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DaVita (DVA)

Participants
Jim Gustafson DaVita, Inc.
Kent J. Thiry DaVita, Inc.
Javier J. Rodriguez DaVita, Inc.
Joel Ackerman DaVita, Inc.
LeAnne M. Zumwalt DaVita, Inc.
Justin Lake Wolfe Research LLC
Kevin Mark Fischbeck Bank of America Merrill Lynch
Stephen Tanal Goldman Sachs & Co. LLC
Gary P. Taylor JPMorgan Securities LLC
John W. Ransom Raymond James & Associates, Inc.
Lisa Bedell Clive Sanford C. Bernstein Ltd.
Call transcript
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Operator

Good evening. My name is Iris and I will be your conference facilitator today. At this time, I would like to welcome everyone to DaVita's Third Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. you. Thank Mr. begin may conference. your you Gustafson,

Jim Gustafson

President Group and note Thiry, Thank Kidney Rodriguez, room quarter company. us today to And via CEO Vice joining third are: during Joel Care; CFO; And our and DaVita we forward-looking everyone call. you, Officer. I'm me CEO; We Javier the also Gustafson, our may of and Please securities Iris, conference Jim meaning statements in Accounting appreciate Hilger, Vice LeAnne our interest call, this Relations. our welcome your within in Zumwalt, Investor of Ackerman, are that Jim with of our Kent President. laws. Chief make teleconference federal the continued

third unknown All differ of release risks results or most release Report cause on SEC from to that earnings and materially of Quarterly of filings. these Form our our to actual including quarter filings Report could XX-Q. today earlier our earlier recent statements uncertainties are third Form and described known SEC and XX-K in those refer Please and quarter on today our subject Annual to in

statements are and do duty information intend currently based available we no statements. to to and us, undertake these on not update forward-looking Our

earnings over most Officer. Chief available you GAAP turn the will during measures. the included we non-GAAP Thiry, I'll on now to financial Additionally, financial we'd like measures to Kent our our remind release some comparable our discuss the these in to that press to measures non-GAAP this call SEC Executive call, website. A of is submitted reconciliation and

Kent J. Thiry

got and headlines interest all course over. to number Joel before the one victory, in thanks we and DaVita. you about of the in Jim, with but regarding JR to X you, talk to XXXX. for Prop Thank excellent DMG, is close Headline of take of let stakeholders. all our your four I've sale Javier news let transaction the Optum continue work Number certainly that together two, primarily, for to of going I'm Okay. we

did However, execute not timeline date some year approval as quarter in Joel and in four, did the some extend to unusual meet we the of have do we most this three of light Number earlier will amendment regulatory recall, ongoing in an of JR process. the go depth. you expenses, termination which that will case through

And is tradition, your our detail out, added and talk about improved foremost So a about they either all then, going that into accomplishment evaluate broaden the the slightly of an going experience. I'm so clinical or on include been caregiving of comes We're finally centers. we've we do we we'll has solid a net is, without PD the in coming that peritoneal more patients, a take dialysis dialysis of our right top to to to is clinical can year-to-date, so that a accomplishment at far X,XXX going what because latter a basis now talk the category care this into forward And clinical company. are always the patient business. more strength you what people call. it way the finally, get of as ongoing before what ability not fourth it's operating headline year. all in operating the far different in so consistent And first is, the and to go solid and net quarter That synthesis, a first with

pick of in a experience tremendous our many take lead up that the that's outcomes, life, improvement please physical improved to those does stay the in many of the of outcomes so these over. quality cases Javier, it patients, clinical this because not mobility and will story it's patient but always their of for Now same, clinical they day. and scheduling

Javier J. Rodriguez

Kent, you, good and afternoon. Thank

calcimimetics, team update X, I in. right on today, for XXXX. guidance will four and Let jump an me discuss Prop topics

Prop on First X.

me with the Let start obvious.

and defeated. entire Association coalition union-backed thank the the Chamber We patients, pursuing hard for included In believe that displays California, American to to was organizing by right outcome ballot SEIU-UHW California California defeat X XXX putting members voters the for patients initiative. the efforts. and initiative California Nurses this Hospital care. broad Association, Emergency but of their union's California stopping abuse we the we We them anticipate over the objectives worked Commerce our a also above was do not not coalition Room and system. entire This of Medical only that are of Prop X, Unfortunately, to that few. College Physicians of Association, American the Proposition pleased ballot of the California mention the process access The life-sustaining disregard the

We to opposing cause spend these types initiatives over us of next expect this resource the considerable to years.

to baseline we're it's to million While spend necessary increase $XX difficult of spend forecast an counter initiative. in specific incremental the on assuming general is advocacies our plus whatever year per

quarter, the calcimimetics. treatment cost per essentially Now so declined income. operating on third revenue In both to treatment to per is slightly, and neutral

of to This the excludes short-lived benefit any calcimimetics margin the a before that may administer We mid-single-digit enter to our should market. drug. net impact be to the come continue expect generics indirect cost

whether to have team, I our of the or dedication take and the the delivering Third, our We're caregivers of by life-sustaining campaigns pause professionalism to recognize to opportunity committed want it's them. and and inspired therapy. hurricanes, California proud stayed recent an the

XXXX. let me for guidance provide Lastly,

There billion. this. annual guidance, range at low reasons is to we're last range to operating $X.X we narrowing two $X.XX the the end our of the billion adjusted income This for guidance quarter. For are specified

First great but feel about more is, we advocacy, $XX results. for we the million spent

a million will Joel executive, $XX Second policy our discuss. which in for change retirement is

context of an from guidance would because and the was that billion the was of $X.X – excluding at provided that also variable ongoing to such the like beginning billion We $X.X to the quite we unprecedented guidance year, advocacy, operation. distinct

$X.XX would words, other context, be we the above add provided we guidance or $XX $X.XXX yielding million So the if into billion put In you the will want high to range end at last updated to guidance you year. billion. to the original updated a

quarter cut how it was solid it, you matter So and year-to-date. operationally solid no a

hand Now, to on over our results. details it Joel financial for I'll

Joel Ackerman

Adjusted operations million. quarter Javier. the Thanks, $XXX income for was third operating from continuing

a Let day me the and of to due end the was $X.XX On cost. growth The of through due is walk to Medicare XX% calcimimetics growth, of reminder the treatment low at in with first G&A to of decline revenue. compared normal our the long-term non-recurring prior non-acquired X% from puts range. continued guidance recoveries you remainder decrease periods Approximately due debt down and items. was a cost second be revenue, similar in other two due in in is to the quarter of per to bad as a growth XXXX. had half normalized decrease revenue¸ RPT significantly quarter Approximately, components; X.X% the takes to increased QX. our which

First, $XX in in million million lab quarter-over-quarter is a Q&A $XX advocacy (X:XX). increase. spend, This and the segment dialysis

accelerating Second, is segment. the non-cash equity retirement for of the modifying This adoption to held G&A due equity executive the and approximately million awards officers. existing $XX by awards in on treatment corporate charge a of policy

quarter For million. international, the $X our in was operating adjusted loss

operating or We income continue to gains QX losses. in any foreign achieve adjusted exchange to break-even XXXX, excluding expect

for has Operating $XXX $X.X strong flow, the billion from and year-to-date. and cash nearly operations remained our which quarter flow enduring. cash Now million continuing was

flow to cash $X.X the operating expect to billion. to from billion be continuing $X.X continue operations year for We

XX.X of continuing beginning of after also than at approximately September We million the representing consistent approximately year-to-date quarter. to We repurchased the with end year. year billion, repurchase includes approximately X% of million we XXXX, last repurchases expect no CapEx share more On the Through stock to of shares $XXX mentioned the for for $X.XX operations million our the XX, for approximately earnings previously. call. our be $XX we repurchases. since the This outstanding made shares

DaVita effective the income rate continuing was quarter, For XX.X%. to our third operations from on tax attributable

the now adoption policy. rate to our of as result spend XX.X% be XX.X%. expect This the continuing the DaVita on from increased For is and year, and a of to we the retirement income executive between attributable effective advocacy operations full tax

for over to turn remarks. Now I'll closing it Kent

Kent J. Thiry

just very stage, for under the resist but these really a they and disregard strikingly there's With for to JR. an like another to move statements quite the organize one, processes before try it for can't a and patient care as the Q&A. heavily stunning bit to we few It's being I'd well-developed industry that for entire It's care irresponsible this to union a little Okay. trying calls, about. respect also unsustainably to that. we teammates to purport is water. to one demonstrate Number ironically in SEIU-UHW, and patients a redundancy redundant supervised to try put by at I make to avoid thing to

to integrated two, care and get teammates our for this represent to forward very be able best our we Number the well through we're do if kidney in continue as it year. implementing did will general the the we to So movement for PATIENTS towards Act patients particular going legislature. well-positioned and we

something spends how never Democrats one majority need for time despite you to XX us? But well the time The know done. over we never from whoever because that even in more the that in over party. House, here things very always the might this is really like far with sides does the with these You has have news Senate middle, ask, we change is somewhat DaVita the affect good far the taking strayed get that years and too skewed majority, both

Republican we've the highly all disproportionate there. House from represent massively and Act. the sides in constituencies along of strong who benefit the have percentage the invested and of a way both fact position the And patients a would And Democratic in Democratic PATIENTS so the

an And so some ways in and constituent philosophical better fit. even it's

to cash we the and of to work the will Fourth work again very caring four those for and and to to make for comments take of DMG put please move the closed seriously. like questions? flow quite deal is that, we Q&A it and hard once third resiliency Operator, proceeds finally, point our The to before to our I'd just get continue could we you. to respect

Jim Gustafson

Iris?

Kent J. Thiry

a that...? have way you getting do Jim, of

Operator

I'm sorry.

the We will question-and-answer session. now begin

our first Lake Research. We question from Wolfe Justin from have coming

Your now line open. is

Justin Lake

Thanks.

Let's the the start obviously, a results, off of moving and with kind quarter of third parts here. lot

the that total fourth little $XX is in that million quarter? to is third that one, case, previous the you weren't and took you to think if the quarter midpoint. bit, core $XX up is ahead like about, run rate math and of ex million, the So business if running costs simplify that's sounds right for down those two say contemplated I like guidance the about a costs, guidance number sounds had so the what plan the the it at at it it to underlying midpoint, fair Is that of the the wanted

Joel Ackerman

So Justin, Joel here.

of where a real consistent with terms in expected, little but had right bit we we're running bounces Your around there. pretty is math much what no changes

Justin Lake

coming how charges And think all to point of aren't with again as XXXX, kind going moving once for then we jump continue think about we the underlying XXXX, of about into remove should next the rate the off OI into out Okay. of right year? XXXX these OI we going parts, run that

Joel Ackerman

Yeah.

So, normalize I to want guidance you bunch guess, we've the given really things. I would and with kind of of XXXX for a start then you'd

$XX the half to year the out the called guide advocacy, there out. a and in So DaVita from million other change, of which also about, in half of I'd Rx we the million then one debt of out; $XX and policy the we've bad we've at this is third $XX as up a of DHS year called million headwind Medicare of beginning two there's talked good which the was is the which year; back call things which one-time first showed retirement the

Justin Lake

Okay.

I'm billion So to I you still if $X.X in I run that do math, with about OI. rate agree think that? Do coming out

Joel Ackerman

is short The answer yes.

Justin Lake

Okay.

... So think as we

Joel Ackerman

say what standpoint on of math. from an an FD limited OI. We're I agree But – yes, not from kind an from we about FD, adjusted accounting standpoint can your with

Justin Lake

forward going you how up maybe we XXXX, anything could about normal about growth us next is $X.X we think growth OI in And for maybe given to Okay. about there talk relative I then, how into that tell about year, should rate the business? think you the should billion brought

Joel Ackerman

XXXX on there. We're not guidance to going now. go not in give We're a position to right

Justin Lake

billion. that Maybe puts about headwinds, think tailwinds and us want to $X.X takes, versus you

Joel Ackerman

really. Not

Justin Lake

I'll the Okay. queue. you. back Thank in jump

Joel Ackerman

Thanks.

Javier J. Rodriguez

not say guidance And given piece that that guidance guidance to I've the up range, of on a Justin, I you billion on said $X.XXX it. range was did right got The should probably picked paper while be billion. I $X.X question, the you

for So that. my apologies

Operator

Fischbeck Merrill coming Lynch. from We have our Kevin Bank from of question America next

open. now is Your line

Kevin Mark Fischbeck

kind I $XX at thanks. if two, that's of a like the midpoint follow of way can probably look on to it of decline but don't range bigger to the line of on I core wanted about the of million, and advocacy of coming million Great, looking coming that the up comp, business does than if kind kind decline, the $XX right I think the not end but that is of it charges? that most down inline then you if top of know slightly guidance, top its better, those understand say more the stock two that one-time even why is

Kent J. Thiry

Joel, why don't continue. you

Joel Ackerman

sure the that say you again? understood I Could Kevin, question. I'm not

Kevin Mark Fischbeck

items about Yeah, then your down and that down discrete – you million. the that's comp million end coming there. of $XX the thought, more from the to called you high down so from But $XX took kind advocacy quarter down than more $XX there's million slightly the billion, $X.X you by better business guidance why And range, so even billion if high the you answer $X.X $X.XXX so more, you end two the than was was core million? said took coming to billion question than you right inline $X.X not million last than out, had is Justin's billion $XX to of range $XX stock earlier, in it was

Joel Ackerman

coming out. we billion, there. we a at to think fluctuations There $X.XXX don't comfortable point that there for would you as I specific billion I Yeah, guide and look so $X.X at this a expect would anything those, to we're as with are look reason is range in

Kevin Mark Fischbeck

bouncing that issue know are million issues an you just any Okay. with seeing X.X the you is term been de really demand that, talk novo And numbers, long new there million (XX:XX) driving of guys has end around is bottom then treatment that or it anything around around about, to opening the range, you X.X this sites?

Javier J. Rodriguez

... short The is answer

Kent J. Thiry

you to...? want do JR,

Javier J. Rodriguez

lot a Kent. the There Thanks, volume. is Yeah. in obviously of noise

are lower seeing it range. end below of in the We the range the or

from the with so And tell what's like can And data hypertension, what we there's there's of going with going dynamics we mortality several years on several nothing on upstream diabetes, and that lag. diseases have had transplants.

have anything the that. are. So, be could seeing unfortunately, useful don't I that you things same on that We're

Kevin Mark Fischbeck

think million now X no is still is think But – the X.X million (XX:XX). – you're range, that not you're million it's to X to to X.X right not expecting you there (XX:XX) million reason to

Javier J. Rodriguez

We're if that looking to the we'll all variables and at back get guidance. you change we need to

Kevin Mark Fischbeck

and I into I that expect – something Okay. the B, to into, then was might the last the the was sale, wasn't you do sounds then reading little am still deal of exactly if itself, is sure same the on a there be And do business? sure you question had lines what there XXXX that deal from valuation on A, of should drop to Is to I commentary change that along charge infer – the impairment wasn't that I proceeds, DMG business? quite there I we just no guess, what something was like – the just

Javier J. Rodriguez

Yeah.

reserve. adjustment the result itself, valuation cetera, of our booked of including quarter. the to on we update the of risks, value the this need valuation the based evaluate So fair business transaction performance every various our And the inputs et timing, is

continue timing Optum as to transaction to complicated far is but As the this work is in regulatory close concerned, with XXXX. a process look we hard

Kevin Mark Fischbeck

the nothing's you proceeds But what about will be? net changed think

Javier J. Rodriguez

have the terms been date. only made termination the the changes been deal, of In to have that changes

Kevin Mark Fischbeck

Okay. All Thanks. right. Great.

Kent J. Thiry

operator... Okay,

Operator

Sorry.

Sachs. from comes Tanal from question next Goldman Steve Our

open. Your line now is

Stephen Tanal

Thanks the guys. afternoon, question. Good for

couple $XX. quarter, questions. RPTs RPTs sound where of XQ didn't just specific into wanted about I on it for you did sized calcimimetics to down share that it I a for think XQ? you this It but like minute, a So number the dig step Can from was

Kent J. Thiry

to want you JR, that? grab

Javier J. Rodriguez

for calcimimetics. $X.XX. is That's decline The the the from RPT impact quarter

Stephen Tanal

quarter. about so Sequentially, in the $X.XX it. Got

Javier J. Rodriguez

yeah. Roughly,

Stephen Tanal

And and anything Did changing that any any on impact RPTs or have Okay. is update commercial rate, then just there. there inside of that mix bucket?

Kent J. Thiry

JR. ahead, Go

Javier J. Rodriguez

Yeah. couple of RPT, a things. On

unusual not in plans, small so our – toward anything and we're start negotiations. and seen slight but mix two, in Number we shift off a seeing paying have decline me commercial by a Let saying would no unfortunately what the the and one into take forward there question juncture. one there's future, clear this at are trend, the that ask is nothing on one, can trends, what that so take can you lower

Stephen Tanal

the And don't how of exchanges it. is additional that lower Got paying I kind context or the color any shift – in that to best think know, there? on as about any plans,

Javier J. Rodriguez

exchanges insight lower any they're into plans. have don't and but it towards yes paying shifting We

Stephen Tanal

it. Got

of kind the bit maybe from had exposure. we've and obviously maybe lastly bit been exposure expecting of loss but you million hurricanes line, looks a as It little XXXX to recapture to some just Michael of picture, And about had and to related bigger kind $X well. probably Okay. like this a XQ little revenue some Florence

any year million or the the either how what or affecting the and been may on So both materialized volumes hurricanes whether this have of guidance? or impact that context $X on that's expenses

Joel Ackerman

impact QX but significant, which net XX nothing some points quarter, an on is offset this I hurricane impact is not significant. maybe by OI in on think basis The Yeah. the NAG from XXXX, uptick is impact

Stephen Tanal

at And back, this just before last Understood. Prop. X the one I it's maybe point, you. it. kind Got jump behind of

and $XX stated, safe Sounds suggests costs million today at advocacy something for about million at QX? XQ, it is like $XX in around million obviously in you so color looking there's XQ you're $XX of is know you're the looking assume $XX year in million to

Javier J. Rodriguez

in it's range. right the Yeah,

Stephen Tanal

Thank you. Perfect.

Javier J. Rodriguez

you. Thank

Operator

have We Taylor our from Gary coming question from JPMorgan. next

open. now is line Your

Gary P. Taylor

actually. evening Good Gosh. morning. Good morning. Good Hi

quick Just a ones. few

part is or the impact all your that was accounting? $XXX Just net Will DMG on from just the cash it of tax and this proceeds the related, transaction million. the charge related to

Joel Ackerman

an the have on won't proceeds. It impact

Gary P. Taylor

And we given adjustments through months make your I the want I'm nine which if looks correct, new billion $X.XXX adjusted of you – know comparable I to all OI it sure to be it's think guidance. like would

So that it $XXX correct? do implies million have $XXX to XQ I million of

Joel Ackerman

I'm sorry, Gary.

quick little a running You're there.

Gary P. Taylor

billion I Yeah. billion. of $X.X correct I the $X.XXX was that new nine-month your I guidance on OI press and in and adjusted to was comparable. If taking the $X.XXX release number billion believe had OI

think it XQ? $XXX million $XXX OI to I for implies million So of

Joel Ackerman

Yeah. right. That's

Gary P. Taylor

the obvious easing – like than XQ looks year-over-year implies decline. sequentially costs down like why answer to as is Which are an increasing advocacy would maybe it be there it larger losses looks a but are sequentially, The XQ? pharma more

Joel Ackerman

– math the stumbling don't apologize I I about for I'm OI after on just that. flat. My and recollection and adjusted you QX, little a Gary, are QX here, was

Gary P. Taylor

Okay. My it not Maybe last I'm question... doing right.

Joel Ackerman

going math a we're just Gary, to keeps little I'll and it do for while that going you. here, clarify

Gary P. Taylor

may I will been incorrect. last for Okay. Kent. have question be My

Given the readdress issue there the insurance about the thinking you've of there's do advocate the particularly state the involved, about think in the it's ongoing, industry do the that's need issue assistance but insurance – way this sort is the you degree charitable where talked I with in or necessity believes approach skin right Is to any a legislatures? been some advocacy to not have to game. in lobby they premium of just you think I'm guess just SEIU some

Kent J. Thiry

Yeah, very question. fair

with to the SEIU was respect them. with plan with, that only CPA that worked was one involved legislation First, the there

or else. that an and anything aren't Now other since much of that's more like period more for a child. But poster identifiable dialysis there patients don't lot so are it's our so that easy say premium charitable expensive, not plans assistance much to

one interesting. of insurance pretty true which worked that sort doesn't industry was respect with is it, it to on as one while was much the that legislation, rather a like that all plan actually So, predatory there at really only that or piece group

you gotten work to Now let's time likely it's take and I and both I it's outcome we the going to period take-up, compromise so it's will a moving that each long regulators the fair as that lot think decide. said context, reason wait a and to payers at of idea. own to establishing know, for of a another a We patients most providers and and complicated you the question there's just Historically our pretty that, of is run think, the agree is out have haven't could hurt trying everybody our much things and a now on try pretty it's And But conduct been out. beyond own for quite code idea quickly. fair to to. sort time

try they And so the out folks are truth. appropriately to hesitant as sort

So can trying a where that we're consideration decision in state not of month. might next still there notion decision to of for under And the an They they the make we'll industry once if could year. a some next see make in sort again take compromise. this be

Gary P. Taylor

Appreciate Thank you. it.

Joel Ackerman

your on question Hey, before Gary, just let me over QX clarify QX. on

if add So an of the and that to million up if about the retirement well you'd number. show back you the QX ahead QX take you'd QX. compare add as $XX quarter, in adjusted QX come with you'd then in back and advocacy advocacy And QX being

Gary P. Taylor

– I Appreciate it. is I was that. Got – I'll okay, rework you. And guess,

Operator

We John Ransom question coming next have James. from Raymond from our

now line Your open. is

John W. Ransom

Hi.

me. Just of a percent look and in contracted? your couple your If is contracts, at what currently revenue commercial XXXX, commercial we from

Javier J. Rodriguez

haven't... We

Kent J. Thiry

JR?

Javier J. Rodriguez

Kent. thanks Yeah,

majority. it We the haven't is but disclosed the great number,

John W. Ransom

JR, for to just I'm I also out would the record... point that like

Kent J. Thiry

answer question. the then you Well,

John W. Ransom

great that's doesn't out spell say I fine. in (XX:XX) when majority Well, it anything, CX cell but

wonder if to opinion, know the bit I It an seems been a and spending like to the and a million efficient to capital it efforts is, down million is question any we having still I'm high between there's to number second more break efficiency, become done I high in spending an seems like think capital range CapEx more link pest growth? and how $XXX level I've awfully I the of this, just road? about, if more that $XXX about work should we've The but any rate know run try

Joel Ackerman

Yeah.

ways to that $XXX said And million what which short-term, to changes forward, specific. and happen as are as for we long-term no So next down ways anticipate capital efficient. the continuing both coming said in is nothing the looking we we've looking more for year. about capital business That to well the make quarter past

John W. Ransom

Okay.

Joel Ackerman

said Oh! with more the I'm update I'm efficient on term, capital make to for you But year, for quarter, apologize. the specifics I've that. long I over the sorry, are looking $XXX the yeah, business told million but to we no for ways

John W. Ransom

just And much of be might year – didn't with guy about for the out your I total to next losses terms for pull some this, the only then Okay. but I pharmacy will we how in avoided know in think year new structure?

Kent J. Thiry

Yeah.

So JR or Joel?

Joel Ackerman

Yeah.

So, of is are at second year. $XX in what we million out as would $XX said We we've pharmacy. the to have back half million that this you'd tailwind lose a looking for so year, next for to still that range,

John W. Ransom

you. Got

Thank Okay. you.

Operator

comes Our from next question Lisa Bernstein. Clive from

line now Your open. is

Lisa Bedell Clive

Great. Thanks.

in just they see and in the related from national sounds seems Health. job place on question, contract good whether competition the historically share. commercial was a wanted a that ARA, enrollment than drill private mix bigger your decline on have big seen and whack some or just large particularly of and you United have you lost thus of more with a that comment patient attracting fluctuations maybe slight with like quarterly competitor a you fluctuations in comment with normal mentioned those and to on out sort July your it private down Could that they now enrollment trends your there new do didn't mix period that quarter, First, – a July patients

proportion making curious into the the into and wondering You theirs? many on quite how push you dynamics you where increased HHD what just just priority They've of I'm you X% much out clinics what appears X% a dialysis. patients patients FMC HHD and them platform? HHD. is in big to near PD on point proportion us to quarters, a at from just obviously I'm may bigger build it this for about then their few markets, today your to that but be And remind HHD. a past of in are Could are don't final question, home have on run

Kent J. Thiry

time. them home, Okay. way and modalities. let On the so in our at XX% order Well, have thank try about about you that's XX.X% remember both of over on for questions take X.X% them take on them. patients a I since and me one reverse HHD, the I'll PD and we

is question to trend? the one in call particular second the there the anything should we out any on that. On on competitive answer that We landscape, no the calling commercial worth anything have we see on ARA, seen out. don't And in the change is third that's

Lisa Bedell Clive

Okay. Thanks much. very

Kent J. Thiry

Thank you.

Operator

have coming from Justin next our We Wolfe Research. from question Lake

now Your open. line is

Justin Lake

Thanks for question, taking again. my

So back commercial up on here. follow mix the just to

that? been the it stable the get eight color four, talking more pretty for what seems in of any decline give last it's think Can I six, you you in saw of Given the us quarter, did quarters a magnitude, about through any here. terms it worse the quarter,

Kent J. Thiry

Yeah.

words to shift really decline negotiations these plans. we than Seasonally to that opens little comforting. enrollment on call Medicare to But that on. the helpful slight already going are change up outlined always QX adjusted and again lower else not obviously out. paying nothing and our because had that It's so a that look small and Justin, be other trying know There's same. that's we're that has I

Justin Lake

as rate, number run in rate The putting right tax what going we think should Okay. be here? into we about our models to forward is go XXXX, the

Joel Ackerman

Yeah.

you I all tax So which deductible, be kind but but Think the reasonable not help not get a to be specific guidance spend, advocacy you back can estimate. obviously tax that to most think should about we're here, of it to give year. guidance increased the the will will beginning not our of step going at and not of deductible

Justin Lake

expected you higher Could – what you is tell has if gone core, tax up of or rate than me why? if so the the in year and it

Joel Ackerman

the It's high range. end at the of

lot pretty what things A the in was course of we that's the code of got know, the when the range. over we out year really and You up that clarified tax range. where new put drove wound

Justin Lake

Okay.

we the is of So reasonable the high kind starting advocacy a should think ex about end of range core the stuff point?

Joel Ackerman

Yes.

Justin Lake

bought a October. down you bunch and of meaningfully buy Okay. seven September year anything looks months and versus in it in first slowed like the then and buy buy July in down the And then, didn't down of you the that August the stock

just the think you So given what about pretty of repo that's pacing should we different first anything months? of in the terms did than seven share

Joel Ackerman

Yeah.

tried Our which comfortable. above talked below We've done, to further the it's that we've is higher I than down we getting but leverage. up communicate way been get range about. And safe as and range at above slowing deal think are our we feels think historically that pre-buy in reasons, X.XX, of always we've I was end above of say kind to we're the of going wound around typically DMG for anticipation – various the comfort to comfortable a leverage we're or

Justin Lake

Okay.

it's maybe repurchase on of a that going before wait here, you take kind until deal say pause the share and is DMG to fair that closes right the there meaningful read? So is

Joel Ackerman

things Look, impact right ballpark. that but there could that, you're always think general are I in the

Justin Lake

post to think would the it that's mean, second particular that deal, there then a Okay. typical point I five-plus we're complicating you in back lengthening months just anything this versus And the I DMG to circling is request. or deal.

Joel Ackerman

is ongoing, unfortunately, said, process. Yeah, look, the we the details of as live and it's process the can't it's just we regulatory discuss extensive,

Justin Lake

Okay.

different a ask I'll maybe So, this. on question

– ahead. go Just

Sorry.

Kent J. Thiry

eliminate to than just the we But Justin, given length proven time ambiguity the been I'd contemplated of be process any it's case. that's obvious difficult more and just to that perhaps add, has has taken. it a

Justin Lake

the of Is coming the tell process the there maybe what or? from they coming difficulty wanting divest in the would of expected is DOJ whether need have Optum close divest to or And us divestitures not it people to is a is deal. resistance would lot to a from can you

Joel Ackerman

the We're think sharing not any of comfortable details. I

hard constructive So, and working see to it's every but everybody's taking And sorry the we and that all working I Everybody, hard. it's about Optum, that, more. process, just bit government, work are thing that think of to the hard.

Justin Lake

Okay.

that's sues divestitures, you a court. the the that just we possibility think an we I'll to say a way if go to the does back and the Let and and what we deal to this to there at says, me the United Optum Is is get back deal, in doesn't and a if auction? what of goes just And that's case, it DOJ – FTC jump happens come break If other go and that's let's one reasonable. and this run loses, here, where close the need package point queue.

Joel Ackerman

Yeah.

look, to to in And with get don't process. to done Justin, that, We're the we hypotheticals. this speculate I XXXX. are working think hard is we closed XXXX. want just complex trying get deal It a about this in

Justin Lake

guys. Thanks right. All

Kent J. Thiry

Thanks, Justin.

Operator

from We have ... question our next coming

Kent J. Thiry

Operator?

Operator

James. Raymond I'm from John sorry from Ransom –

open. Your line is now

John W. Ransom

Hi.

of to more you are with guys And about the kind do Just there you something like of on seems this you company I'm is just it that Kent. this I companies is what at some that appears you all to a near with? back but familiar everybody from know question, could think fighting is because (XX:XX) bit be little the think at me. payers. be doing proposition and picky value mean, one odds to also kind than we just stepping I of of about the a little page? bit term fighting, squishy fighting, stuff, for over seem the you Strategically, the feels line think and kind make of differently guys more time we're everybody unions back other think from that in sort to a about same and I the with odds good bring around where the

Kent J. Thiry

including lots aligned point aligned from me And doing work we but the it's of profit, it's we're of and making overshadowed I of with and assistance, with of lot not payers, a who continue on highly great on chunk at very propositions. fact is strong visibility some our charitable charitable of preventing policy has probing a a a implementing premium question. I the shot the visibility a premium think good payers, take that, that care big not assistance which let big feel value from that strides Yeah, think they have feelings very the to view, free fair based

is I of last make invisible much much a in better. And a spot. pretty lot pretty and well-situated been point then visible probably positive And you ways inconsistent in we're as so, been that CMS, aligned the in we've would years. and a I'd out Congress, that feel the there XX also I the as think say activity of spot for with activity with never much And in good as would we've

lot is you think sense have bunch things a difficult negative is the relationship it's respect silver more point of I that by a the consistent group that done, sort And any people I unfortunately just things them bunch I dealings very looked whole which they got to that inside. lining, day if starts have trended the an a experienced, one, with off so, a on And with misleading to so group have would it's I emerged them. which and levels sum of have one out perhaps difficult. are a have we and too reasons can't the that of negative once to on headlines at kicked of had with and newspaper in what unions, one that way we the to were pretty who for where pretty With awful zero talked constructive doing quite the

very it's think I So, a concern. reasonable

spoke idea. compromise respect I at make of would And sort lot better. they think repeat with CPA, person that data another run feel were us to good you it's non-visible a who is I would a that the earlier, reasonable right I think some the taking

John W. Ransom

per of proven looking executed me these X% a we're than further over to let's four but having of I mean, dialysis care patient, risk-sharing traction know that not than quality hook revenue look and me the we mercy a kind XXXX, in X%, at guess to I and such the number. a us just years payers, you're we're with things? were or outcomes, any of fighting we – some be world I of you X% XX along fee-for-service XXXX, x it's there pay – ago. clear treatment been perspective, more increases further patients the further for and and surprising some for Okay. It's on that it Why we my doesn't with your from dollars were will in the why we're guys has any in you not – one vertical still take the also these not XX,XXX isn't states why

Kent J. Thiry

then every none enough that warrant Yeah, are them deals JR in economics I'll significant go want them first to may We to and are done year. more it. because getting don't have of isolation announce add. of Number new each one, we aligned

and progress largely payers, and has been ways. don't of other over steady acquisition the and they all so the and plans quality has a nationally, lot Why quantity lot slowly, – so the – of have And conversations has have patients spread have they lot a of it while because is it's moved grown. however, for of grown they're by a country

so, partner all has good And ability isolate of their to and a discretely dancing been be track those limited. patients to

uncomfortable they a legitimately Now now. administrative resources that a to right of there get really amount lot administratively of that's changing having with. without But were an simply lot couldn't historically, them allocate

so So, that's slowly. really it's the reason moved primary

believed didn't wanted other for On of they And that testing while in government to it. have ESCOs, the just you were they side get appetite ESCOs much stuff. an they to to work because they try really saw

has years hoped PATIENTS three, of we we're lost we when happen put by said Act Now for idea work. that into four because is is happened program while they not what but them the would their aside the exactly would has what's years a four plateaued, that, sort was scaled and

the just goes binary years. it one in? in us that's you government do so the with that this to a cost a few sometimes the road and fork JR, And you way get join want

Javier J. Rodriguez

agree about we essential our the in very patient John, take XX for be of leaning diverse and are we to in want one just payers of is We back in in place natural caregivers. care you dialysis they said, add dancing Kent's the unique to That and to XX have that be dynamic set have with as a point, that hours DNA clinics really much X because to have that only possible. that we I'll a partner-oriented partner, believe responsibility Sure. patients. that as with the is our that

one And so most, therefore, model the that we of caregiving if they out fail there. most, not the to are see efficient

constraint everyone efficient long MSP for we dialysis because to of if is that had a of look So the change XX-XX for noise timeframe and would incredibly, our of the that payer around therefore of treatment this. average if like and allow puts life-sustaining they're of incredibly therapy, on deals, more of patient, sort $XXX how weighted the mix kinds patients it bundled the hours a all system. lot we at are and at little a across our commercial, chronic to have normal get a going instead four gift wonders and limits these the doing the of per else, it restraints revenue And on fact and you is all it the But expensive.

point, solution a put your So are this. but of is to the our dynamics, partnering some to those to DNA trying all and around

John W. Ransom

so expansive great the commentary. appreciate much. really were Those Thanks answers. I

Javier J. Rodriguez

you. Thank

Operator

Clive Bernstein. We question Lisa another have from coming from

open. now is line Your

Lisa Bedell Clive

Great. Thanks.

initiative? are the Just with just that from supporters time doesn't PATIENTS on months, much I'm two I'm Congress the the fund on just a then ground decided coming how an pass actually further payers need pulled instead then for just about was and care second that that covered industry. But be made by understand new to comments extension, And have if Act, patients onto month went was payers interestingly small yearend, to losing way? they follow-ups; dialysis focus more the should they do in. so whether as the and it for a one you much three could the you your involvement without didn't substantial that interesting got but opioid XXXX need a what it Congress have only may it there becomes table fact to seemingly to in the back the integrated how obviously out. it curious are chances build, MSP trying XX this a private think for many the in

Kent J. Thiry

to want or take one the you first LeAnne, both?

LeAnne M. Zumwalt

the I'll one. either. first do can I take

of to they Act, it their are sponsors PATIENTS house, and still very our returning in well-positioned are As the the four positioned well relates we are leadership. all with

continue support base. did the the and this a from we to We will broad have have have you policy although to have has. merits So continue it new it the build to it think leadership Congress will

about the go we have building of good next Congress. we feel So that the to into support same kind

Kent J. Thiry

to did have tomorrow that or And number D at the can perhaps with R have an and exact that do but half of relationships half senior split we almost of call if lost, may – retain want LeAnne provide with leaders, the given we in folks. XXX something you sponsors perfect some Lisa up the we and we're about house

You'll net see shape. supported good by in we're the very that answer still numbers is the that

agenda, bad on Although there's so is because system they've going and noise lot bad. in a a the news a lot power that's things when of that pent-up in the got of a change just always there's

a sword on of idea shelf. that's sitting that the because of are we us On other bipartisan the that sword, done, get for and that absolutely edge the good other that's side to is they some stuff hyper hand, other are the such typically

and so didn't house the So fors, that play need the impetus need one that enough any from of Unfortunately it, the on Then way is the at savings, way. of the MSP, into it pay we made the argue look version were thrilled and so you that that tailwind lost bill in kept any comes either Senate didn't we bill. opioid can that kind it we've it that. one

optimistic soon because is know it. it's the same that, At that actually companies we that time, about always that to sound know and we're on oppose private never to generates the policy place lot it's happen a news anytime the a of it, going that business that there has good So we it happened interpret say right savings. insurance and way that people still what shelf it's

So lay-up. it's to be a never going

Lisa Bedell Clive

Okay. Thanks that. for

Kent J. Thiry

Thank Lisa. you,

Operator

There are time. no this questions in queue at

Kent J. Thiry

for you interest hard for we and work your until will the DaVita, next you. months talk we again. Okay. thank you Well, in Thank all three for

Operator

concludes for your participation. conference. That today's Thank you

disconnect. You may now