Statement Of Income Alternative
Statement Of Income Alternative (USD $) | |||
In Thousands, except Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Net operating revenues | $6,108,800 | $5,660,173 | $5,264,151 |
Operating expenses and charges: | |||
Patient care costs | 4,248,668 | 3,920,487 | 3,590,344 |
General and administrative | 531,531 | 508,240 | 491,236 |
Depreciation and amortization | 228,986 | 216,917 | 193,470 |
Provision for uncollectible accounts | 161,786 | 146,229 | 136,682 |
Equity investment income | (2,442) | (796) | (1,217) |
Valuation gain on alliance and product supply agreement | 0 | 0 | (55,275) |
Total operating expenses and charges | 5,168,529 | 4,791,077 | 4,355,240 |
Operating income | 940,271 | 869,096 | 908,911 |
Debt expense | (185,755) | (224,716) | (257,147) |
Other income, net | 3,708 | 12,411 | 22,460 |
Income before income taxes | 758,224 | 656,791 | 674,224 |
Income tax expense | 278,465 | 235,471 | 245,581 |
Net income | 479,759 | 421,320 | 428,643 |
Less: Net income attributable to noncontrolling interests | (57,075) | (47,160) | (46,865) |
Net income attributable to DaVita Inc. | $422,684 | $374,160 | $381,778 |
Earnings per share: | |||
Basic earnings per share attributable to DaVita Inc. | 4.08 | 3.56 | 3.61 |
Diluted earnings per share attributable to DaVita Inc. | 4.06 | 3.53 | 3.55 |
Weighted average shares for earnings per share: | |||
Basic | 103,603,885 | 105,149,448 | 105,893,052 |
Diluted | 104,167,685 | 105,939,725 | 107,418,240 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Thousands | Dec. 31, 2009
| Dec. 31, 2008
|
ASSETS | ||
Cash and cash equivalents | $539,459 | $410,881 |
Short-term investments | 26,475 | 35,532 |
Accounts receivable, less allowance of $229,317 and $211,222 | 1,105,903 | 1,075,457 |
Inventories | 70,041 | 84,174 |
Other receivables | 263,456 | 239,165 |
Other current assets | 40,234 | 33,761 |
Income tax receivable | 0 | 32,130 |
Deferred income taxes | 256,953 | 217,196 |
Total current assets | 2,302,521 | 2,128,296 |
Property and equipment, net | 1,104,925 | 1,048,075 |
Amortizable intangibles, net | 136,732 | 160,521 |
Equity investments | 22,631 | 19,274 |
Long-term investments | 7,616 | 5,656 |
Other long-term assets | 32,615 | 47,330 |
Goodwill | 3,951,196 | 3,876,931 |
Assets, Total | 7,558,236 | 7,286,083 |
LIABILITIES AND EQUITY | ||
Accounts payable | 176,657 | 282,883 |
Other liabilities | 461,092 | 495,239 |
Accrued compensation and benefits | 286,121 | 312,216 |
Current portion of long-term debt | 100,007 | 72,725 |
Income taxes payable | 23,064 | 0 |
Total current liabilities | 1,046,941 | 1,163,063 |
Long-term debt | 3,532,217 | 3,622,421 |
Other long-term liabilities | 87,692 | 101,442 |
Alliance and product supply agreement, net | 30,647 | 35,977 |
Deferred income taxes | 334,855 | 244,884 |
Total liabilities | 5,032,352 | 5,167,787 |
Commitments and contingencies | ||
Noncontrolling interests subject to put provisions | 331,725 | 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; 103,062,698 and 103,753,673 shares outstanding) | 135 | 135 |
Additional paid-in capital | 621,685 | 584,358 |
Retained earnings | 2,312,134 | 1,889,450 |
Treasury stock, at cost (31,799,585 and 31,108,610 shares) | (793,340) | (691,857) |
Accumulated other comprehensive loss | (5,548) | (14,339) |
Total DaVita Inc. shareholders' equity | 2,135,066 | 1,767,747 |
Noncontrolling interests not subject to put provisions | 59,093 | 59,152 |
Total equity | 2,194,159 | 1,826,899 |
Liabilities and Stockholders' Equity, Total | $7,558,236 | $7,286,083 |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
In Thousands, except Share data | Dec. 31, 2009
| Dec. 31, 2008
|
Accounts receivable, allowance | $229,317 | $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 | 103,062,698 | 103,753,673 |
Treasury stock, shares | 31,799,585 | 31,108,610 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Cash flows from operating activities: | |||
Net income. | $479,759 | $421,320 | $428,643 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 228,986 | 216,917 | 193,470 |
Valuation gain on alliance and product supply agreement | 0 | 0 | (55,275) |
Stock-based compensation expense | 44,422 | 41,235 | 34,149 |
Tax benefits from stock award exercises | 18,241 | 13,988 | 32,788 |
Excess tax benefits from stock award exercises | (6,950) | (8,013) | (25,541) |
Deferred income taxes | 50,869 | 94,912 | 18,601 |
Equity investment income, net | (204) | (796) | (1,217) |
Loss (gain) on disposal of assets | 9,761 | 15,216 | (2,825) |
Non-cash debt expense and non-cash rent charges | 11,184 | 11,794 | 12,713 |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||
Accounts receivable | (32,313) | (149,939) | 15,911 |
Inventories | 15,115 | (2,715) | 11,271 |
Other receivables and other current assets | (35,104) | (40,960) | (61,049) |
Other long-term assets | 7,288 | (11,929) | (14,528) |
Accounts payable | (104,879) | 57,422 | (9,216) |
Accrued compensation and benefits | (9,138) | (31,602) | 9,691 |
Other current liabilities | (43,543) | 8,871 | 657 |
Income taxes | 44,578 | (30,087) | (12,942) |
Other long-term liabilities | (11,362) | 8,067 | 5,764 |
Net cash provided by operating activities | 666,710 | 613,701 | 581,065 |
Cash flows from investing activities: | |||
Additions of property and equipment | (274,605) | (317,962) | (272,212) |
Acquisitions | (87,617) | (101,959) | (127,094) |
Proceeds from asset sales | 7,697 | 530 | 12,289 |
Purchase of investments available-for-sale | (2,062) | (2,009) | (52,085) |
Purchase of investments held-to-maturity | (22,664) | (21,048) | (23,061) |
Proceeds from the sale of investments available-for-sale | 16,693 | 21,291 | 32,274 |
Proceeds from maturities of investments held-to-maturity | 16,380 | 21,355 | 4,795 |
Purchase of equity investments | (2,100) | 0 | (17,550) |
Distributions received on equity investments | 2,547 | 908 | 1,134 |
Purchase of intangible assets | (329) | (65) | (2,291) |
Other investment activity | 0 | 1,220 | (2,942) |
Net cash used in investing activities | (346,060) | (397,739) | (446,743) |
Cash flows from financing activities: | |||
Borrowings | 18,767,592 | 17,089,018 | 13,113,640 |
Payments on long-term debt | (18,828,824) | (17,102,569) | (13,160,942) |
Deferred financing costs | (42) | (130) | (4,511) |
Purchase of treasury stock | (153,495) | (232,715) | (6,350) |
Excess tax benefits from stock award exercises | 6,950 | 8,013 | 25,541 |
Stock award exercises and other share issuances, net | 67,908 | 40,247 | 62,902 |
Distributions to noncontrolling interests | (67,748) | (59,357) | (48,029) |
Contributions from noncontrolling interests | 13,071 | 19,074 | 14,735 |
Proceeds from sales of additional noncontrolling interests | 9,375 | 10,701 | 5,536 |
Purchases from noncontrolling interests | (6,859) | (24,409) | 0 |
Net cash (used in) provided by financing activities | (192,072) | (252,127) | 2,522 |
Net increase (decrease) in cash and cash equivalents | 128,578 | (36,165) | 136,844 |
Cash and cash equivalents at beginning of year | 410,881 | 447,046 | 310,202 |
Cash and cash equivalents at end of year | $539,459 | $410,881 | $447,046 |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | ||||||||
In Thousands | Non-controlling interests subject to put provisions
| Common stock
| Additional paid-in capital
| Retained earnings
| Treasury stock
| Accumulated other comprehensive income (loss)
| Non-controlling interests not subject to put provisions
| Total
|
Beginning Balance at Dec. 31, 2006 | $191,871 | $135 | $523,500 | $1,129,621 | ($526,920) | $12,997 | $37,079 | $1,139,333 |
Beginning Balance (in shares) at Dec. 31, 2006 | 134,862 | (30,226) | ||||||
Comprehensive income: | ||||||||
Net income | 428,643 | |||||||
Comprehensive income: | ||||||||
Net income | 421,320 | |||||||
Ending Balance at Dec. 31, 2008 | 1,826,899 | |||||||
Comprehensive income: | ||||||||
Net income | 479,759 | |||||||
Ending Balance at Dec. 31, 2009 | $2,194,159 |
Organization and summary of sig
Organization and summary of significant accounting policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Organization and summary of significant accounting policies | 1.Organization and summary of significant accounting policies Organization DaVita Inc. principally operates kidney dialysis centers and provides related lab services primarily in dialysis centers and in contracted hospitals across the United States. The Company also operates other ancillary services and strategic initiatives which relate primarily to its core business of providing renal care services. As of December31, 2009, the Company operated or provided administrative services to 1,530 outpatient dialysis centers located in 43 states and the District of Columbia, serving approximately 118,000 patients. The Companys dialysis and related lab services business qualifies as a separately reportable segment and all other ancillary services and strategic initiatives have been combined and disclosed in the other segments category. Basis of presentation These consolidated financial statements are prepared in accordance with United States generally accepted accounting principles. The financial statements include DaVita and its subsidiaries, partnerships and other entities in which it maintains a 100%, majority voting, or other controlling financial interest (collectively, the Company). All significant intercompany transactions and balances have been eliminated. Non-marketable equity investments are recorded under the equity or cost method of accounting based upon whether the Company has significant influence over the investee. The Company has evaluated subsequent events through February25, 2010, which is the date these consolidated financial statements were issued. Use of estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and contingencies. Although actual results in subsequent periods will differ from these estimates, such estimates are developed based on the best information available to management and managements best judgments at the time made. All significant assumptions and estimates underlying the amounts reported in the financial statements and accompanying notes are regularly reviewed and updated. Changes in estimates are reflected in the financial statements based upon on-going actual experience trends, or subsequent settlements and realizations depending on the nature and predictability of the estimates and contingencies. Interim changes in estimates related to annual operating costs are applied prospectively within annual periods. The most significant assumptions and estimates underlying these financial statements and accompanying notes involve revenue recognition and provisions for uncollectible accounts, impairments and valuation adjustments, accounting for income taxes, quarterly variable compensation accruals, purchase accounting valuation estimates, fair value estimates and stock-based compensation. Specific estimating risks and contingencies are further addressed within these notes to the consolidated financial statements. Net operating revenues and accounts receivable Revenues associated with Medicar |
Earnings per share
Earnings per share | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Earnings per share | 2.Earningsper share Basic net income per share is calculated by dividing net income by the weighted average number of common shares and vested stock units outstanding. Diluted net income per share includes the dilutive effect of 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 net income per share are as follows: Year ended December31, 2009 2008 2007 (shares in thousands) Basic: Net income attributable to DaVita Inc. $ 422,684 $ 374,160 $ 381,778 Weighted average shares outstanding during the year 103,595 105,140 105,848 Vested stock units 9 9 45 Weighted average shares for basic earnings per share calculation 103,604 105,149 105,893 Basic net income per share attributable to DaVita Inc $ 4.08 $ 3.56 $ 3.61 Diluted: Net income attributable to DaVita Inc. $ 422,684 $ 374,160 $ 381,778 Weighted average shares outstanding during the year 103,595 105,140 105,848 Vested stock units 9 9 45 Assumed incremental shares from stock plans 564 791 1,525 Weighted average shares for diluted earnings per share calculation 104,168 105,940 107,418 Diluted net income per share attributable to DaVita Inc $ 4.06 $ 3.53 $ 3.55 Shares subject to anti-dilutive awards excluded from calculation(1) 9,912 10,053 260 (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. |
Accounts receivable
Accounts receivable | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Accounts receivable | 3.Accounts receivable Approximately 18% and 9% of the accounts receivable balances as of December31, 2009 and 2008, respectively, were more than six months old, and there were no significant balances over one year old. Approximately 2% and 1% of our accounts receivable as of December31, 2009 and 2008, respectively, relate to amounts due from patients. Accounts receivable are principally from Medicare and Medicaid programs and commercial insurance plans. |
Other receivables
Other receivables | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Other receivables | 4.Other receivables Other receivables were comprised of the following: December31, 2009 2008 Supplier rebates and other non-trade receivables $ 195,753 $ 172,604 Medicare bad debt claims 45,600 38,700 Operating advances under management and administrative services agreements 22,103 27,861 $ 263,456 $ 239,165 Operating advances under management and administrative services agreements are generally unsecured. |
Other current assets
Other current assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Other current assets | 5.Other current assets Other current assets consist principally of prepaid expenses and operating deposits. |
Property and equipment
Property and equipment | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Property and equipment | 6.Property and equipment Property and equipment were comprised of the following: December31, 2009 2008 Land $ 11,771 $ 11,771 Buildings 34,294 33,833 Leasehold improvements 997,668 873,306 Equipment and information systems 999,305 928,795 New center and capital asset projects in progress 32,280 36,875 2,075,318 1,884,580 Less accumulated depreciation and amortization (970,393 ) (836,505 ) $ 1,104,925 $ 1,048,075 Depreciation and amortization expense on property and equipment was $214,515, $201,006 and $178,990 for 2009, 2008 and 2007, respectively. Interest on debt incurred during the development of new centers and other capital asset projects is capitalized as a component of the asset cost based on the respective in-process capital asset balances. Interest capitalized was $3,627, $4,189 and $3,878 for 2009, 2008 and 2007, respectively. |
Amortizable intangibles
Amortizable intangibles | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Amortizable intangibles | 7.Amortizable intangibles Amortizable intangible assets were comprised of the following: December31, 2009 2008 Noncompetition and other agreements $ 291,022 $ 285,270 Lease agreements 8,156 8,637 Deferred debt issuance costs 72,656 72,748 371,834 366,655 Less accumulated amortization (235,102 ) (206,134 ) Total amortizable intangible assets $ 136,732 $ 160,521 Amortizable intangible liabilities were comprised of the following: December31, 2009 2008 Alliance and product supply agreement commitment (See Note22) $ 68,200 $ 68,200 Less accumulated amortization (37,553 ) (32,223 ) $ 30,647 $ 35,977 Net amortization expense from noncompetition and other agreements and the amortizable intangible liabilities was $14,471, $15,911 and $14,480 for 2009, 2008 and 2007, respectively. Lease agreements which are amortized to rent expense were $565 in 2009, $1,420 in 2008 and $2,240 in 2007, respectively. Deferred debt issuance costs are amortized to debt expense as described in Note 13 to the consolidated financial statements. Scheduled amortization charges from intangible assets and liabilities as of December31, 2009 were as follows: Noncompetitionand other agreements Deferreddebt issuancecosts Alliance and ProductSupply Agreementliability 2010 $ 20,100 $ 9,390 $ (5,330 ) 2011 19,660 8,922 (5,330 ) 2012 18,935 6,423 (5,330 ) 2013 16,817 2,741 (5,330 ) 2014 15,133 2,290 (5,330 ) Thereafter 15,844 477 (3,997 ) |
Equity investments
Equity investments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Equity investments | 8.Equity investments Equity investments in non-consolidated businesses were $22,631 and $19,274 at December31, 2009 and 2008, respectively. During 2009, 2008 and 2007, the Company recognized income of $2,442, $796 and $1,217, respectively, relating to equity investments in non-consolidated businesses under the equity method of accounting. See Note 17, section Changes in DaVita Inc.s ownership interest in consolidated subsidiaries to the consolidated financial statements for additional information regarding equity investment transactions. In 2009, the Company also contributed $1,100 to an existing joint venture in which the Company owns a 50% equity investment. On December31, 2007, the Company acquired a 50% equity investment in a joint venture that operated six dialysis centers for $17,550. |
Investments in debt and equity
Investments in debt and equity securities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Investments in debt and equity securities | 9.Investments in debt and equity securities 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 other debt securities classified as available for sale are recorded at fair value. The Companys investments consist of the following: December31, 2009 December31, 2008 Held to maturity Available for sale Total Held to maturity Available for sale Total Certificates of deposit, money market funds and U.S. treasury notes due within one year $ 25,275 $ $ 25,275 $ 19,355 $ $ 19,355 Investments in mutual funds 8,816 8,816 21,833 21,833 $ 25,275 $ 8,816 $ 34,091 $ 19,355 $ 21,833 $ 41,188 Short-term investments $ 25,275 $ 1,200 $ 26,475 $ 19,355 $ 16,177 $ 35,532 Long-term investments 7,616 7,616 5,656 5,656 $ 25,275 $ 8,816 $ 34,091 $ 19,355 $ 21,833 $ 41,188 The cost of the certificates of deposit, money market funds and U.S. treasury notes at December31, 2009 and 2008 approximates fair value. As of December31, 2009 and 2008, the available for sale investments included $205 and $1,558, respectively, of gross pre-tax unrealized losses. During 2009 and 2008 the Company recorded gross pre-tax unrealized gains (losses) of $1,614 and $(1,922), respectively, in other comprehensive income associated with changes in the fair value of these investments. During 2009, the Company sold investments in mutual funds for net proceeds of $16,693, and recognized a pre-tax gain of $261, or $159 after tax, that was previously recorded in other comprehensive income. In 2009, the Company also purchased approximately $6,300 of investments that are classified as held to maturity, net of investments routinely reinvested as required for VillageHealth, see discussion below. During 2008, the Company sold investments in mutual funds for net proceeds of $21,291 and recognized a pre-tax gain of $486, or $297 after-tax, that was also previously recorded in other comprehensive income. These pre-tax gains are included in other income. See Note 18 to the consolidated financial statements for further details. As of December31, 2009, investments totaling $22,275 classified as held to maturity are used to maintain certain capital requirements of the special needs plans of VillageHealth, which is a wholly-owned subsidiary of the Company. As of December31, 2009, the Company discontinued the VillageHealth special needs plans and is in process of paying out all incurred claims. The Company also expects to liquidate its investments that are currently held to maintain certain capital requirements as soon as all of the claims are paid and the various state regulatory agencies approve the release of these investments. The investments in mutual funds classified |
Goodwill
Goodwill | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Goodwill | 10.Goodwill Changes in the book value of goodwill were as follows: Year ended December31, 2009 2008 Balance at January1 $ 3,876,931 $ 3,767,933 Acquisitions 78,199 89,234 Sales of and purchases from noncontrolling interests (3,293 ) 20,141 Divestitures (641 ) DVA Renal Healthcare income tax adjustments (642 ) Other adjustments 265 Balance at December31 $ 3,951,196 $ 3,876,931 As of December31, 2009, there was $3,882,254 and $68,942 of goodwill associated with the dialysis and related lab services business and the ancillary services and strategic initiatives, respectively. As of December31, 2008, there was $3,808,942 and $67,989 of goodwill associated with the dialysis and related lab services business and the ancillary services and strategic initiatives, respectively. |
Other liabilities
Other liabilities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Other liabilities | 11.Other liabilities Other accrued liabilities were comprised of the following: December31, 2009 2008 Payor refunds and retractions $ 320,187 $ 361,205 Insurance and self-insurance accruals 59,734 55,844 Accrued interest 36,881 44,308 Accrued non-income tax liabilities 11,581 8,920 Interest rate swaps 10,792 18 Other 21,917 24,944 $ 461,092 $ 495,239 |
Income taxes
Income taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Income taxes | 12.Income taxes A reconciliation of the beginning and ending liability for unrecognized tax benefits that do not meet the more-likely-than-not threshold were as follows: YearendedDecember31, 2009 2008 Balance beginning $ 10,887 $ 25,744 Additions for tax positions related to current year 6,939 1,934 Additions for tax positions related to prior years 14,941 463 Reductions for tax positions related to prior years (1,738 ) (17,254 ) Settlements (336 ) Balance ending $ 30,693 $ 10,887 As of December31, 2009, it is reasonably possible that $18,342 of unrecognized tax benefits may be recognized within the next 12 months, primarily related to the filing of tax accounting method changes. These changes will have no impact on the Companys effective tax rate. As of December31, 2009, unrecognized tax benefits totaling $12,351 would affect the Companys effective tax rate, if recognized. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. At December31, 2009 and 2008, the Company had approximately $3,226 and $1,402, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefits. The Company and its subsidiaries file U.S. federal income tax returns and various state returns. The Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2004. Income tax expense consisted of the following: Year ended December31, 2009 2008 2007 Current: Federal $ 193,181 $ 118,764 $ 196,556 State 34,415 20,595 30,424 Deferred: Federal 44,376 81,306 14,945 State 6,493 14,806 3,656 $ 278,465 $ 235,471 $ 245,581 Deferred tax assets and liabilities arising from temporary differences were as follows: December31, 2009 2008 Receivables $ 142,315 $ 108,275 Alliance and product supply agreement 11,922 13,995 Accrued liabilities 125,992 117,474 Other 62,208 65,635 Deferred tax assets 342,437 305,379 Valuation allowance (14,191 ) (12,588 ) Net deferred tax assets 328,246 292,791 Intangible assets (317,306 ) (262,029 ) Property and equipment (84,041 ) (55,747 ) Other (4,801 ) (2,703 ) Deferred tax liabilities (406,148 ) (320,479 ) Net deferred tax liabilities $ (77,902 ) $ (27,688 ) At December31, 2009, the Company had state net operating loss carryforwards of approximately $169,497 that expire through 2029, and federal net operating loss carryforwards of $10,657 that expire through 2029. The utilization of these losses may be limited in future years based on the profitability of |
Long-term debt
Long-term debt | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Long-term debt | 13.Long-term debt Long-term debt was comprised of the following: December31, 2009 2008 Senior Secured Credit Facilities: Term loan A $ 153,125 $ 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 15,891 15,266 Capital lease obligations 4,635 5,873 Total principal debt outstanding 3,629,526 3,691,389 Premium on the 65/8% senior notes 2,698 3,757 3,632,224 3,695,146 Less current portion (100,007 ) (72,725 ) $ 3,532,217 $ 3,622,421 Scheduled maturities of long-term debt at December31, 2009 were as follows: 2010 100,007 2011 67,589 2012 1,707,625 2013 901,374 2014 495 Thereafter 852,436 Senior Secured Credit Facility The Senior Secured Credit Facilities are guaranteed by substantially all of the Companys direct and indirect wholly-owned subsidiaries and are secured by substantially all of the Companys and its subsidiary guarantors assets. The Senior Secured Credit Facilities also contain customary affirmative and negative covenants and require compliance with financial covenants, including an interest rate coverage ratio, and a leverage ratio that determines the interest rate margins on term loan A and the revolving line of credit. The Senior Secured Credit Facilities in general also contain limits on the general amount of capital expenditures for internal growth, acquisitions and capital improvements, redemptions or acquisitions of capital stock, the payment of dividends and distributions in cash as well as limits on the amount of tangible net assets in non-guarantor subsidiaries. However, the limitations on capital expenditures for internal growth will not apply during the periods in which the Companys leverage ratio is less than 3.5:1. The Companys leverage ratio at December31, 2009 was less than 3.5:1. Term Loans Term loan A and term loan B total outstanding borrowings each consist of various individual tranche amounts that can range in maturity from one month to twelve months. Each specific tranche bears interest at a LIBOR rate determined by the maturity of that specific tranche and the interest rates are reset as each specific tranche matures. The overall weighted average interest rate for each term loan is determined based upon the LIBOR interest rates in effect for all of the individual tranches plus the interest rate margin. Term Loan A Term loan A currently bears interest at LIBOR plus a margin of 1.50%, for an overall weighted average effective rate of 1.74% at December31, 2009. The interest rate margin is subject to adjustment depending upon certain financial conditions and could range from 1.50% to 2.25%. Term loan A matures in October 2011 and requires annual principal payments of $87,500 in 2010 and $65,625 in 2011, respectively. During 2009 and 2008, the Company made principal payments totaling $61,250 and $14 |
Leases
Leases | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Leases | 14.Leases The majority of the Companys facilities are leased under non-cancelable operating leases, ranging in terms from five to 15 years, which contain renewal options of five to ten years at the fair rental value at the time of renewal. The Company leases are generally subject to periodic consumer price index increases or contain fixed escalation clauses. The Company also leases certain equipment under capital leases. Future minimum lease payments under non-cancelable operating leases and capital leases are as follows: Operating leases Capital leases 2010 $ 215,993 $ 851 2011 197,042 852 2012 176,378 870 2013 152,512 835 2014 130,718 579 Thereafter 439,217 2,801 $ 1,311,860 6,788 Less portion representing interest (2,153 ) Total capital lease obligations, including current portion $ 4,635 Rent expense under all operating leases for 2009, 2008, and 2007 was $248,792, $225,531 and $200,626, respectively. Rent expense is recorded on a straight-line basis, over the term of the lease, for leases that contain fixed escalation clauses or include abatement provisions. Leasehold improvement incentives are deferred and amortized to rent expense over the term of the lease. The net book value of property and equipment under capital leases was $5,432, $6,612 and $7,191 at December31, 2009, 2008 and 2007, respectively. Capital lease obligations are included in long-term debt. See Note 13 to the consolidated financial statements. |
Employee benefit plans
Employee benefit plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Employee benefit plans | 15.Employee benefit plans The Company has a savings plan for substantially all employees which has been established pursuant to the provisions of Section401(k) of the Internal Revenue Code, or IRC. The plan allows for employees to contribute a percentage of their base annual salaries on a tax-deferred basis not to exceed IRC limitations. The Company does not provide any matching contributions. The Company also maintains a voluntary compensation deferral plan, the DaVita Voluntary Deferral Plan. This plan is non-qualified and permits certain employees whose annualized base salary equals or exceeds a minimum annual threshold amount as set by the Company to elect to defer all or a portion of their annual bonus payment and up to 50% of their base salary into a deferral account maintained by the Company. Total contributions to this plan in 2009 and 2008 were $2,062, and $1,993, respectively. Deferred amounts are generally paid out in cash at the participants election either in the first or second year following retirement or in a specified future period at least three to four years after the deferral election was effective. During 2009 and 2008, the Company distributed $601 and $764, respectively, to participants. Participants are credited with their proportional amount of annual earnings from the plan. The assets of this plan are held in a rabbi trust and as such are subject to the claims of the Companys general creditors in the event of its bankruptcy. As of December31, 2009 and 2008, the total fair value of assets held in trust were $7,246 and $4,556, respectively. As part of the acquisition of DVA Renal Healthcare on October5, 2005, the Company acquired an Executive Retirement Plan for certain members of management. This plan is non-qualified and contributions to the plan were made at the discretion of DVA Renal Healthcare based upon a pre-determined percentage of a participants base salary. Effective November 2005, all contributions to this plan were discontinued and the balance of the plan assets will be paid out upon termination of each individual participant. During 2009 and 2008, the Company distributed $241 and $142, respectively, to participants. As of December31, 2009 and 2008, the total fair value of assets held in trust was $1,570 and $1,490, respectively. The Company maintained a non-qualified deferred compensation plan for key employees. Company contributions were discretionary and were deposited into a rabbi trust. Participants in the plan were subject to a vesting period and typically receive annual distributions from the plan commencing one year after grant date, although in certain situations distributions are paid upon termination or retirement. Participants also had the option to direct their balances into certain investment funds and were credited with their proportional amount of earnings from the investments. The assets of this plan were held in the rabbi trust and were subject to the claims of the Companys general creditors in the event of its bankruptcy. There were no contributions to this plan in 2009. In 2008, the Company contributed $16 to this plan. During 2009, the Company distributed $15,851, inc |
Contingencies
Contingencies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Contingencies | 16.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 the Company 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 Cour |
DaVita Inc. stock-based compens
DaVita Inc. stock-based compensation and shareholders' equity | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
DaVita Inc. stock-based compensation and shareholders' equity | 17.DaVita Inc. stock-based compensation and shareholders equity Stock-based compensation Stock-based compensation recognized in a period represents the amortization during that period of the estimated grant-date fair value of stock-based awards over their vesting terms, adjusted for expected forfeitures. Shares issued upon exercise of stock awards are generally issued from shares held in treasury. Stock-based compensation plans and agreements On May29, 2007, the Companys stockholders approved an amendment and restatement of the Companys Employee Stock Purchase Plan to increase the number of shares of common stock available for issuance under that plan by 800,001 shares, and approved an amendment and restatement of the Companys 2002 Equity Compensation Plan to increase the number of shares of common stock available for issuance under that plan by 6,000,000 shares and, among other things, to remove certain available share recycling features, to change the limit on the maximum number of shares of common stock that may be subject to awards granted to any single recipient in any consecutive twenty-four month period so that such limit applies only to awards of stock options and stock appreciation rights, and to provide additional exceptions from the three year minimum vesting period generally applicable to grants of restricted stock units and other full share awards. The Companys stock-based compensation plans and agreements are described below. 2002 Plan.The DaVita Inc. 2002 Equity Compensation Plan (the 2002 Plan) is the Companys omnibus equity compensation plan and provides for grants of stock-based awards to employees, directors and other individuals providing services to the Company, except that incentive stock options may only be awarded to employees. The 2002 Plan mandates a maximum award term of five years, and stipulates that stock options and stock appreciation rights be granted with prices not less than the fair market value on the date of grant. The 2002 Plan further requires that full share awards such as restricted stock units reduce shares available under the 2002 Plan at a rate of 3.0:1. The Companys nonqualified stock options, stock appreciation rights and stock units awarded under the 2002 Plan generally vest over 48 to 60 months from the date of grant. At December31, 2009, there were 13,316,104 stock options and stock-settled stock appreciation rights and 69,696 stock units outstanding and 4,041,592 shares available for future grants under the 2002 Plan. Predecessor plans.Various prior stock-based compensation plans were terminated upon shareholder approval of the 2002 Plan in 2002, and the 1999 Non-Executive Officer and Non-Director Equity Compensation Plan (the 1999 Plan) expired in 2009, both except with respect to option awards then outstanding. Stock options granted under these terminated plans were generally issued with exercise prices equal to the market price of the stock on the date of grant, vested over four years from the date of grant, and bore maximum award terms of five to 10 years. For these terminated plans, there were only 20,084 stock options remaining outstanding under the 1999 Pl |
Other comprehensive income
Other comprehensive income | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Other comprehensive income | 18.Other comprehensive income Charges and credits to other comprehensive income have been as follows: 2007 Before tax amount Tax(expense) benefit Net-of-tax amount Unrealized losses on interest rate swaps $ (11,733 ) $ 4,564 $ (7,169 ) Less reclassification of net swap realized gains into net income (14,498 ) 5,640 (8,858 ) Net swap activity (26,231 ) 10,204 (16,027 ) Unrealized gains on investments 6,892 (2,681 ) 4,211 Less reclassification of net investment realized gains into net income (6,042 ) 2,350 (3,692 ) Net investment activity 850 (331 ) 519 Total $ (25,381 ) $ 9,873 $ (15,508 ) 2008 Before tax amount Tax(expense) benefit Net-of-tax amount Unrealized losses on interest rate swaps $ (21,190 ) $ 8,243 $ (12,947 ) Less reclassification of net swap realized losses into net income 4,239 (1,649 ) 2,590 Net swap activity (16,951 ) 6,594 (10,357 ) Unrealized losses on investments (1,922 ) 748 (1,174 ) Less reclassification of net investment realized gains into net income (486 ) 189 (297 ) Net investment activity (2,408 ) 937 (1,471 ) Total $ (19,359 ) $ 7,531 $ (11,828 ) 2009 Before tax amount Tax(expense) benefit Net-of-tax amount Unrealized losses on interest rate swaps $ (4,220 ) $ 1,642 $ (2,578 ) Less reclassification of net swap realized losses into net income 17,253 (6,711 ) 10,542 Net swap activity 13,033 (5,069 ) 7,964 Unrealized gains on investments 1,614 (628 ) 986 Less reclassification of net investment realized gains into net income (261 ) 102 (159 ) Net investment activity 1,353 (526 ) 827 Total $ 14,386 $ (5,595 ) $ 8,791 Changes in accumulated other comprehensive income (loss) has been as follows: Interestrate swaps Investment securities Accumulated other comprehensive income Balance December31, 2007 (3,030 ) 519 (2,511 ) Net activity (10,357 ) (1,471 ) (11,828 ) Balance December31, 2008 $ (13,387 ) $ (952 ) $ (14,339 ) Net activity 7,964 827 8,791 Balance December31, 2009 $ (5,423 ) $ (125 ) $ (5,548 ) |
Acquisitions and divestitures
Acquisitions and divestitures | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Acquisitions and divestitures | 19.Acquisitions and divestitures Acquisitions 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 not that they meet the definition of an asset or a liability. Transaction costs are excluded from the acquisition cost and are expensed as incurred. Any contingent consideration included by the acquirer as part of the purchase price must also be measured at fair value at the acquisition date and is classified as either equity or a liability. A Company that obtains control but acquires less than 100% of an acquiree is required to record 100% of the fair value of the acquiree assets, liabilities, and noncontrolling interests at the acquisition date. The adoption of these requirements did not have a material impact on the Companys consolidated financial statements. The total acquisition amounts were as follows: Year ended December31, 2009 2008 2007 Cash paid, net of cash acquired $ 87,617 $ 101,959 $ 127,094 Deferred purchase price and other acquisition obligations 338 2,286 1,195 Aggregate purchase cost $ 87,955 $ 104,245 $ 128,289 Number of chronic dialysis centers acquired 19 20 16 During 2009, 2008, and 2007, the Company acquired dialysis businesses consisting of 19 centers, 20 centers and 16 centers for a total of $87,955, $93,024 and $57,783, respectively, in cash and deferred purchase price obligations. In 2009, the Company also acquired additional ownership interests in several existing majority-owned joint ventures for $6,859. In 2008, the Company also acquired an 80% ownership interest in one vascular access clinic for $11,221 and in addition, purchased additional ownership interests in several existing majority-owned joint ventures for $24,409. In 2007, the Company also acquired an 85% ownership interest in HomeChoice Partners for $70,506 in cash and deferred purchase price obligations. HCP provides infusion therapy services to patients with acute or chronic conditions that can be treated at home or at an ambulatory infusion site. The assets and liabilities for all acquisitions were recorded at their estimated fair values at the dates of the acquisitions and are included in the Companys financial statements and operating results from the designated effective dates of the acquisitions. The initial purchase cost allocations for acquired businesses are recorded at fair values based upon the best information available to management and are finalized when identified pre-acquisition contingencies have been resolved and other information arranged to be obtained has been received, but in no case in excess of one year from t |
Variable interest entities
Variable interest entities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Variable interest entities | 20.Variable interest entities Effective for the Companys first annual reporting period that begins after November15, 2009, the FASB 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 at risk, as a group, lose the power from voting rights or similar rights concerning those investments to direct the activities of the entity that most significantly impact the entitys economic performance. The Company is currently in the process of assessing the expected impact of this standard on its consolidated financial statements. In December 2008, the FASB required public entities to provide additional disclosures about transfers of financial assets and required public enterprises to provide additional disclosures about their involvement in variable interest entities and certain special purpose entities. Because these requirements impact disclosures and not the accounting treatment for transfers of financial assets and interests in variable interest entities, these requirements did not impact the Companys consolidated financial condition or results of operations. 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 or joint ventures that require subordinated support in addition to their equity capital to finance operations. These include dialysis operating entities in New York and other states and physician practice management entities in various states. Under the terms of the applicable arrangements, the Company bears most of the economic risks and rewards of ownership for 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 such VIEs. DaVita manages these VIE subsidiaries and provides operating and capital funding as neces |
Concentrations
Concentrations | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Concentrations | 21.Concentrations Approximately 65% of the Companys total dialysis and related lab services revenues in 2009, 65% in 2008 and 64% in 2007 are from government-based programs, principally Medicare and Medicaid. Accounts receivable, and other receivables, from Medicare and Medicaid-assigned plans were approximately $467,900 and $467,400, respectively as of December31, 2009 and 2008. No other single payor accounted for more than 5% of total accounts receivable. A significant physician-prescribed pharmaceutical administered during dialysis, EPO, is provided by a sole supplier and accounted for approximately 20% of net operating revenues. Although the Company currently receives discounted prices for EPO, the supplier has unilateral pricing discretion and in the future the Company may not be able to achieve the same cost levels historically obtained. |
Noncontrolling interests subjec
Noncontrolling interests subject to put provisions and other commitments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Noncontrolling interests subject to put provisions and other commitments | 22.Noncontrolling interests subject to put provisions and other commitments Noncontrolling interests subject to put provisions The Company has potential obligations to purchase the 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 a predetermined multiple of earnings or cash flow attributable to the noncontrolling interests put to the Company, which is intended to approximate fair value. The methodology the Company uses to estimate the fair values of the noncontrolling interests subject to put provisions assumes either the higher of a liquidation value of net assets or an average multiple of earnings, based on historical earnings, patient mix and other performance indicators, as well as other factors. The estimated fair values of the noncontrolling interests subject to put provisions can fluctuate and the implicit multiple of earnings at which these noncontrolling interest obligations may be settled will vary significantly depending upon market conditions including potential purchasers access to the 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 amounts of noncontrolling interests subject to put provisions that contractually employ a predetermined multiple of earnings rather than 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 $7,200. 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 as defined by FASB have been indefinitely deferred. Future distributions upon dissolution of these entities would be valued below the related noncontrolling interest carrying balances in the consolidated balance sheet. Other commitments In conjunction with the acquisition of DVA Renal Healthcare, Inc., formerly known as Gambro Healthcare, Inc., which occurred in October 2005, the Company entered into an Alliance and Product Supply Agreement (the Product Supply Agreement) with Gambro AB and Gambro Renal Products, Inc (Gambro Renal Products). The Product Supply Agreement has an initial term of seven years and will automatically renew for three additional one-year pe |
Fair values of financial instru
Fair values of financial instruments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Fair values of financial instruments | 23.Fair values of financial instruments Effective January1, 2008, the FASB established a framework for measuring assets and liabilities at fair value and also required additional disclosures about fair value measurements. These requirements applied to assets and liabilities that are carried at fair value on a recurring basis. Effective January1, 2009 the FASB issued additional requirements relating to nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis at least annually. The adoption of these requirements relating to nonfinancial assets and liabilities did not have a material impact on the Companys consolidated financial statements. The following table summarizes the Companys assets and liabilities measured at fair value on a recurring basis as of December31, 2009: Total Quotedpricesin activemarketsfor identical assets (Level 1) Significantother observableinputs (Level 2) Significant unobservable inputs (Level 3) Assets Available for sale securities $ 8,816 $ 8,816 $ $ Liabilities Interest rate swap agreements $ 10,792 $ $ 10,792 $ Temporary equity Noncontrolling interests subject to put provisions $ 331,725 $ $ $ 331,725 The available for sale securities represent investments in various open-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 9 to the 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 currently reported. See Note 13 to the consolidated financial statements for further discussion. See Note 22 to the consolidated financial statements for a discussion of the Companys methodology for estimating the fair value of noncontrolling interests subject to put obligations. Effective January1, 2008, the FASB allowed companies the alternative to measure certain financial assets and liabilities at fair value on an instrument-by-instrument basis that are currently not required to be measured at fair value. This provision was also designed to reduce the volatility in earnings caused by measuring related assets and liabilities differently and established presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The Company did not elect to measure certain assets and liabilities at fair value on |
Segment reporting
Segment reporting | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Segment reporting | 24.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 primarily of pharmacy services, infusion therapy services, disease management services, vascular access services, ESRD clinical research programs and physician services. 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 since 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 the operating segments. For internal management reporting, segment operations include direct segment operating expenses with the exception of stock-based compensation expense and equity investment income. The following is a summary of segment revenues, segment operating margin (loss), and a reconciliation of segment margin to income before income taxes: Years ended December31, 2009 2008(2) 2007(2) Segment revenues: Dialysis and related lab services(1) $ 5,791,698 $ 5,415,363 $ 5,130,181 OtherAncillary services and strategic initiatives 317,102 244,810 133,970 Consolidated revenues $ 6,108,800 $ 5,660,173 $ 5,264,151 Segment operating margin (loss): Dialysis and related lab services $ 999,961 $ 939,391 $ 990,049 OtherAncillary services and strategic initiatives (17,710 ) (29,856 ) (48,206 ) Total segment margin 982,251 909,535 941,843 Reconciliation of segment margin to income before income taxes: Stock-based compensation (44,422 ) (41,235 ) (34,149 ) Equity investment income 2,442 796 1,217 Consolidated operating income 940,271 869,096 908,911 Debt expense (185,755 ) (224,716 ) (257,147 ) Other income 3,708 12,411 22,460 Consolidated income before income taxes $ 758,224 $ 656,791 $ 674,224 (1) Includes management fees for providing management and administrative services to dialysis centers in which the Company either owns an equity investment or are wholly-owned by thi |
Supplemental cash flow informat
Supplemental cash flow information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Supplemental cash flow information | 25.Supplemental cash flow information The table below provides supplemental cash flow information: Year ended December31, 2009 2008 2007 Cash paid: Income taxes $ 161,671 $ 163,147 $ 205,955 Interest 186,280 222,558 245,325 Non-cash investing and financing activities: Fixed assets acquired under capital lease obligations 2,769 Liabilities assumed in conjunction with common stock acquisitions 1,653 Assets exchanged for equity investments 2,618 Assets received for additional noncontrolling interests 51 |
Selected quarterly financial da
Selected quarterly financial data (unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Selected quarterly financial data (unaudited) | 26.Selected quarterly financial data (unaudited) 2009 2008 December31 September30 June30 March31 December31 September30 June30 March31 Net operating revenues $ 1,568,204 $ 1,573,915 $ 1,519,041 $ 1,447,640 $ 1,461,010 $ 1,447,135 $ 1,407,304 $ 1,344,724 Operating income 238,712 245,001 235,954 220,604 223,109 221,772 218,434 205,781 Income before income taxes 194,563 200,465 190,139 173,057 169,364 169,748 166,101 151,578 Net income attributable to DaVita Inc. 109,724 110,930 105,819 96,211 98,365 93,910 94,951 86,934 Basic earnings per share attributable to DaVita Inc. 1.07 1.07 1.02 0.93 0.95 0.90 0.91 0.81 Diluted earnings per share attributable to DaVita Inc. $ 1.06 $ 1.06 $ 1.02 $ 0.92 $ 0.94 $ 0.89 $ 0.90 $ 0.80 |
Condensed consolidating financi
Condensed consolidating financial statements | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Condensed consolidating financial statements | 27.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 Companys 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 its 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 ventures, partnerships and third parties are not guarantors of these obligations. Condensed Consolidating Statements of Income DaVitaInc. Guarantor Subsidiaries Non- Guarantor Subsidiaries Consolidating Adjustments Consolidated Total FortheyearendedDecember31,2009 Net operating revenues $ 401,058 $ 5,100,716 $ 1,032,676 $ (425,650 ) $ 6,108,800 Operating expenses 246,578 4,484,083 863,518 (425,650 ) 5,168,529 Operating income 154,480 616,633 169,158 940,271 Debt (expense) (188,109 ) (179,294 ) (1,304 ) 182,952 (185,755 ) Other income, net 186,189 471 (182,952 ) 3,708 Income tax expense 60,414 212,571 5,480 278,465 Equity earnings in subsidiaries 330,538 103,430 (433,968 ) Net income 422,684 328,198 162,845 (433,968 ) 479,759 Less: Net income attributable to noncontrolling interests (57,075 ) (57,075 ) Net income attributable to DaVita Inc. $ 422,684 $ 328,198 $ 162,845 $ (491,043 ) $ 422,684 FortheyearendedDecember31,2008 Net operating revenues $ 363,112 $ 4,808,324 $ 881,810 $ (393,073 ) $ 5,660,173 Operating expenses 228,729 4,208,769 746,652 (393,073 ) 4,791,077 Operating income 134,383 599,555 135,158 869,096 Debt (expense) (227,535 ) (189,506 ) (2,520 ) 194,845 (224,716 ) Other income, net 206,527 729 (194,845 ) 12,411 Income tax expense 43,763 188,888 2,820 235,471 Equity earnings in subsidiaries 304,548 81,459 (386,007 ) Net income 374,160 302,620 130,547 (386,007 ) 421,320 Less: Net income attributable to noncontrolling interests (47,160 ) (47,160 ) Net inc |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | DAVITA INC. SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS Description Balanceat beginning of year Amounts charged to income Amounts writtenoff Balance atendof year (in thousands) Allowance for uncollectible accounts: Year ended December31, 2007 $ 171,757 $ 136,682 $ 112,486 $ 195,953 Year ended December31, 2008 $ 195,953 $ 146,229 $ 130,960 $ 211,222 Year ended December31, 2009 $ 211,222 $ 161,786 $ 143,691 $ 229,317 |
Document Information
Document Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2009-12-31 |
Entity Information
Entity Information (USD $) | |||
12 Months Ended
Dec. 31, 2009 | Jan. 29, 2010
| Jun. 30, 2009
| |
Trading Symbol | DVA | ||
Entity Registrant Name | DAVITA INC | ||
Entity Central Index Key | 0000927066 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 103,200,000 | ||
Entity Public Float | $5,100,000,000 |