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Delaware
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51-0354549
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page No.
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|
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PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
|
||
|
|
|
||
|
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|
||
|
|
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||
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Item 2.
|
|
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Item 3.
|
|
|
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Item 4.
|
|
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||
|
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|
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PART II. OTHER INFORMATION
|
|
|
Item 1.
|
|
|
||
Item 1A.
|
|
|
||
Item 2.
|
|
|
||
Item 5.
|
|
|
||
Item 6.
|
|
|
||
|
|
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Dialysis and related lab patient service revenues
|
$
|
2,718,403
|
|
|
$
|
2,494,609
|
|
|
$
|
5,309,477
|
|
|
$
|
4,917,395
|
|
Provision for uncollectible accounts
|
(49,406
|
)
|
|
(109,600
|
)
|
|
(23,861
|
)
|
|
(216,658
|
)
|
||||
Net dialysis and related lab patient service revenues
|
2,668,997
|
|
|
2,385,009
|
|
|
5,285,616
|
|
|
4,700,737
|
|
||||
Other revenues
|
217,956
|
|
|
314,390
|
|
|
450,781
|
|
|
629,913
|
|
||||
Total revenues
|
2,886,953
|
|
|
2,699,399
|
|
|
5,736,397
|
|
|
5,330,650
|
|
||||
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Patient care costs and other costs
|
2,069,089
|
|
|
1,894,664
|
|
|
4,104,674
|
|
|
3,746,709
|
|
||||
General and administrative
|
264,094
|
|
|
262,796
|
|
|
530,623
|
|
|
525,691
|
|
||||
Depreciation and amortization
|
147,079
|
|
|
140,026
|
|
|
289,878
|
|
|
272,910
|
|
||||
Equity investment (income) loss
|
(9,795
|
)
|
|
825
|
|
|
(9,950
|
)
|
|
148
|
|
||||
Provision for uncollectible accounts
|
(2,100
|
)
|
|
(606
|
)
|
|
(8,100
|
)
|
|
1,304
|
|
||||
Investment and other asset impairments
|
11,245
|
|
|
—
|
|
|
11,245
|
|
|
15,168
|
|
||||
Goodwill impairment charges
|
3,106
|
|
|
10,498
|
|
|
3,106
|
|
|
34,696
|
|
||||
Gain on changes in ownership interests, net
|
(33,957
|
)
|
|
—
|
|
|
(33,957
|
)
|
|
(6,273
|
)
|
||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(526,827
|
)
|
||||
Total operating expenses and charges
|
2,448,761
|
|
|
2,308,203
|
|
|
4,887,519
|
|
|
4,063,526
|
|
||||
Operating income
|
438,192
|
|
|
391,196
|
|
|
848,878
|
|
|
1,267,124
|
|
||||
Debt expense
|
(119,692
|
)
|
|
(107,934
|
)
|
|
(233,208
|
)
|
|
(212,331
|
)
|
||||
Other income, net
|
1,994
|
|
|
4,798
|
|
|
6,576
|
|
|
8,784
|
|
||||
Income from continuing operations before income taxes
|
320,494
|
|
|
288,060
|
|
|
622,246
|
|
|
1,063,577
|
|
||||
Income tax expense
|
83,868
|
|
|
101,915
|
|
|
154,605
|
|
|
383,580
|
|
||||
Net income from continuing operations
|
236,626
|
|
|
186,145
|
|
|
467,641
|
|
|
679,997
|
|
||||
Net income (loss) from discontinued operations, net of tax
|
69,696
|
|
|
(24,520
|
)
|
|
63,910
|
|
|
(18,087
|
)
|
||||
Net income
|
306,322
|
|
|
161,625
|
|
|
531,551
|
|
|
661,910
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(39,046
|
)
|
|
(34,624
|
)
|
|
(85,589
|
)
|
|
(87,212
|
)
|
||||
Net income attributable to DaVita Inc.
|
$
|
267,276
|
|
|
$
|
127,001
|
|
|
$
|
445,962
|
|
|
$
|
574,698
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic net income from continuing operations per share
attributable to DaVita Inc. |
$
|
1.16
|
|
|
$
|
0.79
|
|
|
$
|
2.23
|
|
|
$
|
3.09
|
|
Basic net income per share attributable to DaVita Inc.
|
$
|
1.56
|
|
|
$
|
0.66
|
|
|
$
|
2.54
|
|
|
$
|
3.00
|
|
Diluted net income from continuing operations per
share attributable to DaVita Inc. |
$
|
1.15
|
|
|
$
|
0.78
|
|
|
$
|
2.19
|
|
|
$
|
3.04
|
|
Diluted net income per share attributable to DaVita Inc.
|
$
|
1.53
|
|
|
$
|
0.65
|
|
|
$
|
2.51
|
|
|
$
|
2.95
|
|
Weighted average shares for earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
171,617,238
|
|
|
191,088,216
|
|
|
175,267,270
|
|
|
191,728,913
|
|
||||
Diluted
|
174,105,884
|
|
|
193,987,983
|
|
|
177,949,934
|
|
|
194,630,936
|
|
||||
Amounts attributable to DaVita Inc.:
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
$
|
199,603
|
|
|
$
|
151,292
|
|
|
$
|
390,618
|
|
|
$
|
592,197
|
|
Net income (loss) from discontinued operations
|
67,673
|
|
|
(24,291
|
)
|
|
55,344
|
|
|
(17,499
|
)
|
||||
Net income
attributable to DaVita Inc.
|
$
|
267,276
|
|
|
$
|
127,001
|
|
|
$
|
445,962
|
|
|
$
|
574,698
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
306,322
|
|
|
$
|
161,625
|
|
|
$
|
531,551
|
|
|
$
|
661,910
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized (losses) gains on interest rate cap agreements:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized (losses) gains on interest rate cap agreements
|
(268
|
)
|
|
(1,815
|
)
|
|
782
|
|
|
(5,002
|
)
|
||||
Reclassifications of net realized losses on interest rate cap agreements
into net income |
1,537
|
|
|
1,265
|
|
|
3,074
|
|
|
2,529
|
|
||||
Unrealized gains on investments:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized gains on investments
|
—
|
|
|
1,057
|
|
|
—
|
|
|
2,614
|
|
||||
Reclassification of net investment realized gains into net income
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
(211
|
)
|
||||
Unrealized (losses) gains on foreign currency translation:
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(50,529
|
)
|
|
49,142
|
|
|
(30,648
|
)
|
|
62,403
|
|
||||
Other comprehensive (loss) income
|
(49,260
|
)
|
|
49,578
|
|
|
(26,792
|
)
|
|
62,333
|
|
||||
Total comprehensive income
|
257,062
|
|
|
211,203
|
|
|
504,759
|
|
|
724,243
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
(39,046
|
)
|
|
(34,624
|
)
|
|
(85,589
|
)
|
|
(87,210
|
)
|
||||
Comprehensive income attributable to DaVita Inc.
|
$
|
218,016
|
|
|
$
|
176,579
|
|
|
$
|
419,170
|
|
|
$
|
637,033
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
389,264
|
|
|
$
|
508,234
|
|
Restricted cash and equivalents
|
90,884
|
|
|
10,686
|
|
||
Short-term investments
|
4,528
|
|
|
32,830
|
|
||
Accounts receivable, net
|
1,842,108
|
|
|
1,714,750
|
|
||
Inventories
|
112,729
|
|
|
181,799
|
|
||
Other receivables
|
471,802
|
|
|
372,919
|
|
||
Income tax receivable
|
23,540
|
|
|
49,440
|
|
||
Prepaid and other current assets
|
97,426
|
|
|
112,058
|
|
||
Current assets held for sale
|
6,053,081
|
|
|
5,761,642
|
|
||
Total current assets
|
9,085,362
|
|
|
8,744,358
|
|
||
Property and equipment, net of accumulated depreciation of $3,328,176
and $3,103,662
|
3,229,098
|
|
|
3,149,213
|
|
||
Intangible assets, net of accumulated amortization of $362,054 and $356,774
|
100,255
|
|
|
113,827
|
|
||
Equity method and other investments
|
249,020
|
|
|
245,534
|
|
||
Long-term investments
|
34,200
|
|
|
37,695
|
|
||
Other long-term assets
|
59,070
|
|
|
47,287
|
|
||
Goodwill
|
6,678,559
|
|
|
6,610,279
|
|
||
|
$
|
19,435,564
|
|
|
$
|
18,948,193
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Accounts payable
|
$
|
542,272
|
|
|
$
|
509,116
|
|
Other liabilities
|
568,536
|
|
|
552,662
|
|
||
Accrued compensation and benefits
|
633,092
|
|
|
616,116
|
|
||
Current portion of long-term debt
|
1,768,514
|
|
|
178,213
|
|
||
Current liabilities held for sale
|
1,271,364
|
|
|
1,185,070
|
|
||
Total current liabilities
|
4,783,778
|
|
|
3,041,177
|
|
||
Long-term debt
|
8,175,573
|
|
|
9,158,018
|
|
||
Other long-term liabilities
|
418,123
|
|
|
365,325
|
|
||
Deferred income taxes
|
526,425
|
|
|
486,247
|
|
||
Total liabilities
|
13,903,899
|
|
|
13,050,767
|
|
||
Commitments and contingencies:
|
|
|
|
||||
Noncontrolling interests subject to put provisions
|
1,047,158
|
|
|
1,011,360
|
|
||
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; 182,815,212 and 182,462,278 shares issued and 170,820,196 and 182,462,278 shares outstanding,
respectively) |
183
|
|
|
182
|
|
||
Additional paid-in capital
|
1,022,783
|
|
|
1,042,899
|
|
||
Retained earnings
|
4,088,043
|
|
|
3,633,713
|
|
||
Treasury stock (11,995,016 and zero shares, respectively)
|
(809,900
|
)
|
|
—
|
|
||
Accumulated other comprehensive (loss) income
|
(21,925
|
)
|
|
13,235
|
|
||
Total DaVita Inc. shareholders' equity
|
4,279,184
|
|
|
4,690,029
|
|
||
Noncontrolling interests not subject to put provisions
|
205,323
|
|
|
196,037
|
|
||
Total equity
|
4,484,507
|
|
|
4,886,066
|
|
||
|
$
|
19,435,564
|
|
|
$
|
18,948,193
|
|
|
Six months ended
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
531,551
|
|
|
$
|
661,910
|
|
Adjustments to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|||
Depreciation and amortization
|
289,878
|
|
|
390,244
|
|
||
Impairment charges
|
14,351
|
|
|
100,483
|
|
||
Stock-based compensation expense
|
19,861
|
|
|
17,504
|
|
||
Deferred income taxes
|
56,882
|
|
|
40,938
|
|
||
Equity investment income, net
|
(434
|
)
|
|
9,367
|
|
||
Gain on sales of business interests, net
|
(59,053
|
)
|
|
(6,273
|
)
|
||
Other non-cash charges, net
|
44,337
|
|
|
28,611
|
|
||
Changes in operating assets and liabilities, net of effect of acquisitions and
divestitures: |
|
|
|
||||
Accounts receivable
|
(101,746
|
)
|
|
(113,208
|
)
|
||
Inventories
|
71,632
|
|
|
(31,067
|
)
|
||
Other receivables and other current assets
|
(91,685
|
)
|
|
(108,852
|
)
|
||
Other long-term assets
|
3,454
|
|
|
(12,124
|
)
|
||
Accounts payable
|
35,228
|
|
|
(55,897
|
)
|
||
Accrued compensation and benefits
|
23,818
|
|
|
(63,727
|
)
|
||
Other current liabilities
|
58,321
|
|
|
13,991
|
|
||
Income taxes
|
24,356
|
|
|
123,637
|
|
||
Other long-term liabilities
|
3,824
|
|
|
19,520
|
|
||
Net cash provided by operating activities
|
924,575
|
|
|
1,015,057
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|||
Additions of property and equipment
|
(473,977
|
)
|
|
(398,940
|
)
|
||
Acquisitions
|
(89,465
|
)
|
|
(619,839
|
)
|
||
Proceeds from asset and business sales
|
116,241
|
|
|
70,236
|
|
||
Purchase of investments available for sale
|
(4,195
|
)
|
|
(6,812
|
)
|
||
Purchase of investments held-to-maturity
|
(3,726
|
)
|
|
(220,591
|
)
|
||
Proceeds from sale of investments available for sale
|
5,662
|
|
|
5,049
|
|
||
Proceeds from investments held-to-maturity
|
32,628
|
|
|
320,484
|
|
||
Purchase of equity investments
|
(10,241
|
)
|
|
(1,194
|
)
|
||
Distributions received on equity investments
|
3,009
|
|
|
—
|
|
||
Net cash used in investing activities
|
(424,064
|
)
|
|
(851,607
|
)
|
|
Six months ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings
|
28,128,131
|
|
|
25,529,555
|
|
||
Payments on long-term debt and other financing costs
|
(27,556,348
|
)
|
|
(25,593,587
|
)
|
||
Purchase of treasury stock
|
(805,179
|
)
|
|
(231,674
|
)
|
||
Stock award exercises and other share issuances, net
|
3,132
|
|
|
8,163
|
|
||
Distributions to noncontrolling interests
|
(94,006
|
)
|
|
(116,075
|
)
|
||
Contributions from noncontrolling interests
|
31,569
|
|
|
39,872
|
|
||
Proceeds from sales of additional noncontrolling interests
|
15
|
|
|
—
|
|
||
Purchases of noncontrolling interests
|
(13,223
|
)
|
|
(1,432
|
)
|
||
Net cash used in financing activities
|
(305,909
|
)
|
|
(365,178
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(3,473
|
)
|
|
4,192
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
191,129
|
|
|
(197,536
|
)
|
||
Less: Net increase in cash, cash equivalents and restricted cash from discontinued
operations |
229,901
|
|
|
32,720
|
|
||
Net decrease in
cash, cash equivalents and restricted cash
from continuing
operations |
(38,772
|
)
|
|
(230,256
|
)
|
||
Cash, cash equivalents and restricted cash of continuing operations at beginning of
the year |
518,920
|
|
|
683,463
|
|
||
Cash, cash equivalents and restricted cash of continuing operations at end of the
period |
$
|
480,148
|
|
|
$
|
453,207
|
|
|
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
|
|
|||||||||||||||||||||||
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
|
103,641
|
|
|
|
|
|
|
|
|
|
|
|
663,618
|
|
|
|
|
|
|
|
|
|
|
|
663,618
|
|
|
63,296
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,878
|
|
|
102,878
|
|
|
(2
|
)
|
||||||||
Stock purchase shares issued
|
|
|
|
360
|
|
|
|
|
|
22,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,131
|
|
|
|
|
||||||||
Stock unit shares issued
|
|
|
|
117
|
|
|
|
|
|
(101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(101
|
)
|
|
|
|
||||||||
Stock-settled SAR shares
issued |
|
|
|
398
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Stock-settled stock-based
compensation expense |
|
|
|
|
|
|
|
|
|
34,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,981
|
|
|
|
|
||||||||
Changes in noncontrolling interest
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions
|
(128,853
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(82,614
|
)
|
||||||||
Contributions
|
52,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,641
|
|
||||||||
Acquisitions and divestitures
|
43,799
|
|
|
|
|
|
|
|
|
(823
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(823
|
)
|
|
(5,770
|
)
|
||||||||
Partial purchases
|
(397
|
)
|
|
|
|
|
|
|
|
(2,752
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,752
|
)
|
|
(2,208
|
)
|
||||||||
Fair value remeasurements
|
(32,999
|
)
|
|
|
|
|
|
|
|
32,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,999
|
|
|
|
|
||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,967
|
)
|
|
(810,949
|
)
|
|
|
|
|
(810,949
|
)
|
|
|
|
||||||||
Retirement of treasury stock
|
|
|
|
(12,967
|
)
|
|
(13
|
)
|
|
(70,718
|
)
|
|
(740,218
|
)
|
|
12,967
|
|
|
810,949
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Balance at December 31, 2017
|
$
|
1,011,360
|
|
|
182,462
|
|
|
$
|
182
|
|
|
$
|
1,042,899
|
|
|
$
|
3,633,713
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
13,235
|
|
|
$
|
4,690,029
|
|
|
$
|
196,037
|
|
Cumulative effect of change in
accounting principle |
|
|
|
|
|
|
|
|
|
|
|
|
8,368
|
|
|
|
|
|
|
|
|
(8,368
|
)
|
|
—
|
|
|
|
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
52,278
|
|
|
|
|
|
|
|
|
|
|
|
445,962
|
|
|
|
|
|
|
|
|
|
|
|
445,962
|
|
|
33,311
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(26,792
|
)
|
|
(26,792
|
)
|
|
|
|
||||||||
Stock unit shares issued
|
|
|
|
146
|
|
|
|
|
|
(448
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(448
|
)
|
|
|
|
||||||||
Stock-settled SAR shares issued
|
|
|
|
207
|
|
|
1
|
|
|
(4,886
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,885
|
)
|
|
|
|
||||||||
Stock-settled stock-based
compensation expense |
|
|
|
|
|
|
|
|
|
19,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,832
|
|
|
|
|
||||||||
Changes in noncontrolling interest
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions
|
(57,997
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,009
|
)
|
||||||||
Contributions
|
19,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,393
|
|
||||||||
Acquisitions and divestitures
|
665
|
|
|
|
|
|
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79
|
|
|
(203
|
)
|
||||||||
Partial purchases
|
(820
|
)
|
|
|
|
|
|
|
|
(12,197
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,197
|
)
|
|
(206
|
)
|
||||||||
Fair value remeasurements
|
22,496
|
|
|
|
|
|
|
|
|
(22,496
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,496
|
)
|
|
|
|
||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,995
|
)
|
|
(809,900
|
)
|
|
|
|
|
(809,900
|
)
|
|
|
|
||||||||
Balance at June 30, 2018
|
$
|
1,047,158
|
|
|
182,815
|
|
|
$
|
183
|
|
|
$
|
1,022,783
|
|
|
$
|
4,088,043
|
|
|
(11,995
|
)
|
|
$
|
(809,900
|
)
|
|
$
|
(21,925
|
)
|
|
$
|
4,279,184
|
|
|
$
|
205,323
|
|
1
.
|
Condensed consolidated interim financial statements
|
2
.
|
Revenue recognition
|
|
For the three months ended
|
||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
(1)
|
||||||||||||||||||||
|
U.S. dialysis and related lab services
|
|
Other - Ancillary services and strategic initiatives
|
|
Consolidated
|
|
U.S. dialysis and related lab services
|
|
Other - Ancillary services and strategic initiatives
|
|
Consolidated
|
||||||||||||
Patient service revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare and Medicare Advantage
|
$
|
1,526,066
|
|
|
$
|
|
$
|
1,526,066
|
|
|
$
|
1,313,504
|
|
|
$
|
|
$
|
1,313,504
|
|
||||
Medicaid and Managed Medicaid
|
150,288
|
|
|
|
|
150,288
|
|
|
151,286
|
|
|
|
|
151,286
|
|
||||||||
Other government
|
110,338
|
|
|
86,530
|
|
|
196,868
|
|
|
90,712
|
|
|
62,604
|
|
|
153,316
|
|
||||||
Commercial
|
796,732
|
|
|
19,139
|
|
|
815,871
|
|
|
764,864
|
|
|
15,324
|
|
|
780,188
|
|
||||||
Other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare and Medicare Advantage
|
|
|
154,028
|
|
|
154,028
|
|
|
|
|
225,511
|
|
|
225,511
|
|
||||||||
Medicaid and Managed Medicaid
|
|
|
16,158
|
|
|
16,158
|
|
|
|
|
19,020
|
|
|
19,020
|
|
||||||||
Commercial
|
|
|
17,006
|
|
|
17,006
|
|
|
|
|
26,812
|
|
|
26,812
|
|
||||||||
Other
(2)
|
4,919
|
|
|
35,034
|
|
|
39,953
|
|
|
4,849
|
|
|
44,322
|
|
|
49,171
|
|
||||||
Eliminations of intersegment revenues
|
(20,096
|
)
|
|
(9,189
|
)
|
|
(29,285
|
)
|
|
(13,285
|
)
|
|
(6,124
|
)
|
|
(19,409
|
)
|
||||||
Total
|
$
|
2,568,247
|
|
|
$
|
318,706
|
|
|
$
|
2,886,953
|
|
|
$
|
2,311,930
|
|
|
$
|
387,469
|
|
|
$
|
2,699,399
|
|
|
(1)
|
As noted above, prior period amounts have not been adjusted under the cumulative effect method. The Company's dialysis and related lab services revenues for the three months ended June 30, 2017 has been presented net of the provision for uncollectible accounts of
$109,600
in this table to conform to the current period presentation.
|
(2)
|
Other consists of management fees and revenue from the Company's ancillary services and strategic initiatives.
|
|
For the six months ended
|
||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
(1)
|
||||||||||||||||||||
|
U.S. dialysis and related lab services
|
|
Other - Ancillary services and strategic initiatives
|
|
Consolidated
|
|
U.S. dialysis and related lab services
|
|
Other - Ancillary services and strategic initiatives
|
|
Consolidated
|
||||||||||||
Patient service revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare and Medicare Advantage
|
$
|
3,011,258
|
|
|
$
|
|
$
|
3,011,258
|
|
|
$
|
2,586,100
|
|
|
$
|
|
$
|
2,586,100
|
|
||||
Medicaid and Managed Medicaid
|
307,783
|
|
|
|
|
307,783
|
|
|
295,871
|
|
|
|
|
295,871
|
|
||||||||
Other government
|
217,458
|
|
|
169,068
|
|
|
386,526
|
|
|
182,704
|
|
|
110,366
|
|
|
293,070
|
|
||||||
Commercial
|
1,579,711
|
|
|
38,857
|
|
|
1,618,568
|
|
|
1,521,574
|
|
|
29,206
|
|
|
1,550,780
|
|
||||||
Other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare and Medicare Advantage
|
|
|
296,786
|
|
|
296,786
|
|
|
|
|
450,713
|
|
|
450,713
|
|
||||||||
Medicaid and Managed Medicaid
|
|
|
31,949
|
|
|
31,949
|
|
|
|
|
37,615
|
|
|
37,615
|
|
||||||||
Commercial
|
|
|
57,427
|
|
|
57,427
|
|
|
|
|
52,020
|
|
|
52,020
|
|
||||||||
Other
(2)
|
10,033
|
|
|
73,973
|
|
|
84,006
|
|
|
10,159
|
|
|
91,899
|
|
|
102,058
|
|
||||||
Eliminations of intersegment revenues
|
(38,519
|
)
|
|
(19,387
|
)
|
|
(57,906
|
)
|
|
(25,084
|
)
|
|
(12,493
|
)
|
|
(37,577
|
)
|
||||||
Total
|
$
|
5,087,724
|
|
|
$
|
648,673
|
|
|
$
|
5,736,397
|
|
|
$
|
4,571,324
|
|
|
$
|
759,326
|
|
|
$
|
5,330,650
|
|
|
(1)
|
As noted above, prior period amounts have not been adjusted under the cumulative effect method. The Company's dialysis and related lab services revenues for the six months ended June 30, 2017 has been presented net of the provision for uncollectible accounts of
$216,658
in this table to conform to the current period presentation.
|
(2)
|
Other consists of management fees and revenue from the Company's ancillary services and strategic initiatives.
|
3
.
|
Earnings per share
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerators:
|
|
|
|
|
|
|
|
|
|
||||||
Net income from continuing operations attributable to DaVita Inc.
|
$
|
199,603
|
|
|
$
|
151,292
|
|
|
$
|
390,618
|
|
|
$
|
592,197
|
|
Change in noncontrolling interest redemption rights in excess of fair value
|
(98
|
)
|
|
—
|
|
|
(98
|
)
|
|
—
|
|
||||
Net income from continuing operations for basic earnings per share
calculation |
199,505
|
|
|
151,292
|
|
|
390,520
|
|
|
592,197
|
|
||||
Net income (loss) from discontinued operations attributable to DaVita Inc.
|
67,673
|
|
|
(24,291
|
)
|
|
55,344
|
|
|
(17,499
|
)
|
||||
Net income attributable to DaVita Inc. for basic earnings per share
calculation |
$
|
267,178
|
|
|
$
|
127,001
|
|
|
$
|
445,864
|
|
|
$
|
574,698
|
|
Basic:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding during the period
|
173,811
|
|
|
193,282
|
|
|
177,461
|
|
|
193,923
|
|
||||
Contingently returnable shares held in escrow for the DaVita HealthCare
Partners merger |
(2,194
|
)
|
|
(2,194
|
)
|
|
(2,194
|
)
|
|
(2,194
|
)
|
||||
Weighted average shares for basic earnings per share calculation
|
171,617
|
|
|
191,088
|
|
|
175,267
|
|
|
191,729
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income from continuing operations per share attributable to
DaVita Inc. |
$
|
1.16
|
|
|
$
|
0.79
|
|
|
$
|
2.23
|
|
|
$
|
3.09
|
|
Basic net income (loss) from discontinued operations per share
attributable to DaVita Inc. |
0.40
|
|
|
(0.13
|
)
|
|
0.31
|
|
|
(0.09
|
)
|
||||
Basic net income per share attributable to DaVita Inc.
|
$
|
1.56
|
|
|
$
|
0.66
|
|
|
$
|
2.54
|
|
|
$
|
3.00
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding during the period
|
173,811
|
|
|
193,282
|
|
|
177,461
|
|
|
193,923
|
|
||||
Assumed incremental shares from stock plans
|
295
|
|
|
706
|
|
|
489
|
|
|
708
|
|
||||
Weighted average shares for diluted earnings per share calculation
|
174,106
|
|
|
193,988
|
|
|
177,950
|
|
|
194,631
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted net income from continuing operations per share attributable to
DaVita Inc. |
$
|
1.15
|
|
|
$
|
0.78
|
|
|
$
|
2.19
|
|
|
$
|
3.04
|
|
Diluted net income (loss) from discontinued operations per share
attributable to DaVita Inc. |
0.38
|
|
|
(0.13
|
)
|
|
0.32
|
|
|
(0.09
|
)
|
||||
Diluted net income per share attributable to DaVita Inc.
|
$
|
1.53
|
|
|
$
|
0.65
|
|
|
$
|
2.51
|
|
|
$
|
2.95
|
|
Anti-dilutive stock-settled awards excluded from calculation
(1)
|
6,227
|
|
|
3,780
|
|
|
4,840
|
|
|
3,603
|
|
|
(1)
|
Shares associated with stock-settled stock appreciation rights excluded from the diluted denominator calculation because they are antidilutive under the treasury stock method.
|
4
.
|
Restricted cash and equivalents
|
5
.
|
Short-term and long-term investments
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Debt
securities |
|
Equity
securities |
|
Total
|
|
Debt
securities |
|
Equity
securities |
|
Total
|
||||||||||||
Certificates of deposit and other time deposits
|
$
|
2,228
|
|
|
$
|
—
|
|
|
$
|
2,228
|
|
|
$
|
31,630
|
|
|
$
|
—
|
|
|
$
|
31,630
|
|
Investments in mutual funds and common stock
|
—
|
|
|
36,500
|
|
|
36,500
|
|
|
—
|
|
|
38,895
|
|
|
38,895
|
|
||||||
|
$
|
2,228
|
|
|
$
|
36,500
|
|
|
$
|
38,728
|
|
|
$
|
31,630
|
|
|
$
|
38,895
|
|
|
$
|
70,525
|
|
Short-term investments
|
$
|
2,228
|
|
|
$
|
2,300
|
|
|
$
|
4,528
|
|
|
$
|
31,630
|
|
|
$
|
1,200
|
|
|
$
|
32,830
|
|
Long-term investments
|
—
|
|
|
34,200
|
|
|
34,200
|
|
|
—
|
|
|
37,695
|
|
|
37,695
|
|
||||||
|
$
|
2,228
|
|
|
$
|
36,500
|
|
|
$
|
38,728
|
|
|
$
|
31,630
|
|
|
$
|
38,895
|
|
|
$
|
70,525
|
|
6
.
|
Equity method and other investments
|
7
.
|
Goodwill
|
|
U.S. dialysis and
related lab services
|
|
Other-ancillary
services and
strategic initiatives
|
|
Consolidated total
|
||||||
Balance at January 1, 2017
|
$
|
5,691,587
|
|
|
$
|
323,788
|
|
|
$
|
6,015,375
|
|
Acquisitions
|
485,434
|
|
|
131,598
|
|
|
617,032
|
|
|||
Divestitures
|
(32,260
|
)
|
|
(126
|
)
|
|
(32,386
|
)
|
|||
Goodwill impairment charges
|
—
|
|
|
(36,196
|
)
|
|
(36,196
|
)
|
|||
Foreign currency and other adjustments
|
—
|
|
|
46,454
|
|
|
46,454
|
|
|||
Balance at December 31, 2017
|
$
|
6,144,761
|
|
|
$
|
465,518
|
|
|
$
|
6,610,279
|
|
Acquisitions
|
6,357
|
|
|
99,863
|
|
|
106,220
|
|
|||
Divestitures
|
(218
|
)
|
|
(15,166
|
)
|
|
(15,384
|
)
|
|||
Goodwill impairment charges
|
—
|
|
|
(3,106
|
)
|
|
(3,106
|
)
|
|||
Foreign currency and other adjustments
|
—
|
|
|
(19,450
|
)
|
|
(19,450
|
)
|
|||
Balance at June 30, 2018
|
$
|
6,150,900
|
|
|
$
|
527,659
|
|
|
$
|
6,678,559
|
|
|
|
|
|
|
|
||||||
Balance at June 30, 2018:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
6,150,900
|
|
|
$
|
561,937
|
|
|
$
|
6,712,837
|
|
Accumulated impairment charges
|
—
|
|
|
(34,278
|
)
|
|
(34,278
|
)
|
|||
|
$
|
6,150,900
|
|
|
$
|
527,659
|
|
|
$
|
6,678,559
|
|
8
.
|
Income taxes
|
|
June 30,
2018
|
|
December 31,
2017
|
||||
Senior secured credit facilities:
|
|
|
|
||||
Term Loan A
|
$
|
725,000
|
|
|
$
|
775,000
|
|
Term Loan A-2
|
952,000
|
|
|
—
|
|
||
Term Loan B
|
3,360,000
|
|
|
3,377,500
|
|
||
Revolver
|
—
|
|
|
300,000
|
|
||
Senior notes
|
4,500,000
|
|
|
4,500,000
|
|
||
Acquisition obligations and other notes payable
|
172,692
|
|
|
150,512
|
|
||
Capital lease obligations
|
292,296
|
|
|
297,170
|
|
||
Total debt principal outstanding
|
10,001,988
|
|
|
9,400,182
|
|
||
Discount and deferred financing costs
|
(57,901
|
)
|
|
(63,951
|
)
|
||
|
9,944,087
|
|
|
9,336,231
|
|
||
Less current portion
|
(1,768,514
|
)
|
|
(178,213
|
)
|
||
|
$
|
8,175,573
|
|
|
$
|
9,158,018
|
|
2018 (remainder of the year)
|
95,011
|
|
2019
|
1,712,246
|
|
2020
|
74,792
|
|
2021
|
3,311,046
|
|
2022
|
1,287,741
|
|
2023
|
162,580
|
|
Thereafter
|
3,358,572
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
Derivatives designated as hedging instruments
|
|
Balance sheet location
|
|
Fair value
|
|
Balance sheet location
|
|
Fair value
|
||||
Interest rate cap agreements
|
|
Other long-term assets
|
|
$
|
2,085
|
|
|
Other long-term assets
|
|
$
|
1,032
|
|
|
Amount of unrecognized gains (losses) in OCI on interest rate cap agreements
|
|
Location of losses reclassified from accumulated OCI into income
|
|
Amount of losses reclassified from accumulated OCI into income
|
||||||||||||||||||||||||||||
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|||||||||||||||||||||||||
Derivatives designated as cash flow hedges
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||||||||||
Interest rate cap
agreements |
$
|
(361
|
)
|
|
$
|
(2,969
|
)
|
|
$
|
1,053
|
|
|
$
|
(8,186
|
)
|
|
Debt expense
|
|
$
|
2,070
|
|
|
$
|
2,070
|
|
|
$
|
4,140
|
|
|
$
|
4,139
|
|
Tax benefit
(expense) |
93
|
|
|
1,154
|
|
|
(271
|
)
|
|
3,184
|
|
|
Tax expense
|
|
(533
|
)
|
|
(805
|
)
|
|
(1,066
|
)
|
|
(1,610
|
)
|
||||||||
Total
|
$
|
(268
|
)
|
|
$
|
(1,815
|
)
|
|
$
|
782
|
|
|
$
|
(5,002
|
)
|
|
|
|
$
|
1,537
|
|
|
$
|
1,265
|
|
|
$
|
3,074
|
|
|
$
|
2,529
|
|
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 June 30, 2018
|
|
For the six months ended June 30, 2018
|
||||||||||||||||||||||||||
|
Interest
rate cap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive income (loss) |
|
Interest
rate cap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive income (loss) |
||||||||||||||
Beginning balance
|
$
|
(12,527
|
)
|
|
|
|
$
|
39,862
|
|
|
$
|
27,335
|
|
|
$
|
(12,408
|
)
|
|
$
|
5,662
|
|
|
$
|
19,981
|
|
|
$
|
13,235
|
|
Cumulative effect
of change in accounting principle (1) |
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(2,706
|
)
|
|
(5,662
|
)
|
|
—
|
|
|
(8,368
|
)
|
|||||||
Unrealized (losses)
gains |
(361
|
)
|
|
|
|
(50,529
|
)
|
|
(50,890
|
)
|
|
1,053
|
|
|
—
|
|
|
(30,648
|
)
|
|
(29,595
|
)
|
|||||||
Related income tax
benefit (expense) |
93
|
|
|
|
|
—
|
|
|
93
|
|
|
(271
|
)
|
|
—
|
|
|
—
|
|
|
(271
|
)
|
|||||||
|
(268
|
)
|
|
|
|
(50,529
|
)
|
|
(50,797
|
)
|
|
782
|
|
|
—
|
|
|
(30,648
|
)
|
|
(29,866
|
)
|
|||||||
Reclassification
from accumulated other comprehensive income into net income |
2,070
|
|
|
|
|
—
|
|
|
2,070
|
|
|
4,140
|
|
|
—
|
|
|
—
|
|
|
4,140
|
|
|||||||
Related income tax
benefit (expense) |
(533
|
)
|
|
|
|
—
|
|
|
(533
|
)
|
|
(1,066
|
)
|
|
—
|
|
|
—
|
|
|
(1,066
|
)
|
|||||||
|
1,537
|
|
|
|
|
—
|
|
|
1,537
|
|
|
3,074
|
|
|
—
|
|
|
—
|
|
|
3,074
|
|
|||||||
Ending balance
|
$
|
(11,258
|
)
|
|
|
|
$
|
(10,667
|
)
|
|
$
|
(21,925
|
)
|
|
$
|
(11,258
|
)
|
|
$
|
—
|
|
|
$
|
(10,667
|
)
|
|
$
|
(21,925
|
)
|
(1)
|
Reflects the cumulative effect of a change in accounting principle for ASUs 2016-01 and 2018-03 on classification and measurement of financial instruments and ASU 2018-02 on remeasurement and reclassification of deferred tax effects in accumulated other comprehensive income associated with the 2017 Tax Act.
|
|
For the three months ended June 30, 2017
|
|
For the six months ended June 30, 2017
|
||||||||||||||||||||||||||||
|
Interest
rate cap 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
|
$
|
(13,952
|
)
|
|
$
|
3,594
|
|
|
$
|
(66,528
|
)
|
|
$
|
(76,886
|
)
|
|
$
|
(12,029
|
)
|
|
$
|
2,175
|
|
|
$
|
(79,789
|
)
|
|
$
|
(89,643
|
)
|
Unrealized (losses)
gains |
(2,969
|
)
|
|
1,446
|
|
|
49,142
|
|
|
47,619
|
|
|
(8,186
|
)
|
|
3,428
|
|
|
62,403
|
|
|
57,645
|
|
||||||||
Related income tax
benefit (expense) |
1,154
|
|
|
(389
|
)
|
|
—
|
|
|
765
|
|
|
3,184
|
|
|
(812
|
)
|
|
—
|
|
|
2,372
|
|
||||||||
|
(1,815
|
)
|
|
1,057
|
|
|
49,142
|
|
|
48,384
|
|
|
(5,002
|
)
|
|
2,616
|
|
|
62,403
|
|
|
60,017
|
|
||||||||
Reclassification
from accumulated other comprehensive income into net income |
2,070
|
|
|
(117
|
)
|
|
—
|
|
|
1,953
|
|
|
4,139
|
|
|
(346
|
)
|
|
—
|
|
|
3,793
|
|
||||||||
Related income tax
(expense) benefit |
(805
|
)
|
|
46
|
|
|
—
|
|
|
(759
|
)
|
|
(1,610
|
)
|
|
135
|
|
|
—
|
|
|
(1,475
|
)
|
||||||||
|
1,265
|
|
|
(71
|
)
|
|
—
|
|
|
1,194
|
|
|
2,529
|
|
|
(211
|
)
|
|
—
|
|
|
2,318
|
|
||||||||
Ending balance
|
$
|
(14,502
|
)
|
|
$
|
4,580
|
|
|
$
|
(17,386
|
)
|
|
$
|
(27,308
|
)
|
|
$
|
(14,502
|
)
|
|
$
|
4,580
|
|
|
$
|
(17,386
|
)
|
|
$
|
(27,308
|
)
|
15
.
|
Acquisitions and divestitures
|
Current assets
|
$
|
8,854
|
|
Property and equipment
|
4,303
|
|
|
Intangible and other long-term assets
|
1,486
|
|
|
Goodwill
|
106,220
|
|
|
Current liabilities
|
(10,290
|
)
|
|
Long-term liabilities
|
(171
|
)
|
|
Noncontrolling interests
|
(1,349
|
)
|
|
|
$
|
109,053
|
|
|
For the six
months ended
June 30, 2018
|
||
Beginning balance
|
$
|
6,388
|
|
Contingent earn-out obligations associated with acquisitions
|
1,436
|
|
|
Remeasurement of fair value for contingent earn-out obligations
|
(335
|
)
|
|
Ending balance
|
$
|
7,489
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
$
|
1,252,430
|
|
|
$
|
1,196,066
|
|
|
$
|
2,480,362
|
|
|
$
|
2,283,050
|
|
Expenses
|
1,192,528
|
|
|
1,157,901
|
|
|
2,418,935
|
|
|
2,232,352
|
|
||||
Goodwill impairment charges
|
—
|
|
|
50,619
|
|
|
—
|
|
|
50,619
|
|
||||
Income (loss) from discontinued operations before taxes
|
59,902
|
|
|
(12,454
|
)
|
|
61,427
|
|
|
79
|
|
||||
Income tax benefit (expense)
|
9,794
|
|
|
(12,066
|
)
|
|
2,483
|
|
|
(18,166
|
)
|
||||
Net income (loss) from discontinued operations, net of tax
|
$
|
69,696
|
|
|
$
|
(24,520
|
)
|
|
$
|
63,910
|
|
|
$
|
(18,087
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
404,435
|
|
|
$
|
179,668
|
|
Other current assets
|
862,764
|
|
|
826,608
|
|
||
Property and equipment, net
|
425,943
|
|
|
379,945
|
|
||
Intangible assets, net
|
1,316,468
|
|
|
1,316,550
|
|
||
Other long-term assets
|
161,622
|
|
|
178,894
|
|
||
Goodwill
|
2,881,849
|
|
|
2,879,977
|
|
||
Total current assets held for sale
|
$
|
6,053,081
|
|
|
$
|
5,761,642
|
|
Liabilities
|
|
|
|
|
|
||
Other liabilities
|
$
|
580,978
|
|
|
$
|
505,734
|
|
Medical payables
|
487,920
|
|
|
457,040
|
|
||
Current portion of long-term debt
|
2,636
|
|
|
2,845
|
|
||
Long-term debt
|
34,076
|
|
|
35,003
|
|
||
Other long-term liabilities
|
165,754
|
|
|
184,448
|
|
||
Total current liabilities held for sale
|
$
|
1,271,364
|
|
|
$
|
1,185,070
|
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
Net cash provided by operating activities from discontinued operations
|
$
|
112,683
|
|
|
$
|
101,215
|
|
Net cash used in investing activities from discontinued operations
|
$
|
(20,982
|
)
|
|
$
|
(85,289
|
)
|
17
.
|
Variable interest entities
|
18
.
|
Fair values 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
|
$
|
36,500
|
|
|
$
|
36,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate cap agreements
|
$
|
2,085
|
|
|
$
|
—
|
|
|
$
|
2,085
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Contingent earn-out obligations
|
$
|
7,489
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,489
|
|
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interests subject to put provisions
|
$
|
1,047,158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,047,158
|
|
19
.
|
Segment reporting
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Segment net revenues:
|
|
|
|
|
|
|
|
||||||||
U.S. dialysis and related lab services
|
|
|
|
|
|
|
|
||||||||
Patient service revenues:
|
|
|
|
|
|
|
|
||||||||
External sources
|
$
|
2,612,734
|
|
|
$
|
2,416,373
|
|
|
$
|
5,101,899
|
|
|
$
|
4,777,234
|
|
Intersegment revenues
|
20,096
|
|
|
13,285
|
|
|
38,519
|
|
|
25,084
|
|
||||
U.S. dialysis and related lab services patient service
revenues |
2,632,830
|
|
|
2,429,658
|
|
|
5,140,418
|
|
|
4,802,318
|
|
||||
Provision for uncollectible accounts
|
(49,406
|
)
|
|
(109,292
|
)
|
|
(24,208
|
)
|
|
(216,069
|
)
|
||||
Net U.S. dialysis and related lab services patient
service revenues |
2,583,424
|
|
|
2,320,366
|
|
|
5,116,210
|
|
|
4,586,249
|
|
||||
Other revenues
(1)
|
4,919
|
|
|
4,849
|
|
|
10,033
|
|
|
10,159
|
|
||||
Total U.S. dialysis and related lab services revenues
|
2,588,343
|
|
|
2,325,215
|
|
|
5,126,243
|
|
|
4,596,408
|
|
||||
Other—Ancillary services and strategic initiatives
|
|
|
|
|
|
|
|
||||||||
Patient service revenues
|
105,669
|
|
|
77,928
|
|
|
207,925
|
|
|
139,572
|
|
||||
Other external sources
|
213,037
|
|
|
309,541
|
|
|
440,748
|
|
|
619,754
|
|
||||
Intersegment revenues
|
9,189
|
|
|
6,124
|
|
|
19,387
|
|
|
12,493
|
|
||||
Total ancillary services and strategic initiatives revenues
|
327,895
|
|
|
393,593
|
|
|
668,060
|
|
|
771,819
|
|
||||
Total net segment revenues
|
2,916,238
|
|
|
2,718,808
|
|
|
5,794,303
|
|
|
5,368,227
|
|
||||
Elimination of intersegment revenues
|
(29,285
|
)
|
|
(19,409
|
)
|
|
(57,906
|
)
|
|
(37,577
|
)
|
||||
Consolidated revenues
|
$
|
2,886,953
|
|
|
$
|
2,699,399
|
|
|
$
|
5,736,397
|
|
|
$
|
5,330,650
|
|
Segment operating margin:
|
|
|
|
|
|
|
|
||||||||
U.S. dialysis and related lab services
|
$
|
449,443
|
|
|
$
|
450,472
|
|
|
$
|
882,822
|
|
|
$
|
1,395,212
|
|
Other—Ancillary services and strategic initiatives
|
2,815
|
|
|
(48,245
|
)
|
|
(4,175
|
)
|
|
(106,466
|
)
|
||||
Total segment operating margin
|
452,258
|
|
|
402,227
|
|
|
878,647
|
|
|
1,288,746
|
|
||||
Reconciliation of segment operating margin to consolidated
income from continuing operations before income taxes: |
|
|
|
|
|
|
|
||||||||
Corporate administrative support
|
(14,066
|
)
|
|
(11,031
|
)
|
|
(29,769
|
)
|
|
(21,622
|
)
|
||||
Consolidated operating income
|
438,192
|
|
|
391,196
|
|
|
848,878
|
|
|
1,267,124
|
|
||||
Debt expense
|
(119,692
|
)
|
|
(107,934
|
)
|
|
(233,208
|
)
|
|
(212,331
|
)
|
||||
Other income, net
|
1,994
|
|
|
4,798
|
|
|
6,576
|
|
|
8,784
|
|
||||
Consolidated income from continuing operations before
income taxes |
$
|
320,494
|
|
|
$
|
288,060
|
|
|
$
|
622,246
|
|
|
$
|
1,063,577
|
|
|
(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.
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
U.S. dialysis and related lab services
|
$
|
138,252
|
|
|
$
|
130,001
|
|
|
$
|
273,028
|
|
|
$
|
255,030
|
|
Other
—
Ancillary services and strategic initiatives
|
8,827
|
|
|
10,025
|
|
|
16,850
|
|
|
17,880
|
|
||||
|
$
|
147,079
|
|
|
$
|
140,026
|
|
|
$
|
289,878
|
|
|
$
|
272,910
|
|
|
June 30,
2018
|
|
December 31,
2017
|
||||
Segment assets
|
|
|
|
|
|
||
U.S. dialysis and related lab services (including equity
investments of $93,282 and $84,866, respectively) |
$
|
11,989,864
|
|
|
$
|
11,776,042
|
|
Other—Ancillary services and strategic initiatives (including
equity investments of $155,738 and $160,668, respectively) |
1,392,619
|
|
|
1,410,509
|
|
||
DMG—Held for sale (including equity investments of $5,099 and
$10,321, respectively) |
6,053,081
|
|
|
5,761,642
|
|
||
Consolidated assets
|
$
|
19,435,564
|
|
|
$
|
18,948,193
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
U.S. dialysis and related lab services
|
$
|
194,188
|
|
|
$
|
152,233
|
|
|
$
|
383,238
|
|
|
$
|
325,761
|
|
Other—Ancillary services and strategic initiatives
|
25,047
|
|
|
11,289
|
|
|
37,392
|
|
|
24,508
|
|
||||
DMG—Held for sale
|
22,299
|
|
|
20,883
|
|
|
53,347
|
|
|
48,671
|
|
||||
|
$
|
241,534
|
|
|
$
|
184,405
|
|
|
$
|
473,977
|
|
|
$
|
398,940
|
|
20
.
|
Changes in DaVita Inc.’s ownership interest in consolidated subsidiaries
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to DaVita Inc.
|
$
|
267,276
|
|
|
$
|
127,001
|
|
|
$
|
445,962
|
|
|
$
|
574,698
|
|
Changes in paid-in capital for:
|
|
|
|
|
|
|
|
||||||||
Sales of noncontrolling interests
|
3
|
|
|
—
|
|
|
79
|
|
|
—
|
|
||||
Purchases of noncontrolling interests
|
(10,203
|
)
|
|
618
|
|
|
(12,197
|
)
|
|
195
|
|
||||
Net transfers to noncontrolling interests
|
(10,200
|
)
|
|
618
|
|
|
(12,118
|
)
|
|
195
|
|
||||
Net income attributable to DaVita Inc., net of transfers to
noncontrolling interests |
$
|
257,076
|
|
|
$
|
127,619
|
|
|
$
|
433,844
|
|
|
$
|
574,893
|
|
21
.
|
New accounting standards
|
22
.
|
Condensed consolidating financial statements
|
|
|
DaVita Inc.
|
|
Guarantor
subsidiaries
|
|
Non-
Guarantor
subsidiaries
|
|
Consolidating
adjustments
|
|
Consolidated
total
|
||||||||||
For The Three Months Ended June 30, 2018
|
|
|
|
|
|
|||||||||||||||
Patient services revenues
|
|
$
|
—
|
|
|
$
|
1,831,545
|
|
|
$
|
936,646
|
|
|
$
|
(49,788
|
)
|
|
$
|
2,718,403
|
|
Provision for uncollectible accounts
|
|
—
|
|
|
(27,159
|
)
|
|
(22,247
|
)
|
|
—
|
|
|
(49,406
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
1,804,386
|
|
|
914,399
|
|
|
(49,788
|
)
|
|
2,668,997
|
|
|||||
Other revenues
|
|
205,317
|
|
|
214,266
|
|
|
43,137
|
|
|
(244,764
|
)
|
|
217,956
|
|
|||||
Total net revenues
|
|
205,317
|
|
|
2,018,652
|
|
|
957,536
|
|
|
(294,552
|
)
|
|
2,886,953
|
|
|||||
Operating expenses and charges
|
|
145,649
|
|
|
1,850,377
|
|
|
747,287
|
|
|
(294,552
|
)
|
|
2,448,761
|
|
|||||
Operating income
|
|
59,668
|
|
|
168,275
|
|
|
210,249
|
|
|
—
|
|
|
438,192
|
|
|||||
Debt expense
|
|
(120,814
|
)
|
|
(52,363
|
)
|
|
(9,274
|
)
|
|
62,759
|
|
|
(119,692
|
)
|
|||||
Other income, net
|
|
105,344
|
|
|
2,856
|
|
|
4,440
|
|
|
(110,646
|
)
|
|
1,994
|
|
|||||
Income tax expense
|
|
13,257
|
|
|
40,019
|
|
|
30,592
|
|
|
—
|
|
|
83,868
|
|
|||||
Equity earnings in subsidiaries
|
|
236,335
|
|
|
192,356
|
|
|
—
|
|
|
(428,691
|
)
|
|
—
|
|
|||||
Net income from continuing operations
|
|
267,276
|
|
|
271,105
|
|
|
174,823
|
|
|
(476,578
|
)
|
|
236,626
|
|
|||||
Net (loss) income from discontinued operations, net of
tax |
|
—
|
|
|
(34,770
|
)
|
|
56,579
|
|
|
47,887
|
|
|
69,696
|
|
|||||
Net income
|
|
267,276
|
|
|
236,335
|
|
|
231,402
|
|
|
(428,691
|
)
|
|
306,322
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,046
|
)
|
|
(39,046
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
267,276
|
|
|
$
|
236,335
|
|
|
$
|
231,402
|
|
|
$
|
(467,737
|
)
|
|
$
|
267,276
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Three Months Ended June 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Patient service revenues
|
|
$
|
—
|
|
|
$
|
1,654,430
|
|
|
$
|
879,780
|
|
|
$
|
(39,601
|
)
|
|
$
|
2,494,609
|
|
Provision for uncollectible accounts
|
|
—
|
|
|
(72,845
|
)
|
|
(36,755
|
)
|
|
—
|
|
|
(109,600
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
1,581,585
|
|
|
843,025
|
|
|
(39,601
|
)
|
|
2,385,009
|
|
|||||
Other revenues
|
|
193,585
|
|
|
305,319
|
|
|
15,835
|
|
|
(200,349
|
)
|
|
314,390
|
|
|||||
Total net revenues
|
|
193,585
|
|
|
1,886,904
|
|
|
858,860
|
|
|
(239,950
|
)
|
|
2,699,399
|
|
|||||
Operating expenses
|
|
138,104
|
|
|
1,682,483
|
|
|
727,566
|
|
|
(239,950
|
)
|
|
2,308,203
|
|
|||||
Operating income
|
|
55,481
|
|
|
204,421
|
|
|
131,294
|
|
|
—
|
|
|
391,196
|
|
|||||
Debt expense
|
|
(106,159
|
)
|
|
(48,117
|
)
|
|
(13,038
|
)
|
|
59,380
|
|
|
(107,934
|
)
|
|||||
Other income
|
|
102,299
|
|
|
1,369
|
|
|
5,997
|
|
|
(104,867
|
)
|
|
4,798
|
|
|||||
Income tax expense
|
|
20,528
|
|
|
71,299
|
|
|
10,088
|
|
|
—
|
|
|
101,915
|
|
|||||
Equity earnings in subsidiaries
|
|
95,908
|
|
|
85,549
|
|
|
—
|
|
|
(181,457
|
)
|
|
—
|
|
|||||
Net income from continuing operations
|
|
127,001
|
|
|
171,923
|
|
|
114,165
|
|
|
(226,944
|
)
|
|
186,145
|
|
|||||
Net (loss) income from discontinued operations, net of
tax |
|
—
|
|
|
(76,015
|
)
|
|
6,008
|
|
|
45,487
|
|
|
(24,520
|
)
|
|||||
Net income
|
|
127,001
|
|
|
95,908
|
|
|
120,173
|
|
|
(181,457
|
)
|
|
161,625
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,624
|
)
|
|
(34,624
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
127,001
|
|
|
$
|
95,908
|
|
|
$
|
120,173
|
|
|
$
|
(216,081
|
)
|
|
$
|
127,001
|
|
|
|
DaVita Inc.
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Six Months Ended June 30, 2018
|
|
|
|
|
|
|||||||||||||||
Patient service revenues
|
|
$
|
—
|
|
|
$
|
3,621,733
|
|
|
$
|
1,785,047
|
|
|
$
|
(97,303
|
)
|
|
$
|
5,309,477
|
|
Provision for uncollectible accounts
|
|
—
|
|
|
(17,531
|
)
|
|
(6,330
|
)
|
|
—
|
|
|
(23,861
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
3,604,202
|
|
|
1,778,717
|
|
|
(97,303
|
)
|
|
5,285,616
|
|
|||||
Other revenues
|
|
400,882
|
|
|
419,226
|
|
|
114,070
|
|
|
(483,397
|
)
|
|
450,781
|
|
|||||
Total net revenues
|
|
400,882
|
|
|
4,023,428
|
|
|
1,892,787
|
|
|
(580,700
|
)
|
|
5,736,397
|
|
|||||
Operating expenses
|
|
279,005
|
|
|
3,641,471
|
|
|
1,547,743
|
|
|
(580,700
|
)
|
|
4,887,519
|
|
|||||
Operating income
|
|
121,877
|
|
|
381,957
|
|
|
345,044
|
|
|
—
|
|
|
848,878
|
|
|||||
Debt expense
|
|
(235,148
|
)
|
|
(104,560
|
)
|
|
(16,649
|
)
|
|
123,149
|
|
|
(233,208
|
)
|
|||||
Other income
|
|
209,425
|
|
|
5,379
|
|
|
10,144
|
|
|
(218,372
|
)
|
|
6,576
|
|
|||||
Income tax expense
|
|
27,644
|
|
|
88,962
|
|
|
37,999
|
|
|
—
|
|
|
154,605
|
|
|||||
Equity earnings in subsidiaries
|
|
377,452
|
|
|
258,851
|
|
|
—
|
|
|
(636,303
|
)
|
|
—
|
|
|||||
Net income from continuing operations
|
|
445,962
|
|
|
452,665
|
|
|
300,540
|
|
|
(731,526
|
)
|
|
467,641
|
|
|||||
Net (loss) income from discontinued operations, net of
tax |
|
—
|
|
|
(75,213
|
)
|
|
43,900
|
|
|
95,223
|
|
|
63,910
|
|
|||||
Net income
|
|
445,962
|
|
|
377,452
|
|
|
344,440
|
|
|
(636,303
|
)
|
|
531,551
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85,589
|
)
|
|
(85,589
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
445,962
|
|
|
$
|
377,452
|
|
|
$
|
344,440
|
|
|
$
|
(721,892
|
)
|
|
$
|
445,962
|
|
|
|
DaVita Inc.
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Six Months Ended June 30, 2017
|
|
|
|
|
|
|||||||||||||||
Patient service revenues
|
|
$
|
—
|
|
|
$
|
3,185,156
|
|
|
$
|
1,809,011
|
|
|
$
|
(76,772
|
)
|
|
$
|
4,917,395
|
|
Provision for uncollectible accounts
|
|
—
|
|
|
(133,898
|
)
|
|
(82,760
|
)
|
|
—
|
|
|
(216,658
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
3,051,258
|
|
|
1,726,251
|
|
|
(76,772
|
)
|
|
4,700,737
|
|
|||||
Other revenues
|
|
414,971
|
|
|
610,937
|
|
|
31,925
|
|
|
(427,920
|
)
|
|
629,913
|
|
|||||
Total net revenues
|
|
414,971
|
|
|
3,662,195
|
|
|
1,758,176
|
|
|
(504,692
|
)
|
|
5,330,650
|
|
|||||
Operating expenses
|
|
270,014
|
|
|
2,891,303
|
|
|
1,406,901
|
|
|
(504,692
|
)
|
|
4,063,526
|
|
|||||
Operating income
|
|
144,957
|
|
|
770,892
|
|
|
351,275
|
|
|
—
|
|
|
1,267,124
|
|
|||||
Debt expense
|
|
(208,823
|
)
|
|
(95,760
|
)
|
|
(25,270
|
)
|
|
117,522
|
|
|
(212,331
|
)
|
|||||
Other income
|
|
202,636
|
|
|
4,172
|
|
|
9,583
|
|
|
(207,607
|
)
|
|
8,784
|
|
|||||
Income tax expense
|
|
54,481
|
|
|
307,165
|
|
|
21,934
|
|
|
—
|
|
|
383,580
|
|
|||||
Equity earnings in subsidiaries
|
|
490,409
|
|
|
248,165
|
|
|
—
|
|
|
(738,574
|
)
|
|
—
|
|
|||||
Net income from continuing operations
|
|
574,698
|
|
|
620,304
|
|
|
313,654
|
|
|
(828,659
|
)
|
|
679,997
|
|
|||||
Net (loss) income from discontinued operations, net of
tax |
|
—
|
|
|
(129,895
|
)
|
|
21,723
|
|
|
90,085
|
|
|
(18,087
|
)
|
|||||
Net income
|
|
574,698
|
|
|
490,409
|
|
|
335,377
|
|
|
(738,574
|
)
|
|
661,910
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,212
|
)
|
|
(87,212
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
574,698
|
|
|
$
|
490,409
|
|
|
$
|
335,377
|
|
|
$
|
(825,786
|
)
|
|
$
|
574,698
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Three Months Ended June 30, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
267,276
|
|
|
$
|
236,335
|
|
|
$
|
231,402
|
|
|
$
|
(428,691
|
)
|
|
$
|
306,322
|
|
Other comprehensive income (loss)
|
|
1,269
|
|
|
—
|
|
|
(50,529
|
)
|
|
—
|
|
|
(49,260
|
)
|
|||||
Total comprehensive income
|
|
268,545
|
|
|
236,335
|
|
|
180,873
|
|
|
(428,691
|
)
|
|
257,062
|
|
|||||
Less: Comprehensive income attributable to
noncontrolling interest |
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,046
|
)
|
|
(39,046
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
268,545
|
|
|
$
|
236,335
|
|
|
$
|
180,873
|
|
|
$
|
(467,737
|
)
|
|
$
|
218,016
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Three Months Ended June 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
127,001
|
|
|
$
|
95,908
|
|
|
$
|
120,173
|
|
|
$
|
(181,457
|
)
|
|
$
|
161,625
|
|
Other comprehensive income
|
|
436
|
|
|
—
|
|
|
49,142
|
|
|
—
|
|
|
49,578
|
|
|||||
Total comprehensive income
|
|
127,437
|
|
|
95,908
|
|
|
169,315
|
|
|
(181,457
|
)
|
|
211,203
|
|
|||||
Less: Comprehensive income attributable to the
noncontrolling interests |
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,624
|
)
|
|
(34,624
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
127,437
|
|
|
$
|
95,908
|
|
|
$
|
169,315
|
|
|
$
|
(216,081
|
)
|
|
$
|
176,579
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Six Months Ended June 30, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
445,962
|
|
|
$
|
377,452
|
|
|
$
|
344,440
|
|
|
$
|
(636,303
|
)
|
|
$
|
531,551
|
|
Other comprehensive income (loss)
|
|
3,856
|
|
|
—
|
|
|
(30,648
|
)
|
|
—
|
|
|
(26,792
|
)
|
|||||
Total comprehensive income
|
|
449,818
|
|
|
377,452
|
|
|
313,792
|
|
|
(636,303
|
)
|
|
504,759
|
|
|||||
Less: Comprehensive income attributable to
noncontrolling interest |
|
—
|
|
|
—
|
|
|
—
|
|
|
(85,589
|
)
|
|
(85,589
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
449,818
|
|
|
$
|
377,452
|
|
|
$
|
313,792
|
|
|
$
|
(721,892
|
)
|
|
$
|
419,170
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Six Months Ended June 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
574,698
|
|
|
$
|
490,409
|
|
|
$
|
335,377
|
|
|
$
|
(738,574
|
)
|
|
$
|
661,910
|
|
Other comprehensive (loss) income
|
|
(70
|
)
|
|
—
|
|
|
62,403
|
|
|
—
|
|
|
62,333
|
|
|||||
Total comprehensive income
|
|
574,628
|
|
|
490,409
|
|
|
397,780
|
|
|
(738,574
|
)
|
|
724,243
|
|
|||||
Less: Comprehensive income attributable to the
noncontrolling interests |
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,210
|
)
|
|
(87,210
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
574,628
|
|
|
$
|
490,409
|
|
|
$
|
397,780
|
|
|
$
|
(825,784
|
)
|
|
$
|
637,033
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
As of June 30, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
|
$
|
193,991
|
|
|
$
|
—
|
|
|
$
|
195,273
|
|
|
$
|
—
|
|
|
$
|
389,264
|
|
Restricted cash and equivalents
|
|
1,004
|
|
|
11,367
|
|
|
78,513
|
|
|
—
|
|
|
90,884
|
|
|||||
Accounts receivable, net
|
|
—
|
|
|
1,274,067
|
|
|
568,041
|
|
|
—
|
|
|
1,842,108
|
|
|||||
Other current assets
|
|
37,185
|
|
|
547,928
|
|
|
124,912
|
|
|
—
|
|
|
710,025
|
|
|||||
Current assets held for sale
|
|
—
|
|
|
5,101,853
|
|
|
951,228
|
|
|
—
|
|
|
6,053,081
|
|
|||||
Total current assets
|
|
232,180
|
|
|
6,935,215
|
|
|
1,917,967
|
|
|
—
|
|
|
9,085,362
|
|
|||||
Property and equipment, net
|
|
441,159
|
|
|
1,553,931
|
|
|
1,234,008
|
|
|
—
|
|
|
3,229,098
|
|
|||||
Intangible assets, net
|
|
199
|
|
|
46,491
|
|
|
53,565
|
|
|
—
|
|
|
100,255
|
|
|||||
Investments in subsidiaries
|
|
10,304,847
|
|
|
3,163,787
|
|
|
—
|
|
|
(13,468,634
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
3,579,186
|
|
|
—
|
|
|
1,386,117
|
|
|
(4,965,303
|
)
|
|
—
|
|
|||||
Other long-term assets and investments
|
|
54,077
|
|
|
68,922
|
|
|
219,291
|
|
|
—
|
|
|
342,290
|
|
|||||
Goodwill
|
|
—
|
|
|
4,767,041
|
|
|
1,911,518
|
|
|
—
|
|
|
6,678,559
|
|
|||||
Total assets
|
|
$
|
14,611,648
|
|
|
$
|
16,535,387
|
|
|
$
|
6,722,466
|
|
|
$
|
(18,433,937
|
)
|
|
$
|
19,435,564
|
|
Current liabilities
|
|
$
|
1,831,526
|
|
|
$
|
1,219,455
|
|
|
$
|
461,433
|
|
|
$
|
—
|
|
|
$
|
3,512,414
|
|
Current liabilities held for sale
|
|
—
|
|
|
734,745
|
|
|
536,619
|
|
|
—
|
|
|
1,271,364
|
|
|||||
Intercompany payables
|
|
—
|
|
|
3,548,086
|
|
|
1,417,217
|
|
|
(4,965,303
|
)
|
|
—
|
|
|||||
Long-term debt and other long-term liabilities
|
|
7,897,430
|
|
|
728,254
|
|
|
494,437
|
|
|
—
|
|
|
9,120,121
|
|
|||||
Noncontrolling interests subject to put provisions
|
|
603,508
|
|
|
—
|
|
|
—
|
|
|
443,650
|
|
|
1,047,158
|
|
|||||
Total DaVita Inc. shareholders' equity
|
|
4,279,184
|
|
|
10,304,847
|
|
|
3,163,787
|
|
|
(13,468,634
|
)
|
|
4,279,184
|
|
|||||
Noncontrolling interests not subject to put
provisions |
|
—
|
|
|
—
|
|
|
648,973
|
|
|
(443,650
|
)
|
|
205,323
|
|
|||||
Total equity
|
|
4,279,184
|
|
|
10,304,847
|
|
|
3,812,760
|
|
|
(13,912,284
|
)
|
|
4,484,507
|
|
|||||
Total liabilities and equity
|
|
$
|
14,611,648
|
|
|
$
|
16,535,387
|
|
|
$
|
6,722,466
|
|
|
$
|
(18,433,937
|
)
|
|
$
|
19,435,564
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
As of December 31, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
|
$
|
149,305
|
|
|
$
|
—
|
|
|
$
|
358,929
|
|
|
$
|
—
|
|
|
$
|
508,234
|
|
Restricted cash and equivalents
|
|
1,002
|
|
|
9,384
|
|
|
300
|
|
|
—
|
|
|
10,686
|
|
|||||
Accounts receivable, net
|
|
—
|
|
|
1,208,715
|
|
|
506,035
|
|
|
—
|
|
|
1,714,750
|
|
|||||
Other current assets
|
|
67,025
|
|
|
595,066
|
|
|
86,955
|
|
|
—
|
|
|
749,046
|
|
|||||
Current assets held for sale
|
|
—
|
|
|
4,992,067
|
|
|
769,575
|
|
|
—
|
|
|
5,761,642
|
|
|||||
Total current assets
|
|
217,332
|
|
|
6,805,232
|
|
|
1,721,794
|
|
|
—
|
|
|
8,744,358
|
|
|||||
Property and equipment, net
|
|
408,010
|
|
|
1,560,390
|
|
|
1,180,813
|
|
|
—
|
|
|
3,149,213
|
|
|||||
Intangible assets, net
|
|
250
|
|
|
50,971
|
|
|
62,606
|
|
|
—
|
|
|
113,827
|
|
|||||
Investments in subsidiaries
|
|
10,009,874
|
|
|
3,085,722
|
|
|
—
|
|
|
(13,095,596
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
3,677,947
|
|
|
—
|
|
|
1,313,213
|
|
|
(4,991,160
|
)
|
|
—
|
|
|||||
Other long-term assets and investments
|
|
47,297
|
|
|
68,344
|
|
|
214,875
|
|
|
—
|
|
|
330,516
|
|
|||||
Goodwill
|
|
—
|
|
|
4,732,320
|
|
|
1,877,959
|
|
|
—
|
|
|
6,610,279
|
|
|||||
Total assets
|
|
$
|
14,360,710
|
|
|
$
|
16,302,979
|
|
|
$
|
6,371,260
|
|
|
$
|
(18,086,756
|
)
|
|
$
|
18,948,193
|
|
Current liabilities
|
|
$
|
238,706
|
|
|
$
|
1,181,139
|
|
|
$
|
436,262
|
|
|
$
|
—
|
|
|
$
|
1,856,107
|
|
Current liabilities held for sale
|
|
—
|
|
|
739,294
|
|
|
445,776
|
|
|
—
|
|
|
1,185,070
|
|
|||||
Intercompany payables
|
|
—
|
|
|
3,690,042
|
|
|
1,301,118
|
|
|
(4,991,160
|
)
|
|
—
|
|
|||||
Long-term debt and other long-term liabilities
|
|
8,857,373
|
|
|
682,630
|
|
|
469,587
|
|
|
—
|
|
|
10,009,590
|
|
|||||
Noncontrolling interests subject to put provisions
|
|
574,602
|
|
|
—
|
|
|
—
|
|
|
436,758
|
|
|
1,011,360
|
|
|||||
Total DaVita Inc. shareholders' equity
|
|
4,690,029
|
|
|
10,009,874
|
|
|
3,085,722
|
|
|
(13,095,596
|
)
|
|
4,690,029
|
|
|||||
Noncontrolling interests not subject to put
provisions |
|
—
|
|
|
—
|
|
|
632,795
|
|
|
(436,758
|
)
|
|
196,037
|
|
|||||
Total equity
|
|
4,690,029
|
|
|
10,009,874
|
|
|
3,718,517
|
|
|
(13,532,354
|
)
|
|
4,886,066
|
|
|||||
Total liabilities and equity
|
|
$
|
14,360,710
|
|
|
$
|
16,302,979
|
|
|
$
|
6,371,260
|
|
|
$
|
(18,086,756
|
)
|
|
$
|
18,948,193
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Six Months Ended June 30, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
445,962
|
|
|
$
|
377,452
|
|
|
$
|
344,440
|
|
|
$
|
(636,303
|
)
|
|
$
|
531,551
|
|
Changes in operating assets and liabilities and non-cash
items included in net income |
|
(361,991
|
)
|
|
26,502
|
|
|
92,210
|
|
|
636,303
|
|
|
393,024
|
|
|||||
Net cash provided by operating activities
|
|
83,971
|
|
|
403,954
|
|
|
436,650
|
|
|
—
|
|
|
924,575
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions of property and equipment
|
|
(77,169
|
)
|
|
(258,471
|
)
|
|
(138,337
|
)
|
|
—
|
|
|
(473,977
|
)
|
|||||
Acquisitions
|
|
—
|
|
|
(8,195
|
)
|
|
(81,270
|
)
|
|
—
|
|
|
(89,465
|
)
|
|||||
Proceeds from asset and business sales
|
|
—
|
|
|
28,546
|
|
|
87,695
|
|
|
—
|
|
|
116,241
|
|
|||||
Proceeds (purchases) from investment sales and other
items, net |
|
32,415
|
|
|
(8,257
|
)
|
|
(1,021
|
)
|
|
—
|
|
|
23,137
|
|
|||||
Net cash used in investing activities
|
|
(44,754
|
)
|
|
(246,377
|
)
|
|
(132,933
|
)
|
|
—
|
|
|
(424,064
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and related financing costs, net
|
|
584,500
|
|
|
(5,429
|
)
|
|
(5,090
|
)
|
|
—
|
|
|
573,981
|
|
|||||
Intercompany borrowing (payments)
|
|
225,216
|
|
|
(130,553
|
)
|
|
(94,663
|
)
|
|
—
|
|
|
—
|
|
|||||
Other items
|
|
(804,245
|
)
|
|
(13,208
|
)
|
|
(62,437
|
)
|
|
—
|
|
|
(879,890
|
)
|
|||||
Net cash provided by (used in) financing activities
|
|
5,471
|
|
|
(149,190
|
)
|
|
(162,190
|
)
|
|
—
|
|
|
(305,909
|
)
|
|||||
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
|
—
|
|
|
—
|
|
|
(3,473
|
)
|
|
—
|
|
|
(3,473
|
)
|
|||||
Net increase in cash, cash equivalents and
restricted cash |
|
44,688
|
|
|
8,387
|
|
|
138,054
|
|
|
—
|
|
|
191,129
|
|
|||||
Less: Net increase in cash, cash equivalents and
restricted cash from discontinued operations |
|
—
|
|
|
6,404
|
|
|
223,497
|
|
|
—
|
|
|
229,901
|
|
|||||
Net increase (decrease) in cash, cash equivalents and
restricted cash from continuing operations |
|
44,688
|
|
|
1,983
|
|
|
(85,443
|
)
|
|
—
|
|
|
(38,772
|
)
|
|||||
Cash, cash equivalents and restricted cash of continuing
operations at beginning of the year |
|
150,307
|
|
|
9,384
|
|
|
359,229
|
|
|
—
|
|
|
518,920
|
|
|||||
Cash, cash equivalents and restricted cash of continuing
operations at end of the period |
|
$
|
194,995
|
|
|
$
|
11,367
|
|
|
$
|
273,786
|
|
|
$
|
—
|
|
|
$
|
480,148
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For The Six Months Ended June 30, 2017
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
574,698
|
|
|
$
|
490,409
|
|
|
$
|
335,377
|
|
|
$
|
(738,574
|
)
|
|
$
|
661,910
|
|
Changes in operating assets and liabilities and non-cash
items included in net income |
|
(429,399
|
)
|
|
37,851
|
|
|
6,121
|
|
|
738,574
|
|
|
353,147
|
|
|||||
Net cash provided by operating activities
|
|
145,299
|
|
|
528,260
|
|
|
341,498
|
|
|
—
|
|
|
1,015,057
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions of property and equipment
|
|
(50,966
|
)
|
|
(182,494
|
)
|
|
(165,480
|
)
|
|
—
|
|
|
(398,940
|
)
|
|||||
Acquisitions
|
|
—
|
|
|
(538,450
|
)
|
|
(81,389
|
)
|
|
—
|
|
|
(619,839
|
)
|
|||||
Proceeds from asset and business sales, net of cash
divested |
|
—
|
|
|
70,127
|
|
|
109
|
|
|
—
|
|
|
70,236
|
|
|||||
Proceeds (purchases) from investment sales and other
items, net |
|
49,036
|
|
|
(2,933
|
)
|
|
50,833
|
|
|
—
|
|
|
96,936
|
|
|||||
Net cash used in investing activities
|
|
(1,930
|
)
|
|
(653,750
|
)
|
|
(195,927
|
)
|
|
—
|
|
|
(851,607
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and related financing costs, net
|
|
(54,992
|
)
|
|
(6,893
|
)
|
|
(2,147
|
)
|
|
—
|
|
|
(64,032
|
)
|
|||||
Intercompany (payments) borrowing
|
|
(39,814
|
)
|
|
117,661
|
|
|
(77,847
|
)
|
|
—
|
|
|
—
|
|
|||||
Other items
|
|
(223,511
|
)
|
|
(1,432
|
)
|
|
(76,203
|
)
|
|
—
|
|
|
(301,146
|
)
|
|||||
Net cash (used in) provided by financing activities
|
|
(318,317
|
)
|
|
109,336
|
|
|
(156,197
|
)
|
|
—
|
|
|
(365,178
|
)
|
|||||
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
|
—
|
|
|
—
|
|
|
4,192
|
|
|
—
|
|
|
4,192
|
|
|||||
Net decrease in cash, cash equivalents and restricted cash
|
|
(174,948
|
)
|
|
(16,154
|
)
|
|
(6,434
|
)
|
|
—
|
|
|
(197,536
|
)
|
|||||
Less: Net (decrease) increase in cash, cash equivalents
and restricted cash from discontinued operations |
|
—
|
|
|
(16,194
|
)
|
|
48,914
|
|
|
—
|
|
|
32,720
|
|
|||||
Net (decrease) increase in cash, cash equivalents and
restricted cash from continuing operations |
|
(174,948
|
)
|
|
40
|
|
|
(55,348
|
)
|
|
—
|
|
|
(230,256
|
)
|
|||||
Cash, cash equivalents and restricted cash of continuing
operations at beginning of the year |
|
549,921
|
|
|
8,687
|
|
|
124,855
|
|
|
—
|
|
|
683,463
|
|
|||||
Cash, cash equivalents and restricted cash of continuing
operations at end of the period |
|
$
|
374,973
|
|
|
$
|
8,727
|
|
|
$
|
69,507
|
|
|
$
|
—
|
|
|
$
|
453,207
|
|
23
.
|
Supplemental data
|
|
|
Consolidated
Total
|
|
Physician
Groups |
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
For The Six Months Ended June 30, 2018
|
|
|
|
|
||||||||||||
Patient service operating revenues
|
|
$
|
5,309,477
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,309,477
|
|
Provision for uncollectible accounts
|
|
(23,861
|
)
|
|
—
|
|
|
—
|
|
|
(23,861
|
)
|
||||
Net patient service operating revenues
|
|
5,285,616
|
|
|
—
|
|
|
—
|
|
|
5,285,616
|
|
||||
Other revenues
|
|
450,781
|
|
|
—
|
|
|
—
|
|
|
450,781
|
|
||||
Total net operating revenues
|
|
5,736,397
|
|
|
—
|
|
|
—
|
|
|
5,736,397
|
|
||||
Operating expenses
|
|
4,887,519
|
|
|
—
|
|
|
—
|
|
|
4,887,519
|
|
||||
Operating income
|
|
848,878
|
|
|
—
|
|
|
—
|
|
|
848,878
|
|
||||
Debt expense, including refinancing charges
|
|
(233,208
|
)
|
|
—
|
|
|
—
|
|
|
(233,208
|
)
|
||||
Other income
|
|
6,576
|
|
|
—
|
|
|
—
|
|
|
6,576
|
|
||||
Income tax expense
|
|
154,605
|
|
|
—
|
|
|
—
|
|
|
154,605
|
|
||||
Net income from continuing operations
|
|
467,641
|
|
|
—
|
|
|
—
|
|
|
467,641
|
|
||||
Net income from discontinued operations, net of tax
|
|
63,910
|
|
|
16,466
|
|
|
323
|
|
|
47,121
|
|
||||
Net income
|
|
531,551
|
|
|
16,466
|
|
|
323
|
|
|
514,762
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
(85,589
|
)
|
|
(8,544
|
)
|
|
—
|
|
|
(77,045
|
)
|
||||
Net income attributable to DaVita Inc.
|
|
$
|
445,962
|
|
|
$
|
7,922
|
|
|
$
|
323
|
|
|
$
|
437,717
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
For The Six Months Ended June 30, 2018
|
|
|
|
|
||||||||||||
Net income
|
|
$
|
531,551
|
|
|
$
|
16,466
|
|
|
$
|
323
|
|
|
$
|
514,762
|
|
Other comprehensive loss
|
|
(26,792
|
)
|
|
—
|
|
|
—
|
|
|
(26,792
|
)
|
||||
Total comprehensive income
|
|
504,759
|
|
|
16,466
|
|
|
323
|
|
|
487,970
|
|
||||
Less: Comprehensive income attributable to the noncontrolling
interests |
|
(85,589
|
)
|
|
(8,544
|
)
|
|
—
|
|
|
(77,045
|
)
|
||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
419,170
|
|
|
$
|
7,922
|
|
|
$
|
323
|
|
|
$
|
410,925
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
As of June 30, 2018
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
389,264
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
389,264
|
|
Restricted cash and equivalents
|
|
90,884
|
|
|
—
|
|
|
—
|
|
|
90,884
|
|
||||
Accounts receivable, net
|
|
1,842,108
|
|
|
—
|
|
|
—
|
|
|
1,842,108
|
|
||||
Other current assets
|
|
710,025
|
|
|
—
|
|
|
—
|
|
|
710,025
|
|
||||
Current assets held for sale
|
|
6,053,081
|
|
|
524,595
|
|
|
3,056
|
|
|
5,525,430
|
|
||||
Total current assets
|
|
9,085,362
|
|
|
524,595
|
|
|
3,056
|
|
|
8,557,711
|
|
||||
Property and equipment, net
|
|
3,229,098
|
|
|
—
|
|
|
—
|
|
|
3,229,098
|
|
||||
Amortizable intangibles, net
|
|
100,255
|
|
|
—
|
|
|
—
|
|
|
100,255
|
|
||||
Other long-term assets
|
|
342,290
|
|
|
—
|
|
|
—
|
|
|
342,290
|
|
||||
Goodwill
|
|
6,678,559
|
|
|
—
|
|
|
—
|
|
|
6,678,559
|
|
||||
Total assets
|
|
$
|
19,435,564
|
|
|
$
|
524,595
|
|
|
$
|
3,056
|
|
|
$
|
18,907,913
|
|
Current liabilities
|
|
$
|
3,512,414
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,512,414
|
|
Current liabilities held for sale
|
|
1,271,364
|
|
|
334,091
|
|
|
—
|
|
|
937,273
|
|
||||
Payables to parent
|
|
—
|
|
|
56,761
|
|
|
3,056
|
|
|
(59,817
|
)
|
||||
Long-term debt and other long-term liabilities
|
|
9,120,121
|
|
|
—
|
|
|
—
|
|
|
9,120,121
|
|
||||
Noncontrolling interests subject to put provisions
|
|
1,047,158
|
|
|
—
|
|
|
—
|
|
|
1,047,158
|
|
||||
Total DaVita Inc. shareholders’ equity
|
|
4,279,184
|
|
|
133,743
|
|
|
—
|
|
|
4,145,441
|
|
||||
Noncontrolling interests not subject to put provisions
|
|
205,323
|
|
|
—
|
|
|
—
|
|
|
205,323
|
|
||||
Shareholders’ equity
|
|
4,484,507
|
|
|
133,743
|
|
|
—
|
|
|
4,350,764
|
|
||||
Total liabilities and shareholder’s equity
|
|
$
|
19,435,564
|
|
|
$
|
524,595
|
|
|
$
|
3,056
|
|
|
$
|
18,907,913
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries
(1)
|
||||||||
For The Six Months Ended June 30, 2018
|
|
|
|
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
531,551
|
|
|
$
|
16,466
|
|
|
$
|
323
|
|
|
$
|
514,762
|
|
Changes in operating and intercompany assets and liabilities and
non-cash items included in net income |
|
393,024
|
|
|
101,201
|
|
|
(323
|
)
|
|
292,146
|
|
||||
Net cash provided by (used in) operating activities
|
|
924,575
|
|
|
117,667
|
|
|
—
|
|
|
806,908
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Additions of property and equipment
|
|
(473,977
|
)
|
|
(2,097
|
)
|
|
—
|
|
|
(471,880
|
)
|
||||
Acquisitions
|
|
(89,465
|
)
|
|
—
|
|
|
—
|
|
|
(89,465
|
)
|
||||
Proceeds from asset and business sales
|
|
116,241
|
|
|
—
|
|
|
—
|
|
|
116,241
|
|
||||
Investments and other items
|
|
23,137
|
|
|
(1,021
|
)
|
|
—
|
|
|
24,158
|
|
||||
Net cash used in investing activities
|
|
(424,064
|
)
|
|
(3,118
|
)
|
|
—
|
|
|
(420,946
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt
|
|
573,981
|
|
|
—
|
|
|
—
|
|
|
573,981
|
|
||||
Intercompany
|
|
—
|
|
|
57,783
|
|
|
—
|
|
|
(57,783
|
)
|
||||
Other items
|
|
(879,890
|
)
|
|
—
|
|
|
—
|
|
|
(879,890
|
)
|
||||
Net cash (used in) provided by financing activities
|
|
(305,909
|
)
|
|
57,783
|
|
|
—
|
|
|
(363,692
|
)
|
||||
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(3,473
|
)
|
|
—
|
|
|
—
|
|
|
(3,473
|
)
|
||||
Net increase in cash, cash equivalents and restricted cash
|
|
191,129
|
|
|
172,332
|
|
|
—
|
|
|
18,797
|
|
||||
Less: Net increase in cash, cash equivalents and
restricted cash from discontinued operations |
|
229,901
|
|
|
172,332
|
|
|
—
|
|
|
57,569
|
|
||||
Net decrease in cash, cash equivalents and restricted cash from
continuing operations |
|
(38,772
|
)
|
|
—
|
|
|
—
|
|
|
(38,772
|
)
|
||||
Cash, cash equivalents and restricted cash of continuing operations
at beginning of the year |
|
518,920
|
|
|
—
|
|
|
—
|
|
|
518,920
|
|
||||
Cash, cash equivalents and restricted cash of continuing operations
at end of the period |
|
$
|
480,148
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
480,148
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
Three months ended
|
|
Six months ended
|
|||||||||||||||||||||||||||||||
|
June 30,
2018 |
|
March 31,
2018
|
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
|||||||||||||||||||||||||
|
(dollars in millions)
|
|||||||||||||||||||||||||||||||||
Revenues:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dialysis and related lab
patient service revenues |
$
|
2,718
|
|
|
|
|
|
$
|
2,591
|
|
|
|
|
|
$
|
2,495
|
|
|
|
|
|
$
|
5,309
|
|
|
|
|
$
|
4,917
|
|
|
|
||
Provision for
uncollectible accounts |
(49
|
)
|
|
|
|
|
26
|
|
|
|
|
|
(110
|
)
|
|
|
|
|
(24
|
)
|
|
|
|
(217
|
)
|
|
|
|||||||
Net dialysis and related
lab patient service revenues |
2,669
|
|
|
|
|
|
2,617
|
|
|
|
|
|
2,385
|
|
|
|
|
|
5,286
|
|
|
|
|
4,701
|
|
|
|
|||||||
Other revenues
|
218
|
|
|
|
|
|
233
|
|
|
|
|
|
314
|
|
|
|
|
|
451
|
|
|
|
|
630
|
|
|
|
|||||||
Total consolidated revenues
|
2,887
|
|
|
100
|
%
|
|
2,849
|
|
|
100
|
%
|
|
2,699
|
|
|
100
|
%
|
|
5,736
|
|
|
100
|
%
|
|
5,331
|
|
|
100
|
%
|
|||||
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patient care costs
|
2,069
|
|
|
72
|
%
|
|
2,036
|
|
|
71
|
%
|
|
1,895
|
|
|
70
|
%
|
|
4,105
|
|
|
72
|
%
|
|
3,747
|
|
|
70
|
%
|
|||||
General and administrative
|
264
|
|
|
9
|
%
|
|
267
|
|
|
9
|
%
|
|
263
|
|
|
10
|
%
|
|
531
|
|
|
9
|
%
|
|
526
|
|
|
10
|
%
|
|||||
Depreciation and
amortization |
147
|
|
|
5
|
%
|
|
143
|
|
|
5
|
%
|
|
140
|
|
|
5
|
%
|
|
290
|
|
|
5
|
%
|
|
273
|
|
|
5
|
%
|
|||||
Equity investment (income)
loss |
(10
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1
|
|
|
—
|
%
|
|
(10
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||||
Provision for uncollectible
accounts |
(2
|
)
|
|
—
|
%
|
|
(6
|
)
|
|
—
|
%
|
|
(1
|
)
|
|
—
|
%
|
|
(8
|
)
|
|
—
|
%
|
|
1
|
|
|
—
|
%
|
|||||
Investment and other
asset impairments |
11
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
11
|
|
|
—
|
%
|
|
15
|
|
|
—
|
%
|
|||||
Goodwill impairment
charges |
3
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
10
|
|
|
—
|
%
|
|
3
|
|
|
—
|
%
|
|
35
|
|
|
1
|
%
|
|||||
Gain on changes in
ownership interests, net |
(34
|
)
|
|
(1
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(34
|
)
|
|
(1
|
)%
|
|
(6
|
)
|
|
—
|
%
|
|||||
Gain on settlement, net
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(527
|
)
|
|
(10
|
)%
|
|||||
Total operating expenses and
charges |
2,449
|
|
|
85
|
%
|
|
2,439
|
|
|
86
|
%
|
|
2,308
|
|
|
86
|
%
|
|
4,888
|
|
|
85
|
%
|
|
4,064
|
|
|
76
|
%
|
|||||
Operating income
|
$
|
438
|
|
|
15
|
%
|
|
$
|
411
|
|
|
14
|
%
|
|
$
|
391
|
|
|
14
|
%
|
|
$
|
849
|
|
|
15
|
%
|
|
$
|
1,267
|
|
|
24
|
%
|
|
(1)
|
On January 1, 2018, we adopted
Revenue from Contracts with Customers
(Topic 606) using the cumulative effect method for those contracts that were not substantially completed as of January 1, 2018. Results related to performance obligations satisfied beginning on
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||
|
June 30,
2018 |
|
March 31,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||||
|
(dollars in millions)
|
||||||||||||||||||
Revenues:
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dialysis and related lab services patient service revenues
|
$
|
2,633
|
|
|
$
|
2,508
|
|
|
$
|
2,430
|
|
|
$
|
5,140
|
|
|
$
|
4,802
|
|
Provision for uncollectible accounts
|
(49
|
)
|
|
25
|
|
|
(109
|
)
|
|
(24
|
)
|
|
(216
|
)
|
|||||
U.S. dialysis and related lab services net patient service
revenues |
2,583
|
|
|
2,533
|
|
|
2,320
|
|
|
5,116
|
|
|
4,586
|
|
|||||
Other revenues
|
5
|
|
|
5
|
|
|
5
|
|
|
10
|
|
|
10
|
|
|||||
Total U.S. dialysis and related lab services revenues
|
2,588
|
|
|
2,538
|
|
|
2,325
|
|
|
5,126
|
|
|
4,596
|
|
|||||
Other—Ancillary services and strategic initiatives other revenues
|
222
|
|
|
238
|
|
|
315
|
|
|
460
|
|
|
632
|
|
|||||
Other—Ancillary services and strategic initiatives patient
service revenues, net |
106
|
|
|
102
|
|
|
78
|
|
|
208
|
|
|
140
|
|
|||||
Total other—ancillary services and strategic initiatives
revenues |
328
|
|
|
340
|
|
|
394
|
|
|
668
|
|
|
772
|
|
|||||
Elimination of intersegment revenues
|
(29
|
)
|
|
(29
|
)
|
|
(19
|
)
|
|
(58
|
)
|
|
(38
|
)
|
|||||
Consolidated revenues
|
$
|
2,887
|
|
|
$
|
2,849
|
|
|
$
|
2,699
|
|
|
$
|
5,736
|
|
|
$
|
5,331
|
|
|
(1)
|
On January 1, 2018, we adopted Topic 606 using the cumulative effect method for those contracts that were not substantially completed as of January 1, 2018. Results related to performance obligations satisfied beginning on and after January 1, 2018 are presented under Topic 606, while results related to the satisfaction of performance obligations in prior periods continue to be reported in accordance with our historical accounting under
Revenue Recognition
(Topic 605).
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||
|
June 30,
2018 |
|
March 31,
2018
|
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||||
|
(dollars in millions)
|
||||||||||||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dialysis and related lab services
|
$
|
449
|
|
|
$
|
433
|
|
|
$
|
450
|
|
|
$
|
883
|
|
|
$
|
1,395
|
|
Other—Ancillary services and strategic initiatives
|
3
|
|
|
(7
|
)
|
|
(48
|
)
|
|
(4
|
)
|
|
(106
|
)
|
|||||
Corporate administrative support
|
(14
|
)
|
|
(16
|
)
|
|
(11
|
)
|
|
(30
|
)
|
|
(22
|
)
|
|||||
Total consolidated operating income
|
$
|
438
|
|
|
$
|
411
|
|
|
$
|
391
|
|
|
$
|
849
|
|
|
$
|
1,267
|
|
Reconciliation of non-GAAP measures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill impairment charges
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
35
|
|
Impairment of assets
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
15
|
|
|||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(527
|
)
|
|||||
Equity investment income related to gain on settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Gain on changes in ownership interests, net
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(6
|
)
|
|||||
Adjusted consolidated operating income
(1)
|
$
|
419
|
|
|
$
|
411
|
|
|
$
|
402
|
|
|
$
|
829
|
|
|
$
|
781
|
|
|
(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 goodwill impairment charges, other asset impairments, a net settlement gain, and net gains on changes in ownership interests. Adjusted operating income as so defined is a non-GAAP measure and is not intended as a
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||
|
June 30,
2018 |
|
March 31,
2018
|
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||||
|
(dollars in millions, except per treatment data)
|
||||||||||||||||||
Revenues:
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dialysis and related lab services patient service
revenues |
$
|
2,633
|
|
|
$
|
2,508
|
|
|
$
|
2,430
|
|
|
$
|
5,140
|
|
|
$
|
4,802
|
|
Provision for uncollectible accounts
|
(49
|
)
|
|
25
|
|
|
(109
|
)
|
|
(24
|
)
|
|
(216
|
)
|
|||||
U.S. dialysis and related lab services net patient
service revenues |
2,583
|
|
|
2,533
|
|
|
2,320
|
|
|
5,116
|
|
|
4,586
|
|
|||||
Other revenues
|
5
|
|
|
5
|
|
|
5
|
|
|
10
|
|
|
10
|
|
|||||
Total U.S. dialysis and related lab services revenues
|
2,588
|
|
|
2,538
|
|
|
2,325
|
|
|
5,126
|
|
|
4,596
|
|
|||||
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Patient care costs
|
1,810
|
|
|
1,779
|
|
|
1,561
|
|
|
3,590
|
|
|
3,109
|
|
|||||
General and administrative
|
196
|
|
|
196
|
|
|
189
|
|
|
392
|
|
|
377
|
|
|||||
Depreciation and amortization
|
138
|
|
|
135
|
|
|
130
|
|
|
273
|
|
|
255
|
|
|||||
Equity investment income
|
(6
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
(11
|
)
|
|
(13
|
)
|
|||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(527
|
)
|
|||||
Total operating expenses and charges
|
2,139
|
|
|
2,105
|
|
|
1,875
|
|
|
4,243
|
|
|
3,201
|
|
|||||
Operating income
|
$
|
449
|
|
|
$
|
433
|
|
|
$
|
450
|
|
|
$
|
883
|
|
|
$
|
1,395
|
|
Reconciliation of non-GAAP measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gain on settlement, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(527
|
)
|
|||||
Equity investment income related to gain on
settlement |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Adjusted operating income
(2)
|
$
|
449
|
|
|
$
|
433
|
|
|
$
|
450
|
|
|
$
|
883
|
|
|
$
|
865
|
|
Dialysis treatments
|
7,331,590
|
|
|
7,174,026
|
|
|
7,035,894
|
|
|
14,505,615
|
|
|
13,840,278
|
|
|||||
Average dialysis treatments per treatment day
|
93,995
|
|
|
92,568
|
|
|
90,204
|
|
|
93,284
|
|
|
89,292
|
|
|||||
Average dialysis and related lab services net revenue per
treatment |
$
|
352.37
|
|
|
$
|
353.05
|
|
|
$
|
329.79
|
|
|
$
|
352.71
|
|
|
$
|
331.37
|
|
|
(1)
|
On January 1, 2018, we adopted Topic 606 using the cumulative effect method for those contracts that were not substantially completed as of January 1, 2018. Results related to performance obligations satisfied beginning on and after January 1, 2018 are presented under Topic 606, while results related to the satisfaction of performance obligations in prior periods continue to be reported in accordance with our historical accounting under
Revenue Recognition
Topic 605.
|
(2)
|
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 normalized prior period results.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||
|
June 30,
2018 |
|
March 31,
2018
|
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||||
|
(dollars in millions)
|
||||||||||||||||||
U.S. revenues:
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Other revenues
|
$
|
221
|
|
|
$
|
237
|
|
|
$
|
314
|
|
|
$
|
458
|
|
|
$
|
630
|
|
Total
|
221
|
|
|
237
|
|
|
314
|
|
|
458
|
|
|
630
|
|
|||||
International revenues:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Dialysis patient service revenues
|
106
|
|
|
102
|
|
|
78
|
|
|
208
|
|
|
140
|
|
|||||
Other revenues
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|||||
Total
|
107
|
|
|
103
|
|
|
79
|
|
|
210
|
|
|
142
|
|
|||||
Total net revenues
(1)
|
$
|
328
|
|
|
$
|
340
|
|
|
$
|
394
|
|
|
$
|
668
|
|
|
$
|
772
|
|
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating and other general expenses
|
$
|
345
|
|
|
$
|
347
|
|
|
$
|
430
|
|
|
$
|
692
|
|
|
$
|
835
|
|
Goodwill impairment
|
3
|
|
|
—
|
|
|
10
|
|
|
3
|
|
|
35
|
|
|||||
Impairment of other assets
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
15
|
|
|||||
Gain on changes in ownership interests
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(6
|
)
|
|||||
Total operating expenses and charges
|
325
|
|
|
347
|
|
|
442
|
|
|
672
|
|
|
878
|
|
|||||
Total ancillary services and strategic initiatives operating loss
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
(48
|
)
|
|
$
|
(4
|
)
|
|
$
|
(106
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. operating loss
|
$
|
4
|
|
|
$
|
(5
|
)
|
|
$
|
(36
|
)
|
|
$
|
(1
|
)
|
|
$
|
(89
|
)
|
Reconciliation of non-GAAP:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill impairment charges
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
35
|
|
|||||
Gain on changes in ownership interests, net
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|||||
Impairment of other assets
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
15
|
|
|||||
Adjusted operating loss
(2)
|
$
|
(20
|
)
|
|
$
|
(5
|
)
|
|
$
|
(26
|
)
|
|
$
|
(25
|
)
|
|
$
|
(39
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
International operating loss
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(13
|
)
|
|
$
|
(3
|
)
|
|
$
|
(18
|
)
|
Reconciliation of non-GAAP:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill impairment charge
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
Gain on changes in ownership interests, net
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(6
|
)
|
|||||
Adjusted operating loss
(2)
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
(13
|
)
|
|
$
|
1
|
|
|
$
|
(24
|
)
|
Total adjusted ancillary services and strategic initiatives
operating loss (2) |
$
|
(17
|
)
|
|
$
|
(7
|
)
|
|
$
|
(38
|
)
|
|
$
|
(24
|
)
|
|
$
|
(62
|
)
|
|
(1)
|
On January 1, 2018, we adopted Topic 606 using the cumulative effect method for those contracts that were not substantially completed as of January 1, 2018. Results related to performance obligations satisfied beginning on and after January 1, 2018 are presented under Topic 606, while results related to the satisfaction of performance obligations in prior periods continue to be reported in accordance with our historical accounting under
Revenue Recognition
Topic 605.
|
(2)
|
For the periods presented in the table above, adjusted operating loss is defined as operating loss before certain items which we do not believe are indicative of ordinary results, including goodwill impairment charges, other asset impairments, and net gain on changes in ownership interests. Adjusted operating loss as so defined is a non-GAAP measure and is not intended as a substitute for GAAP operating loss. 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.
|
|
Remainder of
2018 |
|
1-3
years |
|
4-5
years |
|
After
5 years |
|
Total
|
||||||||||
Scheduled payments under contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
83
|
|
|
$
|
5,032
|
|
|
$
|
1,278
|
|
|
$
|
3,317
|
|
|
$
|
9,710
|
|
Interest payments on the senior notes
|
118
|
|
|
710
|
|
|
401
|
|
|
202
|
|
|
1,431
|
|
|||||
Interest payments on Term Loan B
(1)
|
83
|
|
|
405
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|||||
Interest payments on Term Loan A
(2)
|
15
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Interest payments on Term Loan A-2
(2)
|
16
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|||||
Kidney Care capital lease obligations
|
12
|
|
|
66
|
|
|
173
|
|
|
41
|
|
|
292
|
|
|||||
Kidney Care operating leases
|
232
|
|
|
1,282
|
|
|
663
|
|
|
1,261
|
|
|
3,438
|
|
|||||
DMG capital lease obligations
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
DMG operating leases
|
44
|
|
|
225
|
|
|
107
|
|
|
254
|
|
|
630
|
|
|||||
|
$
|
639
|
|
|
$
|
7,749
|
|
|
$
|
2,622
|
|
|
$
|
5,075
|
|
|
$
|
16,085
|
|
Potential cash requirements under other commitments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Letters of credit
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37
|
|
Noncontrolling interests subject to put provisions
|
641
|
|
|
257
|
|
|
72
|
|
|
77
|
|
|
1,047
|
|
|||||
Non-owned and minority owned put provisions
|
27
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|||||
Operating capital advances
|
—
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
5
|
|
|||||
Purchase commitments
|
195
|
|
|
875
|
|
|
251
|
|
|
—
|
|
|
1,321
|
|
|||||
|
$
|
900
|
|
|
$
|
1,170
|
|
|
$
|
324
|
|
|
$
|
79
|
|
|
$
|
2,473
|
|
|
(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
June 30, 2018
plus an interest rate margin of
2.00%
for Term Loan A and plus an interest rate margin of
1.00%
for Term Loan A-2.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest rate |
|
|
|||||||||||||||||||
|
Expected maturity date
|
|
|
|
|
|
|
Fair
Value |
||||||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
|
|||||||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Long term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fixed rate
|
$
|
25
|
|
|
$
|
32
|
|
|
$
|
30
|
|
|
$
|
28
|
|
|
$
|
1,278
|
|
|
$
|
155
|
|
|
$
|
3,353
|
|
|
$
|
4,901
|
|
|
5.28
|
%
|
|
$
|
4,792
|
|
Variable rate
|
$
|
70
|
|
|
$
|
1,680
|
|
|
$
|
45
|
|
|
$
|
3,283
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
5,101
|
|
|
4.72
|
%
|
|
$
|
5,129
|
|
|
Notional Amount
|
|
Contract maturity date
|
|
|
|
Fair
Value |
||||||||||||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Receive variable
|
|
||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
||||||||||||||||||||||||
Cap agreements
|
$
|
3,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
LIBOR above 3.5%
|
|
$
|
2
|
|
•
|
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 and 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 various relationships and/or contracts related to our business, including joint venture arrangements, medical director agreements, real estate leases and consulting agreements with physicians; 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 flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and investments, repurchases of stock at the levels intended or announced, or at all, 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, or to refinance existing debt on favorable terms when otherwise available.
|
•
|
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.
|
•
|
Risk that CMS, through its contracted Medicare Administrative Contractors (MACs) or otherwise, implements Local Coverage Determinations (LCDs) or other decisions that limit the frequency a provider can bill Medicare for home dialysis treatments or other rules that may impact reimbursement. MACs have proposed drafts of LCDs to this effect. Such coverage determinations could have an adverse impact on our revenue. There is also risk commercial insurers could seek to incorporate the requirements or limitations associated with such LCDs into their contracted terms with dialysis providers, which could have an adverse impact on our revenue.
|
•
|
Risk that a MAC, or multiple MACs, change their interpretations of existing regulations, manual provisions and/or guidance; or seek to implement or enforce new interpretations that are inconsistent with how we have interpreted existing regulations, manual provisions and/or guidance.
|
•
|
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, including increases in maintenance costs and capital expenditures to improve, renovate and maintain our facilities, equipment and information technology to meet changing regulatory requirements, 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 BBA, an annual 2% reduction to Medicare payments took effect on April 1, 2013, and has been extended through 2027. 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 from participation in the federal healthcare programs, 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 and outside of 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 were fully phased-in in 2017 and range between 95% and 115% of the Medicare Fee-for-Service (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 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
|
|
|
|
||||||||||
April 1-30, 2018
|
3,970,706
|
|
|
$
|
63.46
|
|
|
3,970,706
|
|
|
$
|
568.7
|
|
May 1-31, 2018
|
2,288,507
|
|
|
66.39
|
|
|
2,288,507
|
|
|
416.8
|
|
||
June 1-30, 2018
|
1,538,499
|
|
|
69.94
|
|
|
1,538,499
|
|
|
309.2
|
|
||
Total
|
7,797,712
|
|
|
$
|
65.60
|
|
|
7,797,712
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
|
|
|
|
|
Amendment No. 3, dated as of June 22, 2018, by and among DaVita Inc., HealthCare Partners Holdings, LLC, and Robert D. Mosher, as the member representative, amending that certain Agreement and Plan of Merger, dated as of May 20, 2012, by and among DaVita Inc., Seismic Acquisition LLC, HealthCare Partners Holdings, LLC, and Robert D. Mosher, as the member representative, as amended by that certain Amendment to Agreement and Plan of Merger, dated as of July 6, 2012, and Amendment No. 2 to Agreement and Plan of Merger, dated as of August 30, 2013.
ü
|
|
|
|
|
|
Form of Stock Appreciation Rights Agreement-Board members (DaVita Inc. 2011 Incentive Award Plan).
ü
*
|
|
|
|
|
|
Form of Restricted Stock Units Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).
ü
*
|
|
|
|
|
|
Form of Stock Appreciation Rights Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).
ü
*
|
|
|
|
|
|
Form of Performance Stock Units Agreement -Executives (DaVita Inc. 2011 Incentive Award Plan).
ü
*
|
|
|
|
|
|
Transition Agreement, dated as of July 31, 2018, by and between DaVita Inc. and James Hilger.
ü
*
|
|
|
|
|
|
Ratio of earnings to fixed charges.
ü
|
|
|
|
|
|
Certification of the Chief Executive Officer, dated May 3, 2018, 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 May 3, 2018, 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 May 3, 2018, 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 May 3, 2018, 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.
|
1.
|
Amendments
. The Merger Agreement is hereby amended, effective as of the Closing (as defined in the Share Purchase Agreement), as follows:
|
|
|
|
PARENT
:
|
||
|
||
DAVITA INC.
|
||
|
|
|
By:
|
|
/s/ Chet Mehta
|
|
|
Name: /s/ Chet Mehta
|
|
|
Title: Group Vice President, Finance
|
|
|
|
|
||
COMPANY
:
|
||
|
||
HEALTHCARE PARTNERS HOLDINGS LLC
|
||
|
|
|
By:
|
|
/s/ Chet Mehta
|
|
|
Name: Chet Mehta
|
|
|
Title: Group Vice President, Finance
|
|
|
|
|
||
MEMBER REPRESENTATIVE
:
|
||
|
|
|
By:
|
|
/s/ Robert D. Mosher
|
|
|
Name: Robert D. Mosher
|
|
|
|
Grantee:
|
|
«Grantee»
|
|
|
|
Address:
|
|
«Address_1»
|
|
|
«City», «State» «Zip»
|
|
|
|
Grant Date:
|
|
«Grant_Date»
|
|
|
|
Base Shares:
|
|
«SSAR_Award»
|
|
|
|
Base Price per Share:
|
|
$«Base_Price»
|
|
|
|
Vesting Schedule:
|
|
«SSAR_Vesting_1»
|
|
|
«SSAR_Vesting_2»
|
|
|
|
Expiration Date:
|
|
«Expiration_Date»
|
|
|
|
Plan Name:
|
|
2011 Incentive Award Plan
|
|
|
|
Plan ID#:
|
|
2011
|
DaVita Inc.
|
|
Grantee
|
|
|
|
Eric Severson
|
|
«Grantee»
|
Chief People Officer
|
|
|
Grantee:
|
|
«Grantee»
|
|
|
|
Address:
|
|
«Address_1»
|
|
|
«City», «State» «Zip»
|
|
|
|
Grant Date:
|
|
«Grant_Date»
|
|
|
|
Number of Units:
|
|
«RSU_Award»
|
|
|
|
Vesting Schedule:
|
|
«RSU_Vesting_1»
|
|
|
«RSU_Vesting_2»
|
|
|
|
Plan Name:
|
|
2011 Incentive Award Plan
|
|
|
|
Plan ID#:
|
|
FVA3
|
DaVita Inc.
|
|
Grantee
|
|
|
|
Eric Severson
|
|
«Grantee»
|
Chief People Officer
|
|
|
6.
|
Taxes
|
12.
|
[Non-Competition/]Non-Solicitation/Non-Disclosure
|
•
|
Change of Control
: Change of Control shall mean:
|
•
|
Cause
: Cause shall mean: (1) a material breach by Grantee of his or her duties and responsibilities which do not differ in any material respect from the duties and responsibilities of Grantee during the ninety (90) days immediately prior to a Change of Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on Grantee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; (2) willful misconduct or gross negligence which results in material harm to the Company; (3) the conviction of Grantee of, or a plea of
nolo contendere
by Grantee to, a felony or other crime involving fraud or dishonesty; or (4) willful violation of Company policies which results in material harm to the Company.
|
Grantee:
|
|
«Grantee»
|
|
|
|
Address:
|
|
«Address_1»
|
|
|
«City», «State» «Zip»
|
|
|
|
Grant Date:
|
|
«Grant_Date»
|
|
|
|
Base Shares:
|
|
«SSAR_Award»
|
|
|
|
Base Price per Share:
|
|
$«Base_Price»
|
|
|
|
Vesting Schedule:
|
|
«SSAR_Vesting_1»
|
|
|
«SSAR_Vesting_2»
|
|
|
|
Expiration Date:
|
|
«Expiration_Date»
|
|
|
|
Plan Name:
|
|
2011 Incentive Award Plan
|
|
|
|
Plan ID#:
|
|
2011
|
DaVita Inc.
|
|
Grantee
|
|
|
|
[___________]
|
|
«Grantee»
|
Chief People Officer, [Kidney Care][DaVita Medical Group]
|
|
|
•
|
Change of Control
: Change of Control shall mean:
|
•
|
Cause
: Cause shall mean: (1) a material breach by Grantee of his or her duties and responsibilities which do not differ in any material respect from the duties and responsibilities of Grantee during the ninety (90) days immediately prior to a Change of Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on Grantee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; (2) willful misconduct or gross negligence which results in material harm to the Company; (3) the conviction of Grantee of, or a plea of
nolo contendere
by Grantee to, a felony or other crime involving fraud or dishonesty; or (4) willful violation of Company policies which results in material harm to the Company.
|
Grantee:
|
|
«Grantee»
|
|
|
|
Address:
|
|
«Address_1»
|
|
|
«City», «State» «Zip»
|
|
|
|
Grant Date:
|
|
«Grant_Date»
|
|
|
|
Performance Conditions:
|
|
As indicated on
Exhibit B
|
|
|
|
Vesting Conditions:
|
|
As indicated on
Exhibit B
|
|
|
|
Vesting Dates:
|
|
As indicated on
Exhibit B
|
|
|
|
Number of Units:
|
|
«PSU_Award»
|
|
|
|
Plan Name:
|
|
2011 Incentive Award Plan
|
|
|
|
Plan ID#:
|
|
FVA3
|
DaVita Inc.
|
|
Grantee
|
|
|
|
Eric Severson
|
|
«Grantee»
|
Chief People Officer
|
|
|
6.
|
Taxes
|
•
|
Change of Control
: Change of Control shall mean:
|
•
|
Cause
: Cause shall mean: (1) a material breach by Grantee of his or her duties and responsibilities which do not differ in any material respect from the duties and responsibilities of Grantee during the ninety (90) days immediately prior to a Change of Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on Grantee’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; (2) willful misconduct or gross negligence which results in material harm to the Company; (3) the conviction of Grantee of, or a plea of
nolo contendere
by Grantee to, a felony or other crime involving fraud or dishonesty; or (4) willful violation of Company policies which results in material harm to the Company.
|
•
|
“
TSR
” means the Company’s total shareholder return, which will be calculated by dividing (i) the Closing Average Share Value by (ii) the Opening Average Share Value.
|
•
|
“
Index Total Return
” means the total return of the Standard & Poor’s 500 Stock Index, which will be calculated by dividing (i) the Closing Average Index Value by (ii) the Opening Average Index Value.
|
•
|
“
Opening Average Share Value
” means the average, over the trading days in the Opening Average Period, of the closing price of a company’s stock multiplied by the Accumulated Shares for each trading day during the Opening Average Period.
|
•
|
“
Opening Average Index Value”
means the average, over the trading days in the Opening Average Period, of the closing price of the S&P 500 Total Return Stock Index (S&P Capital IQ symbol ^SP500TR).
|
•
|
“
Opening Average Period
” means the trading days during the three months ended March 31, 2018.
|
•
|
“
Accumulated Shares
” means, for a given trading day, the sum of (i) one (1) share and (ii) a cumulative number of shares of the company’s common stock purchased with dividends declared on a company’s common stock, assuming same day reinvestment of the dividends in the common stock of a company at the closing price on the ex-dividend date, for ex-dividend dates between the first day of the Opening Average Period and the trading day.
|
•
|
“
Closing Average Share Value
” means the average, over the trading days in the Closing Average Period, of the closing price of the company’s stock multiplied by the Accumulated Shares for each trading day during the Closing Average Period.
|
•
|
“
Closing Average Index Value”
means the average, over the trading days in the Closing Average Period, of the closing price of the S&P 500 Total Return Stock Index (S&P Capital IQ symbol ^SP500TR).
|
•
|
“
Closing Average Period
” means (i) in the absence of a Change of Control, (a) for the First Tranche, the trading days during the three months ended March 31, 2021 or (b) for the Second Tranche, the trading days during the three months ended March 31, 2022; or (ii) in the case of a Change of Control, the trading days during the period beginning thirty (30) calendar days prior to the Change of Control and ending on the Accelerated End Date.
|
•
|
“
Accelerated End Date
” means the date five (5) calendar days (or such shorter period as may be established by the Compensation Committee in its sole discretion) prior to the Change of Control.
|
|
|
|
Accum.
|
Share
|
|
|
|
|
Accum.
|
Share
|
Date
|
Close
|
Ex-Div.
|
Shares
|
Value
|
|
Date
|
Close
|
Ex-Div.
|
Shares
|
Value
|
12/31/2013
|
$51.05
|
$ -
|
1.002055
|
$51.15
|
|
3/31/2014
|
$52.01
|
$ -
|
1.004439
|
$52.24
|
12/30/2013
|
$51.11
|
$ -
|
1.002055
|
$51.22
|
|
3/28/2014
|
$51.83
|
$ -
|
1.004439
|
$52.06
|
12/27/2013
|
$51.18
|
$ -
|
1.002055
|
$51.29
|
|
3/27/2014
|
$51.31
|
$ -
|
1.004439
|
$51.54
|
12/26/2013
|
$51.00
|
$ -
|
1.002055
|
$51.10
|
|
3/26/2014
|
$51.55
|
$ -
|
1.004439
|
$51.78
|
12/24/2013
|
$51.28
|
$ -
|
1.002055
|
$51.39
|
|
3/25/2014
|
$52.01
|
$ -
|
1.004439
|
$52.24
|
12/23/2013
|
$51.24
|
$ -
|
1.002055
|
$51.35
|
|
3/24/2014
|
$51.46
|
$ -
|
1.004439
|
$51.69
|
12/20/2013
|
$51.03
|
$ -
|
1.002055
|
$51.13
|
|
3/21/2014
|
$51.72
|
$ -
|
1.004439
|
$51.95
|
12/19/2013
|
$50.36
|
$ -
|
1.002055
|
$50.46
|
|
3/20/2014
|
$52.03
|
$ -
|
1.004439
|
$52.26
|
12/18/2013
|
$50.25
|
$ -
|
1.002055
|
$50.35
|
|
3/19/2014
|
$51.33
|
$ -
|
1.004439
|
$51.56
|
12/17/2013
|
$49.36
|
$ -
|
1.002055
|
$49.46
|
|
3/18/2014
|
$51.31
|
$ -
|
1.004439
|
$51.54
|
12/16/2013
|
$50.28
|
$ -
|
1.002055
|
$50.38
|
|
3/17/2014
|
$50.42
|
$ -
|
1.004439
|
$50.64
|
12/13/2013
|
$49.73
|
$ -
|
1.002055
|
$49.83
|
|
3/14/2014
|
$50.04
|
$ -
|
1.004439
|
$50.26
|
12/12/2013
|
$49.42
|
$ -
|
1.002055
|
$49.52
|
|
3/13/2014
|
$50.14
|
$ -
|
1.004439
|
$50.36
|
12/11/2013
|
$48.70
|
$ -
|
1.002055
|
$48.80
|
|
3/12/2014
|
$51.28
|
$ -
|
1.004439
|
$51.51
|
12/10/2013
|
$49.30
|
$ -
|
1.002055
|
$49.40
|
|
3/11/2014
|
$51.83
|
$ -
|
1.004439
|
$52.06
|
12/9/2013
|
$49.56
|
$ -
|
1.002055
|
$49.66
|
|
3/10/2014
|
$52.27
|
$ -
|
1.004439
|
$52.50
|
12/6/2013
|
$49.55
|
$ -
|
1.002055
|
$49.65
|
|
3/7/2014
|
$52.45
|
$0.125
|
1.004439
|
$52.68
|
12/5/2013
|
$48.19
|
$ -
|
1.002055
|
$48.29
|
|
3/6/2014
|
$52.41
|
$ -
|
1.002055
|
$52.52
|
12/4/2013
|
$48.94
|
$ -
|
1.002055
|
$49.04
|
|
3/5/2014
|
$51.99
|
$ -
|
1.002055
|
$52.10
|
12/3/2013
|
$48.65
|
$0.100
|
1.002055
|
$48.75
|
|
3/4/2014
|
$51.30
|
$ -
|
1.002055
|
$51.41
|
12/2/2013
|
$49.71
|
$ -
|
1.000000
|
$49.71
|
|
3/3/2014
|
$50.45
|
$ -
|
1.002055
|
$50.55
|
|
|
Opening average
|
$50.09
|
|
|
|
Closing average
|
$51.69
|
|
Index
|
|
|
Index
|
Date
|
Value
|
|
Date
|
Value
|
12/31/2013
|
3,315.59
|
|
3/31/2014
|
3,375.51
|
12/30/2013
|
3,302.30
|
|
3/28/2014
|
3,348.83
|
12/27/2013
|
3,302.66
|
|
3/27/2014
|
3,333.23
|
12/26/2013
|
3,303.15
|
|
3/26/2014
|
3,339.00
|
12/24/2013
|
3,287.55
|
|
3/25/2014
|
3,362.44
|
12/23/2013
|
3,277.62
|
|
3/24/2014
|
3,347.36
|
12/20/2013
|
3,259.79
|
|
3/21/2014
|
3,363.72
|
12/19/2013
|
3,244.15
|
|
3/20/2014
|
3,373.60
|
12/18/2013
|
3,245.59
|
|
3/19/2014
|
3,353.29
|
12/17/2013
|
3,192.33
|
|
3/18/2014
|
3,373.98
|
12/16/2013
|
3,202.22
|
|
3/17/2014
|
3,349.71
|
12/13/2013
|
3,182.07
|
|
3/14/2014
|
3,317.81
|
12/12/2013
|
3,182.33
|
|
3/13/2014
|
3,327.11
|
12/11/2013
|
3,193.52
|
|
3/12/2014
|
3,366.07
|
12/10/2013
|
3,229.72
|
|
3/11/2014
|
3,364.17
|
12/9/2013
|
3,239.99
|
|
3/10/2014
|
3,381.22
|
12/6/2013
|
3,233.99
|
|
3/7/2014
|
3,382.57
|
12/5/2013
|
3,197.76
|
|
3/6/2014
|
3,380.49
|
12/4/2013
|
3,211.59
|
|
3/5/2014
|
3,374.10
|
12/3/2013
|
3,214.95
|
|
3/4/2014
|
3,373.64
|
12/2/2013
|
3,225.06
|
|
3/3/2014
|
3,322.85
|
Opening average
|
3,240.19
|
|
Closing average
|
3,357.65
|
(i)
|
Executive’s annual base salary shall remain at $375,000 (“
Base Salary
”);
|
(ii)
|
Executive shall remain eligible to receive an annual incentive bonus for the 2018 performance year (the “
2018 Bonus
”), 2019 performance year (the “
2019 Bonus
”) and 2020 performance year (but prorated to reflect service prior to CAO Retirement Date) (the “
Prorated 2020 Bonus
”), with a maximum annual opportunity for each period equal to $350,000 (the “
Maximum Bonus Potential
”) and actual payout for each year no less than the same percentage of Maximum Bonus Potential as the weighted average percentage of Maximum Bonus Potential generally paid as an annual incentive bonus to Company teammates with respect to 2018 and 2019, respectively, under the Company’s broad-based program, subject to reductions in payout levels after applying negative discretion for significant underperformance by the Executive, as determined by the Compensation Committee of the Company’s Board of Directors (the “
Committee
”), provided that the actual payout for the Prorated 2020 Bonus shall equal the actual payout percentage of the Maximum Bonus Potential paid to the Executive with respect to the 2019 performance year, but subject to a reduction in payout level after applying negative discretion for significant underperformance by the Executive during the 2020 period, as determined by the Committee, provided further that (x) Executive shall forfeit the 2018 Bonus and/or 2019 Bonus if his employment with the Company terminates prior to the applicable payment date for any reason other than as set forth in
Section 2(b)
of this Agreement and (y) Executive shall forfeit the Prorated 2020 Bonus if his employment with the Company terminates prior to the CAO Retirement Date for any reason other than as set forth in
Section 2(b)
of this Agreement;
|
(iii)
|
subject to Executive’s employment with the Company through the grant date of the 2019 annual equity awards to senior executive officers of the Company, Executive shall be eligible to receive an annual equity grant, with a grant date fair value of $400,000 for the 2019 grant year, to be delivered in the same equity vehicles as, and with vesting terms consistent with, the Executive’s 2018 equity awards from the Company; and
|
(iv)
|
subject to (x) the Executive’s continued employment through the CAO Retirement Date, (y) Executive’s compliance with this Agreement and (z) Executive’s execution and non-revocation of the Supplemental Release (as defined herein), with such release to become effective no later than the 30th day following the Executive’s termination of employment, (I) Executive’s time-based restricted stock units that are outstanding as of the date of such termination of employment, shall become fully vested and shall be settled
|
(i)
|
claims, actions, causes of action or liabilities arising under Title VII of the Civil Rights Act, as amended, the Age Discrimination in Employment Act, as amended, the Equal Pay Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, as amended, the Rehabilitation Act, as amended, the Americans with Disabilities Act, as amended, Section 1981 of the Civil Rights Act, the 1991 Civil Rights Act, the Family and Medical Leave Act, as amended, and/or any other federal, state, municipal or local employment discrimination statutes or ordinances (including, but not limited to, claims based on age, sex, attainment of benefit plan rights, race, religion, national origin, marital status, sexual orientation, ancestry, harassment, parental status, handicap, disability, retaliation, and veteran status); and/or
|
(ii)
|
claims, actions, causes of action or liabilities arising under any other federal, state, municipal, or local statute, law, ordinance or regulation; and/or
|
(iii)
|
future causes of action under the federal false claims act and/or any state false claims act relating in any manner to information learned while employed with the Company; and/or
|
(iv)
|
any other claim whatsoever including, but not limited to, claims for severance pay, sick pay, unpaid wages, unpaid bonuses, unpaid paid time off, claims based upon breach of contract, breach of the covenant of good faith and fair dealing, wrongful termination, defamation, interference with contract, intentional and/or negligent infliction of emotional distress, fraud, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever arising out of or relating to his employment with and/or separation from employment with the Company and/or any of the other Releasees, but excluding any claims which by law the Executive cannot waive, including claims for indemnification, and any claim that the Company has failed to make any payments or to provide any of the payments or benefits described in the Employment Agreement or this Agreement.
|
|
|
DaVita Inc.
|
||
|
|
|
||
|
|
|
||
|
|
By:
|
/s/ Joel Ackerman
|
|
|
|
|
Name:
Joel Ackerman
|
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|||
|
|
/s/ James Hilger
|
||
|
|
|
a.
|
claims, actions, causes of action or liabilities arising under Title VII of the Civil Rights Act, as amended, the Age Discrimination in Employment Act, as amended, the Equal Pay Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, as amended, the Rehabilitation Act, as amended, the Americans with Disabilities Act, as amended, Section 1981 of the Civil Rights Act, the 1991 Civil Rights Act, the Family and Medical Leave Act, as amended, and/or any other federal, state, municipal or local employment discrimination statutes or ordinances (including, but not limited to, claims based on age, sex, attainment of benefit plan rights, race, religion, national origin, marital status, sexual orientation, ancestry, harassment, parental status, handicap, disability, retaliation, and veteran status); and/or
|
b.
|
claims, actions, causes of action or liabilities arising under any other federal, state, municipal, or local statute, law, ordinance or regulation; and/or
|
c.
|
future causes of action under the federal false claims act and/or any state false claims act relating in any manner to information learned while employed with the Company; and/or
|
d.
|
any other claim whatsoever including, but not limited to, claims for severance pay, sick pay, unpaid wages, unpaid bonuses, unpaid paid time off, claims based upon breach of contract, breach of the covenant of good faith and fair dealing, wrongful termination, defamation, interference with contract, intentional and/or negligent infliction of emotional distress, fraud, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever arising out of or relating to his employment with and/or separation from employment with the Company and/or any of the other Releasees, but excluding any claims which by law Executive cannot waive, including claims for indemnification, and any claim that the Company has failed to make any payments or to provide any of the payments or benefits described in the Employment Agreement, dated as of September 22, 2015, between Executive and the Company, as amended (the “Employment Agreement”), and the Transition Agreement, dated as of [___________, between Executive and the Company (the “Transition Agreement”).
|
|
Six months
ended June 30, 2018 |
|
Year ended December 31,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Earnings adjusted for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations before
income taxes |
$
|
622,246
|
|
|
$
|
1,399,786
|
|
|
$
|
1,623,105
|
|
|
$
|
688,387
|
|
|
$
|
1,094,322
|
|
|
$
|
692,438
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt expense
|
233,208
|
|
|
430,634
|
|
|
414,116
|
|
|
408,380
|
|
|
410,223
|
|
|
429,938
|
|
||||||
Interest portion of rent expense
|
94,599
|
|
|
171,842
|
|
|
154,901
|
|
|
143,311
|
|
|
130,640
|
|
|
120,398
|
|
||||||
Less: Noncontrolling interests
|
(77,463
|
)
|
|
(175,176
|
)
|
|
(159,404
|
)
|
|
(158,304
|
)
|
|
(140,949
|
)
|
|
(124,438
|
)
|
||||||
|
250,344
|
|
|
427,300
|
|
|
409,613
|
|
|
393,387
|
|
|
399,914
|
|
|
425,898
|
|
||||||
|
$
|
872,590
|
|
|
$
|
1,827,086
|
|
|
$
|
2,032,718
|
|
|
$
|
1,081,774
|
|
|
$
|
1,494,236
|
|
|
$
|
1,118,336
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt expense
|
233,208
|
|
|
430,634
|
|
|
414,116
|
|
|
408,380
|
|
|
410,223
|
|
|
429,938
|
|
||||||
Interest portion of rent expense
|
94,599
|
|
|
171,842
|
|
|
154,901
|
|
|
143,311
|
|
|
130,640
|
|
|
120,398
|
|
||||||
Capitalized interest
|
12,290
|
|
|
19,176
|
|
|
12,990
|
|
|
9,723
|
|
|
7,888
|
|
|
6,408
|
|
||||||
|
$
|
340,097
|
|
|
$
|
621,652
|
|
|
$
|
582,007
|
|
|
$
|
561,414
|
|
|
$
|
548,751
|
|
|
$
|
556,744
|
|
Ratio of earnings to fixed charges
|
2.57
|
|
|
2.94
|
|
|
3.49
|
|
|
1.93
|
|
|
2.72
|
|
|
2.01
|
|
/
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
|
August 1, 2018
|
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
|
August 1, 2018
|