DaVita Inc. 3rd Quarter 2020 Results

 

DENVER, Oct. 29, 2020 /PRNewswire/ -- DaVita Inc.(NYSE: DVA) announced financial and operating results for the third quarter ended September 30, 2020. During the quarter, notwithstanding the challenges of responding to COVID-19, the Company delivered strong financial and operating results, and continued its focus on patient care and the safety of its patients, caregivers, teammates, and physician partners.

"I am proud of the hard work and dedication of our 65,000 teammates in delivering essential, life-preserving care to our patients," said Javier Rodriguez, CEO of DaVita Inc. "Due to their efforts, we have been able to sustain continuity of care despite the disruption caused by the pandemic, while maintaining our strategic focus on leading the transformation of kidney care."

Financial results for the quarter ended September 30, 2020:

  • Consolidated revenues of $2.924 billion.
  • Operating income of $438 million or 15.0% operating margin.
  • Diluted earnings per share from continuing operations of $1.28 and adjusted diluted earnings per share from continuing operations of $1.80.
  • Operating cash flow from continuing operations of $483 million and free cash flow from continuing operations of $287 million.
  • Refinanced $1.5 billion of 5% senior notes with $1.5 billion of new 3.75% senior notes in August.
  • Deployed proceeds from issuance of $1.75 billion of 4.625% senior notes in June to redeem $1.75 billion of 5.125% senior notes in July.
  • Repurchased 8,231,679 shares of our common stock at an average cost of $88.13 per share, including 7,981,679 shares purchased in a "modified" Dutch auction tender offer in September.

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

2020

 

2019

 

2020

 

2019

Net income attributable to DaVita Inc.:

(dollars in millions, except per share data)

 

Net income from continuing operations

$

159

   

$

150

   

$

590

   

$

465

 
 

Diluted per share

$

1.28

   

$

0.99

   

$

4.72

   

$

2.87

 
 

Adjusted net income from continuing operations(1)

$

223

   

$

232

   

$

697

   

$

588

 
 

Diluted per share adjusted(1)

$

1.80

   

$

1.53

   

$

5.58

   

$

3.64

 
 

Net income

$

159

   

$

143

   

$

600

   

$

566

 
 

Diluted per share

$

1.28

   

$

0.95

   

$

4.80

   

$

3.50

 

________________________

(1)

For definitions of non-GAAP financial measures, see the note titled "Note on Non-GAAP Financial Measures" and related reconciliations beginning on page 15.

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

2020

 

2019

 

2020

 

2019

 

Amount

 

Margin

 

Amount

 

Margin

 

Amount

 

Margin

 

Amount

 

Margin

Operating income:

(dollars in millions)

 

Operating income

$

438

   

15.0

%

 

$

378

   

13.0

%

 

$

1,313

   

15.2

%

 

$

1,181

   

13.9

%

 

Adjusted operating income(1)(2)

$

438

   

15.0

%

 

$

462

   

15.9

%

 

$

1,364

   

15.8

%

 

$

1,306

   

15.4

%

________________________

(1)

For definitions of non-GAAP financial measures, see the note titled "Note on Non-GAAP Financial Measures" and related reconciliations beginning on page 15.

(2)

Adjusted operating income margin is adjusted operating income divided by consolidated revenues.

U.S. dialysis metrics:

Volume: Total U.S. dialysis treatments for the third quarter of 2020 were 7,656,173, or an average of 96,914 treatments per day, representing a per day decrease of 0.2% compared to the third quarter of 2019. Normalized non-acquired treatment growth in the third quarter of 2020 compared to the third quarter of 2019 was 0.6%.

 

Three months ended

 

Quarter

change

 

Nine months ended

   
 

September 30,

2020

 

June 30,

2020

   

September 30,

2020

 

September 30,

2019

 

Year to date

change

Per treatment metrics:

                     

Revenue

$

349.63

   

$

352.26

   

$

(2.63)

   

$

349.82

   

$

349.26

   

$

0.56

 

Patient care costs

$

232.57

   

$

238.02

   

$

(5.45)

   

$

235.97

   

$

239.90

   

$

(3.93)

 

General and administrative

$

39.62

   

$

27.78

   

$

11.84

   

$

31.56

   

$

28.80

   

$

2.76

 

Primary drivers of the changes in the table above were as follows:

Revenue: The quarter change was primarily due to a decrease in commercial revenue per treatment, unfavorable changes in government payor mix and a decline in calcimimetics revenue per treatment, partially offset by increases in inpatient dialysis service revenue and Medicare rates due to the temporary suspension of Medicare sequestration. The year to date change was primarily due to favorable changes in government and commercial revenue per treatment, including an increase in Medicare rates due to the base rate increase in 2020 and the temporary suspension of Medicare sequestration, and an increase in inpatient dialysis services revenue, partially offset by a decline in calcimimetics revenue per treatment.

Patient care costs: The quarter change was primarily due to decreases in COVID-19-related costs, including compensation expense, and pharmaceutical intensity, partially offset by increases in health benefit expenses and other direct dialysis center operating expenses. The year to date change was primarily due to decreases in pharmaceutical unit costs, other direct dialysis center operating expenses, and health benefit expenses, partially offset by an increase in labor costs and COVID-19-related costs, including compensation expense.

General and administrative: The quarter change was primarily due to increases in advocacy costs, as described below, contributions to our charitable foundation and compensation expense. The year to date change was primarily due to increases in advocacy costs, as described below, contributions to our charitable foundation and compensation expense including costs related to COVID-19. These increases were partially offset by decreases in travel expenses, long-term incentive compensation expense and health benefit expenses.

Certain items impacting the quarter:

Share repurchases: The following table summarizes our common stock repurchases during the three months ended September 30, 2020.

 

Three months ended September 30, 2020

 

Shares

repurchased

 

Amount paid

(in millions)

 

Average paid

per share

Tender offer(1)

7,981,679

   

$

704

   

$

88.22

 

Open market repurchases

250,000

   

21

   

85.04

 
 

8,231,679

   

$

725

   

$

88.13

 

________________________

(1)

The aggregate amount paid for shares repurchased pursuant to our tender offer during the three months ended September 30, 2020 includes the clearing price of $88.00 per share plus related fees and expenses of $1.8 million.

Subsequent to September 30, 2020 through October 28, 2020, we repurchased 1,827,836 shares of our common stock for $161 million at an average cost of $87.96 per share.

Debt transactions: In August 2020, we issued $1.5 billion in aggregate principal amount of 3.75% senior notes due 2031 and used the net proceeds from these 3.75% senior notes, together with cash on hand, to redeem in full all $1.5 billion in aggregate principal amount of our outstanding 5% senior notes due 2025, including payment of accrued interest and a redemption premium. We also redeemed in full our $1.75 billion in aggregate principal amount of our outstanding 5.125% senior notes due 2024, including payment of accrued interest and a redemption premium, in July 2020 with the proceeds from our $1.75 billion in aggregate principal amount of 4.625% senior notes due 2030 issued in June 2020, together with cash on hand.

Advocacy costs: During the three months ended September 30, 2020, we incurred advocacy costs of approximately $66 million to counter union policy efforts, including a California ballot initiative. These costs are included in the U.S. dialysis segment's general and administrative expenses.

Financial and operating metrics:

 

Three months ended

September 30,

 

Rolling twelve months ended

September 30,

 

2020

 

2019

 

2020

 

2019

Cash flow:

(dollars in millions)

 

Operating cash flow

$

483

   

$

641

   

$

2,175

   

$

1,781

 
 

Operating cash flow from continuing operations

$

483

   

$

648

   

$

2,172

   

$

1,602

 
 

Free cash flow from continuing operations (1)

$

287

   

$

437

   

$

1,393

   

$

722

 

________________________

(1)

For definitions of non-GAAP financial measures, see the note titled "Note on Non-GAAP Financial Measures" and related reconciliations beginning on page 15.

 

 

Three months ended

September 30, 2020

 

Nine months ended

September 30, 2020

Effective income tax rate on:

 
 

Income from continuing operations

23.2

%

 

24.3

%

 

Income from continuing operations attributable to DaVita Inc.(1)

29.2

%

 

28.9

%

 

Adjusted income from continuing operations attributable to DaVita Inc.(1)

28.0

%

 

28.2

%

________________________

(1)

For definitions of non-GAAP financial measures, see the note titled "Note on Non-GAAP Financial Measures" and related reconciliations beginning on page 15.

Center activity: As of September 30, 2020, we provided dialysis services to a total of approximately 238,200 patients at 3,100 outpatient dialysis centers, of which 2,809 centers were located in the United States and 291 centers were located in nine countries outside of the United States. During the third quarter of 2020, we opened a total of 17 new dialysis centers, acquired five dialysis centers and closed eight dialysis centers in the United States. We also acquired eleven dialysis centers, opened one new dialysis center and sold or closed eight dialysis centers outside of the United States during the third quarter of 2020.

Outlook:

The following forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, including those described below, and actual results may vary materially from these forward-looking measures. In particular, the widespread impact of the COVID-19 pandemic continues to generate significant risk and uncertainty, and as a result, our future results could vary materially from the guidance provided below. We do not provide guidance for diluted net income from continuing operations per share attributable to DaVita Inc., effective income tax rate on income from continuing operations or free cash flow from continuing operations on a basis consistent with United States generally accepted accounting principles (GAAP) nor a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures on a forward-looking basis because we are unable to predict certain items contained in the GAAP measures without unreasonable efforts. These non-GAAP financial measures do not include certain items, including loss on changes in ownership interests, accruals for legal matters, refinancing charges and foreign currency fluctuations, which may be significant. The guidance for our effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc. also excludes the amount of third party owners' income and related taxes attributable to non-tax paying entities.

 

Current 2020 guidance

 

Prior 2020 guidance

 

Low

 

High

 

Low

 

High

 

(dollars in millions, except per share data)

Revenue

$

11,500

   

$

11,600

   

$

11,500

   

$

11,700

 

Adjusted operating income margin

15.3

%

 

15.6

%

 

14.0

%

 

14.75

%

Effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc.

28.0

%

 

29.5

%

 

28.0

%

 

29.5

%

Adjusted diluted net income from continuing operations per share attributable to DaVita Inc.

$

7.35

   

$

7.60

   

$

6.25

   

$

6.75

 

Capital expenditures from continuing operations

$

650

   

$

690

   

$

700

   

$

750

 

Free cash flow from continuing operations

$

1,100

   

$

1,250

   

$

800

   

$

1,000

 

We will be holding a conference call to discuss our results for the third quarter ended September 30, 2020, on October 29, 2020, at 5:00 p.m. Eastern Time. To join the conference call, please dial (877) 918-6630 from the U.S. or (517) 308-9042 from outside the U.S., and provide the operator the password 'Earnings'. A replay of the conference call will be available on our website at investors.davita.com for the following 30 days.

DaVita Inc. and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"), including statements in this release, filings with the Securities and Exchange Commission ("SEC"), reports to stockholders and in meetings with investors and analysts. All statements in this release, during the related presentation or other meetings, other than statements of historical fact, are forward-looking statements and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the PSLRA. These forward-looking statements could include, among other things, DaVita's response to and the expected future impacts of COVID-19, including statements about our balance sheet and liquidity, our expenses, revenues, billings and collections and future results, potential need, ability or willingness to use any funds under the CARES Act or other government programs, availability or cost of supplies, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, and overall impact on our patients, as well as other statements regarding our future operations, financial condition and prospects, government and commercial payment rates, our ongoing stock repurchase program, and statements related to our guidance and expectations for future periods and the assumptions underlying any such projections. Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on DaVita's current expectations and are based solely on information available as of the date of this release. DaVita undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. Actual future events and results could differ materially from any forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things:

  • the continuing impact of the dynamic and evolving COVID-19 pandemic, including, without limitation, on our patients, teammates, physician partners, suppliers, business, operations, reputation, financial condition and results of operations, the government's response to the COVID-19 pandemic, and the consequences of an extended economic downturn resulting from the impacts of COVID-19, such as a potential negative impact on our commercial mix, any of which may also have the effect of heightening many of the other risks and uncertainties discussed below;
  • our need, ability and willingness to utilize any funds received under the CARES Act or other government programs, and the consequences of our decisions with respect thereto;
  • the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment rates, and a reduction in the number or percentage of our patients under such plans, including without limitation as a result of restrictions or prohibitions on the use and/or availability of charitable premium assistance, which may result in the loss of revenues or patients, or our making incorrect assumptions about how our patients will respond to any change in financial assistance from charitable organizations;
  • noncompliance by us or our business associates with any privacy or security laws or any security breach by us or a third party involving the misappropriation, loss or other unauthorized use or disclosure of confidential information;
  • the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof or related litigation, result in a reduction in coverage or reimbursement rates for our services, a reduction in the number of patients enrolled in higher-paying commercial plans or that are enrolled in or select Medicare Advantage plans, or other material impacts to our business; or our making incorrect assumptions about how our patients will respond to any such developments;
  • a reduction in government payment rates under the Medicare program or other government-based programs and the impact of the Medicare Advantage benchmark structure;
  • risks arising from potential and proposed federal and/or state legislation, regulation, ballot, executive action or other initiatives, including such initiatives related to healthcare and/or labor matters, such as AB290 and Proposition 23 in California;
  • the impact of the upcoming election cycle, the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the future of the Affordable Care Act, the exchanges and many other core aspects of the current healthcare marketplace, as well as the composition of the U.S. Supreme Court;
  • our ability to successfully implement our strategy with respect to home-based dialysis, including maintaining our existing business and further developing our capabilities in a complex and highly regulated environment;
  • changes in pharmaceutical practice patterns, reimbursement and payment policies and processes, or pharmaceutical pricing, including with respect to calcimimetics;
  • legal and compliance risks, such as our continued compliance with complex government regulations;
  • continued increased competition from dialysis providers and others, and other potential marketplace changes;
  • our ability to maintain contracts with physician medical directors, changing affiliation models for physicians, and the emergence of new models of care introduced by the government or private sector that may erode our patient base and reimbursement rates, such as accountable care organizations, independent practice associations and integrated delivery systems;
  • our ability to complete acquisitions, mergers or dispositions that we might announce or be considering, on terms favorable to us or at all, or to integrate and successfully operate any business we may acquire or have acquired, or to successfully expand our operations and services in markets outside the United States, or to businesses outside of dialysis;
  • uncertainties related to potential payments and/or adjustments under certain provisions of the equity purchase agreement for the sale of our DaVita Medical Group (DMG) business, such as post-closing adjustments and indemnification obligations;
  • the variability of our cash flows, including without limitation any extended billing or collections cycles; the risk that we may not be able to generate or access sufficient cash in the future to service our indebtedness or to fund our other liquidity needs; and the risk that we may not be able to refinance our indebtedness as it becomes due, on terms favorable to us or at all;
  • factors that may impact our ability to repurchase stock under our stock repurchase program and the timing of any such stock repurchases, as well as our use of a considerable amount of available funds to repurchase stock;
  • risks arising from the use of accounting estimates, judgments and interpretations in our financial statements;
  • impairment of our goodwill, investments or other assets; and
  • uncertainties associated with the other risk factors set forth in DaVita Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and the risks and uncertainties discussed in any subsequent reports that DaVita has filed or furnished with the SEC from time to time.

The financial information presented in this release is unaudited and is subject to change as a result of subsequent events or adjustments, if any, arising prior to the filing of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

Contact:

Jim Gustafson

 

Investor Relations

 

DaVita Inc.

 

(310) 536-2585

 

DAVITA INC.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(dollars in thousands, except per share data)

 
 

Three months ended September 30,

 

Nine months ended September 30,

 

2020

 

2019

 

2020

 

2019

Dialysis patient service revenues

$

2,781,650

   

$

2,777,192

   

$

8,253,128

   

$

8,130,697

 

Other revenues

142,416

   

126,886

   

392,154

   

359,198

 

Total revenues

2,924,066

   

2,904,078

   

8,645,282

   

8,489,895

 

Operating expenses and charges:

             

Patient care costs

1,971,719

   

1,991,172

   

5,931,732

   

5,913,860

 

General and administrative

363,280

   

298,736

   

943,065

   

824,887

 

Depreciation and amortization

156,894

   

155,915

   

468,949

   

456,685

 

Equity investment income

(5,496)

   

(3,936)

   

(27,681)

   

(11,158)

 

Loss on changes in ownership interest, net

   

   

16,252

   

 

Goodwill impairment charges

   

83,855

   

   

124,892

 

Total operating expenses and charges

2,486,397

   

2,525,742

   

7,332,317

   

7,309,166

 

Operating income

437,669

   

378,336

   

1,312,965

   

1,180,729

 

Debt expense

(73,658)

   

(88,589)

   

(243,642)

   

(351,774)

 

Debt prepayment, refinancing and redemption charges

(86,074)

   

(21,242)

   

(89,022)

   

(33,402)

 

Other income, net

5,395

   

5,280

   

10,590

   

17,863

 

Income from continuing operations before income taxes

283,332

   

273,785

   

990,891

   

813,416

 

Income tax expense

65,792

   

65,254

   

240,564

   

197,938

 

Net income from continuing operations

217,540

   

208,531

   

750,327

   

615,478

 

Net (loss) income from discontinued operations, net of tax

   

(6,843)

   

9,980

   

102,854

 

Net income

217,540

   

201,688

   

760,307

   

718,332

 

Less: Net income attributable to noncontrolling interests

(58,866)

   

(58,418)

   

(160,438)

   

(152,222)

 

Net income attributable to DaVita Inc.

$

158,674

   

$

143,270

   

$

599,869

   

$

566,110

 
               

Earnings per share attributable to DaVita Inc.:

             

Basic net income from continuing operations per share

$

1.31

   

$

1.00

   

$

4.81

   

$

2.88

 

Basic net income per share

$

1.31

   

$

0.95

   

$

4.89

   

$

3.51

 

Diluted net income from continuing operations per share

$

1.28

   

$

0.99

   

$

4.72

   

$

2.87

 

Diluted net income per share

$

1.28

   

$

0.95

   

$

4.80

   

$

3.50

 
               

Weighted average shares for earnings per share:

             

Basic

120,905,038

   

150,675,465

   

122,582,099

   

161,147,122

 

Diluted

123,953,879

   

151,295,950

   

124,927,380

   

161,636,011

 
               

Amounts attributable to DaVita Inc.:

             

Net income from continuing operations

$

158,674

   

$

150,113

   

$

589,889

   

$

464,590

 

Net (loss) income from discontinued operations

   

(6,843)

   

9,980

   

101,520

 

Net income attributable to DaVita Inc.

$

158,674

   

$

143,270

   

$

599,869

   

$

566,110

 

 

DAVITA INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(dollars in thousands)

 
 

Three months ended

September 30,

 

Nine months ended

September 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

217,540

   

$

201,688

   

$

760,307

   

$

718,332

 

Other comprehensive income (loss), net of tax:

             

Unrealized losses on interest rate cap agreements:

             

Unrealized losses

(1,628)

   

(1,060)

   

(16,470)

   

(1,672)

 

Reclassifications of net realized losses into net income

1,034

   

1,569

   

4,280

   

4,782

 

Unrealized gains (losses) on foreign currency translation:

             

Foreign currency translation adjustments

13,171

   

(44,502)

   

(62,842)

   

(45,790)

 

Other comprehensive income (loss)

12,577

   

(43,993)

   

(75,032)

   

(42,680)

 

Total comprehensive income

230,117

   

157,695

   

685,275

   

675,652

 

Less: Comprehensive income attributable to noncontrolling interests

(58,866)

   

(58,418)

   

(160,438)

   

(152,222)

 

Comprehensive income attributable to DaVita Inc.

$

171,251

   

$

99,277

   

$

524,837

   

$

523,430

 

 

DAVITA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

 
 

Nine months ended September 30,

 

2020

 

2019

Cash flows from operating activities:

     

Net income

$

760,307

   

$

718,332

 

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

     

Depreciation and amortization

468,949

   

456,685

 

Debt prepayment, refinancing and redemption charges

86,957

   

33,402

 

Impairment charges

   

124,892

 

Stock-based compensation expense

67,217

   

47,811

 

Deferred income taxes

191,783

   

72,590

 

Equity investment income, net

3,026

   

5,131

 

Loss on sales of business interests, net

16,252

   

23,022

 

Other non-cash charges, net

(7,980)

   

24,291

 

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:

     

Accounts receivable

(12,405)

   

(182,684)

 

Inventories

(8,445)

   

9,519

 

Other receivables and other current assets

(62,025)

   

51,319

 

Other long-term assets

(1,853)

   

2,324

 

Accounts payable

445

   

(106,662)

 

Accrued compensation and benefits

(12,124)

   

(57,930)

 

Other current liabilities

123,833

   

140,046

 

Income taxes

(100,160)

   

57,279

 

Other long-term liabilities

(19,547)

   

(27,542)

 

Net cash provided by operating activities

1,494,230

   

1,391,825

 

Cash flows from investing activities:

     

Additions of property and equipment

(449,896)

   

(547,183)

 

Acquisitions

(112,597)

   

(77,348)

 

Proceeds from asset and business sales

83,339

   

3,863,619

 

Purchase of debt investments held-to-maturity

(147,829)

   

(98,322)

 

Purchase of other debt and equity investments

(3,388)

   

(5,160)

 

Proceeds from debt investments held-to-maturity

148,341

   

 

Proceeds from sale of other debt and equity investments

3,434

   

5,893

 

Purchase of equity method investments

(9,613)

   

(8,770)

 

Distributions from equity method investments

902

   

1,296

 

Net cash (used in) provided by investing activities

(487,307)

   

3,134,025

 

Cash flows from financing activities:

     

Borrowings

3,826,484

   

38,519,991

 

Payments on long-term debt

(3,927,411)

   

(40,485,415)

 

Deferred financing and debt redemption costs

(105,705)

   

(84,588)

 

Purchase of treasury stock

(1,025,878)

   

(1,837,022)

 

Distributions to noncontrolling interests

(179,098)

   

(157,170)

 

Stock award exercises and other share issuances, net

3,838

   

7,333

 

Contributions from noncontrolling interests

32,854

   

44,095

 

Purchases of noncontrolling interests

(6,782)

   

(10,988)

 

Net cash used in financing activities

(1,381,698)

   

(4,003,764)

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(16,606)

   

(4,178)

 

Net increase in cash, cash equivalents and restricted cash

(391,381)

   

517,908

 

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

   

(423,813)

 

Net (decrease) increase in cash, cash equivalents and restricted cash from continuing operations

(391,381)

   

941,721

 

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

1,208,718

   

415,420

 

Cash, cash equivalents and restricted cash of continuing operations at end of the period

$

817,337

   

$

1,357,141

 

 

DAVITA INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands, except share data)

 
 

September 30,

2020

 

December 31,

2019

ASSETS

     

Cash and cash equivalents

$

710,514

   

$

1,102,372

 

Restricted cash and equivalents

106,823

   

106,346

 

Short-term investments

19,360

   

11,572

 

Accounts receivable

1,804,390

   

1,795,598

 

Inventories

106,254

   

97,949

 

Other receivables

548,381

   

489,695

 

Prepaid and other current assets

58,512

   

66,866

 

Income tax receivable

75,441

   

19,772

 

Total current assets

3,429,675

   

3,690,170

 

Property and equipment, net of accumulated depreciation of $4,368,659 and $3,969,566, respectively

3,417,919

   

3,473,384

 

Operating lease right-of-use assets

2,834,163

   

2,830,047

 

Intangible assets, net of accumulated amortization of $75,727 and $81,922, respectively

118,078

   

135,684

 

Equity method and other investments

252,483

   

241,983

 

Long-term investments

29,867

   

36,519

 

Other long-term assets

96,110

   

115,972

 

Goodwill

6,868,377

   

6,787,635

 
 

$

17,046,672

   

$

17,311,394

 

LIABILITIES AND EQUITY

     

Accounts payable

$

388,504

   

$

403,840

 

Other liabilities

879,792

   

756,174

 

Accrued compensation and benefits

701,968

   

695,052

 

Current portion of operating lease liabilities

365,190

   

343,912

 

Current portion of long-term debt

163,787

   

130,708

 

Income tax payable

   

42,412

 

Total current liabilities

2,499,241

   

2,372,098

 

Long-term operating lease liabilities

2,710,550

   

2,723,800

 

Long-term debt

7,866,545

   

7,977,526

 

Other long-term liabilities

147,371

   

160,809

 

Deferred income taxes

765,691

   

577,543

 

Total liabilities

13,989,398

   

13,811,776

 

Commitments and contingencies

     

Noncontrolling interests subject to put provisions

1,303,934

   

1,180,376

 

Equity:

     

Preferred stock ($0.001 par value, 5,000,000 shares authorized; none issued)

   

 

Common stock ($0.001 par value, 450,000,000 shares authorized; 126,065,294 and 113,781,317 shares issued and outstanding at September 30, 2020, respectively, and 125,842,853 shares issued and outstanding at December 31, 2019)

126

   

126

 

Additional paid-in capital

694,132

   

749,043

 

Retained earnings

2,031,607

   

1,431,738

 

Treasury stock (12,283,977 and zero shares, respectively)

(1,028,578)

   

 

Accumulated other comprehensive loss

(122,530)

   

(47,498)

 

Total DaVita Inc. shareholders' equity

1,574,757

   

2,133,409

 

Noncontrolling interests not subject to put provisions

178,583

   

185,833

 

Total equity

1,753,340

   

2,319,242

 
 

$

17,046,672

   

$

17,311,394

 

 

DAVITA INC.

SUPPLEMENTAL FINANCIAL DATA

(unaudited)

(dollars in millions, except for per share and per treatment data)

 
 

Three months ended

 

Nine months

ended

September 30,

2020

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

1. Consolidated business metrics:

             

Operating income margin

15.0

%

 

14.2

%

 

13.0

%

 

15.2

%

Adjusted operating income margin excluding certain items(1)(3)

15.0

%

 

16.0

%

 

15.9

%

 

15.8

%

General and administrative expenses as a percent of consolidated revenues(2)

12.4

%

 

11.0

%

 

10.3

%

 

10.9

%

Effective income tax rate on income from continuing operations

23.2

%

 

24.6

%

 

23.8

%

 

24.3

%

Effective income tax rate on income from continuing operations attributable to DaVita Inc.(1)

29.2

%

 

29.2

%

 

30.3

%

 

28.9

%

Effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc.(1)

28.0

%

 

28.0

%

 

27.6

%

 

28.2

%

               

2. Summary of financial results:

             

Revenues:

             

U.S. dialysis patient services and other

$

2,694

   

$

2,675

   

$

2,691

   

$

7,986

 

Other—Ancillary services

             

U.S. other

125

   

116

   

118

   

365

 

International dialysis patient service and other

147

   

129

   

131

   

412

 
 

271

   

245

   

248

   

777

 

Eliminations

(41)

   

(40)

   

(36)

   

(117)

 

Total consolidated revenues

$

2,924

   

$

2,880

   

$

2,904

   

$

8,645

 

Operating income (loss):

             

U.S. dialysis

$

471

   

$

523

   

$

501

   

$

1,485

 

Other—Ancillary services

             

U.S.

(14)

   

(41)

   

(15)

   

(74)

 

International(4)

7

   

1

   

(83)

   

25

 
 

(7)

   

(40)

   

(98)

   

(49)

 

Corporate administrative support expenses

(26)

   

(73)

   

(25)

   

(123)

 

Total consolidated operating income

$

438

   

$

410

   

$

378

   

$

1,313

 

 

DAVITA INC.

SUPPLEMENTAL FINANCIAL DATA - continued

(unaudited)

(dollars in millions, except for per share and per treatment data)

 
 

Three months ended

 

Nine months

ended

September 30,

2020

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

3. Summary of reportable segment financial results:

             
               

U.S. dialysis

             

Revenue:

             

Dialysis patient service revenues

$

2,677

   

$

2,667

   

$

2,681

   

$

7,955

 

Other revenues

17

   

8

   

10

   

31

 

Total operating revenues

2,694

   

2,675

   

2,691

   

7,986

 

Operating expenses:

             

Patient care costs

1,781

   

1,802

   

1,813

   

5,366

 

General and administrative

303

   

210

   

235

   

718

 

Depreciation and amortization

148

   

148

   

148

   

443

 

Equity investment income

(9)

   

(8)

   

(5)

   

(25)

 

Total operating expenses

2,224

   

2,152

   

2,191

   

6,501

 

Segment operating income

$

471

   

$

523

   

$

501

   

$

1,485

 
               

4. U.S. dialysis business metrics:

             

Volume:

             

Treatments

7,656,173

   

7,570,908

   

7,673,191

   

22,740,403

 

Number of treatment days

79.0

   

78.0

   

79.0

   

234.6

 

Average treatments per day

96,914

   

97,063

   

97,129

   

96,933

 

Per day year over year (decrease) increase

(0.2)

%

 

0.7

%

 

2.7

%

 

0.7

%

Normalized non-acquired treatment growth year over year(5)

0.6

%

 

1.6

%

 

2.2

%

   

Operating net revenues:

             

Average patient service revenue per treatment

$

349.63

   

$

352.26

   

$

349.41

   

$

349.82

 

Expenses:

             

Patient care costs per treatment

$

232.57

   

$

238.02

   

$

236.32

   

$

235.97

 

General and administrative expenses per treatment

$

39.62

   

$

27.78

   

$

30.63

   

$

31.56

 

Accounts receivable:

             

Receivables

$

1,670

   

$

1,649

   

$

1,719

     

DSO

58

   

57

   

60

     

 

DAVITA INC.

SUPPLEMENTAL FINANCIAL DATA - continued

(unaudited)

(dollars in millions, except for per share and per treatment data)

 
 

Three months ended

 

Nine months

ended

September 30,

2020

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

5. Cash flow:

             

Operating cash flow

$

483

   

$

651

   

$

641

   

$

1,494

 

Operating cash flow from continuing operations

$

483

   

$

651

   

$

648

   

$

1,494

 

Operating cash flow from continuing operations, last twelve months

$

2,172

   

$

2,337

   

$

1,602

     

Free cash flow from continuing operations(1)

$

287

   

$

507

   

$

437

   

$

977

 

Free cash flow from continuing operations, last twelve months(1)

$

1,393

   

$

1,543

   

$

722

     

Capital expenditures from continuing operations:

             

Routine maintenance/IT/other

$

84

   

$

74

   

$

84

   

$

239

 

Development and relocations

$

75

   

$

63

   

$

90

   

$

211

 

Acquisition expenditures

$

68

   

$

10

   

$

11

   

$

113

 

Proceeds from sale of self-developed properties

$

11

   

$

42

   

$

12

   

$

79

 
               

6. Debt and capital structure:

             

Total debt(6)

$

8,111

   

$

9,886

   

$

8,212

     

Net debt, net of cash and cash equivalents(6)

$

7,401

   

$

6,957

   

$

6,959

     

Leverage ratio (see calculation on page 14)

2.96x

   

3.66x

   

3.21x

     

Weighted average effective interest rate:

             

During the quarter

3.31

%

 

3.64

%

 

5.09

%

   

At end of the quarter

3.11

%

 

3.65

%

 

4.66

%

   

On the senior secured credit facilities at end of the quarter

2.11

%

 

2.10

%

 

4.30

%

   

Debt with fixed and capped rates as a percentage of total debt:

             

Debt with rates fixed by its terms

45

%

 

54

%

 

44

%

   

Debt with rates fixed by its terms or capped by cap agreements

88

%

 

90

%

 

86

%

   

Amount spent on share repurchases

$

725

   

$

   

$

1,748

   

$

1,029

 

Number of shares repurchased

8,231,679

   

   

30,591,750

   

12,283,977

 
 

Certain columns, rows or percentages may not sum or recalculate due to the use of rounded numbers.

_________________

(1)

These are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to their most comparable measure calculated and presented in accordance with GAAP, and for a definition of adjusted amounts, see attached reconciliation schedules.

(2)

General and administrative expenses includes certain corporate support, long-term incentive compensation, accruals for legal matters, advocacy costs and charitable contributions.

(3)

Adjusted operating income margin is adjusted operating income divided by consolidated revenues.

(4)

The reported operating income (loss) for the three months ended September 30, 2020, June 30, 2020 and September 30, 2019, include  foreign currency (losses) gains of approximately $(2.9), $(3.7) and $2.9, respectively, and approximately $3.1 for the nine months ended September 30, 2020.

(5)

Normalized non-acquired treatment growth reflects year over year growth in treatment volume, adjusted to exclude acquisitions and other similar transactions, and further adjusted to normalize for the number and mix of treatment days in a given quarter versus the prior year quarter.

(6)

The debt amounts as of September 30, 2020, June 30, 2020 and September 30, 2019 presented exclude approximately $80.9, $85.1 and $76.0, respectively, of debt discount and other deferred financing costs related to our senior secured credit facilities and senior notes in effect or outstanding at that time.

DAVITA INC.
SUPPLEMENTAL FINANCIAL DATA-continued
(unaudited)
(dollars in thousands)

Note 1: Calculation of the Leverage Ratio

Under our senior secured credit facilities (the "Credit Agreement") dated August 12, 2019, the leverage ratio is defined as (a) all funded debt plus the face amount of all letters of credit issued, minus unrestricted cash and cash equivalents (including short-term investments) not to exceed $750,000 divided by (b) "Consolidated EBITDA." The leverage ratio determines the interest rate margin payable by the Company for its Term Loan A and revolving line of credit under the Credit Agreement by establishing the margin over the base interest rate (LIBOR) that is applicable. The calculation below is based on the last twelve months of "Consolidated EBITDA," as of the end of the reported period and pro forma for acquisitions or divestitures that occurred during the period, and "Consolidated net debt" at the end of the reported period, each as defined in the Credit Agreement. The Company's management believes the presentation of "Consolidated EBITDA" is useful to investors to enhance their understanding of the Company's leverage ratio under its Credit Agreement. The leverage ratio calculated by the Company is a non-GAAP measure and should not be considered a substitute for the ratio of total debt to operating income, determined in accordance with GAAP. The Company's calculation of its leverage ratio might not be calculated in the same manner as, and thus might not be comparable to, similarly titled measures of other companies.

 

Rolling twelve months ended

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

Net income attributable to DaVita Inc. from continuing operations (1)

$

832,131

   

$

823,570

   

$

624,922

 

Income taxes

322,254

   

321,716

   

249,686

 

Interest expense

297,145

   

307,509

   

437,513

 

Depreciation and amortization

627,416

   

626,436

   

611,841

 

Impairment charges

   

83,855

   

124,892

 

Noncontrolling interests and equity investment income, net

226,307

   

221,002

   

210,641

 

Stock-settled stock-based compensation

86,417

   

80,228

   

56,784

 

Debt prepayment, refinancing and redemption charges

89,022

   

24,190

   

33,402

 

Loss (gain) on changes in ownership interest, net

16,252

   

16,252

   

(28,152)

 

Other

18,421

   

10,264

   

24,088

 

"Consolidated EBITDA"

$

2,515,365

   

$

2,515,022

   

$

2,345,617

 
           
 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

Total debt, excluding debt discount and other deferred financing costs(2)

$

8,111,276

   

$

9,886,314

   

$

8,211,895

 

Letters of credit issued

64,634

   

57,452

   

72,777

 
 

8,175,910

   

9,943,766

   

8,284,672

 

Less: Cash and cash equivalents including short-term investments(3)

(718,726)

   

(750,000)

   

(750,000)

 

Consolidated net debt

$

7,457,184

   

$

9,193,766

   

$

7,534,672

 

Last twelve months "Consolidated EBITDA"

$

2,515,365

   

$

2,515,022

   

$

2,345,617

 

Leverage ratio

2.96x

   

3.66x

   

3.21x

 

Maximum leverage ratio permitted under the Credit Agreement

5.00x

   

5.00x

   

5.00x

 

________________________

(1)

The net income measure presented is our net income from continuing operations attributable to DaVita Inc., since the Credit Agreement requires divestitures to be reflected on a pro forma basis for our leverage ratio calculation, and this measure of net income already excludes our discontinued operations divested.

(2)

The debt amounts as of September 30, 2020, June 30, 2020 and September 30, 2019 presented exclude approximately $80,945, $85,080 and $75,979, respectively, of debt discount and other deferred financing costs related to our senior secured credit facilities and senior notes in effect at that time.

(3)

This excludes amounts not readily convertible to cash related to the Company's non-qualified deferred compensation plans for all periods presented. The Credit Agreement limits the amount deducted for cash and cash equivalents, including short-term investments, to the lesser of all unrestricted cash and cash equivalents of the Company or $750,000.

DAVITA INC.
RECONCILIATIONS FOR NON-GAAP MEASURES
(unaudited)

Note on Non-GAAP Financial Measures

As used in this press release, the term "adjusted" refers to non-GAAP measures as follows, each as reconciled to its most comparable GAAP measure as presented in the non-GAAP reconciliations in the notes to this press release: (i) for income measures, the term "adjusted" refers to operating performance measures that exclude certain items such as impairment charges, (gain) loss on ownership changes, restructuring charges, debt prepayment and refinancing charges and gains and charges associated with settlements; and (ii) the term "effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc." represents the Company's effective tax rate excluding applicable non-GAAP items and noncontrolling owners' income, which primarily relates to non-tax paying entities.

These non-GAAP or "adjusted" measures are presented because management believes these measures are useful adjuncts to GAAP results. However, these non-GAAP measures should not be considered alternatives to the corresponding measures determined under GAAP.

Specifically, management uses adjusted operating income, adjusted net income from continuing operations attributable to DaVita Inc. and adjusted diluted net income from continuing operations per share attributable to DaVita Inc. to compare and evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe these non-GAAP measures also are useful to investors and analysts in evaluating our performance over time and relative to competitors, as well as in analyzing the underlying trends in our business. Furthermore, we believe these presentations enhance a user's understanding of our normal consolidated operating income by excluding certain items which we do not believe are indicative of our ordinary results of operations. As a result, adjusting for these amounts allows for comparison to our normalized prior period results.

In addition, the effective income tax rate on income from continuing operations attributable to DaVita Inc. excludes noncontrolling owners' income, which primarily relates to non-tax paying entities.

The effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc. excludes noncontrolling owners' income and certain non-deductible and other charges which we do not believe are indicative of our ordinary results. Accordingly, we believe these adjusted effective income tax rates are useful to management, investors and analysts in evaluating our performance and establishing expectations for income taxes incurred on our ordinary results attributable to DaVita Inc.

Finally, under our definition, free cash flow from continuing operations represents net cash provided by operating activities from continuing operations less distributions to noncontrolling interests and all capital expenditures (including development capital expenditures, routine maintenance and information technology); plus contributions from noncontrolling interests and sale leaseback proceeds. Management uses this measure to assess our ability to fund acquisitions and meet our debt service obligations and we believe this measure is equally useful to investors and analysts as an adjunct to cash flows from operating activities from continuing operations and other measures under GAAP.

It is important to bear in mind that these non-GAAP "adjusted" measures are not measures of financial performance or liquidity under GAAP and should not be considered in isolation from, nor as substitutes for, their most comparable GAAP measures.

The following Notes 2 through 5 provide reconciliations of the non-GAAP financial measures presented in this press release to their most comparable GAAP measures.

DAVITA INC.

RECONCILIATIONS FOR NON-GAAP MEASURES - continued

(unaudited)

(dollars in thousands, except for per share data)

 

Note 2:  Adjusted net income from continuing operations and adjusted diluted net income from continuing operations per share attributable to DaVita Inc.

 
 

Three months ended

 

September 30, 2020

 

June 30, 2020

 

September 30, 2019

 

Dollars

 

Per share

 

Dollars

 

Per share

 

Dollars

 

Per share

Net income from continuing operations attributable to DaVita Inc.

$

158,674

   

$

1.28

   

$

201,602

   

$

1.62

   

$

150,113

   

$

0.99

 

Operating charges:

                     

Goodwill impairment charges

   

   

   

   

83,855

   

0.55

 

Loss on changes in ownership interests, net

   

   

16,252

   

0.13

   

   

 

General and administrative:

                     

Accruals for legal matters

   

   

35,000

   

0.28

   

   

 

Debt prepayment, refinancing and redemption charges

86,074

   

0.69

   

   

   

21,242

   

0.14

 

Related income tax

(21,476)

   

(0.17)

   

(10,988)

   

(0.09)

   

(23,236)

   

(0.15)

 

Adjusted net income from continuing operations attributable to DaVita Inc.

$

223,272

   

$

1.80

   

$

241,866

   

$

1.95

   

$

231,974

   

$

1.53

 
 

Certain columns or rows may not sum or recalculate due to the use of rounded numbers.

 

 

Nine months ended

 

September 30, 2020

 

September 30, 2019

 

Dollars

 

Per share

 

Dollars

 

Per share

Net income from continuing operations attributable to DaVita Inc.

$

589,889

   

$

4.72

   

$

464,590

   

$

2.87

 

Operating charges:

             

Goodwill impairment charges

   

   

124,892

   

0.77

 

Loss on changes in ownership interests, net

16,252

   

0.13

   

   

 

General and administrative:

             

Accruals for legal matters

35,000

   

0.28

   

   

 

Debt prepayment, refinancing and redemption charges

89,022

   

0.71

   

33,402

   

0.21

 

Related income tax

(33,200)

   

(0.27)

   

(35,231)

   

(0.22)

 

Adjusted net income from continuing operations attributable to DaVita Inc.

$

696,963

   

$

5.58

   

$

587,653

   

$

3.64

 
 

Certain columns or rows may not sum or recalculate due to the use of rounded numbers.

 

DAVITA INC.

RECONCILIATIONS FOR NON-GAAP MEASURES - continued

(unaudited)

(dollars in thousands, except for per share data)

 

Note 3:  Adjusted operating income

 
 

Three months ended

 

Nine months ended

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2019

Consolidated:

                 

Operating income

$

437,669

   

$

409,920

   

$

378,336

   

$

1,312,965

   

$

1,180,729

 

Operating charges:

                 

Goodwill impairment charges

   

   

83,855

   

   

124,892

 

Loss on changes in ownership interests, net

   

16,252

   

   

16,252

   

 

General and administrative:

                 

Accruals for legal matters

   

35,000

   

   

35,000

   

 

Adjusted operating income

$

437,669

   

$

461,172

   

$

462,191

   

$

1,364,217

   

$

1,305,621

 
 
 
 

Three months ended

 

Nine months ended

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

September 30,

2020

 

September 30,

2019

Consolidated:

                 

U.S. dialysis:

                 

Segment operating income

$

470,596

   

$

522,630

   

$

500,742

   

$

1,484,833

   

$

1,416,680

 

Other - Ancillary services:

                 

U.S.

                 

Segment operating loss

(13,912)

   

(40,991)

   

(14,928)

   

(74,273)

   

(45,498)

 

Loss on changes in ownership interests, net

   

16,252

   

   

16,252

   

 

Adjusted operating loss

(13,912)

   

(24,739)

   

(14,928)

   

(58,021)

   

(45,498)

 

International

                 

Segment operating income (loss)

6,826

   

1,370

   

(82,797)

   

24,919

   

(124,906)

 

Goodwill impairment charges

   

   

83,855

   

   

124,892

 

Adjusted operating income (loss)

6,826

   

1,370

   

1,058

   

24,919

   

(14)

 

Adjusted Other - Ancillary services operating loss

(7,086)

   

(23,370)

   

(13,870)

   

(33,102)

   

(45,513)

 

Corporate administrative support expenses:

                 

Segment expenses

(25,841)

   

(73,088)

   

(24,681)

   

(122,514)

   

(65,546)

 

Accruals for legal matters

   

35,000

   

   

35,000

   

 

Adjusted Corporate administrative support expenses

(25,841)

   

(38,088)

   

(24,681)

   

(87,513)

   

(65,547)

 

Adjusted operating income

$

437,669

   

$

461,172

   

$

462,191

   

$

1,364,217

   

$

1,305,621

 
 

Certain columns or rows may not sum or recalculate due to the use of rounded numbers.

 

DAVITA INC.

RECONCILIATIONS FOR NON-GAAP MEASURES - continued

(unaudited)

(dollars in thousands)

 

Note 4:  Effective income tax rates on income from continuing operations attributable to DaVita Inc.

 
 

Three months ended

 

Nine months

ended

September 30,

2020

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

Income from continuing operations before income taxes

$

283,332

   

$

338,084

   

$

273,785

   

$

990,891

 

Less: Noncontrolling owners' income primarily attributable to non-tax paying entities

(59,216)

   

(53,335)

   

(58,502)

   

(160,923)

 

Income from continuing operations before income taxes attributable to DaVita Inc.

$

224,116

   

$

284,749

   

$

215,283

   

$

829,968

 
               

Income tax expense for continuing operations

$

65,792

   

$

83,212

   

$

65,254

   

$

240,564

 

Less: Income tax attributable to noncontrolling interests

(350)

   

(65)

   

(84)

   

(485)

 

Income tax expense from continuing operations attributable to DaVita Inc.

$

65,442

   

$

83,147

   

$

65,170

   

$

240,079

 
               

Effective income tax rate on income from continuing operations attributable to DaVita Inc.

29.2

%

 

29.2

%

 

30.3

%

 

28.9

%

The effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc. is computed as follows:

 

Three months ended

 

Nine months

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

ended

September 30,

2020

Income from continuing operations before income taxes

$

283,332

   

$

338,084

   

$

273,785

   

$

990,891

 

Operating charges:

             

Goodwill impairment charges

   

   

83,855

   

 

Loss on changes in ownership interests, net

   

16,252

   

   

16,252

 

General and administrative:

             

Accruals for legal matters

   

35,000

   

   

35,000

 

Debt prepayment, refinancing and redemption charges

86,074

   

   

21,242

   

89,022

 

Noncontrolling owners' income primarily attributable to non-tax paying entities

(59,216)

   

(53,335)

   

(58,502)

   

(160,923)

 

Adjusted income from continuing operations before income taxes attributable to DaVita Inc.

$

310,190

   

$

336,001

   

$

320,380

   

$

970,242

 

Income tax expense

$

65,792

   

$

83,212

   

$

65,254

   

$

240,564

 

Add income tax related to:

             

Operating charges:

             

Goodwill impairment charges

   

   

17,768

   

 

Loss on changes in ownership interests, net

   

2,255

   

   

2,255

 

General and administrative:

             

Accruals for legal matters

   

8,733

   

   

8,733

 

Debt prepayment, refinancing and redemption charges

21,476

   

   

5,468

   

22,212

 

Less income tax related to:

             

Noncontrolling interests

(350)

   

(65)

   

(84)

   

(485)

 

Income tax on adjusted income from continuing operations attributable to DaVita Inc.

$

86,918

   

$

94,135

   

$

88,406

   

$

273,279

 

Effective income tax rate on adjusted income from continuing operations attributable to DaVita Inc.

28.0

%

 

28.0

%

 

27.6

%

 

28.2

%

 

Certain columns, rows or percentages may not sum or recalculate due to the use of rounded numbers.

 

DAVITA INC.

RECONCILIATIONS FOR NON-GAAP MEASURES - continued

(unaudited)

(dollars in thousands)

 

Note 5:  Free cash flow from continuing operations

 
 

Three months ended

 

Nine months

ended

September 30,

2020

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

Net cash provided by continuing operating activities

$

482,727

   

$

651,122

   

$

647,553

   

$

1,494,230

 

Less: Distributions to noncontrolling interests

(60,545)

   

(60,422)

   

(61,456)

   

(179,098)

 

Plus: Contributions from noncontrolling interests

12,272

   

11,195

   

12,814

   

32,854

 

Cash provided by continuing operating activities attributable to DaVita Inc.

434,454

   

601,895

   

598,911

   

1,347,986

 

Less: Expenditures for routine maintenance and information technology

(83,507)

   

(74,196)

   

(83,513)

   

(239,317)

 

Less: Expenditures for development

(74,722)

   

(62,529)

   

(89,752)

   

(210,579)

 

Plus: Proceeds from sale of self-developed properties

10,530

   

41,574

   

11,616

   

79,307

 

Free cash flow from continuing operations

$

286,755

   

$

506,744

   

$

437,262

   

$

977,397

 

 

 

Rolling twelve months ended

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

Net cash provided by continuing operating activities

$

2,172,131

   

$

2,336,957

   

$

1,602,098

 

Less: Distributions to noncontrolling interests

(255,051)

   

(255,962)

   

(213,938)

 

Plus: Contributions from noncontrolling interests

46,076

   

46,618

   

53,227

 

Cash provided by continuing operating activities attributable to DaVita Inc.

1,963,156

   

2,127,613

   

1,441,387

 

Less: Expenditures for routine maintenance and information technology

(369,560)

   

(369,566)

   

(363,946)

 

Less: Expenditures for development

(299,699)

   

(314,729)

   

(406,309)

 

Plus: Proceeds from sale of self-developed properties

98,672

   

99,758

   

51,058

 

Free cash flow from continuing operations

$

1,392,569

   

$

1,543,076

   

$

722,190

 
 

Certain columns or rows may not sum or recalculate due to the use of rounded numbers.

 

DaVita Logo (PRNewsfoto/DaVita)

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/davita-inc-3rd-quarter-2020-results-301163382.html

SOURCE DaVita Inc.

 
 
Company Codes: NYSE:DVA
 

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