DaVita (DVA) 10-Q 5 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Thousands, except Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net operating revenues	$1,573,915	$1,447,135	$4,540,596	$4,199,163
Operating expenses and charges:
Patient care costs	1,095,857	1,005,648	3,153,622	2,909,143
General and administrative	134,931	128,617	394,370	374,581
Depreciation and amortization	56,813	54,970	172,121	160,673
Provision for uncollectible accounts	42,021	37,305	119,990	109,433
Equity investment income	(708)	(1,177)	(1,066)	(654)
Total operating expenses and charges	1,328,914	1,225,363	3,839,037	3,553,176
Operating income	245,001	221,772	701,559	645,987
Debt expense	(45,535)	(54,505)	(140,924)	(168,891)
Other income	999	2,481	3,026	10,331
Income before income taxes	200,465	169,748	563,661	487,427
Income tax expense	74,195	62,010	209,485	175,853
Net income	126,270	107,738	354,176	311,574
Less: Net income attributable to noncontrolling interests	(15,340)	(13,828)	(41,216)	(35,779)
Net income attributable to DaVita Inc.	$110,930	$93,910	$312,960	$275,795
Earnings per share:
Basic earnings per share attributable to DaVita Inc.	1.07	0.9	3.01	2.61
Diluted earnings per share attributable to DaVita Inc.	1.06	0.89	$3	2.59
Weighted average shares for earnings per share:
Basic	104,127,334	104,556,770	103,904,768	105,569,971
Diluted	104,607,318	105,577,823	104,315,019	106,421,184

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
ASSETS
Cash and cash equivalents	$581,680	$410,881
Short-term investments	20,680	35,532
Accounts receivable, less allowance of $225,931 and $211,222	1,142,861	1,075,457
Inventories	69,014	84,174
Other receivables	235,785	239,165
Other current assets	34,816	33,761
Income tax receivable	0	32,130
Deferred income taxes	223,697	217,196
Total current assets	2,308,533	2,128,296
Property and equipment, net	1,088,446	1,048,075
Amortizable intangibles, net	141,925	160,521
Investments in third-party dialysis businesses	24,011	19,274
Long-term investments	7,567	5,656
Other long-term assets	34,262	47,330
Goodwill	3,932,964	3,876,931
Assets, Total	7,537,708	7,286,083
LIABILITIES AND EQUITY
Accounts payable	256,707	282,883
Other liabilities	426,856	495,239
Accrued compensation and benefits	314,677	312,216
Current portion of long-term debt	100,677	72,725
Income taxes payable	14,592	0
Total current liabilities	1,113,509	1,163,063
Long-term debt	3,555,853	3,622,421
Other long-term liabilities	100,722	101,442
Alliance and product supply agreement, net	31,980	35,977
Deferred income taxes	304,675	244,884
Total liabilities	5,106,739	5,167,787
Commitments and contingencies	-	-
Noncontrolling interests subject to put provisions	292,636	291,397
Equity:
Preferred stock ($0.001 par value, 5,000,000 shares authorized; none issued)	0	0
Common stock ($0.001 par value, 450,000,000 shares authorized; 134,862,283 shares issued; 103,232,774 and 103,753,673 shares outstanding)	135	135
Additional paid-in capital	638,253	584,358
Retained earnings	2,202,410	1,889,450
Treasury stock, at cost (31,629,509 and 31,108,610 shares)	(756,157)	(691,857)
Accumulated other comprehensive loss	(7,838)	(14,339)
Total DaVita Inc. shareholders' equity	2,076,803	1,767,747
Noncontrolling interests not subject to put provisions	61,530	59,152
Total equity	2,138,333	1,826,899
Liabilities and Stockholders' Equity, Total	$7,537,708	$7,286,083

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Thousands, except Share data	Sep. 30, 2009	Dec. 31, 2008
Accounts receivable, allowance	$225,931	$211,222
Preferred stock, par value	0.001	0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Common stock, par value	0.001	0.001
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	134,862,283	134,862,283
Common stock, shares outstanding	103,232,774	103,753,673
Treasury stock, shares	31,629,509	31,108,610

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flows from operating activities:
Net income	$354,176	$311,574
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	172,121	160,673
Stock-based compensation expense	33,850	29,975
Tax benefits from stock award exercises	12,434	10,174
Excess tax benefits from stock award exercises	(8,115)	(5,054)
Deferred income taxes	45,417	56,157
Equity investment income	(1,066)	(654)
Loss on disposal of assets	7,826	9,688
Non-cash debt and non-cash rent charges	7,497	9,971
Changes in operating assets and liabilities, other than from acquisitions and divestitures:
Accounts receivable	(68,235)	(130,022)
Inventories	15,858	(1,248)
Other receivables and other current assets	(2,164)	(28,684)
Other long-term assets	5,641	(12,761)
Accounts payable	(58,995)	(12,800)
Accrued compensation and benefits	20,733	(11,752)
Other current liabilities	(68,383)	29,838
Income taxes	55,226	(3,086)
Other long-term liabilities	(9,702)	3,163
Net cash provided by operating activities	514,119	415,152
Cash flows from investing activities:
Additions of property and equipment	(205,653)	(223,851)
Acquisitions	(64,001)	(77,157)
Proceeds from asset sales	6,256	451
Purchase of investments available for sale	(1,737)	(1,695)
Purchase of investments held-to-maturity	(16,942)	(19,005)
Proceeds from sale of investments available for sale	16,537	5,323
Proceeds from maturities of investments held-to-maturity	16,123	18,728
Distributions received on equity investments	929	802
Purchase of intangible assets and other	(260)	(65)
Net cash used in investing activities	(248,748)	(296,469)
Cash flows from financing activities:
Borrowings	13,924,642	12,937,047
Payments on long-term debt	(13,961,667)	(12,938,297)
Deferred financing costs	(42)	(130)
Purchase of treasury stock	(61,223)	(169,673)
Excess tax benefits from stock award exercises	8,115	5,054
Stock award exercises and other share issuances, net	30,309	33,670
Distributions to noncontrolling interests	(46,888)	(43,391)
Contributions from noncontrolling interests	11,117	13,525
Proceeds from sales of additional noncontrolling interests	7,733	8,422
Purchases from noncontrolling interests	(6,668)	(24,009)
Net cash used in financing activities	(94,572)	(177,782)
Net increase (decrease) in cash and cash equivalents	170,799	(59,099)
Cash and cash equivalents at beginning of period	410,881	447,046
Cash and cash equivalents at end of period	$581,680	$387,947

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Thousands	Non-controlling interests subject to put provisions		Common stock Amount	Additional paid-in capital	Retained earnings		Treasury stock Amount	Accumulated other comprehensive income (loss)	Non-controlling interests not subject to put provisions	Total
Beginning Balance at Dec. 31, 2007		134,862				(27,732)
Beginning Balance at Dec. 31, 2007	$330,467		$135	$479,115	$1,515,290		($487,744)	($2,511)	$48,178	$1,504,285
Comprehensive income:
Beginning Balance at Dec. 31, 2007		134,862				(27,732)
Beginning Balance at Dec. 31, 2007	330,467		135	479,115	1,515,290		(487,744)	(2,511)	48,178	1,504,285
Comprehensive income:
Ending Balance at Dec. 31, 2008										1,826,899
Comprehensive income:
Beginning Balance at Dec. 31, 2008		134,862
Beginning Balance at Dec. 31, 2008			135							1,826,899
Comprehensive income:
Net income										354,176
Ending Balance at Sep. 30, 2009										2,138,333
Beginning Balance at Jun. 30, 2009		134,862
Beginning Balance at Jun. 30, 2009			135
Comprehensive income:
Ending Balance at Sep. 30, 2009			$135
Ending Balance at Sep. 30, 2009		134,862

1.Condensed consolidated interi

1.Condensed consolidated interim financial statements
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1.Condensed consolidated interim financial statements	1. Condensed consolidated interim financial statements The condensed consolidated interim financial statements included in this report are prepared by the Company without audit. In the opinion of management, all adjustments consisting only of normal recurring items necessary for a fair presentation of the results of operations are reflected in these 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 provisions for uncollectible accounts, impairments and valuation adjustments, fair value estimates, accounting for income taxes, variable compensation accruals, purchase accounting valuation estimates and stock-based compensation. The results of operations for the nine months ended September30, 2009 are not necessarily indicative of the operating results for the full year. The consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December31, 2008. Prior year balances and amounts have been classified to conform to the current year presentation. The Company has evaluated subsequent events through November5, 2009, which is the date these condensed consolidated financial statements were issued.

2.Significant new accounting po

2.Significant new accounting policies
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2.Significant new accounting policies	2. Significant new accounting policies On June29, 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (Codification) as the single source of authoritative U.S. generally accepted accounting principles (GAAP) for all nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) are also sources of authoritative U.S. GAAP for SEC registrants. The Codification does not change U.S. GAAP but takes previously issued FASB standards and other U.S. GAAP authoritative pronouncements, changes the way the standards are referred to, and includes them in specific topic areas. The Codification is effective for financial statements issued for interim and annual periods ending after September15, 2009. The adoption of the Codification did not have any impact on the Companys financial statements. Effective January1, 2009, the Company was required to treat noncontrolling interests as a separate component of equity, but apart from the Companys equity, and not as a liability or other item outside of equity. The Company was also required to identify and present consolidated net income attributable to the Company and to noncontrolling interests on the face of the consolidated statement of income. Previously, the Company had reported minority interests (noncontrolling interests) as a reduction to operating income. In addition, changes in the Companys ownership interest while it retains a controlling financial interest are required to be accounted for as equity transactions. The Company was also required to expand disclosures in the financial statements to include a reconciliation of the beginning and ending balances of the equity attributable to the Company and the noncontrolling owners and a schedule showing the effects of changes in the Companys ownership interest in a subsidiary on the equity attributable to the Company. This change did not have a material impact on the Companys consolidated financial statements; however, it did change the presentation of minority interests in the Companys consolidated financial statements. In conjunction with adopting these requirements, the Company is required to classify securities with redemption features that are not solely within the Companys control such as its noncontrolling interests that are subject to put provisions outside of permanent equity and to measure these noncontrolling interests at fair value. See Note 9 to the condensed consolidated financial statements for further details. These presentation and disclosure requirements have been applied retrospectively for all prior periods presented. All business combinations consummated after January1, 2009 are required to be accounted for under the acquisition method (previously referred to as the purchase method). Under the acquisition method, the acquirer recognizes the assets acquired, the liabilities assumed, contractual contingencies, as well as any noncontrolling interests in the acquiree at their fair values at the acquisition date. Noncontractual contingencies are recognized at the acquisition date at their fair values only if it is more likely than

3.Earnings per share

3.Earnings per share
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3.Earnings per share	3. Earnings per share Basic net income per share is calculated by dividing net income attributable to DaVita Inc. by the weighted average number of common shares and vested stock units outstanding. Diluted net income per share includes the dilutive effect of outstanding stock options, stock-settled stock appreciation rights and unvested stock units (under the treasury stock method). The reconciliations of the numerators and denominators used to calculate basic and diluted earnings per share are as follows: Three months ended September30, Nine months ended September30, 2009 2008 2009 2008 (shares in thousands) Basic: Net income attributable to DaVita Inc. $ 110,930 $ 93,910 $ 312,960 $ 275,795 Weighted average shares outstanding during the period 104,118 104,548 103,896 105,561 Vested stock units 9 9 9 9 Weighted average shares for basic earnings per share calculation 104,127 104,557 103,905 105,570 Basic net income per share attributable to DaVita Inc $ 1.07 $ 0.90 $ 3.01 $ 2.61 Diluted: Net income for diluted earnings per share calculation $ 110,930 $ 93,910 $ 312,960 $ 275,795 Weighted average shares outstanding during the period 104,118 104,548 103,896 105,561 Vested stock units 9 9 9 9 Assumed incremental shares from stock plans 480 1,021 410 851 Weighted average shares for diluted earnings per share calculation 104,607 105,578 104,315 106,421 Diluted net income per share attributable to DaVita Inc. $ 1.06 $ 0.89 $ 3.00 $ 2.59 Shares subject to anti-dilutive awards excluded from calculation (1) 9,696 6,333 13,125 10,218 (1) Shares associated with stock options and stock-settled stock appreciation rights that are excluded from the diluted denominator calculation because they are anti-dilutive under the treasury stock method.

4.Stock-based compensation and

4.Stock-based compensation and other common stock transactions
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4.Stock-based compensation and other common stock transactions	4. Stock-based compensation and other common stock transactions Stock-based compensation recognized during a period is based on the estimated grant-date fair value of the portion of the stock-based awards vesting during that period, adjusted for expected forfeitures. Stock-based compensation recognized in these condensed consolidated financial statements for the three and nine months ended September30, 2009 and 2008 includes compensation cost for stock-based awards granted prior to, but not fully vested as of, January1, 2006 and subsequent stock-based awards granted through September30, 2009 and 2008, respectively. Shares issued upon exercise of stock awards are generally issued from shares in treasury. The Company has used the Black-Scholes-Merton valuation model for estimating the grant-date fair value of stock options and stock-settled stock appreciation rights granted in all periods. During the first nine months of 2009, the Company granted 3,991 stock-settled stock appreciation rights with a grant-date fair value of $47,833 and a weighted-average expected life of approximately 3.5 years, and also granted 14 stock units with a grant-date fair value of $647 and a weighted-average expected life of approximately 0.6 of a year. For the nine months ended September30, 2009 and 2008, the Company recognized $33,850 and $29,975, respectively, in stock-based compensation expense for stock options, stock-settled stock appreciation rights, stock units and discounted employee stock plan purchases, which are primarily included in general and administrative expenses. The estimated tax benefit recorded for stock-based compensation through September30, 2009 and 2008 was $12,820 and $11,306, respectively. As of September30, 2009, there was $88,023 of total estimated unrecognized compensation cost related to nonvested stock-based compensation arrangements under our equity compensation and stock purchase plans. The Company expects to recognize this cost over a weighted average remaining period of 1.5 years. During the nine months ended September30, 2009 and 2008, the Company received $27,304 and $29,876, respectively, in cash proceeds from stock option exercises and $12,434 and $10,174, respectively, in actual tax benefits upon the exercise of stock awards. During the third quarter of 2009, the Company repurchased 1,109 shares of its common stock for $62,373 or an average price of $56.25 per share. For the first nine months of 2009, the Company repurchased a total of 1,853 shares of its common stock for $94,388 or an average price of $50.93 per share. As of September30, 2009, a total of $33,165 of share repurchases had not yet been settled in cash. In addition, the Company repurchased 1,049 additional shares of its common stock from October1, 2009 through October7, 2009 for $59,107, or an average price of $56.32 per share. All of these share repurchases were consummated pursuant to previously announced authorizations by the Companys Board of Directors. On October8, 2009, the Companys Board of Directors authorized an additional $500,000 for share repurchases. The Company has not repurchased any additional shares of its common stock from Oct

5.Long-term debt

5.Long-term debt
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5.Long-term debt	5. Long-term debt Long-term debt was comprised of the following: September30, 2009 December31, 2008 Senior secured credit facilities: Term loan A $ 175,000 $ 214,375 Term loan B 1,705,875 1,705,875 Senior and senior subordinated notes 1,750,000 1,750,000 Acquisition obligations and other notes payable 18,001 15,266 Capital lease obligations 4,746 5,873 Total debt principal outstanding 3,653,622 3,691,389 Premium on the 65/8% senior notes 2,908 3,757 3,656,530 3,695,146 Less current portion (100,677 ) (72,725 ) $ 3,555,853 $ 3,622,421 Scheduled maturities of long-term debt at September30, 2009 are as follows: 2009 (remainder of the year) $ 32,661 2010 90,520 2011 67,752 2012 1,707,625 2013 901,783 2014 845 Thereafter 852,436 During the first nine months of 2009, the Company made mandatory principal payments totaling $39,375 on the term loan A. Effective January1, 2009, the Company was required to provide enhanced disclosures about the Companys derivative and hedging activities. The Company is required to provide additional disclosures about (a)how and why the Company uses derivative instruments, (b)how derivative instruments and related hedged items are accounted for, and (c)how derivative instruments and related hedged items affect the Companys financial position, financial performance, and cash flows. These requirements did not have a material impact on the Companys consolidated financial statements. The Company has elected to provide comparative disclosures for the prior period presented. The Company has entered into several interest rate swap agreements as a means of hedging its exposure to and volatility from variable-based interest rate changes as part of its overall risk management strategy. These agreements are not held for trading or speculative purposes, and have the economic effect of converting portions of our variable rate debt to a fixed rate. These agreements are designated as cash flow hedges, and as a result, hedge-effective gains or losses resulting from changes in the fair values of these swaps are reported in other comprehensive income until such time as each specific swap tranche is realized, at which time the amounts are reclassified into net income. Net amounts paid or received for each specific swap tranche that have settled have been reflected as adjustments to debt expense. These agreements do not contain credit-risk contingent features. As of September30, 2009, the Company maintained a total of eight interest rate swap agreements with amortizing notional amounts totaling $482,600. These agreements had the economic effect of modifying the LIBOR-based variable interest rate on an equivalent amount of the Companys debt to fixed rates ranging from 3.88% to 4.70%, resulting in an overall weighted average effective interest rate of 5.70% on the hedged portion of the Companys Senior Secured Cre

6.Contingencies

6.Contingencies
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6.Contingencies	6. Contingencies The majority of the Companys revenues are from government programs and may be subject to adjustment as a result of: (1)examination by government agencies or contractors for which the resolution of any matters raised may take extended periods of time to finalize; (2)differing interpretations of government regulations by different fiscal intermediaries or regulatory authorities; (3)differing opinions regarding a patients medical diagnosis or the medical necessity of services provided; and (4)retroactive applications or interpretations of governmental requirements. In addition, the Companys revenues from commercial payors may be subject to adjustment as a result of potential claims for refunds, as a result of government actions or as a result of other claims by commercial payors. Inquiries by the Federal Government In December 2008, the Company received a subpoena for documents from the Office of Inspector General, U.S. Department of Health and Human Services, or OIG, relating to the pharmaceutical products Zemplar, Hectorol, Venofer, Ferrlecit and Epogen, or EPO, as well as other related matters. The subpoena covers the period from January 2003 to the present. The Company has been in contact with the United States Attorneys Office, or U.S. Attorneys Office, for the Northern District of Georgia and the U.S. Department of Justice in Washington, DC, since November 2008 relating to this matter, and has been advised that this is a civil inquiry. On June17, 2009, the Company learned that the allegations were made as part of a civil qui tam complaint filed by individuals and brought pursuant to the federal False Claims Act. The case remains under seal in the United States District Court for the Northern District of Georgia. The Company is cooperating with the inquiry and is producing the requested records. To the Companys knowledge, no proceedings have been initiated by the federal government against the Company at this time. Although the Company cannot predict whether or when proceedings might be initiated, or when these matters may be resolved, it is not unusual for investigations such as these to continue for a considerable period of time. Responding to the subpoena will continue to require managements attention and significant legal expense. Any negative findings could result in substantial financial penalties against us and exclusion from future participation in the Medicare and Medicaid programs. In February 2007, the Company received a request for information from the OIG for records relating to EPO claims submitted to Medicare. In August 2007, the Company received a subpoena from the OIG seeking similar documents. The requested documents relate to services provided from 2001 to 2004 by a number of the Companys centers. The request and subpoena were sent from the OIGs offices in Houston and Dallas, Texas. The Company is cooperating with the inquiry and is producing the requested records. The Company has been in contact with the U.S. Attorneys Office for the Eastern District of Texas, which has stated that this is a civil inquiry related to EPO claims. On July6, 2009, the United States District Court for the

7.Investments

7.Investments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
7.Investments	7. Investments Based on the Companys intentions and strategy involving investments, the Company classifies certain debt securities as held-to-maturity and records them at amortized cost. Equity securities that have readily determinable fair values and certain other debt securities classified as available for sale are recorded at fair value. The Companys investments consist of the following: September30, 2009 December31, 2008 Held to maturity Available for sale Total Held to maturity Available for sale Total Certificates of deposit and U.S. treasury notes due within one year $ 19,920 $ $ 19,920 $ 19,355 $ $ 19,355 Investments in mutual funds 8,327 8,327 21,833 21,833 $ 19,920 $ 8,327 $ 28,247 $ 19,355 $ 21,833 $ 41,188 Short-term investments $ 19,920 $ 760 $ 20,680 $ 19,355 $ 16,177 $ 35,532 Long-term investments 7,567 7,567 5,656 5,656 $ 19,920 $ 8,327 $ 28,247 $ 19,355 $ 21,833 $ 41,188 The cost of the certificates of deposit and U.S. treasury notes at September30, 2009 and December31, 2008 approximates their fair value. As of September30, 2009 and December31, 2008, the available for sale investments included $519 and $1,558, respectively, of gross pre-tax unrealized losses. During the nine months ended September30, 2009, the Company recorded gross pre-tax unrealized gains of $1,294, or $791 after tax, in other comprehensive income associated with changes in the fair value of these investments. During the nine months ended September30, 2009, the Company sold investments in mutual funds for net proceeds of $16,537, and recognized a pre-tax gain of $255, or $156 after tax, that was previously recorded in other comprehensive income. The pre-tax gain is included in other income. The certificates of deposit and U.S. treasury notes classified as held to maturity are investments used to maintain certain capital requirements of the special need plans of VillageHealth, which is a wholly-owned subsidiary of the Company. The investments in mutual funds classified as available for sale are held in trust to fund existing obligations associated with several of the Companys non-qualified deferred compensation plans.

8.Fair value of financial instr

8.Fair value of financial instruments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
8.Fair value of financial instruments	8. Fair value of financial instruments The Company measures the fair value of certain assets, liabilities and noncontrolling interests subject to put provisions based upon certain valuation techniques that include observable or unobservable inputs and assumptions that market participants would use in pricing these assets, liabilities and commitments. The Company also has classified certain assets, liabilities and noncontrolling interests subject to put provisions that are measured at fair value into the appropriate fair value hierarchy levels. The following table summarizes the Companys assets and liabilities measured at fair value on a recurring basis as of September30, 2009: Total Quotedpricesin activemarketsfor identical assets (Level 1) Significantother observableinputs (Level 2) Significant unobservable inputs (Level 3) Assets Available for sale securities $ 8,327 $ 8,327 $ $ Liabilities Interest rate swap agreements $ 14,851 $ $ 14,851 $ Temporary equity Noncontrolling interests subject to put provisions $ 292,636 $ $ $ 292,636 The available for sale securities represent investments in various open or closed-ended registered investment companies, or mutual funds, and are recorded at fair value based upon the quoted market prices as reported by each mutual fund. See Note 7 to the condensed consolidated financial statements for further discussion. The interest rate swap agreements are recorded at fair value based upon valuation models and a variety of techniques as reported by various broker dealers that are based upon relevant observable market inputs such as current interest rates, forward yield curves, and other credit and liquidity market conditions. The Company does not believe the ultimate amount that could be realized upon settlement of these interest rate swap agreements would be materially different than the fair values as currently reported. See Note 5 to the condensed consolidated financial statements for further discussion. See Note 9 to the condensed consolidated financial statements for a discussion of the Companys methodology for estimating the fair value of noncontrolling interests subject to put obligations. The Company has other financial instruments in addition to the above that consist primarily of cash, accounts receivable, notes receivable, accounts payable, other accrued liabilities and debt. The balances of the non-debt financial instruments are presented in the condensed consolidated financial statements at September30, 2009 at their approximate fair values due to the short-term nature of their settlements. Borrowings under the Companys Senior Secured Credit Facilities totaled $1,880,875 as of September30, 2009 and the fair value was $1,815,919 based upon quoted market prices. The fair value of the Companys senior and senior subordinated notes was approximately $1,747,250 at September30, 2009, based upon quoted market prices, as compared to the carrying amount of $1,750,00

9.Noncontrolling interests subj

9.Noncontrolling interests subject to put provisions and other commitments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
9.Noncontrolling interests subject to put provisions and other commitments	9. Noncontrolling interests subject to put provisions and other commitments The Company has potential obligations to purchase the noncontrolling interests held by third parties in several of its joint ventures and non-wholly-owned subsidiaries. These obligations are in the form of put provisions and are exercisable at the third-party owners discretion within specified periods as outlined in each specific put provision. If these put provisions were exercised, the Company would be required to purchase the third-party owners noncontrolling interests at either the appraised fair market value or at a predetermined multiple of earnings or cash flow attributable to the noncontrolling interest put to the Company, which is intended to approximate fair value. The methodology the Company used to estimate the fair value of the noncontrolling interests subject to these put provisions assumes either the higher of a liquidation value of net assets or an average multiple of earnings, historical earnings, patient mix and other performance indicators, as well as other factors. The estimated fair values of the noncontrolling interests subject to these put provisions can also fluctuate and the implicit multiple of earnings at which these noncontrolling interest obligations may ultimately be settled could vary significantly from our current estimates depending upon market conditions including potential purchasers access to the credit and capital markets, which can impact the level of competition for dialysis and non-dialysis related businesses, the economic performance of these businesses and the restricted marketability of the third-party owners noncontrolling interests. The amount of noncontrolling interests subject to put provisions using a predetermined multiple of earnings and therefore not at fair value are immaterial. Additionally, the Company has certain other potential commitments to provide operating capital to several dialysis centers that are wholly-owned by third parties or centers in which the Company owns an equity investment as well as to physician-owned vascular access clinics that the Company operates under management and administrative service agreements of approximately $12,200. Certain consolidated joint ventures are contractually scheduled to dissolve after terms ranging from ten to fifty years. Accordingly, the noncontrolling interests in these joint ventures are considered mandatorily redeemable instruments for which the classification and measurement requirements have been indefinitely deferred. Future distributions upon dissolution of these entities would be valued below the related noncontrolling interest carrying balances in the condensed consolidated balance sheet.

10.Income taxes

10.Income taxes
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
10.Income taxes	10. Income taxes As of September30, 2009, the Companys total liability for unrecognized tax benefits relating to tax positions that do not meet the more-likely-than-not threshold was $12,580, all of which would impact the Companys effective tax rate if recognized. This balance represents an increase of $1,693 from the December31, 2008 balance of $10,887 due to the addition of 2009 liabilities, offset by statute expirations. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. At September30, 2009 and December31, 2008, the Company had approximately $2,783 and $1,402, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefits.

11.Segment reporting

11.Segment reporting
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
11.Segment reporting	11. Segment reporting The Company operates principally as a dialysis and related lab services business but also operates other ancillary services and strategic initiatives. These ancillary services and strategic initiatives consist of infusion therapy services, pharmacy services, vascular access services, physician services, disease management services and full-service special need plans, as well as clinical research programs. For internal management reporting, the dialysis and related lab services business and each of the ancillary services and strategic initiatives have been defined as separate operating segments by management as separate financial information is regularly produced and reviewed by the Companys chief operating decision maker in making decisions about allocating resources and assessing financial results. The Companys chief operating decision maker is its Chief Executive Officer. The dialysis and related lab services business qualifies as a separately reportable segment and all of the other ancillary services and strategic initiatives operating segments have been combined and disclosed in the other segments category. The Companys operating segment financial information is prepared on an internal management reporting basis that the Chief Executive Officer uses to allocate resources and analyze the performance of operating segments. For internal management reporting, segment operations include direct segment operating expenses with the exception of stock-based compensation expense and equity investment gains (losses). The following is a summary of segment revenues, segment operating margin (loss), and a reconciliation of segment margin to income before income taxes: Three months ended September30, Nine months ended September30, 2009 2008 2009 2008 Segment revenues: Dialysis and related lab services (1) $ 1,491,260 $ 1,377,977 $ 4,308,988 $ 4,025,934 Other Ancillary services and strategic initiatives 82,655 69,158 231,608 173,229 Consolidated revenues $ 1,573,915 $ 1,447,135 $ 4,540,596 $ 4,199,163 Segment operating margin (loss): Dialysis and related lab services $ 260,087 $ 235,245 $ 746,069 $ 699,642 Other Ancillary services and strategic initiatives (4,357 ) (3,891 ) (11,726 ) (24,334 ) Total segment margin $ 255,730 $ 231,354 $ 734,343 $ 675,308 Reconciliation of segment margin to income before income taxes: Stock-based compensation (11,437 ) (10,759 ) (33,850 ) (29,975 ) Equity investment income 708 1,177 1,066 654 Consolidated operating income 245,001 221,772 701,559 645,987 Debt expense (45,535 ) (54,505 ) (140,924 ) (168,891 ) Other income 999 2,481 3,026 10,331 C

12.Changes in DaVita Inc.'s own

12.Changes in DaVita Inc.'s ownership interest in consolidated subsidiaries
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
12.Changes in DaVita Inc.'s ownership interest in consolidated subsidiaries	12. Changes in DaVita Inc.s ownership interest in consolidated subsidiaries The effects of changes in DaVita Inc.s ownership interest on the Companys equity are as follows: Threemonths ended September30,2009 Nine months ended September30,2009 Net income attributable to DaVita Inc. $ 110,930 $ 312,960 Decrease in paid-in capital for sales of noncontrolling interest in three and ten joint ventures, respectively (503 ) (837 ) Decrease in paid-in capital for the purchase of noncontrolling interest in two and five joint ventures, respectively (1,184 ) (3,639 ) Net transfer from noncontrolling interests (1,687 ) (4,476 ) Change from net income attributable to DaVita Inc. and transfers (to) from noncontrolling interests $ 109,243 $ 308,484

13.Variable interest entities

13.Variable interest entities
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
13.Variable interest entities	13. Variable interest entities The FASB, effective for the Companys first annual reporting period that begins after November15, 2009, is eliminating the quantitative approach previously required for determining the primary beneficiary of a variable interest entity, and requiring additional disclosures about an enterprises involvement in variable interest entities. An enterprise will be required to perform an analysis to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity by having both the power to direct the activities of a variable interest entity that most significantly impact the entitys economic performance and the obligation to absorb losses of the entity, or the right to receive benefits from the entity. In addition, the FASB is establishing new guidance for determining whether an entity is a variable interest entity, requiring an ongoing reassessment of whether an enterprise is the primary beneficiary of a variable interest entity, and adding an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that the holders of the equity investment are at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entitys economic performance. The Company is currently in process of assessing the expected impact of this standard on its consolidated financial statements. The Company is deemed to be the primary beneficiary of all of the variable interest entities (VIEs) with which it is associated. These VIEs are principally operating subsidiaries owned by related party nominee owners for the Companys benefit in jurisdictions in which the Company does not qualify for direct ownership under applicable regulations. These include dialysis operating entities in New York state and physician practice management entities in various other states. Under the terms of the applicable arrangements, the Company bears virtually all of the economic risks and rewards of ownership for each of these operating VIEs. The Company has contractual arrangements with its respective related party nominee owners which indemnify them from the economic losses, and entitle the Company to the economic benefits, that may result from ownership of these VIEs. DaVita manages these VIE subsidiaries and provides operating and capital funding as necessary to accomplish its operational and strategic objectives. Accordingly, since the Company bears virtually all of the risks and rewards attendant to their ownership, the Company consolidates these variable interest entities as their primary beneficiary. Total assets of these operating VIEs were approximately $16,000 and their liabilities to unrelated third parties were approximately $10,000 at September30, 2009. The Company also sponsors certain deferred compensation plans whose trusts qualify as VIEs and as their primary beneficiary the Company consolidates each of these plans. The assets of these plans are recorded in short-term or

14.Condensed consolidating fina

14.Condensed consolidating financial statements
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
14.Condensed consolidating financial statements	14. Condensed consolidating financial statements The following information is presented in accordance with Rule 3-10 of Regulation S-X. The operating and investing activities of the separate legal entities included in the consolidated financial statements are fully interdependent and integrated. Revenues and operating expenses of the separate legal entities include intercompany charges for management and other services. The senior notes and the senior subordinated notes were issued by the Company and are guaranteed by substantially all of the Companys direct and indirect wholly-owned subsidiaries. Each of the guarantor subsidiaries has guaranteed the notes on a joint and several, full and unconditional basis. Non-wholly-owned subsidiaries, joint venture partnerships and other third parties are not guarantors of these obligations. Condensed Consolidating Statements of Income For the three months ended September30, 2009 DaVitaInc. Guarantor subsidiaries Non-Guarantor subsidiaries Consolidating adjustments Consolidated total Net operating revenues $ 104,771 $ 1,310,558 $ 269,201 $ (110,615 ) $ 1,573,915 Operating expenses 57,742 1,158,277 223,510 (110,615 ) 1,328,914 Operating income 47,029 152,281 45,691 245,001 Debt (expense) (46,434 ) (37,146 ) (253 ) 38,298 (45,535 ) Other income 39,175 122 (38,298 ) 999 Income tax expense 15,854 56,754 1,587 74,195 Equity earnings in subsidiaries 87,014 28,298 (115,312 ) Net income 110,930 86,679 43,973 (115,312 ) 126,270 Less: Net income attributable to noncontrolling interests (15,340 ) (15,340 ) Net income attributable to DaVita Inc. $ 110,930 $ 86,679 $ 43,973 $ (130,652 ) $ 110,930 For the three months ended September30, 2008 Net operating revenues $ 92,199 $ 1,226,156 $ 228,496 $ (99,716 ) $ 1,447,135 Operating expenses 59,243 1,075,997 189,839 (99,716 ) 1,225,363 Operating income 32,956 150,159 38,657 221,772 Debt (expense) (55,565 ) (43,574 ) (1,832 ) 46,466 (54,505 ) Other income 48,718 229 (46,466 ) 2,481 Income tax expense 10,413 51,803 (206 ) 62,010 Equity earnings in subsidiaries 78,214 22,370 (100,584 ) Net income 93,910 77,152 37,260 (100,584 ) 107,738 Less: Net income attributable to noncontrolling interests (13,828 ) (13,828 ) Net income attributable to DaVita Inc. $

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 30, 2009
Entity [Text Block]
Trading Symbol	DVA
Entity Registrant Name	DAVITA INC
Entity Central Index Key	0000927066
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		102,200,000