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Acquisitions and divestitures | 6 Months Ended
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Jun. 30, 2017
Business Combinations [Abstract] |
Acquisitions and divestitures | Acquisitions and divestitures Acquisition of Renal Ventures On May 1, 2017, the Company completed its acquisition of 100% of the equity of Colorado-based Renal Ventures Management, LLC (Renal Ventures) for approximately $361,563 in net cash, subject to certain post-closing adjustments. Renal Ventures operated 36 operating dialysis centers, one uncertified dialysis center and one home program that provided services to approximately 2,600 patients in six states. As a part of this transaction, the Company was required to divest three Renal Ventures outpatient dialysis centers, and three outpatient dialysis centers and one uncertified dialysis center of the Company for approximately $21,219 in net cash. The Company also incurred approximately $4,600 in transaction and integration costs during the six months ended June 30, 2017 associated with the acquisition that are included in general and administrative expenses. The initial purchase price allocation for the Renal Ventures 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. In particular, certain working capital items, income tax amounts and the fair value of intangibles and fixed assets are pending final audit, issuance of final tax returns and valuation reports. The following table summarizes the assets acquired and liabilities assumed in the transactions and recognized at the acquisition date at estimated fair values:
Current assets | $ | 24,529 |
Property and equipment | 36,295 |
Amortizable intangible and other long-term assets | 11,547 |
Goodwill | 296,582 |
Current liabilities | (6,912 | )
Long-term liabilities | (478 | )
| $ | 361,563 |
The amortizable intangible assets acquired relate to non-compete agreements having a weighted-average useful life of five years. The total estimated amount of goodwill deductible for tax purposes associated with this acquisition was approximately $296,582. Other routine acquisitions During the six months ended June 30, 2017, the Company acquired dialysis and other businesses consisting of 20 dialysis centers located in the U.S., 55 dialysis centers located outside the U.S., and five other medical businesses for a total of $258,276 in net cash, $3,823 in deferred purchase price obligations, and $8,787 in earn-outs and liabilities assumed. The assets and liabilities for these 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. The initial purchase price allocations for these transactions have been recorded at estimated fair values based on the best information available to management and will be finalized when certain information arranged to be obtained has been received. In particular, certain income tax amounts are pending final evaluation and quantification of pre-acquisition tax contingencies and filing of final tax returns. In addition, valuation of medical claims liabilities, certain working capital items, and the fair value of fixed assets and intangibles are pending final audits and related valuation reports. The following table summarizes the assets acquired and liabilities assumed in these transactions and recognized at their acquisition dates at estimated fair values:
Current assets | $ | 7,439 |
Property and equipment | 13,278 |
Amortizable intangible and other long-term assets | 14,180 |
Non-amortizable intangibles | 4,833 |
Goodwill | 276,182 |
Current liabilities | (6,467 | )
Long-term liabilities | (2,484 | )
Noncontrolling interests | (36,075 | )
| $ | 270,886 |
Amortizable intangible assets acquired during the first six months of 2017 had weighted-average estimated useful lives of approximately five years. The majority of the intangible assets acquired during the first six months of 2017 relate to non-compete agreements having a weighted-average useful life and amortization period of five years. The total estimated amount of goodwill deductible for tax purposes associated with these acquisitions was approximately $207,080. Pro forma financial information The following summary, prepared on a pro forma basis, combines the results of operations as if the acquisitions through June 30, 2017 had been consummated as of the beginning of 2017 and 2016, after including the impact of certain adjustments such as amortization of intangibles and income tax effects.
| Three months ended June 30, |  | Six months ended June 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
| (unaudited)
Pro forma net revenues | $ | 3,900,750 |  |  | $ | 3,820,558 |  |  | $ | 7,678,519 |  |  | $ | 7,576,206 |
Pro forma net income attributable to DaVita Inc. | 128,654 |  |  | 58,996 |  |  | 579,906 |  |  | 160,709 |
Pro forma basic net income per share attributable to DaVita Inc. | 0.67 |  |  | 0.29 |  |  | 3.02 |  |  | 0.79 |
Pro forma diluted net income per share attributable to DaVita Inc. | 0.66 |  |  | 0.28 |  |  | 2.98 |  |  | 0.77 |
Contingent earn-out obligations The Company has several contingent earn-out obligations associated with acquisitions that could result in the Company paying the former owners of acquired companies a total of up to $16,684 if certain EBITDA, operating income performance targets or quality margins are met primarily over the next one to six years. Contingent earn-out obligations are remeasured at 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 17 to these condensed consolidated financial statements for further details. As of June 30, 2017, the Company has estimated the fair value of these contingent earn-out obligations to be $11,674, of which a total of $4,666 is included in other liabilities and the remaining $7,008 is included in other long-term liabilities in the Company’s consolidated balance sheet. The following is a reconciliation of changes in the contingent earn-out obligations for the six months ended June 30, 2017:
Beginning balance, January 1, 2017 | $ | 9,977 |
Contingent earn-out obligations associated with acquisitions | 3,849 |
Remeasurement of fair value for contingent earn-out obligations | 415 |
Payments on contingent earn-out obligations | (2,567 | )
| $ | 11,674 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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