Held for sale and discontinued operations

DaVita Medical Group

In December 2017, the Company entered into an equity purchase agreement to sell its DMG division to Collaborative Care Holdings, LLC (Optum), a subsidiary of UnitedHealth Group Inc., for $4,900,000 in cash, subject to net working capital and other customary adjustments. The transaction is expected to close in 2018 and is subject to regulatory approvals and other customary closing conditions. As a result of this pending transaction, the DMG business has been classified as held for sale and its results of operations are reported as discontinued operations for all periods presented in these condensed consolidated financial statements.

The following table presents the financial results of discontinued operations related to DMG:



	Three months ended June 30,					Six months ended June 30,
	2018		2017			2018		2017
Revenues	$	1,252,430	$	1,196,066		$	2,480,362	$	2,283,050
Expenses	1,192,528		1,157,901			2,418,935		2,232,352
Goodwill impairment charges	—		50,619			—		50,619
Income (loss) from discontinued operations before taxes	59,902		(12,454		)	61,427		79
Income tax benefit (expense)	9,794		(12,066		)	2,483		(18,166		)
Net income (loss) from discontinued operations, net of tax	$	69,696	$	(24,520	)	$	63,910	$	(18,087	)

The following table presents the financial position of discontinued operations related to DMG:



	June 30, 2018		December 31, 2017
Assets
Cash and cash equivalents	$	404,435	$	179,668
Other current assets	862,764		826,608
Property and equipment, net	425,943		379,945
Intangible assets, net	1,316,468		1,316,550
Other long-term assets	161,622		178,894
Goodwill	2,881,849		2,879,977
Total current assets held for sale	$	6,053,081	$	5,761,642
Liabilities
Other liabilities	$	580,978	$	505,734
Medical payables	487,920		457,040
Current portion of long-term debt	2,636		2,845
Long-term debt	34,076		35,003
Other long-term liabilities	165,754		184,448
Total current liabilities held for sale	$	1,271,364	$	1,185,070

The following table presents cash flows of discontinued operations related to DMG:



	June 30, 2018			June 30, 2017
Net cash provided by operating activities from discontinued operations	$	112,683		$	101,215
Net cash used in investing activities from discontinued operations	$	(20,982	)	$	(85,289	)

DMG acquisitions

During the first six months of 2018, the Company's DMG business acquired two medical businesses for a total of $1,280 in cash and deferred purchase price of $99. 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 acquisitions are pending final quantification. 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 current held for sale assets and liabilities.

Sale of Tandigm Health Investment

Effective June 1, 2018, DMG sold its 19% ownership interest in the Tandigm Health joint venture and a related supporting business resulting in a gain, net of tax, of $18,636.

Goodwill impairment charges

As previously disclosed, prior to being reclassified as held for sale the Company recorded goodwill impairment charges for the DMG business of $50,619 for the three and six months ended June 30, 2017. These charges resulted from continuing developments in the Company’s DMG business, including recent annual updates to Medicare Advantage benchmark reimbursement rates, changes in expectations concerning future government reimbursement rates and the Company’s expected ability to mitigate them, as well as medical cost and utilization trends.