Davita 1st quarter 2011 results
Denver--(business wire)--davita inc. (nyse:dva) today announced results for the quarter ended march 31, 2011. net income attributable to davita inc. for the quarter ended march 31, 2011 was $94.5 million, or $0.96 per share. this compares to net income attributable to davita inc. for the quarter ended march 31, 2010 of $109.4 million, or $1.04 per share. financial and operating highlights include: cash flow: for the rolling twelve months ended march 31, 2011 operating cash flow was $908 million and free cash flow was $643 million. for the three months ended march 31, 2011 operating cash flow was $330 million and free cash flow was $267 million. operating income: operating income for the three months ended march 31, 2011 was $236 million as compared to $243 million for the same period of 2010. volume: total treatments for the first quarter of 2011 were 4,602,375, or 59,771 treatments per day, representing a per day increase of 7.2% over the first quarter of 2010. non-acquired treatment growth in the quarter was 4.0% over the prior year’s first quarter. our normalized non-acquired treatment growth in the quarter was 4.2% over the prior year’s first quarter. effective tax rate: our effective tax rate was 35.5% for the quarter ended march 31, 2011. this effective tax rate is impacted by the amount of third party owners’ income attributable to non-tax paying entities. the effective tax rate attributable to davita inc. was 40.0% for the quarter ended march 31, 2011. we are updating our effective tax rate attributable to davita inc. for 2011 to now be in the range of 39.0% to 40.0%. our previous expected effective tax rate attributable to davita inc. was in the range of 39.5% to 40.5%. share repurchases: during the first quarter of 2011, we repurchased a total of 162,300 shares of our common stock for $13.6 million, or an average price of $84.02 per share. as of march 31, 2011, all of these shares repurchases had not yet been settled in cash. in addition, we also repurchased a total of 969,100 shares of our common stock from april 1, 2011 through april 30, 2011 for $84.4 million, or an average price of $87.08 per share. as a result of these transactions, our remaining board authorization for share repurchases as of april 30, 2011 is approximately $583.5 million. center activity: as of march 31, 2011, we operated or provided administrative services at 1,642 outpatient dialysis centers serving approximately 128,000 patients, of which 1,610 centers are consolidated in our financial statements. during the first quarter of 2011, we acquired and opened a total of 33 centers, sold one center and closed two centers. outlook we expect our operating income for 2011 to be in the range of $1,040 million to $1,100 million and expect our operating cash flows for 2011 to be in the range of $840 million to $940 million. we also expect our operating income for 2012 to be in the range of $1,100 million to $1,200 million. these projections and the underlying assumptions involve significant risks and uncertainties, including those described below and actual results may vary significantly from these current projections. we will be holding a conference call to discuss our results for the first quarter ended march 31, 2011 on may 3, 2011 at 8:30 a.m. eastern time. the dial in number is (800) 399-4406. a replay of the conference call will be available on davita’s official web page, www.davita.com, for the following 30 days. this release contains forward-looking statements, within the meaning of the federal securities laws, including statements related to our 2011 and 2012 operating income, our 2011 operating cash flows and our 2011 expected effective tax rate attributable to davita inc. factors that could impact future results include the uncertainties associated with governmental regulations, general economic and other market conditions, competition, accounting estimates, the variability of our cash flows and the risk factors set forth in our sec filings, including our annual report on form 10-k for the year ended december 31, 2010, and subsequent quarterly reports to be filed on form 10-q. the forward-looking statements should be considered in light of these risks and uncertainties. these risks and uncertainties include those relating to: the concentration of profits generated from commercial payor plans, 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 end stage renal disease program or other government-based programs, the impact of health care reform legislation that was enacted in the united states in march 2010, changes in pharmaceutical or anemia management practice patterns, payment policies, or pharmaceutical pricing, our ability to maintain contracts with physician medical directors, legal compliance risks, including our continued compliance with complex government regulations, the resolution of ongoing investigations by various federal and state governmental agencies, continued increased competition from large and medium-sized dialysis providers that compete directly with us, our ability to complete any acquisitions, mergers or dispositions that we might be considering or announce, or integrate and successfully operate any business we may acquire, and expansion of our operations and services to markets outside the united states. we base our forward-looking statements on information currently available to us at the time of this release, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of changes in underlying factors, new information, future events or otherwise. this release contains non-gaap financial measures. for reconciliations of these non-gaap financial measures to their most comparable measure calculated and presented in accordance with gaap, see the attached reconciliation schedules. for the reasons stated in the reconciliation schedules, we believe our presentation of non-gaap financial measures provides useful supplemental information for investors. davita inc. consolidated statements of income (unaudited) (dollars in thousands, except per share data) march 31, davita inc. consolidated statements of cash flows (unaudited) (dollars in thousands) march 31, davita inc. consolidated balance sheets (unaudited) (dollars in thousands, except per share data) 2011 2010 davita inc. supplemental financial data (unaudited) (dollars in millions, except for per share and per treatment data) 2011 2010 2010 davita inc. supplemental financial data—continued (unaudited) (dollars in millions, except for per share and per treatment data) 2011 2010 2010 davita inc. supplemental financial data—continued (unaudited) (dollars in millions, except for per share and per treatment data) 2011 2010 2010 2.58 x 2.72 x 2.36 x davita inc.supplemental financial data—continued(unaudited)(dollars in thousands) note 1: calculation of the leverage ratio under the company’s senior secured credit facilities (credit agreement), the leverage ratio is defined as all funded debt plus the face amount of all letters of credit issued, minus cash and cash equivalents, divided by “consolidated ebitda”. the leverage ratio determines the interest rate margin payable by the company for its term loan a and revolving line of credit under the credit agreement by establishing the margin over the base interest rate (libor) that is applicable. the following leverage ratio was calculated using “consolidated ebitda” as defined in the credit agreement. the calculation below is based on the last twelve months of “consolidated ebitda”, pro forma for routine acquisitions that occurred during the period. the company’s management believes the presentation of “consolidated ebitda” is useful to investors to enhance their understanding of the company’s leverage ratio under its credit agreement. rolling twelve months ended march 31, 2011 2.58 x in accordance with the credit agreement, the company’s leverage ratio cannot exceed 4.25 to 1.0 as of march 31, 2011. at that date the company’s leverage ratio did not exceed 4.25 to 1.0. davita inc.reconciliations for non-gaap measures(unaudited)(dollars in thousands) 1. net income attributable to davita inc. excluding after-tax debt refinancing and redemption charges and diluted earnings per share attributable to davita inc. excluding after-tax debt refinancing and redemption charges. we believe that net income attributable to davita inc. excluding after-tax debt refinancing and redemption charges and diluted earnings per share attributable to davita inc. excluding after-tax debt refinancing and redemption charges enhances a user’s understanding of our normal net income attributable to davita inc. and diluted earnings per share attributable to davita inc. for these periods by providing a measure that is more meaningful because it excludes charges that resulted from the refinancing of our senior secured credit facilities and the redemption of the aggregate principal amount of our outstanding 6⅝% senior notes due 2013 and the aggregate principal amount of our outstanding 7 ¼% senior subordinated notes 2015 and accordingly, is more comparable to prior periods and indicative of consistent net income attributable to davita inc. and diluted earnings per share attributable to davita inc. these measures are not measures of financial performance under united states generally accepted accounting principles (gaap) and should not be considered as an alternative to net income attributable to davita inc. and diluted earnings per share attributable to davita inc. 2011 2010 2010 2011 2010 2010 davita inc.reconciliations for non-gaap measures(unaudited)(dollars in thousands) 2. effective income tax rates we believe that reporting the effective income tax rate attributable to davita inc. enhances an investor’s understanding of davita’s effective income tax rate for the periods presented because it excludes noncontrolling owners’ income that primarily relates to non-tax paying entities and accordingly is more comparable to prior periods presentations regarding davita’s effective income tax rate and is more meaningful to an investor to fully understand the related income tax effects on davita inc.’s operating results. this is not a measure under gaap and should not be considered as an alternative to the effective income tax rate calculated in accordance with gaap. effective income tax rate as compared to the effective income tax rate attributable to davita inc. is as follows: 2011 2010 2010 2011 2010 2010 davita inc.reconciliations for non-gaap measures(unaudited)(dollars in thousands) 3. free cash flow free cash flow represents net cash provided by operating activities less income distributions to noncontrolling interests and capital expenditures for routine maintenance and information technology. we believe free cash flow is a useful adjunct to cash flow from operating activities and other measurements under gaap, since free cash flow is a meaningful measure of our ability to fund acquisition and development activities and meet our debt service requirements. in addition, free cash flow excluding income distributions to noncontrolling interests provides an investor with an understanding of free cash flows that are attributable to davita inc. free cash flow is not a measure of financial performance under gaap and should not be considered as an alternative to cash flows from operating, investing or financing activities, as an indicator of cash flows or as a measure of liquidity. 2011 2010 2010 2011 2010 2010
