Business Context and Reporting Period
Company: DaVita Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 6, 2012
Reporting Period: This filing addresses accounting standard changes effective January 1, 2012, and a subsequent event regarding a settlement agreement. It does not reflect operational events occurring after February 24, 2012, except for the items described below.
Key Financial Metrics
This filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it discloses changes to the presentation of financial data:
- Revenue Presentation: The provision for uncollectible accounts related to patient service revenue is now presented as a deduction from patient service operating revenues.
- Comprehensive Income: Components of other comprehensive income are now reported in a separate statement of comprehensive income.
- Historical Data: Consolidated financial statements for the years ended December 31, 2011, 2010, and 2009 have been revised retrospectively to reflect these changes (see Exhibit 99.1).
Material Changes Versus Prior Period
The primary material change is the adoption of two new accounting standards effective January 1, 2012:
- FASB ASU No. 2011-07: Health Care Entities – Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts.
- FASB ASU No. 2011-05 (as amended by ASU No. 2011-12): Comprehensive Income – Presentation of Comprehensive Income.
These adoptions required retrospective revisions to all periods presented in the attached financial statements.
Guidance, Outlook, Risks, and Unusual Items
- Subsequent Event: The filing references an "agreement in principle regarding the prospective settlement" described in Note 29 of the consolidated financial statements. Specific terms or financial impacts of this settlement are not detailed in the text of this 8-K.
- Management Commentary: The company explicitly states that this report does not modify or update any other disclosures from the 2011 Form 10-K, other than those required for the accounting standard changes and the settlement event.
- Risks/Contingencies: The filing directs investors to Note 29 of the attached financial statements for details on the settlement contingency.
Important Facts for Investor Verification
- Review Exhibit 99.1 for the revised consolidated financial statements for 2009, 2010, and 2011 to understand the impact of the new presentation standards on historical revenue and bad debt figures.
- Examine Note 29 within the attached financial statements for specific details regarding the "agreement in principle" for the prospective settlement.
- Read this 8-K in conjunction with the 2011 Form 10-K filed on February 24, 2012, as this report does not contain updated operational data for the period between February 24, 2012, and July 6, 2012.