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Acquisitions and Divestitures | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
Acquisitions and Divestitures | Acquisitions and divestitures Routine acquisitions During 2019, the Company acquired seven dialysis centers in the U.S. and 16 dialysis centers outside the U.S. for a total of $98,836 in net cash paid, earn-outs of $23,536, and deferred purchase price and liabilities assumed of $4,326. During 2018, the Company acquired 18 dialysis centers in the U.S. and 28 dialysis centers outside the U.S. for a total of $176,161 in net cash, earn-outs of $1,246, and deferred purchase price and liabilities assumed of $34,394. In one of these transactions the Company acquired a controlling interest in a previously nonconsolidated U.S. dialysis partnership for which the Company recognized a non-cash gain of $28,152 on our prior interest upon consolidation. During 2017, the Company acquired 30 dialysis centers in the U.S. and 68 dialysis centers outside the U.S. for a total of $308,550 in net cash, earn-outs of $2,692 and deferred purchase price of $23,748. 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 financial statements and operating results from the effective dates of the acquisitions. For several of the 2019 acquisitions, certain income tax amounts are pending final evaluation and quantification of any pre-acquisition tax contingencies. In addition, valuation of intangibles and certain other working capital items relating to several of these acquisitions are 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, as well as the estimated fair value of noncontrolling interests assumed in these transactions:
| Year ended December 31,
| 2019 |  | 2018 |  | 2017
Current assets | $ | 6,713 |  |  | $ | 23,686 |  |  | $ | 14,366 |
Property and equipment | 4,842 |  |  | 11,421 |  |  | 18,192 |
Amortizable intangible and other long-term assets | 1,980 |  |  | 3,079 |  |  | 11,663 |
Indefinite-lived licenses | 31,858 |  |  | 23,656 |  |  | 32,296 |
Goodwill | 90,226 |  |  | 278,348 |  |  | 318,832 |
Deferred income taxes | — |  |  | — |  |  | (210 | )
Noncontrolling interests assumed | (1,762 | ) |  | (80,291 | ) |  | (44,303 | )
Liabilities assumed | (7,159 | ) |  | (19,946 | ) |  | (15,846 | )
| $ | 126,698 |  |  | $ | 239,953 |  |  | $ | 334,990 |
Amortizable intangible assets acquired during 2019, 2018 and 2017, primarily related to non-compete agreements, had weighted-average estimated useful lives of six years, six years and seven years, respectively. The total amount of goodwill deductible for tax purposes associated with these acquisitions for 2019, 2018, and 2017 was approximately $88,517, $165,013 and $237,363, respectively. 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 $359,913 in net cash. Renal Ventures operated 36 dialysis centers, one uncertified dialysis center and one home program, which 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 $11,950 in transaction and integration costs during the year ended December 31, 2017 associated with this acquisition that are included in general and administrative expenses. The purchase price allocation for the Renal Ventures acquisition was finalized in 2018 with no material change to the initial allocation. The following table summarizes the assets acquired and liabilities assumed in this transaction and recognized at the acquisition date at estimated fair values:
Current assets, net of cash acquired | $ | 22,739 |
Property and equipment | 36,295 |
Amortizable intangible and other long-term assets | 11,547 |
Goodwill | 298,200 |
Current liabilities | (8,389 | )
Long-term liabilities | (479 | )
| $ | 359,913 |
Amortizable intangible assets acquired, primarily related to non-compete agreements, had weighted-average estimated useful lives of five years. The total estimated amount of goodwill deductible for tax purposes associated with this acquisition was approximately $298,200. Pro forma financial information (unaudited) The following summary, prepared on a pro forma basis, combines the results of operations as if all acquisitions within continuing operations in 2019 and 2018 had been consummated as of the beginning of 2018, including the impact of certain adjustments such as amortization of intangibles, interest expense on acquisition financing and income tax effects.
| Year ended December 31,
| 2019 |  | 2018
| (unaudited)
Pro forma total revenues | $ | 11,416,498 |  |  | $ | 11,566,736 |
Pro forma net income from continuing operations attributable to DaVita Inc. | $ | 709,631 |  |  | $ | 640,112 |
Pro forma basic net income per share from continuing operations attributable to DaVita Inc. | $ | 4.63 |  |  | $ | 3.75 |
Pro forma diluted net income per share from continuing operations attributable to DaVita Inc. | $ | 4.61 |  |  | $ | 3.71 |
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 approximately $33,889 if certain performance targets or quality margins are met over the next one year to five 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 remeasurement recognized in earnings. See Note 24 for further details. As of December 31, 2019, the Company estimated the fair value of these contingent earn-out obligations to be $24,586, of which a total of $6,712 is included in other current liabilities, and the remaining $17,874 is included in other long-term liabilities in the Company’s consolidated balance sheet. The following is a reconciliation of changes in liabilities for contingent earn-out obligations for the year ended December 31, 2019:
Balance at December 31, 2017 | $ | 6,388 |
Contingent earn-out obligations associated with acquisitions | 1,246 |
Remeasurement of fair value | (4,729 | )
Payments of contingent earn-out obligations | (297 | )
Balance at December 31, 2018 | $ | 2,608 |
Contingent earn-out obligations associated with acquisitions | 23,536 |
Remeasurement of fair value | (784 | )
Payments of contingent earn-out obligations | (774 | )
| $ | 24,586 |

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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 Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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