DAVITA INC. Item 7.01. Regulation FD Disclosure.
In conjunction with its anticipated modified "Dutch auction" tender offer for
shares of its common stock for an aggregate purchase price of up to
2020 Outlook
As discussed on its most recent earnings call on
The foregoing forward-looking measures and the underlying assumptions involve
significant known and unknown risks and uncertainties, including those described
below, and actual results may vary materially from these forward-looking
measures. In particular, the widespread impact of the novel coronavirus
(COVID-19) pandemic continues to generate significant risk and uncertainty, and
as a result, our future results could vary materially from the guidance provided
above. We do not provide guidance for diluted net income from continuing
operations per share attributable to
Item 8.01. Other Events. Tender Offer
The Company is releasing this information to provide investors with updated
information in conjunction with its anticipated modified "Dutch auction" tender
offer The tender offer is not conditioned upon any minimum number of shares
being tendered and is not subject to a financing condition. DaVita expects to
finance the share purchases in the tender offer with cash on hand, and to the
extent necessary, borrowings under its currently undrawn
Assumptions Relating to 2020 Outlook
Set out below is a further discussion of the assumptions upon which the guidance set forth in Item 7.01 above is provided as well as information relating to changes to anticipated results should conditions ultimately differ from those assumed in the guidance provided above.
The increased guidance ranges included forecasted changes in expenses and
revenue in the second half of 2020 as compared to the first half of 2020,
including a reduction in calcimimetics profits, expenditures relating to
Proposition 23, the union-sponsored ballot initiative in
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Forward-Looking Statements
The guidance and other forward-looking information in this report (collectively, "forward-looking statements") and the underlying assumptions involve significant risks and uncertainties, including those described below, and actual results may vary significantly from these forward-looking statements. Among other things, we cannot assure you that our actual financial and operating results will not differ, perhaps materially, from the guidance set forth above. Similarly, we cannot assure you that the proposed tender offer described above will occur on the terms currently contemplated, or at all.
The information in this report is for informational purposes only and is neither
an offer to purchase nor a solicitation of an offer to sell shares of the
Company's common stock. The tender offer for the outstanding shares of our
common stock described in this report has not commenced. At the time the tender
offer is commenced, the Company will file a Tender Offer Statement on Schedule
TO with the
• our ability to satisfy the conditions to the tender offer;
• the price per share at which we ultimately determine to purchase shares
in the tender offer and the number of shares tendered in the tender
offer;
• the terms, timing, costs and interest rate on any indebtedness incurred
to fund such purchases;
• our ability to commence and complete the tender offer, including the
number of shares we are able to purchase pursuant to the tender offer;
• our ability to achieve the benefits contemplated by the tender offer;
• any adverse impact that the tender offer may have on us and the trading
market for our common stock;
• the continuing impact of the dynamic and rapidly evolving COVID-19
pandemic, including, without limitation, on our patients, teammates,
physician partners, suppliers, business, operations, reputation,
financial condition and results of operations, the government's response
to the COVID-19 pandemic, and the consequences of an extended economic
downturn resulting from the impacts of COVID-19, including a potential
negative impact on our commercial mix, any of which may also have the
effect of heightening many of the other risks and uncertainties discussed
below;
• the concentration of profits generated by higher-paying commercial payor
plans for which there is continued downward pressure on average realized
payment rates, and a reduction in the number or percentage of our
patients under such plans, including without limitation as a result of
restrictions or prohibitions on the use and/or availability of charitable
premium assistance, which may result in the loss of revenues or patients,
or our making incorrect assumptions about how our patients will respond
to any change in financial assistance from charitable organizations;
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• noncompliance by us or our business associates with any privacy or
security laws or any security breach by us or a third party involving the
misappropriation, loss or other unauthorized use or disclosure of
confidential information;
• the extent to which the ongoing implementation of healthcare reform, or
changes in or new legislation, regulations or guidance, enforcement
thereof or related litigation result in a reduction in coverage or
reimbursement rates for our services, a reduction in the number of
patients enrolled in higher-paying commercial plans, or that are enrolled
in or select Medicare Advantage plans, or other material impacts to our
business; or our making incorrect assumptions about how our patients will
respond to any such developments;
• a reduction in government payment rates under the Medicare program or
other government-based programs and the impact of the Medicare Advantage
benchmark structure;
• risks arising from potential and proposed federal and/or state
legislation, regulation, ballot, executive action or other initiatives,
including such initiatives related to healthcare and/or labor matters,
such as AB290 and Proposition 23 in California ;
• the impact of the upcoming election cycle, the political environment and
related developments on the current healthcare marketplace and on our
business, including with respect to the future of the Affordable Care
Act, the exchanges and many other core aspects of the current healthcare
marketplace;
• our ability to successfully implement our strategy with respect to
home-based dialysis, including maintaining our existing business and
further developing our capabilities in a complex and highly regulated
environment;
• changes in pharmaceutical practice patterns, reimbursement and payment
policies and processes, or pharmaceutical pricing, including with respect
to calcimimetics;
• legal and compliance risks, such as our continued compliance with complex
government regulations;
• continued increased competition from dialysis providers and others, and
other potential marketplace changes;
• our ability to maintain contracts with physician medical directors,
changing affiliation models for physicians, and the emergence of new
models of care introduced by the government or private sector that may
erode our patient base and reimbursement rates, such as accountable care
organizations, independent practice associations and integrated delivery
systems;
• our ability to complete acquisitions, mergers or dispositions that we
might announce or be considering, on terms favorable to us or at all, or
to integrate and successfully operate any business we may acquire or have
acquired, or to successfully expand our operations and services in
markets outside the United States , or to businesses outside of dialysis;
• uncertainties related to potential payments and/or adjustments under
certain provisions of the equity purchase agreement for the sale of our
DaVita Medical Group (DMG) business, such as post-closing adjustments and
indemnification obligations;
• the variability of our cash flows, including without limitation any
extended billing or collections cycles; the risk that we may not be able
to generate or access sufficient cash in the future to service our
indebtedness or to fund our other liquidity needs; and the risk that we
may not be able to refinance our indebtedness as it becomes due, on terms
favorable to us or at all;
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• factors that may impact our ability to repurchase stock under our stock
repurchase program (including the tender offer described above) and the
timing of any such stock repurchases, as well as our use of a
considerable amount of available funds to repurchase stock;
• risks arising from the use of accounting estimates, judgments and
interpretations in our financial statements;
• impairment of our goodwill, investments or other assets; and
• uncertainties associated with the other risks described in Part I, Item
1A "Risk Factors" and Part II, Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in
our Annual Report on Form 10-K for the year ended December 31, 2019 , Part
I, Item 2 "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and Part II, Item 1A "Risk Factors in each of
our Quarterly Reports on Form 10-Q for the quarters ended March 31 and
June 30, 2020 and the other risks and uncertainties discussed in any
subsequent reports that we file or furnish with the SEC from time to
time.
The forward-looking statements should be considered in light of these risks and uncertainties. All forward-looking statements in this report are based solely on information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise.
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