14.	Acquisitions

On March 1, 2016, the Company completed its acquisition of The Everett Clinic Medical Group (TEC) pursuant to an agreement and plan of merger dated November 23, 2015, whereby TEC became a 100% consolidated subsidiary of HCP. The total consideration paid at closing for all outstanding common units of TEC was approximately $398,093, net of cash acquired, plus the assumption of certain liabilities totaling approximately $7,287, subject to certain post-closing adjustments.

The initial purchase price allocation for the TEC acquisition is recorded at estimated fair values based upon the best information available to management and will be finalized when certain information arranged to be obtained has been received. The fair values of property and equipment and intangible assets were valued by an independent third party and are pending issuance of the final valuation report. Certain income tax amounts are pending issuance of final tax returns.

The following table summarizes the assets acquired and liabilities assumed in the transaction and recognized at the acquisition date at their estimated fair values:

Current assets, net of cash acquired	$	90,830
Property and equipment		107,310
Amortizable intangible and other long-term assets		34,050
Goodwill		249,278
Current liabilities assumed		(49,322	)
Long-term deferred income taxes		(16,881	)
Noncontrolling interests assumed		(9,885	)
Aggregate purchase price	$	405,380

Amortizable intangible assets acquired in this acquisition had a weighted average estimated useful life of six years. Of the goodwill recognized in this acquisition, approximately $267 is expected to be deductible for tax purposes.

The noncontrolling interests acquired as part of the acquisition are stated at estimated fair value based on the estimated fair values of the underlying assets and liabilities of each non-wholly-owned entity.

The operating results of TEC are included in the Company’s condensed consolidated financial statements effective March 1, 2016.

Other routine acquisitions

During the three months ended March 31, 2016, the Company acquired dialysis businesses and other businesses consisting of one dialysis center located outside the U.S., and one other medical business for a total of $7,061 in net cash and deferred purchase price obligations totaling $100. The assets and liabilities for all acquisitions were recorded at their estimated fair values at the dates of the acquisitions and are included in the Company’s condensed consolidated financial statements, as are their operating results from the designated effective dates of the acquisitions. Certain income tax amounts are pending final evaluation and quantification of any pre-acquisition tax contingencies. In addition, valuation of medical claims liabilities and certain other working capital items relating to these acquisitions is pending final quantification.

The following table summarizes the assets acquired and liabilities assumed in these transactions and recognized at their acquisition dates at estimated fair values:

	Three months ended
	March 31, 2016
Current assets	$	56
Property and equipment		239
Amortizable intangible and other long-term assets		740
Goodwill		11,171
Noncontrolling interests assumed		(5,045	)
Aggregate purchase price	$	7,161

The intangible asset acquired relates to a non-compete agreement with an estimated useful life and amortization period of seven years. The total amount of goodwill deductible for tax purposes associated with these acquisitions was approximately $6,851.

Other pending transactions

In the first quarter of 2016 the Company entered into a definitive agreement, subject to certain closing conditions, with Khazanah Nasional Berhad (Khazanah) and Mitsui and Co., Ltd (Mitsui) whereby Khazanah and Mitsui have subscribed to invest $300,000 over three years for a 40% total stake in the Company’s Asia-Pacific dialysis business.

On August 17, 2015, the Company entered into a definitive agreement to acquire Colorado-based Renal Ventures Limited, LLC (Renal Ventures), including a 100 percent interest in all dialysis centers owned by Renal Ventures, for approximately $415,000 in cash, subject to, among other things, adjustments for certain items such as working capital. Renal Ventures currently operates 36 dialysis clinics in six states serving approximately 2,400 patients, and also operates other ancillary businesses. The transaction is subject to approval by the Federal Trade Commission (FTC) including Hart-Scott-Rodino antitrust clearance. The Company anticipates that it will be required by the FTC to divest a certain number of outpatient dialysis centers as a condition of the transaction. The Company expects the transaction to close in 2016.

Pro forma financial information

The following summary, prepared on a pro forma basis, combines the results of operations as if the acquisitions and divestitures in 2016 had been consummated as of the beginning of 2016 and 2015, after including the impact of certain adjustments such as amortization of intangibles and income tax effects.

	Three months ended March 31,
	2016		2015
	(unaudited)
Pro forma net revenues	$	3,651,057	$	3,398,247
Pro forma net income attributable to DaVita HealthCare Partners Inc.		97,010		(109,034	)
Pro forma basic net income per share attributable to DaVita HealthCare Partners Inc.		0.47		(0.51	)
Pro forma diluted net income per share attributable to DaVita HealthCare Partners Inc.		0.47		(0.51	)

Contingent earn-out obligations

The Company has several contingent earn-out obligations associated with acquisitions that could result in the Company paying the former shareholders of acquired companies a total of up to $128,603 if certain EBITDA, operating income performance targets or quality margins are met over the next one to two years.

Contingent earn-out obligations are remeasured to fair value at each reporting date until the contingencies are resolved with changes in the liability due to the re-measurement recorded in earnings. See Note 16 to these condensed consolidated financial statements for further details. As of March 31, 2016, the Company has estimated the fair value of these contingent earn-out obligations to be $32,903, of which a total of $28,029 is included in other liabilities and the remaining $4,874 is included in other long-term liabilities in the Company’s condensed consolidated balance sheet.

The following is a reconciliation of changes in the contingent earn-out obligations for the three months ended March 31, 2016:

Beginning balance, January 1, 2016	$	34,135
Remeasurement of fair value for contingent earn-out obligations		(373	)
Payments on contingent earn-out obligations		(859	)
	$	32,903