Condensed consolidating financial statements

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed consolidating financial statements

Condensed consolidating financial statements

The following information is presented in accordance with Rule 3-10 of Regulation S-X. The operating and investing activities of the separate legal entities included in the Company’s condensed consolidated financial statements are fully interdependent and integrated. Revenues and operating expenses of the separate legal entities include intercompany charges for management and other administrative services. The Company’s senior notes are guaranteed by a substantial majority of its domestic subsidiaries as measured by revenue, income and assets. The subsidiary guarantors have guaranteed the senior notes on a joint and several basis. However, a subsidiary guarantor will be released from its obligations under its guarantee of the senior notes and the indentures governing the senior notes if, in general, there is a sale or other disposition of all or substantially all of the assets of such subsidiary guarantor, including by merger or consolidation, or a sale or other disposition of all of the equity interests in such subsidiary guarantor held by the Company and its restricted subsidiaries, as defined in the indentures; such subsidiary guarantor is designated by the Company as an unrestricted subsidiary, as defined in the indentures, or otherwise ceases to be a restricted subsidiary of the Company, in each case in accordance with the indentures; or such subsidiary guarantor no longer guarantees any other indebtedness, as defined in the indentures, of the Company or any of its restricted subsidiaries, except for guarantees that are contemporaneously released. The senior notes are not guaranteed by certain of the Company’s domestic subsidiaries, any of the Company’s foreign subsidiaries, or any entities that do not constitute subsidiaries within the meaning of the indentures, such as corporations in which the Company holds capital stock with less than a majority of the voting power, joint ventures and partnerships in which the Company holds less than a majority of the equity or voting interests, non-owned entities and third parties.

Condensed Consolidating Statements of Operations

	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

Condensed Consolidating Statements of Comprehensive Income

			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

Condensed Consolidating Balance Sheets

			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

Condensed Consolidating Statements of Cash Flows

				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