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DaVita (DVA)

Participants
Jim Gustafson Vice President of Investor Relations
Javier Rodriguez Chief Executive Officer
Joel Ackerman Chief Financial Officer
Justin Lake Wolfe Research
Andrew Mok Barclays
Kevin Fischbeck Bank of America
Whit Mayo UBS
Pito Chickering Deutsche Bank
Gary Taylor JPMorgan
Matt Larew William Blair
Lisa Clive Bernstein
Jeff Gates Gates Capital Management
Call transcript
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Operator

Ladies and gentlemen, good evening. My name is Cath and I will be your conference facilitator today. At this time, I would like to welcome everyone to the DaVita First Quarter 2020 Earnings Call. [Operator Instructions] Thank you. Mr. begin now may you your conference. Gustafson,

Jim Gustafson

and call. We you, welcome, in everyone, conference quarter first our appreciate company. to our Thank your interest continued

joining Javier Gustafson, remotely LeAnne Ackerman, Zumwalt, Jim Vice President. of and Relations. I'm Vice President our CFO today our Rodriguez, And are Group CEO; Joel Investor me

this we make federal forward-looking laws. note securities within the Please call, that statements during the will meaning of

differ risks materially these All those actual subject and unknown uncertainties are and the that statements the of results in known to from described forward-looking cause could to statements.

quarter our and recent For which XX-Q, our press quarter concerning for Form SEC filed of these be further subsequent will first and report annual details uncertainties, XXXX risks please release on and most refer to report XX-K first Form filings, today. on our including quarterly earnings the

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

we you to Additionally, some the we'd measures submitted website. included remind financial measures. to comparable non-GAAP and non-GAAP in like this GAAP that SEC press on measures available will reconciliation these to release earnings financial our is discuss A of our call, the during

turn now over will Rodriguez. call I Javier to the

Javier Rodriguez

you and everyone. Jim good Thank you, families I and hope afternoon are that your healthy.

of my Let of nonclinical world. our many that and all want helping with others including up organizations XX,XXX nurses, on crisis. me caregivers workers to workers, give living energy people for during source care appreciation global other to These courage who which healthcare expressing around Their and to is meaning a begin worldwide, I frontlines gratitude dedication the caregivers patient to and the inspiration. dieticians DaVita, by to life the of the sincere physician extend is care and this are technicians, are partners. social

Act. At relating the across response care continued to CARES of Capital provide impact platform dialysis strength ability our in on talked about from care I'll our our For and decisions our all today's topics, patients hospitals, clinic. I home three to to crisis, the business of call, the to the the our discuss our sites the COVID of and Market, and patients

the highlights the and teammates COVID power multisite the of the to our resilience platform. and response strength connecting of Our demonstrates

Let me to give bring to examples you it a few light.

national has to COVID First, free dedicated be maintain open hospital dialysis precious capacity footprint government continued the up clinics to leveraging who we're treat together patients and geographic our other by partnership patients creating helped by the has The dialysis be care scale help our resources. which and to for that with team joined dialysis providers. COVID operate with industry suspected and are in accessed resources to positive, can isolated

by our to well Next, for supporting of as or to in growth leader during a home to in our our position crisis serve they this in home the as patients dialysis in hospital have dialyzing dialysis home, moved continued and all care may virus. between patients helping center continued due of national provide

allow us to expand our of been safety in provider utilize to patients their capabilities maintaining to while the our team. we've home, leading treatment addition, In the to access telehealth care able of their

for we're the now in-center that With to telehealth using further provide care. government, of platform the support support patient

help hospital our to able needs where allocate to to support Finally, been and patients partners. areas in deliver we've most hospitals and our over that XXX services, caregivers resources we shift

term the the some while of me trends and expectations Next, COVID. the impact long let business short covering address we're seeing of for

on patients the wanted spread Initially COVID its we're the of in all however spread the providers before the setting. infection like On hospital positive is burden about in outpatient stable this possible treated COVID recognized CDC an similar alleviate from in to the to terms of treat pandemic geographic and focus control hospitals you've patients not news. the of who’ve waves experiencing to well able COVID in quickly virus, read if impact, CDC DaVita, the been the as

are DaVita suspected treated patients in XX% to tasks or week are show been COVID continued the positive with of positive our The positive other COVID are patients multiple of suspected at treatment of clinic COVID comorbidities. or no cohortships[ph] virus, while tips has symptoms three XXX,XXX either short all maintaining to be Today one of settings. be these outpatient who’ve the to over and times maintaining a patient nearly on care nothing the operational extraordinary, but of risk

business our impact uncertain. somewhat on and The near is still dynamic term

guidance we're who affirm providers issues heard are liquidity time. contrast to the significant on or volume maybe drop-off that to in be may However, due This you've procedures. our from facing elective other this able for at XXXX what

believe impact you the our of the on the economy. The need the lag As will patients and duration economic this times generally. primarily COVID be long-term impact of our know, of of optional is virus sustaining it We multiple visibility. business impact devastating is impact is on its less week. dialysis scope life that our on COVID treatment we have unemployment the not each business of based broader will on The

of population on virus dialysis mix. from growth the to that the the commercial volume more expect these would of the status and could be due a by We our CKD impacted because of of weakening late Volume broader factors mix and the insurance the health negatively mix, have stage our is ESRD uncertain existing on our impact impact and on potential patients economy. greatest the as population patients

acted funds effort to the or clinics, they time uninsured administration positive care this crisis. need have quickly in the knock certain collaborated insured ensure policies Next, healthcare and the access where our modifying administration necessary. also in crisis. The COVID by response providers cohortships[ph] an industry and in facilitate swift of to to patients ability that regulations treat I to dialysis to with want this The administration distributing of during patients by time to

intent targets. DaVita spirit prevent has funding. of believe continue to the federal company relief doors, our We will provide the action for earnings their not with a was to fund the help uninsured providers care government been the the to and to make need be without the including healthcare able this patients, for their closing from that and

result, have that government time. As decided has the Act, fall this of this incurred the DaVita costs although parameters to at within fund we accept a relief the CARES under financial support not

our it's best needed. country individuals, in of shareholders organizations, We to the allow that's or believe redistributed to our to truly that be providers company, dollars these healthcare and interest other

matters. opinion, the focus an do year our for current part. last an greater contribute increased the right crisis companies are society is and to our the healthcare has been of ESG over and thing happy lead opportunity we good and doing to the In for

been is future entire Let thankful bigger, we have them. part We're to know and our our company the we that has me the culture. ability comment is know with crisis, ability this resilience. strong. key as are that or what doing In our they on support part can with a this they're DaVita’s the of something an fact heroes our They village still conclude say, caregivers unpredictable virus. we're know that frontline a that true We we

on financial results discuss Now, to provide our update an and on our to Joel outlook. QX to

Joel Ackerman

a Thanks, selflessly patients. vulnerable who care of be dialysis to provide to I life of want proud our sustaining this by Javier. teammates I to DaVita start am all part our thanking Village.

details forward we strong financial in in a higher going than Q&A. impact The are volumes coverage. a my usual. the press potential the on decrease relatively patient and related To is focus pandemic, treatment unemployment the remarks answer level little commercial severity quarter and any include COVID uncertainty of the face resulting details The factors impact the during was that I COVID. COVID. start, duration driving the our on with QX I'll and population in and of health on from can release questions impact to insurance significantly this

of a forecast of and than is range uncertainty, wider are than As to the financial result usual usual. possibilities this outcomes harder

steady Our have fairly treatment far. volumes remained so

mortality, will admits rest the we transplants volumes resulting For any COVID. patient XXXX new from and/or changes expect be by in impacted of

On impacts crisis, the teammates, as teammates, some policies. Redistribution and benefits enter help confirmed higher of for of of our teammates equipment incurring patients across utilization shifts elevated the COVID. reimbursement protective labor of to suspected offset clean and overtime machines creation for for enhancements expenses, materials certain to and of our financial of personal The country, needed patients. teammates and and costs supplies educational to patients care result and a additional and of and development investment or pricing purchases dedicated PTO of we're with personal hours of clinics, our the who compensation to for patients telehealth increased

as guidance maintaining increased given X, XXXX operating revenue, recognize expect flow, adjusted May these we're of but free our the income, the expenses include well add cost earnings for cash which and time, suspension of in revenue reductions changing COVID. our ranges rapidly could beginning per related this million uncertainty At about for to as to business. our sequestration the dynamics margin XXXX, other to Offsets $XX we share,

factors COVID impact growth is quantify. two longer-term considered The We and mix. of and are uncertain difficult that the believe main to

infected. and growth, base This infection and our on and both of CKD in be will long-term populations COVID. mortality the primarily on late in depend status due health rates, rate changes patients the First to could growth stage age by ESRD impacted the fatality

this unemployment lead insurance to commercial dynamics. of will the you likely highlight commercial reimbursement from which four can't We receive levels fewer predict impact increased important at rates the earnings I having Second, plans. higher creates because will headwinds patients net but time, insurance

our recovery. as First, matters the the believe retain in to recession, when coverage have peak that unemployment more near-term, you maybe of patients recovery but slower our a level a sensitivity the of the many shape of return work than a in to consider the to we preference business of

and unemployment to work currently face in large when peak are numbers are number of may from coverage. employers. a not it's furloughed to who any the Second, benefits included furloughed recognize receiving eventually individuals estimating Those return unemployment actually health that in patients still disruptions important

insured number potential that current of mix coverage have to This well in insurance employment. patients change Third, patients a in as COBRA. as relative our patients should the mitigate is tied includes significant their help increase individual not to the unemployment. This our with on commercially

including and/or options have out reductions sharing can the which coverage and access their Medicare now exchange Finally, recession, they tax patients and that plan of employer COBRA coverage, if based cost available credits patients lose is XXXX Medicaid. many where several came our

drew negative is Looking credit reflected sheet at COVID. generation, near-term we sheet. million on caution, time not Out did and material revolving in $XXX which from balance abundance we March, line, see impact quarter ending of our of an from cash down our balance this at our first

the repay to Given cash our expect balance near-term shortly. current and revolver we outlook,

March We also in any repurchased suspended repurchases stocks share subsequently. have and not

our we of This us solid our pandemic. in financial near-term, to to We use preserve to to expect brought important, and financial we'll on position the weather flow is sheet and look will challenges with to caution and uncertainty. health the and balance on high believe current face of that In cash allow and to regards by what teammates most put us to capital liquidity our deployment generation our a the in care and patients. the operational focus delivering safety quality continue flexibility

line please operator, that With open Q&A. for the

Operator

right, of sir? Justin speakers, from Lake All question our Instructions] [Operator you. is first Research, Wolfe Thank

Justin Lake

of should hoping appreciate that think kind One, growth obviously expectations of delineate, good saw what think really things maybe you us relative your here. any Good internal you afternoon. walk kind versus of the detail, core to was was own there and kind quarter, all we about? first a a can you I I items few what through

Joel Ackerman

Sure.

what my One take that. many that a it call higher I things, terms me views Hello, RPT a year. although way of out lead me say of in was Joel full broadly strong out. I'd let dimensions quarter bit was So any about here. would would than three expected, a the change It's in Justin. although not across stood to

And fundamental gain but it highlight was joint is I growth, had good well-managed there Second there international non-recurring. our our was would of broad strong Asia were exchange highlight – things, that strength. G&A very about contributor, just finally that broadly, from strong is a part $XX international of venture pharma, foreign a in three quarter, million was a I'd costs productivity, was although

Justin Lake

helpful. That's

the views talked you bit way in about full higher year. that a RPT that we the than anything So but a should that not change the expected, think benefited there something doesn't about that being reoccur, on quarter particular? Was

Joel Ackerman

little nothing bit bounce worth the particular, a around highlighting. number from in Nothing quarter-to-quarter, RPT so will

Justin Lake

again, think mean, because I side, teens. X like moving growth into cost I'm number getting I'm the getting you about have of And guys core something parts – that a kind you

Joel Ackerman

tricky you thinking think it's quarter, I a QX-over-QX? Well, are

Justin Lake

Yes, year-over-year.

Joel Ackerman

usually then was Yes. Well, was to year say back came variability you'll a year, negatives strong QX its calcimimetics was head typical year and – well, half not little quarter. particularly QX there is I'd a got going year grows. impact the there. the on QX COVID on be turned seasonality quarter and initiatives the you've some weak positive the last some in see This so as and there from then the This ballot quarterly of a is

to margin you're there focus or I that think calculating number So think the I be is about that hesitant you on. you're calculating the there something a as full rate growth year just is where would

Justin Lake

the that maybe impact the the can back benefit first the quarter and RPT you caught the number's the both by and queue, And been And like in can then it income. calcimimetics – before Okay. CMS. the I us in to operating quarter, then looks give jumped in second

So how for rest the about the we of that year? should Thanks. think

Joel Ackerman

Sure.

I The in per those treatment. was anything said number change QX is of we've number of year. for so So per wouldn't OI for for the benefit. XX – XX million and RPT full looking of full I'm OI the and which to the calcimimetics, QX million $X.X million of cost $X.XX cost I'd say The XX was change, RPT, treatment the year, numbers, $X.XX about $X.XX RPT

Justin Lake

detail. the for Thanks

Operator

Lake. you Mr. as well, Thank

Our question Andrew Mok from of sir Barclays, is next

Andrew Mok

Hi, good afternoon.

permanent of mix. we to wanted you a should back recession, the that's looks that something follow the higher treatment Just patients, on If looking held rates, at mix play like up it up better commercial base revenue losses? on your see negotiated job again rates last could through commercial lower than more out potentially commercial commercial

Javier Rodriguez

way, me Andrew. Let grab that

last a I think it's of very, going recession we one the This at to course difficult compare, had of dynamic is end unique. on. the very different

one, and the people have all And have the still then so furloughed. now to exchanges. exchanges we –number happen so what's how and have we there said, have have know these we many of don't been will COBRA We and as going pick people Joel that we still

whole know furloughed where to be you how will so this look didn't people have when bunch what don't And we the of recession at we as that bit, on to a opposed appears play a dynamic or for last paused out.

to lot was the answer Last stayed dynamic, question? time meaning there not rate no a would been similar And of change in dynamic that to Did inform in your past. change. the it information have had that what the rate I

Andrew Mok

just question then follow-up Okay, great. good. And yes, a that's –

potentially do in follow to therapy? will question the accelerate interest seeing dialysis? patients dialysis, crisis Thanks. up to second, Just on a your you within home any shift pursue uptick are home longer-term think And home this you

Javier Rodriguez

question. asking dynamic, interesting people an that same are It's Yes. many

and slight the but pick catheters that we look don't it are, to for this when little now really then then deemed downtick, is And now but again, weakness, started we saw the placement what long-term you know the that it. in that a essential, implications impacted once it For administration up. it, at so it's so of early

and center matters. home. start In of about, addition, lot our that there's Meaning platform then in a we patients go education really that talked as through

a because the of the we nonessential would Well, that not that we so down have virus. in number a bit saw went and personnel educators lot centers, didn't we spread

home. our patients we had center therefore of moved in So less

time will XX,XXX still which or saw we And the roughly it of patterns we you restart there's back and that add growth. at so we think is patients mark to go pre-COVID we when that home over energy, lot together, a XX% so all

Andrew Mok

Okay, great. Thanks.

Javier Rodriguez

Thank Andrew. you,

Operator

America. Andrew. question is Thank of Kevin next Speakers, you, from our Bank from Kevin?

Kevin Fischbeck

Great. bunch obviously of goes a highlighted you about earlier ask kind guys guess, in of guys a pressures to Thanks. uncertainty year hiring the, on, the economy. announced I and and wanted the big potential including as you year the impact of push

you was trying recession. how purpose additional about of and heading to increase costs essentially understand, taking hiring in that So just large thought the into what the on

Javier Rodriguez

Yes, Kevin. thanks,

you think the you through is clinics to and categories. put of think hiring two G&A have all you caregivers. I the people, One got out that gets when into the spread it then frontline

a which And we hiring was caregivers. announced, so for big what was frontline

you're And opportunity a great so times that what shortage had this a a robust it's had have to economy, and workforce. stable seeing is like sometimes you've that where a in you've nursing

so And you jobs country saw. people the for lot of what want we to fill that's while so We and looking now had really them there's across openings

Kevin Fischbeck

backfilling This anything in about of trying is like add some it open segment kind to Okay. was to growth more that? fuel positions than about or

Javier Rodriguez

Correct.

Kevin Fischbeck

I any clinics hospital Has patients a Okay. And maybe managing your of there? that their COVID with in hospitals way out dialysis in about or any dialysis the the press by themselves guess clinics, volume your there then dynamic needing trying there's more impacted been dialysis. to outpatient hospital lot pushing has clear in direction, business either been

Javier Rodriguez

In from it that geography-to-geography. general, is is short lumpy answer the

some so big well because procedures if census And seen geographies COVID that acute in elective have decrease the hasn't have all where hospitals as area. that the hit in or seen of

areas the you would there net COVID have asking. we an where it what it course are is that's you where quite increase. if model nothing active seen notice is Of all economic But other out, in when that you're

Kevin Fischbeck

about you pressures labor I the revenue you potential kind to opportunity cost the easier number mentioned recession, How come in any mentioned then of? on you of versus can think a And by recession? of a around offsets be headwinds do perfect. guess might that the that's the Yes, you think save recession.

Javier Rodriguez

it? want grab you to Joel, Yeah.

Joel Ackerman

Sure.

those think two in ways lower of so of productivity comes that bucket. And be well. because mitigation pressure, to things expect we we there is would higher you costs, we've out pressures actions there pull about there are benefit, proactively a and the resilient mitigate one turnover, wage got and cost do, which really context as So of could what yes, have that it buckets. other recognizing take occur would things if business think could are training to really pressure levers can the that volume I One take salary, is a business, to so and related second in the mixed is naturally then two could model to some be we the costs we of recession, lower

it a there's to well. proactive as natural component So and a component

Kevin Fischbeck

I that allied reread it's that anything going mean relative growth these without you the headwinds fact normal you're range expect below during you of would range of offsets. mention you still to kind a recession the that recession? in during the maybe to or grow the Would

Joel Ackerman

loss how I to much, would likely it tell. we play recession this say job is too is how just There's know this think terms roll is will look don't about about like. will we furloughs, of job How loss and we much forward much mix. how what versus the when so mitigate to could yet out peak in true early of of that just

So I of much to how tell it's be mitigate we'd a able standpoint. cost early to from too would say that

Kevin Fischbeck

Right. Great. Thanks.

Operator

UBS. is Kevin. from next well, as Speakers, you thank question And Mayo Whit our of

Whit Mayo

hospitals some you growth afternoon. Hey, driving about follow the a Kevin's with years. recent has guys but the little number the associated coverage bit has thanks. hospital been many I that's factors wanted a those question. in years. you that you for on don't I to how I Can changed, talk contract with that good double-digits remarkable had hospitals? business you mean, that just Hey, have of of and revenue some maybe up just provide think

Javier Rodriguez

business the tough general you of a color little I'll very In and see. the meaning give demands to Sure. and because cyclicality, hospitals and business, is try a up of the that down XX/X.

business it very to So hard is a enter.

can see is patient. having and the take And care value this where you team network hospital platform shines the actually and really the to of our pools place having of the the a so where float have the

course a the and of value price that So value lot seen what our that in hospitals would and included of is be service. the we've proposition

seen And that way. in we've grow so a platform significant

Whit Mayo

Okay.

the mean, and business? I I and hospitals number So there's as think organic mean, way growing XXX look XX%, you're I that of about to the is that growth that revenue, at of the

Javier Rodriguez

or you and disclose? is down not want to can we Joe, break the something revenue that price the

Joel Ackerman

it's but be would to a That we been disclose, it core it, lower Yes. something Whit, Sure. tends I than margin it faster the has very well. although as growing business business, and a not business small add

Whit Mayo

the be versus is had showing uptick and your in and lot what a economics progressive, Parsabiv and may another Sensipar, much today? then on the calcimimetics two ASP us Okay. a question over just you data's I Sensipar of can higher think split I is the use the between refresh

Joel Ackerman

don't that I we've out broken specifically. split think

our you ago oral declines at we've last year how how spike know seen that calcimimetics the As starting then pricing as and ASP it's by and driven the between years in in largely gap profitability and look two declines. year, this the and you

I the as as coming period going-forward, the going of end, think about to profitability we obviously is is calcimimetics think away. an tobacco it

reimburse is really the how us it I and other CMS between important for will the oral and question bundling will the issue by the the think how some patient methodology. drive or is drug, XXXX that's what And is IV and the economics. genetic and what work does us by

Javier Rodriguez

that of And might much the now isn't preference, a and so that a expensive. day and end pick oral there the a physicians lot the it know that IV or reminder more whether we the have at on is quick Whit, IV is they data right

much a are to price. physicians their clinical or equivalent fiduciary So clinically responsibility the do to appears equivalent cheaper be what's at feeling

Whit Mayo

last X the this COVID Stage And impact the you what And one think to on and back or Okay. be some at comments looking That's population. mentioned, will volumes just Stage on patient to maybe Javier CKD of the know, trying just what just one helpful. impact about I on you're population. thinking ESRD don't X maybe more on of a could impact there's going you little patients about elaborate the to obviously, your if how the census be COVID-XX kind be from longer-term can bit today, on an of and

Javier Rodriguez

to try I and in a And Sure. it's can there's imagine, of can but game. as as lot helpful Whit, be pretty I'll you early as just dynamics the

on just So duration the severity first sorts to another to another things, argument that And so and an the would we dialysis is optimist here, you did be and that the the the on have okay but and disclosure the of and course virus. have magnitude? wave at, and how depends probably be you those wave patients isn't the if all of biggest for to impact of all start it CKD if assume look have there to actually if been going virus and what much

is volumes that something virus is, have is if had to were too do increase to some that damage could to the at people you early going that damage? look wouldn't did tell. And actually Two so kidney

a we're put the because be is to into preferred And therapy is categories, of while that of coming are the course replacement now living donors. and transplant. transplant would other of donors infection. right what side, risk the were living And donors active if kidney a seeing the On the you deceased going the the down virus there's

volume would dialysis be of in some would those patients. potential there so that increase And numbers changes

a eye close the of going it. and some and how on we're are those keeping So don't out know it'll on, takes all we that are so net gives

Whit Mayo

helpful. that's Thanks. Well,

Javier Rodriguez

you. Thank

Operator

Chickering sir. you, from next Deutsche Whit. question is Pito Bank, our of Thank Speakers,

Pito Chickering

productivity questions. sounds in taking home for quarter. guys. year? shift last Can few here, It Thanks to it including the it Good the of wasn't about strong A my or productivity from talk was centers a drivers PD you ones therapies. like these for afternoon was consolidation,

productivity? factors increased other led to what So

Joel Ackerman

Yes, below and specific just our fact largest spend focusing manage labor to is nothing that long-term, we of with highlight need deal I time the order would increases are RPT over item a something to other the it's lot in our it's than, well something inflation. obviously on it's nothing, we cost

just that tackling we and to blocking just excel at. it's continue So

Pito Chickering

people on COBRA Okay. benefits COBRA the the any been changes terms recession? in From to benefits, stay length prior there have of versus COBRA could

Javier Rodriguez

I XX any is our disability. months add because COBRA that understanding but My expansion, of population know of can don't patient

So there's a disability extension.

And know COVID essence, patient have coverage so population if exception. months. XX there's our a for not do I in could

Pito Chickering

Medicare there is adopting a into macro are to do point? a impact sort Advantage can pocket who out of and at you looking move more this add perspective of Okay. of a lot your what's at point from or uncertainty, think to this patients XXXX Medicare Advantage, people we can the of provide the that costs reduce uncertainty as sort fuel

Javier Rodriguez

why it. is It and people used your individual personal at of of It have lot a restrictions. know. MA pocket question it additional there's don't just different benefits. Medicare Well, because doesn't you day reason the views in would general, and to it speculation on almost it in decision. an end basically is very why reason unlimited the has the the stay max of people And the we because is it But a which if and will, some out has a has network, pick they're would because is

have out If pocket of really in you your expenses. coverage, secondary helps you it

The we've that, in Medicare so we because in population to is likely we population continue have enroll what past wasn't that don't And population. that only of this conclude anything the only to is than that the general Advantage. so we say said would different our why any would the other reason and allowed is to mirror lead information us are

pre are ones that failing. the only enrolled kidneys people are that the So there their

have with that. of in nervous, be going Will enrollment. so or more sit open answer website? they And Will we more fatigue? in there's are any they is what don't And And be we a fall? with know someone? patients Will be the the normal be us to situation? now Is will able the short still environment virus the is question to more the a

So the would one I'm pick you just giving another. versus data how of someone

Pito Chickering

XQ. last these through Thanks which you'd in there's there Is through perspective of And to bunch then, much be that value costs, much. we a for should XQ. a modeling question thinking here we'll during add about so cost can they how just Great. being layered dollar walk some way from so any roll new

Joel Ackerman

Yes.

with, it whole got We're we're of past cetera. predict pandemic and second we've to what the past we assumed length as is around if uncertainty that a We've a really or to how we've at moving the things begins pace think peak. So range about Pito, a the and pieces at cetera, played I of we would DNA also the et in tough we note et peak. scenarios But again, generally taper. lot there various wave. severity whole are modeled – the around pandemic, modeled haven't a of that kind the bunch of

about you as wanted and just point out. just to our guidance we're I that with, what So, comfortable think

for will $XX In million to $XX are range. number terms specific numbers, thinking of the million we somewhere the April be in

I range. think to how May down. reasonable it it's And be will then on start pandemic out, again, in same expect we'd the expect to plays depending the tapering

Pito Chickering

event back that will doing consider we June quarter and you that began of you're at government third share when better, at not into one, your the this guys you point, more actually last or it's so apologize I And repurchases guys taking of point, any do Thanks just buying point. peak Like share are you a granted again, this if this at as that, you're point viewing sort the the past because much. think repurchases. things on, Okay. of shares walk and

Joel Ackerman

Yes.

don't date, So you one. can't we a give have because I

cautious with deployment. We are certainly be capital going to

Given uncertainty. all the

the level I likely a in think to we're liquidity than we past. of keep higher have

of how So might hard going forward to when we're that repurchases caution to share some – relax. and about think going when say

Pito Chickering

Great. quarter. Thanks guys. Great much Alright. so

Javier Rodriguez

Thank you.

Operator

you thank well, as Pito. And

JPMorgan. Our from Gary next Taylor with question Gary? is

Gary Taylor

Hi. Good afternoon.

Just a few.

last on clarify $XX is was million Joel, it's to just expense – to operating you said million was were expense additional you for that plausible? were May response, your additional Just you that and when and saying $XX April that

Joel Ackerman

that operating would related Yes, would expect be we that incremental COVID. the expense to

Gary Taylor

two the the return TBD on that's to Or billion XXX decision how billion XX CARES decision the would funds? Act determination a And sort of you. made is provider to distributed. that things develop? the first that been about is depending limit Thank Have between you full the funding,

Javier Rodriguez

if which that intention they net. their And ways. the might head. safety aggregating be the economic in in of money, that CARES different correct for that the I’m in everybody lost the the that open. damage I but were keep getting people Joel, were decided the here government, not, I’m so be because those from pools have Act how needed details they that used was they fund severe I we our And funds doors to because are it of, relief wrong might I can a perspective, me my interpret is were can But be

the so And you by have you, there cited that the gave tell million expense while And numbers you big we way, increases. Joel monthly. from numbers $XX $XX it’s that million, that can the the is

So we the to so We don’t that going have money, big of had intention that was expenses. we’re think that get back.

Gary Taylor

I flipped a wonder higher I income income in by out the anything little was to the expense usual those? million a just And if those both on, couple I $X million $XX unusual, a other income then negative know interest change, statement. on numbers quarter, equity Okay. in the Joel, investment pull than looked down almost to this flip than would you comment saw

Joel Ackerman

Yes.

component but Asia and – turns out. relates On details flow income. of is It equity moves that another through a equity and it on I used income, revenue joint it no this it the offset million turns this that the to deconsolidation into level. there’s into it the venture the called and X/X/XXXX, equity that FX moves the OI $XX of the EPS, take down It’s be in There of to into the our starting it, it costs impact few biggest that at the NCI and component is of clinics, will XX-Q. was what to it does got income it then on an of

call big there. I those So are things the out

FX loss international associated million. different On that the was the with was business $X about other there a income,

So the out. things are big I those call

Gary Taylor

Thank you.

Operator

well, And as you thank Gary.

is from Sir? Blair. Matt of question Our William next

Matt Larew

taking was you’ve afternoon. grant it. I keeping I time the it have April the were Actually for you ask think had dollars, announced contemplating Hi, dollars. want receipt good CARES one on Thanks the questions. of to the XX, more you, said just Obviously

a was today. or or that by to this decision from proactive curious, the guidance from management, April Board your regulation understand to decision Just there influenced additional was the XX just and government trying

Javier Rodriguez

including to a the labor to say Yes. which to many is spirit COVID, things the of which came government, high ladder, very It was the the to could and be management. described additional the related the other totally which expenses on PT, good on And call. and that a proactive of which We all decision overtime reimburse Board is that commended. have we by was again make case needs we’ve you the side,

like said, we’ve this. Just had anything never

distribute going wellbeing care that money make the so And to to of. of has we’re taken Americans sure

the need then that in are to And where we we time Well, that safety we’ll reconcile. We don’t know spot net. reconcile. we’re not

want we to so be proactive. And

back give government that that people the visibility. possible and to them as really the gets need So be soon people can redeployed Those money can that it. as money

So it’s the made than really about we the decision. spirit,

Matt Larew

then fair this sort this comment enough that you you enough. you’re DaVita Thanks, to if for and an what morning, just curious you Javier. giving Venture targets group of And any about not might on an just give just wanting it. Yes, answer actually and morning opportunity to have

Javier Rodriguez

Yes. Thank you, Matt.

great DaVita out there is And And Group kinds of about entrepreneurs you? excited partner really this coming now so lot have with We’re that saying, a things. demand. basically out with we generating Venture, we can of they’re Venture all and and really are

company diagnostic as means being to and the markets care of to partner expanding to want so partners full from we’re company a technologies capital we talked And from kidney in a we to need that choice. going we’re and that areas certain And about be being other dialysis to pharmaceuticals transplant.

to excited we out it. so there about and be we’re really And want

Joel Ackerman

about And millions. The you context is, to think if all, change thing there flow, the these thinking number digit small. going you I’d likely be not the it’s these of add the free single at cash our are as think so magnitude we’re only investments, in relatively to in of about it

Matt Larew

Okay. Thank you.

Javier Rodriguez

Thank you.

Operator

you, Matt. Thank

from Clive Ma’am? Bernstein. Lisa of question Our is next

Lisa Clive

Hi.

likely even follow-up get legislation XX from question pandemic could that that’s and the Washington main to of my passed? almost Just busy is months, But COVID-XX with in have is all question more COBRA sort focus. COVID-XX Washington, a think in in go you clearly, on XX comments live Do D.C. XXX% that paying they any And patients do point because is month premium act the at on of patient’s makes after you out COBRA, today? disability extension, it isn’t that how the though XXX%. there drop bill understanding of the

So that is COBRA that assume on fair the it premium only CAF stay big ones are who have ones support? the to

Javier Rodriguez

grab them. I you all, exceeded you’ve Lisa, don’t know know technical that of And of if my me knowledge first piece. Let Joel, COBRA.

Lisa Clive

way the of guess I it, other because… asking

Joel Ackerman

do has I not answer. the

Lisa Clive

more up COBRA. your the end well, understand, guess, way long unemployment a will because asking it’s the given I’m it. patients up COBRA country, a if I part that actually do it, lot Okay. of trying they if on other we’ve to becomes much across seeing how – of we the numbers been bigger just on end

into insights be do you if helpful. have So that, that would any

Javier Rodriguez

do not. Yes, I

do get I so but that. but back any on insights And we not to you, have – more could

part Sorry. question, second you your a had But Lisa. of

Lisa Clive

act, patients whether Washington in just the discussions around given general that. any COVID-XX also the just has On impact and

Javier Rodriguez

with power have crisis. for we ask able will with fashion will but areas, of were helped, because in I because really value to have How we we that cohorting integrated centers. the sites a up hands if care connecting had see see obviously, our how that been the hopeful just this were other and having you care I’ll look lot able smaller courage COVID at DaVita childcare and we as makers were general, care of saw stand Well, that deck and policy We of that an the I’m PPE to this not all the things. they of organized anything, and see players. example, and teammates say in take did to obviously how of in on other the organized not

around capabilities the also And that connect sees of is and useful. so and we’re the and sites resource organization hopeful technology country the system care the if patients. that the benefit the And government quite could the you

see So we will post-COVID.

Lisa Clive

great. Thanks. Okay,

Javier Rodriguez

Thank you.

Operator

Lisa. you, Thank

Justin Our Sir? next question is of Lake Research. Wolfe from

Justin Lake

Thanks got a back more letting few in. I’ve here. me jump for

gave a of there walked Peter’s don’t costs remarks answer and May. But kind understand not in April costs number. First insignificant question I on our were new in us specific your your through, just wanted to costs. follow-up, with Joel, I to associated give to to and you you you want COVID prepared

mentioned the then and talked reductions. other about You $XX from also sequestration you million benefit cost

I’m you in together, looks curious trying to about x you when I’m think reductions. from February it’s potentially headwind So a bundle other where as those it of like relative But cost were kind just that to you net or gave COVID? your kind the the it. incremental guide additional think of can impacts? Is the those about in offset an updated costs should or original headwind of How mind we you

Javier Rodriguez

example start the costs you simple is, performance add QX core COVID there that you in natural of So without strong a absorbing a about in back costs comfortable come if we are we in like – with the the kind offset is then headwind and We T&E our feel that feel it with a some that. wind changing way and sequestration, I’m like with that net-net, up and potential guidance. down. then of we’re thinking

to So million cost suspension of other get some and sequestration if guidance, from do maintaining the about want you the $XX-ish we by how to negative offsets. strong offset COVID think our QX the

Justin Lake

expectations QX I pin when guide you terms for your how can better the versus you internal of the year? down And was set much in

Javier Rodriguez

that. cannot down No, me pin on you

Justin Lake

just that amounted and reported to – California? to add Jersey should anything new should what wanted consider doing know in or out in and I we I company, Okay. for Then there different But just you in dialysis you those much. and that that was if in – of what subpoenas ask got there, of the were business of the this in filed, they there income guess were years your XX-Q investigation there. couple cost New new that historically a we really is XX

Javier Rodriguez

just want to the would through and on and agreement. No. I We’ve been law course And very, lead our very we and of continue years compliance. corporate spirit seriously. the of integrity been for What show five add taken we have to it compliance is, of we

they’re can get every ways, we’re including they so and with because we that. disappointed you But see come we time I doing get through every personally, tell very, course, on many frustrated hope time satisfied them basis. am we daily once talk what very different them. inquiries. that And compliance you can they a And that we’re live And of I investigations,

to else add to nothing Justin. that, So

Justin Lake

And of a questions numbers couple just here. Understood. then

significant I’m that’s like of curious a a not commercial mentioned a that your tell quarter, two-thirds, number is can just You round patients coverage just there, anything have tied share, portion to it that you even us? if employment. you could half

Javier Rodriguez

I XX%, in are who kind there so are Yes, that. COBRA and two numbers patients the the really of components to exchanges, the XX% There’s on to believe.

Justin Lake

Okay.

to XX% So are tied XX% to employment?

Javier Rodriguez

Right.

Justin Lake

you and think COBRA us the was in say of the terms number then quarter give of operating to day And okay. a would exchanges, you tied results? extra the quarter, benefit the for you can Or or first the – in the what what

Javier Rodriguez

I’ll No, you hold we up. hang before number on, that get

Justin Lake

being gave, it’s And XXX, the think think that could we then zero still to Okay. going do an lower I just Should be XX% about be just then you impact talked that about – originally and previous, to there going XX% to California or AB like lower. you be than there? now know you

Javier Rodriguez

due you there’s what that of an case. basically stayed tell I the the you so that terms think extension COVID, number, is what As late to opposed and I give means is, in injunction a can to

until case goes fourth an much unlikely of and the impact XXXX. so depending then going timing to because to of And how the quarter, the I am unless, of have QX

and same. The still shifted the of the outcome course timing number’s has So unknown. is the

Justin Lake

payer with quarter of said ended Okay. there in any you us mix? commercial what down. Javier, And the think last one, you quarter, terms mix I of the kind give was you or in Can specificity

Javier Rodriguez

published I believe, we it.

it, say I Joel? So can right,

Joel Ackerman

I believe correct. not that is

there movement significant basis, in out nothing – on there call was was think the nothing it it there. quarterly it's the if we for Just important, the but important quarter. We'll

Justin Lake

range, still give So the take. XX% in or

Joel Ackerman

Yes.

Justin Lake

a all Thanks guys. I the lot questions. appreciate

Javier Rodriguez

Thank you, Justin.

Operator

Justin. you, Thank

of next Jeff Capital Sir? is Gates from Management. Our Gates question

Jeff Gates

a couple Yes, of questions.

had best an I'm signs in And if the you've volume I any there's, of in uptick volume First, was quarters. few just a see noticed volume quarter the and wondering you de what is might this number to do you one? be you environment to going to be two, that able novos. won't number to And force driving many or those less as do know

So will your capital at budget come all? down

Javier Rodriguez

want You to Joel. grab,

Joel Ackerman

had at ready call reasonable anything undertaking of out no I declare Yes, the we're tiny of say sure. doubt. on to to was the a specific certainly quarter, up. NAG We quarter. the wouldn't bit NAG I been end yet. efforts there we've – a some victory wouldn't of I don't noise And drive back

nothing there. to out call So

to wait in I home I not and happens de there accelerated is, just de and possibly going our But that that certainly budget COVID see if you I of out in comes think and overall side. down. terms bring is In the to novos, think on we're volumes see the think what is but and industry what decline that headwind happens that in de of a novos would would capital novos, possibility there NAG to home, a potential shift the industry an

Jeff Gates

have constructing planned? trouble any centers having you're not So you that

Joel Ackerman

come down I'd spend lasts, XXXX, depending our shut there. how long Well, might the for a states capital various down bit say see we on

how Just long done last. things right on that depend now, but we can't some that'll projects physically get

Javier Rodriguez

up impact million of saying somewhere that one $XX million the well, questions? finish any is in range. to other the $XX let me by in day Just Jeff,

Operator

And Thank Jeff. speakers, any yes questions now. of have as don't queue we you on

Javier Rodriguez

and our The for in The just that literally all seen co-hearted how put I've let Okay. of a us proud days focus beautiful, the us helping the up and sites our over that don't wrap The beautiful, our dedication and highlighted The and hard are of this a three, been control of in think balance critical to a is care couple has beautiful. sheet take importance Number competitors team. proven part. and of two, me the beauty time aside Point patients. cost platform, beautiful this to beautiful, do beautiful, of the the that words. the of last connecting thank together record is we one, convey we together I lastly, our it been Number in closing our I crisis. the our care has model to government to Well do and philosophically clinical remarks. virus. our I happy I fact strong infection just of and with words am if and know can platform team management. XX have and been as you through track do into work business put expertise It's resilience has come everything that And country our financially, support.

for you thank your and we'll next So again interest in our company talk quarter.

Operator

Ladies concludes call. speakers. first Thank gentlemen, and you, XXXX earnings that quarter DaVita’s

now great a You may participating have day. Thank for disconnect. you and