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Segment reporting | 6 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
Segment Reporting Disclosure | Segment reporting The Company’s business is comprised of its U.S. dialysis and related lab services business, various ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. On June 19, 2019, the Company completed the sale of its DMG division to Optum, a subsidiary of UnitedHealth Group Inc. As a result of this transaction, DMG's results of operations have been reported as discontinued operations for all periods presented. The Company’s separate operating segments include its U.S. dialysis and related lab services business, each of its ancillary services and strategic initiatives, its kidney care operations in each foreign sovereign jurisdiction, its other health operations in each foreign sovereign jurisdiction, and its equity method investment in the APAC JV. The U.S. dialysis and related lab services business qualifies as a separately reportable segment, and all 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 performance of the Company's operating segments. For internal management reporting, segment operations include direct segment operating expenses but generally exclude corporate administrative support costs, which consist primarily of indirect labor, benefits and long-term incentive-based compensation expenses of certain departments which provide support to all of the Company’s various operating lines of business, except to the extent that such costs are charged to and borne by certain ancillary services and strategic initiatives via internal management fees. These corporate administrative support costs are reduced by internal management fees received from the Company’s ancillary lines of business. 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,
| 2019 |  | 2018 |  | 2019 |  | 2018
Segment revenues: |  |  |  |  |  |  |
U.S. dialysis and related lab services |  |  |  |  |  |  |
Patient service revenues: |  |  |  |  |  |  |
External sources | $ | 2,612,200 |  |  | $ | 2,612,734 |  |  | $ | 5,129,489 |  |  | $ | 5,101,899 |
Intersegment revenues | 30,042 |  |  | 20,096 |  |  | 60,462 |  |  | 38,519 |
U.S. dialysis and related lab services patient service revenues | 2,642,242 |  |  | 2,632,830 |  |  | 5,189,951 |  |  | 5,140,418 |
Provision for uncollectible accounts | (10,249 | ) |  | (49,406 | ) |  | (15,712 | ) |  | (24,208 | )
Net U.S. dialysis and related lab services patient service revenues | 2,631,993 |  |  | 2,583,424 |  |  | 5,174,239 |  |  | 5,116,210 |
Other revenues(1): |  |  |  |  |  |  |
External sources | 5,209 |  |  | 4,919 |  |  | 9,893 |  |  | 10,033 |
Intersegment revenues | 292 |  |  | — |  |  | 513 |  |  | — |
Total U.S. dialysis and related lab services revenues | $ | 2,637,494 |  |  | $ | 2,588,343 |  |  | $ | 5,184,645 |  |  | $ | 5,126,243 |
Other—Ancillary services and strategic initiatives |  |  |  |  |  |  |
Patient service revenues, net | $ | 121,865 |  |  | $ | 105,669 |  |  | $ | 239,728 |  |  | $ | 207,925 |
Other external sources | 113,680 |  |  | 213,037 |  |  | 222,419 |  |  | 440,748 |
Intersegment revenues | 3,403 |  |  | 9,189 |  |  | 6,739 |  |  | 19,387 |
Total ancillary services and strategic initiatives revenues | 238,948 |  |  | 327,895 |  |  | 468,886 |  |  | 668,060 |
Total net segment revenues | 2,876,442 |  |  | 2,916,238 |  |  | 5,653,531 |  |  | 5,794,303 |
Elimination of intersegment revenues | (33,737 | ) |  | (29,285 | ) |  | (67,714 | ) |  | (57,906 | )
Consolidated revenues | $ | 2,842,705 |  |  | $ | 2,886,953 |  |  | $ | 5,585,817 |  |  | $ | 5,736,397 |
Segment operating margin: |  |  |  |  |  |  |  |  |  |  |
U.S. dialysis and related lab services | $ | 498,957 |  |  | $ | 449,443 |  |  | $ | 915,939 |  |  | $ | 882,822 |
Other—Ancillary services and strategic initiatives | (15,050 | ) |  | 2,815 |  |  | (72,680 | ) |  | (4,175 | )
Total segment operating margin | 483,907 |  |  | 452,258 |  |  | 843,259 |  |  | 878,647 |
Reconciliation of segment operating margin to consolidated income from continuing operations before income taxes: |  |  |  |  |  |  |
Corporate administrative support | (22,021 | ) |  | (14,066 | ) |  | (40,866 | ) |  | (29,769 | )
Consolidated operating income | 461,886 |  |  | 438,192 |  |  | 802,393 |  |  | 848,878 |
Debt expense | (131,666 | ) |  | (119,692 | ) |  | (263,185 | ) |  | (233,208 | )
Debt prepayment charges | (12,160 | ) |  | — |  |  | (12,160 | ) |  | — |
Other income, net | 5,643 |  |  | 1,994 |  |  | 12,583 |  |  | 6,576 |
Consolidated income from continuing operations before income taxes | $ | 323,703 |  |  | $ | 320,494 |  |  | $ | 539,631 |  |  | $ | 622,246 |
(1) | Includes management fee revenue from providing management and administrative services to dialysis ventures in which the Company owns a noncontrolling equity investment or which are wholly-owned by third parties.
A summary of assets by reportable segment was as follows:
| June 30, 2019 |  | December 31, 2018
Segment assets |  |  |  |  |
U.S. dialysis and related lab services (including equity investments of $101,161 and $95,290, respectively) | $ | 18,352,683 |  |  | $ | 12,333,641 |
Other—Ancillary services and strategic initiatives (including equity investments of $124,516 and $129,321, respectively) | 1,578,277 |  |  | 1,387,046 |
DMG—Held for sale (including equity investments of $0 and $4,833, respectively) | — |  |  | 5,389,565 |
Consolidated assets | $ | 19,930,960 |  |  | $ | 19,110,252 |
Depreciation and amortization expense by reportable segment was as follows:
| Three months ended June 30, |  | Six months ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
U.S. dialysis and related lab services | $ | 144,621 |  |  | $ | 138,252 |  |  | $ | 285,401 |  |  | $ | 273,028 |
Other—Ancillary services and strategic initiatives | 7,621 |  |  | 8,827 |  |  | 15,369 |  |  | 16,850 |
| $ | 152,242 |  |  | $ | 147,079 |  |  | $ | 300,770 |  |  | $ | 289,878 |
Expenditures for property and equipment by reportable segment were as follows:
| Three months ended June 30, |  | Six months ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
U.S. dialysis and related lab services | $ | 149,264 |  |  | $ | 197,051 |  |  | $ | 319,812 |  |  | $ | 388,458 |
Other—Ancillary services and strategic initiatives | 7,062 |  |  | 22,184 |  |  | 15,640 |  |  | 32,172 |
DMG—Held for sale | 18,714 |  |  | 22,299 |  |  | 38,466 |  |  | 53,347 |
| $ | 175,040 |  |  | $ | 241,534 |  |  | $ | 373,918 |  |  | $ | 473,977 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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