Held for Sale and Discontinued Operations

12 Months Ended

Dec. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Held for Sale and Discontinued Operations

Held for sale and discontinued operations

DaVita Medical Group (DMG)

On December 5, 2017, we entered into an equity purchase agreement to sell our DMG division to Optum, a subsidiary of UnitedHealth Group Inc., for $4,900,000 in cash, subject to net working capital and other customary adjustments. The transaction is expected to close in 2018 and is subject to regulatory approval and other customary closing conditions. As a result of this pending transaction, the DMG business has been reclassified as held for sale and its results of operations are reported as discontinued operations for all periods presented.

The following table presents the financial results of discontinued operations related to DMG:

	Year ended December 31,
	2017			2016			2015
Net revenues	$	4,676,213		$	4,113,414		$	3,837,260
Expenses	4,634,782			3,994,624			3,596,342
Goodwill and other asset impairment charges	651,659			253,000			206,169
(Loss) income from discontinued operations before taxes	(610,228		)	(134,210		)	34,749
Income tax benefit (expense)	364,856			(24,052		)	(88,216		)
Net loss from discontinued operations, net of tax	$	(245,372	)	$	(158,262	)	$	(53,467	)

As previously disclosed, the Company’s DMG business has continued to experience declining operating results in recent years, and prior to being reclassified as held for sale the Company recorded goodwill and other asset impairment charges for the DMG business of $651,659, $253,000 and $206,169 in 2017, 2016 and 2015, respectively. These charges resulted from continuing developments in the Company’s DMG business, including recent annual updates to Medicare Advantage benchmark reimbursement rates, changes in expectations concerning future government reimbursement rates and the Company’s expected ability to mitigate them, medical cost and utilization trends, commercial pricing pressures, underperformance of certain DMG business units and other market factors.

The following table presents the financial position of discontinued operations related to DMG:

	December 31, 2017		December 31, 2016
Assets
Cash and cash equivalents	$	179,668	$	238,411
Other current assets	888,697		722,545
Property and equipment, net	379,945		311,246
Intangible assets, net	1,316,550		1,454,263
Other long-term assets	116,805		94,684
Goodwill	2,879,977		3,391,942
Total assets held for sale	$	5,761,642	$	6,213,091
Total current assets held for sale	$	5,761,642	$	960,956
Total long-term assets held for sale	$	—	$	5,252,135
Liabilities
Other liabilities	$	505,734	$	460,458
Medical payables	457,040		349,506
Current portion of long-term debt	2,845		4,779
Long-term debt	35,003		2,652
Other long-term liabilities	184,448		418,723
Total liabilities held for sale	$	1,185,070	$	1,236,118
Total current liabilities held for sale	$	1,185,070	$	807,233
Total long-term liabilities held for sale	$	—	$	428,885

The following table presents cash flows of discontinued operations related to DMG:

	Year ended December 31,
	2017			2016			2015
Net cash provided by operating activities from discontinued operations	$	351,557		$	287,049		$	365,138
Net cash used in investing activities from discontinued operations	$	(232,329	)	$	(430,917	)	$	(121,893	)

DMG acquisitions

During 2017, the Company's DMG business acquired other medical businesses for a total of $135,416 in net cash, deferred purchase price of $1,038, and liabilities assumed of $10,145. During 2016, the Company acquired other medical businesses for a total of $398,748 in net cash and deferred purchase price and liabilities assumed of $7,694. During 2015, the Company acquired other medical businesses for a total of $41,918 in net cash and deferred purchase price of $944. For several of the 2017 acquisitions, certain income tax amounts are pending final evaluation and quantification of any pre-acquisition tax contingencies. In addition, valuation of medical claims liabilities and certain other working capital items relating to several of these acquisitions are pending final quantification. The assets and liabilities for all acquisitions were recorded at their estimated fair values at the dates of the acquisitions and are included in the Company’s current held for sale assets and liabilities.