false--12-31Q12020000092706624637300000.0010.00145000000045000000012584285312585717812584285312180488081922000846430001241880001177950001301440001243550000.0010.001500000050000000068842000396956600040921660000.5040522980 0000927066 2020-01-01 2020-03-31 0000927066 2020-05-01 0000927066 2019-01-01 2019-03-31 0000927066 2019-12-31 0000927066 2020-03-31 0000927066 us-gaap:SegmentContinuingOperationsMember 2020-01-01 2020-03-31 0000927066 2019-03-31 0000927066 2018-12-31 0000927066 us-gaap:SegmentDiscontinuedOperationsMember 2020-01-01 2020-03-31 0000927066 us-gaap:SegmentContinuingOperationsMember 2019-01-01 2019-03-31 0000927066 us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-03-31 0000927066 us-gaap:ParentMember 2019-01-01 2019-03-31 0000927066 us-gaap:StockAppreciationRightsSARSMember us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000927066 dva:TemporaryEquityRedeemableNoncontrollingInterestsMember 2019-01-01 2019-03-31 0000927066 us-gaap:NoncontrollingInterestMember 2018-12-31 0000927066 us-gaap:CommonStockMember 2019-03-31 0000927066 us-gaap:ParentMember 2018-12-31 0000927066 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000927066 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000927066 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000927066 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000927066 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000927066 us-gaap:NoncontrollingInterestMember 2019-03-31 0000927066 us-gaap:TreasuryStockMember 2018-12-31 0000927066 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ParentMember 2019-01-01 2019-03-31 0000927066 dva:TemporaryEquityRedeemableNoncontrollingInterestsMember 2019-03-31 0000927066 us-gaap:ParentMember 2019-03-31 0000927066 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000927066 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000927066 us-gaap:TreasuryStockMember 2019-03-31 0000927066 us-gaap:RestrictedStockUnitsRSUMember us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000927066 us-gaap:CommonStockMember 2018-12-31 0000927066 dva:TemporaryEquityRedeemableNoncontrollingInterestsMember 2018-12-31 0000927066 us-gaap:RetainedEarningsMember 2018-12-31 0000927066 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000927066 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000927066 us-gaap:RetainedEarningsMember 2019-03-31 0000927066 us-gaap:StockAppreciationRightsSARSMember us-gaap:ParentMember 2019-01-01 2019-03-31 0000927066 us-gaap:CommonStockMember 2020-03-31 0000927066 dva:TemporaryEquityRedeemableNoncontrollingInterestsMember 2020-01-01 2020-03-31 0000927066 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000927066 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000927066 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000927066 us-gaap:RetainedEarningsMember 2019-12-31 0000927066 us-gaap:CommonStockMember 2019-12-31 0000927066 us-gaap:ParentMember 2020-01-01 2020-03-31 0000927066 dva:TemporaryEquityRedeemableNoncontrollingInterestsMember 2019-12-31 0000927066 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000927066 us-gaap:ParentMember 2020-03-31 0000927066 us-gaap:TreasuryStockMember 2019-12-31 0000927066 us-gaap:StockAppreciationRightsSARSMember us-gaap:ParentMember 2020-01-01 2020-03-31 0000927066 us-gaap:RetainedEarningsMember 2020-03-31 0000927066 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000927066 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ParentMember 2020-01-01 2020-03-31 0000927066 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0000927066 us-gaap:RestrictedStockUnitsRSUMember us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000927066 us-gaap:ParentMember 2019-12-31 0000927066 us-gaap:StockAppreciationRightsSARSMember us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000927066 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000927066 us-gaap:StockAppreciationRightsSARSMember us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000927066 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0000927066 us-gaap:NoncontrollingInterestMember 2020-03-31 0000927066 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000927066 us-gaap:TreasuryStockMember 2020-03-31 0000927066 us-gaap:NoncontrollingInterestMember 2019-12-31 0000927066 dva:TemporaryEquityRedeemableNoncontrollingInterestsMember 2020-03-31 0000927066 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000927066 dva:OtherGovernmentPayorsMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 dva:MedicareandMedicareAdvantageMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:MedicareandMedicareAdvantageMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 dva:MedicaidandManagedMedicaidMember 2019-01-01 2019-03-31 0000927066 dva:CommercialPayorsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:MedicaidandManagedMedicaidMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 dva:MedicareandMedicareAdvantageMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 dva:OtherSourcesofRevenueMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 dva:CommercialPayorsMember 2020-01-01 2020-03-31 0000927066 dva:CommercialPayorsMember 2019-01-01 2019-03-31 0000927066 dva:MedicaidandManagedMedicaidMember 2020-01-01 2020-03-31 0000927066 dva:OtherGovernmentPayorsMember 2019-01-01 2019-03-31 0000927066 us-gaap:IntersegmentEliminationMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 dva:MedicaidandManagedMedicaidMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:CommercialPayorsMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 dva:OtherGovernmentPayorsMember 2020-01-01 2020-03-31 0000927066 dva:MedicareandMedicareAdvantageMember 2019-01-01 2019-03-31 0000927066 dva:OtherSourcesofRevenueMember 2019-01-01 2019-03-31 0000927066 us-gaap:IntersegmentEliminationMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 dva:MedicaidandManagedMedicaidMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 dva:OtherGovernmentPayorsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:CommercialPayorsMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 dva:MedicareandMedicareAdvantageMember 2020-01-01 2020-03-31 0000927066 dva:OtherSourcesofRevenueMember 2020-01-01 2020-03-31 0000927066 dva:OtherGovernmentPayorsMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:OtherSourcesofRevenueMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 us-gaap:IntersegmentEliminationMember 2020-01-01 2020-03-31 0000927066 dva:MedicaidandManagedMedicaidMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 dva:MedicareandMedicareAdvantageMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 us-gaap:IntersegmentEliminationMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 dva:CommercialPayorsMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 dva:OtherSourcesofRevenueMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:OtherGovernmentPayorsMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 us-gaap:IntersegmentEliminationMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 dva:OtherSourcesofRevenueMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 us-gaap:IntersegmentEliminationMember 2019-01-01 2019-03-31 0000927066 dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 dva:CertificatesOfDepositCommercialPaperAndMoneyMarketFundsMember 2020-03-31 0000927066 us-gaap:OtherLongTermInvestmentsMember 2019-12-31 0000927066 dva:MutualFundsAndCommonStockMember 2020-03-31 0000927066 dva:MutualFundsAndCommonStockMember 2019-12-31 0000927066 us-gaap:OtherLongTermInvestmentsMember 2020-03-31 0000927066 us-gaap:ShortTermInvestmentsMember 2019-12-31 0000927066 dva:CertificatesOfDepositCommercialPaperAndMoneyMarketFundsMember 2019-12-31 0000927066 us-gaap:ShortTermInvestmentsMember 2020-03-31 0000927066 dva:MutualFundsAndCommonStockMember 2019-01-01 2019-03-31 0000927066 dva:MutualFundsAndCommonStockMember 2020-01-01 2020-03-31 0000927066 dva:ParentCompanyAndRestrictedSubsidiariesMember srt:MinimumMember 2020-03-31 0000927066 dva:DeconsolidatedNoncontrollingEntityMember 2020-03-31 0000927066 dva:ParentCompanyAndRestrictedSubsidiariesMember 2020-03-31 0000927066 dva:ParentCompanyAndRestrictedSubsidiariesMember srt:MaximumMember 2020-03-31 0000927066 dva:DeconsolidatedNoncontrollingEntityMember 2019-12-31 0000927066 us-gaap:EquitySecuritiesMember 2020-03-31 0000927066 us-gaap:OtherOwnershipInterestMember 2019-12-31 0000927066 us-gaap:EquitySecuritiesMember 2019-12-31 0000927066 dva:DeconsolidatedNoncontrollingEntityMember 2020-03-31 0000927066 us-gaap:OtherOwnershipInterestMember 2020-03-31 0000927066 dva:OtherReportingUnitsMember 2020-01-01 2020-03-31 0000927066 country:DE dva:KidneyCareMember 2019-01-01 2019-03-31 0000927066 us-gaap:AllOtherSegmentsMember 2020-03-31 0000927066 2019-01-01 2019-12-31 0000927066 dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-12-31 0000927066 us-gaap:AllOtherSegmentsMember 2019-12-31 0000927066 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0000927066 dva:USDialysisAndRelatedLabServicesMember 2018-12-31 0000927066 dva:USDialysisAndRelatedLabServicesMember 2020-03-31 0000927066 dva:USDialysisAndRelatedLabServicesMember 2019-12-31 0000927066 us-gaap:AllOtherSegmentsMember 2018-12-31 0000927066 dva:InterestRateCapAgreementsEffectiveJuneTwentyNineTwoThousandEighteenMember 2020-01-01 2020-03-31 0000927066 us-gaap:OtherNoncurrentAssetsMember dva:InterestRateCapAgreementsEffectiveJune302019Member 2019-12-31 0000927066 srt:MaximumMember dva:TermLoanFacilityMember dva:InterestRateCapAgreementsEffectiveJune302019Member 2020-03-31 0000927066 srt:MaximumMember dva:TermLoanFacilityMember dva:InterestRateCapAgreementsEffectiveJuneTwentyNineTwoThousandEighteenMember 2020-01-01 2020-03-31 0000927066 dva:InterestRateCapAgreementsEffectiveJune302019Member us-gaap:CashFlowHedgingMember dva:DebtExpenseMember 2020-01-01 2020-03-31 0000927066 srt:MaximumMember dva:TermLoanFacilityMember dva:InterestRateCapAgreementsEffectiveJuneTwentyNineTwoThousandEighteenMember 2020-03-31 0000927066 dva:InterestRateCapAgreementsEffectiveJune302019Member 2020-01-01 2020-03-31 0000927066 us-gaap:OtherNoncurrentAssetsMember dva:InterestRateCapAgreementsEffectiveJuneTwentyNineTwoThousandEighteenMember 2019-12-31 0000927066 dva:InterestRateCapAgreementsEffectiveJuneTwentyNineTwoThousandEighteenMember us-gaap:CashFlowHedgingMember dva:DebtExpenseMember 2020-01-01 2020-03-31 0000927066 us-gaap:OtherNoncurrentAssetsMember dva:InterestRateCapAgreementsEffectiveJune302019Member 2020-03-31 0000927066 srt:MaximumMember dva:TermLoanFacilityMember dva:InterestRateCapAgreementsEffectiveJune302019Member 2020-01-01 2020-03-31 0000927066 us-gaap:OtherNoncurrentAssetsMember dva:InterestRateCapAgreementsEffectiveJuneTwentyNineTwoThousandEighteenMember 2020-03-31 0000927066 us-gaap:InterestRateCapMember us-gaap:CashFlowHedgingMember dva:DebtExpenseMember 2019-01-01 2019-03-31 0000927066 us-gaap:CashFlowHedgingMember 2019-01-01 2019-03-31 0000927066 us-gaap:CashFlowHedgingMember dva:IncomeTaxExpenseBenefitMember 2019-01-01 2019-03-31 0000927066 us-gaap:CashFlowHedgingMember 2020-01-01 2020-03-31 0000927066 us-gaap:InterestRateCapMember us-gaap:CashFlowHedgingMember dva:DebtExpenseMember 2020-01-01 2020-03-31 0000927066 us-gaap:CashFlowHedgingMember dva:IncomeTaxExpenseBenefitMember 2020-01-01 2020-03-31 0000927066 dva:SeniorNotesFivePointZeroPercentDueTwentyTwentyFiveMember 2019-12-31 0000927066 dva:TermLoanAMember 2020-03-31 0000927066 us-gaap:RevolvingCreditFacilityMember 2020-03-31 0000927066 us-gaap:NotesPayableOtherPayablesMember 2019-12-31 0000927066 dva:TermLoanBMember 2020-03-31 0000927066 dva:SeniorNotesFivePointOneTwoFivePercentDueTwentyTwentyFourMember 2020-03-31 0000927066 us-gaap:NotesPayableOtherPayablesMember 2020-03-31 0000927066 dva:TermLoanB1Member 2020-03-31 0000927066 dva:SeniorNotesFivePointOneTwoFivePercentDueTwentyTwentyFourMember 2019-12-31 0000927066 dva:SeniorNotesFivePointOneTwoFivePercentDueTwentyTwentyFourMember 2020-01-01 2020-03-31 0000927066 dva:FinanceLeaseMember 2020-03-31 0000927066 dva:TermLoanB1Member 2019-12-31 0000927066 dva:TermLoanAMember 2020-01-01 2020-03-31 0000927066 dva:SeniorNotesFivePointZeroPercentDueTwentyTwentyFiveMember 2020-01-01 2020-03-31 0000927066 dva:TermLoanAMember 2019-12-31 0000927066 dva:SeniorNotesFivePointZeroPercentDueTwentyTwentyFiveMember 2020-03-31 0000927066 us-gaap:RevolvingCreditFacilityMember 2020-01-01 2020-03-31 0000927066 dva:TermLoanBMember 2020-01-01 2020-03-31 0000927066 dva:TermLoanBMember 2019-12-31 0000927066 dva:TermLoanB1Member 2020-01-01 2020-03-31 0000927066 dva:FinanceLeaseMember 2019-12-31 0000927066 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0000927066 dva:FinanceLeaseMember 2020-01-01 2020-03-31 0000927066 dva:TermLoanB1Member 2020-02-13 2020-02-13 0000927066 us-gaap:NotesPayableOtherPayablesMember 2020-01-01 2020-03-31 0000927066 dva:TermLoanB1Member 2020-02-13 0000927066 dva:SeniorSecuredCreditFacilitiesMember 2019-12-31 0000927066 dva:TermLoanAAndRevolverSubjectToUncappedPortionOfVariabilityOfLIBORMember 2020-03-31 0000927066 dva:TermLoanB1Member us-gaap:LondonInterbankOfferedRateLIBORMember 2020-02-13 2020-02-13 0000927066 us-gaap:SeniorNotesMember 2020-03-31 0000927066 dva:SeniorSecuredCreditFacilitiesMember 2020-03-31 0000927066 us-gaap:SeniorNotesMember 2019-12-31 0000927066 srt:MaximumMember 2020-03-31 0000927066 srt:MinimumMember 2020-03-31 0000927066 dva:StockholderDerivativeLitigationMember 2017-08-15 2017-08-15 0000927066 dva:USAttorneyPrescriptionDrugInvestigationMember 2017-12-01 2017-12-31 0000927066 dva:USAttorneyPrescriptionDrugInvestigationMember dva:CashPaidForPortionPreviouslyRefundedMember 2017-12-01 2017-12-31 0000927066 dva:USAttorneyPrescriptionDrugInvestigationMember dva:IncrementalCashPortionMember 2017-12-01 2017-12-31 0000927066 dva:CommitmentsToProvideOperatingCapitalMember 2020-03-31 0000927066 dva:PremiumPricedStockSettledStockAppreciationRightsMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2020-01-23 2020-01-23 0000927066 us-gaap:StockAppreciationRightsSARSMember 2020-01-01 2020-03-31 0000927066 dva:PremiumPricedStockSettledStockAppreciationRightsMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-01-23 2020-01-23 0000927066 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0000927066 dva:PremiumPricedStockSettledStockAppreciationRightsMember 2020-01-23 2020-01-23 0000927066 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-03-31 0000927066 dva:PremiumPricedStockSettledStockAppreciationRightsMember 2020-01-23 0000927066 dva:PremiumPricedStockSettledStockAppreciationRightsMember 2019-11-04 2019-11-04 0000927066 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-03-31 0000927066 us-gaap:SubsequentEventMember 2020-05-04 0000927066 2019-11-04 0000927066 dva:OpenMarketPurchasesMember 2019-01-01 2019-03-31 0000927066 dva:OpenMarketPurchasesMember 2020-01-01 2020-03-31 0000927066 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2020-01-01 2020-03-31 0000927066 us-gaap:SubsequentEventMember 2020-04-01 2020-05-04 0000927066 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000927066 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000927066 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000927066 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000927066 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000927066 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000927066 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000927066 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000927066 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000927066 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000927066 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000927066 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000927066 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000927066 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000927066 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000927066 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000927066 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000927066 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000927066 us-gaap:OtherNoncurrentLiabilitiesMember 2020-03-31 0000927066 dva:OtherAccruedLiabilitiesMember 2020-03-31 0000927066 us-gaap:NoncompeteAgreementsMember 2020-01-01 2020-03-31 0000927066 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember dva:ForeignDialysisCentersMember 2020-01-01 2020-03-31 0000927066 srt:MinimumMember dva:EBITDAOperatingIncomePerformanceTargetsOrQualityMarginsMember dva:OtherCompaniesMember 2020-01-01 2020-03-31 0000927066 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember 2020-03-31 0000927066 us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 srt:MaximumMember dva:EBITDAOperatingIncomePerformanceTargetsOrQualityMarginsMember dva:OtherCompaniesMember 2020-01-01 2020-03-31 0000927066 srt:MaximumMember 2020-01-01 2020-03-31 0000927066 dva:OtherCompaniesMember 2020-03-31 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember 2020-01-01 2020-03-31 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember 2019-01-01 2019-03-31 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember dva:CoronavirusAidReliefAndEconomicSecurityActAdditionalTaxBenefitMember 2019-01-01 2019-03-31 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember dva:CoronavirusAidReliefAndEconomicSecurityActAdditionalTaxBenefitMember 2020-01-01 2020-03-31 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember 2017-12-05 2017-12-05 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember 2019-01-01 2019-12-31 0000927066 us-gaap:DiscontinuedOperationsHeldforsaleMember dva:DaVitaMedicalGroupMember 2019-06-19 2019-06-19 0000927066 2019-06-19 2019-06-19 0000927066 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2020-03-31 0000927066 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:InterestRateCapMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 us-gaap:InterestRateCapMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000927066 dva:DaVitaMedicalGroupMember 2019-01-01 2019-03-31 0000927066 dva:DaVitaMedicalGroupMember 2020-01-01 2020-03-31 0000927066 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2020-01-01 2020-03-31 0000927066 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-03-31 0000927066 us-gaap:OperatingSegmentsMember dva:USDialysisAndRelatedLabServicesMember 2019-01-01 2019-03-31 0000927066 us-gaap:OperatingSegmentsMember dva:USDialysisAndRelatedLabServicesMember us-gaap:IntersubsegmentEliminationsMember 2020-01-01 2020-03-31 0000927066 us-gaap:OperatingSegmentsMember dva:USDialysisAndRelatedLabServicesMember 2020-01-01 2020-03-31 0000927066 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember us-gaap:IntersubsegmentEliminationsMember 2020-01-01 2020-03-31 0000927066 us-gaap:OperatingSegmentsMember dva:USDialysisAndRelatedLabServicesMember us-gaap:IntersubsegmentEliminationsMember 2019-01-01 2019-03-31 0000927066 us-gaap:OperatingSegmentsMember dva:USDialysisAndRelatedLabServicesMember dva:ExternalSourcesMember 2019-01-01 2019-03-31 0000927066 us-gaap:OperatingSegmentsMember us-gaap:AllOtherSegmentsMember us-gaap:IntersubsegmentEliminationsMember 2019-01-01 2019-03-31 0000927066 us-gaap:OperatingSegmentsMember dva:USDialysisAndRelatedLabServicesMember dva:ExternalSourcesMember 2020-01-01 2020-03-31 0000927066 us-gaap:OperatingSegmentsMember 2019-01-01 2019-03-31 0000927066 us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2020-01-01 2020-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2020-01-01 2020-03-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2020-01-01 2020-03-31 0000927066 srt:ConsolidationEliminationsMember 2020-01-01 2020-03-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-01-01 2019-03-31 0000927066 srt:ConsolidationEliminationsMember 2019-01-01 2019-03-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2019-01-01 2019-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-01-01 2019-03-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2018-12-31 0000927066 srt:ConsolidationEliminationsMember us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2019-03-31 0000927066 srt:ConsolidationEliminationsMember us-gaap:SegmentContinuingOperationsMember 2019-01-01 2019-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember us-gaap:SegmentContinuingOperationsMember 2019-01-01 2019-03-31 0000927066 srt:ConsolidationEliminationsMember 2018-12-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-12-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember us-gaap:SegmentContinuingOperationsMember 2019-01-01 2019-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-12-31 0000927066 srt:ConsolidationEliminationsMember 2019-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember us-gaap:SegmentDiscontinuedOperationsMember 2019-01-01 2019-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember us-gaap:SegmentContinuingOperationsMember 2019-01-01 2019-03-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2020-03-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2020-03-31 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2020-03-31 0000927066 srt:ConsolidationEliminationsMember 2020-03-31 0000927066 dva:NewCreditAgreementMember 2019-08-12 0000927066 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-12-31 0000927066 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-12-31 0000927066 srt:ConsolidationEliminationsMember 2019-12-31 0000927066 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2019-12-31 0000927066 us-gaap:SubsequentEventMember 2020-04-01 2020-04-30 iso4217:USD xbrli:shares xbrli:pure dva:segment iso4217:USD xbrli:shares dva:clinic



 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
FORM 10-Q
 
 
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 1-14106
 
 
 
 
 
logoa29.jpg
DAVITA INC.
Delaware
 
51-0354549
(State of incorporation)
 
(I.R.S. Employer Identification No.)
2000 16th Street
Denver,
CO
80202
Telephone number (720631-2100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
 
Trading symbol(s):
 
Name of each exchange on which registered:
Common Stock, $0.001 par value
 
DVA
 
NYSE
 
 
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
 
 
 
 
Non-accelerated filer
☐ 
Smaller reporting company
 
 
 
 
Emerging growth company
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes      No  ☒
As of May 1, 2020, the number of shares of the Registrant’s common stock outstanding was approximately 121.8 million shares.
 
 
 
 
 




DAVITA INC.
INDEX

 
 
 
 
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 6.
 
 
 
 
 
 
Note: Items 3, 4 and 5 of Part II are omitted because they are not applicable.
 

i




DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands, except per share data)
 
Three months ended
March 31,
 
2020
 
2019
Dialysis patient service revenues
$
2,713,281

 
$
2,629,689

Other revenues
127,956

 
113,423

Total revenues
2,841,237

 
2,743,112

Operating expenses and charges:
 

 
 

Patient care costs
1,975,449

 
1,964,935

General and administrative
263,576

 
250,813

Depreciation and amortization
154,679

 
148,528

Equity investment income
(17,843
)
 
(2,708
)
Goodwill impairment charges

 
41,037

Total operating expenses and charges
2,375,861

 
2,402,605

Operating income
465,376

 
340,507

Debt expense
(88,603
)
 
(131,519
)
Debt refinancing charges
(2,948
)
 

Other (loss) income, net
(4,350
)
 
6,940

Income from continuing operations before income taxes
369,475

 
215,928

Income tax expense
91,560

 
56,746

Net income from continuing operations
277,915

 
159,182

Net income from discontinued operations, net of tax
9,980

 
30,305

Net income
287,895

 
189,487

Less: Net income attributable to noncontrolling interests
(48,302
)
 
(40,198
)
Net income attributable to DaVita Inc.
$
239,593

 
$
149,289

Earnings per share attributable to DaVita Inc.:
 

 
 

Basic net income from continuing operations per share
$
1.84

 
$
0.72

Basic net income per share
$
1.92

 
$
0.90

Diluted net income from continuing operations per share
$
1.81

 
$
0.72

Diluted net income per share
$
1.89

 
$
0.90

Weighted average shares for earnings per share:
 
 
 
Basic
124,901,671

 
166,387,958

Diluted
126,894,847

 
166,780,657

Amounts attributable to DaVita Inc.:
 
 
 
Net income from continuing operations
$
229,613

 
$
120,254

Net income from discontinued operations
9,980

 
29,035

Net income attributable to DaVita Inc.
$
239,593

 
$
149,289

 
See notes to condensed consolidated financial statements.

1



DAVITA INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands)
 
 
Three months ended
March 31,
 
2020
 
2019
Net income
$
287,895

 
$
189,487

Other comprehensive income, net of tax:
 

 
 

Unrealized losses on interest rate cap agreements:
 

 
 

Unrealized losses
(13,018
)
 
(580
)
Reclassifications of net realized losses into net income
1,623

 
1,606

Unrealized losses on foreign currency translation:
 
 
 

Foreign currency translation adjustments
(81,632
)
 
(13,653
)
Other comprehensive loss
(93,027
)
 
(12,627
)
Total comprehensive income
194,868

 
176,860

Less: Comprehensive income attributable to noncontrolling interests
(48,302
)
 
(40,198
)
Comprehensive income attributable to DaVita Inc.
$
146,566

 
$
136,662

 See notes to condensed consolidated financial statements.


2



DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands, except per share data)
 
March 31,
2020
 
December 31,
2019
ASSETS
 

 
 

Cash and cash equivalents
$
1,381,764

 
$
1,102,372

Restricted cash and equivalents
106,724

 
106,346

Short-term investments
9,376

 
11,572

Accounts receivable
1,820,132

 
1,795,598

Inventories
95,685

 
97,949

Other receivables
519,081

 
489,695

Prepaid and other current assets
59,853

 
66,866

Income tax receivable
31,324

 
19,772

Total current assets
4,023,939

 
3,690,170

Property and equipment, net of accumulated depreciation of $4,092,166 and $3,969,566, respectively
3,445,423

 
3,473,384

Operating lease right-of-use assets
2,847,776

 
2,830,047

Intangible assets, net of accumulated amortization of $84,643 and $81,922, respectively
117,953

 
135,684

Equity method and other investments
254,499

 
241,983

Long-term investments
34,657

 
36,519

Other long-term assets
94,030

 
115,972

Goodwill
6,778,023

 
6,787,635

 
$
17,596,300

 
$
17,311,394

LIABILITIES AND EQUITY
 

 
 

Accounts payable
$
340,092

 
$
403,840

Other liabilities
757,784

 
756,174

Accrued compensation and benefits
596,999

 
695,052

Current portion of operating lease liabilities
356,033

 
343,912

Current portion of long-term debt
146,318

 
130,708

Income tax payable
23,520

 
42,412

Total current liabilities
2,220,746

 
2,372,098

Long-term operating lease liabilities
2,734,370

 
2,723,800

Long-term debt
8,442,136

 
7,977,526

Other long-term liabilities
161,940

 
160,809

Deferred income taxes
675,728

 
577,543

Total liabilities
14,234,920

 
13,811,776

Commitments and contingencies
 
 
 
Noncontrolling interests subject to put provisions
1,228,036

 
1,180,376

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; 125,857,178 and 121,804,880
shares issued and outstanding at M
arch 31, 2020, respectively and 125,842,853 shares issued and
outstanding at December 31, 2019)
126

 
126

Additional paid-in capital
720,053

 
749,043

Retained earnings
1,671,331

 
1,431,738

Treasury stock (4,052,298 and zero shares, respectively)
(303,139
)
 

Accumulated other comprehensive loss
(140,525
)
 
(47,498
)
Total DaVita Inc. shareholders' equity
1,947,846

 
2,133,409

Noncontrolling interests not subject to put provisions
185,498

 
185,833

Total equity
2,133,344

 
2,319,242

 
$
17,596,300

 
$
17,311,394

See notes to condensed consolidated financial statements.

3



DAVITA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
 
Three months ended
March 31,
 
2020
 
2019
Cash flows from operating activities:
 

 
 

Net income
$
287,895

 
$
189,487

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 

Depreciation and amortization
154,679

 
148,528

Impairment charges

 
41,037

Debt refinancing charges
884

 

Stock-based compensation expense
19,870

 
12,110

Deferred income taxes
103,301

 
41,372

Equity investment loss, net
(9,482
)
 
(337
)
Other non-cash charges, net
5,055

 
1,720

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
Accounts receivable
(32,966
)
 
(132,292
)
Inventories
1,835

 
3,324

Other receivables and other current assets
(24,965
)
 
1,199

Other long-term assets
2,673

 
(1,997
)
Accounts payable
(24,045
)
 
(38,537
)
Accrued compensation and benefits
(96,428
)
 
(173,583
)
Other current liabilities
3,982

 
17,236

Income taxes
(32,616
)
 
32,502

Other long-term liabilities
709

 
(465
)
Net cash provided by operating activities
360,381

 
141,304

Cash flows from investing activities:
 
 
 

Additions of property and equipment
(154,942
)
 
(198,878
)
Acquisitions
(34,107
)
 
(11,274
)
Proceeds from asset and business sales
31,518

 
13,903

Purchase of debt investments held-to-maturity
(5,049
)
 
(209
)
Purchase of other debt and equity investments
(2,633
)
 
(3,290
)
Proceeds from debt investments held-to-maturity
5,049

 

Proceeds from sale of other debt and equity investments
3,268

 
3,302

Purchase of equity method investments
(6,174
)
 
(4,067
)
Distributions from equity method investments
445

 
155

Net cash used in investing activities
(162,625
)
 
(200,358
)
Cash flows from financing activities:
 
 
 
Borrowings
570,779

 
17,133,464

Payments on long-term debt and other financing costs
(104,942
)
 
(16,776,267
)
Purchase of treasury stock
(321,798
)
 

Distributions to noncontrolling interests
(58,131
)
 
(44,230
)
Stock award exercises and other share issuances, net
2,397

 
1,517

Contributions from noncontrolling interests
9,387

 
18,947

Purchases of noncontrolling interests
(700
)
 
(8,480
)
Net cash provided by financing activities
96,992

 
324,951

Effect of exchange rate changes on cash, cash equivalents and restricted cash
(14,978
)
 
(921
)
Net increase in cash, cash equivalents and restricted cash
279,770

 
264,976

Less: Net increase in cash, cash equivalents and restricted cash from discontinued operations

 
118,962

Net increase in cash, cash equivalents and restricted cash from continuing operations
279,770

 
146,014

Cash, cash equivalents and restricted cash of continuing operations at beginning of the year
1,208,718

 
415,420

Cash, cash equivalents and restricted cash of continuing operations at end of the year
$
1,488,488

 
$
561,434

See notes to condensed consolidated financial statements.

4



DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(dollars and shares in thousands)
 
Three months ended March 31, 2020
 
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 December 31, 2019
$
1,180,376

 
125,843

 
$
126

 
$
749,043

 
$
1,431,738

 

 
$

 
$
(47,498
)
 
$
2,133,409

 
$
185,833

Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
Net income
32,176

 
 
 
 
 
 
 
239,593

 
 
 
 
 
 
 
239,593

 
16,126

Other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(93,027
)
 
(93,027
)
 
 
Stock purchase shares issued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Stock unit shares issued
 
 
8

 
 
 
(75
)
 
 
 
 
 
 
 
 
 
(75
)
 
 
Stock-settled SAR shares
issued
 
 
6

 
 
 
(245
)
 
 
 
 
 
 
 
 
 
(245
)
 
 
Stock-settled stock-based
compensation expense
 
 
 
 
 
 
19,797

 
 
 
 
 
 
 
 
 
19,797

 
 
Changes in noncontrolling
interest from:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions
(37,566
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
(20,565
)
Contributions
5,283

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
4,104

Partial purchases
(255
)
 
 
 
 
 
(445
)
 
 
 


 


 
 
 
(445
)
 


Fair value remeasurements
48,022

 
 
 
 
 
(48,022
)
 
 
 
 
 
 
 
 
 
(48,022
)
 
 
Purchase of treasury stock
 
 
 
 
 
 
 
 
 
 
(4,052
)
 
(303,139
)
 
 
 
(303,139
)
 


Balance at March 31, 2020
$
1,228,036

 
125,857

 
$
126

 
$
720,053

 
$
1,671,331

 
(4,052
)
 
$
(303,139
)
 
$
(140,525
)
 
$
1,947,846

 
$
185,498


 
Three months ended March 31, 2019
 
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 December 31, 2018
$
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

See notes to condensed consolidated financial statements

5


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars and shares in thousands, except per share data)


Unless otherwise indicated in this Quarterly Report on Form 10-Q "the Company", "we", "us", "our" and similar terms refer to DaVita Inc. and its consolidated subsidiaries.
1.
Condensed consolidated interim financial statements
The unaudited condensed consolidated interim financial statements included in this report are prepared by the Company. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations are reflected in these condensed consolidated interim financial statements. All significant intercompany accounts and transactions have been eliminated. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The most significant estimates and assumptions underlying these financial statements and accompanying notes generally involve revenue recognition and accounts receivable, impairments of goodwill, accounting for income taxes, certain fair value estimates and loss contingencies. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results for the full year. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (10-K). Prior year balances and amounts have been reclassified to conform to the current year presentation. The Company has evaluated subsequent events through the date these condensed consolidated interim financial statements were issued and has included all necessary adjustments and disclosures. 
2.
Revenue recognition
The following table summarizes the Company's segment revenues by primary payor source:
 
For the three months ended
 
March 31, 2020
 
March 31, 2019
 
U.S. dialysis
 
Other - Ancillary services
 
Consolidated
 
U.S. dialysis
 
Other - Ancillary services
 
Consolidated
Dialysis patient service revenues:
 
 
 
 
 
 
 
 
 
 
 
Medicare and Medicare Advantage
$
1,502,222

 
$
 
$
1,502,222

 
$
1,493,516

 
$
 
$
1,493,516

Medicaid and Managed Medicaid
171,467

 


 
171,467

 
154,190

 

 
154,190

Other government
111,910

 
94,574

 
206,484

 
106,127

 
84,475

 
190,602

Commercial
825,582

 
39,467

 
865,049

 
788,413

 
33,388

 
821,801

Other revenues:
 
 
 
 
 
 
 
 
 
 
 
Medicare and Medicare Advantage


 
98,478

 
98,478

 

 
61,700

 
61,700

Medicaid and Managed Medicaid


 
366

 
366

 

 
6

 
6

Commercial


 
10,521

 
10,521

 

 
32,619

 
32,619

Other(1)
5,442

 
17,602

 
23,044

 
4,905

 
17,750

 
22,655

Eliminations of intersegment revenues
(32,242
)
 
(4,152
)
 
(36,394
)
 
(30,641
)
 
(3,336
)
 
(33,977
)
Total
$
2,584,381

 
$
256,856

 
$
2,841,237

 
$
2,516,510

 
$
226,602

 
$
2,743,112

 
(1)
Other consists of management service fees earned in the respective Company line of business as well as other revenue from the Company's ancillary services.
The Company’s allowance for doubtful accounts related to performance obligations satisfied in years prior to January 1, 2018 was $4,422 and $8,328 as of March 31, 2020 and December 31, 2019, respectively.
There are significant uncertainties associated with estimating revenue, which generally take several years to resolve. These estimates are subject to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payor issues, as well as patient issues including, without limitation, determination of applicable primary and secondary coverage, changes in patient insurance coverage and coordination of benefits. As these estimates are refined over time, both positive and negative adjustments to revenue are recognized in the current period.

6


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


Dialysis patient service revenues. Revenues are recognized based on the Company’s estimate of the transaction price the Company expects to collect as a result of satisfying its performance obligations. Dialysis patient service revenues are recognized in the period services are provided based on these estimates. Revenues consist primarily of payments from government and commercial health plans for dialysis services provided to patients. A usual and customary fee schedule is maintained for the Company’s dialysis treatments and related lab services; however, actual collectible revenue is normally recognized at a discount from the fee schedule.
Other revenues. Other revenues consist of fees for management and administrative support services provided to outpatient dialysis centers that the Company does not own or in which the Company owns a noncontrolling interest, revenues associated with the Company's non-dialysis ancillary services, and administrative and management support services to certain non-dialysis joint ventures in which the Company owns a noncontrolling interest.
3.
Earnings per share
Basic earnings per share is calculated by dividing net income attributable to the Company by the weighted average number of common shares outstanding. Weighted average common shares outstanding include restricted stock unit awards that are no longer subject to forfeiture because the recipients have satisfied either the explicit vesting terms or retirement eligibility requirements.
Diluted earnings per share includes the dilutive effect of outstanding stock-settled stock appreciation rights and unvested stock units as computed under the treasury stock method.
The reconciliations of the numerators and denominators used to calculate basic and diluted earnings per share were as follows:
 
Three months ended
March 31,
 
2020
 
2019
 
 

 
 

Net income from continuing operations attributable to DaVita Inc.
$
229,613

 
$
120,254

Net income from discontinued operations attributable to DaVita Inc.
9,980

 
29,035

Net income attributable to DaVita Inc.
$
239,593

 
$
149,289

 
 
 
 
Weighted average shares - basic
124,902

 
166,388

Assumed incremental shares from stock plans
1,993

 
393

Weighted average shares - diluted
126,895

 
166,781

 
 
 
 
Basic net income attributable to DaVita Inc. from:
 
 
 
Continuing operations per share
$
1.84

 
$
0.72

Discontinued operations per share
0.08

 
0.18

Basic net income per share attributable to DaVita Inc.
$
1.92

 
$
0.90

 
 
 
 
Diluted net income attributable to DaVita Inc. from:
 
 
 
Continuing operations per share
$
1.81

 
$
0.72

Discontinued operations per share
0.08

 
0.18

Diluted net income per share attributable to DaVita Inc.
$
1.89

 
$
0.90

 
 
 
 
Anti-dilutive stock-settled awards excluded from calculations(1)
3,207

 
6,150

 
(1)
Shares associated with stock-settled stock appreciation rights and performance stock units were excluded from the diluted denominator calculations because they are anti-dilutive under the treasury stock method.

7


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


4.
Short-term and long-term investments
The Company’s short-term and long-term debt and equity investments consist of the following:
 
March 31, 2020
 
December 31, 2019
 
Debt
securities
 
Equity
securities
 
Total
 
Debt
securities
 
Equity
securities
 
Total
Certificates of deposit and other time deposits
$
8,190

 
$

 
$
8,190

 
$
8,140

 
$

 
$
8,140

Investments in mutual funds and common stock

 
35,843

 
35,843

 

 
39,951

 
39,951

 
$
8,190

 
$
35,843

 
$
44,033

 
$
8,140

 
$
39,951

 
$
48,091

Short-term investments
$
8,190

 
$
1,186

 
$
9,376

 
$
8,140

 
$
3,432

 
$
11,572

Long-term investments

 
34,657

 
34,657

 

 
36,519

 
36,519

 
$
8,190

 
$
35,843

 
$
44,033

 
$
8,140

 
$
39,951

 
$
48,091


Debt securities: The Company's short-term debt investments are principally bank certificates of deposit with contractual maturities longer than three months but shorter than one year. These debt securities are accounted for as held to maturity and recorded at amortized cost, which approximated their fair values at March 31, 2020 and December 31, 2019.
Equity securities: The Company's equity investments in mutual funds and common stock are held within a trust to fund existing obligations associated with several of the Company’s non-qualified deferred compensation plans. During the three months ended March 31, 2020, the Company recognized pre-tax net losses of $3,407 in other (loss) income associated with changes in the fair value of these equity securities, comprised of pre-tax realized gains of $293 and a net increase in unrealized losses of $3,700. During the three months ended March 31, 2019, the Company recognized pre-tax net gains of $1,893 in other (loss) income associated with changes in the fair value of these equity securities, comprised of pre-tax realized gains of $170 and a net increase in unrealized gains of $1,723.
5.
Equity method and other investments
The Company maintains equity method and minor adjusted cost method investments in the private securities of certain other healthcare and healthcare-related businesses. The Company classifies these investments as "Equity method and other investments" on its consolidated balance sheet.
The Company's equity method and other investments were comprised of the following:
 
March 31, 2020
 
December 31, 2019
APAC joint venture
$
123,696

 
$
116,924

Other equity method partnerships
114,355

 
114,611

Adjusted cost method investments
16,448

 
10,448

 
$
254,499

 
$
241,983


During the three months ended March 31, 2020 and 2019, the Company recognized equity investment income of $17,843 and $2,708, respectively, from equity method investments in nonconsolidated businesses. 
Equity investments in nonconsolidated businesses over which the Company maintains significant influence, but which do not have readily determinable fair values, are carried on the equity method. The Company's largest equity method investment is its ownership interest in DaVita Care Pte. Ltd. (the APAC joint venture, or APAC JV), which is 75%-owned by the Company and 25%-owned by its other noncontrolling investor. As described in Note 9 to the Company's consolidated financial statements included in the 10-K, the Company does not consolidate the APAC JV.
The Company's other equity method investments include legal entities over which the Company has significant influence but in which it does not maintain a controlling financial interest. Almost all of these are U.S. partnerships in the form of limited liability companies. The Company's ownership interests in these partnerships vary, but typically range from 30% to 50%. During the three months ended March 31, 2020 and 2019, there were no meaningful impairments or other valuation adjustments recognized on these investments.

8


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


6.
Goodwill
Changes in goodwill by reportable segments were as follows:
 
U.S. dialysis
 
Other - Ancillary services
 
Consolidated
Balance at December 31, 2018
$
6,275,004

 
$
566,956

 
$
6,841,960

Acquisitions
18,089

 
72,137

 
90,226

Impairment charges

 
(124,892
)
 
(124,892
)
Foreign currency and other adjustments
(5,993
)
 
(13,666
)
 
(19,659
)
Balance at December 31, 2019
$
6,287,100

 
$
500,535

 
$
6,787,635

Acquisitions
2,839

 
23,931

 
26,770

Divestitures
(1,549
)
 

 
(1,549
)
Foreign currency and other adjustments

 
(34,833
)
 
(34,833
)
Balance at March 31, 2020
$
6,288,390

 
$
489,633

 
$
6,778,023

 
 
 
 
 
 
Goodwill
$
6,288,390

 
$
638,117

 
$
6,926,507

Accumulated impairment charges

 
(148,484
)
 
(148,484
)
 
$
6,288,390

 
$
489,633

 
$
6,778,023


During the three months ended March 31, 2020, the Company did not recognize any goodwill impairment charges.
During the three months ended March 31, 2019, the Company recognized a $41,037 goodwill impairment charge in its Germany kidney care business. This charge resulted primarily from a change in relevant discount rates, as well as a decline in current and expected future patient census and an increase in the first quarter of 2019 and expected future costs, principally due to wage increases expected to result from recently announced legislation.
Developments, events, changes in operating performance and other changes in circumstances since the dates of the Company’s last annual goodwill impairment assessments have not caused management to believe it is more likely than not that the fair values of any of the Company's reporting units would be less than their respective carrying amounts as of March 31, 2020. Except as described in Note 10 to the 10-K, none of the Company's various other reporting units were considered at risk of significant goodwill impairment as of March 31, 2020
As dialysis treatments are an essential, life-sustaining service for patients who depend on them, the Company's operations have continued and are currently expected to continue during the novel coronavirus (COVID-19) pandemic. However, the ultimate impact of the dynamic and rapidly evolving COVID-19 pandemic on the Company will depend on future developments that are highly uncertain and difficult to predict, including among other things the severity and duration of the pandemic, the impact on our patient population, the pandemic’s impact on the U.S. and global economies and unemployment, and the timing, scope and effectiveness of governmental responses. While the Company does not currently expect a material adverse impact to its business as a result of this public health crisis, there can be no assurance that the COVID-19 pandemic will not have a material adverse impact on one or more of the Company's businesses.
7.
Income taxes
As of March 31, 2020, the Company’s total liability for unrecognized tax benefits relating to tax positions that do not meet the more-likely-than-not threshold was $68,602, of which $64,356 would impact the Company's effective tax rate if recognized. The total balance increased $388 from the December 31, 2019 balance of $68,214.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. At March 31, 2020 and December 31, 2019, the Company had approximately $15,249 and $14,428, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefits. 

9


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


8.
Long-term debt
Long-term debt was comprised of the following: 
 
 
 
 
 
 
 
As of March 31, 2020
 
March 31, 2020
 
December 31, 2019
 
Maturity date
 
Interest rate
 
Estimated fair value(1)
Senior Secured Credit Facilities:
 
 
 
 
 
 
 
 
 
Term Loan A
$
1,728,125

 
$
1,739,063

 
8/12/2024
 
LIBOR + 1.50%
 
$
1,659,000

Term Loan B-1(2)
2,736,267

 

 
8/12/2026
 
LIBOR + 1.75%
 
$
2,640,498

Term Loan B(2)

 
2,743,125

 
8/12/2026
 
LIBOR + 2.25%
 
$

Revolving line of credit
500,000