Davita Inc. (DVA, Financial) filed Quarterly Report for the period ended 2010-03-31.
Davita Inc. has a market cap of $6.44 billion; its shares were traded at around $62.43 with a P/E ratio of 14.94 and P/S ratio of 1.05. Davita Inc. had an annual average earning growth of 23.5% over the past 10 years. GuruFocus rated Davita Inc. the business predictability rank of 4-star.DVA is in the portfolios of Lee Ainslie of Maverick Capital, Andreas Halvorsen of Viking Global Investors LP, Edward Owens of Vanguard Health Care Fund, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates.
Consolidated net operating revenues for the first quarter of 2010 increased by approximately $111 million, or approximately 7.7%, as compared to the first quarter of 2009. The increase in consolidated net operating revenues was primarily due to an increase in dialysis and related lab services net revenues of approximately $101 million, principally due to an increase in the number of treatments from non-acquired treatment growth in existing and new centers and growth through acquisitions, as well as an increase in the average dialysis revenue per treatment. The increase in consolidated net revenues was also due to an increase of approximately $10 million in the ancillary services and strategic initiatives net revenues primarily from growth in our pharmacy business.
Outlook for 2010. Currently, we still expect our operating income for 2010 to be in the range of $950 million to $1,020 million and we expect our operating cash flows for 2010 to be in the range of $675 million to $725 million. These projections and the underlying assumptions involve significant risks and uncertainties, and actual results may vary significantly from current projections. These risks, among others, include those relating to the concentration of profits generated from commercial payors, continued downward pressure on average realized payment rates from commercial payors, which may result in the loss of revenue or patients, a reduction in the number of patients under higher-paying commercial plans, a reduction in government payment rates or changes to the structure of payments under the Medicare ESRD program or other government-based programs, including, for example, the implementation of a bundled payment rate system which will lower reimbursement for services we provide to Medicare patients, and the impact of health care reform legislation that was enacted in
Liquidity and capital resources. Cash flow from operations during the first quarter of 2010 was $262 million, compared to $134 million during the first quarter of 2009. The improved cash flow was primarily the result of improved earnings, cash collections and the timing of payments for certain expenditures. Non-operating cash outflows for the first quarter of 2010 included capital asset expenditures of $45 million, including $22 million for new center developments and relocations and $23 million for maintenance and information technology. We also spent an additional $1.1 million for acquisitions. We paid distributions to noncontrolling interests of $19 million. Non-operating cash outflows for the first quarter of 2009 included capital asset expenditures of approximately $73 million, including $42 million for new center developments and relocations and $31 million for maintenance and information technology. We spent an additional $40 million for acquisitions and paid distributions to noncontrolling interests of $14 million. We also repurchased 0.7 million shares of common stock for approximately $32 million.
We currently expect to spend approximately $125 million for capital asset expenditures in 2010 related to routine maintenance items and information technology equipment. We also expect to spend $250 million for new center development, relocations and center acquisitions in 2010, depending upon the availability of projects and sufficient project returns, which does not include any potential expenditures for our new corporate headquarters. We expect to generate approximately $675 million to $725 million of operating cash flow in 2010. Our actual expenditures for growth and cash flows in 2010 could vary significantly from these expected amounts due to the timing of payments and collections.
As of March 31, 2010, we maintained a total of six interest rate swap agreements with amortizing notional amounts totaling $350 million. These agreements had the economic effect of modifying the LIBOR-based variable interest rate on an equivalent amount of our debt to fixed rates ranging from 4.05% to 4.70%, resulting in an overall weighted average effective interest rate of 5.83% on the hedged portion of our Senior Secured Credit Facilities, including the term loan B margin of 1.50%. The swap agreements expire by September 30, 2010 and require quarterly interest payments. During the three months ended March 31, 2010, we accrued net charges of $3.6 million from these swaps which is included in debt expense. As of March 31, 2010, the total fair value of these swaps was a liability of $7.1 million. During the three months ended March 31, 2010 we recorded $2.0 million, net of tax, as an increase to other comprehensive income for previous losses that were reclassified into income, net of valuation losses.
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Davita Inc. has a market cap of $6.44 billion; its shares were traded at around $62.43 with a P/E ratio of 14.94 and P/S ratio of 1.05. Davita Inc. had an annual average earning growth of 23.5% over the past 10 years. GuruFocus rated Davita Inc. the business predictability rank of 4-star.DVA is in the portfolios of Lee Ainslie of Maverick Capital, Andreas Halvorsen of Viking Global Investors LP, Edward Owens of Vanguard Health Care Fund, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Consolidated net operating revenues for the first quarter of 2010 decreased by approximately $9 million, or approximately 0.6%, as compared to the fourth quarter of 2009. The decrease in consolidated net operating revenues was primarily due to a decrease in dialysis and related lab services net revenues of approximately $5 million, principally due to a decrease in the number of treatments as a result of fewer treatment days in the first quarter of 2010, partially offset by an increase in the average dialysis revenue per treatment. The decrease in consolidated net revenues was also due to a decrease of approximately $4 million in the ancillary services and strategic initiatives net revenues primarily as a result of discontinuing the VillageHealth special needs plans effective December 31, 2009.Consolidated net operating revenues for the first quarter of 2010 increased by approximately $111 million, or approximately 7.7%, as compared to the first quarter of 2009. The increase in consolidated net operating revenues was primarily due to an increase in dialysis and related lab services net revenues of approximately $101 million, principally due to an increase in the number of treatments from non-acquired treatment growth in existing and new centers and growth through acquisitions, as well as an increase in the average dialysis revenue per treatment. The increase in consolidated net revenues was also due to an increase of approximately $10 million in the ancillary services and strategic initiatives net revenues primarily from growth in our pharmacy business.
Outlook for 2010. Currently, we still expect our operating income for 2010 to be in the range of $950 million to $1,020 million and we expect our operating cash flows for 2010 to be in the range of $675 million to $725 million. These projections and the underlying assumptions involve significant risks and uncertainties, and actual results may vary significantly from current projections. These risks, among others, include those relating to the concentration of profits generated from commercial payors, continued downward pressure on average realized payment rates from commercial payors, which may result in the loss of revenue or patients, a reduction in the number of patients under higher-paying commercial plans, a reduction in government payment rates or changes to the structure of payments under the Medicare ESRD program or other government-based programs, including, for example, the implementation of a bundled payment rate system which will lower reimbursement for services we provide to Medicare patients, and the impact of health care reform legislation that was enacted in
Liquidity and capital resources. Cash flow from operations during the first quarter of 2010 was $262 million, compared to $134 million during the first quarter of 2009. The improved cash flow was primarily the result of improved earnings, cash collections and the timing of payments for certain expenditures. Non-operating cash outflows for the first quarter of 2010 included capital asset expenditures of $45 million, including $22 million for new center developments and relocations and $23 million for maintenance and information technology. We also spent an additional $1.1 million for acquisitions. We paid distributions to noncontrolling interests of $19 million. Non-operating cash outflows for the first quarter of 2009 included capital asset expenditures of approximately $73 million, including $42 million for new center developments and relocations and $31 million for maintenance and information technology. We spent an additional $40 million for acquisitions and paid distributions to noncontrolling interests of $14 million. We also repurchased 0.7 million shares of common stock for approximately $32 million.
We currently expect to spend approximately $125 million for capital asset expenditures in 2010 related to routine maintenance items and information technology equipment. We also expect to spend $250 million for new center development, relocations and center acquisitions in 2010, depending upon the availability of projects and sufficient project returns, which does not include any potential expenditures for our new corporate headquarters. We expect to generate approximately $675 million to $725 million of operating cash flow in 2010. Our actual expenditures for growth and cash flows in 2010 could vary significantly from these expected amounts due to the timing of payments and collections.
As of March 31, 2010, we maintained a total of six interest rate swap agreements with amortizing notional amounts totaling $350 million. These agreements had the economic effect of modifying the LIBOR-based variable interest rate on an equivalent amount of our debt to fixed rates ranging from 4.05% to 4.70%, resulting in an overall weighted average effective interest rate of 5.83% on the hedged portion of our Senior Secured Credit Facilities, including the term loan B margin of 1.50%. The swap agreements expire by September 30, 2010 and require quarterly interest payments. During the three months ended March 31, 2010, we accrued net charges of $3.6 million from these swaps which is included in debt expense. As of March 31, 2010, the total fair value of these swaps was a liability of $7.1 million. During the three months ended March 31, 2010 we recorded $2.0 million, net of tax, as an increase to other comprehensive income for previous losses that were reclassified into income, net of valuation losses.
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