XML 36 R29.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Held for Sale and Discontinued Operations
 12 Months Ended
Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Held for Sale and Discontinued Operations
DaVita Medical Group (DMG)
On June 19, 2019, the Company completed the sale of its DMG business to Optum, a subsidiary of UnitedHealth Group Inc., for an aggregate purchase price of $4,340,000, prior to certain closing and post-closing adjustments specified in the related equity purchase agreement dated as of December 5, 2017, as amended as of September 20, 2018 and as of December 11, 2018 (as amended, the equity purchase agreement).
The Company recorded a preliminary estimated pre-tax net loss of approximately $23,022 on the sale of its DMG business in 2019. This preliminary net loss is based on initial estimates of the Company's expected aggregate proceeds from the sale, net of transaction costs and obligations, as well as the estimated values of DMG net assets sold as of the closing date. These estimated net proceeds include $4,465,476 in cash received from Optum at closing, or $3,824,509 net of cash and restricted cash included in the DMG net assets sold.
The ultimate net proceeds from the DMG sale, as well as the value of its previously held for sale net assets sold, remain subject to estimate revisions and post-closing adjustments pursuant to the equity purchase agreement, which could be material. Under the equity purchase agreement, the Company also has certain indemnification obligations that could require payments to the buyer relating to the Company's previous ownership and operation of the DMG business. Potential payments under these provisions, if any, remain subject to significant uncertainties and could have a material adverse effect on the net proceeds ultimately retained by the Company or the total amount of its loss on the sale of this business.
The following table presents the financial results of discontinued operations related to DMG:
 
Year ended December 31,
 
2019
 
2018
 
2017
Net revenues
$
2,713,059

 
$
4,963,792

 
$
4,676,213

Expenses
2,543,865

 
4,962,686

 
4,634,782

Goodwill and other asset impairment charges
—

 
41,537

 
651,659

Valuation adjustment on disposal group
—

 
316,840

 
—

Income (loss) from discontinued operations before taxes
169,194

 
(357,271
)
 
(610,228
)
Loss on sale of discontinued operations before taxes
(23,022
)
 
—

 
—

Income tax expense (benefit)
40,689

 
99,768

 
(364,856
)
Net income (loss) from discontinued operations, net of tax
$
105,483

 
(457,038
)
 
$
(245,372
)

The following table presents cash flows of discontinued operations related to DMG:
 
Year ended December 31,
 
2019
 
2018
 
2017
Net cash provided by operating activities from discontinued operations
$
99,634

 
$
290,684

 
$
357,274

Net cash used in investing activities from discontinued operations
$
(43,442
)
 
$
(57,382
)
 
$
(232,329
)

DMG acquisitions
During the period from January 1, 2019 to June 18, 2019 immediately prior to the sale, the DMG business acquired two medical businesses for a total of $2,025 in net cash and deferred purchase price of $212. During 2018, the DMG business acquired other medical businesses for a total of $6,995 in net cash, deferred purchase price of $1,142. During 2017, the 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.