v2.4.0.8

Segment reporting | 12 Months Ended
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Dec. 31, 2013
Segment reporting |
25. | Segment reporting
The Company primarily operates two major lines of business, the largest being its U.S. dialysis and related lab services business and the other being HCP. The Company also operates various other ancillary services and strategic initiatives. As of December 31, 2013, the ancillary services and strategic initiatives consisted primarily of pharmacy services, disease management services, vascular access services, ESRD clinical research programs, physician services, direct primary care and the Company’s international dialysis operations. The Company’s operating segments have been defined based on the separate financial information that is regularly produced and reviewed by the Company’s chief operating decision makers in making decisions about allocating resources to and assessing the financial results of the Company’s different business units. The chief operating decision maker for the Company, its U.S. dialysis business, and its ancillary services and strategic initiatives is its Chief Executive Officer. The chief operating decision makers for the HCP business are the Chief Executive Officer and HCP’s Chief Executive Officer. The Company’s separate operating segments include its U.S. dialysis and related lab services business, its HCP operations in each region, each of its ancillary services and strategic initiatives, and its international operations in the European and Middle Eastern, Asia Pacific, and Latin American regions. The U.S. dialysis and related lab services business and the HCP business each qualify as separately reportable segments, while all of the other ancillary services and strategic initiatives operating segments, including the international operating segments, have been combined and disclosed in the other segments category. The Company’s operating segment financial information included in this report is prepared on the internal management reporting basis that the chief operating decision maker uses to allocate resources and assess the financial results of the operating segments. For internal management reporting, segment operations include direct segment operating expenses but exclude (i) the HCP contingent earn-out obligation adjustment, (ii) corporate support, which consists primarily of indirect labor, benefits and long-term incentive based compensation of certain departments which provide support to all of the Company’s different operating lines of business, (iii) the reduction of a tax asset associated with the HCP acquisition escrow provisions, and (iv) transaction expenses in 2012 associated with the HCP acquisition. The following is a summary of segment revenues, segment operating margin (loss), and a reconciliation of segment operating margin to consolidated income from continuing operations before income taxes:
|  | Year ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
Segment revenues: |  |  |  |  |  |  |  |  |  |  |  |
U.S. dialysis and related lab services |  |  |  |  |  |  |  |  |  |  |  |
Patient service revenues: |  |  |  |  |  |  |  |  |  |  |  |
External sources |  | $ | 7,998,692 |  |  | $ | 7,299,032 |  |  | $ | 6,462,811 |
Intersegment revenues |  |  | 34,080 |  |  |  | 17,786 |  |  |  | 11,141 |
Total dialysis and related lab services revenues |  |  | 8,032,772 |  |  |  | 7,316,818 |  |  |  | 6,473,952 |
Less: Provision for uncollectible accounts |  |  | (281,146 | ) |  |  | (233,580 | ) |  |  | (190,234 | )
Net dialysis and related lab services patient service revenues |  |  | 7,751,626 |  |  |  | 7,083,238 |  |  |  | 6,283,718 |
Other revenues(1) |  |  | 12,600 |  |  |  | 11,447 |  |  |  | 11,019 |
Total net dialysis and related lab services revenues |  |  | 7,764,226 |  |  |  | 7,094,685 |  |  |  | 6,294,737 |
HCP |  |  |  |  |  |  |  |  |  |  |  |
HCP revenues: |  |  |  |  |  |  |  |  |  |  |  |
External sources |  | $ | 2,919,964 |  |  | $ | 419,431 |  |  | $ | — |
Intersegment revenues |  |  | 250 |  |  |  | — |  |  |  | — |
Total HCP capitated revenues |  |  | 2,920,214 |  |  |  | 419,431 |  |  |  | — |
Net patient service revenues |  |  | 220,251 |  |  |  | 34,407 |  |  |  | — |
Other revenues |  |  | 55,723 |  |  |  | 23,552 |  |  |  | — |
Total revenues |  | $ | 3,196,188 |  |  | $ | 477,390 |  |  | $ | — |
Other – Ancillary services and strategic initiatives |  |  |  |  |  |  |  |  |  |  |  |
Net patient service revenues |  | $ | 75,852 |  |  | $ | 16,824 |  |  | $ | 7,730 |
Capitated revenues |  |  | 67,351 |  |  |  | 61,906 |  |  |  | 45,133 |
Other external sources |  |  | 694,763 |  |  |  | 553,261 |  |  |  | 395,347 |
Intersegment revenues |  |  | 13,916 |  |  |  | 10,481 |  |  |  | 5,796 |
Total ancillary services and strategic initiatives revenues |  |  | 851,882 |  |  |  | 642,472 |  |  |  | 454,006 |
Total net segment revenues |  |  | 11,812,296 |  |  |  | 8,214,547 |  |  |  | 6,748,743 |
Elimination of intersegment revenues |  |  | (48,246 | ) |  |  | (28,267 | ) |  |  | (16,937 | )
Consolidated net revenues |  | $ | 11,764,050 |  |  | $ | 8,186,280 |  |  | $ | 6,731,806 |
Segment operating margin (loss):(2) |  |  |  |  |  |  |  |  |  |  |  |
U.S. dialysis and related lab services |  | $ | 1,211,540 |  |  | $ | 1,378,241 |  |  | $ | 1,235,869 |
HCP |  |  | 385,253 |  |  |  | 66,930 |  |  |  | — |
Other—Ancillary services and strategic initiatives |  |  | (38,595 | ) |  |  | (64,877 | ) |  |  | (34,105 | )
Total segment margin |  |  | 1,558,198 |  |  |  | 1,380,294 |  |  |  | 1,201,764 |
Reconciliation of segment operating margin to consolidated income from continuing operations before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Contingent earn-out obligation adjustment |  |  | 56,977 |  |  |  | — |  |  |  | — |
Corporate support costs(3) |  |  | (65,041 | ) |  |  | (52,457 | ) |  |  | (47,051 | )
Transaction expenses |  |  | — |  |  |  | (30,753 | ) |  |  | — |
Consolidated operating income |  |  | 1,550,134 |  |  |  | 1,297,084 |  |  |  | 1,154,713 |
Debt expense |  |  | (429,943 | ) |  |  | (288,554 | ) |  |  | (241,090 | )
Debt refinancing and redemption charges |  |  | — |  |  |  | (10,963 | ) |  |  | — |
Other income |  |  | 4,787 |  |  |  | 3,737 |  |  |  | 2,982 |
Consolidated income from continuing operations before income taxes |  | $ | 1,124,978 |  |  | $ | 1,001,304 |  |  | $ | 916,605 |
(1) | Includes management fees for providing management and administrative services to dialysis centers in which the Company owns a minority equity investment or which are wholly-owned by third parties.
(2) | Certain costs previously reported in the ancillary services and strategic initiatives have been reclassified to U.S. dialysis and related lab services to conform to the current year presentation.
(3) | Corporate support costs also include $7,721 of an adjustment to reduce a tax asset associated with the HCP acquisition escrow provisions.
Depreciation and amortization expense for the U.S. dialysis and related lab services business for 2013, 2012 and 2011 were $355,879, $310,375 and $259,685, respectively, and were $14,502, $7,050 and $4,540, respectively, for the ancillary services and strategic initiatives. Depreciation and amortization expense for HCP for 2013 was $158,356 and for the year ended December 31, 2012 was $24,544. Summary of assets by segment is as follows:
|  | December 31, |
|  | 2013 |  |  | 2012 |
Segment assets |  |  |  |  |  |  |  |
U.S. dialysis and related lab services |  | $ | 10,248,993 |  |  | $ | 9,351,466 |
HCP |  |  | 6,265,767 |  |  |  | 6,228,403 |
Other—Ancillary services and strategic initiatives(1) |  |  | 584,117 |  |  |  | 434,764 |
Consolidated assets |  | $ | 17,098,877 |  |  | $ | 16,014,633 |
(1) | Includes approximately $26 million and $13 million, respectively, of net property and equipment related to the Company’s international operations.
In 2013 and 2012, total expenditures for property and equipment for the U.S. dialysis and related lab services were $554,345 and $524,180, respectively, for HCP were $31,582 and $7,464, respectively, and for the ancillary services and strategic initiatives were $31,670 and $18,502, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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