|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delaware
|
|
51-0354549
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
|
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
Title of each class:
|
|
Trading symbol(s):
|
|
Name of each exchange on which registered:
|
Common Stock, $0.001 par value
|
|
DVA
|
|
New York Stock Exchange
|
|
|
|
|
|
|
|
|
|
Page No.
|
|
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
Item 2.
|
|
|
||
Item 3.
|
|
|
||
Item 4.
|
|
|
||
|
|
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
Item 1.
|
|
|
||
Item 1A.
|
|
|
||
Item 2.
|
|
|
||
Item 5.
|
|
|
||
Item 6.
|
|
|
||
|
|
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Dialysis and related lab patient service revenues
|
$
|
2,635,152
|
|
|
$
|
2,591,074
|
|
Provision for uncollectible accounts
|
(5,463
|
)
|
|
25,545
|
|
||
Net dialysis and related lab patient service revenues
|
2,629,689
|
|
|
2,616,619
|
|
||
Other revenues
|
113,423
|
|
|
232,825
|
|
||
Total revenues
|
2,743,112
|
|
|
2,849,444
|
|
||
Operating expenses and charges:
|
|
|
|
|
|
||
Patient care costs
|
1,964,935
|
|
|
2,035,585
|
|
||
General and administrative
|
250,813
|
|
|
266,529
|
|
||
Depreciation and amortization
|
148,528
|
|
|
142,799
|
|
||
Equity investment income
|
(2,708
|
)
|
|
(155
|
)
|
||
Provision for uncollectible accounts
|
—
|
|
|
(6,000
|
)
|
||
Goodwill impairment charges
|
41,037
|
|
|
—
|
|
||
Total operating expenses and charges
|
2,402,605
|
|
|
2,438,758
|
|
||
Operating income
|
340,507
|
|
|
410,686
|
|
||
Debt expense
|
(131,519
|
)
|
|
(113,516
|
)
|
||
Other income, net
|
6,940
|
|
|
4,582
|
|
||
Income from continuing operations before income taxes
|
215,928
|
|
|
301,752
|
|
||
Income tax expense
|
56,746
|
|
|
70,737
|
|
||
Net income from continuing operations
|
159,182
|
|
|
231,015
|
|
||
Net income (loss) from discontinued operations, net of tax
|
30,305
|
|
|
(5,786
|
)
|
||
Net income
|
189,487
|
|
|
225,229
|
|
||
Less: Net income attributable to noncontrolling interests
|
(40,198
|
)
|
|
(46,543
|
)
|
||
Net income attributable to DaVita Inc.
|
$
|
149,289
|
|
|
$
|
178,686
|
|
Earnings per share attributable to DaVita Inc.:
|
|
|
|
|
|
||
Basic net income from continuing operations per share
|
$
|
0.72
|
|
|
$
|
1.07
|
|
Basic net income per share
|
$
|
0.90
|
|
|
$
|
1.00
|
|
Diluted net income from continuing operations per share
|
$
|
0.72
|
|
|
$
|
1.05
|
|
Diluted net income per share
|
$
|
0.90
|
|
|
$
|
0.98
|
|
Weighted average shares for earnings per share:
|
|
|
|
||||
Basic
|
166,387,958
|
|
|
178,957,865
|
|
||
Diluted
|
166,780,657
|
|
|
181,834,547
|
|
||
Amounts attributable to DaVita Inc.:
|
|
|
|
||||
Net income from continuing operations
|
$
|
120,254
|
|
|
$
|
191,015
|
|
Net income (loss) from discontinued operations
|
29,035
|
|
|
(12,329
|
)
|
||
Net income attributable to DaVita Inc.
|
$
|
149,289
|
|
|
$
|
178,686
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
189,487
|
|
|
$
|
225,229
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
||
Unrealized (losses) gains on interest rate cap agreements:
|
|
|
|
|
|
||
Unrealized (losses) gains
|
(580
|
)
|
|
1,050
|
|
||
Reclassifications of net realized losses into net income
|
1,606
|
|
|
1,537
|
|
||
Unrealized (losses) gains on foreign currency translation:
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(13,653
|
)
|
|
19,881
|
|
||
Other comprehensive (loss) income
|
(12,627
|
)
|
|
22,468
|
|
||
Total comprehensive income
|
176,860
|
|
|
247,697
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
(40,198
|
)
|
|
(46,543
|
)
|
||
Comprehensive income attributable to DaVita Inc.
|
$
|
136,662
|
|
|
$
|
201,154
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
459,242
|
|
|
$
|
323,038
|
|
Restricted cash and equivalents
|
102,192
|
|
|
92,382
|
|
||
Short-term investments
|
4,035
|
|
|
2,935
|
|
||
Accounts receivable, net
|
1,953,422
|
|
|
1,858,608
|
|
||
Inventories
|
104,236
|
|
|
107,381
|
|
||
Other receivables
|
489,581
|
|
|
469,796
|
|
||
Income tax receivable
|
42,650
|
|
|
68,614
|
|
||
Prepaid and other current assets
|
64,770
|
|
|
111,840
|
|
||
Current assets held for sale, net
|
6,004,948
|
|
|
5,389,565
|
|
||
Total current assets
|
9,225,076
|
|
|
8,424,159
|
|
||
Property and equipment, net of accumulated depreciation of $3,538,992 and $3,524,098
|
3,392,266
|
|
|
3,393,669
|
|
||
Operating lease right-of-use assets
|
2,736,536
|
|
|
—
|
|
||
Intangible assets, net of accumulated amortization of $82,265 and $80,566
|
118,324
|
|
|
118,846
|
|
||
Equity method and other investments
|
226,309
|
|
|
224,611
|
|
||
Long-term investments
|
34,414
|
|
|
35,424
|
|
||
Other long-term assets
|
73,651
|
|
|
71,583
|
|
||
Goodwill
|
6,799,368
|
|
|
6,841,960
|
|
||
|
$
|
22,605,944
|
|
|
$
|
19,110,252
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Accounts payable
|
$
|
365,192
|
|
|
$
|
463,270
|
|
Other liabilities
|
572,944
|
|
|
595,850
|
|
||
Accrued compensation and benefits
|
495,327
|
|
|
658,913
|
|
||
Current portion of operating leases liabilities
|
367,413
|
|
|
—
|
|
||
Current portion of long-term debt
|
4,676,691
|
|
|
1,929,369
|
|
||
Current liabilities held for sale
|
1,753,310
|
|
|
1,243,759
|
|
||
Total current liabilities
|
8,230,877
|
|
|
4,891,161
|
|
||
Long-term operating leases liabilities
|
2,625,776
|
|
|
—
|
|
||
Long-term debt
|
5,787,013
|
|
|
8,172,847
|
|
||
Other long-term liabilities
|
143,756
|
|
|
450,669
|
|
||
Deferred income taxes
|
588,805
|
|
|
562,536
|
|
||
Total liabilities
|
17,376,227
|
|
|
14,077,213
|
|
||
Commitments and contingencies:
|
|
|
|
||||
Noncontrolling interests subject to put provisions
|
1,143,044
|
|
|
1,124,641
|
|
||
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; 166,396,147 and
166,387,307 shares issued and outstanding, respectively) |
166
|
|
|
166
|
|
||
Additional paid-in capital
|
990,380
|
|
|
995,006
|
|
||
Retained earnings
|
2,932,359
|
|
|
2,743,194
|
|
||
Accumulated other comprehensive loss
|
(47,551
|
)
|
|
(34,924
|
)
|
||
Total DaVita Inc. shareholders' equity
|
3,875,354
|
|
|
3,703,442
|
|
||
Noncontrolling interests not subject to put provisions
|
211,319
|
|
|
204,956
|
|
||
Total equity
|
4,086,673
|
|
|
3,908,398
|
|
||
|
$
|
22,605,944
|
|
|
$
|
19,110,252
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
189,487
|
|
|
$
|
225,229
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
148,528
|
|
|
142,799
|
|
||
Impairment charges
|
41,037
|
|
|
—
|
|
||
Stock-based compensation expense
|
12,110
|
|
|
9,685
|
|
||
Deferred income taxes
|
41,372
|
|
|
43,617
|
|
||
Equity investment (loss) income, net
|
(337
|
)
|
|
3,564
|
|
||
Other non-cash charges, net
|
1,720
|
|
|
9,959
|
|
||
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
|
|
|
|
||||
Accounts receivable
|
(132,292
|
)
|
|
(63,701
|
)
|
||
Inventories
|
3,324
|
|
|
57,621
|
|
||
Other receivables and other current assets
|
1,199
|
|
|
(34,120
|
)
|
||
Other long-term assets
|
(1,997
|
)
|
|
2,054
|
|
||
Accounts payable
|
(38,537
|
)
|
|
(62,830
|
)
|
||
Accrued compensation and benefits
|
(173,583
|
)
|
|
(62,550
|
)
|
||
Other current liabilities
|
17,236
|
|
|
49,379
|
|
||
Income taxes
|
32,502
|
|
|
30,772
|
|
||
Other long-term liabilities
|
(465
|
)
|
|
11,061
|
|
||
Net cash provided by operating activities
|
141,304
|
|
|
362,539
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|||
Additions of property and equipment
|
(198,878
|
)
|
|
(232,443
|
)
|
||
Acquisitions
|
(11,274
|
)
|
|
(16,582
|
)
|
||
Proceeds from asset and business sales
|
13,903
|
|
|
18,535
|
|
||
Purchase of other debt and equity investments
|
(3,290
|
)
|
|
(2,646
|
)
|
||
Purchase of investments held-to-maturity
|
(209
|
)
|
|
(3,586
|
)
|
||
Proceeds from sale of other debt and equity investments
|
3,302
|
|
|
5,151
|
|
||
Proceeds from investments held-to-maturity
|
—
|
|
|
31,454
|
|
||
Purchase of equity investments
|
(4,067
|
)
|
|
(2,476
|
)
|
||
Distributions received on equity investments
|
155
|
|
|
2,465
|
|
||
Net cash used in investing activities
|
(200,358
|
)
|
|
(200,128
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings
|
17,133,464
|
|
|
13,306,898
|
|
||
Payments on long-term debt and other financing costs
|
(16,776,267
|
)
|
|
(13,202,225
|
)
|
||
Purchase of treasury stock
|
—
|
|
|
(290,377
|
)
|
||
Distributions to noncontrolling interests
|
(44,230
|
)
|
|
(45,467
|
)
|
||
Stock award exercises and other share issuances, net
|
1,517
|
|
|
(1,185
|
)
|
||
Contributions from noncontrolling interests
|
18,947
|
|
|
12,009
|
|
||
Purchases of noncontrolling interests
|
(8,480
|
)
|
|
(2,200
|
)
|
||
Net cash provided by (used in) financing activities
|
324,951
|
|
|
(222,547
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(921
|
)
|
|
6,668
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
264,976
|
|
|
(53,468
|
)
|
||
Less: Net increase in cash, cash equivalents and restricted cash from discontinued operations
|
118,962
|
|
|
17,834
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash from continuing operations
|
146,014
|
|
|
(71,302
|
)
|
||
Cash, cash equivalents and restricted cash of continuing operations at beginning of the year
|
415,420
|
|
|
518,920
|
|
||
Cash, cash equivalents and restricted cash of continuing operations at end of the period
|
$
|
561,434
|
|
|
$
|
447,618
|
|
|
Non-
controlling interests subject to put provisions |
|
DaVita Inc. Shareholders’ Equity
|
|
Non-
controlling interests not subject to put provisions |
||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
|
|
Common stock
|
|
Additional
paid-in capital |
|
Retained
earnings |
|
Treasury stock
|
|
Accumulated
other comprehensive income |
|
|
|
||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
Total
|
|
|||||||||||||||||||||||
Balance at January 1, 2018
|
$
|
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
|
24,107
|
|
|
|
|
|
|
|
|
|
|
|
178,686
|
|
|
|
|
|
|
|
|
|
|
|
178,686
|
|
|
22,436
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,468
|
|
|
22,468
|
|
|
|
|
||||||||
Stock unit shares issued
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Stock-settled SAR shares issued
|
|
|
|
195
|
|
|
1
|
|
|
(4,887
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,886
|
)
|
|
|
|
||||||||
Stock-settled stock-based
compensation expense |
|
|
|
|
|
|
|
|
|
9,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,682
|
|
|
|
|
||||||||
Changes in noncontrolling interest
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Distributions
|
(26,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19,301
|
)
|
||||||||||||||||
Contributions
|
9,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,501
|
|
||||||||
Acquisitions and divestitures
|
688
|
|
|
|
|
|
|
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76
|
|
|
(66
|
)
|
||||||||
Partial purchases
|
|
|
|
|
|
|
|
|
|
(1,994
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,994
|
)
|
|
(206
|
)
|
||||||||
Fair value remeasurements
|
15,004
|
|
|
|
|
|
|
|
|
(15,004
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,004
|
)
|
|
|
|
||||||||
Purchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,197
|
)
|
|
(298,377
|
)
|
|
|
|
|
(298,377
|
)
|
|
|
|
||||||||
Balance at March 31, 2018
|
$
|
1,034,501
|
|
|
182,661
|
|
|
$
|
183
|
|
|
$
|
1,030,772
|
|
|
$
|
3,820,767
|
|
|
(4,197
|
)
|
|
$
|
(298,377
|
)
|
|
$
|
27,335
|
|
|
$
|
4,580,680
|
|
|
$
|
201,401
|
|
|
Non-
controlling interests subject to put provisions |
|
DaVita Inc. Shareholders’ Equity
|
|
Non-
controlling interests not subject to put provisions |
||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||
|
|
Common stock
|
|
Additional
paid-in capital |
|
Retained
earnings |
|
Treasury stock
|
|
Accumulated
other comprehensive loss |
|
|
|
||||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
|
Total
|
|
|||||||||||||||||||||||
Balance at January 1, 2019
|
$
|
1,124,641
|
|
|
166,387
|
|
|
$
|
166
|
|
|
$
|
995,006
|
|
|
$
|
2,743,194
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(34,924
|
)
|
|
$
|
3,703,442
|
|
|
$
|
204,956
|
|
Cumulative effect of change
in accounting principle |
(38
|
)
|
|
|
|
|
|
|
|
|
|
|
39,876
|
|
|
|
|
|
|
|
|
|
|
|
39,876
|
|
|
(6
|
)
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net income
|
25,389
|
|
|
|
|
|
|
|
|
|
|
|
149,289
|
|
|
|
|
|
|
|
|
|
|
|
149,289
|
|
|
14,809
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,627
|
)
|
|
(12,627
|
)
|
|
|
|
||||||||
Stock unit shares issued
|
|
|
|
9
|
|
|
|
|
|
(104
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(104
|
)
|
|
|
|
||||||||
Stock-settled SAR shares issued
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
||||||||
Stock-settled stock-based
compensation expense |
|
|
|
|
|
|
|
|
|
12,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,091
|
|
|
|
|
||||||||
Changes in noncontrolling interest
from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions
|
(27,565
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,665
|
)
|
||||||||
Contributions
|
6,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,532
|
|
||||||||
Acquisitions and divestitures
|
1,762
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
||||||||
Partial purchases
|
(1,967
|
)
|
|
|
|
|
|
|
|
(2,206
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,206
|
)
|
|
(4,307
|
)
|
||||||||
Fair value remeasurements
|
14,407
|
|
|
|
|
|
|
|
|
(14,407
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,407
|
)
|
|
|
|
||||||||
Balance at March 31, 2019
|
$
|
1,143,044
|
|
|
166,396
|
|
|
$
|
166
|
|
|
$
|
990,380
|
|
|
$
|
2,932,359
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(47,551
|
)
|
|
$
|
3,875,354
|
|
|
$
|
211,319
|
|
1.
|
Condensed consolidated interim financial statements
|
2.
|
Revenue recognition
|
|
For the three months ended
|
||||||||||||||||||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||||||||||
|
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
|
$
|
1,493,516
|
|
|
$
|
—
|
|
|
$
|
1,493,516
|
|
|
$
|
1,485,192
|
|
|
$
|
—
|
|
|
$
|
1,485,192
|
|
Medicaid and Managed Medicaid
|
154,190
|
|
|
—
|
|
|
154,190
|
|
|
157,496
|
|
|
—
|
|
|
157,496
|
|
||||||
Other government
|
106,127
|
|
|
84,475
|
|
|
190,602
|
|
|
107,119
|
|
|
82,537
|
|
|
189,656
|
|
||||||
Commercial
|
788,413
|
|
|
33,388
|
|
|
821,801
|
|
|
782,979
|
|
|
19,718
|
|
|
802,697
|
|
||||||
Other revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medicare and Medicare Advantage
|
—
|
|
|
61,700
|
|
|
61,700
|
|
|
—
|
|
|
142,758
|
|
|
142,758
|
|
||||||
Medicaid and Managed Medicaid
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
15,791
|
|
|
15,791
|
|
||||||
Commercial
|
—
|
|
|
32,619
|
|
|
32,619
|
|
|
—
|
|
|
40,420
|
|
|
40,420
|
|
||||||
Other(1)
|
4,905
|
|
|
17,750
|
|
|
22,655
|
|
|
5,114
|
|
|
38,941
|
|
|
44,055
|
|
||||||
Eliminations of intersegment revenues
|
(30,641
|
)
|
|
(3,336
|
)
|
|
(33,977
|
)
|
|
(18,422
|
)
|
|
(10,199
|
)
|
|
(28,621
|
)
|
||||||
Total
|
$
|
2,516,510
|
|
|
$
|
226,602
|
|
|
$
|
2,743,112
|
|
|
$
|
2,519,478
|
|
|
$
|
329,966
|
|
|
$
|
2,849,444
|
|
|
(1)
|
Other consists of management fees and revenue from the Company's ancillary services and strategic initiatives.
|
3.
|
Earnings per share
|
|
Three months ended
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Numerators:
|
|
|
|
|
|
||
Net income from continuing operations attributable to DaVita Inc.
|
$
|
120,254
|
|
|
$
|
191,015
|
|
Net income (loss) from discontinued operations attributable to DaVita Inc.
|
29,035
|
|
|
(12,329
|
)
|
||
Net income attributable to DaVita Inc. for earnings per share calculation
|
$
|
149,289
|
|
|
$
|
178,686
|
|
|
|
|
|
||||
Basic:
|
|
|
|
||||
Weighted average shares outstanding during the period
|
166,388
|
|
|
181,152
|
|
||
Weighted average contingently returnable shares held in escrow for the DaVita HealthCare Partners merger
|
—
|
|
|
(2,194
|
)
|
||
Weighted average shares for basic earnings per share calculation
|
166,388
|
|
|
178,958
|
|
||
|
|
|
|
||||
Basic net income (loss) attributable to DaVita Inc. from:
|
|
|
|
||||
Continuing operations per share
|
$
|
0.72
|
|
|
$
|
1.07
|
|
Discontinued operations per share
|
0.18
|
|
|
(0.07
|
)
|
||
Basic net income per share attributable to DaVita Inc.
|
$
|
0.90
|
|
|
$
|
1.00
|
|
|
|
|
|
||||
Diluted:
|
|
|
|
||||
Weighted average shares outstanding during the period
|
166,388
|
|
|
181,152
|
|
||
Assumed incremental shares from stock plans
|
393
|
|
|
683
|
|
||
Weighted average shares for diluted earnings per share calculation
|
166,781
|
|
|
181,835
|
|
||
|
|
|
|
||||
Diluted net income (loss) attributable to DaVita Inc. from:
|
|
|
|
||||
Continuing operations per share
|
$
|
0.72
|
|
|
$
|
1.05
|
|
Discontinued operations per share
|
0.18
|
|
|
(0.07
|
)
|
||
Diluted net income per share attributable to DaVita Inc.
|
$
|
0.90
|
|
|
$
|
0.98
|
|
Anti-dilutive stock-settled awards excluded from calculation(1)
|
6,150
|
|
|
3,453
|
|
|
(1)
|
Shares associated with stock-settled stock appreciation rights excluded from the diluted denominator calculation because they are anti-dilutive under the treasury stock method.
|
4.
|
Restricted cash and equivalents
|
5.
|
Short-term and long-term investments
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Debt
securities |
|
Equity
securities |
|
Total
|
|
Debt
securities |
|
Equity
securities |
|
Total
|
||||||||||||
Certificates of deposit and other time deposits
|
$
|
2,235
|
|
|
$
|
—
|
|
|
$
|
2,235
|
|
|
$
|
2,235
|
|
|
$
|
—
|
|
|
$
|
2,235
|
|
Investments in mutual funds and common stock
|
—
|
|
|
36,214
|
|
|
36,214
|
|
|
—
|
|
|
36,124
|
|
|
36,124
|
|
||||||
|
$
|
2,235
|
|
|
$
|
36,214
|
|
|
$
|
38,449
|
|
|
$
|
2,235
|
|
|
$
|
36,124
|
|
|
$
|
38,359
|
|
Short-term investments
|
$
|
2,235
|
|
|
$
|
1,800
|
|
|
$
|
4,035
|
|
|
$
|
2,235
|
|
|
$
|
700
|
|
|
$
|
2,935
|
|
Long-term investments
|
—
|
|
|
34,414
|
|
|
34,414
|
|
|
—
|
|
|
35,424
|
|
|
35,424
|
|
||||||
|
$
|
2,235
|
|
|
$
|
36,214
|
|
|
$
|
38,449
|
|
|
$
|
2,235
|
|
|
$
|
36,124
|
|
|
$
|
38,359
|
|
6.
|
Equity method and other investments
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
APAC joint venture
|
$
|
125,062
|
|
|
$
|
129,173
|
|
Other equity method partnerships
|
88,861
|
|
|
83,052
|
|
||
Adjusted cost method investments
|
12,386
|
|
|
12,386
|
|
||
|
$
|
226,309
|
|
|
$
|
224,611
|
|
7.
|
Goodwill
|
|
U.S. dialysis and
related lab services
|
|
Other-ancillary services and strategic initiatives
|
|
Consolidated total
|
||||||
Balance at December 31, 2017
|
$
|
6,144,761
|
|
|
$
|
465,518
|
|
|
$
|
6,610,279
|
|
Acquisitions
|
130,574
|
|
|
147,774
|
|
|
278,348
|
|
|||
Divestitures
|
(331
|
)
|
|
(15,166
|
)
|
|
(15,497
|
)
|
|||
Impairment charges
|
—
|
|
|
(3,106
|
)
|
|
(3,106
|
)
|
|||
Foreign currency and other adjustments
|
—
|
|
|
(28,064
|
)
|
|
(28,064
|
)
|
|||
Balance at December 31, 2018
|
$
|
6,275,004
|
|
|
$
|
566,956
|
|
|
$
|
6,841,960
|
|
Acquisitions
|
7,027
|
|
|
1,628
|
|
|
8,655
|
|
|||
Impairment charges
|
—
|
|
|
(41,037
|
)
|
|
(41,037
|
)
|
|||
Foreign currency and other adjustments
|
—
|
|
|
(10,210
|
)
|
|
(10,210
|
)
|
|||
Balance at March 31, 2019
|
$
|
6,282,031
|
|
|
$
|
517,337
|
|
|
$
|
6,799,368
|
|
|
|
|
|
|
|
||||||
Balance at March 31, 2019:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
6,282,031
|
|
|
$
|
585,347
|
|
|
$
|
6,867,378
|
|
Accumulated impairment charges
|
—
|
|
|
(68,010
|
)
|
|
(68,010
|
)
|
|||
|
$
|
6,282,031
|
|
|
$
|
517,337
|
|
|
$
|
6,799,368
|
|
Reporting unit
|
|
Goodwill balance as
of March 31, 2019 |
|
Carrying amount
coverage(1) |
|
Sensitivities
|
||||
Operating income(2)
|
|
Discount rate(3)
|
||||||||
Germany Kidney Care
|
|
$
|
354,182
|
|
|
—%
|
|
(1.4)%
|
|
(9.3)%
|
|
(1)
|
Excess of estimated fair value of the reporting unit over its carrying amount as of the latest assessment date.
|
(2)
|
Potential impact on estimated fair value of a sustained, long-term reduction of 3% in operating income as of the latest assessment date.
|
(3)
|
Potential impact on estimated fair value of an increase in discount rates of 100 basis points as of the latest assessment date.
|
8.
|
Income taxes
|
9.
|
Long-term debt
|
|
|
|
|
|
|
|
As of March 31, 2019
|
||||||||
|
March 31, 2019
|
|
December 31, 2018
|
|
Maturity date
|
|
Interest rate
|
|
Estimated fair value (2)
|
||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
|
||||||
Term Loan A(1)
|
$
|
650,000
|
|
|
$
|
675,000
|
|
|
12/24/2019
|
|
2.00% + LIBOR
|
|
$
|
649,155
|
|
Term Loan A-2(1)
|
995,000
|
|
|
995,000
|
|
|
12/24/2019
|
|
1.00% + LIBOR
|
|
$
|
999,975
|
|
||
Term Loan B
|
3,333,750
|
|
|
3,342,500
|
|
|
6/24/2021
|
|
2.75% + LIBOR(3)
|
|
$
|
3,350,419
|
|
||
Revolver(1)
|
575,000
|
|
|
175,000
|
|
|
12/24/2019
|
|
2.00% + LIBOR
|
|
$
|
575,000
|
|
||
Senior Notes:
|
|
|
|
|
|
|
|
|
|
||||||
5 3/4% Senior Notes
|
1,250,000
|
|
|
1,250,000
|
|
|
8/15/2022
|
|
5.75%
|
|
$
|
1,271,875
|
|
||
5 1/8% Senior Notes
|
1,750,000
|
|
|
1,750,000
|
|
|
7/15/2024
|
|
5.125%
|
|
$
|
1,729,175
|
|
||
5% Senior Notes
|
1,500,000
|
|
|
1,500,000
|
|
|
5/1/2025
|
|
5%
|
|
$
|
1,439,250
|
|
||
Acquisition obligations and other notes payable(4)
|
181,885
|
|
|
183,979
|
|
|
2019-2026
|
|
6.30%
|
|
$
|
181,885
|
|
||
Financing lease obligations(5)
|
276,564
|
|
|
282,737
|
|
|
2019-2036
|
|
4.84%
|
|
$
|
276,564
|
|
||
Total debt principal outstanding
|
10,512,199
|
|
|
10,154,216
|
|
|
|
|
|
|
|
||||
Discount and deferred financing costs(6)
|
(48,495
|
)
|
|
(52,000
|
)
|
|
|
|
|
|
|
||||
|
10,463,704
|
|
|
10,102,216
|
|
|
|
|
|
|
|
||||
Less current portion
|
(4,676,691
|
)
|
|
(1,929,369
|
)
|
|
|
|
|
|
|
||||
|
$
|
5,787,013
|
|
|
$
|
8,172,847
|
|
|
|
|
|
|
|
|
(1)
|
On May 6, 2019, the Company entered into an agreement to extend the maturity dates of its Term Loan A, Term Loan A-2 and Revolver by six months, to December 24, 2019.
|
(2)
|
Fair values are based upon quoted market prices for similar instruments, a level 2 input. The balances of acquisition obligations and other notes payable and financing lease obligations are presented in the condensed consolidated financial statements at March 31, 2019 at their approximate fair values due to the short-term nature of their settlements.
|
(3)
|
Term Loan B is subject to a LIBOR component floor of 0.75%.
|
(4)
|
The acquisition obligations and other notes payable interest rate is the weighted average interest rate based on the current interest rate in effect and assuming no changes to the LIBOR based interest rates.
|
(5)
|
The interest rate presented for financing lease obligations is the weighted average discount rate.
|
(6)
|
The carrying amount of the Company’s senior secured credit facilities includes a discount of $5,487 and deferred financing costs of $11,319, and the carrying amount of the Company’s senior notes includes deferred financing costs of $31,689 as of March 31, 2019.
|
2019 (remainder of the year)(1)
|
4,654,038
|
|
2020
|
83,658
|
|
2021
|
940,050
|
|
2022
|
1,291,930
|
|
2023
|
52,538
|
|
2024
|
1,784,606
|
|
Thereafter
|
1,705,379
|
|
|
(1)
|
Includes $2,372,764 representing our estimate of Term Loan B principal prepayments expected to be paid in 2019 from net cash proceeds of the DMG sale, as described below.
|
|
|
|
|
|
|
|
|
|
March 31, 2019
|
|
Fair value
|
||||||||||||||
|
Notional amount
|
|
LIBOR maximum rate
|
|
Effective date
|
|
Expiration date
|
|
Debt expense
|
|
Recorded OCI loss
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
October 2015 caps
|
$
|
3,500,000
|
|
|
3.5%
|
|
6/29/2018
|
|
6/30/2020
|
|
$
|
2,163
|
|
|
$
|
781
|
|
|
$
|
70
|
|
|
$
|
851
|
|
|
Amount of unrecognized (losses) gains in OCI on interest rate cap agreements
|
|
Income statement location
|
|
Reclassification from accumulated other comprehensive income into net income
|
||||||||||||
|
Three months ended March 31,
|
|
|
Three months ended March 31,
|
|||||||||||||
Derivatives designated as cash flow hedges
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|||||||||
Interest rate cap agreements
|
$
|
(781
|
)
|
|
$
|
1,414
|
|
|
Debt expense
|
|
$
|
2,163
|
|
|
$
|
2,070
|
|
Tax expense (benefit)
|
201
|
|
|
(364
|
)
|
|
Tax expense
|
|
(557
|
)
|
|
(533
|
)
|
||||
Total
|
$
|
(580
|
)
|
|
$
|
1,050
|
|
|
|
|
$
|
1,606
|
|
|
$
|
1,537
|
|
10.
|
Leases
|
Lease cost
|
Three months ended March 31, 2019
|
||
Operating lease cost(1):
|
|
||
Fixed lease expense
|
$
|
128,110
|
|
Variable lease expense
|
28,571
|
|
|
Financing lease cost:
|
|
||
Amortization of leased assets
|
5,826
|
|
|
Interest on lease liabilities
|
3,775
|
|
|
Net lease cost
|
$
|
166,282
|
|
|
(1)
|
Includes short-term lease expense and sublease income, which are immaterial.
|
Lease term and discount rate
|
March 31, 2019
|
|
Weighted average remaining lease term (years):
|
|
|
Operating leases
|
9.0
|
|
Finance leases
|
10.1
|
|
Weighted average discount rate:
|
|
|
Operating leases
|
4.2
|
%
|
Finance leases
|
4.8
|
%
|
|
Three months ended
March 31, 2019 |
||
Other information
|
|||
Gain on sale leaseback, net
|
$
|
3,987
|
|
Cash paid for amounts included in the measurement of lease
liabilities: |
|
||
Operating cash flows from operating leases
|
$
|
153,587
|
|
Operating cash flows from finance leases
|
$
|
5,661
|
|
Financing cash flows from finance leases
|
$
|
5,344
|
|
Net operating lease assets obtained in exchange for new or modified
operating lease liabilities |
$
|
45,034
|
|
|
Operating leases
|
|
Finance leases
|
||||
2019 (remainder of the year)
|
$
|
365,155
|
|
|
$
|
30,702
|
|
2020
|
474,121
|
|
|
37,974
|
|
||
2021
|
443,729
|
|
|
33,637
|
|
||
2022
|
405,176
|
|
|
33,860
|
|
||
2023
|
358,578
|
|
|
33,975
|
|
||
2024
|
306,512
|
|
|
33,993
|
|
||
Thereafter
|
1,275,632
|
|
|
162,183
|
|
||
Total future minimum lease payments
|
$
|
3,628,903
|
|
|
$
|
366,324
|
|
Less portion representing interest
|
(635,714
|
)
|
|
(89,760
|
)
|
||
Present value of lease liabilities
|
$
|
2,993,189
|
|
|
$
|
276,564
|
|
|
Operating leases
|
|
Capital leases
|
||||
2019
|
$
|
483,488
|
|
|
$
|
36,754
|
|
2020
|
462,154
|
|
|
41,044
|
|
||
2021
|
432,950
|
|
|
34,026
|
|
||
2022
|
395,462
|
|
|
33,690
|
|
||
2023
|
349,649
|
|
|
33,845
|
|
||
Thereafter
|
1,589,949
|
|
|
194,611
|
|
||
|
$
|
3,713,652
|
|
|
373,970
|
|
|
Less portion representing interest
|
|
|
(91,233
|
)
|
|||
Total capital lease obligations, including current portion
|
|
|
$
|
282,737
|
|
11.
|
Contingencies
|
12.
|
Other commitments
|
13.
|
Long-term incentive compensation
|
14.
|
Accumulated other comprehensive (loss) income
|
|
For the three months ended March 31, 2019
|
|
For the three months ended March 31, 2018
|
||||||||||||||||||||||||
|
Interest
rate cap agreements |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive (loss) income |
|
Interest
rate cap agreements |
|
Investment
securities |
|
Foreign
currency translation adjustments |
|
Accumulated
other comprehensive (loss) income |
||||||||||||||
Beginning balance
|
$
|
(8,961
|
)
|
|
$
|
(25,963
|
)
|
|
$
|
(34,924
|
)
|
|
$
|
(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
|
(781
|
)
|
|
(13,653
|
)
|
|
(14,434
|
)
|
|
1,414
|
|
|
—
|
|
|
19,881
|
|
|
21,295
|
|
|||||||
Related income tax benefit
|
201
|
|
|
—
|
|
|
201
|
|
|
(364
|
)
|
|
—
|
|
|
—
|
|
|
(364
|
)
|
|||||||
|
(580
|
)
|
|
(13,653
|
)
|
|
(14,233
|
)
|
|
1,050
|
|
|
—
|
|
|
19,881
|
|
|
20,931
|
|
|||||||
Reclassification into net income
|
2,163
|
|
|
—
|
|
|
2,163
|
|
|
2,070
|
|
|
—
|
|
|
—
|
|
|
2,070
|
|
|||||||
Related income
|
(557
|
)
|
|
—
|
|
|
(557
|
)
|
|
(533
|
)
|
|
—
|
|
|
—
|
|
|
(533
|
)
|
|||||||
|
1,606
|
|
|
—
|
|
|
1,606
|
|
|
1,537
|
|
|
—
|
|
|
—
|
|
|
1,537
|
|
|||||||
Ending balance
|
$
|
(7,935
|
)
|
|
$
|
(39,616
|
)
|
|
$
|
(47,551
|
)
|
|
$
|
(12,527
|
)
|
|
$
|
—
|
|
|
$
|
39,862
|
|
|
$
|
27,335
|
|
|
(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 Tax Cuts and Jobs Act of 2017.
|
15.
|
Acquisitions and divestitures
|
Current assets
|
$
|
1,117
|
|
Property and equipment
|
923
|
|
|
Intangible and other long-term assets
|
4,312
|
|
|
Goodwill
|
8,655
|
|
|
Current liabilities
|
(592
|
)
|
|
Long-term liabilities
|
(88
|
)
|
|
Noncontrolling interests
|
(1,762
|
)
|
|
|
$
|
12,565
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenues
|
$
|
1,382,281
|
|
|
$
|
1,227,932
|
|
Expenses
|
1,338,153
|
|
|
1,226,407
|
|
||
Income from discontinued operations before taxes
|
44,128
|
|
|
1,525
|
|
||
Income tax expense
|
13,823
|
|
|
7,311
|
|
||
Net income (loss) from discontinued operations, net of tax
|
$
|
30,305
|
|
|
$
|
(5,786
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
533,615
|
|
|
$
|
414,683
|
|
Other current assets
|
613,359
|
|
|
557,403
|
|
||
Property and equipment, net
|
476,781
|
|
|
458,040
|
|
||
Operating lease right-of-use assets
|
412,388
|
|
|
—
|
|
||
Intangible assets, net
|
1,317,036
|
|
|
1,316,974
|
|
||
Other long-term assets
|
120,347
|
|
|
112,127
|
|
||
Goodwill
|
2,848,262
|
|
|
2,847,178
|
|
||
Valuation allowance on disposal group
|
(316,840
|
)
|
|
(316,840
|
)
|
||
Total current assets held for sale, net
|
$
|
6,004,948
|
|
|
$
|
5,389,565
|
|
Liabilities
|
|
|
|
|
|
||
Other liabilities
|
$
|
624,319
|
|
|
$
|
479,134
|
|
Medical payables
|
512,523
|
|
|
436,839
|
|
||
Current portion of operating leases liabilities
|
68,031
|
|
|
—
|
|
||
Current portion of long-term debt
|
2,832
|
|
|
3,122
|
|
||
Long-term operating leases liabilities
|
387,841
|
|
|
—
|
|
||
Long-term debt
|
33,073
|
|
|
33,425
|
|
||
Other long-term liabilities
|
124,691
|
|
|
291,239
|
|
||
Total current liabilities held for sale
|
$
|
1,753,310
|
|
|
$
|
1,243,759
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities from discontinued operations
|
$
|
68,240
|
|
|
$
|
156,248
|
|
Net cash used in investing activities from discontinued operations
|
$
|
(22,809
|
)
|
|
$
|
(33,068
|
)
|
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 equity securities
|
$
|
36,214
|
|
|
$
|
36,214
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate cap agreements
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
70
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Contingent earn-out obligations
|
$
|
3,432
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,432
|
|
Temporary equity
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interests subject to put provisions
|
$
|
1,143,044
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,143,044
|
|
19.
|
Segment reporting
|
|
Three months ended
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Segment revenues:
|
|
|
|
||||
U.S. dialysis and related lab services
|
|
|
|
||||
Patient service revenues:
|
|
|
|
||||
External sources
|
$
|
2,517,289
|
|
|
$
|
2,489,165
|
|
Intersegment revenues
|
30,420
|
|
|
18,422
|
|
||
U.S. dialysis and related lab services patient service revenues
|
2,547,709
|
|
|
2,507,587
|
|
||
Provision for uncollectible accounts
|
(5,463
|
)
|
|
25,199
|
|
||
Net U.S. dialysis and related lab services patient service revenues
|
2,542,246
|
|
|
2,532,786
|
|
||
Other revenues(1):
|
|
|
|
||||
External sources
|
4,684
|
|
|
5,114
|
|
||
Intersegment revenues
|
221
|
|
|
—
|
|
||
Total U.S. dialysis and related lab services revenues
|
$
|
2,547,151
|
|
|
$
|
2,537,900
|
|
Other—Ancillary services and strategic initiatives
|
|
|
|
||||
Patient service revenues, net
|
$
|
117,863
|
|
|
$
|
102,255
|
|
Other external sources
|
108,739
|
|
|
227,711
|
|
||
Intersegment revenues
|
3,336
|
|
|
10,199
|
|
||
Total ancillary services and strategic initiatives revenues
|
229,938
|
|
|
340,165
|
|
||
Total net segment revenues
|
2,777,089
|
|
|
2,878,065
|
|
||
Elimination of intersegment revenues
|
(33,977
|
)
|
|
(28,621
|
)
|
||
Consolidated revenues
|
$
|
2,743,112
|
|
|
$
|
2,849,444
|
|
Segment operating margin:
|
|
|
|
|
|
||
U.S. dialysis and related lab services
|
$
|
416,981
|
|
|
$
|
433,380
|
|
Other—Ancillary services and strategic initiatives
|
(57,630
|
)
|
|
(6,990
|
)
|
||
Total segment operating margin
|
359,351
|
|
|
426,390
|
|
||
Reconciliation of segment operating margin to consolidated income from continuing
operations before income taxes: |
|
|
|
||||
Corporate administrative support
|
(18,844
|
)
|
|
(15,704
|
)
|
||
Consolidated operating income
|
340,507
|
|
|
410,686
|
|
||
Debt expense
|
(131,519
|
)
|
|
(113,516
|
)
|
||
Other income, net
|
6,940
|
|
|
4,582
|
|
||
Consolidated income from continuing operations before income taxes
|
$
|
215,928
|
|
|
$
|
301,752
|
|
|
(1)
|
Includes management fee revenue from providing management and administrative services to dialysis ventures in which the Company owns a noncontrolling equity investment or which are wholly-owned by third parties.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Segment assets
|
|
|
|
|
|
||
U.S. dialysis and related lab services (including equity
investments of $101,173 and $95,290, respectively) |
$
|
15,095,326
|
|
|
$
|
12,333,641
|
|
Other—Ancillary services and strategic initiatives (including
equity investments of $125,136 and $129,321, respectively) |
1,505,670
|
|
|
1,387,046
|
|
||
DMG—Held for sale (including equity investments of $5,282 and
$4,833, respectively) |
6,004,948
|
|
|
5,389,565
|
|
||
Consolidated assets
|
$
|
22,605,944
|
|
|
$
|
19,110,252
|
|
|
Three months ended
March 31,
|
||||||
|
2019
|
|
2018
|
||||
U.S. dialysis and related lab services
|
$
|
140,780
|
|
|
$
|
134,776
|
|
Other—Ancillary services and strategic initiatives
|
7,748
|
|
|
8,023
|
|
||
|
$
|
148,528
|
|
|
$
|
142,799
|
|
|
Three months ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
U.S. dialysis and related lab services
|
$
|
170,548
|
|
|
$
|
191,406
|
|
Other—Ancillary services and strategic initiatives
|
8,578
|
|
|
9,988
|
|
||
DMG—Held for sale
|
19,752
|
|
|
31,049
|
|
||
|
$
|
198,878
|
|
|
$
|
232,443
|
|
20.
|
Changes in DaVita Inc.’s ownership interests in consolidated subsidiaries
|
|
Three months ended
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income attributable to DaVita Inc.
|
$
|
149,289
|
|
|
$
|
178,686
|
|
Changes in paid-in capital for:
|
|
|
|
||||
Sales of noncontrolling interests
|
—
|
|
|
76
|
|
||
Purchases of noncontrolling interests
|
(2,206
|
)
|
|
(1,994
|
)
|
||
Net transfers to noncontrolling interests
|
(2,206
|
)
|
|
(1,918
|
)
|
||
Net income attributable to DaVita Inc., net of transfers to noncontrolling interests
|
$
|
147,083
|
|
|
$
|
176,768
|
|
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 March 31, 2019
|
|
|
|
|
|
|||||||||||||||
Patient services revenues
|
|
$
|
—
|
|
|
$
|
1,777,246
|
|
|
$
|
918,604
|
|
|
$
|
(60,698
|
)
|
|
$
|
2,635,152
|
|
Provision for uncollectible accounts
|
|
—
|
|
|
(3,970
|
)
|
|
(1,493
|
)
|
|
—
|
|
|
(5,463
|
)
|
|||||
Net patient service revenues
|
|
—
|
|
|
1,773,276
|
|
|
917,111
|
|
|
(60,698
|
)
|
|
2,629,689
|
|
|||||
Other revenues
|
|
188,836
|
|
|
111,141
|
|
|
35,619
|
|
|
(222,173
|
)
|
|
113,423
|
|
|||||
Total net revenues
|
|
188,836
|
|
|
1,884,417
|
|
|
952,730
|
|
|
(282,871
|
)
|
|
2,743,112
|
|
|||||
Operating expenses and charges
|
|
143,659
|
|
|
1,660,453
|
|
|
881,364
|
|
|
(282,871
|
)
|
|
2,402,605
|
|
|||||
Operating income
|
|
45,177
|
|
|
223,964
|
|
|
71,366
|
|
|
—
|
|
|
340,507
|
|
|||||
Debt expense
|
|
(133,595
|
)
|
|
(52,479
|
)
|
|
(10,719
|
)
|
|
65,274
|
|
|
(131,519
|
)
|
|||||
Other income, net
|
|
110,198
|
|
|
2,596
|
|
|
9,111
|
|
|
(114,965
|
)
|
|
6,940
|
|
|||||
Income tax expense
|
|
7,026
|
|
|
46,544
|
|
|
3,176
|
|
|
—
|
|
|
56,746
|
|
|||||
Equity earnings in subsidiaries
|
|
134,535
|
|
|
46,151
|
|
|
—
|
|
|
(180,686
|
)
|
|
—
|
|
|||||
Net income from continuing operations
|
|
149,289
|
|
|
173,688
|
|
|
66,582
|
|
|
(230,377
|
)
|
|
159,182
|
|
|||||
Net (loss) income from discontinued operations, net of tax
|
|
—
|
|
|
(39,153
|
)
|
|
19,767
|
|
|
49,691
|
|
|
30,305
|
|
|||||
Net income
|
|
149,289
|
|
|
134,535
|
|
|
86,349
|
|
|
(180,686
|
)
|
|
189,487
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,198
|
)
|
|
(40,198
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
149,289
|
|
|
$
|
134,535
|
|
|
$
|
86,349
|
|
|
$
|
(220,884
|
)
|
|
$
|
149,289
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For the three months ended March 31, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Patient service revenues
|
|
$
|
—
|
|
|
$
|
1,790,188
|
|
|
$
|
848,401
|
|
|
$
|
(47,515
|
)
|
|
$
|
2,591,074
|
|
Provision for uncollectible accounts
|
|
—
|
|
|
9,628
|
|
|
15,917
|
|
|
—
|
|
|
25,545
|
|
|||||
Net patient service revenues
|
|
—
|
|
|
1,799,816
|
|
|
864,318
|
|
|
(47,515
|
)
|
|
2,616,619
|
|
|||||
Other revenues
|
|
195,565
|
|
|
204,960
|
|
|
70,933
|
|
|
(238,633
|
)
|
|
232,825
|
|
|||||
Total net revenues
|
|
195,565
|
|
|
2,004,776
|
|
|
935,251
|
|
|
(286,148
|
)
|
|
2,849,444
|
|
|||||
Operating expenses
|
|
133,356
|
|
|
1,791,094
|
|
|
800,456
|
|
|
(286,148
|
)
|
|
2,438,758
|
|
|||||
Operating income
|
|
62,209
|
|
|
213,682
|
|
|
134,795
|
|
|
—
|
|
|
410,686
|
|
|||||
Debt expense
|
|
(114,334
|
)
|
|
(52,197
|
)
|
|
(7,375
|
)
|
|
60,390
|
|
|
(113,516
|
)
|
|||||
Other income
|
|
104,081
|
|
|
2,523
|
|
|
5,704
|
|
|
(107,726
|
)
|
|
4,582
|
|
|||||
Income tax expense
|
|
14,387
|
|
|
48,944
|
|
|
7,406
|
|
|
—
|
|
|
70,737
|
|
|||||
Equity earnings in subsidiaries
|
|
141,117
|
|
|
66,496
|
|
|
—
|
|
|
(207,613
|
)
|
|
—
|
|
|||||
Net income from continuing operations
|
|
178,686
|
|
|
181,560
|
|
|
125,718
|
|
|
(254,949
|
)
|
|
231,015
|
|
|||||
Net loss from discontinued operations, net of tax
|
|
—
|
|
|
(40,443
|
)
|
|
(12,679
|
)
|
|
47,336
|
|
|
(5,786
|
)
|
|||||
Net income
|
|
178,686
|
|
|
141,117
|
|
|
113,039
|
|
|
(207,613
|
)
|
|
225,229
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,543
|
)
|
|
(46,543
|
)
|
|||||
Net income attributable to DaVita Inc.
|
|
$
|
178,686
|
|
|
$
|
141,117
|
|
|
$
|
113,039
|
|
|
$
|
(254,156
|
)
|
|
$
|
178,686
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For the three months ended March 31, 2019
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
149,289
|
|
|
$
|
134,535
|
|
|
$
|
86,349
|
|
|
$
|
(180,686
|
)
|
|
$
|
189,487
|
|
Other comprehensive income (loss)
|
|
1,026
|
|
|
—
|
|
|
(13,653
|
)
|
|
—
|
|
|
(12,627
|
)
|
|||||
Total comprehensive income
|
|
150,315
|
|
|
134,535
|
|
|
72,696
|
|
|
(180,686
|
)
|
|
176,860
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,198
|
)
|
|
(40,198
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
150,315
|
|
|
$
|
134,535
|
|
|
$
|
72,696
|
|
|
$
|
(220,884
|
)
|
|
$
|
136,662
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For the three months ended March 31, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Net income
|
|
$
|
178,686
|
|
|
$
|
141,117
|
|
|
$
|
113,039
|
|
|
$
|
(207,613
|
)
|
|
$
|
225,229
|
|
Other comprehensive income
|
|
2,587
|
|
|
—
|
|
|
19,881
|
|
|
—
|
|
|
22,468
|
|
|||||
Total comprehensive income
|
|
181,273
|
|
|
141,117
|
|
|
132,920
|
|
|
(207,613
|
)
|
|
247,697
|
|
|||||
Less: Comprehensive income attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,543
|
)
|
|
(46,543
|
)
|
|||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
181,273
|
|
|
$
|
141,117
|
|
|
$
|
132,920
|
|
|
$
|
(254,156
|
)
|
|
$
|
201,154
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
As of March 31, 2019
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
|
$
|
194,347
|
|
|
$
|
—
|
|
|
$
|
264,895
|
|
|
$
|
—
|
|
|
$
|
459,242
|
|
Restricted cash and equivalents
|
|
1,006
|
|
|
12,114
|
|
|
89,072
|
|
|
—
|
|
|
102,192
|
|
|||||
Accounts receivable, net
|
|
—
|
|
|
1,349,185
|
|
|
604,237
|
|
|
—
|
|
|
1,953,422
|
|
|||||
Other current assets
|
|
37,185
|
|
|
568,029
|
|
|
100,058
|
|
|
—
|
|
|
705,272
|
|
|||||
Current assets held for sale, net
|
|
—
|
|
|
4,842,062
|
|
|
1,162,886
|
|
|
—
|
|
|
6,004,948
|
|
|||||
Total current assets
|
|
232,538
|
|
|
6,771,390
|
|
|
2,221,148
|
|
|
—
|
|
|
9,225,076
|
|
|||||
Property and equipment, net
|
|
503,677
|
|
|
1,610,442
|
|
|
1,278,147
|
|
|
—
|
|
|
3,392,266
|
|
|||||
Operating lease right-of-use assets
|
|
107,237
|
|
|
1,594,411
|
|
|
1,034,888
|
|
|
—
|
|
|
2,736,536
|
|
|||||
Intangible assets, net
|
|
130
|
|
|
39,813
|
|
|
78,381
|
|
|
—
|
|
|
118,324
|
|
|||||
Investments in subsidiaries
|
|
10,191,084
|
|
|
3,323,518
|
|
|
—
|
|
|
(13,514,602
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
3,756,675
|
|
|
—
|
|
|
1,496,009
|
|
|
(5,252,684
|
)
|
|
—
|
|
|||||
Other long-term assets and investments
|
|
53,978
|
|
|
84,137
|
|
|
196,259
|
|
|
—
|
|
|
334,374
|
|
|||||
Goodwill
|
|
—
|
|
|
4,812,366
|
|
|
1,987,002
|
|
|
—
|
|
|
6,799,368
|
|
|||||
Total assets
|
|
$
|
14,845,319
|
|
|
$
|
18,236,077
|
|
|
$
|
8,291,834
|
|
|
$
|
(18,767,286
|
)
|
|
$
|
22,605,944
|
|
Current liabilities
|
|
$
|
4,702,717
|
|
|
$
|
1,182,342
|
|
|
$
|
592,508
|
|
|
$
|
—
|
|
|
$
|
6,477,567
|
|
Current liabilities held for sale
|
|
—
|
|
|
1,084,512
|
|
|
668,798
|
|
|
—
|
|
|
1,753,310
|
|
|||||
Intercompany payables
|
|
—
|
|
|
3,648,453
|
|
|
1,604,231
|
|
|
(5,252,684
|
)
|
|
—
|
|
|||||
Long-term operating leases liabilities
|
|
133,936
|
|
|
1,502,922
|
|
|
988,918
|
|
|
—
|
|
|
2,625,776
|
|
|||||
Long-term debt and other long-term liabilities
|
|
5,520,830
|
|
|
626,764
|
|
|
371,980
|
|
|
—
|
|
|
6,519,574
|
|
|||||
Noncontrolling interests subject to put provisions
|
|
612,482
|
|
|
—
|
|
|
—
|
|
|
530,562
|
|
|
1,143,044
|
|
|||||
Total DaVita Inc. shareholders' equity
|
|
3,875,354
|
|
|
10,191,084
|
|
|
3,323,518
|
|
|
(13,514,602
|
)
|
|
3,875,354
|
|
|||||
Noncontrolling interests not subject to put
provisions |
|
—
|
|
|
—
|
|
|
741,881
|
|
|
(530,562
|
)
|
|
211,319
|
|
|||||
Total equity
|
|
3,875,354
|
|
|
10,191,084
|
|
|
4,065,399
|
|
|
(14,045,164
|
)
|
|
4,086,673
|
|
|||||
Total liabilities and equity
|
|
$
|
14,845,319
|
|
|
$
|
18,236,077
|
|
|
$
|
8,291,834
|
|
|
$
|
(18,767,286
|
)
|
|
$
|
22,605,944
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
As of December 31, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash and cash equivalents
|
|
$
|
60,653
|
|
|
$
|
—
|
|
|
$
|
262,385
|
|
|
$
|
—
|
|
|
$
|
323,038
|
|
Restricted cash and equivalents
|
|
1,005
|
|
|
12,048
|
|
|
79,329
|
|
|
—
|
|
|
92,382
|
|
|||||
Accounts receivable, net
|
|
—
|
|
|
1,264,290
|
|
|
594,318
|
|
|
—
|
|
|
1,858,608
|
|
|||||
Other current assets
|
|
37,185
|
|
|
601,318
|
|
|
122,063
|
|
|
—
|
|
|
760,566
|
|
|||||
Current assets held for sale
|
|
—
|
|
|
4,440,953
|
|
|
948,612
|
|
|
—
|
|
|
5,389,565
|
|
|||||
Total current assets
|
|
98,843
|
|
|
6,318,609
|
|
|
2,006,707
|
|
|
—
|
|
|
8,424,159
|
|
|||||
Property and equipment, net
|
|
491,462
|
|
|
1,624,835
|
|
|
1,277,372
|
|
|
—
|
|
|
3,393,669
|
|
|||||
Intangible assets, net
|
|
153
|
|
|
42,933
|
|
|
75,760
|
|
|
—
|
|
|
118,846
|
|
|||||
Investments in subsidiaries
|
|
10,102,750
|
|
|
3,239,862
|
|
|
—
|
|
|
(13,342,612
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
3,419,448
|
|
|
—
|
|
|
1,471,203
|
|
|
(4,890,651
|
)
|
|
—
|
|
|||||
Other long-term assets and investments
|
|
53,385
|
|
|
80,537
|
|
|
197,696
|
|
|
—
|
|
|
331,618
|
|
|||||
Goodwill
|
|
—
|
|
|
4,812,365
|
|
|
2,029,595
|
|
|
—
|
|
|
6,841,960
|
|
|||||
Total assets
|
|
$
|
14,166,041
|
|
|
$
|
16,119,141
|
|
|
$
|
7,058,333
|
|
|
$
|
(18,233,263
|
)
|
|
$
|
19,110,252
|
|
Current liabilities
|
|
$
|
1,945,943
|
|
|
$
|
1,251,534
|
|
|
$
|
449,925
|
|
|
$
|
—
|
|
|
$
|
3,647,402
|
|
Current liabilities held for sale
|
|
—
|
|
|
722,766
|
|
|
520,993
|
|
|
—
|
|
|
1,243,759
|
|
|||||
Intercompany payables
|
|
—
|
|
|
3,327,026
|
|
|
1,563,625
|
|
|
(4,890,651
|
)
|
|
—
|
|
|||||
Long-term debt and other long-term liabilities
|
|
7,918,581
|
|
|
715,065
|
|
|
552,406
|
|
|
—
|
|
|
9,186,052
|
|
|||||
Noncontrolling interests subject to put provisions
|
|
598,075
|
|
|
—
|
|
|
—
|
|
|
526,566
|
|
|
1,124,641
|
|
|||||
Total DaVita Inc. shareholders' equity
|
|
3,703,442
|
|
|
10,102,750
|
|
|
3,239,862
|
|
|
(13,342,612
|
)
|
|
3,703,442
|
|
|||||
Noncontrolling interests not subject to put
provisions |
|
—
|
|
|
—
|
|
|
731,522
|
|
|
(526,566
|
)
|
|
204,956
|
|
|||||
Total equity
|
|
3,703,442
|
|
|
10,102,750
|
|
|
3,971,384
|
|
|
(13,869,178
|
)
|
|
3,908,398
|
|
|||||
Total liabilities and equity
|
|
$
|
14,166,041
|
|
|
$
|
16,119,141
|
|
|
$
|
7,058,333
|
|
|
$
|
(18,233,263
|
)
|
|
$
|
19,110,252
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For the three months ended March 31, 2019
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
149,289
|
|
|
$
|
134,535
|
|
|
$
|
86,349
|
|
|
$
|
(180,686
|
)
|
|
$
|
189,487
|
|
Changes in operating assets and liabilities and non-cash
items included in net income |
|
(124,409
|
)
|
|
(197,096
|
)
|
|
92,636
|
|
|
180,686
|
|
|
(48,183
|
)
|
|||||
Net cash provided by (used in) operating activities
|
|
24,880
|
|
|
(62,561
|
)
|
|
178,985
|
|
|
—
|
|
|
141,304
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions of property and equipment
|
|
(38,942
|
)
|
|
(112,376
|
)
|
|
(47,560
|
)
|
|
—
|
|
|
(198,878
|
)
|
|||||
Acquisitions
|
|
—
|
|
|
—
|
|
|
(11,274
|
)
|
|
—
|
|
|
(11,274
|
)
|
|||||
Proceeds from asset and business sales
|
|
—
|
|
|
1,456
|
|
|
12,447
|
|
|
—
|
|
|
13,903
|
|
|||||
Proceeds (purchases) from investment sales and other items, net
|
|
1,804
|
|
|
(4,558
|
)
|
|
(1,355
|
)
|
|
—
|
|
|
(4,109
|
)
|
|||||
Net cash used in investing activities
|
|
(37,138
|
)
|
|
(115,478
|
)
|
|
(47,742
|
)
|
|
—
|
|
|
(200,358
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and related financing costs, net
|
|
365,133
|
|
|
(2,439
|
)
|
|
(5,497
|
)
|
|
—
|
|
|
357,197
|
|
|||||
Intercompany borrowing (payments)
|
|
(220,697
|
)
|
|
229,211
|
|
|
(8,514
|
)
|
|
—
|
|
|
—
|
|
|||||
Other items
|
|
1,517
|
|
|
(8,480
|
)
|
|
(25,283
|
)
|
|
—
|
|
|
(32,246
|
)
|
|||||
Net cash provided by (used in) financing activities
|
|
145,953
|
|
|
218,292
|
|
|
(39,294
|
)
|
|
—
|
|
|
324,951
|
|
|||||
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
|
—
|
|
|
—
|
|
|
(921
|
)
|
|
—
|
|
|
(921
|
)
|
|||||
Net increase in cash, cash equivalents and
restricted cash |
|
133,695
|
|
|
40,253
|
|
|
91,028
|
|
|
—
|
|
|
264,976
|
|
|||||
Less: Net increase in cash, cash equivalents and restricted cash from discontinued operations
|
|
—
|
|
|
40,187
|
|
|
78,775
|
|
|
—
|
|
|
118,962
|
|
|||||
Net increase in cash, cash equivalents and restricted cash from continuing operations
|
|
133,695
|
|
|
66
|
|
|
12,253
|
|
|
—
|
|
|
146,014
|
|
|||||
Cash, cash equivalents and restricted cash of continuing
operations at beginning of the year |
|
61,658
|
|
|
12,048
|
|
|
341,714
|
|
|
—
|
|
|
415,420
|
|
|||||
Cash, cash equivalents and restricted cash of continuing
operations at end of the period |
|
$
|
195,353
|
|
|
$
|
12,114
|
|
|
$
|
353,967
|
|
|
$
|
—
|
|
|
$
|
561,434
|
|
|
|
|
|
Guarantor
subsidiaries |
|
Non-
Guarantor subsidiaries |
|
Consolidating
adjustments |
|
Consolidated
total |
||||||||||
For the three months ended March 31, 2018
|
|
DaVita Inc.
|
|
|
|
|
||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
178,686
|
|
|
$
|
141,117
|
|
|
$
|
113,039
|
|
|
$
|
(207,613
|
)
|
|
$
|
225,229
|
|
Changes in operating assets and liabilities and non-cash
items included in net income |
|
(82,391
|
)
|
|
32,484
|
|
|
(20,396
|
)
|
|
207,613
|
|
|
137,310
|
|
|||||
Net cash provided by operating activities
|
|
96,295
|
|
|
173,601
|
|
|
92,643
|
|
|
—
|
|
|
362,539
|
|
|||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions of property and equipment
|
|
(27,356
|
)
|
|
(125,375
|
)
|
|
(79,712
|
)
|
|
—
|
|
|
(232,443
|
)
|
|||||
Acquisitions
|
|
—
|
|
|
(4,417
|
)
|
|
(12,165
|
)
|
|
—
|
|
|
(16,582
|
)
|
|||||
Proceeds from asset and business sales
|
|
—
|
|
|
18,535
|
|
|
—
|
|
|
—
|
|
|
18,535
|
|
|||||
Proceeds (purchases) from investment sales and other items, net
|
|
31,665
|
|
|
(762
|
)
|
|
(541
|
)
|
|
—
|
|
|
30,362
|
|
|||||
Net cash provided by (used in) investing activities
|
|
4,309
|
|
|
(112,019
|
)
|
|
(92,418
|
)
|
|
—
|
|
|
(200,128
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and related financing costs, net
|
|
116,307
|
|
|
(3,377
|
)
|
|
(8,257
|
)
|
|
—
|
|
|
104,673
|
|
|||||
Intercompany borrowing (payments)
|
|
47,394
|
|
|
(49,783
|
)
|
|
2,389
|
|
|
—
|
|
|
—
|
|
|||||
Other items
|
|
(291,562
|
)
|
|
(2,200
|
)
|
|
(33,458
|
)
|
|
—
|
|
|
(327,220
|
)
|
|||||
Net cash used in financing activities
|
|
(127,861
|
)
|
|
(55,360
|
)
|
|
(39,326
|
)
|
|
—
|
|
|
(222,547
|
)
|
|||||
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
|
—
|
|
|
—
|
|
|
6,668
|
|
|
—
|
|
|
6,668
|
|
|||||
Net decrease in cash, cash equivalents and restricted cash
|
|
(27,257
|
)
|
|
6,222
|
|
|
(32,433
|
)
|
|
—
|
|
|
(53,468
|
)
|
|||||
Less: Net increase in cash, cash equivalents and restricted cash from discontinued operations
|
|
—
|
|
|
6,185
|
|
|
11,649
|
|
|
—
|
|
|
17,834
|
|
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash from continuing operations
|
|
(27,257
|
)
|
|
37
|
|
|
(44,082
|
)
|
|
—
|
|
|
(71,302
|
)
|
|||||
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 |
|
$
|
123,050
|
|
|
$
|
9,421
|
|
|
$
|
315,147
|
|
|
$
|
—
|
|
|
$
|
447,618
|
|
23.
|
Supplemental data
|
|
|
Consolidated
Total
|
|
Physician
Groups |
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries(1)
|
||||||||
For the three months ended March 31, 2019
|
|
|
|
|
||||||||||||
Patient service operating revenues
|
|
$
|
2,635,152
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,635,152
|
|
Provision for uncollectible accounts
|
|
(5,463
|
)
|
|
—
|
|
|
—
|
|
|
(5,463
|
)
|
||||
Net patient service operating revenues
|
|
2,629,689
|
|
|
—
|
|
|
—
|
|
|
2,629,689
|
|
||||
Other revenues
|
|
113,423
|
|
|
—
|
|
|
—
|
|
|
113,423
|
|
||||
Total net operating revenues
|
|
2,743,112
|
|
|
—
|
|
|
—
|
|
|
2,743,112
|
|
||||
Operating expenses
|
|
2,402,605
|
|
|
—
|
|
|
—
|
|
|
2,402,605
|
|
||||
Operating income
|
|
340,507
|
|
|
—
|
|
|
—
|
|
|
340,507
|
|
||||
Debt expense
|
|
(131,519
|
)
|
|
—
|
|
|
—
|
|
|
(131,519
|
)
|
||||
Other income
|
|
6,940
|
|
|
—
|
|
|
—
|
|
|
6,940
|
|
||||
Income tax expense
|
|
56,746
|
|
|
—
|
|
|
—
|
|
|
56,746
|
|
||||
Net income from continuing operations
|
|
159,182
|
|
|
—
|
|
|
—
|
|
|
159,182
|
|
||||
Net income from discontinued operations, net of tax
|
|
30,305
|
|
|
9,237
|
|
|
463
|
|
|
20,605
|
|
||||
Net income
|
|
189,487
|
|
|
9,237
|
|
|
463
|
|
|
179,787
|
|
||||
Less: Net income attributable to noncontrolling interests
|
|
(40,198
|
)
|
|
(1,255
|
)
|
|
—
|
|
|
(38,943
|
)
|
||||
Net income attributable to DaVita Inc.
|
|
$
|
149,289
|
|
|
$
|
7,982
|
|
|
$
|
463
|
|
|
$
|
140,844
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries(1)
|
||||||||
For the three months ended March 31, 2019
|
|
|
|
|
||||||||||||
Net income
|
|
$
|
189,487
|
|
|
$
|
9,237
|
|
|
$
|
463
|
|
|
$
|
179,787
|
|
Other comprehensive loss
|
|
(12,627
|
)
|
|
—
|
|
|
—
|
|
|
(12,627
|
)
|
||||
Total comprehensive income
|
|
176,860
|
|
|
9,237
|
|
|
463
|
|
|
167,160
|
|
||||
Less: Comprehensive income attributable to the noncontrolling
interests |
|
(40,198
|
)
|
|
(1,255
|
)
|
|
—
|
|
|
(38,943
|
)
|
||||
Comprehensive income attributable to DaVita Inc.
|
|
$
|
136,662
|
|
|
$
|
7,982
|
|
|
$
|
463
|
|
|
$
|
128,217
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries(1)
|
||||||||
As of March 31, 2019
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
459,242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
459,242
|
|
Restricted cash and equivalents
|
|
102,192
|
|
|
—
|
|
|
—
|
|
|
102,192
|
|
||||
Accounts receivable, net
|
|
1,953,422
|
|
|
—
|
|
|
—
|
|
|
1,953,422
|
|
||||
Other current assets
|
|
705,272
|
|
|
—
|
|
|
—
|
|
|
705,272
|
|
||||
Current assets held for sale, net
|
|
6,004,948
|
|
|
629,422
|
|
|
3,288
|
|
|
5,372,238
|
|
||||
Total current assets
|
|
9,225,076
|
|
|
629,422
|
|
|
3,288
|
|
|
8,592,366
|
|
||||
Property and equipment, net
|
|
3,392,266
|
|
|
—
|
|
|
—
|
|
|
3,392,266
|
|
||||
Operating lease right-of-use assets
|
|
2,736,536
|
|
|
—
|
|
|
—
|
|
|
2,736,536
|
|
||||
Amortizable intangibles, net
|
|
118,324
|
|
|
—
|
|
|
—
|
|
|
118,324
|
|
||||
Other long-term assets
|
|
334,374
|
|
|
—
|
|
|
—
|
|
|
334,374
|
|
||||
Goodwill
|
|
6,799,368
|
|
|
—
|
|
|
—
|
|
|
6,799,368
|
|
||||
Total assets
|
|
$
|
22,605,944
|
|
|
$
|
629,422
|
|
|
$
|
3,288
|
|
|
$
|
21,973,234
|
|
Current liabilities
|
|
$
|
6,477,567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,477,567
|
|
Current liabilities held for sale
|
|
1,753,310
|
|
|
412,368
|
|
|
—
|
|
|
1,340,942
|
|
||||
Payables to parent
|
|
—
|
|
|
72,539
|
|
|
3,288
|
|
|
(75,827
|
)
|
||||
Long-term operating leases liabilities
|
|
2,625,776
|
|
|
—
|
|
|
—
|
|
|
2,625,776
|
|
||||
Long-term debt and other long-term liabilities
|
|
6,519,574
|
|
|
—
|
|
|
—
|
|
|
6,519,574
|
|
||||
Noncontrolling interests subject to put provisions
|
|
1,143,044
|
|
|
—
|
|
|
—
|
|
|
1,143,044
|
|
||||
Total DaVita Inc. shareholders’ equity
|
|
3,875,354
|
|
|
144,515
|
|
|
—
|
|
|
3,730,839
|
|
||||
Noncontrolling interests not subject to put provisions
|
|
211,319
|
|
|
—
|
|
|
—
|
|
|
211,319
|
|
||||
Shareholders’ equity
|
|
4,086,673
|
|
|
144,515
|
|
|
—
|
|
|
3,942,158
|
|
||||
Total liabilities and shareholder’s equity
|
|
$
|
22,605,944
|
|
|
$
|
629,422
|
|
|
$
|
3,288
|
|
|
$
|
21,973,234
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
|
Consolidated
Total
|
|
Physician
Groups
|
|
Unrestricted
Subsidiaries
|
|
Company and
Restricted Subsidiaries(1)
|
||||||||
For the three months ended March 31, 2019
|
|
|
|
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
189,487
|
|
|
$
|
9,237
|
|
|
$
|
463
|
|
|
$
|
179,787
|
|
Changes in operating and intercompany assets and liabilities and
non-cash items included in net income |
|
(48,183
|
)
|
|
9,696
|
|
|
(463
|
)
|
|
(57,416
|
)
|
||||
Net cash provided by operating activities
|
|
141,304
|
|
|
18,933
|
|
|
—
|
|
|
122,371
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Additions of property and equipment
|
|
(198,878
|
)
|
|
(229
|
)
|
|
—
|
|
|
(198,649
|
)
|
||||
Acquisitions
|
|
(11,274
|
)
|
|
—
|
|
|
—
|
|
|
(11,274
|
)
|
||||
Proceeds from asset and business sales
|
|
13,903
|
|
|
—
|
|
|
—
|
|
|
13,903
|
|
||||
Investments and other items
|
|
(4,109
|
)
|
|
(1,355
|
)
|
|
—
|
|
|
(2,754
|
)
|
||||
Net cash used in investing activities
|
|
(200,358
|
)
|
|
(1,584
|
)
|
|
—
|
|
|
(198,774
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt
|
|
357,197
|
|
|
—
|
|
|
—
|
|
|
357,197
|
|
||||
Intercompany
|
|
—
|
|
|
28,965
|
|
|
—
|
|
|
(28,965
|
)
|
||||
Other items
|
|
(32,246
|
)
|
|
—
|
|
|
—
|
|
|
(32,246
|
)
|
||||
Net cash (used in) provided by financing activities
|
|
324,951
|
|
|
28,965
|
|
|
—
|
|
|
295,986
|
|
||||
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(921
|
)
|
|
—
|
|
|
—
|
|
|
(921
|
)
|
||||
Net increase in cash, cash equivalents and restricted cash
|
|
264,976
|
|
|
46,314
|
|
|
—
|
|
|
218,662
|
|
||||
Less: Net increase in cash, cash equivalents and restricted cash from discontinued operations
|
|
118,962
|
|
|
46,314
|
|
|
—
|
|
|
72,648
|
|
||||
Net increase in cash, cash equivalents and restricted cash from continuing operations
|
|
146,014
|
|
|
—
|
|
|
—
|
|
|
146,014
|
|
||||
Cash, cash equivalents and restricted cash of continuing operations
at beginning of the year |
|
415,420
|
|
|
—
|
|
|
—
|
|
|
415,420
|
|
||||
Cash, cash equivalents and restricted cash of continuing operations
at end of the period |
|
$
|
561,434
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
561,434
|
|
|
(1)
|
After elimination of the unrestricted subsidiaries and the physician groups.
|
|
Three months ended
|
|||||||||||||||||||
|
March 31,
2019 |
|
December 31,
2018 |
|
March 31,
2018 |
|||||||||||||||
|
(dollars in millions)
|
|||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dialysis and related lab patient service revenues
|
$
|
2,635
|
|
|
|
|
|
$
|
2,730
|
|
|
|
|
|
$
|
2,591
|
|
|
|
|
Provision for uncollectible accounts
|
(5
|
)
|
|
|
|
|
(14
|
)
|
|
|
|
|
26
|
|
|
|
|
|||
Net dialysis and related lab patient service revenues
|
2,630
|
|
|
|
|
|
2,716
|
|
|
|
|
|
2,617
|
|
|
|
|
|||
Other revenues
|
113
|
|
|
|
|
|
105
|
|
|
|
|
|
233
|
|
|
|
|
|||
Total consolidated revenues
|
2,743
|
|
|
100
|
%
|
|
2,821
|
|
|
100
|
%
|
|
2,849
|
|
|
100
|
%
|
|||
Operating expenses and charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Patient care costs
|
1,965
|
|
|
72
|
%
|
|
2,027
|
|
|
72
|
%
|
|
2,036
|
|
|
71
|
%
|
|||
General and administrative
|
251
|
|
|
9
|
%
|
|
269
|
|
|
10
|
%
|
|
267
|
|
|
9
|
%
|
|||
Depreciation and amortization
|
149
|
|
|
5
|
%
|
|
155
|
|
|
5
|
%
|
|
143
|
|
|
5
|
%
|
|||
Equity investment (income) loss
|
(3
|
)
|
|
—
|
%
|
|
11
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Provision for uncollectible accounts
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(6
|
)
|
|
—
|
%
|
|||
Goodwill impairment charges
|
41
|
|
|
1
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Gain on changes in ownership interests, net
|
—
|
|
|
—
|
%
|
|
(28
|
)
|
|
(1
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Total operating expenses and charges
|
2,403
|
|
|
88
|
%
|
|
2,433
|
|
|
86
|
%
|
|
2,439
|
|
|
86
|
%
|
|||
Operating income
|
$
|
341
|
|
|
12
|
%
|
|
$
|
388
|
|
|
14
|
%
|
|
$
|
411
|
|
|
14
|
%
|
|
Three months ended
|
||||||||||
|
March 31,
2019 |
|
December 31,
2018 |
|
March 31,
2018 |
||||||
|
(dollars in millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
U.S. dialysis and related lab services patient service revenues
|
$
|
2,548
|
|
|
$
|
2,642
|
|
|
$
|
2,508
|
|
Provision for uncollectible accounts
|
(5
|
)
|
|
(14
|
)
|
|
25
|
|
|||
U.S. dialysis and related lab services net patient service revenues
|
2,542
|
|
|
2,628
|
|
|
2,533
|
|
|||
Other revenues
|
5
|
|
|
5
|
|
|
5
|
|
|||
Total net U.S. dialysis and related lab services revenues
|
2,547
|
|
|
2,633
|
|
|
2,538
|
|
|||
Other—Ancillary services and strategic initiatives other revenues
|
112
|
|
|
107
|
|
|
238
|
|
|||
Other—Ancillary services and strategic initiatives patient service revenues, net
|
118
|
|
|
117
|
|
|
102
|
|
|||
Total net other—ancillary services and strategic initiatives revenues
|
230
|
|
|
224
|
|
|
340
|
|
|||
Total net segment revenues
|
2,777
|
|
|
2,857
|
|
|
2,878
|
|
|||
Elimination of intersegment revenues
|
(34
|
)
|
|
(35
|
)
|
|
(29
|
)
|
|||
Consolidated revenues
|
$
|
2,743
|
|
|
$
|
2,821
|
|
|
$
|
2,849
|
|
|
Three months ended
|
||||||||||
|
March 31,
2019 |
|
December 31,
2018 |
|
March 31,
2018 |
||||||
|
(dollars in millions)
|
||||||||||
Operating income (loss):
|
|
|
|
|
|
||||||
U.S. dialysis and related lab services
|
$
|
417
|
|
|
$
|
437
|
|
|
$
|
433
|
|
Other—Ancillary services and strategic initiatives
|
(58
|
)
|
|
(29
|
)
|
|
(7
|
)
|
|||
Corporate administrative support
|
(19
|
)
|
|
(20
|
)
|
|
(16
|
)
|
|||
Total consolidated operating income
|
$
|
341
|
|
|
$
|
388
|
|
|
$
|
411
|
|
Reconciliation of non-GAAP measures:
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Goodwill impairment charges
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Gain on changes in ownership interests, net
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||
Equity investment loss (income):
|
|
|
|
|
|
||||||
Loss due to business sale in APAC JV
|
—
|
|
|
9
|
|
|
—
|
|
|||
Loss due to impairments in APAC JV
|
—
|
|
|
2
|
|
|
—
|
|
|||
Adjusted consolidated operating income(1)
|
$
|
382
|
|
|
$
|
370
|
|
|
$
|
411
|
|
|
(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 impairment charges and net gain on changes in ownership interests. 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
|
||||||||||
|
March 31,
2019 |
|
December 31,
2018 |
|
March 31,
2018 |
||||||
|
(dollars in millions, except per treatment data)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
U.S. dialysis and related lab services patient service revenues
|
$
|
2,548
|
|
|
$
|
2,642
|
|
|
$
|
2,508
|
|
Provision for uncollectible accounts
|
(5
|
)
|
|
(14
|
)
|
|
25
|
|
|||
U.S. dialysis and related lab services net patient service revenues
|
2,542
|
|
|
2,628
|
|
|
2,533
|
|
|||
Other revenues
|
5
|
|
|
5
|
|
|
5
|
|
|||
Total U.S. dialysis and related lab services revenues
|
2,547
|
|
|
2,633
|
|
|
2,538
|
|
|||
Operating expenses and charges:
|
|
|
|
|
|
||||||
Patient care costs
|
1,797
|
|
|
1,872
|
|
|
1,779
|
|
|||
General and administrative
|
197
|
|
|
210
|
|
|
196
|
|
|||
Depreciation and amortization
|
141
|
|
|
147
|
|
|
135
|
|
|||
Equity investment income
|
(5
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||
Gain on changes in ownership interests, net
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||
Total operating expenses and charges
|
2,130
|
|
|
2,196
|
|
|
2,105
|
|
|||
Operating income
|
$
|
417
|
|
|
$
|
437
|
|
|
$
|
433
|
|
Reconciliation of non-GAAP measures:
|
|
|
|
|
|
|
|
|
|||
Gain on changes in ownership interests, net
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||
Adjusted operating income(1)
|
$
|
417
|
|
|
$
|
409
|
|
|
$
|
433
|
|
Dialysis treatments
|
7,297,460
|
|
|
7,552,412
|
|
|
7,174,026
|
|
|||
Average dialysis treatments per treatment day
|
95,267
|
|
|
95,119
|
|
|
92,568
|
|
|||
Average dialysis and related lab services net revenue per treatment
|
$
|
348.37
|
|
|
$
|
347.97
|
|
|
$
|
353.05
|
|
|
(1)
|
For the periods presented in the table above adjusted operating income is defined as operating income before certain items which we do not believe are indicative of ordinary results, including a net gain on changes in ownership interest. 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
|
||||||||||
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||
|
(dollars in millions)
|
||||||||||
U.S. revenues:
|
|
|
|
|
|
||||||
Other revenues
|
$
|
109
|
|
|
$
|
100
|
|
|
$
|
237
|
|
Total
|
109
|
|
|
100
|
|
|
237
|
|
|||
International revenues:
|
|
|
|
|
|
|
|
|
|||
Dialysis patient service revenues
|
118
|
|
|
117
|
|
|
102
|
|
|||
Other revenues
|
3
|
|
|
7
|
|
|
1
|
|
|||
Total
|
120
|
|
|
124
|
|
|
103
|
|
|||
Total net revenues
|
$
|
230
|
|
|
$
|
224
|
|
|
$
|
340
|
|
Operating expenses and charges:
|
|
|
|
|
|
||||||
Operating and other general expenses
|
$
|
247
|
|
|
$
|
253
|
|
|
$
|
347
|
|
Goodwill impairment
|
41
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses and charges
|
288
|
|
|
253
|
|
|
347
|
|
|||
Total ancillary services and strategic initiatives operating loss
|
$
|
(58
|
)
|
|
$
|
(29
|
)
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
||||||
U.S. operating loss
|
$
|
(15
|
)
|
|
$
|
(19
|
)
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
||||||
International operating loss
|
$
|
(43
|
)
|
|
$
|
(10
|
)
|
|
$
|
(2
|
)
|
Reconciliation of non-GAAP:
|
|
|
|
|
|
||||||
Goodwill impairment charge
|
41
|
|
|
—
|
|
|
—
|
|
|||
Equity investment loss (income):
|
|
|
|
|
|
||||||
Loss due to business sale in APAC JV
|
—
|
|
|
9
|
|
|
—
|
|
|||
Loss due to impairments in APAC JV
|
—
|
|
|
2
|
|
|
—
|
|
|||
Adjusted operating loss(1)
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Total adjusted ancillary services and strategic initiatives operating loss(1)
|
$
|
(17
|
)
|
|
$
|
(19
|
)
|
|
$
|
(7
|
)
|
|
(1)
|
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 the effect of impairment charges and net loss 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.
|
|
Three months ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
|
(dollars in millions)
|
||||||
Net cash provided by operating activities
|
|
|
|
||||
Net income
|
$
|
189
|
|
|
$
|
225
|
|
Non-cash items
|
244
|
|
|
210
|
|
||
Working capital
|
(290
|
)
|
|
(85
|
)
|
||
Other
|
(2
|
)
|
|
13
|
|
||
|
$
|
141
|
|
|
$
|
363
|
|
|
|
|
|
||||
Net cash used in investing activities
|
|
|
|
||||
Capital expenditures:
|
|
|
|
||||
Routine maintenance/IT/other
|
$
|
(90
|
)
|
|
$
|
(119
|
)
|
Development and relocations
|
(109
|
)
|
|
(114
|
)
|
||
Acquisition expenditures
|
(11
|
)
|
|
(17
|
)
|
||
Proceeds from sale of self-developed properties
|
12
|
|
|
18
|
|
||
Other
|
(2
|
)
|
|
32
|
|
||
|
$
|
(200
|
)
|
|
$
|
(200
|
)
|
|
|
|
|
||||
Net cash provided by (used in) financing activities
|
|
|
|
||||
Debt issuances, net
|
$
|
357
|
|
|
$
|
105
|
|
Distributions to noncontrolling interest
|
(44
|
)
|
|
(45
|
)
|
||
Contributions from noncontrolling interest
|
19
|
|
|
12
|
|
||
Other
|
(7
|
)
|
|
(5
|
)
|
||
Share repurchases
|
—
|
|
|
(290
|
)
|
||
|
$
|
325
|
|
|
$
|
(223
|
)
|
Total number of shares repurchased(1)
|
—
|
|
|
4,197,304
|
|
|
(1)
|
At March 31, 2018, $16 million of our share repurchases remained unsettled.
|
|
|
Three months ended
|
|
|
|
Three months ended
|
||||||||
|
|
March 31
|
|
|
|
March 31
|
||||||||
U.S. centers:
|
|
2019
|
|
2018
|
|
International centers:
|
|
2019
|
|
2018
|
||||
Centers at beginning of year
|
|
2,664
|
|
|
2,510
|
|
|
Centers at beginning of year
|
|
241
|
|
|
237
|
|
Acquired
|
|
2
|
|
|
1
|
|
|
Acquired
|
|
2
|
|
|
4
|
|
Developed
|
|
27
|
|
|
28
|
|
|
Developed and hospital operated
|
|
—
|
|
|
—
|
|
Managed and administrative, net(1)
|
|
(1
|
)
|
|
1
|
|
|
Managed, net(1)
|
|
—
|
|
|
—
|
|
Sold and closed(2)
|
|
(2
|
)
|
|
(1
|
)
|
|
Sold and closed(2)
|
|
—
|
|
|
(1
|
)
|
Closed(3)
|
|
(1
|
)
|
|
—
|
|
|
APAC JV operated, net
|
|
—
|
|
|
1
|
|
Number of centers at end of period
|
|
2,689
|
|
|
2,539
|
|
|
Number of centers at end of period
|
|
243
|
|
|
241
|
|
|
(1)
|
Represents dialysis centers that we manage or provide administrative services for but in which we own a noncontrolling equity investment or which are wholly-owned by third parties.
|
(2)
|
Represents dialysis centers that were sold and/or closed for which patients were not retained.
|
(3)
|
Represents dialysis centers that were closed for which the majority of patients were retained and transferred to one of our other existing outpatient dialysis centers.
|
|
Remainder of
2019 |
|
1-3
years |
|
4-5
years |
|
After
5 years |
|
Total
|
||||||||||
Potential cash requirements under other commitments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Letters of credit
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79
|
|
Noncontrolling interests subject to put provisions
|
623
|
|
|
269
|
|
|
115
|
|
|
136
|
|
|
1,143
|
|
|||||
Non-owned and minority owned put provisions
|
2
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Operating capital advances
|
1
|
|
|
2
|
|
|
1
|
|
|
3
|
|
|
7
|
|
|||||
Purchase commitments
|
274
|
|
|
1,026
|
|
|
—
|
|
|
—
|
|
|
1,300
|
|
|||||
|
$
|
979
|
|
|
$
|
1,325
|
|
|
$
|
116
|
|
|
$
|
139
|
|
|
$
|
2,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest rate |
|
|
|||||||||||||||||||
|
Expected maturity date
|
|
|
|
|
|
|
Fair
Value |
||||||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
|
|
|||||||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Long term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Fixed rate
|
$
|
31
|
|
|
$
|
33
|
|
|
$
|
30
|
|
|
$
|
1,280
|
|
|
$
|
41
|
|
|
$
|
1,777
|
|
|
$
|
1,701
|
|
|
$
|
4,893
|
|
|
5.29
|
%
|
|
$
|
4,833
|
|
Variable rate
|
$
|
4,623
|
|
|
$
|
51
|
|
|
$
|
910
|
|
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
5,619
|
|
|
5.01
|
%
|
|
$
|
5,640
|
|
|
Notional Amount
|
|
Contract maturity date
|
|
|
|
|
|
Fair
Value |
|||||||||||||||||||||||
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Receive variable
|
|
|||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Cap agreements
|
$
|
3,500
|
|
|
$
|
—
|
|
|
$
|
3,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
LIBOR above 3.5%
|
|
$
|
—
|
|
•
|
Suspension or termination of our participation in government payment programs;
|
•
|
Refunds of amounts received in violation of law or applicable payment program requirements dating back to the applicable statute of limitation periods;
|
•
|
Loss of required government certifications or exclusion from government payment programs;
|
•
|
Loss of licenses required to operate healthcare facilities or administer pharmaceuticals in the states in which we operate;
|
•
|
Reductions in payment rates or coverage for dialysis and ancillary services and pharmaceuticals;
|
•
|
Criminal or civil liability, fines, damages or monetary penalties for violations of healthcare fraud and abuse laws, including the federal Anti-Kickback Statute, Civil Monetary Penalties Law, Stark Law and FCA, or other failures to meet regulatory requirements;
|
•
|
Enforcement actions by governmental agencies and/or state law 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, among other things;
|
•
|
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 negatively impact our business relationships, affect our ability to attract and retain patients and physicians, 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, financial condition and cash flows, 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, or interpretation or enforcement thereof;
|
•
|
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 agents or intermediaries from making improper payments to foreign officials or any third party 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 our ability to bill for treatments or other drugs and services or other rules that may impact reimbursement. 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 and business needs, 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-
|
•
|
Risk that failure to adequately develop and maintain our clinical systems or failure of our clinical systems to operate effectively could have a material adverse effect on our business, results of operations, financial condition and cash flows. For example, 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, if our clinical systems fail to accurately capture the data we report to CMS or we otherwise have data integrity issues with respect to the reported information, we might be over-reimbursed by the government, which could subject us to 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 and quantified, or (b) the date any corresponding cost report is due, if applicable. An overpayment impermissibly retained under this statute could, among other things, subject us to liability under the FCA, exclusion from participation in the federal healthcare programs, and penalties under the federal Civil Monetary Penalty statute and could adversely impact our reputation.
|
•
|
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 2019, 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.
|
Exhibit
|
|
|
Number
|
|
|
|
|
|
|
Employment Agreement between Javier J. Rodriguez and DaVita Inc., dated as of April 29, 2019. (1)*
|
|
|
|
|
|
Executive Chairman Agreement between Kent J. Thiry and DaVita Inc., dated as of April 29, 2019. (2)*
|
|
|
|
|
|
Non-Employee Director Compensation Policy. *ü
|
|
|
|
|
|
Certification of the Chief Executive Officer, dated May 7, 2019, 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 7, 2019, 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 7, 2019, 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 7, 2019, 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 - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
*
|
Management contract or executive compensation plan or arrangement.
|
ü
|
Filed or furnished herewith.
|
(1)
|
Filed on April 29, 2019 as Exhibit 10.1 to the Company's Current Report on Form 8-K.
|
(2)
|
Filed on April 29, 2019 as Exhibit 10.2 to the Company's Current Report on Form 8-K.
|
|
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.
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•
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to pay differentially higher compensation for higher levels of work, responsibility and performance;
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•
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to provide a compensation structure that will attract highly competent candidates; and
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•
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to provide a significant portion of compensation in the form of equity-based awards to align non-employee director compensation with increases in long-term shareholder value.
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/S/ KENT J. THIRY
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Kent J. Thiry
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Chief Executive Officer
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/S/ Joel Ackerman
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Joel Ackerman
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Chief Financial Officer and Treasurer
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1.
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The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/S/ KENT J. THIRY
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Kent J. Thiry
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Chief Executive Officer
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May 7, 2019
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1.
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The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/S/ Joel Ackerman
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Joel Ackerman
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Chief Financial Officer and Treasurer
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May 7, 2019
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