Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2017

Summary of Segment Net Revenues, Segment Operating Income (Loss) and Reconciliation of Segment Income to Consolidated Income Before Income Taxes

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



	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Segment net revenues:
U.S. dialysis and related lab services
Patient service revenues:
External sources	$	2,403,222		$	2,352,574		$	4,752,123		$	4,666,236
Intersegment revenues	26,436			14,470			50,196			28,779
Total dialysis and related lab services revenues	2,429,658			2,367,044			4,802,319			4,695,015
Less: Provision for uncollectible accounts	(109,335		)	(106,515		)	(216,105		)	(211,266		)
Net dialysis and related lab services patient service revenues	2,320,323			2,260,529			4,586,214			4,483,749
Other revenues⁽¹⁾	4,891			4,250			10,194			8,223
Total net dialysis and related lab services revenues	2,325,214			2,264,779			4,596,408			4,491,972
DMG
DMG revenues:
Capitated revenues	987,420			874,119			1,877,105			1,740,138
Net patient service revenues	189,529			169,167			368,501			281,601
Other revenues⁽²⁾	19,070			16,235			37,339			26,569
Intersegment capitated and other revenues	47			44			105			115
Total net DMG revenues	1,196,066			1,059,565			2,283,050			2,048,423
Other—Ancillary services and strategic initiatives
Net patient service revenues	83,566			56,860			150,858			108,244
Capitated revenues	34,658			25,866			63,009			47,855
Other external sources	264,456			325,095			531,736			631,187
Intersegment revenues	10,913			14,720			26,216			26,546
Total ancillary services and strategic initiatives revenues	393,593			422,541			771,819			813,832
Total net segment revenues	3,914,873			3,746,885			7,651,277			7,354,227
Elimination of intersegment revenues	(37,396		)	(29,234		)	(76,517		)	(55,440		)
Consolidated net revenues	$	3,877,477		$	3,717,651		$	7,574,760		$	7,298,787
Segment operating margin (loss):
U.S. dialysis and related lab services⁽³⁾	$	450,472		$	449,190		$	1,395,212		$	889,245
DMG	(12,880		)	(102,059		)	(572		)	(159,204		)
Other—Ancillary services and strategic initiatives	(48,245		)	(12,644		)	(106,466		)	(23,745		)
Total segment operating margin	389,347			334,487			1,288,174			706,296
Reconciliation of segment operating margin to consolidated income before income taxes:
Corporate administrative support	(11,031		)	(5,417		)	(21,622		)	(12,337		)
Consolidated operating income	378,316			329,070			1,266,552			693,959
Debt expense	(107,962		)	(102,894		)	(212,391		)	(205,778		)
Other income, net	5,253			3,215			9,496			6,191
Consolidated income before income taxes	$	275,607		$	229,391		$	1,063,657		$	494,372


(1)	Includes management fees for providing management and administrative services to dialysis centers that are wholly-owned by third parties and legal entities in which the Company owns a noncontrolling equity investment.


(2)	Includes medical consulting service fees and management fees for providing management and administrative services to unconsolidated joint ventures and revenue related to the maintenance of existing physician networks.


(3)	U.S. dialysis and related lab services operating income includes the net gain on the settlement with the VA.

Summary of Depreciation and Amortization Expense by Reportable Segment



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
U.S. dialysis and related lab services	$	130,002	$	119,350	$	255,030	$	235,887
DMG	60,011		54,211		117,334		100,473
Ancillary services and strategic initiatives	10,025		6,820		17,880		13,376
	$	200,038	$	180,381	$	390,244	$	349,736

Summary of Assets by Reportable Segment

Subsequent to the issuance of the Company’s fiscal year 2016 consolidated financial statements and their inclusion in its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2017 (the “2016 10-K”), the Company determined that it had misstated its disclosure of segment assets at December 31, 2016 in Note 25 to those consolidated financial statements. This misstatement resulted in an overstatement of “U.S. dialysis and related lab services” segment assets of $338,963 and a corresponding understatement of “Other - ancillary services and strategic initiatives” segment assets of the same amount. The Company performed an assessment of the materiality of this misstatement and concluded that this misstatement as originally disclosed was not materially misleading in its 2016 consolidated financial statements taken as a whole. The Company therefore has not amended its financial statements filed on its 2016 10-K to correct this misstatement, but has provided the corrected disclosure here.

Summary of assets by reportable segment is as follows:



	June 30, 2017		December 31, 2016
Segment assets
U.S. dialysis and related lab services (including equity investments of $83,102 and $66,924, respectively)	$	11,500,974	$	11,099,137
DMG (including equity investments of $13,169 and $10,350, respectively)	6,282,819		6,213,091
Other—Ancillary services and strategic initiatives (including equity investments of $446,197 and $425,115, respectively)	1,557,991		1,429,029
Consolidated assets	$	19,341,784	$	18,741,257

Summary of Expenditures for Property and Equipment by Reportable Segment

Expenditures for property and equipment by reportable segment is as follows:



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
U.S. dialysis and related lab services	$	152,233	$	150,932	$	325,761	$	284,380
DMG	20,883		18,098		48,671		38,243
Ancillary services and strategic initiatives	11,289		16,410		24,508		36,004
	$	184,405	$	185,440	$	398,940	$	358,627