DENVER, May 5, 2020 /PRNewswire/ -- During the first
quarter of 2020, DaVita Inc. (NYSE: DVA) took significant steps to
respond to the novel coronavirus (COVID-19) pandemic while
continuing to provide high-quality care for its patients whose
lives depend on receiving dialysis treatment multiple times each
week.
During this time of great challenge, our top priorities continue
to be the health, safety and well-being of our patients, teammates
and physician partners and helping to ensure that our patients have
the ability to maintain continuity of care throughout this crisis,
whether in the inpatient, in-center or home setting. Throughout
this crisis, we are working to support our communities and help
preserve precious hospital resources. We have been collaborating
with the U.S. Department of Health and Human Services, the Centers
for Medicare and Medicaid Services, Centers for Disease Control and
Prevention, and dialysis providers nationwide to help ensure that
the dialysis community is able to support dialysis patients
nationwide.
"I am proud and humbled by the amazing efforts of our 65,000
teammates around the world," said Javier
Rodriguez, CEO of DaVita Inc., "I offer my deepest gratitude
to them all, especially to our caregiving teammates and physician
partners working heroically to provide life-sustaining therapy to
approximately 238,000 dialysis patients globally."
In addition, the Company announced financial and operating
results for the first quarter ended March
31, 2020.
Financial results for the quarter ended March 31,
2020
First quarter 2020 highlights:
- Consolidated revenues of $2.841
billion.
- Operating income of $465 million
or 16.4% operating margin.
- Diluted earnings per share from continuing operations of
$1.81 and adjusted diluted earnings
per share from continuing operations of $1.83.
- Operating cash flow from continuing operations of $360 million and free cash flow from continuing
operations of $184 million.
- Repurchased 4,052,298 shares of our common stock at an average
cost of $74.81 per share.
|
Three months
ended
March 31,
|
|
|
2020
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
Net income
attributable to DaVita Inc.:
|
(dollars in
millions, except per share data)
|
|
Net income from
continuing operations
|
$
|
230
|
|
|
$
|
120
|
|
|
Diluted per
share
|
$
|
1.81
|
|
|
$
|
0.72
|
|
|
Adjusted net income
from continuing operations(1)
|
$
|
232
|
|
|
$
|
152
|
|
|
Diluted per share
adjusted(1)
|
$
|
1.83
|
|
|
$
|
0.91
|
|
|
Net income
|
$
|
240
|
|
|
$
|
149
|
|
|
Diluted per
share
|
$
|
1.89
|
|
|
$
|
0.90
|
|
|
Three months ended
March 31,
|
|
2020
|
|
2019
|
|
Amount
|
|
Margin
|
|
Amount
|
|
Margin
|
Operating
income:
|
(dollars in
millions)
|
|
Operating
income
|
$
|
465
|
|
|
16.4
|
%
|
|
$
|
341
|
|
|
12.4
|
%
|
|
Adjusted operating
income(1)
|
$
|
465
|
|
|
16.4
|
%
|
|
$
|
382
|
|
|
13.9
|
%
|
___________________
|
(1)
|
For definitions of
non-GAAP financial measures, see the note titled "Note on Non-GAAP
Financial Measures" and related reconciliations beginning on page
15.
|
U.S. dialysis metrics:
Volume: Total U.S. dialysis treatments for the first
quarter of 2020 were 7,513,321, or an average of 96,821 treatments
per day, representing a per day increase of 1.6% over the first
quarter of 2019. Normalized non-acquired treatment growth in the
first quarter of 2020 as compared to the first quarter of 2019 was
2.3%.
|
Three months
ended
|
|
Quarter
change
|
|
March 31,
2020
|
|
December 31,
2019
|
|
Per treatment
metrics:
|
|
|
|
|
|
Revenue
|
$
|
347.54
|
|
|
$
|
348.31
|
|
|
$
|
(0.77)
|
|
Patient care
costs
|
$
|
237.35
|
|
|
$
|
237.44
|
|
|
$
|
(0.09)
|
|
General and
administrative
|
$
|
27.14
|
|
|
$
|
27.27
|
|
|
$
|
(0.13)
|
|
Primary drivers of the changes in the table above were as
follows:
Revenue: The change was primarily due to a Medicare rate
decline related to calcimimetics and a seasonal decrease from
co-insurance and deductibles, partially offset by increases in base
Medicare rates in 2020 and seasonally higher inpatient dialysis
service revenue.
Patient care costs: The change was primarily due to
decreases in other direct operating expenses associated with our
dialysis centers and pharmaceutical unit costs, partially offset by
increases in labor and benefits costs, payroll taxes and
pharmaceutical intensity.
General and administrative: The change was primarily
due to decreases in long-term incentive compensation expense and
professional fees, partially offset by increases in payroll taxes
and labor costs.
Certain items impacting the quarter:
Share repurchases: The following table summarizes
repurchases of our common stock during the quarter ended
March 31, 2020:
|
Three months ended
March 31, 2020
|
|
Shares
repurchased
|
|
Amount paid
(in millions)
|
|
Average paid
per share
|
Open market
repurchases
|
4,052,298
|
|
|
$
|
303
|
|
|
$
|
74.81
|
|
Subsequent to March 31, 2020 through May 4, 2020, we have not repurchased any shares
of our common stock. As of May 4,
2020, we have a total of $1.400
billion available for additional share repurchases under our
current repurchase authorization. Although this share repurchase
authorization does not have an expiration date, we remain subject
to share repurchase limitations, including under the terms of our
senior secured credit facilities and the indentures governing our
senior notes.
Non-GAAP adjustments to net income:
Debt refinancing charges: On February 13, 2020, we
entered into an amendment to our credit agreement to refinance the
senior secured Term Loan B with a senior secured Term Loan B-1 that
bears interest at a rate equal to LIBOR plus an applicable margin
of 1.75% and matures on August 12, 2026. No additional debt
was incurred, nor any additional proceeds received, by us in
connection with this refinancing. As a result of this transaction
we recognized debt refinancing charges of $3
million in the quarter ended March 31, 2020. These
charges primarily represent fees incurred on this transaction.
Financial and operating metrics:
|
Three months
ended
March 31,
|
|
|
2020
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
Cash
flow:
|
(dollars in
millions)
|
|
Operating cash
flow
|
$
|
360
|
|
|
$
|
141
|
|
|
Operating cash flow
from continuing operations
|
$
|
360
|
|
|
$
|
73
|
|
|
Free cash flow from
(used in) continuing operations (1)
|
$
|
184
|
|
|
$
|
(119)
|
|
___________________
|
(1)
|
For definitions of
non-GAAP financial measures, see the note titled "Note on Non-GAAP
Financial Measures" and related reconciliations beginning on page
15.
|
|
Three months
ended
March 31, 2020
|
Effective income
tax rate on:
|
|
|
Income from
continuing operations
|
24.8
|
%
|
|
Income from
continuing operations attributable to DaVita Inc.
|
28.5
|
%
|
|
Adjusted income from
continuing operations attributable to DaVita
Inc.(1)
|
28.5
|
%
|
___________________
|
(1)
|
For definitions of
non-GAAP financial measures, see the note titled "Note on Non-GAAP
Financial Measures" and related reconciliations beginning on page
15.
|
Center activity: As of March 31, 2020, we provided
dialysis services to a total of approximately 238,000 patients at
3,054 outpatient dialysis centers, of which 2,772 centers were
located in the United States and
282 centers were located in ten countries outside of the United States. During the first quarter of
2020, we opened a total of 22 new dialysis centers, acquired two
centers and closed five dialysis centers in the United States. We also opened three new
dialysis centers, acquired 22 dialysis centers and closed two
dialysis centers outside of the United
States during the first quarter of 2020.
Outlook:
The following forward-looking measures and the underlying
assumptions involve significant risks and uncertainties, including
those described below, and actual results may vary materially from
these forward-looking measures. In particular, the widespread
impact of the COVID-19 pandemic continues to generate significant
risk and uncertainty, and as a result, our future results could
vary materially from the guidance provided below. We do not provide
guidance for diluted net income from continuing operations per
share attributable to DaVita Inc., effective income tax rate on
income from continuing operations or free cash flow from continuing
operations on a basis consistent with United States generally accepted accounting
principles (GAAP) nor a reconciliation of forward-looking non-GAAP
financial measures to the most directly comparable GAAP financial
measures on a forward-looking basis because we are unable to
predict certain items contained in the GAAP measures without
unreasonable efforts. These non-GAAP financial measures do not
include certain items, including refinancing charges and foreign
currency fluctuations, which may be significant. The guidance for
effective income tax rate on adjusted income from continuing
operations attributable to DaVita Inc. also excludes the amount of
third party owners' income and related taxes attributable to
non-tax paying entities.
|
Current 2020
guidance
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
(dollars in
millions, except per share data)
|
Revenue
|
$
|
11,500
|
|
|
$
|
11,700
|
|
Operating income
margin
|
13.0
|
%
|
|
14.0
|
%
|
Effective income tax
rate on adjusted income from continuing operations attributable to DaVita
Inc.
|
28.0
|
%
|
|
29.5
|
%
|
Adjusted diluted net
income from continuing operations
per share attributable to DaVita Inc.
|
$
|
5.75
|
|
|
$
|
6.25
|
|
Capital expenditures
from continuing operations
|
$
|
700
|
|
|
$
|
750
|
|
Free cash flow from
continuing operations
|
$
|
600
|
|
|
$
|
800
|
|
We will be holding a conference call to discuss our results for
the first quarter ended March 31, 2020, on May 5, 2020,
at 5:00 p.m. Eastern Time. To join
the conference call, please dial (877) 918-6630 from the U.S. or
(517) 308-9042 from outside the U.S., and provide the operator the
password 'Earnings'. A replay of the conference call will be
available on our website at investors.davita.com for the following
30 days.
DaVita Inc. and its representatives may from time to time
make written and oral forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 ("PSLRA"),
including statements in this release, filings with the Securities
and Exchange Commission ("SEC"), reports to stockholders and in
meetings with investors and analysts. All statements in this
release, during the related presentation or other meetings, other
than statements of historical fact, are forward-looking statements
and as such are intended to be covered by the safe harbor for
"forward-looking statements" provided by the PSLRA. These
forward-looking statements include, among other things, DaVita's
response to and the expected future impacts of COVID-19, statements
about our balance sheet and liquidity, our expenses, revenues,
billings and collections and future results, potential need,
ability or willingness to use any funds under the CARES Act or
other government programs, availability of supplies, treatment
volumes, number of percentage or patients under commercial
insurance, and overall impact on our patients, as well as
statements related to our guidance and expectations for future
periods and the assumptions underlying any such projections.
Without limiting the foregoing, statements including the words
"expect," "intend," "will," "could," "plan," "anticipate,"
"believe," and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are
based on DaVita's current expectations and are based solely on
information available as of the date of this release. DaVita
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of changed
circumstances, new information, future events or otherwise. Actual
future events and results could differ materially from any
forward-looking statements due to numerous factors that involve
substantial known and unknown risks and uncertainties. These risks
and uncertainties include, among other things:
- the impact of the dynamic and rapidly evolving COVID-19
pandemic, including, without limitation, on our patients,
teammates, physician partners, suppliers, business, operations,
reputation, financial condition and results of operations, the
government's response to the COVID-19 pandemic, and the
consequences of an economic downturn resulting from the impacts of
COVID-19, any of which may also have the effect of heightening many
of the other risks and uncertainties discussed below;
- our need, ability and willingness to utilize any funds
received under the CARES Act or subsequent legislation, and the
consequences of our decisions with respect thereto;
- the concentration of profits generated by higher-paying
commercial payor plans for which there is continued downward
pressure on average realized payment rates, and a reduction in the
number or percentage of our patients under such plans, including
without limitation as a result of restrictions or prohibitions on
the use and/or availability of charitable premium assistance, which
may result in the loss of revenues or patients, or our making
incorrect assumptions about how our patients will respond to any
change in financial assistance from charitable
organizations;
- noncompliance by us or our business associates with any
privacy or security laws or any security breach by us or a third
party involving the misappropriation, loss or other unauthorized
use or disclosure of confidential information;
- the extent to which the ongoing implementation of healthcare
reform, or changes in or new legislation, regulations or guidance,
enforcement thereof or related litigation result in a reduction in
coverage or reimbursement rates for our services, a reduction in
the number of patients enrolled in higher-paying commercial plans,
or other material impacts to our business; or our making incorrect
assumptions about how our patients will respond to any such
developments;
- a reduction in government payment rates under the Medicare
End Stage Renal Disease program or other government-based programs
and the impact of the Medicare Advantage benchmark
structure;
- risks arising from potential and proposed federal and/or
state legislation, regulation, ballot, executive action or other
initiatives, including such initiatives related to healthcare
and/or labor matters;
- the impact of the political environment and related
developments on the current healthcare marketplace and on our
business, including with respect to the future of the Affordable
Care Act, the exchanges and many other core aspects of the current
healthcare marketplace;
- our ability to successfully implement our strategy with
respect to home-based dialysis, including maintaining our existing
business and further developing our capabilities in a complex and
highly regulated environment;
- changes in pharmaceutical practice patterns, reimbursement
and payment policies and processes, or pharmaceutical pricing,
including with respect to calcimimetics;
- legal and compliance risks, such as our continued compliance
with complex government regulations;
- continued increased competition from dialysis providers and
others, and other potential marketplace changes;
- our ability to maintain contracts with physician medical
directors, changing affiliation models for physicians, and the
emergence of new models of care introduced by the government or
private sector that may erode our patient base and reimbursement
rates, such as accountable care organizations, independent practice
associations and integrated delivery systems;
- our ability to complete acquisitions, mergers or
dispositions that we might announce or be considering, on terms
favorable to us or at all, or to integrate and successfully operate
any business we may acquire or have acquired, or to successfully
expand our operations and services in markets outside the United States, or to businesses outside of
dialysis;
- uncertainties related to potential payments and/or
adjustments under certain provisions of the equity purchase
agreement for the sale of our DaVita Medical Group (DMG) business,
such as post-closing adjustments and indemnification
obligations;
- the variability of our cash flows, including without
limitation any extended billing or collections cycles; the risk
that we may not be able to generate or access sufficient cash in
the future to service our indebtedness or to fund our other
liquidity needs; and the risk that we may not be able to refinance
our indebtedness as it becomes due, on terms favorable to us or at
all;
- factors that may impact our ability to repurchase stock
under our stock repurchase program and the timing of any such stock
repurchases, as well as our use of a considerable amount of
available funds to repurchase stock;
- risks arising from the use of accounting estimates,
judgments and interpretations in our financial statements;
- impairment of our goodwill, investments or other assets;
and
- uncertainties associated with the other risk factors set
forth in DaVita Inc.'s Annual Report on Form 10-K for the year
ended December 31, 2019, and the
risks and uncertainties discussed in any subsequent reports that
DaVita has filed or furnished with the SEC from time to
time.
The financial information presented in this release is
unaudited and is subject to change as a result of subsequent events
or adjustments, if any, arising prior to the filing of the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020.
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
|
|
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
|
|
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
|
|
DAVITA
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
(dollars in
thousands, except 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 March 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
|
|
DAVITA
INC.
|
SUPPLEMENTAL
FINANCIAL DATA
|
(unaudited)
|
(dollars in
millions, except for per share and per treatment
data)
|
|
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
1. Consolidated
business metrics:
|
|
|
|
|
|
Operating income
margin
|
16.4
|
%
|
|
16.0
|
%
|
|
12.4
|
%
|
Adjusted operating
income margin excluding certain items(1)(3)
|
16.4
|
%
|
|
16.0
|
%
|
|
13.9
|
%
|
General and
administrative expenses as a percent of consolidated
revenues(2)
|
9.3
|
%
|
|
9.6
|
%
|
|
9.1
|
%
|
Effective income tax
rate on income from continuing operations
|
24.8
|
%
|
|
21.4
|
%
|
|
26.3
|
%
|
Effective income tax
rate on income from continuing operations attributable to DaVita
Inc.(1)
|
28.5
|
%
|
|
25.2
|
%
|
|
32.0
|
%
|
Effective income tax
rate on adjusted income from continuing operations attributable to
DaVita Inc.(1)
|
28.5
|
%
|
|
25.2
|
%
|
|
30.1
|
%
|
|
|
|
|
|
|
2. Summary of
financial results:
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
U.S. net dialysis
patient services and other
|
$
|
2,617
|
|
|
$
|
2,687
|
|
|
$
|
2,547
|
|
Other—Ancillary services
|
|
|
|
|
|
U.S. other
|
124
|
|
|
122
|
|
|
109
|
|
International net
dialysis patient service and other
|
137
|
|
|
132
|
|
|
120
|
|
|
261
|
|
|
255
|
|
|
230
|
|
Eliminations
|
(36)
|
|
|
(43)
|
|
|
(34)
|
|
Total consolidated
revenues
|
$
|
2,841
|
|
|
$
|
2,899
|
|
|
$
|
2,743
|
|
Operating income
(loss):
|
|
|
|
|
|
U.S.
dialysis
|
$
|
492
|
|
|
$
|
508
|
|
|
$
|
417
|
|
Other—Ancillary services
|
|
|
|
|
|
U.S.
|
(19)
|
|
|
(21)
|
|
|
(15)
|
|
International(4)
|
17
|
|
|
2
|
|
|
(43)
|
|
|
(3)
|
|
|
(19)
|
|
|
(58)
|
|
Corporate
administrative support expenses
|
(24)
|
|
|
(27)
|
|
|
(19)
|
|
Total consolidated
operating income
|
$
|
465
|
|
|
$
|
463
|
|
|
$
|
341
|
|
DAVITA
INC.
|
SUPPLEMENTAL
FINANCIAL DATA - continued
|
(unaudited)
|
(dollars in
millions, except for per share and per treatment
data)
|
|
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
3. Summary of
reportable segment financial results:
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
dialysis
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Net dialysis patient
service revenues
|
$
|
2,611
|
|
|
$
|
2,676
|
|
|
$
|
2,542
|
|
Other
revenues
|
5
|
|
|
11
|
|
|
5
|
|
Total operating
revenues
|
2,617
|
|
|
2,687
|
|
|
2,547
|
|
Operating
expenses:
|
|
|
|
|
|
Patient care
costs
|
1,783
|
|
|
1,824
|
|
|
1,797
|
|
General and
administrative
|
204
|
|
|
209
|
|
|
197
|
|
Depreciation and
amortization
|
146
|
|
|
150
|
|
|
141
|
|
Equity investment
income
|
(9)
|
|
|
(5)
|
|
|
(5)
|
|
Total operating
expenses
|
2,125
|
|
|
2,179
|
|
|
2,130
|
|
Segment operating
income
|
$
|
492
|
|
|
$
|
508
|
|
|
$
|
417
|
|
|
|
|
|
|
|
4. U.S. dialysis
business metrics:
|
|
|
|
|
|
Volume:
|
|
|
|
|
|
Treatments
|
7,513,321
|
|
|
7,681,462
|
|
|
7,297,460
|
|
Number of treatment
days
|
77.6
|
|
|
79.4
|
|
|
76.6
|
|
Average treatments
per day
|
96,821
|
|
|
96,744
|
|
|
95,267
|
|
Per day year over
year increase
|
1.6
|
%
|
|
1.7
|
%
|
|
2.9
|
%
|
Normalized
non-acquired treatment growth year over
year(5)
|
2.3
|
%
|
|
2.1
|
%
|
|
2.4
|
%
|
Operating net
revenues:
|
|
|
|
|
|
Average patient
service revenue per treatment
|
$
|
347.54
|
|
|
$
|
348.31
|
|
|
$
|
348.37
|
|
Expenses:
|
|
|
|
|
|
Patient care costs per
treatment
|
$
|
237.35
|
|
|
$
|
237.44
|
|
|
$
|
246.29
|
|
General and
administrative expenses per treatment
|
$
|
27.14
|
|
|
$
|
27.27
|
|
|
$
|
27.00
|
|
Accounts
receivable:
|
|
|
|
|
|
Net
receivables
|
$
|
1,668
|
|
|
$
|
1,671
|
|
|
$
|
1,794
|
|
DSO
|
59
|
|
|
58
|
|
|
64
|
|
DAVITA
INC.
|
SUPPLEMENTAL
FINANCIAL DATA - continued
|
(unaudited)
|
(dollars in
millions, except for per share and per treatment
data)
|
|
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
5. Cash
flow:
|
|
|
|
|
|
Operating cash
flow
|
$
|
360
|
|
|
$
|
681
|
|
|
$
|
141
|
|
Operating cash flow
from continuing operations
|
$
|
360
|
|
|
$
|
678
|
|
|
$
|
73
|
|
Operating cash flow
from continuing operations, last twelve months
|
$
|
2,260
|
|
|
$
|
1,973
|
|
|
$
|
1,348
|
|
Free cash flow from
continuing operations(1)
|
$
|
184
|
|
|
$
|
415
|
|
|
$
|
(119)
|
|
Free cash flow from
continuing operations, last twelve months(1)
|
$
|
1,429
|
|
|
$
|
1,127
|
|
|
$
|
372
|
|
Capital expenditures
from continuing operations:
|
|
|
|
|
|
Routine
maintenance/IT/other
|
$
|
82
|
|
|
$
|
130
|
|
|
$
|
80
|
|
Development and
relocations
|
$
|
73
|
|
|
$
|
89
|
|
|
$
|
99
|
|
Acquisition
expenditures
|
$
|
34
|
|
|
$
|
24
|
|
|
$
|
10
|
|
Proceeds from sale of
self-developed properties
|
$
|
27
|
|
|
$
|
19
|
|
|
$
|
12
|
|
|
|
|
|
|
|
6. Debt and
capital structure:
|
|
|
|
|
|
Total
debt(6)
|
$
|
8,657
|
|
|
$
|
8,181
|
|
|
$
|
10,512
|
|
Net debt, net of cash
and cash equivalents(6)
|
$
|
7,275
|
|
|
$
|
7,079
|
|
|
$
|
10,053
|
|
Leverage ratio (see
calculation on page 14)
|
3.17x
|
|
|
3.08x
|
|
|
4.62x
|
|
Weighted average
effective interest rate:
|
|
|
|
|
|
During the
quarter
|
4.35
|
%
|
|
4.55
|
%
|
|
5.16
|
%
|
At end of the
quarter
|
3.75
|
%
|
|
4.46
|
%
|
|
5.14
|
%
|
On the senior secured
credit facilities at end of the quarter
|
2.78
|
%
|
|
3.93
|
%
|
|
5.00
|
%
|
Debt with fixed and
capped rates as a percentage of total debt:
|
|
|
|
|
|
Debt with rates fixed
by its terms
|
42
|
%
|
|
44
|
%
|
|
46
|
%
|
Debt with rates fixed
by its terms or capped by cap agreements
|
82
|
%
|
|
87
|
%
|
|
79
|
%
|
Amount spent on share
repurchases
|
$
|
303
|
|
|
$
|
542
|
|
|
$
|
—
|
|
Number of shares
repurchased
|
4,052,298
|
|
|
8,368,506
|
|
|
—
|
|
|
Certain columns, rows
or percentages may not sum or recalculate due to the use of rounded
numbers.
|
_________________
|
(1)
|
These are non-GAAP
financial measures. For a reconciliation of these non-GAAP
financial measures to their most comparable measure calculated and
presented in accordance with GAAP, and for a definition of adjusted
amounts, see attached reconciliation schedules.
|
(2)
|
General and
administrative expenses includes certain corporate support,
long-term incentive compensation and advocacy costs.
|
(3)
|
Adjusted operating
income margin is a calculation of adjusted operating income divided
by consolidated revenues.
|
(4)
|
The reported
operating income (loss) for the three months ended March 31,
2020, December 31, 2019 and March 31, 2019,
include approximately $9.7, $(4.1) and $(0.6), respectively,
of foreign currency gain (loss).
|
(5)
|
Normalized
non-acquired growth reflects year over year growth in treatment
volume, adjusted to exclude acquisitions and other similar
transactions, further adjusted to normalize for the number and mix
of treatment days in a given quarter versus the prior year
quarter.
|
(6)
|
The reported balance
sheet amounts at March 31, 2020, December 31,
2019 and March 31, 2019, exclude approximately $68.8,
$72.8 and $48.5, respectively, of debt discount and other
deferred financing costs related to our senior secured credit
facilities and senior notes in effect at that time. The reported
balance sheet amounts exclude DMG debt which was classified as held
for sale liabilities as of March 31, 2019.
|
DAVITA INC.
SUPPLEMENTAL FINANCIAL
DATA-continued
(unaudited)
(dollars in
thousands)
Note 1: Calculation of the Leverage Ratio
Under our new senior secured credit facilities (the New Credit
Agreement) dated August 12, 2019 and
our prior senior secured credit facilities (the Prior Credit
Agreement), the leverage ratio is defined as all funded debt plus
the face amount of all letters of credit issued, minus cash and
cash equivalents, not to exceed certain limits under the New Credit
Agreement, including short-term investments, divided by
"Consolidated EBITDA". The leverage ratio determines the interest
rate margin payable by the Company for its new Term Loan A and new
revolving line of credit under the New Credit Agreement by
establishing the margin over the base interest rate (LIBOR) that is
applicable. The following leverage ratios were calculated using
"Consolidated EBITDA" and "Consolidated net debt" as defined in the
credit agreement that was in effect at the end of each period. The
calculation below is based on the last twelve months of
"Consolidated EBITDA", as of the end of the reported period and pro
forma for routine acquisitions that occurred during the period. The
Company's management believes the presentation of "Consolidated
EBITDA" is useful to users to enhance their understanding of the
Company's leverage ratio under its credit agreement in effect at
that time. The leverage ratio calculated by the Company is a
non-GAAP measure and should not be considered a substitute for debt
to net income attributable to DaVita Inc., net income attributable
to DaVita Inc. or total debt as determined in accordance with
United States generally accepted
accounting principles (GAAP). The Company's calculation of its
leverage ratio might not be calculated in the same manner as, and
thus might not be comparable to, similarly titled measures by other
companies.
|
Rolling twelve
months ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Net
income(1)
|
$
|
816,191
|
|
|
$
|
706,832
|
|
|
$
|
129,997
|
|
Income
taxes
|
314,442
|
|
|
279,628
|
|
|
350,689
|
|
Interest
expense
|
354,995
|
|
|
397,934
|
|
|
462,877
|
|
Depreciation and
amortization
|
621,302
|
|
|
615,151
|
|
|
596,764
|
|
Impairment
charges
|
83,855
|
|
|
124,892
|
|
|
103,018
|
|
Noncontrolling
interests and equity investment income, net
|
222,118
|
|
|
223,175
|
|
|
173,609
|
|
Stock-settled
stock-based compensation
|
72,918
|
|
|
63,404
|
|
|
75,489
|
|
Debt prepayment,
refinancing and redemption charges
|
36,350
|
|
|
33,402
|
|
|
—
|
|
Gain on changes in
ownership interest, net
|
—
|
|
|
—
|
|
|
(85,699)
|
|
Valuation
adjustment
|
—
|
|
|
—
|
|
|
316,840
|
|
Other
|
(10,216)
|
|
|
(12,025)
|
|
|
22,712
|
|
"Consolidated
EBITDA"
|
$
|
2,511,955
|
|
|
$
|
2,432,393
|
|
|
$
|
2,146,296
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Total debt, excluding
debt discount and other deferred financing
costs(2)
|
$
|
8,657,211
|
|
|
$
|
8,181,074
|
|
|
$
|
10,548,104
|
|
Letters of credit
issued
|
57,705
|
|
|
72,759
|
|
|
79,099
|
|
|
8,714,916
|
|
|
8,253,833
|
|
|
10,627,203
|
|
Less: Cash and cash
equivalents including short-term
investments(3)
|
(750,000)
|
|
|
(750,000)
|
|
|
(710,603)
|
|
Consolidated net
debt
|
$
|
7,964,916
|
|
|
$
|
7,503,833
|
|
|
$
|
9,916,600
|
|
Last twelve months
"Consolidated EBITDA"
|
$
|
2,511,955
|
|
|
$
|
2,432,393
|
|
|
$
|
2,146,296
|
|
Leverage
ratio
|
3.17x
|
|
|
3.08x
|
|
|
4.62x
|
|
Maximum leverage
ratio permitted under New and Prior Credit Agreement
|
5.00x
|
|
|
5.00x
|
|
|
5.00x
|
|
_______________________
|
(1)
|
The reported net
income for March 31, 2020 and December 31, 2019 is our
reported net income from continuing operations attributable to
DaVita Inc. as the New Credit Agreement requires divestitures to be
reflected on a proforma basis, as such DMG is excluded from our
leverage ratio calculation. The reported net income for
March 31, 2019 is our reported net income attributable to
DaVita Inc.
|
(2)
|
The reported total
debt amounts at March 31, 2020, December 31, 2019 and
March 31, 2019, exclude $68,757, $72,840 and $48,495,
respectively, of debt discount and other deferred financing costs
related to our senior secured credit facilities and senior notes in
effect at that time.
|
(3)
|
Excluding
DMG's-physician owned entities' cash for the twelve months ended
March 31, 2019 and amounts not readily convertible to cash
related to the Company's non-qualified deferred compensation plans
for all periods presented. The Company's New Credit Agreement
limits the amount deducted for cash and cash equivalents to the
lesser of all unrestricted cash and cash equivalents of the Company
or $750,000.
|
DAVITA INC.
RECONCILIATIONS FOR
NON-GAAP MEASURES
(unaudited)
Note on Non-GAAP Financial Measures
As used in this press release, the term "adjusted" refers to
non-GAAP measures as follows, each as reconciled to its most
comparable GAAP measure as presented in the non-GAAP
reconciliations in the notes to this press release: (i) for income
measures, the term "adjusted" refers to operating performance
measures that exclude certain items such as impairment charges,
(gain) loss on ownership changes, restructuring charges, debt
prepayment charges and gains and charges associated with
settlements; and (ii) the term "effective income tax rate on
adjusted income from continuing operations attributable to DaVita
Inc." represents the Company's effective tax rate excluding
applicable non-GAAP items and noncontrolling owners' income, which
primarily relates to non-tax paying entities.
These non-GAAP or "adjusted" measures are presented because
management believes these measures are useful adjuncts to GAAP
results. However, these non-GAAP measures should not be considered
alternatives to the corresponding measures determined under
GAAP.
Specifically, management uses adjusted operating income,
adjusted net income from continuing operations attributable to
DaVita Inc. and adjusted diluted net income from continuing
operations per share attributable to DaVita Inc. to compare and
evaluate our performance period over period and relative to
competitors, to analyze the underlying trends in our business, to
establish operational budgets and forecasts and for incentive
compensation purposes. We believe these non-GAAP measures also are
useful to investors and analysts in evaluating our performance over
time and relative to competitors, as well as in analyzing the
underlying trends in our business. Furthermore, we believe these
presentations enhance a user's understanding of our normal
consolidated operating income by excluding certain items which we
do not believe are indicative of our ordinary results of
operations. As a result, adjusting for these amounts allows for
comparison to our normalized prior period results.
In addition, the effective income tax rate on income from
continuing operations attributable to DaVita Inc. excludes
noncontrolling owners' income, which primarily relates to non-tax
paying entities.
The effective income tax rate on adjusted income from continuing
operations attributable to DaVita Inc. excludes noncontrolling
owners' income and certain non-deductible and other charges which
we do not believe are indicative of our ordinary results.
Accordingly, we believe these adjusted effective income tax rates
are useful to management, investors and analysts in evaluating our
performance and establishing expectations for income taxes incurred
on our ordinary results attributable to DaVita Inc.
Finally, under our new definition, free cash flow from
continuing operations represents net cash provided by operating
activities from continuing operations less distributions to
noncontrolling interests and all capital expenditures (including
development capital expenditures, routine maintenance and
information technology); plus contributions from noncontrolling
interests and sale leaseback proceeds. Management uses this measure
to assess our ability to fund acquisitions and meet our debt
service obligations and we believe this measure is equally useful
to investors and analysts as an adjunct to cash flows from
operating activities from continuing operations and other measures
under GAAP.
It is important to bear in mind that these non-GAAP "adjusted"
measures are not measures of financial performance or liquidity
under GAAP and should not be considered in isolation from, nor as
substitutes for, their most comparable GAAP measures.
The following Notes 2 through 5 provide reconciliations of the
non-GAAP financial measures presented in this press release to
their most comparable GAAP measures.
DAVITA INC.
RECONCILIATIONS FOR
NON-GAAP MEASURES -
continued
(unaudited)
(dollars in thousands,
except for per share data)
Note 2: Adjusted net income from
continuing operations and adjusted diluted net income from
continuing operations per share attributable to DaVita Inc.
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
|
Dollars
|
|
Per
share
|
|
Dollars
|
|
Per
share
|
|
Dollars
|
|
Per
share
|
Net income from
continuing operations attributable to DaVita Inc.
|
$
|
229,613
|
|
|
$
|
1.81
|
|
|
$
|
242,242
|
|
|
$
|
1.86
|
|
|
$
|
120,254
|
|
|
$
|
0.72
|
|
Operating
charges:
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,037
|
|
|
0.25
|
|
Debt refinancing
charges
|
2,948
|
|
|
0.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Related income
tax
|
(736)
|
|
|
(0.01)
|
|
|
—
|
|
|
—
|
|
|
(8,865)
|
|
|
(0.05)
|
|
Adjusted net income
from continuing operations attributable to DaVita Inc.
|
$
|
231,825
|
|
|
$
|
1.83
|
|
|
$
|
242,242
|
|
|
$
|
1.86
|
|
|
$
|
152,426
|
|
|
$
|
0.91
|
|
|
Certain columns or
rows may not sum or recalculate due to the use of rounded
numbers.
|
Note 3: Adjusted operating income
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Consolidated:
|
|
|
|
|
|
Operating
income
|
$
|
465,376
|
|
|
$
|
462,588
|
|
|
$
|
340,507
|
|
Operating
charges:
|
|
|
|
|
|
Goodwill impairment
charges
|
—
|
|
|
—
|
|
|
41,037
|
|
Adjusted operating
income
|
$
|
465,376
|
|
|
$
|
462,588
|
|
|
$
|
381,544
|
|
|
|
|
|
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Consolidated:
|
|
|
|
|
|
U.S.
dialysis:
|
|
|
|
|
|
Segment operating
income
|
$
|
491,607
|
|
|
$
|
508,146
|
|
|
$
|
416,981
|
|
Other - Ancillary
services:
|
|
|
|
|
|
U.S.
|
|
|
|
|
|
Segment operating
loss
|
(19,369)
|
|
|
(20,878)
|
|
|
(14,918)
|
|
International
|
|
|
|
|
|
Segment operating
income (loss)
|
16,723
|
|
|
2,109
|
|
|
(42,712)
|
|
Goodwill
impairment charges
|
—
|
|
|
—
|
|
|
41,037
|
|
Adjusted operating
income (loss)
|
16,723
|
|
|
2,109
|
|
|
(1,675)
|
|
Adjusted Other -
Ancillary services operating loss
|
(2,646)
|
|
|
(18,770)
|
|
|
(16,593)
|
|
Corporate
administrative support expenses
|
(23,585)
|
|
|
(26,788)
|
|
|
(18,844)
|
|
Adjusted operating
income
|
$
|
465,376
|
|
|
$
|
462,588
|
|
|
$
|
381,544
|
|
|
Certain columns or
rows may not sum or recalculate due to the use of rounded
numbers.
|
DAVITA INC.
RECONCILIATIONS FOR
NON-GAAP MEASURES -
continued
(unaudited)
(dollars in
thousands)
Note 4: Effective income tax rates on
income from continuing operations attributable to DaVita
Inc.
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Income from
continuing operations before income taxes
|
$
|
369,475
|
|
|
$
|
382,023
|
|
|
$
|
215,928
|
|
Less: Noncontrolling
owners' income primarily attributable to non-tax paying
entities
|
(48,372)
|
|
|
(58,118)
|
|
|
(39,008)
|
|
Income from
continuing operations before income taxes attributable to DaVita
Inc.
|
$
|
321,103
|
|
|
$
|
323,905
|
|
|
$
|
176,920
|
|
|
|
|
|
|
|
Income tax expense
for continuing operations
|
$
|
91,560
|
|
|
$
|
81,690
|
|
|
$
|
56,746
|
|
Less: Income tax
attributable to noncontrolling interests
|
(70)
|
|
|
(27)
|
|
|
(80)
|
|
Income tax expense
from continuing operations attributable to DaVita Inc.
|
$
|
91,490
|
|
|
$
|
81,663
|
|
|
$
|
56,666
|
|
|
|
|
|
|
|
Effective income tax
rate on income from continuing operations attributable to DaVita
Inc.
|
28.5
|
%
|
|
25.2
|
%
|
|
32.0
|
%
|
The effective income tax rate on adjusted income from continuing
operations attributable to DaVita Inc. is computed as follows:
|
Three months
ended
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Income from
continuing operations before income taxes
|
$
|
369,475
|
|
|
$
|
382,023
|
|
|
$
|
215,928
|
|
Operating
charges:
|
|
|
|
|
|
Goodwill impairment
charges
|
—
|
|
|
—
|
|
|
41,037
|
|
Debt refinancing
charges
|
2,948
|
|
|
—
|
|
|
—
|
|
Noncontrolling
owners' income primarily attributable to non-tax paying
entities
|
(48,372)
|
|
|
(58,118)
|
|
|
(39,008)
|
|
Adjusted income from
continuing operations before income taxes attributable to DaVita
Inc.
|
$
|
324,051
|
|
|
$
|
323,905
|
|
|
$
|
217,957
|
|
Income tax
expense
|
$
|
91,560
|
|
|
$
|
81,690
|
|
|
$
|
56,746
|
|
Add income tax
related to:
|
|
|
|
|
|
Operating
charges:
|
|
|
|
|
|
Goodwill impairment
charges
|
—
|
|
|
—
|
|
|
8,865
|
|
Debt refinancing
charges
|
736
|
|
|
—
|
|
|
—
|
|
Less income tax
related to:
|
|
|
|
|
|
Noncontrolling
interests
|
(70)
|
|
|
(27)
|
|
|
(80)
|
|
Income tax on
adjusted income from continuing operations attributable to DaVita
Inc.
|
$
|
92,226
|
|
|
$
|
81,663
|
|
|
$
|
65,531
|
|
Effective income tax
rate on adjusted income from continuing operations attributable
to DaVita Inc.
|
28.5
|
%
|
|
25.2
|
%
|
|
30.1
|
%
|
|
Certain columns, rows
or percentages may not sum or recalculate due to the use of rounded
numbers.
|
DAVITA INC.
RECONCILIATIONS FOR
NON-GAAP MEASURES -
continued
(unaudited)
(dollars in
thousands)
Note 5: Free cash flow from continuing
operations
|
Three months
ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,
2019
|
Net cash provided by
continuing operating activities
|
$
|
360,381
|
|
|
$
|
677,901
|
|
|
$
|
73,064
|
|
Less: Distributions
to noncontrolling interests
|
(58,131)
|
|
|
(75,953)
|
|
|
(44,230)
|
|
Plus: Contributions
to noncontrolling interests
|
9,387
|
|
|
13,222
|
|
|
18,947
|
|
Cash provided by
continuing operating activities attributable to DaVita
Inc.
|
311,637
|
|
|
615,170
|
|
|
47,781
|
|
Less: Expenditures
for routine maintenance and information technology
|
(81,614)
|
|
|
(130,243)
|
|
|
(80,390)
|
|
Less: Expenditures
for development
|
(73,328)
|
|
|
(89,120)
|
|
|
(98,736)
|
|
Plus: Proceeds from
sale of self-developed properties
|
27,203
|
|
|
19,365
|
|
|
12,444
|
|
Free cash flow from
continuing operations
|
$
|
183,898
|
|
|
$
|
415,172
|
|
|
$
|
(118,901)
|
|
|
|
|
|
|
Rolling twelve
months ended
|
|
March 31,
2020
|
|
December 31,
2019
|
|
March 31,2
019
|
Net cash provided by
continuing operating activities
|
$
|
2,260,038
|
|
|
$
|
1,972,721
|
|
|
$
|
1,347,729
|
|
Less: Distributions
to noncontrolling interests
|
(247,024)
|
|
|
(233,123)
|
|
|
(195,204)
|
|
Plus: Contributions
to noncontrolling interests
|
47,757
|
|
|
57,317
|
|
|
59,249
|
|
Cash provided by
continuing operating activities attributable to DaVita
Inc.
|
2,060,771
|
|
|
1,796,915
|
|
|
1,211,774
|
|
Less: Expenditures
for routine maintenance and information technology
|
(356,668)
|
|
|
(355,444)
|
|
|
(396,160)
|
|
Less: Expenditures
for development
|
(347,228)
|
|
|
(372,636)
|
|
|
(483,487)
|
|
Plus: Proceeds from
sale of self-developed properties
|
72,576
|
|
|
57,817
|
|
|
39,588
|
|
Free cash flow from
continuing operations
|
$
|
1,429,451
|
|
|
$
|
1,126,652
|
|
|
$
|
371,715
|
|
|
Certain columns or
rows may not sum or recalculate due to the use of rounded
numbers.
|
Contact:
|
Jim
Gustafson
|
|
Investor
Relations
|
|
DaVita
Inc.
|
|
(310)
536-2585
|
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SOURCE DaVita Inc.