v2.4.1.9
Segment reporting
 3 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
Segment reporting

17.

Segment reporting

The Company operates two major divisions, Kidney Care and HCP. The Kidney Care division is comprised of the Company’s U.S. dialysis and related lab services business, various other ancillary services and strategic initiatives, including its international dialysis operations, and the Company’s corporate support costs. The Company’s U.S. dialysis and related lab services business is the Company’s largest line of business, and is a leading provider of kidney dialysis services in the U.S. for patients suffering from chronic kidney failure, also known as ESRD. The Company’s HCP division is a patient- and physician-focused integrated health care delivery and management company with nearly three decades of providing coordinated outcomes-based medical care in a cost-effective manner.

As of March 31, 2015, the Company’s ancillary services and strategic initiatives consisted primarily of pharmacy services, disease management services, vascular access services, 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 maker in making decisions about allocating resources to and assessing the financial results of the Company’s different operating lines of business. The chief operating decision maker for the Company is its 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, and 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 corporate support expenses, which consist 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. Corporate support costs in 2015 have been reduced by internal management fees paid by the Company’s ancillary lines of businesses.

The following is a summary of segment net revenues, segment operating margin (loss), and a reconciliation of segment operating margin to consolidated income from continuing operations before income taxes:

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2015

 

 

2014

 

Segment net revenues:

 

 

 

 

 

 

 

 

U.S. dialysis and related lab services

 

 

 

 

 

 

 

 

Patient service revenues:

 

 

 

 

 

 

 

 

External sources

 

$

2,154,294

 

 

$

2,028,743

 

Intersegment revenues

 

 

11,856

 

 

 

7,832

 

Total dialysis and related lab services revenues

 

 

2,166,150

 

 

 

2,036,575

 

Less: Provision for uncollectible accounts

 

 

(97,477

)

 

 

(81,463

)

Net dialysis and related lab services patient service

   revenues

 

 

2,068,673

 

 

 

1,955,112

 

Other revenues(1)

 

 

3,184

 

 

 

3,154

 

Total net dialysis and related lab services revenues

 

 

2,071,857

 

 

 

1,958,266

 

HCP

 

 

 

 

 

 

 

 

HCP revenues:

 

 

 

 

 

 

 

 

Capitated revenues

 

 

832,472

 

 

 

771,542

 

Net patient service revenues

 

 

80,210

 

 

 

56,222

 

Other revenues(2)

 

 

15,053

 

 

 

12,523

 

Intersegment capitated and other revenues

 

 

37

 

 

 

152

 

Total revenues

 

 

927,772

 

 

 

840,439

 

Other—Ancillary services and strategic initiatives

 

 

 

 

 

 

 

 

Net patient service revenues

 

 

35,624

 

 

 

27,399

 

Capitated revenues

 

 

18,043

 

 

 

16,023

 

Other external sources

 

 

246,562

 

 

 

208,633

 

Intersegment revenues

 

 

4,942

 

 

 

4,819

 

Total ancillary services and strategic initiatives

   revenues

 

 

305,171

 

 

 

256,874

 

Total net segment revenues

 

 

3,304,800

 

 

 

3,055,579

 

Elimination of intersegment revenues

 

 

(16,835

)

 

 

(12,803

)

Consolidated net revenues

 

$

3,287,965

 

 

$

3,042,776

 

Segment operating margin (loss):

 

 

 

 

 

 

 

 

U.S. dialysis and related lab services

 

$

(104,489

)

 

$

386,700

 

HCP

 

 

60,294

 

 

 

53,953

 

Other—Ancillary services and strategic initiatives

 

 

(13,828

)

 

 

1,678

 

Total segment margin (loss)

 

 

(58,023

)

 

 

442,331

 

Reconciliation of segment operating margin to consolidated

   income from continuing operations before income taxes:

 

 

 

 

 

 

 

 

Corporate support costs

 

 

(6,133

)

 

 

(1,106

)

Consolidated operating (loss) income

 

 

(64,156

)

 

 

441,225

 

Debt expense

 

 

(97,392

)

 

 

(106,335

)

Other (loss) income

 

 

(533

)

 

 

1,698

 

Consolidated (loss) income from continuing

   operations before income taxes

 

$

(162,081

)

 

$

336,588

 

 

(1)

Includes management fees for providing management and administrative services to dialysis centers that are wholly-owned by third parties or centers in which the Company owns a minority equity investment.

(2)

Includes payments received for medical consulting services and management fees for providing management and administrative services to an unconsolidated joint venture that provides medical services in which the Company owns a 50% interest, as well as revenue related to the maintenance of existing physician networks.

Depreciation and amortization expense by segment is as follows:

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2015

 

 

2014

 

U.S. dialysis and related lab services.

 

$

104,993

 

 

$

96,443

 

HCP

 

 

43,279

 

 

 

41,737

 

Ancillary services and strategic initiatives

 

 

5,517

 

 

 

4,399

 

 

 

$

153,789

 

 

$

142,579

 

 

Summary of assets by segment is as follows:

 

 

 

March 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Segment assets

 

 

 

 

 

 

 

 

U.S. dialysis and related lab services (including equity

   investments of $28,406 and $28,138, respectively)

 

$

11,352,546

 

 

$

10,959,096

 

HCP (including equity investments of $19,709 and $15,393,

   respectively)

 

 

6,313,981

 

 

 

6,285,984

 

Other—Ancillary services and strategic initiatives (including

   equity investments of $21,902 and $22,106, respectively)

 

 

700,136

 

 

 

697,635

 

Consolidated assets

 

$

18,366,663

 

 

$

17,942,715

 

 

Expenditures for property and equipment by segment is as follows:

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2015

 

 

2014

 

U.S. dialysis and related lab services.

 

$

105,395

 

 

$

113,230

 

HCP

 

 

5,034

 

 

 

4,502

 

Ancillary services and strategic initiatives

 

 

10,992

 

 

 

8,830

 

 

 

$

121,421

 

 

$

126,562