Segment Reporting

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment reporting

The Company's operations are comprised of its U.S. dialysis and related lab services business (its U.S. dialysis business), its various ancillary services and strategic initiatives, including its international operations (collectively, its ancillary services), and its corporate administrative support. See Note 1 "Organization" for a summary description of the Company's businesses.

On June 19, 2019, the Company completed the sale of its DMG business to Optum. As a result of this transaction, DMG's results of operations have been reported as discontinued operations for all periods presented.

The Company’s operating segments have been defined based on the separate financial information that is regularly produced and reviewed by the Company’s chief operating decision maker in making decisions about allocating resources to and assessing the financial performance of the Company’s various operating lines of business. The chief operating decision maker for the Company is its Chief Executive Officer.

The Company’s separate operating segments include its U.S. dialysis and related lab services business, each of its ancillary services and strategic initiatives, its kidney care operations in each foreign sovereign jurisdiction, its other health operations in each foreign sovereign jurisdiction, and its equity method investment in the APAC joint venture. The U.S. dialysis and related lab services business qualifies as a separately reportable segment, and all other ancillary services and strategic initiatives operating segments, including the international operating segments, have been combined and disclosed in the other segments category.

The Company’s operating segment financial information included in this report is prepared on the internal management reporting basis that the chief operating decision maker uses to allocate resources and assess the financial performance of the Company's operating segments. For internal management reporting, segment operations include direct segment operating expenses but generally exclude corporate administrative support costs, which consist primarily of indirect labor, benefits and long-term incentive compensation expenses of certain departments which provide support to all of the Company’s various operating lines of business, except to the extent that such costs are charged to and borne by certain ancillary services and strategic initiatives via internal management fees. These corporate administrative support costs are reduced by internal management fees received from the Company’s ancillary lines of business.

The following is a summary of segment revenues, segment operating margin (loss), and a reconciliation of segment operating margin to consolidated income from continuing operations before income taxes:

	Year ended December 31,
	2020		2019		2018
Segment revenues:
U.S. dialysis
Patient service revenues:
External sources	$	10,488,731	$	10,421,401	$	10,274,046
Intersegment revenues	144,091		131,199		92,950
U.S. dialysis revenues before provision	10,632,822		10,552,600		10,366,996
Provision for uncollectible accounts	(13,458)		(21,715)		(50,927)
U.S. dialysis patient service revenues	10,619,364		10,530,885		10,316,069
Other revenues(1)
External sources	39,376		30,895		19,880
Intersegment revenues	1,195		1,126		—
Total U.S. dialysis revenues	$	10,659,935	$	10,562,906	$	10,335,949
Other - Ancillary services
Net patient service revenues	550,978		497,021		437,275
Other external sources	484,977		460,877		724,577
Intersegment revenues	16,743		14,030		34,236
Total ancillary services	1,052,698		971,928		1,196,088
Total net segment revenues	11,712,633		11,534,834		11,532,037
Elimination of intersegment revenues	(162,029)		(146,355)		(127,186)
Consolidated revenues	$	11,550,604	$	11,388,479	$	11,404,851
Segment operating margin (loss):
U.S. dialysis	$	1,917,604	$	1,924,826	$	1,709,721
Other - Ancillary services(2)	(76,261)		(189,174)		(93,789)
Total segment margin	1,841,343		1,735,652		1,615,932
Reconciliation of segment operating margin to consolidated income from continuing operations before income taxes:
Corporate administrative support	(146,707)		(92,335)		(90,108)
Consolidated operating income	1,694,636		1,643,317		1,525,824
Debt expense	(304,111)		(443,824)		(487,435)
Debt prepayment, refinancing and redemption charges	(89,022)		(33,402)		—
Other income	16,759		29,348		10,089
Income from continuing operations before income taxes	$	1,318,262	$	1,195,439	$	1,048,478

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(1)Includes management fee revenues from providing management and administrative services to dialysis ventures in which the Company owns a noncontrolling interest or which are wholly-owned by third parties.

(2)Includes equity investment income of $5,866, $9,366, and $24,866 in 2020, 2019 and 2018, respectively.

Depreciation and amortization expense by reportable segment was as follows:

	Year ended December 31,
	2020		2019		2018
U.S. dialysis	$	594,552	$	583,454	$	558,810
Other - Ancillary services	35,883		31,698		32,225
	$	630,435	$	615,152	$	591,035

Summary of assets by reportable segment was as follows:

	Year ended December 31,
	2020		2019
Segment assets
U.S. dialysis(1)	$	15,344,647	$	15,778,880
Other - Ancillary services(2)	1,643,869		1,532,514
Consolidated assets	$	16,988,516	$	17,311,394

(1)Includes equity method and other investments of $122,974 and $124,188 in 2020 and 2019, respectively.

(2)Includes equity method and other investments of $134,517 and 117,795 in 2020 and 2019, respectively and includes approximately $181,137 and $154,572 in 2020 and 2019, respectively, of net property and equipment related to the Company’s international operations.

Expenditures for property and equipment by reportable segment were as follows: 

	Year ended December 31,
	2020		2019		2018
U.S. dialysis	646,870		$	681,339	$	856,108
Other - Ancillary services	27,671		46,741		45,806
DMG - Discontinued operations	—		38,466		85,224
	$	674,541	$	766,546	$	987,138