Company Quick10K Filing
Quick10K
Davita
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$52.38 166 $8,720
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-07 Earnings, Exhibits
8-K 2019-04-27 Officers, Exhibits
8-K 2019-02-13 Earnings, Exhibits
8-K 2018-12-11 Enter Agreement, Impairments, Exhibits
8-K 2018-11-21 Enter Agreement, Exhibits
8-K 2018-11-07 Earnings, Exhibits
8-K 2018-09-28 Other Events
8-K 2018-09-20 Enter Agreement, Exhibits
8-K 2018-08-19 Officers, Exhibits
8-K 2018-08-01 Earnings, Exhibits
8-K 2018-06-22 Shareholder Vote
8-K 2018-03-12 Other Events
8-K 2018-02-13 Earnings, Exhibits
8-K 2018-02-01 Officers
PKX Posco 16,740
ECHO Echo Global Logistics 630
SFUN Fang Holdings 590
SHSP Sharpspring 192
YRIV Yangtze River Port & Logistics 153
PLBC Plumas Bancorp 131
IMAC IMAC Holdings 29
CNCG Concierge Technologies 0
MFCO Microwave Filter 0
REN Resolute Energy 0
DVA 2019-03-31
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II.
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 5. Other Information
Item 6. Exhibits
EX-10.4 dva-33119xex103.htm
EX-31.1 dva-33119ex311.htm
EX-31.2 dva-33119ex312.htm
EX-32.1 dva-33119ex321.htm
EX-32.2 dva-33119ex322.htm

Davita Earnings 2019-03-31

DVA 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
FORM 10-Q
 
 
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2019
Commission File Number: 1-14106
 
 
 
 
 

logoa18.jpg
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
 
 
 
 
 
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.
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  ☒
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
 
New York Stock Exchange
As of May 3, 2019, the number of shares of the Registrant’s common stock outstanding was approximately 166.4 million shares.
 
 
 
 
 




DAVITA INC.
INDEX

 
 
 
 
Page No.
 
 
PART I. FINANCIAL INFORMATION
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
Item 3.
 
 
Item 4.
 
 
 
 
 
 
 
 
 
PART II. OTHER INFORMATION
 
 
Item 1.
 
 
Item 1A.
 
 
Item 2.
 
 
Item 5.
 
 
Item 6.
 
 
 
 
 
 
Note: Items 3 and 4 of Part II are omitted because they are not applicable.
 
 
 

i




DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands, except per share data)
 
Three months ended
March 31,
 
2019
 
2018
Dialysis and related lab patient service revenues
$
2,635,152

 
$
2,591,074

Provision for uncollectible accounts
(5,463
)
 
25,545

Net dialysis and related lab patient service revenues
2,629,689

 
2,616,619

Other revenues
113,423

 
232,825

Total revenues
2,743,112

 
2,849,444

Operating expenses and charges:
 

 
 

Patient care costs
1,964,935

 
2,035,585

General and administrative
250,813

 
266,529

Depreciation and amortization
148,528

 
142,799

Equity investment income
(2,708
)
 
(155
)
Provision for uncollectible accounts

 
(6,000
)
Goodwill impairment charges
41,037

 

Total operating expenses and charges
2,402,605

 
2,438,758

Operating income
340,507

 
410,686

Debt expense
(131,519
)
 
(113,516
)
Other income, net
6,940

 
4,582

Income from continuing operations before income taxes
215,928

 
301,752

Income tax expense
56,746

 
70,737

Net income from continuing operations
159,182

 
231,015

Net income (loss) from discontinued operations, net of tax
30,305

 
(5,786
)
Net income
189,487

 
225,229

Less: Net income attributable to noncontrolling interests
(40,198
)
 
(46,543
)
Net income attributable to DaVita Inc.
$
149,289

 
$
178,686

Earnings per share attributable to DaVita Inc.:
 

 
 

Basic net income from continuing operations per share
$
0.72

 
$
1.07

Basic net income per share
$
0.90

 
$
1.00

Diluted net income from continuing operations per share
$
0.72

 
$
1.05

Diluted net income per share
$
0.90

 
$
0.98

Weighted average shares for earnings per share:
 
 
 
Basic
166,387,958

 
178,957,865

Diluted
166,780,657

 
181,834,547

Amounts attributable to DaVita Inc.:
 
 
 
Net income from continuing operations
$
120,254

 
$
191,015

Net income (loss) from discontinued operations
29,035

 
(12,329
)
Net income attributable to DaVita Inc.
$
149,289

 
$
178,686

 
See notes to condensed consolidated financial statements.

1



DAVITA INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands)
 
 
Three months ended
March 31,
 
2019
 
2018
Net income
$
189,487

 
$
225,229

Other comprehensive income, net of tax:
 

 
 

Unrealized (losses) gains on interest rate cap agreements:
 

 
 

Unrealized (losses) gains
(580
)
 
1,050

Reclassifications of net realized losses into net income
1,606

 
1,537

Unrealized (losses) gains on foreign currency translation:
 
 
 

Foreign currency translation adjustments
(13,653
)
 
19,881

Other comprehensive (loss) income
(12,627
)
 
22,468

Total comprehensive income
176,860

 
247,697

Less: Comprehensive income attributable to noncontrolling interests
(40,198
)
 
(46,543
)
Comprehensive income attributable to DaVita Inc.
$
136,662

 
$
201,154

 See notes to condensed consolidated financial statements.


2



DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands, except per share data)
 
March 31, 2019
 
December 31, 2018
ASSETS
 

 
 

Cash and cash equivalents
$
459,242

 
$
323,038

Restricted cash and equivalents
102,192

 
92,382

Short-term investments
4,035

 
2,935

Accounts receivable, net
1,953,422

 
1,858,608

Inventories
104,236

 
107,381

Other receivables
489,581

 
469,796

Income tax receivable
42,650

 
68,614

Prepaid and other current assets
64,770

 
111,840

Current assets held for sale, net
6,004,948

 
5,389,565

Total current assets
9,225,076

 
8,424,159

Property and equipment, net of accumulated depreciation of $3,538,992 and $3,524,098
3,392,266

 
3,393,669

Operating lease right-of-use assets
2,736,536

 

Intangible assets, net of accumulated amortization of $82,265 and $80,566
118,324

 
118,846

Equity method and other investments
226,309

 
224,611

Long-term investments
34,414

 
35,424

Other long-term assets
73,651

 
71,583

Goodwill
6,799,368

 
6,841,960

 
$
22,605,944

 
$
19,110,252

LIABILITIES AND EQUITY
 

 
 

Accounts payable
$
365,192

 
$
463,270

Other liabilities
572,944

 
595,850

Accrued compensation and benefits
495,327

 
658,913

Current portion of operating leases liabilities
367,413

 

Current portion of long-term debt
4,676,691

 
1,929,369

Current liabilities held for sale
1,753,310

 
1,243,759

Total current liabilities
8,230,877

 
4,891,161

Long-term operating leases liabilities
2,625,776

 

Long-term debt
5,787,013

 
8,172,847

Other long-term liabilities
143,756

 
450,669

Deferred income taxes
588,805

 
562,536

Total liabilities
17,376,227

 
14,077,213

Commitments and contingencies:
 
 
 
Noncontrolling interests subject to put provisions
1,143,044

 
1,124,641

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; 166,396,147 and
166,387,307 shares issued and outstanding, respectively)
166

 
166

Additional paid-in capital
990,380

 
995,006

Retained earnings
2,932,359

 
2,743,194

Accumulated other comprehensive loss
(47,551
)
 
(34,924
)
Total DaVita Inc. shareholders' equity
3,875,354

 
3,703,442

Noncontrolling interests not subject to put provisions
211,319

 
204,956

Total equity
4,086,673

 
3,908,398

 
$
22,605,944

 
$
19,110,252

See notes to condensed consolidated financial statements.

3



DAVITA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
 
Three months ended
March 31,
 
2019
 
2018
Cash flows from operating activities:
 

 
 

Net income
$
189,487

 
$
225,229

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

Depreciation and amortization
148,528

 
142,799

Impairment charges
41,037

 

Stock-based compensation expense
12,110

 
9,685

Deferred income taxes
41,372

 
43,617

Equity investment (loss) income, net
(337
)
 
3,564

Other non-cash charges, net
1,720

 
9,959

Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
 
 
 
Accounts receivable
(132,292
)
 
(63,701
)
Inventories
3,324

 
57,621

Other receivables and other current assets
1,199

 
(34,120
)
Other long-term assets
(1,997
)
 
2,054

Accounts payable
(38,537
)
 
(62,830
)
Accrued compensation and benefits
(173,583
)
 
(62,550
)
Other current liabilities
17,236

 
49,379

Income taxes
32,502

 
30,772

Other long-term liabilities
(465
)
 
11,061

Net cash provided by operating activities
141,304

 
362,539

Cash flows from investing activities:
 
 
 

Additions of property and equipment
(198,878
)
 
(232,443
)
Acquisitions
(11,274
)
 
(16,582
)
Proceeds from asset and business sales
13,903

 
18,535

Purchase of other debt and equity investments
(3,290
)
 
(2,646
)
Purchase of investments held-to-maturity
(209
)
 
(3,586
)
Proceeds from sale of other debt and equity investments
3,302

 
5,151

Proceeds from investments held-to-maturity

 
31,454

Purchase of equity investments
(4,067
)
 
(2,476
)
Distributions received on equity investments
155

 
2,465

Net cash used in investing activities
(200,358
)
 
(200,128
)
Cash flows from financing activities:
 
 
 
Borrowings
17,133,464

 
13,306,898

Payments on long-term debt and other financing costs
(16,776,267
)
 
(13,202,225
)
Purchase of treasury stock

 
(290,377
)
Distributions to noncontrolling interests
(44,230
)
 
(45,467
)
Stock award exercises and other share issuances, net
1,517

 
(1,185
)
Contributions from noncontrolling interests
18,947

 
12,009

Purchases of noncontrolling interests
(8,480
)
 
(2,200
)
Net cash provided by (used in) financing activities
324,951

 
(222,547
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(921
)
 
6,668

Net increase (decrease) in cash, cash equivalents and restricted cash
264,976

 
(53,468
)
Less: Net increase in cash, cash equivalents and restricted cash from discontinued operations
118,962

 
17,834

Net increase (decrease) in cash, cash equivalents and restricted cash from continuing operations
146,014

 
(71,302
)
Cash, cash equivalents and restricted cash of continuing operations at beginning of the year
415,420

 
518,920

Cash, cash equivalents and restricted cash of continuing operations at end of the period
$
561,434

 
$
447,618


See notes to condensed consolidated financial statements.

4



DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(dollars and shares in thousands)
 
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
income
 
 
 
 
 
Shares
 
Amount
 
 
 
Shares
 
Amount
 
 
Total
 
Balance at January 1, 2018
$
1,011,360

 
182,462

 
$
182

 
$
1,042,899

 
$
3,633,713

 

 
$

 
$
13,235

 
$
4,690,029

 
$
196,037

Cumulative effect of change in
accounting principle
 
 
 
 
 
 
 
 
8,368

 
 
 
 
 
(8,368
)
 

 
 
Comprehensive income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Net income
24,107

 


 


 


 
178,686

 


 


 


 
178,686

 
22,436

Other comprehensive income


 


 


 


 


 


 


 
22,468

 
22,468

 


Stock unit shares issued


 
4

 


 


 


 


 


 


 

 


Stock-settled SAR shares issued


 
195

 
1

 
(4,887
)
 


 


 


 


 
(4,886
)
 


Stock-settled stock-based
compensation expense


 


 


 
9,682

 


 


 


 


 
9,682

 


Changes in noncontrolling interest
from:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions
(26,166
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(19,301
)
Contributions
9,508

 


 


 


 


 


 


 


 


 
2,501

Acquisitions and divestitures
688

 


 


 
76

 


 


 


 


 
76

 
(66
)
Partial purchases


 


 


 
(1,994
)
 


 


 


 


 
(1,994
)
 
(206
)
Fair value remeasurements
15,004

 


 


 
(15,004
)
 


 


 


 


 
(15,004
)
 


Purchase of treasury stock


 


 


 


 


 
(4,197
)
 
(298,377
)
 


 
(298,377
)
 


Balance at March 31, 2018
$
1,034,501

 
182,661

 
$
183

 
$
1,030,772

 
$
3,820,767

 
(4,197
)
 
$
(298,377
)
 
$
27,335

 
$
4,580,680

 
$
201,401


 
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 January 1, 2019
$
1,124,641

 
166,387

 
$
166

 
$
995,006

 
$
2,743,194

 

 
$

 
$
(34,924
)
 
$
3,703,442

 
$
204,956

Cumulative effect of change
in accounting principle
(38
)
 


 


 


 
39,876

 


 


 


 
39,876

 
(6
)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
25,389

 


 


 


 
149,289

 


 


 


 
149,289

 
14,809

Other comprehensive loss


 


 


 


 


 


 


 
(12,627
)
 
(12,627
)
 


Stock unit shares issued


 
9

 


 
(104
)
 


 


 


 


 
(104
)
 


Stock-settled SAR shares issued


 

 


 


 


 


 


 


 

 


Stock-settled stock-based
compensation expense


 


 


 
12,091

 


 


 


 


 
12,091

 


Changes in noncontrolling interest
from:


 


 


 


 


 


 


 


 


 


Distributions
(27,565
)
 


 


 


 


 


 


 


 


 
(16,665
)
Contributions
6,415

 


 


 


 


 


 


 


 


 
12,532

Acquisitions and divestitures
1,762

 


 


 

 


 


 


 


 

 

Partial purchases
(1,967
)
 


 


 
(2,206
)
 


 


 


 


 
(2,206
)
 
(4,307
)
Fair value remeasurements
14,407

 


 


 
(14,407
)
 


 


 


 


 
(14,407
)
 


Balance at March 31, 2019
$
1,143,044

 
166,396

 
$
166

 
$
990,380

 
$
2,932,359

 

 
$

 
$
(47,551
)
 
$
3,875,354

 
$
211,319


 See notes to condensed consolidated financial statements

5


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 condensed consolidated interim financial statements included in this report are prepared by the Company without audit. 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 assets, liabilities, revenues and expenses. The most significant estimates and assumptions underlying these financial statements and accompanying notes generally involve revenue recognition and accounts receivable, leases, impairments of goodwill and investments, accounting for income taxes, consolidation of variable interest entities and certain fair value estimates. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the operating results for the full year. The 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, 2018 (10-K). Prior year balances and amounts have been reclassified to conform to the current year presentation. The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued and has included all necessary adjustments and disclosures. 
2.
Revenue recognition
The Company’s allowance for doubtful accounts related to performance obligations satisfied in years prior was $42,235 and $52,924 as of March 31, 2019 and December 31, 2018, respectively.
There are significant uncertainties associated with estimating revenue, which generally take several years to resolve. These estimates are subject to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payor issues, as well as patient issues including determining applicable primary and secondary coverage, changes in patient coverage and coordination of benefits. As these estimates are refined over time, both positive and negative adjustments to revenue are recognized in the current period. As a result of changes in these estimates, additional revenue of $27,179 was recognized during the three months ended March 31, 2019 associated with performance obligations satisfied prior to January 1, 2019. Additional revenue of $67,410 was recognized during the three months ended March 31, 2018 associated with performance obligations satisfied prior to January 1, 2018, which included $24,000 from electing to apply ASC Topic 606 only to contracts not substantially completed as of January 1, 2018.
The following table summarizes the Company's segment revenues by primary payor source:
 
For the three months ended
 
March 31, 2019
 
March 31, 2018
 
U.S. dialysis and related lab services
 
Other - Ancillary services and strategic initiatives
 
Consolidated
 
U.S. dialysis and related lab services
 
Other - Ancillary services and strategic initiatives
 
Consolidated
Patient service revenues:
 
 
 
 
 
 
 
 
 
 
 
Medicare and Medicare Advantage
$
1,493,516

 
$

 
$
1,493,516

 
$
1,485,192

 
$

 
$
1,485,192

Medicaid and Managed Medicaid
154,190

 

 
154,190

 
157,496

 

 
157,496

Other government
106,127

 
84,475

 
190,602

 
107,119

 
82,537

 
189,656

Commercial
788,413

 
33,388

 
821,801

 
782,979

 
19,718

 
802,697

Other revenues:
 
 
 
 
 
 
 
 
 
 
 
Medicare and Medicare Advantage

 
61,700

 
61,700

 

 
142,758

 
142,758

Medicaid and Managed Medicaid

 
6

 
6

 

 
15,791

 
15,791

Commercial

 
32,619

 
32,619

 

 
40,420

 
40,420

Other(1)
4,905

 
17,750

 
22,655

 
5,114

 
38,941

 
44,055

Eliminations of intersegment revenues
(30,641
)
 
(3,336
)
 
(33,977
)
 
(18,422
)
 
(10,199
)
 
(28,621
)
Total
$
2,516,510

 
$
226,602

 
$
2,743,112

 
$
2,519,478

 
$
329,966

 
$
2,849,444

 
(1)
Other consists of management fees and revenue from the Company's ancillary services and strategic initiatives.

6


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


Dialysis and related lab patient service revenues
Dialysis and related lab services patient service revenues are recognized in the period services are provided. Revenues consist primarily of payments from Medicare, Medicaid and commercial health plans for dialysis and related lab services provided to patients. A usual and customary fee schedule is maintained for the Company’s dialysis treatments and related lab services; however, actual collectible revenue is normally recognized at a discount from the fee schedule.
Other revenues
Other revenues consist of the revenues associated with the ancillary services and strategic initiatives, management and administrative support services that are provided to outpatient dialysis centers that the Company does not own or in which the Company owns a noncontrolling interest, and administrative and management support services to certain other non-dialysis joint ventures in which the Company owns a noncontrolling interest.

7


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


3.
Earnings per share
Basic earnings per share is calculated by dividing net income attributable to the Company, adjusted for any change in noncontrolling interest redemption rights in excess of fair value, by the weighted average number of common shares outstanding, net of the weighted average shares held in escrow that under certain circumstances may have been returned to the Company.
Diluted earnings per share includes the dilutive effect of outstanding stock-settled stock appreciation rights (SSARs) and unvested stock units (under the treasury stock method) as well as the weighted average shares held in escrow that were outstanding during the period.
The reconciliations of the numerators and denominators used to calculate basic and diluted earnings per share were as follows:
 
Three months ended
March 31,
 
2019
 
2018
Numerators:
 

 
 

Net income from continuing operations attributable to DaVita Inc.
$
120,254

 
$
191,015

Net income (loss) from discontinued operations attributable to DaVita Inc.
29,035

 
(12,329
)
Net income attributable to DaVita Inc. for earnings per share calculation
$
149,289

 
$
178,686

 
 
 
 
Basic:
 
 
 
Weighted average shares outstanding during the period
166,388

 
181,152

Weighted average contingently returnable shares held in escrow for the DaVita HealthCare Partners merger

 
(2,194
)
Weighted average shares for basic earnings per share calculation
166,388

 
178,958

 
 
 
 
Basic net income (loss) attributable to DaVita Inc. from:
 
 
 
Continuing operations per share
$
0.72

 
$
1.07

Discontinued operations per share
0.18

 
(0.07
)
Basic net income per share attributable to DaVita Inc.
$
0.90

 
$
1.00

 
 
 
 
Diluted:
 
 
 
Weighted average shares outstanding during the period
166,388

 
181,152

Assumed incremental shares from stock plans
393

 
683

Weighted average shares for diluted earnings per share calculation
166,781

 
181,835

 
 
 
 
Diluted net income (loss) attributable to DaVita Inc. from:
 
 
 
Continuing operations per share
$
0.72

 
$
1.05

Discontinued operations per share
0.18

 
(0.07
)
Diluted net income per share attributable to DaVita Inc.
$
0.90

 
$
0.98

Anti-dilutive stock-settled awards excluded from calculation(1)
6,150

 
3,453

 
(1)
Shares associated with stock-settled stock appreciation rights excluded from the diluted denominator calculation because they are anti-dilutive under the treasury stock method.
4.
Restricted cash and equivalents
The Company had restricted cash and cash equivalents at March 31, 2019 and December 31, 2018. There has been no material change in the nature of the Company's restricted cash and cash equivalents from that described in Note 4 to the Company's consolidated financial statements included in the 10-K.

8


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)


5.
Short-term and long-term investments
The Company’s short-term and long-term debt and equity investments consist of the following:
 
March 31, 2019
 
December 31, 2018
 
Debt
securities
 
Equity
securities
 
Total
 
Debt
securities
 
Equity
securities
 
Total
Certificates of deposit and other time deposits
$
2,235

 
$

 
$
2,235

 
$
2,235

 
$

 
$
2,235

Investments in mutual funds and common stock

 
36,214

 
36,214

 

 
36,124

 
36,124

 
$
2,235

 
$
36,214

 
$
38,449

 
$
2,235

 
$
36,124

 
$
38,359

Short-term investments
$
2,235

 
$
1,800

 
$
4,035

 
$
2,235

 
$
700

 
$
2,935

Long-term investments

 
34,414

 
34,414

 

 
35,424

 
35,424

 
$
2,235

 
$
36,214

 
$
38,449

 
$
2,235

 
$
36,124

 
$
38,359


Debt securities: The Company's short-term debt investments are principally bank certificates of deposit with contractual maturities longer than three months but shorter than one year. These debt securities are accounted for as held to maturity and recorded at amortized cost, which approximates their fair values at March 31, 2019 and December 31, 2018.
Equity securities: The Company's equity investments in mutual funds and common stock are held within a trust to fund existing obligations associated with several of the Company’s non-qualified deferred compensation plans. During the three months ended March 31, 2019, the Company recognized pre-tax net gains in the income statement of $1,893 associated with changes in the fair value of these equity securities, comprised of pre-tax realized gains of $170 and a net increase in unrealized gains of $1,723. During the three months ended March 31, 2018, the Company recognized pre-tax realized gains in the income statement of $86 associated with changes in the fair value of these equity securities, comprised of pre-tax realized gains of $3,746 and a net decrease in unrealized gains of $3,660.
6.
Equity method and other investments
Equity investments in nonconsolidated businesses over which the Company maintains significant influence, but which do not have readily determinable fair values, are carried on the equity method.
The Company maintains equity method and minor adjusted cost method investments in the private securities of certain other healthcare and healthcare-related businesses. The Company classifies these investments as "Equity method and other investments" on its consolidated balance sheet.
The Company's equity method and other investments were comprised of the following:
 
March 31, 2019
 
December 31, 2018
APAC joint venture
$
125,062

 
$
129,173

Other equity method partnerships
88,861

 
83,052

Adjusted cost method investments
12,386

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