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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2022
or
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission File Number: 1-14106
DAVITA INC.
| | | | | | | | |
Delaware | | 51-0354549 |
(State of incorporation) | | (I.R.S. Employer Identification No.) |
| | | | | | | | |
2000 16th Street |
Denver, | CO | 80202 |
Telephone number (720) 631-2100
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class: | | Trading symbol(s): | | Name of each exchange on which registered: |
Common Stock, $0.001 par value | | DVA | | NYSE |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | ☒ | Accelerated filer | ☐ |
| | | |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | |
Emerging growth company | ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
As of October 27, 2022, the number of shares of the registrant’s common stock outstanding was approximately 90.1 million shares.
DAVITA INC.
INDEX
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| | | | Page No. |
| | PART I. FINANCIAL INFORMATION | | |
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Item 1. | | | | |
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Item 2. | | | | |
Item 3. | | | | |
Item 4. | | | | |
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| | PART II. OTHER INFORMATION | | |
Item 1. | | | | |
Item 1A. | | | | |
Item 2. | | | | |
Item 6. | | | | |
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Note: Items 3, 4 and 5 of Part II are omitted because they are not applicable.
DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Dialysis patient service revenues | $ | 2,846,494 | | | $ | 2,837,940 | | | $ | 8,372,874 | | | $ | 8,370,484 | |
Other revenues | 102,200 | | | 100,379 | | | 320,132 | | | 304,346 | |
Total revenues | 2,948,694 | | | 2,938,319 | | | 8,693,006 | | | 8,674,830 | |
Operating expenses: | | | | | | | |
Patient care costs | 2,085,555 | | | 2,008,589 | | | 6,120,872 | | | 5,912,196 | |
General and administrative | 365,447 | | | 293,095 | | | 975,486 | | | 872,612 | |
Depreciation and amortization | 194,414 | | | 170,462 | | | 538,534 | | | 505,852 | |
Equity investment income, net | (8,509) | | | (8,704) | | | (24,696) | | | (23,785) | |
| | | | | | | |
| | | | | | | |
Total operating expenses | 2,636,907 | | | 2,463,442 | | | 7,610,196 | | | 7,266,875 | |
Operating income | 311,787 | | | 474,877 | | | 1,082,810 | | | 1,407,955 | |
Debt expense | (99,680) | | | (72,829) | | | (256,057) | | | (213,167) | |
| | | | | | | |
Other (loss) income, net | (4,898) | | | (7,590) | | | (7,968) | | | 8,766 | |
Income before income taxes | 207,209 | | | 394,458 | | | 818,785 | | | 1,203,554 | |
Income tax expense | 42,515 | | | 74,704 | | | 163,757 | | | 241,224 | |
| | | | | | | |
| | | | | | | |
Net income | 164,694 | | | 319,754 | | | 655,028 | | | 962,330 | |
Less: Net income attributable to noncontrolling interests | (59,328) | | | (60,000) | | | (162,731) | | | (171,353) | |
Net income attributable to DaVita Inc. | $ | 105,366 | | | $ | 259,754 | | | $ | 492,297 | | | $ | 790,977 | |
| | | | | | | |
Earnings per share attributable to DaVita Inc.: | | | | | | | |
| | | | | | | |
Basic net income | $ | 1.16 | | | $ | 2.48 | | | $ | 5.24 | | | $ | 7.41 | |
| | | | | | | |
Diluted net income | $ | 1.13 | | | $ | 2.36 | | | $ | 5.07 | | | $ | 7.08 | |
| | | | | | | |
Weighted average shares for earnings per share: | | | | | | | |
Basic shares | 91,160 | | | 104,793 | | | 93,959 | | | 106,685 | |
Diluted shares | 93,263 | | | 109,838 | | | 97,153 | | | 111,666 | |
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See notes to condensed consolidated financial statements.
DAVITA INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, | | Nine months ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Net income | $ | 164,694 | | | $ | 319,754 | | | $ | 655,028 | | | $ | 962,330 | |
Other comprehensive (loss) income, net of tax: | | | | | | | |
Unrealized gains (losses) on interest rate cap agreements: | | | | | | | |
Unrealized gains (losses) | 41,312 | | | (357) | | | 95,660 | | | 2,466 | |
Reclassifications of net realized losses into net income | 1,033 | | | 1,034 | | | 3,100 | | | 3,100 | |
Unrealized losses on foreign currency translation: | (66,100) | | | (54,528) | | | (95,064) | | | (59,162) | |
Other comprehensive (loss) income | (23,755) | | | (53,851) | | | 3,696 | | | (53,596) | |
Total comprehensive income | 140,939 | | | 265,903 | | | 658,724 | | | 908,734 | |
Less: Comprehensive income attributable to noncontrolling interests | (59,328) | | | (60,000) | | | (162,731) | | | (171,353) | |
Comprehensive income attributable to DaVita Inc. | $ | 81,611 | | | $ | 205,903 | | | $ | 495,993 | | | $ | 737,381 | |
See notes to condensed consolidated financial statements.
DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars and shares in thousands, except per share data)
| | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
ASSETS | | | |
Cash and cash equivalents | $ | 367,510 | | | $ | 461,900 | |
Restricted cash and equivalents | 94,704 | | | 93,060 | |
Short-term investments | 74,305 | | | 22,310 | |
Accounts receivable | 2,089,017 | | | 1,957,583 | |
Inventories | 106,845 | | | 107,428 | |
Other receivables | 392,851 | | | 427,321 | |
Prepaid and other current assets | 65,807 | | | 72,517 | |
Income tax receivable | 11,403 | | | 25,604 | |
Total current assets | 3,202,442 | | | 3,167,723 | |
Property and equipment, net of accumulated depreciation of $5,114,579 and $4,763,135, respectively | 3,240,310 | | | 3,479,972 | |
Operating lease right-of-use assets | 2,721,888 | | | 2,824,787 | |
Intangible assets, net of accumulated amortization of $46,907 and $60,730, respectively | 179,715 | | | 177,693 | |
Equity method and other investments | 243,554 | | | 238,881 | |
Long-term investments | 43,535 | | | 49,514 | |
Other long-term assets | 307,713 | | | 136,677 | |
Goodwill | 7,022,642 | | | 7,046,241 | |
| $ | 16,961,799 | | | $ | 17,121,488 | |
LIABILITIES AND EQUITY | | | |
Accounts payable | $ | 417,139 | | | $ | 402,049 | |
Other liabilities | 796,200 | | | 709,345 | |
Accrued compensation and benefits | 702,877 | | | 659,960 | |
Current portion of operating lease liabilities | 396,880 | | | 394,357 | |
Current portion of long-term debt | 214,254 | | | 179,030 | |
Income tax payable | 10,059 | | | 53,792 | |
Total current liabilities | 2,537,409 | | | 2,398,533 | |
Long-term operating lease liabilities | 2,558,355 | | | 2,672,713 | |
Long-term debt | 8,867,187 | | | 8,729,150 | |
Other long-term liabilities | 106,895 | | | 119,158 | |
Deferred income taxes | 819,073 | | | 830,954 | |
Total liabilities | 14,888,919 | | | 14,750,508 | |
Commitments and contingencies | | | |
Noncontrolling interests subject to put provisions | 1,370,753 | | | 1,434,832 | |
Equity: | | | |
Preferred stock ($0.001 par value, 5,000 shares authorized; none issued) | — | | | — | |
Common stock ($0.001 par value, 450,000 shares authorized; 98,199 and 90,104 shares issued and outstanding at September 30, 2022, respectively, and 97,289 shares issued and outstanding at December 31, 2021) | 98 | | | 97 | |
Additional paid-in capital | 609,345 | | | 540,321 | |
Retained earnings | 846,634 | | | 354,337 | |
Treasury stock (8,095 and zero shares, respectively) | (787,854) | | | — | |
Accumulated other comprehensive loss | (135,551) | | | (139,247) | |
Total DaVita Inc. shareholders' equity | 532,672 | | | 755,508 | |
Noncontrolling interests not subject to put provisions | 169,455 | | | 180,640 | |
Total equity | 702,127 | | | 936,148 | |
| $ | 16,961,799 | | | $ | 17,121,488 | |
See notes to condensed consolidated financial statements.
DAVITA INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
(dollars in thousands)
| | | | | | | | | | | |
| Nine months ended September 30, |
| 2022 | | 2021 |
Cash flows from operating activities: | | | |
Net income | $ | 655,028 | | | $ | 962,330 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 538,534 | | | 505,852 | |
| | | |
| | | |
Stock-based compensation expense | 77,904 | | | 75,898 | |
Deferred income taxes | (35,637) | | | 56,724 | |
Equity investment income, net | (417) | | | (1,687) | |
| | | |
Other non-cash charges, net | 16,035 | | | 13,418 | |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | | | |
Accounts receivable | (135,632) | | | (205,792) | |
Inventories | 347 | | | (2,490) | |
Other receivables and prepaid and other current assets | 43,392 | | | 144,967 | |
Other long-term assets | (49,326) | | | (19,663) | |
Accounts payable | 38,870 | | | (47,412) | |
Accrued compensation and benefits | 35,491 | | | (7,176) | |
Other current liabilities | 87,248 | | | (87,842) | |
Income taxes | (37,770) | | | 22,609 | |
Other long-term liabilities | (13,219) | | | (8,748) | |
Net cash provided by operating activities | 1,220,848 | | | 1,400,988 | |
Cash flows from investing activities: | | | |
Additions of property and equipment | (409,391) | | | (451,909) | |
Acquisitions | (43,811) | | | (45,143) | |
Proceeds from asset and business sales | 116,088 | | | 46,578 | |
Purchase of debt investments held-to-maturity | (94,602) | | | (13,274) | |
Purchase of other debt and equity investments | (3,322) | | | (2,609) | |
Proceeds from debt investments held-to-maturity | 40,660 | | | 13,274 | |
Proceeds from sale of other debt and equity investments | 3,763 | | | 11,976 | |
Other | (782) | | | (745) | |
Purchase of equity method investments | (28,176) | | | (7,925) | |
Distributions from equity method investments | 2,490 | | | 1,592 | |
Net cash used in investing activities | (417,083) | | | (448,185) | |
Cash flows from financing activities: | | | |
Borrowings | 1,705,913 | | | 1,613,036 | |
Payments on long-term debt | (1,557,358) | | | (812,659) | |
Deferred financing and debt redemption costs | — | | | (9,091) | |
Purchase of treasury stock | (802,228) | | | (882,411) | |
Distributions to noncontrolling interests | (188,592) | | | (177,146) | |
Net payments related to stock purchases and awards | (42,248) | | | (59,849) | |
Contributions from noncontrolling interests | 11,382 | | | 28,295 | |
Proceeds from sales of additional noncontrolling interests | 3,673 | | | 2,880 | |
Purchases of noncontrolling interests | (20,770) | | | (11,658) | |
Net cash used in financing activities | (890,228) | | | (308,603) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (6,283) | | | (7,381) | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (92,746) | | | 636,819 | |
Cash, cash equivalents and restricted cash at beginning of the year | 554,960 | | | 501,790 | |
Cash, cash equivalents and restricted cash at end of the period | $ | 462,214 | | | $ | 1,138,609 | |
See notes to condensed consolidated financial statements.
DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(dollars and shares in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2022 |
| Non- controlling interests subject to put provisions | | DaVita Inc. Shareholders’ Equity | | Non- controlling interests not subject to put provisions |
| | |
| | Common stock | | Additional paid-in capital | | Retained earnings | | Treasury stock | | Accumulated other comprehensive loss | | | |
| | Shares | | Amount | | | | Shares | | Amount | | | Total | |
Balance at June 30, 2022 | $ | 1,385,821 | | | 98,179 | | | $ | 98 | | | $ | 578,272 | | | $ | 741,268 | | | (5,973) | | | $ | (603,058) | | | $ | (111,796) | | | $ | 604,784 | | | $ | 170,390 | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | |
Net income | 39,205 | | | | | | | | | 105,366 | | | | | | | | | 105,366 | | | 20,123 | |
| | | | | | | | | | | | | | | | | | | |
Other comprehensive loss | | | | | | | | | | | | | | | (23,755) | | | (23,755) | | | |
| | | | | | | | | | | | | | | | | | | |
Stock award plan | | | 20 | | | | | (986) | | | | | | | | | | | (986) | | | |
Stock-settled stock-based compensation expense | | | | | | | 27,619 | | | | | | | | | | | 27,619 | | | |
Changes in noncontrolling interest from: | | | | | | | | | | | | | | | | | | | |
Distributions | (48,275) | | | | | | | | | | | | | | | | | | | (22,002) | |
Contributions | 1,996 | | | | | | | | | | | | | | | | | | | 270 | |
Acquisitions and divestitures | | | | | | | | | | | | | | | | | | | 867 | |
Partial purchases | (215) | | | | | | | (3,339) | | | | | | | | | | | (3,339) | | | (193) | |
Fair value remeasurements | (7,779) | | | | | | | 7,779 | | | | | | | | | | | 7,779 | | | |
Other | | | | | | | | | | | | | | | | | | | |
Purchase of treasury stock | | | | | | | | | | | (2,122) | | | (184,796) | | | | | (184,796) | | | |
Balance at September 30, 2022 | $ | 1,370,753 | | | 98,199 | | | $ | 98 | | | $ | 609,345 | | | $ | 846,634 | | | (8,095) | | | $ | (787,854) | | | $ | (135,551) | | | $ | 532,672 | | | $ | 169,455 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2022 |
| Non- controlling interests subject to put provisions | | DaVita Inc. Shareholders’ Equity | | Non- controlling interests not subject to put provisions |
| | |
| | Common stock | | Additional paid-in capital | | Retained earnings | | Treasury stock | | Accumulated other comprehensive loss | | | |
| | Shares | | Amount | | | | Shares | | Amount | | | Total | |
Balance at December 31, 2021 | $ | 1,434,832 | | | 97,289 | | | $ | 97 | | | $ | 540,321 | | | $ | 354,337 | | | — | | | $ | — | | | $ | (139,247) | | | $ | 755,508 | | | $ | 180,640 | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | |
Net income | 113,157 | | | | | | | | | 492,297 | | | | | | | | | 492,297 | | | 49,574 | |
| | | | | | | | | | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | | | | | | 3,696 | | | 3,696 | | | |
| | | | | | | | | | | | | | | | | | | |
Stock award plan | | | 910 | | | 1 | | | (55,359) | | | | | | | | | | | (55,358) | | | |
Stock-settled stock-based compensation expense | | | | | | | 77,835 | | | | | | | | | | | 77,835 | | | |
Changes in noncontrolling interest from: | | | | | | | | | | | | | | | | | | | |
Distributions | (125,534) | | | | | | | | | | | | | | | | | | | (63,058) | |
Contributions | 9,300 | | | | | | | | | | | | | | | | | | | 2,082 | |
Acquisitions and divestitures | 2,392 | | | | | | | 939 | | | | | | | | | | | 939 | | | 867 | |
Partial purchases | (11,633) | | | | | | | (6,609) | | | | | | | | | | | (6,609) | | | (193) | |
Fair value remeasurements | (52,218) | | | | | | | 52,218 | | | | | | | | | | | 52,218 | | | |
Other | 457 | | | | | | | | | | | | | | | | | | | (457) | |
Purchase of treasury stock | | | | | | | | | | | (8,095) | | | (787,854) | | | | | (787,854) | | | |
Balance at September 30, 2022 | $ | 1,370,753 | | | 98,199 | | | $ | 98 | | | $ | 609,345 | | | $ | 846,634 | | | (8,095) | | | $ | (787,854) | | | $ | (135,551) | | | $ | 532,672 | | | $ | 169,455 | |
See notes to condensed consolidated financial statements.
DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(dollars and shares in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2021 |
| Non- controlling interests subject to put provisions | | DaVita Inc. Shareholders’ Equity | | Non- controlling interests not subject to put provisions |
| | |
| | Common stock | | Additional paid-in capital | | Retained earnings | | Treasury stock | | Accumulated other comprehensive loss | | | |
| | Shares | | Amount | | | | Shares | | Amount | | | Total | |
Balance at June 30, 2021 | $ | 1,426,211 | | | 110,644 | | | $ | 111 | | | $ | 523,038 | | | $ | 1,383,760 | | | (5,019) | | | $ | (563,230) | | | $ | (65,899) | | | $ | 1,277,780 | | | $ | 185,046 | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | |
Net income | 41,182 | | | | | | | | | 259,754 | | | | | | | | | 259,754 | | | 18,818 | |
Other comprehensive loss | | | | | | | | | | | | | | | (53,851) | | | (53,851) | | | |
| | | | | | | | | | | | | | | | | | | |
Stock award plans | | | 242 | | | | | (23,584) | | | | | | | | | | | (23,584) | | | |
Stock-settled stock-based compensation expense | | | | | | | 24,055 | | | | | | | | | | | 24,055 | | | |
Changes in noncontrolling interest from: | | | | | | | | | | | | | | | | | | | |
Distributions | (49,766) | | | | | | | | | | | | | | | | | | | (28,018) | |
Contributions | 9,041 | | | | | | | | | | | | | | | | | | | 3,329 | |
Acquisitions and divestitures | 5,903 | | | | | | | (351) | | | | | | | | | | | (351) | | | 1 | |
Partial purchases | | | | | | | (6,803) | | | | | | | | | | | (6,803) | | | (362) | |
Fair value remeasurements | (8,654) | | | | | | | 8,654 | | | | | | | | | | | 8,654 | | | |
Purchase of treasury stock | | | | | | | | | | | (2,731) | | | (336,217) | | | | | (336,217) | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Balance at September 30, 2021 | $ | 1,423,917 | | | 110,886 | | | $ | 111 | | | $ | 525,009 | | | $ | 1,643,514 | | | (7,750) | | | $ | (899,447) | | | $ | (119,750) | | | $ | 1,149,437 | | | $ | 178,814 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2021 |
| Non- controlling interests subject to put provisions | | DaVita Inc. Shareholders’ Equity | | Non- controlling interests not subject to put provisions |
| | |
| | Common stock | | Additional paid-in capital | | Retained earnings | | Treasury stock | | Accumulated other comprehensive loss | | | |
| | Shares | | Amount | | | | Shares | | Amount | | | Total | |
Balance at December 31, 2020 | $ | 1,330,028 | | | 109,933 | | | $ | 110 | | | $ | 597,073 | | | $ | 852,537 | | | — | | | $ | — | | | $ | (66,154) | | | $ | 1,383,566 | | | $ | 183,186 | |
Comprehensive income: | | | | | | | | | | | | | | | | | | | |
Net income | 121,774 | | | | | | | | | 790,977 | | | | | | | | | 790,977 | | | 49,579 | |
Other comprehensive loss | | | | | | | | | | | | | | | (53,596) | | | (53,596) | | | |
| | | | | | | | | | | | | | | | | | | |
Stock award plans | | | 953 | | 1 | | (74,761) | | | | | | | | | | | (74,760) | | | |
Stock-settled stock-based compensation expense | | | | | | | 74,568 | | | | | | | | | | | 74,568 | | | |
Changes in noncontrolling interest from: | | | | | | | | | | | | | | | | | | | |
Distributions | (114,008) | | | | | | | | | | | | | | | | | | | (63,138) | |
Contributions | 19,830 | | | | | | | | | | | | | | | | | | | 8,465 | |
Acquisitions and divestitures | 5,903 | | | | | | | (351) | | | | | | | | | | | (351) | | | 1,250 | |
Partial purchases | (552) | | | | | | | (10,578) | | | | | | | | | | | (10,578) | | | (528) | |
Fair value remeasurements | 60,942 | | | | | | | (60,942) | | | | | | | | | | | (60,942) | | | |
Purchase of treasury stock | | | | | | | | | | | (7,750) | | | (899,447) | | | | | (899,447) | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Balance at September 30, 2021 | $ | 1,423,917 | | | 110,886 | | | $ | 111 | | | $ | 525,009 | | | $ | 1,643,514 | | | (7,750) | | | $ | (899,447) | | | $ | (119,750) | | | $ | 1,149,437 | | | $ | 178,814 | |
See notes to condensed consolidated financial statements.
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars and shares in thousands, except per share data)
Unless otherwise indicated in this Quarterly Report on Form 10-Q, "the Company", "we", "us", "our" and similar terms refer to DaVita Inc. and its consolidated subsidiaries.
1. Condensed consolidated interim financial statements
The unaudited condensed consolidated interim financial statements included in this report are prepared by the Company. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations are reflected in these condensed consolidated interim financial statements. All significant intercompany accounts and transactions have been eliminated. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, contingencies and noncontrolling interests subject to put provisions. The most significant estimates and assumptions underlying these financial statements and accompanying notes generally involve revenue recognition and accounts receivable, certain fair value estimates, accounting for income taxes and loss contingencies. The results of operations reflected in these interim financial statements may not necessarily be indicative of annual operating results. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (2021 10-K). Prior period classifications conform to the current period presentation. The Company has evaluated subsequent events through the date these condensed consolidated interim financial statements were issued and has included all necessary adjustments and disclosures.
2. Revenue recognition
The following tables summarize the Company's segment revenues by primary payor source:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2022 | | Three months ended September 30, 2021 |
| U.S. dialysis | | Other — Ancillary services | | Consolidated | | U.S. dialysis | | Other — Ancillary services | | Consolidated |
Dialysis patient service revenues: | | | | | | | | | | | |
Medicare and Medicare Advantage | $ | 1,535,680 | | | $ | | $ | 1,535,680 | | | $ | 1,543,819 | | | $ | | $ | 1,543,819 | |
Medicaid and Managed Medicaid | 193,853 | | | | | 193,853 | | | 203,169 | | | | | 203,169 | |
Other government | 86,852 | | | 116,084 | | | 202,936 | | | 82,624 | | | 113,260 | | | 195,884 | |
Commercial | 880,812 | | | 56,170 | | | 936,982 | | | 862,218 | | | 54,857 | | | 917,075 | |
Other revenues: | | | | | | | | | | | |
Medicare and Medicare Advantage | | | 78,345 | | | 78,345 | | | | | 77,277 | | | 77,277 | |
Medicaid and Managed Medicaid | | | 412 | | | 412 | | | | | 377 | | | 377 | |
Commercial | | | 6,484 | | | 6,484 | | | | | 7,164 | | | 7,164 | |
Other(1) | 6,056 | | | 10,903 | | | 16,959 | | | 6,216 | | | 9,442 | | | 15,658 | |
Eliminations of intersegment revenues | (22,957) | | | | | (22,957) | | | (22,104) | | | | | (22,104) | |
Total | $ | 2,680,296 | | | $ | 268,398 | | | $ | 2,948,694 | | | $ | 2,675,942 | | | $ | 262,377 | | | $ | 2,938,319 | |
(1)Other primarily consists of management service fees earned in the respective Company line of business as well as other non-patient service revenue from the Company's U.S. ancillary services and international operations.
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine months ended September 30, 2022 | | Nine months ended September 30, 2021 |
| U.S. dialysis | | Other - Ancillary services | | Consolidated | | U.S. dialysis | | Other - Ancillary services | | Consolidated |
Dialysis patient service revenues: | | | | | | | | | | | |
Medicare and Medicare Advantage | $ | 4,529,300 | | | $ | | $ | 4,529,300 | | | $ | 4,586,278 | | | $ | | $ | 4,586,278 | |
Medicaid and Managed Medicaid | 570,380 | | | | | 570,380 | | | 585,053 | | | | | 585,053 | |
Other government | 253,731 | | | 349,633 | | | 603,364 | | | 245,125 | | | 338,553 | | | 583,678 | |
Commercial | 2,570,054 | | | 164,302 | | | 2,734,356 | | | 2,528,499 | | | 157,172 | | | 2,685,671 | |
Other revenues: | | | | | | | | | | | |
Medicare and Medicare Advantage | | | 255,204 | | | 255,204 | | | | | 243,085 | | | 243,085 | |
Medicaid and Managed Medicaid | | | 1,181 | | | 1,181 | | | | | 981 | | | 981 | |
Commercial | | | 16,029 | | | 16,029 | | | | | 14,387 | | | 14,387 | |
Other(1) | 18,124 | | | 29,584 | | | 47,708 | | | 19,308 | | | 31,107 | | | 50,415 | |
Eliminations of intersegment revenues | (64,516) | | | | | (64,516) | | | (70,424) | | | (4,294) | | | (74,718) | |
Total | $ | 7,877,073 | | | $ | |