liabilities
|
(8,223
|
)
|
|
Noncontrolling interests
|
(36,075
|
)
|
|
|
$
|
414,909
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(unaudited)
|
||||||||||||||
Pro forma net revenues
|
$
|
3,925,402
|
|
|
$
|
3,844,174
|
|
|
$
|
11,638,894
|
|
|
$
|
11,467,643
|
|
Pro forma net (loss) income attributable to DaVita Inc.
|
$
|
(214,156
|
)
|
|
$
|
572,873
|
|
|
$
|
360,679
|
|
|
$
|
728,759
|
|
Pro forma basic net (loss) income per share attributable to DaVita Inc.
|
$
|
(1.13
|
)
|
|
$
|
2.81
|
|
|
$
|
1.89
|
|
|
$
|
3.57
|
|
Pro forma diluted net (loss) income per share attributable to
DaVita Inc. |
$
|
(1.13
|
)
|
|
$
|
2.77
|
|
|
$
|
1.86
|
|
|
$
|
3.51
|
|
|
For the nine
months ended
September 30, 2017
|
||
Beginning balance, January 1, 2017
|
$
|
9,977
|
|
Contingent earn-out obligations associated with acquisitions
|
4,110
|
|
|
Remeasurement of fair value for contingent earn-out obligations
|
(1,072
|
)
|
|
Payments on contingent earn-out obligations
|
(4,060
|
)
|
|
|
$
|
8,955
|
|
16.
|
Variable interest entities
|
17.
|
Fair value of financial instruments
|
|
Total
|
|
Quoted prices in
active markets for identical assets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments in mutual funds and common stock
|
$
|
57,089
|
|
|
$
|
57,089
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash surrender value of life insurance policies
|
$
|
64,240
|
|
|
$
|
—
|
|
|
$
|
64,240
|
|
|
$
|
—
|
|
Interest rate cap agreements
|
$
|
962
|
|
|
$
|
—
|
|
|
$
|
962
|
|
|
$
|
—
|
|
Funds on deposit with third parties
|
$
|
76,456
|
|
|
$
|
76,456
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Contingent earn-out obligations
|
$
|
8,955
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,955
|
|
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interests subject to put provisions
|
$
|
1,026,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,026,890
|
|
18.
|
Segment reporting
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
||||||||
U.S. dialysis and related lab services
|
|
|
|
|
|
|
|
||||||||
Patient service revenues:
|
|
|
|
|
|
|
|
||||||||
External sources
|
$
|
2,457,302
|
|
|
$
|
2,412,818
|
|
|
$
|
7,209,424
|
|
|
$
|
7,079,054
|
|
Intersegment revenues
|
26,342
|
|
|
16,040
|
|
|
76,538
|
|
|
44,819
|
|
||||
Total dialysis and related lab services revenues
|
2,483,644
|
|
|
2,428,858
|
|
|
7,285,962
|
|
|
7,123,873
|
|
||||
Less: Provision for uncollectible accounts
|
(117,973
|
)
|
|
(109,299
|
)
|
|
(334,078
|
)
|
|
(320,565
|
)
|
||||
Net dialysis and related lab services patient service revenues
|
2,365,671
|
|
|
2,319,559
|
|
|
6,951,884
|
|
|
6,803,308
|
|
||||
Other revenues
(1)
|
4,803
|
|
|
3,912
|
|
|
14,998
|
|
|
12,134
|
|
||||
Total net dialysis and related lab services revenues
|
2,370,474
|
|
|
2,323,471
|
|
|
6,966,882
|
|
|
6,815,442
|
|
||||
DMG
|
|
|
|
|
|
|
|
||||||||
DMG revenues:
|
|
|
|
|
|
|
|
||||||||
Capitated revenues
|
975,526
|
|
|
846,245
|
|
|
2,852,631
|
|
|
2,586,383
|
|
||||
Net patient service revenues
|
187,678
|
|
|
166,622
|
|
|
556,179
|
|
|
448,222
|
|
||||
Other revenues
(2)
|
15,170
|
|
|
15,195
|
|
|
52,509
|
|
|
41,766
|
|
||||
Intersegment capitated and other revenues
|
69
|
|
|
75
|
|
|
174
|
|
|
189
|
|
||||
Total net DMG revenues
|
1,178,443
|
|
|
1,028,137
|
|
|
3,461,493
|
|
|
3,076,560
|
|
||||
Other—Ancillary services and strategic initiatives
|
|
|
|
|
|
|
|
||||||||
Net patient service revenues
|
95,490
|
|
|
57,498
|
|
|
246,349
|
|
|
165,742
|
|
||||
Capitated revenues
|
40,839
|
|
|
26,293
|
|
|
103,848
|
|
|
74,149
|
|
||||
Other external sources
|
263,996
|
|
|
311,292
|
|
|
795,731
|
|
|
942,478
|
|
||||
Intersegment revenues
|
13,743
|
|
|
16,642
|
|
|
39,958
|
|
|
43,189
|
|
||||
Total ancillary services and strategic initiatives revenues
|
414,068
|
|
|
411,725
|
|
|
1,185,886
|
|
|
1,225,558
|
|
||||
Total net segment revenues
|
3,962,985
|
|
|
3,763,333
|
|
|
11,614,261
|
|
|
11,117,560
|
|
||||
Elimination of intersegment revenues
|
(40,154
|
)
|
|
(32,757
|
)
|
|
(116,670
|
)
|
|
(88,197
|
)
|
||||
Consolidated net revenues
|
$
|
3,922,831
|
|
|
$
|
3,730,576
|
|
|
$
|
11,497,591
|
|
|
$
|
11,029,363
|
|
Segment operating margin:
|
|
|
|
|
|
|
|
||||||||
U.S. dialysis and related lab services
(3)
|
$
|
442,777
|
|
|
$
|
452,187
|
|
|
$
|
1,837,989
|
|
|
$
|
1,341,432
|
|
DMG
|
(587,817
|
)
|
|
33,094
|
|
|
(588,389
|
)
|
|
(126,110
|
)
|
||||
Other—Ancillary services and strategic initiatives
|
(36,518
|
)
|
|
361,903
|
|
|
(142,984
|
)
|
|
338,159
|
|
||||
Total segment operating margin
|
(181,558
|
)
|
|
847,184
|
|
|
1,106,616
|
|
|
1,553,481
|
|
||||
Reconciliation of segment operating margin to consolidated income
before income taxes: |
|
|
|
|
|
|
|
||||||||
Corporate administrative support
(4)
|
(10,965
|
)
|
|
(28,028
|
)
|
|
(32,587
|
)
|
|
(40,366
|
)
|
||||
Consolidated operating (loss) income
|
(192,523
|
)
|
|
819,156
|
|
|
1,074,029
|
|
|
1,513,115
|
|
||||
Debt expense
|
(109,623
|
)
|
|
(104,581
|
)
|
|
(322,014
|
)
|
|
(310,359
|
)
|
||||
Other income, net
|
4,370
|
|
|
1,876
|
|
|
13,866
|
|
|
8,067
|
|
||||
Consolidated (loss) income before income taxes
|
$
|
(297,776
|
)
|
|
$
|
716,451
|
|
|
$
|
765,881
|
|
|
$
|
1,210,823
|
|
|
(1)
|
Includes management fees for providing management and administrative services to dialysis centers that are wholly-owned by third parties and legal entities in which the Company owns a noncontrolling equity investment.
|
(2)
|
Includes medical consulting service fees and management fees for providing management and administrative services to unconsolidated joint ventures and revenue related to the maintenance of existing physician networks.
|
(3)
|
U.S. dialysis and related lab services operating income includes the net gain on the settlement with the VA for the nine months ended September 30, 2017.
|
(4)
|
Corporate administrative support costs includes an adjustment of
$27,040
to reduce a receivable associated with the DMG acquisition escrow provision relating to an income tax item for the three and nine months ended September 30, 2016.
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S. dialysis and related lab services
|
$
|
132,112
|
|
|
$
|
122,540
|
|
|
$
|
387,142
|
|
|
$
|
358,427
|
|
DMG
|
60,649
|
|
|
52,595
|
|
|
177,983
|
|
|
153,068
|
|
||||
Ancillary services and strategic initiatives
|
10,522
|
|
|
6,604
|
|
|
28,402
|
|
|
19,980
|
|
||||
|
$
|
203,283
|
|
|
$
|
181,739
|
|
|
$
|
593,527
|
|
|
$
|
531,475
|
|
|
September 30,
2017
|
|
December 31,
2016
|
||||
Segment assets
|
|
|
|
|
|
||
U.S. dialysis and related lab services (including equity
investments of $87,549 and $66,924, respectively) |
$
|
11,649,092
|
|
|
$
|
11,099,137
|
|
DMG (including equity investments of $9,155 and $10,350,
respectively) |
5,788,387
|
|
|
6,213,091
|
|
||
Other—Ancillary services and strategic initiatives (including
equity investments of $448,349 and $425,115, respectively) |
1,575,860
|
|
|
1,429,029
|
|
||
Consolidated assets
|
$
|
19,013,339
|
|
|
$
|
18,741,257
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S. dialysis and related lab services
|
$
|
205,266
|
|
|
$
|
182,741
|
|
|
$
|
531,027
|
|
|
$
|
467,121
|
|
DMG
|
24,282
|
|
|
17,396
|
|
|
72,953
|
|
|
55,639
|
|
||||
Ancillary services and strategic initiatives
|
11,341
|
|
|
16,479
|
|
|
35,849
|
|
|
52,483
|
|
||||
|
$
|
240,889
|
|
|
$
|
216,616
|
|
|
$
|
639,829
|
|
|
$
|
575,243
|
|
19.
|
Changes in DaVita Inc.’s ownership interest in consolidated subsidiaries
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net (loss) income attributable to DaVita Inc.
|
$
|
(214,476
|
)
|
|
$
|
571,332
|
|
|
$
|
360,222
|
|
|
$
|
722,148
|
|
Changes in paid-in capital for:
|
|
|
|
|
|
|
|
||||||||
Purchases of noncontrolling interests
|
—
|
|
|
(604
|
)
|
|
195
|
|
|
(5,135
|
)
|
||||
Net transfers to noncontrolling interests
|
—
|
|
|
(604
|
)
|
|
195
|
|
|
(5,135
|
)
|
||||
Net (loss) income attributable to DaVita Inc., net of
transfers to noncontrolling interests |
$
|
(214,476
|
)
|
|
$
|
570,728
|
|
|
$
|
360,417
|
|
|
$
|
717,013
|
|
20.
|
New accounting standards
|
21.
|
Condensed consolidating financial statements
|
|
|
DaVita Inc.
|
|
Guarantor
subsidiaries
|
|
Non-
Guarantor
subsidiaries
|
|
Consolidating
adjustments
|
|
Consolidated
total
|
||||||||||
For The Three Months Ended September 30, 2017
|
|
|
|
|
|
|||||||||||||||
Patient services revenues
|
|
$
|
—
|
|
|
$
|
1,732,287
|
|
|
$
|
1,076,035
|
|
|
$
|
(62,065
|
)
|
|
$
|
2,746,257
|
|
Less: Provision for uncollectible accounts
|
|
—
|
|
|
(82,860
|
)
|
|
(46,989
|
)
|
|
6,089
|
|
|
(123,760
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
1,649,427
|
|
|
1,029,046
|
|
|
(55,976
|
)
|
|
2,622,497
|
|
|||||
Capitated revenues
|
|
—
|
|
|
461,866
|
|
|
555,481
|
|
|
(982
|
)
|
|
1,016,365
|
|
|||||
Other revenues
|
|
189,275
|
|
|
468,948
|
|
|
52,283
|
|
|
(426,537
|
)
|
|
283,969
|
|
|||||
Total net revenues
|
|
189,275
|
|
|
2,580,241
|
|
|
1,636,810
|
|
|
(483,495
|
)
|
|
3,922,831
|
|
|||||
Operating expenses and charges
|
|
128,488
|
|
|
2,964,867
|
|
|
1,505,494
|
|
|
(483,495
|
)
|
|
4,115,354
|
|
|||||
Operating income (loss)
|
|
60,787
|
|
|
(384,626
|
)
|
|
131,316
|
|
|
—
|
|
|
(192,523
|
)
|
|||||
Debt expense
|
|
(108,453
|
)
|
|
(93,243
|
)
|
|
(16,168
|
)
|
|
108,241
|
|
|
(109,623
|
)
|
|||||
Other income, net
|
|
104,250
|
|
|
1,774
|
|
|
6,587
|
|
|
(108,241
|
)
|
|
4,370
|
|
|||||
Income tax expense (benefit)
|
|
27,624
|
|
|
(150,192
|
)
|
|
(3,174
|
)
|
|
—
|
|
|
(125,742
|
)
|
|||||
Equity (losses) earnings in subsidiaries
|
|
(243,436
|
)
|
|
82,467
|
|
|
—
|
|
|
160,969
|
|
|
—
|
|
|||||
Net (loss) income
|
|
(214,476
|
)
|
|
(243,436
|
)
|
|
124,909
|
|
|
160,969
|
|
|
(172,034
|
)
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,442
|
)
|
|
(42,442
|
)
|
|||||
Net (loss) income attributable to DaVita Inc.
|
|
$
|
(214,476
|
)
|
|
$
|
(243,436
|
)
|
|
$
|
124,909
|
|
|
$
|
118,527
|
|
|
$
|
(214,476
|
)
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Three Months Ended September 30, 2016
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Patient service revenues
|
|
$
|
—
|
|
|
$
|
1,726,892
|
|
|
$
|
959,193
|
|
|
$
|
(42,891
|
)
|
|
$
|
2,643,194
|
|
Less: Provision for uncollectible accounts
|
|
—
|
|
|
(73,833
|
)
|
|
(41,722
|
)
|
|
—
|
|
|
(115,555
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
1,653,059
|
|
|
917,471
|
|
|
(42,891
|
)
|
|
2,527,639
|
|
|||||
Capitated revenues
|
|
—
|
|
|
465,684
|
|
|
406,893
|
|
|
(39
|
)
|
|
872,538
|
|
|||||
Other revenues
|
|
191,815
|
|
|
506,619
|
|
|
32,652
|
|
|
(400,687
|
)
|
|
330,399
|
|
|||||
Total net revenues
|
|
191,815
|
|
|
2,625,362
|
|
|
1,357,016
|
|
|
(443,617
|
)
|
|
3,730,576
|
|
|||||
Operating expenses
|
|
143,784
|
|
|
2,388,114
|
|
|
823,139
|
|
|
(443,617
|
)
|
|
2,911,420
|
|
|||||
Operating income
|
|
48,031
|
|
|
237,248
|
|
|
533,877
|
|
|
—
|
|
|
819,156
|
|
|||||
Debt expense
|
|
(101,895
|
)
|
|
(91,716
|
)
|
|
(14,402
|
)
|
|
103,432
|
|
|
(104,581
|
)
|
|||||
Other income
|
|
99,446
|
|
|
2,659
|
|
|
3,203
|
|
|
(103,432
|
)
|
|
1,876
|
|
|||||
Income tax (benefit) expense
|
|
(20,898
|
)
|
|
(21,486
|
)
|
|
146,685
|
|
|
—
|
|
|
104,301
|
|
|||||
Equity earnings in subsidiaries
|
|
504,852
|
|
|
335,175
|
|
|
—
|
|
|
(840,027
|
)
|
|
—
|
|
|||||
Net income
|
|
571,332
|
|
|
504,852
|
|
|
375,993
|
|
|
(840,027
|
)
|
|
612,150
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,818
|
)
|
|
(40,818
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
571,332
|
|
|
$
|
504,852
|
|
|
$
|
375,993
|
|
|
$
|
(880,845
|
)
|
|
$
|
571,332
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Nine Months Ended September 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Patient services revenues
|
|
$
|
—
|
|
|
$
|
4,966,892
|
|
|
$
|
3,230,584
|
|
|
$
|
(167,374
|
)
|
|
$
|
8,030,102
|
|
Less: Provision for uncollectible accounts
|
|
—
|
|
|
(219,554
|
)
|
|
(138,763
|
)
|
|
6,089
|
|
|
(352,228
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
4,747,338
|
|
|
3,091,821
|
|
|
(161,285
|
)
|
|
7,677,874
|
|
|||||
Capitated revenues
|
|
—
|
|
|
1,393,345
|
|
|
1,566,382
|
|
|
(3,248
|
)
|
|
2,956,479
|
|
|||||
Other revenues
|
|
604,246
|
|
|
1,448,484
|
|
|
122,177
|
|
|
(1,311,669
|
)
|
|
863,238
|
|
|||||
Total net revenues
|
|
604,246
|
|
|
7,589,167
|
|
|
4,780,380
|
|
|
(1,476,202
|
)
|
|
11,497,591
|
|
|||||
Operating expenses and charges
|
|
398,502
|
|
|
7,241,745
|
|
|
4,259,517
|
|
|
(1,476,202
|
)
|
|
10,423,562
|
|
|||||
Operating income
|
|
205,744
|
|
|
347,422
|
|
|
520,863
|
|
|
—
|
|
|
1,074,029
|
|
|||||
Debt expense
|
|
(317,276
|
)
|
|
(276,990
|
)
|
|
(44,827
|
)
|
|
317,079
|
|
|
(322,014
|
)
|
|||||
Other income, net
|
|
306,886
|
|
|
7,502
|
|
|
16,557
|
|
|
(317,079
|
)
|
|
13,866
|
|
|||||
Income tax expense
|
|
84,686
|
|
|
142,156
|
|
|
49,163
|
|
|
—
|
|
|
276,005
|
|
|||||
Equity earnings in subsidiaries
|
|
249,554
|
|
|
313,776
|
|
|
—
|
|
|
(563,330
|
)
|
|
—
|
|
|||||
Net income
|
|
360,222
|
|
|
249,554
|
|
|
443,430
|
|
|
(563,330
|
)
|
|
489,876
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(129,654
|
)
|
|
(129,654
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
360,222
|
|
|
$
|
249,554
|
|
|
$
|
443,430
|
|
|
$
|
(692,984
|
)
|
|
$
|
360,222
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Nine Months Ended September 30, 2016
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Patient services revenues
|
|
$
|
—
|
|
|
$
|
5,044,565
|
|
|
$
|
2,787,176
|
|
|
$
|
(123,100
|
)
|
|
$
|
7,708,641
|
|
Less: Provision for uncollectible accounts
|
|
—
|
|
|
(207,144
|
)
|
|
(129,044
|
)
|
|
—
|
|
|
(336,188
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
4,837,421
|
|
|
2,658,132
|
|
|
(123,100
|
)
|
|
7,372,453
|
|
|||||
Capitated revenues
|
|
—
|
|
|
1,397,378
|
|
|
1,263,404
|
|
|
(250
|
)
|
|
2,660,532
|
|
|||||
Other revenues
|
|
575,700
|
|
|
1,512,039
|
|
|
91,921
|
|
|
(1,183,282
|
)
|
|
996,378
|
|
|||||
Total net revenues
|
|
575,700
|
|
|
7,746,838
|
|
|
4,013,457
|
|
|
(1,306,632
|
)
|
|
11,029,363
|
|
|||||
Operating expenses and charges
|
|
400,129
|
|
|
7,275,863
|
|
|
3,146,888
|
|
|
(1,306,632
|
)
|
|
9,516,248
|
|
|||||
Operating income
|
|
175,571
|
|
|
470,975
|
|
|
866,569
|
|
|
—
|
|
|
1,513,115
|
|
|||||
Debt expense
|
|
(305,097
|
)
|
|
(275,148
|
)
|
|
(38,914
|
)
|
|
308,800
|
|
|
(310,359
|
)
|
|||||
Other income, net
|
|
296,660
|
|
|
12,416
|
|
|
7,791
|
|
|
(308,800
|
)
|
|
8,067
|
|
|||||
Income tax expense
|
|
56,190
|
|
|
140,972
|
|
|
168,849
|
|
|
—
|
|
|
366,011
|
|
|||||
Equity earnings in subsidiaries
|
|
611,204
|
|
|
543,933
|
|
|
—
|
|
|
(1,155,137
|
)
|
|
—
|
|
|||||
Net income
|
|
722,148
|
|
|
611,204
|
|
|
666,597
|
|
|
(1,155,137
|
)
|
|
844,812
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,664
|
)
|
|
(122,664
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
722,148
|
|
|
$
|
611,204
|
|
|
$
|
666,597
|
|
|
$
|
(1,277,801
|
)
|
|
$
|
722,148
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Three Months Ended September 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net (loss) income
|
|
$
|
(214,476
|
)
|
|
$
|
(243,436
|
)
|
|
$
|
124,909
|
|
|
$
|
160,969
|
|
|
$
|
(172,034
|
)
|
Other comprehensive income
|
|
1,641
|
|
|
—
|
|
|
29,143
|
|
|
—
|
|
|
30,784
|
|
|||||
Total comprehensive (loss) income
|
|
(212,835
|
)
|
|
(243,436
|
)
|
|
154,052
|
|
|
160,969
|
|
|
(141,250
|
)
|
|||||
Less: Comprehensive income attributable to
noncontrolling interest |
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,442
|
)
|
|
(42,442
|
)
|
|||||
Comprehensive (loss) income attributable to DaVita Inc.
|
|
$
|
(212,835
|
)
|
|
$
|
(243,436
|
)
|
|
$
|
154,052
|
|
|
$
|
118,527
|
|
|
$
|
(183,692
|
)
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Three Months Ended September 30, 2016
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
571,332
|
|
|
$
|
504,852
|
|
|
$
|
375,993
|
|
|
$
|
(840,027
|
)
|
|
$
|
612,150
|
|
Other comprehensive income
|
|
1,248
|
|
|
—
|
|
|
6,620
|
|
|
—
|
|
|
7,868
|
|
|||||
Total comprehensive income
|
|
572,580
|
|
|
504,852
|
|
|
382,613
|
|
|
(840,027
|
)
|
|
620,018
|
|
|||||
Less: Comprehensive income attributable to the
noncontrolling interests |
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,876
|
)
|
|
(40,876
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
572,580
|
|
|
$
|
504,852
|
|
|
$
|
382,613
|
|
|
$
|
(880,903
|
)
|
|
$
|
579,142
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Nine Months Ended September 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
360,222
|
|
|
$
|
249,554
|
|
|
$
|
443,430
|
|
|
$
|
(563,330
|
)
|
|
$
|
489,876
|
|
Other comprehensive income
|
|
1,571
|
|
|
—
|
|
|
91,546
|
|
|
—
|
|
|
93,117
|
|
|||||
Total comprehensive income
|
|
361,793
|
|
|
249,554
|
|
|
534,976
|
|
|
(563,330
|
)
|
|
582,993
|
|
|||||
Less: Comprehensive income attributable to
noncontrolling interest |
|
—
|
|
|
—
|
|
|
—
|
|
|
(129,652
|
)
|
|
(129,652
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
361,793
|
|
|
$
|
249,554
|
|
|
$
|
534,976
|
|
|
$
|
(692,982
|
)
|
|
$
|
453,341
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Nine Months Ended September 30, 2016
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
722,148
|
|
|
$
|
611,204
|
|
|
$
|
666,597
|
|
|
$
|
(1,155,137
|
)
|
|
$
|
844,812
|
|
Other comprehensive (loss) income
|
|
(5,299
|
)
|
|
—
|
|
|
13,106
|
|
|
—
|
|
|
7,807
|
|
|||||
Total comprehensive income
|
|
716,849
|
|
|
611,204
|
|
|
679,703
|
|
|
(1,155,137
|
)
|
|
852,619
|
|
|||||
Less: Comprehensive income attributable to the
noncontrolling interests |
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,871
|
)
|
|
(122,871
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
716,849
|
|
|
$
|
611,204
|
|
|
$
|
679,703
|
|
|
$
|
(1,278,008
|
)
|
|
$
|
729,748
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
As of September 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
|
$
|
447,627
|
|
|
$
|
14,768
|
|
|
$
|
383,715
|
|
|
$
|
—
|
|
|
$
|
846,110
|
|
Accounts receivable, net
|
|
—
|
|
|
1,325,029
|
|
|
766,045
|
|
|
—
|
|
|
2,091,074
|
|
|||||
Other current assets
|
|
178,901
|
|
|
804,580
|
|
|
112,884
|
|
|
—
|
|
|
1,096,365
|
|
|||||
Total current assets
|
|
626,528
|
|
|
2,144,377
|
|
|
1,262,644
|
|
|
—
|
|
|
4,033,549
|
|
|||||
Property and equipment, net
|
|
368,233
|
|
|
1,752,690
|
|
|
1,265,133
|
|
|
—
|
|
|
3,386,056
|
|
|||||
Intangible assets, net
|
|
289
|
|
|
1,370,085
|
|
|
80,659
|
|
|
—
|
|
|
1,451,033
|
|
|||||
Investments in subsidiaries
|
|
10,116,956
|
|
|
2,738,851
|
|
|
—
|
|
|
(12,855,807
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
3,079,514
|
|
|
—
|
|
|
1,172,721
|
|
|
(4,252,235
|
)
|
|
—
|
|
|||||
Other long-term assets and investments
|
|
46,028
|
|
|
99,584
|
|
|
581,212
|
|
|
—
|
|
|
726,824
|
|
|||||
Goodwill
|
|
—
|
|
|
7,248,275
|
|
|
2,167,602
|
|
|
—
|
|
|
9,415,877
|
|
|||||
Total assets
|
|
$
|
14,237,548
|
|
|
$
|
15,353,862
|
|
|
$
|
6,529,971
|
|
|
$
|
(17,108,042
|
)
|
|
$
|
19,013,339
|
|
Current liabilities
|
|
$
|
283,770
|
|
|
$
|
1,907,482
|
|
|
$
|
683,541
|
|
|
$
|
—
|
|
|
$
|
2,874,793
|
|
Intercompany payables
|
|
—
|
|
|
2,231,303
|
|
|
2,020,932
|
|
|
(4,252,235
|
)
|
|
—
|
|
|||||
Long-term debt and other long-term liabilities
|
|
8,565,734
|
|
|
1,098,121
|
|
|
478,672
|
|
|
—
|
|
|
10,142,527
|
|
|||||
Noncontrolling interests subject to put provisions
|
|
603,463
|
|
|
—
|
|
|
—
|
|
|
423,427
|
|
|
1,026,890
|
|
|||||
Total DaVita Inc. shareholder's equity
|
|
4,784,581
|
|
|
10,116,956
|
|
|
2,738,851
|
|
|
(12,855,807
|
)
|
|
4,784,581
|
|
|||||
Noncontrolling interests not subject to put
provisions |
|
—
|
|
|
—
|
|
|
607,975
|
|
|
(423,427
|
)
|
|
184,548
|
|
|||||
Total equity
|
|
4,784,581
|
|
|
10,116,956
|
|
|
3,346,826
|
|
|
(13,279,234
|
)
|
|
4,969,129
|
|
|||||
Total liabilities and equity
|
|
$
|
14,237,548
|
|
|
$
|
15,353,862
|
|
|
$
|
6,529,971
|
|
|
$
|
(17,108,042
|
)
|
|
$
|
19,013,339
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
As of December 31, 2016
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
|
$
|
549,921
|
|
|
$
|
59,192
|
|
|
$
|
304,074
|
|
|
$
|
—
|
|
|
$
|
913,187
|
|
Accounts receivable, net
|
|
—
|
|
|
1,215,232
|
|
|
702,070
|
|
|
—
|
|
|
1,917,302
|
|
|||||
Other current assets
|
|
277,911
|
|
|
736,727
|
|
|
135,101
|
|
|
—
|
|
|
1,149,739
|
|
|||||
Total current assets
|
|
827,832
|
|
|
2,011,151
|
|
|
1,141,245
|
|
|
—
|
|
|
3,980,228
|
|
|||||
Property and equipment, net
|
|
337,200
|
|
|
1,689,798
|
|
|
1,148,369
|
|
|
—
|
|
|
3,175,367
|
|
|||||
Intangible assets, net
|
|
487
|
|
|
1,491,057
|
|
|
36,223
|
|
|
—
|
|
|
1,527,767
|
|
|||||
Investments in subsidiaries
|
|
9,717,728
|
|
|
2,002,660
|
|
|
—
|
|
|
(11,720,388
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
3,250,692
|
|
|
—
|
|
|
866,955
|
|
|
(4,117,647
|
)
|
|
—
|
|
|||||
Other long-term assets and investments
|
|
39,994
|
|
|
86,710
|
|
|
523,874
|
|
|
—
|
|
|
650,578
|
|
|||||
Goodwill
|
|
—
|
|
|
7,838,984
|
|
|
1,568,333
|
|
|
—
|
|
|
9,407,317
|
|
|||||
Total assets
|
|
$
|
14,173,933
|
|
|
$
|
15,120,360
|
|
|
$
|
5,284,999
|
|
|
$
|
(15,838,035
|
)
|
|
$
|
18,741,257
|
|
Current liabilities
|
|
$
|
303,840
|
|
|
$
|
1,865,193
|
|
|
$
|
527,412
|
|
|
$
|
—
|
|
|
$
|
2,696,445
|
|
Intercompany payables
|
|
—
|
|
|
2,322,124
|
|
|
1,795,523
|
|
|
(4,117,647
|
)
|
|
—
|
|
|||||
Long-term debt and other long-term liabilities
|
|
8,614,445
|
|
|
1,215,315
|
|
|
392,053
|
|
|
—
|
|
|
10,221,813
|
|
|||||
Noncontrolling interests subject to put provisions
|
|
607,601
|
|
|
—
|
|
|
—
|
|
|
365,657
|
|
|
973,258
|
|
|||||
Total DaVita Inc. shareholder's equity
|
|
4,648,047
|
|
|
9,717,728
|
|
|
2,002,660
|
|
|
(11,720,388
|
)
|
|
4,648,047
|
|
|||||
Noncontrolling interests not subject to put
provisions |
|
—
|
|
|
—
|
|
|
567,351
|
|
|
(365,657
|
)
|
|
201,694
|
|
|||||
Total equity
|
|
4,648,047
|
|
|
9,717,728
|
|
|
2,570,011
|
|
|
(12,086,045
|
)
|
|
4,849,741
|
|
|||||
Total liabilities and equity
|
|
$
|
14,173,933
|
|
|
$
|
15,120,360
|
|
|
$
|
5,284,999
|
|
|
$
|
(15,838,035
|
)
|
|
$
|
18,741,257
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Nine Months Ended September 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
360,222
|
|
|
$
|
249,554
|
|
|
$
|
443,430
|
|
|
$
|
(563,330
|
)
|
|
$
|
489,876
|
|
Changes in operating assets and liabilities and non-cash items included in net income
|
|
(291,657
|
)
|
|
606,783
|
|
|
196,207
|
|
|
563,330
|
|
|
1,074,663
|
|
|||||
Net cash provided by operating activities
|
|
68,565
|
|
|
856,337
|
|
|
639,637
|
|
|
—
|
|
|
1,564,539
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions of property and equipment
|
|
(94,385
|
)
|
|
(305,261
|
)
|
|
(240,183
|
)
|
|
—
|
|
|
(639,829
|
)
|
|||||
Acquisitions
|
|
—
|
|
|
(627,324
|
)
|
|
(99,214
|
)
|
|
—
|
|
|
(726,538
|
)
|
|||||
Proceeds from asset and business sales
|
|
—
|
|
|
90,533
|
|
|
1,996
|
|
|
—
|
|
|
92,529
|
|
|||||
Proceeds (purchases) from investment sales and other items, net
|
|
123,894
|
|
|
(6,472
|
)
|
|
49,183
|
|
|
—
|
|
|
166,605
|
|
|||||
Net cash provided by (used in) investing activities
|
|
29,509
|
|
|
(848,524
|
)
|
|
(288,218
|
)
|
|
—
|
|
|
(1,107,233
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and related financing costs, net
|
|
(92,721
|
)
|
|
(10,394
|
)
|
|
(5,348
|
)
|
|
—
|
|
|
(108,463
|
)
|
|||||
Intercompany borrowing (payments)
|
|
197,983
|
|
|
(40,411
|
)
|
|
(157,572
|
)
|
|
—
|
|
|
—
|
|
|||||
Other items
|
|
(305,630
|
)
|
|
(1,432
|
)
|
|
(114,307
|
)
|
|
—
|
|
|
(421,369
|
)
|
|||||
Net cash used in financing activities
|
|
(200,368
|
)
|
|
(52,237
|
)
|
|
(277,227
|
)
|
|
—
|
|
|
(529,832
|
)
|
|||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
5,449
|
|
|
—
|
|
|
5,449
|
|
|||||
Net (decrease) increase in cash and cash equivalents
|
|
(102,294
|
)
|
|
(44,424
|
)
|
|
79,641
|
|
|
—
|
|
|
(67,077
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
549,921
|
|
|
59,192
|
|
|
304,074
|
|
|
—
|
|
|
913,187
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
447,627
|
|
|
$
|
14,768
|
|
|
$
|
383,715
|
|
|
$
|
—
|
|
|
$
|
846,110
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Nine Months Ended September 30, 2016
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
722,148
|
|
|
$
|
611,204
|
|
|
$
|
666,597
|
|
|
$
|
(1,155,137
|
)
|
|
$
|
844,812
|
|
Changes in operating assets and liabilities and non-cash
items included in net income |
|
(586,804
|
)
|
|
228,991
|
|
|
(160,874
|
)
|
|
1,155,137
|
|
|
636,450
|
|
|||||
Net cash provided by operating activities
|
|
135,344
|
|
|
840,195
|
|
|
505,723
|
|
|
—
|
|
|
1,481,262
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions of property and equipment
|
|
(81,785
|
)
|
|
(248,339
|
)
|
|
(245,119
|
)
|
|
—
|
|
|
(575,243
|
)
|
|||||
Acquisitions
|
|
—
|
|
|
(458,556
|
)
|
|
(38,775
|
)
|
|
—
|
|
|
(497,331
|
)
|
|||||
Proceeds from asset and business sales, net of cash
divested |
|
—
|
|
|
24,608
|
|
|
(5,617
|
)
|
|
—
|
|
|
18,991
|
|
|||||
(Purchases) proceeds from investment sales and other
items, net |
|
(236,150
|
)
|
|
(12,825
|
)
|
|
45,316
|
|
|
—
|
|
|
(203,659
|
)
|
|||||
Net cash used in investing activities
|
|
(317,935
|
)
|
|
(695,112
|
)
|
|
(244,195
|
)
|
|
—
|
|
|
(1,257,242
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and related financing costs, net
|
|
(73,889
|
)
|
|
(20,684
|
)
|
|
(4,151
|
)
|
|
—
|
|
|
(98,724
|
)
|
|||||
Intercompany borrowing (payments)
|
|
283,709
|
|
|
(188,247
|
)
|
|
(95,462
|
)
|
|
—
|
|
|
—
|
|
|||||
Other items
|
|
(589,964
|
)
|
|
(9,740
|
)
|
|
(109,548
|
)
|
|
—
|
|
|
(709,252
|
)
|
|||||
Net cash used in financing activities
|
|
(380,144
|
)
|
|
(218,671
|
)
|
|
(209,161
|
)
|
|
—
|
|
|
(807,976
|
)
|
|||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(1,664
|
)
|
|
—
|
|
|
(1,664
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
|
(562,735
|
)
|
|
(73,588
|
)
|
|
50,703
|
|
|
—
|
|
|
(585,620
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
1,186,636
|
|
|
109,357
|
|
|
203,123
|
|
|
—
|
|
|
1,499,116
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
623,901
|
|
|
$
|
35,769
|
|
|
$
|
253,826
|
|
|
$
|
—
|
|
|
$
|
913,496
|
|
22.
|
Supplemental data
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
For The Nine Months Ended September 30, 2017
|
|
|
|
|
||||||||||||
Patient service operating revenues
|
|
$
|
8,030,102
|
|
|
$
|
414,784
|
|
|
$
|
—
|
|
|
$
|
7,615,318
|
|
Less: Provision for uncollectible accounts
|
|
(352,228
|
)
|
|
(11,010
|
)
|
|
—
|
|
|
(341,218
|
)
|
||||
Net patient service operating revenues
|
|
7,677,874
|
|
|
403,774
|
|
|
—
|
|
|
7,274,100
|
|
||||
Capitated revenues
|
|
2,956,479
|
|
|
1,186,185
|
|
|
—
|
|
|
1,770,294
|
|
||||
Other revenues
|
|
863,238
|
|
|
33,688
|
|
|
—
|
|
|
829,550
|
|
||||
Total net operating revenues
|
|
11,497,591
|
|
|
1,623,647
|
|
|
—
|
|
|
9,873,944
|
|
||||
Operating expenses
|
|
10,423,562
|
|
|
1,572,064
|
|
|
(147
|
)
|
|
8,851,645
|
|
||||
Operating income
|
|
1,074,029
|
|
|
51,583
|
|
|
147
|
|
|
1,022,299
|
|
||||
Debt expense, including refinancing charges
|
|
(322,014
|
)
|
|
(6,458
|
)
|
|
—
|
|
|
(315,556
|
)
|
||||
Other income
|
|
13,866
|
|
|
478
|
|
|
—
|
|
|
13,388
|
|
||||
Income tax expense
|
|
276,005
|
|
|
38,059
|
|
|
59
|
|
|
237,887
|
|
||||
Net income
|
|
489,876
|
|
|
7,544
|
|
|
88
|
|
|
482,244
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
(129,654
|
)
|
|
—
|
|
|
—
|
|
|
(129,654
|
)
|
||||
Net income attributable to DaVita Inc.
|
|
$
|
360,222
|
|
|
$
|
7,544
|
|
|
$
|
88
|
|
|
$
|
352,590
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
For The Nine Months Ended September 30, 2017
|
|
|
|
|
||||||||||||
Net income
|
|
$
|
489,876
|
|
|
$
|
7,544
|
|
|
$
|
88
|
|
|
$
|
482,244
|
|
Other comprehensive income
|
|
93,117
|
|
|
—
|
|
|
—
|
|
|
93,117
|
|
||||
Total comprehensive income
|
|
582,993
|
|
|
7,544
|
|
|
88
|
|
|
575,361
|
|
||||
Less: Comprehensive income attributable to the noncontrolling
interests |
|
(129,652
|
)
|
|
—
|
|
|
—
|
|
|
(129,652
|
)
|
||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
453,341
|
|
|
$
|
7,544
|
|
|
$
|
88
|
|
|
$
|
445,709
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
As of September 30, 2017
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
846,110
|
|
|
$
|
162,536
|
|
|
$
|
—
|
|
|
$
|
683,574
|
|
Accounts receivable, net
|
|
2,091,074
|
|
|
174,944
|
|
|
—
|
|
|
1,916,130
|
|
||||
Other current assets
|
|
1,096,365
|
|
|
17,722
|
|
|
—
|
|
|
1,078,643
|
|
||||
Total current assets
|
|
4,033,549
|
|
|
355,202
|
|
|
—
|
|
|
3,678,347
|
|
||||
Property and equipment, net
|
|
3,386,056
|
|
|
3,334
|
|
|
—
|
|
|
3,382,722
|
|
||||
Amortizable intangibles, net
|
|
1,451,033
|
|
|
4,313
|
|
|
—
|
|
|
1,446,720
|
|
||||
Other long-term assets
|
|
726,824
|
|
|
81,877
|
|
|
2,861
|
|
|
642,086
|
|
||||
Goodwill
|
|
9,415,877
|
|
|
30,993
|
|
|
—
|
|
|
9,384,884
|
|
||||
Total assets
|
|
$
|
19,013,339
|
|
|
$
|
475,719
|
|
|
$
|
2,861
|
|
|
$
|
18,534,759
|
|
Current liabilities
|
|
$
|
2,874,793
|
|
|
$
|
202,386
|
|
|
$
|
—
|
|
|
$
|
2,672,407
|
|
Payables to parent
|
|
—
|
|
|
97,434
|
|
|
2,861
|
|
|
(100,295
|
)
|
||||
Long-term debt and other long-term liabilities
|
|
10,142,527
|
|
|
63,272
|
|
|
—
|
|
|
10,079,255
|
|
||||
Noncontrolling interests subject to put provisions
|
|
1,026,890
|
|
|
—
|
|
|
—
|
|
|
1,026,890
|
|
||||
Total DaVita Inc. shareholders’ equity
|
|
4,784,581
|
|
|
112,627
|
|
|
—
|
|
|
4,671,954
|
|
||||
Noncontrolling interests not subject to put provisions
|
|
184,548
|
|
|
—
|
|
|
—
|
|
|
184,548
|
|
||||
Shareholders’ equity
|
|
4,969,129
|
|
|
112,627
|
|
|
—
|
|
|
4,856,502
|
|
||||
Total liabilities and shareholder’s equity
|
|
$
|
19,013,339
|
|
|
$
|
475,719
|
|
|
$
|
2,861
|
|
|
$
|
18,534,759
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
For The Nine Months Ended September 30, 2017
|
|
|
|
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
489,876
|
|
|
$
|
7,544
|
|
|
$
|
88
|
|
|
$
|
482,244
|
|
Changes in operating and intercompany assets and liabilities
and non-cash items included in net income |
|
1,074,663
|
|
|
29,753
|
|
|
(88
|
)
|
|
1,044,998
|
|
||||
Net cash provided by operating activities
|
|
1,564,539
|
|
|
37,297
|
|
|
—
|
|
|
1,527,242
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Additions of property and equipment
|
|
(639,829
|
)
|
|
(5,903
|
)
|
|
—
|
|
|
(633,926
|
)
|
||||
Acquisitions
|
|
(726,538
|
)
|
|
—
|
|
|
—
|
|
|
(726,538
|
)
|
||||
Proceeds from asset and business sales
|
|
92,529
|
|
|
—
|
|
|
—
|
|
|
92,529
|
|
||||
Investments and other items
|
|
166,605
|
|
|
(2,378
|
)
|
|
—
|
|
|
168,983
|
|
||||
Net cash used in investing activities
|
|
(1,107,233
|
)
|
|
(8,281
|
)
|
|
—
|
|
|
(1,098,952
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt
|
|
(108,463
|
)
|
|
—
|
|
|
—
|
|
|
(108,463
|
)
|
||||
Intercompany
|
|
—
|
|
|
28,829
|
|
|
—
|
|
|
(28,829
|
)
|
||||
Other items
|
|
(421,369
|
)
|
|
—
|
|
|
—
|
|
|
(421,369
|
)
|
||||
Net cash (used in) provided by financing activities
|
|
(529,832
|
)
|
|
28,829
|
|
|
—
|
|
|
(558,661
|
)
|
||||
Effect of exchange rate changes on cash
|
|
5,449
|
|
|
—
|
|
|
—
|
|
|
5,449
|
|
||||
Net (decrease) increase in cash
|
|
(67,077
|
)
|
|
57,845
|
|
|
—
|
|
|
(124,922
|
)
|
||||
Cash and cash equivalents at beginning of period
|
|
913,187
|
|
|
104,691
|
|
|
—
|
|
|
808,496
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
846,110
|
|
|
$
|
162,536
|
|
|
$
|
—
|
|
|
$
|
683,574
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||||
|
(dollar amounts rounded to nearest million)
|
||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Kidney Care:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dialysis and related lab services patient
service revenues |
$
|
2,484
|
|
|
$
|
2,430
|
|
|
$
|
2,429
|
|
|
$
|
7,286
|
|
|
$
|
7,124
|
|
Less: Provision for uncollectible accounts
|
(118
|
)
|
|
(109
|
)
|
|
(109
|
)
|
|
(334
|
)
|
|
(321
|
)
|
|||||
U.S. dialysis and related lab services net
patient service revenues |
2,366
|
|
|
2,320
|
|
|
2,320
|
|
|
6,952
|
|
|
6,803
|
|
|||||
Other revenues
|
5
|
|
|
5
|
|
|
4
|
|
|
15
|
|
|
12
|
|
|||||
Total net U.S. dialysis and related lab
services revenues |
2,370
|
|
|
2,325
|
|
|
2,324
|
|
|
6,967
|
|
|
6,815
|
|
|||||
Other—Ancillary services and strategic
initiatives |
277
|
|
|
274
|
|
|
328
|
|
|
833
|
|
|
986
|
|
|||||
Other—Capitated revenues
|
42
|
|
|
36
|
|
|
26
|
|
|
107
|
|
|
74
|
|
|||||
Other—Ancillary services and strategic
initiatives net patient service revenues (less provision for uncollectible accounts) |
95
|
|
|
84
|
|
|
58
|
|
|
246
|
|
|
166
|
|
|||||
Total net other-ancillary services and strategic
initiatives revenues |
414
|
|
|
394
|
|
|
412
|
|
|
1,186
|
|
|
1,226
|
|
|||||
Eliminations within Kidney Care
|
(19
|
)
|
|
(19
|
)
|
|
(10
|
)
|
|
(57
|
)
|
|
(33
|
)
|
|||||
Total Kidney Care net revenues
|
2,765
|
|
|
2,699
|
|
|
2,725
|
|
|
8,096
|
|
|
8,008
|
|
|||||
DMG:
|
|
|
|
|
|
|
|
|
|
||||||||||
DMG capitated revenues
|
976
|
|
|
987
|
|
|
846
|
|
|
2,853
|
|
|
2,586
|
|
|||||
DMG net patient service revenues (less
provision for uncollectible accounts) |
188
|
|
|
190
|
|
|
167
|
|
|
556
|
|
|
448
|
|
|||||
Other revenues
|
15
|
|
|
19
|
|
|
15
|
|
|
53
|
|
|
42
|
|
|||||
Total DMG net revenues
|
1,178
|
|
|
1,196
|
|
|
1,028
|
|
|
3,461
|
|
|
3,076
|
|
|||||
Eliminations between Kidney Care and DMG
|
(21
|
)
|
|
(18
|
)
|
|
(23
|
)
|
|
(60
|
)
|
|
(55
|
)
|
|||||
Total consolidated net revenues
|
$
|
3,923
|
|
|
$
|
3,877
|
|
|
$
|
3,731
|
|
|
$
|
11,498
|
|
|
$
|
11,029
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||||
|
(dollar amounts rounded to nearest million)
|
||||||||||||||||||
Operating (loss) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Kidney Care:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dialysis and related lab services
|
$
|
443
|
|
|
$
|
450
|
|
|
$
|
452
|
|
|
$
|
1,838
|
|
|
$
|
1,341
|
|
Other—Ancillary services and strategic initiatives
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. ancillary services and strategic initiatives
|
(19
|
)
|
|
(36
|
)
|
|
(6
|
)
|
|
(108
|
)
|
|
(7
|
)
|
|||||
International
|
(17
|
)
|
|
(13
|
)
|
|
368
|
|
|
(35
|
)
|
|
345
|
|
|||||
|
(37
|
)
|
|
(48
|
)
|
|
362
|
|
|
(143
|
)
|
|
338
|
|
|||||
Corporate administrative support
|
(11
|
)
|
|
(11
|
)
|
|
(28
|
)
|
|
(33
|
)
|
|
(40
|
)
|
|||||
Total Kidney Care
|
395
|
|
|
391
|
|
|
786
|
|
|
1,662
|
|
|
1,639
|
|
|||||
DMG
|
(588
|
)
|
|
(13
|
)
|
|
33
|
|
|
(588
|
)
|
|
(126
|
)
|
|||||
Total consolidated operating (loss) income
|
$
|
(193
|
)
|
|
$
|
378
|
|
|
$
|
819
|
|
|
$
|
1,074
|
|
|
$
|
1,513
|
|
Reconciliation of non-GAAP measures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill impairment charges
|
601
|
|
|
61
|
|
|
—
|
|
|
686
|
|
|
253
|
|
|||||
Equity investment loss related to APAC JV
goodwill impairment |
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||
Impairment of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|||||
Restructuring charges
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|||||
Equity investment loss related to
restructuring charges |
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(527
|
)
|
|
—
|
|
|||||
Equity investment income related to gain
on settlement |
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||||
Gain on APAC JV ownership changes
|
—
|
|
|
—
|
|
|
(374
|
)
|
|
(6
|
)
|
|
(374
|
)
|
|||||
Gain on Magan acquisition
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||||
Gain on sale of Tandigm ownership interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||||
Loss on sale of DMG Arizona
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Accruals for legal matters
|
(11
|
)
|
|
(4
|
)
|
|
—
|
|
|
(15
|
)
|
|
16
|
|
|||||
Reduction in a receivable associated with the
DMG acquisition escrow provision |
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
|||||
Adjusted consolidated operating income
(1)
|
$
|
399
|
|
|
$
|
436
|
|
|
$
|
472
|
|
|
$
|
1,227
|
|
|
$
|
1,405
|
|
|
(1)
|
For the periods presented in the table above adjusted operating income is defined as operating (loss) income before certain items which we do not believe are indicative of ordinary results, including goodwill and other asset impairment charges, restructuring charges, a net settlement gain, gains (losses) on ownership changes, estimated accruals for certain legal matters and a reduction in a receivable associated with the DMG acquisition escrow provision. Adjusted operating income as so defined is a non-GAAP measure and is not intended as a substitute for GAAP operating (loss) income. We have presented these adjusted amounts because management believes that these presentations enhance a user’s understanding of our normal consolidated operating (loss) income by excluding certain items which we do not believe are indicative of our ordinary results of operations. As a result, adjusting for these amounts allows for comparison to our normal prior period results.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||||
|
(dollar amounts rounded to nearest million, except per treatment data; revenue per treatment rounded to the nearest dollar)
|
||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dialysis and related lab services patient service
revenues |
$
|
2,484
|
|
|
$
|
2,430
|
|
|
$
|
2,429
|
|
|
$
|
7,286
|
|
|
$
|
7,124
|
|
Less: Provision for uncollectible accounts
|
(118
|
)
|
|
(109
|
)
|
|
(109
|
)
|
|
(334
|
)
|
|
(321
|
)
|
|||||
Dialysis and related lab services net patient service
revenues |
2,366
|
|
|
2,320
|
|
|
2,320
|
|
|
6,952
|
|
|
6,803
|
|
|||||
Other revenues
|
5
|
|
|
5
|
|
|
4
|
|
|
15
|
|
|
12
|
|
|||||
Total net dialysis and related lab services revenues
|
2,370
|
|
|
2,325
|
|
|
2,324
|
|
|
6,967
|
|
|
6,815
|
|
|||||
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Patient care costs
|
1,607
|
|
|
1,561
|
|
|
1,565
|
|
|
4,715
|
|
|
4,577
|
|
|||||
General and administrative
|
197
|
|
|
189
|
|
|
188
|
|
|
574
|
|
|
552
|
|
|||||
Depreciation and amortization
|
132
|
|
|
130
|
|
|
123
|
|
|
387
|
|
|
358
|
|
|||||
Equity investment income
|
(8
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(20
|
)
|
|
(13
|
)
|
|||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(527
|
)
|
|
—
|
|
|||||
Total operating expenses and charges
|
1,928
|
|
|
1,875
|
|
|
1,872
|
|
|
5,129
|
|
|
5,474
|
|
|||||
Operating income
|
$
|
443
|
|
|
$
|
450
|
|
|
$
|
452
|
|
|
$
|
1,838
|
|
|
$
|
1,341
|
|
Reconciliation of non-GAAP measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(527
|
)
|
|
—
|
|
|||||
Equity investment income related to gain on
settlement |
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||||
Adjusted operating income
(1)
|
$
|
443
|
|
|
$
|
450
|
|
|
$
|
452
|
|
|
$
|
1,308
|
|
|
$
|
1,341
|
|
Dialysis treatments
|
7,186,280
|
|
|
7,035,894
|
|
|
6,887,992
|
|
|
21,026,558
|
|
|
20,273,476
|
|
|||||
Average dialysis treatments per treatment day
|
90,966
|
|
|
90,204
|
|
|
87,190
|
|
|
89,857
|
|
|
86,307
|
|
|||||
Average dialysis and related lab services revenue per
treatment |
$
|
346
|
|
|
$
|
345
|
|
|
$
|
353
|
|
|
$
|
347
|
|
|
$
|
351
|
|
|
(1)
|
For the periods presented in the table above adjusted operating income is defined as operating income before certain items which we do not believe are indicative of ordinary results, including a net settlement gain. Adjusted operating income as so defined is a non-GAAP measure and is not intended as a substitute for GAAP operating income. We have presented these adjusted amounts because management believes that these presentations enhance a user’s understanding of our normal consolidated operating income by excluding certain items which we do not believe are indicative of our ordinary results of operations. As a result, adjusting for these amounts allows for comparison to our normal prior period results.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||||
|
(dollar amounts rounded to nearest millions)
|
||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
DMG capitated revenue
|
$
|
976
|
|
|
$
|
987
|
|
|
$
|
846
|
|
|
$
|
2,853
|
|
|
$
|
2,586
|
|
Patient service revenue
|
192
|
|
|
195
|
|
|
173
|
|
|
572
|
|
|
462
|
|
|||||
Less: Provision for uncollectible accounts
|
(4
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(16
|
)
|
|
(14
|
)
|
|||||
Net patient service revenue
|
188
|
|
|
190
|
|
|
167
|
|
|
556
|
|
|
448
|
|
|||||
Other revenues
|
15
|
|
|
19
|
|
|
15
|
|
|
53
|
|
|
42
|
|
|||||
Total net revenues
|
1,178
|
|
|
1,196
|
|
|
1,028
|
|
|
3,461
|
|
|
3,076
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Patient care costs
|
995
|
|
|
983
|
|
|
824
|
|
|
2,870
|
|
|
2,457
|
|
|||||
General and administrative expense
|
127
|
|
|
120
|
|
|
121
|
|
|
376
|
|
|
365
|
|
|||||
Depreciation and amortization
|
61
|
|
|
60
|
|
|
53
|
|
|
178
|
|
|
153
|
|
|||||
Goodwill impairment charges
|
601
|
|
|
51
|
|
|
—
|
|
|
652
|
|
|
253
|
|
|||||
Gain on changes of ownership interests, net
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(30
|
)
|
|||||
Equity investment (income) loss
|
—
|
|
|
(4
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
4
|
|
|||||
Total expenses
|
1,766
|
|
|
1,209
|
|
|
995
|
|
|
4,050
|
|
|
3,202
|
|
|||||
Operating (loss) income
|
$
|
(588
|
)
|
|
$
|
(13
|
)
|
|
$
|
33
|
|
|
$
|
(588
|
)
|
|
$
|
(126
|
)
|
Reconciliation of non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Goodwill impairment charges
|
601
|
|
|
51
|
|
|
—
|
|
|
652
|
|
|
253
|
|
|||||
Restructuring charges
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|||||
Gain on Magan acquisition
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||||
Gain on sale of Tandigm ownership interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||||
Loss on sale of DMG Arizona
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Accruals for legal matters
|
(11
|
)
|
|
(4
|
)
|
|
—
|
|
|
(15
|
)
|
|
16
|
|
|||||
Adjusted operating (loss) income
(1)
|
$
|
(5
|
)
|
|
$
|
34
|
|
|
$
|
33
|
|
|
$
|
41
|
|
|
$
|
113
|
|
|
(1)
|
For the periods presented in the table above adjusted operating (loss) income is defined as operating (loss) income before certain items which we do not believe are indicative of ordinary results, including goodwill impairment charges, restructuring charges, (gains) losses on ownership changes, and estimated accruals for legal matters. Adjusted operating (loss) income as so defined is a non-GAAP measure and is not intended as a substitute for GAAP operating (loss) income. We have presented these adjusted amounts because management believes that these presentations enhance a user’s understanding of our normal consolidated operating (loss) income by excluding certain items which we do not believe are
|
|
Members at
|
|
Member months for
|
||||||||||||||||||||
|
|
Three months ended
|
|
Nine months ended
|
|||||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||
Payor classification:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
|
317,600
|
|
|
305,600
|
|
|
303,900
|
|
|
953,300
|
|
|
918,200
|
|
|
914,000
|
|
|
2,791,800
|
|
|
2,846,700
|
|
Commercial
|
352,500
|
|
|
323,700
|
|
|
338,800
|
|
|
1,059,200
|
|
|
983,000
|
|
|
1,026,300
|
|
|
3,038,100
|
|
|
3,112,400
|
|
Medicaid
|
95,400
|
|
|
96,700
|
|
|
107,200
|
|
|
287,100
|
|
|
291,200
|
|
|
326,500
|
|
|
883,400
|
|
|
1,002,000
|
|
|
765,500
|
|
|
726,000
|
|
|
749,900
|
|
|
2,299,600
|
|
|
2,192,400
|
|
|
2,266,800
|
|
|
6,713,300
|
|
|
6,961,100
|
|
Other members:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nonconsolidated
joint ventures |
115,300
|
|
|
157,600
|
|
|
153,800
|
|
|
347,500
|
|
|
471,600
|
|
|
463,800
|
|
|
1,284,500
|
|
|
1,307,800
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||||
|
(dollars rounded to nearest millions)
|
||||||||||||||||||
DMG revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior revenues
|
$
|
738
|
|
|
$
|
753
|
|
|
$
|
634
|
|
|
$
|
2,151
|
|
|
$
|
1,920
|
|
Commercial revenues
|
201
|
|
|
194
|
|
|
165
|
|
|
583
|
|
|
525
|
|
|||||
Medicaid revenues
|
36
|
|
|
41
|
|
|
47
|
|
|
119
|
|
|
141
|
|
|||||
Total capitated revenues
|
976
|
|
|
987
|
|
|
846
|
|
|
2,853
|
|
|
$
|
2,586
|
|
||||
Patient service revenue, net of provision for
uncollectible accounts |
188
|
|
|
190
|
|
|
167
|
|
|
556
|
|
|
448
|
|
|||||
Other revenues
|
15
|
|
|
19
|
|
|
15
|
|
|
53
|
|
|
42
|
|
|||||
Total net revenues
|
$
|
1,178
|
|
|
$
|
1,196
|
|
|
$
|
1,028
|
|
|
$
|
3,461
|
|
|
$
|
3,076
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
||||||||||
|
(dollar amounts rounded to nearest millions)
|
||||||||||||||||||
U.S. revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Net patient service revenues
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
17
|
|
|
$
|
21
|
|
Other revenues
|
276
|
|
|
272
|
|
|
326
|
|
|
829
|
|
|
981
|
|
|||||
Capitated revenues
|
42
|
|
|
36
|
|
|
26
|
|
|
107
|
|
|
74
|
|
|||||
Total
|
323
|
|
|
314
|
|
|
359
|
|
|
952
|
|
|
1,076
|
|
|||||
International revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net patient service revenues
|
90
|
|
|
78
|
|
|
51
|
|
|
230
|
|
|
145
|
|
|||||
Other revenues
|
1
|
|
|
1
|
|
|
2
|
|
|
4
|
|
|
5
|
|
|||||
Total
|
91
|
|
|
79
|
|
|
53
|
|
|
233
|
|
|
150
|
|
|||||
Total net revenues
|
$
|
414
|
|
|
$
|
394
|
|
|
$
|
412
|
|
|
$
|
1,186
|
|
|
$
|
1,226
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. operating loss
|
$
|
(19
|
)
|
|
$
|
(36
|
)
|
|
$
|
(6
|
)
|
|
$
|
(108
|
)
|
|
$
|
(7
|
)
|
Reconciliation of non-GAAP:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill impairment charges
|
—
|
|
|
10
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|||||
Impairment of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|||||
Adjusted operating loss
(1)
|
$
|
(19
|
)
|
|
$
|
(26
|
)
|
|
$
|
(6
|
)
|
|
$
|
(58
|
)
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
International operating (loss) income
|
$
|
(17
|
)
|
|
$
|
(13
|
)
|
|
$
|
368
|
|
|
$
|
(35
|
)
|
|
$
|
345
|
|
Reconciliation of non-GAAP:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investment loss related to APAC JV
goodwill impairment |
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||
Restructuring charges
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Equity investment loss related to
restructuring charges |
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||
Gain on APAC JV ownership changes
|
—
|
|
|
—
|
|
|
(374
|
)
|
|
(6
|
)
|
|
(374
|
)
|
|||||
Adjusted operating loss
(1)
|
$
|
(8
|
)
|
|
$
|
(13
|
)
|
|
$
|
(6
|
)
|
|
$
|
(32
|
)
|
|
$
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total ancillary services and strategic initiatives
operating (loss) income |
$
|
(37
|
)
|
|
$
|
(48
|
)
|
|
$
|
362
|
|
|
$
|
(143
|
)
|
|
$
|
338
|
|
Total adjusted ancillary services and strategic
initiatives operating loss (1) |
$
|
(28
|
)
|
|
$
|
(38
|
)
|
|
$
|
(12
|
)
|
|
$
|
(90
|
)
|
|
$
|
(36
|
)
|
|
(1)
|
For the periods presented in the table above adjusted operating loss is defined as operating income before certain items which we do not believe are indicative of ordinary results, including goodwill and other asset impairment charges, restructuring charges and gains on ownership changes. Adjusted operating loss as so defined is a non-GAAP measure and is not intended as a substitute for GAAP operating (loss) income. We have presented these adjusted amounts because management believes that these presentations enhance a user’s understanding of our normal consolidated operating income by excluding certain items which we do not believe are indicative of our ordinary results of operations. As a result, adjusting for these amounts allows for comparison to our normal prior period results.
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
Reporting unit
|
|
September 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||||||||
|
|
(dollars in millions)
|
||||||||||||||
DMG California
|
|
$
|
561
|
|
|
$
|
—
|
|
|
$
|
561
|
|
|
$
|
—
|
|
DMG Florida
|
|
26
|
|
|
—
|
|
|
76
|
|
|
91
|
|
||||
DMG New Mexico
|
|
14
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
DMG Nevada
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
||||
Vascular access
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
Total
|
|
$
|
601
|
|
|
$
|
—
|
|
|
$
|
686
|
|
|
$
|
253
|
|
|
|
Goodwill balance
as of September 30, 2017 |
|
Carrying
amount coverage (1) |
|
Sensitivities
|
||||
Reporting unit
|
|
|
|
Operating
income (2) |
|
Discount
rate (3) |
||||
|
|
(in millions)
|
|
|
|
|
|
|
||
DMG California
|
|
$
|
1,889
|
|
|
—%
|
|
(3.0)%
|
|
(5.8)%
|
DMG Florida
|
|
$
|
378
|
|
|
—%
|
|
(0.9)%
|
|
(3.3)%
|
DMG New Mexico
|
|
$
|
56
|
|
|
—%
|
|
(1.1)%
|
|
(2.1)%
|
DMG Washington
|
|
$
|
248
|
|
|
17.1%
|
|
(1.7)%
|
|
(3.4)%
|
|
(1)
|
Excess of estimated fair value of the reporting unit over its carrying amount as of the latest assessment date.
|
(2)
|
Potential impact on estimated fair value of a sustained, long-term reduction of 3% in operating income as of the latest assessment date.
|
(3)
|
Potential impact on estimated fair value of an increase in discount rates of 100 basis points as of the latest assessment date.
|
|
Remainder of
2017 |
|
1-3
years |
|
4-5
years |
|
After
5 years |
|
Total
|
||||||||||
Scheduled payments under contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
55
|
|
|
$
|
924
|
|
|
$
|
4,544
|
|
|
$
|
3,313
|
|
|
$
|
8,836
|
|
Interest payments on the senior notes
|
38
|
|
|
710
|
|
|
473
|
|
|
367
|
|
|
1,588
|
|
|||||
Interest payments on Term Loan B
(1)
|
35
|
|
|
404
|
|
|
65
|
|
|
—
|
|
|
504
|
|
|||||
Interest payments on Term Loan A
(2)
|
7
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|||||
Capital lease obligations
|
4
|
|
|
68
|
|
|
44
|
|
|
214
|
|
|
330
|
|
|||||
Operating leases
|
131
|
|
|
1,439
|
|
|
736
|
|
|
1,462
|
|
|
3,768
|
|
|||||
|
$
|
270
|
|
|
$
|
3,580
|
|
|
$
|
5,862
|
|
|
$
|
5,356
|
|
|
$
|
15,068
|
|
Potential cash requirements under other commitments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Letters of credit
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95
|
|
Noncontrolling interests subject to put provisions
|
606
|
|
|
211
|
|
|
109
|
|
|
101
|
|
|
1,027
|
|
|||||
Non-owned and minority owned put provisions
|
29
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
57
|
|
|||||
Operating capital advances
|
1
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
6
|
|
|||||
|
$
|
731
|
|
|
$
|
213
|
|
|
$
|
138
|
|
|
$
|
103
|
|
|
$
|
1,185
|
|
|
(1)
|
Assuming no changes to LIBOR-based interest rates as Term Loan B currently bears interest at LIBOR plus an interest rate margin of
2.75%
.
|
(2)
|
Based upon current LIBOR-based interest rates in effect at September 30, 2017 plus an interest rate margin of
2.00%
for Term Loan A.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest rate |
|
|
|||||||||||||||||||
|
Expected maturity date
|
|
|
|
|
|
|
Fair
Value |
||||||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
|
|||||||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Long term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fixed rate
|
$
|
23
|
|
|
$
|
31
|
|
|
$
|
28
|
|
|
$
|
27
|
|
|
$
|
25
|
|
|
$
|
1,275
|
|
|
$
|
3,522
|
|
|
$
|
4,931
|
|
|
5.26
|
%
|
|
$
|
4,950
|
|
Variable rate
|
$
|
36
|
|
|
$
|
141
|
|
|
$
|
720
|
|
|
$
|
45
|
|
|
$
|
3,281
|
|
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
4,235
|
|
|
4.21
|
%
|
|
$
|
4,267
|
|
|
Notional Amount
|
|
Contract maturity date
|
|
|
|
Fair
Value |
||||||||||||||||||||||
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Receive variable
|
|
||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
||||||||||||||||||||||||
Cap agreements
|
$
|
7,000
|
|
|
$
|
—
|
|
|
$
|
3,500
|
|
|
$
|
—
|
|
|
$
|
3,500
|
|
|
$
|
—
|
|
|
LIBOR above 3.5%
|
|
$
|
1
|
|
•
|
Suspension or termination of our participation in government payment programs;
|
•
|
Refunds of amounts received in violation of law or applicable payment program requirements;
|
•
|
Loss of required government certifications or exclusion from government payment programs;
|
•
|
Loss of licenses required to operate healthcare facilities or administer pharmaceuticals in some of the states in which we operate;
|
•
|
Reductions in payment rates or coverage for dialysis and ancillary services and related pharmaceuticals;
|
•
|
Criminal or civil liability, fines, damages or monetary penalties for violations of healthcare fraud and abuse laws, including the federal Anti-Kickback Statute, Stark Law violations, FCA or other failures to meet regulatory requirements;
|
•
|
Enforcement actions by governmental agencies and/or state claims for monetary damages by patients who believe their protected health information (PHI) has been used, disclosed or not properly safeguarded in violation of federal or state patient privacy laws, including HIPAA and the Privacy Act of 1974;
|
•
|
Mandated changes to our practices or procedures that significantly increase operating expenses;
|
•
|
Imposition of and compliance with corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our billing and business practices which could lead to potential fines;
|
•
|
Termination of relationships with medical directors; and
|
•
|
Harm to our reputation which could impact our business relationships, affect our ability to obtain financing and decrease access to new business opportunities, among other things.
|
•
|
make it difficult for us to make payments on our debt securities;
|
•
|
increase our vulnerability to general adverse economic and industry conditions;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
|
•
|
expose us to interest rate volatility that could adversely affect our business, results of operations and financial condition, and our ability to service our indebtedness;
|
•
|
place us at a competitive disadvantage compared to our competitors that have less debt; and
|
•
|
limit our ability to borrow additional funds.
|
•
|
the collapse or insolvency of our insurance carriers;
|
•
|
further increases in premiums and deductibles;
|
•
|
increases in the number of liability claims against us or the cost of settling or trying cases related to those claims; or
|
•
|
an inability to obtain one or more types of insurance on acceptable terms, if at all.
|
•
|
changes in the local economic environment;
|
•
|
political instability, armed conflicts or terrorism;
|
•
|
social changes;
|
•
|
intellectual property legal protections and remedies;
|
•
|
trade regulations;
|
•
|
procedures and actions affecting approval, production, pricing, reimbursement and marketing of products and services;
|
•
|
foreign currency;
|
•
|
repatriating or moving to other countries cash generated or held abroad, including considerations relating to tax-efficiencies and changes in tax laws;
|
•
|
export controls;
|
•
|
lack of reliable legal systems which may affect our ability to enforce contractual rights;
|
•
|
changes in local laws or regulations;
|
•
|
potentially longer ramp-up times for starting up new operations and for payment and collection cycles;
|
•
|
financial and operational, and information technology systems integration;
|
•
|
failure to comply with U.S. laws, such as the FCPA, or local laws that prohibit us, our partners, or our partners’ or our intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business; and
|
•
|
data and privacy restrictions.
|
•
|
Risk that our rates are reduced by CMS. Uncertainty about future payment rates remains a material risk to our business. Each year, CMS publishes a final rule for PPS, which phases in the reductions to the PPS base rate mandated by the American Taxpayer Relief Act of 2012 as modified by the Protecting Access to Medicare Act of 2014.
|
•
|
Risk that CMS through its contracted Medicare Administrative Contractors (MACs) implement Local Coverage Determinations (LCDs) that limit the frequency a provider can bill Medicare for dialysis treatments. Such coverage determinations could have an adverse impact on our revenue. There is also risk commercial insurers could incorporate the requirements/limitations associated with such LCDs into their contracted terms with dialysis providers, which could have an adverse impact on our revenue.
|
•
|
Risk that increases in our operating costs will outpace the Medicare rate increases we receive. We expect operating costs to continue to increase due to inflationary factors, such as increases in labor and supply costs, regardless of whether there is a compensating inflation-based increase in Medicare payment rates or in payments under the bundled payment rate system.
|
•
|
Risk of federal budget sequestration cuts. As a result of the Budget Control Act of 2011 and the Bipartisan Budget Act of 2015, an annual 2% reduction to Medicare payments took effect on April 1, 2013 and has been extended through 2025. These across-the-board spending cuts have affected and will continue to adversely affect our business, results of operations and financial condition.
|
•
|
Risk that, if our clinical systems fail to accurately capture the data we report to CMS in connection with claims for which at least part of the government’s payments to us is based on clinical performance or patient outcomes or co-morbidities, we might be over-reimbursed by the government, which could subject us to certain liability. For example, CMS published a final rule that implemented a provision of the ACA, requiring providers to report and return Medicare and Medicaid overpayments within the later of (a) 60 days after the overpayment is identified, or (b) the date any corresponding cost report is due, if applicable. An overpayment impermissibly retained under this statute could subject us to liability under the FCA, exclusion, and penalties under the federal Civil Monetary Penalty statute.
|
•
|
the health status of members;
|
•
|
higher than expected utilization of new or existing healthcare services or technologies;
|
•
|
an increase in the cost of healthcare services and supplies, including pharmaceuticals, whether as a result of inflation or otherwise;
|
•
|
changes to mandated benefits or other changes in healthcare laws, regulations and practices;
|
•
|
periodic renegotiation of provider contracts with specialist physicians, hospitals and ancillary providers;
|
•
|
periodic renegotiation of contracts with DMG’s affiliated primary care physicians and specialists;
|
•
|
changes in the demographics of the participating members and medical trends;
|
•
|
contractual or claims disputes with providers, hospitals or other service providers within a health plan’s network;
|
•
|
the occurrence of catastrophes, major epidemics or acts of terrorism; and
|
•
|
the reduction of health plan premiums.
|
•
|
Maintain, at all times, a minimum tangible net equity (TNE);
|
•
|
Submit periodic financial solvency reports to the DMHC containing various data regarding performance and financial solvency;
|
•
|
Comply with extensive regulatory requirements; and
|
•
|
Submit to periodic regulatory audits and reviews concerning DHPC operations and compliance with Knox-Keene.
|
•
|
Maintain, at all times, a minimum cash-to-claims ratio (where cash-to-claims ratio means the organization’s cash, marketable securities and certain qualified receivables, divided by the organization’s total unpaid claims liability). The regulation currently requires a cash-to-claims ratio of 0.75.
|
•
|
Submit periodic reports to the California DMHC containing various data and attestations regarding performance and financial solvency, including incurred but not reported calculations and documentation, and attestations as to whether or not the organization was in compliance with Knox-Keene requirements related to claims payment timeliness, had maintained positive TNE (i.e., at least $1.00) and had maintained positive working capital (i.e., at least $1.00).
|
•
|
Medicare Advantage benchmarks for 2011 were frozen at 2010 levels. From 2012 through 2016, Medicare Advantage benchmark rates were phased down from prior levels. The new benchmarks will be fully phased-in in 2017 and will range between 95% and 115% of the Medicare FFS costs, depending on a plan’s geographic area. If our costs escalate faster than can be absorbed by the level of revenues implied by these benchmark rates, then it could have a material adverse effect on DMG’s business and results of operations.
|
•
|
Rebates received by Medicare Advantage plans that were reduced, with larger reductions for plans failing to receive certain quality ratings.
|
•
|
The Secretary of the Department of Health and Human Services (HHS) has been granted the explicit authority to deny Medicare Advantage plan bids that propose significant increases in cost sharing or decreases in benefits. If the bids submitted by plans contracted with DMG are denied, this could have a material adverse effect on DMG’s business and results of operations.
|
•
|
Medicare Advantage plans with medical loss ratios below 85% are required to pay a rebate to the Secretary of HHS. The rebate amount is the total revenue under the contract year multiplied by the difference between 85% and the plan’s actual medical loss ratio. The Secretary of HHS will halt enrollment in any plan failing to meet this ratio for three consecutive years, and terminate any plan failing to meet the ratio for five consecutive years. If a DMG-contracting Medicare Advantage plan experiences a limitation on enrollment or is otherwise terminated from the Medicare Advantage program, it could have a material adverse effect on DMG’s business and results of operations.
|
•
|
Prescription drug plans are required to provide coverage of certain drug categories on a list developed by the Secretary of HHS, which could increase the cost of providing care to Medicare Advantage enrollees, and thereby reduce DMG’s revenues and earnings. The Medicare Part D premium amount subsidized for high-income beneficiaries has been reduced, which could lower the number of Medicare Advantage enrollees, which would have a negative impact on DMG’s business and results of operations.
|
•
|
CMS increased coding intensity adjustments for Medicare Advantage plans beginning in 2014 and continuing through 2018, which reduces CMS payments to Medicare Advantage plans, which in turn will likely reduce the amounts payable to DMG and its associated physicians, physician groups, and IPAs under its capitation agreements.
|
•
|
As a result of the direct and indirect impacts of the ACA, many Medicare beneficiaries may decide that an original Medicare FFS program is more attractive than a Medicare Advantage plan. As a result, enrollment in the health plans DMG serves may decrease.
|
•
|
Managed care companies offer alternative products such as regional preferred provider organizations (PPOs) and private FFS plans. Medicare PPOs and private FFS plans allow their patients more flexibility in selecting physicians than Medicare Advantage health plans, which typically require patients to coordinate care with a primary care physician. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 has encouraged the creation of regional PPOs through various incentives, including certain risk corridors, or cost reimbursement provisions, a stabilization fund for incentive payments, and special payments to hospitals not otherwise contracted with a Medicare Advantage plan that treat regional plan enrollees. The formation of regional Medicare PPOs and private FFS plans may affect DMG’s relative attractiveness to existing and potential Medicare patients in their service areas.
|
•
|
The payments for the local and regional Medicare Advantage plans are based on a competitive bidding process that may indirectly cause a decrease in the amount of the PMPM fee or result in an increase in benefits offered.
|
•
|
The annual enrollment process and subsequent lock-in provisions of the ACA may adversely affect DMG’s level of revenue growth as it will limit the ability of a health plan to market to and enroll new Medicare beneficiaries in its established service areas outside of the annual enrollment period.
|
•
|
CMS allows Medicare beneficiaries who are enrolled in a Medicare Advantage plan with a quality rating of 4.5 stars or less to enroll in a 5-star rated Medicare Advantage plan at any time during the benefit year. Therefore, DMG may face a competitive disadvantage in recruiting and retaining Medicare beneficiaries.
|
•
|
requiring DMG to change its products and services;
|
•
|
increasing the regulatory, including compliance, burdens under which DMG operates, which, in turn, may negatively impact the manner in which DMG provides services and increase DMG’s costs of providing services;
|
•
|
adversely affecting DMG’s ability to market its products or services through the imposition of further regulatory restrictions regarding the manner in which plans and providers market to Medicare Advantage enrollees; or
|
•
|
adversely affecting DMG’s ability to attract and retain members.
|
|
Total number
of shares purchased |
|
Average
price paid per share |
|
Total number
of shares purchased as part of publicly announced plans or programs |
|
Approximate
dollar value of shares that may yet be purchased under the plans or programs (in millions) |
|||||
Period
|
|
|
|
|||||||||
July 1-31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
445.4
|
|
|
August 1-31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
445.4
|
|
September 1-30, 2017
|
1,982,250
|
|
|
59.09
|
|
|
1,982,250
|
|
|
328.3
|
|
|
Total
|
1,982,250
|
|
|
$
|
59.09
|
|
|
1,982,250
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
|
|
|
|
|
Consulting Agreement, effective June 15, 2017, by and between DaVita Inc. and Roger J. Valine.
ü
*
|
|
|
|
|
|
Amendment to Stock Appreciation Rights Agreements, effective June 15, 2017, by and between DaVita Inc. and Roger J. Valine.
ü
*
|
|
|
|
|
|
Amendment to Employment Agreement, effective October 13, 2017, by and among DaVita Inc., Charles G. Berg and DaVita Medical Management, LLC.
ü
*
|
|
|
|
|
|
Ratio of earnings to fixed charges.
ü
|
|
|
|
|
|
Certification of the Chief Executive Officer, dated November 7, 2017, pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
ü
|
|
|
|
|
|
Certification of the Chief Financial Officer, dated November 7, 2017, pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
ü
|
|
|
|
|
|
Certification of the Chief Executive Officer, dated November 7, 2017, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
ü
|
|
|
|
|
|
Certification of the Chief Financial Officer, dated November 7, 2017, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
ü
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
ü
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
ü
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
ü
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
ü
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
ü
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation, Linkbase Document.
ü
|
ü
|
Filed herewith.
|
*
|
Management contract or executive compensation plan or arrangement.
|
|
DAVITA INC.
|
||
|
|
|
|
|
BY:
|
|
/s/ JAMES K. HILGER
|
|
|
|
James K. Hilger
|
|
|
|
Chief Accounting Officer*
|
*
|
Mr. Hilger has signed both on behalf of the Registrant as a duly authorized officer and as the Registrant’s principal accounting officer.
|
DAVITA INC.
|
|
CONTRACTOR
|
||||
|
|
|
|
|
|
|
By:
|
|
/s/ Kent J. Thiry
|
|
By:
|
|
/s/ Roger J. Valine
|
|
|
Kent J. Thiry
|
|
|
|
Roger J. Valine
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
|
8/10/17
|
|
Date:
|
|
8/02/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approved as to Form:
|
|
|
||||
|
|
|
|
|
|
|
|
|
/s/ Arturo Sida
|
|
|
|
|
|
|
Arturo Sida
|
|
|
|
|
|
|
Vice President, Associate General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY
|
|
|
GRANTEE
|
||||
|
|
|
|
|
|
|
|
By
|
|
/s/ Chetan P. Mehta
|
|
|
/s/ Roger J. Valine
|
||
|
|
Chetan P. Mehta
|
|
|
Roger J. Valine
|
||
|
|
Group Vice President, Finance
|
|
|
|
|
|
Date:
|
|
8/01/17
|
|
|
Date:
|
|
8/01/17
|
DAVITA INC.
|
|
EMPLOYEE
|
/s/ Kent J.Thiry
|
|
/s/ Charles G. Berg
|
By: Kent J. Thiry, Chief Executive Officer
|
|
Charles G. Berg, in his individual capacity
|
|
|
|
DAVITA MEDICAL MANAGEMENT, LLC
|
|
|
/s/ Joseph C. Mello
|
|
|
By: Joseph C. Mello, President
|
|
|
|
|
|
Approved by DaVita Inc. as to form
|
|
|
/s/ Kathleen A. Waters
|
|
|
Kathleen A. Waters
|
|
|
Chief Legal Officer
|
|
|
|
Nine months
ended September 30, 2017 |
|
Year ended December 31,
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Earnings adjusted for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations before
income taxes |
$
|
765,881
|
|
|
$
|
1,488,895
|
|
|
$
|
723,136
|
|
|
$
|
1,309,673
|
|
|
$
|
1,124,978
|
|
|
$
|
1,001,304
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt expense
|
322,014
|
|
|
414,382
|
|
|
408,380
|
|
|
410,294
|
|
|
429,943
|
|
|
288,554
|
|
||||||
Interest portion of rent expense
|
149,398
|
|
|
181,888
|
|
|
166,821
|
|
|
149,432
|
|
|
137,558
|
|
|
112,424
|
|
||||||
Less: Noncontrolling interests
|
(130,043
|
)
|
|
(153,640
|
)
|
|
(158,304
|
)
|
|
(140,949
|
)
|
|
(124,276
|
)
|
|
(105,891
|
)
|
||||||
|
341,369
|
|
|
442,630
|
|
|
416,897
|
|
|
418,777
|
|
|
443,225
|
|
|
295,087
|
|
||||||
|
$
|
1,107,250
|
|
|
$
|
1,931,525
|
|
|
$
|
1,140,033
|
|
|
$
|
1,728,450
|
|
|
$
|
1,568,203
|
|
|
$
|
1,296,391
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt expense
|
322,014
|
|
|
414,382
|
|
|
408,380
|
|
|
410,294
|
|
|
429,943
|
|
|
288,554
|
|
||||||
Interest portion of rent expense
|
149,398
|
|
|
181,888
|
|
|
166,821
|
|
|
149,432
|
|
|
137,558
|
|
|
112,424
|
|
||||||
Capitalized interest
|
13,287
|
|
|
12,990
|
|
|
9,723
|
|
|
7,888
|
|
|
6,408
|
|
|
8,127
|
|
||||||
|
$
|
484,699
|
|
|
$
|
609,260
|
|
|
$
|
584,924
|
|
|
$
|
567,614
|
|
|
$
|
573,909
|
|
|
$
|
409,105
|
|
Ratio of earnings to fixed charges
|
2.28
|
|
|
3.17
|
|
|
1.95
|
|
|
3.05
|
|
|
2.73
|
|
|
3.17
|
|
/
S
/ K
ENT
J. T
HIRY
|
Kent J. Thiry
|
Chief Executive Officer
|
/
S
/ Joel Ackerman
|
Joel Ackerman
|
Chief Financial Officer
|
1.
|
The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/
S
/ K
ENT
J. T
HIRY
|
Kent J. Thiry
|
Chief Executive Officer
|
November 7, 2017
|
1.
|
The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/
S
/ Joel Ackerman
|
Joel Ackerman
|
Chief Financial Officer
|
November 7, 2017
|