<PAGE>
As filed with the Securities and Exchange Commission on
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
TO
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-4034
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Total Renal Care, Inc.
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
Total Renal Care, Inc.
21250 Hawthorne Boulevard, Suite 800
Torrance, California 90503-5517
REQUIRED INFORMATION
1. Financial statements filed as a part of this annual report: Report
of PricewaterhouseCoopers LLP, independent accountants, Audited Statements
of Net Assets Available for Benefits, With Fund Information as of December
31, 1999 and 1998, Audited Statements of Changes in Net Assets Available
for Benefits, With Fund Information for the Years Ended December 31, 1999
and 1998, and Notes to Financial Statements for the Years Ended December
31, 1999 and 1998, and Notes to Financial Statements for the Years Ended
December 31, 1999 and 1998.
2. Exhibit filed as a part of this annual report: Exhibit 23- Consent
of PricewaterhouseCoopers LLP, independent accountants.
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOTAL RENAL CARE, INC.
RETIREMENT SAVINGS PLAN
Date: June 30, 2000 By: /s/ Marie Ficarella
------------------------
Marie Ficarella, Director
of Human Resources and Designated
Representative of the Plan
Administrator
2
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Index
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-12
Supplemental Schedule:
Schedule I - Schedule of Assets Held for Investment Purposes at End of Year 13-14
Schedule II - Schedule of Nonexempt Transactions 15
</TABLE>
<PAGE>
Report of Independent Accountants
To the Participants and Administrator
of the Total Renal Care, Inc. Retirement Savings Plan
In our opinion, the accompanying statement of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the Total Renal Care, Inc. Retirement Savings Plan (the
"Plan") at December 31, 1999 and 1998, and the changes in net assets
available for benefits for the years then ended in conformity with
accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with auditing standards generally accepted in the United States which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes at end of year and nonexempt transactions are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
As discussed in Note 7, nonexempt transactions occurred during 1999.
Management's evaluation of these matters and its plans for corrective
actions are also described in Note 7.
As discussed in Note 10, during 1999 and 1998, the assets of two plans were
merged into the Plan and participants became eligible to participate in the
Plan subject to the provisions of the Plan agreement.
June 15, 2000
1
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Financial Statements and
Supplemental Schedule
December 31, 1999 and 1998
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Statement of Net Assets Available for Benefits
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31,
1999 1998
<S> <C> <C>
Assets
Investments, at fair value $ 55,928,125 $ 41,032,885
Receivables:
Participant notes 2,289,995 1,737,316
------------- -------------
Net assets available for benefits $ 58,218,120 $ 42,770,201
------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 907,218 $ 575,876
Net appreciation in fair value of investments 4,333,085 2,779,310
------------- -------------
5,240,303 3,355,186
------------- -------------
Contributions:
Employer 57,894 23,519
Employee 13,944,516 8,210,124
------------- -------------
14,002,410 8,233,643
Transfer from affiliated plan 67,282 -
------------- -------------
Total additions 19,309,995 11,588,829
Deductions from net assets attributed to:
Benefit payments 4,189,585 1,451,040
Transaction charge 75,932 30,093
Participant notes receivable terminated
due to withdrawal of participant 128,275 58,252
------------- -------------
Total deductions 4,393,792 1,539,385
Change in forfeiture reserve, net 14,031 2,815
------------- -------------
Net increase prior to plan merger 14,930,234 10,052,259
Transfer of assets due to plan merger 517,685 16,501,860
------------- -------------
Net increase 15,447,919 26,554,119
Net assets available for benefits at beginning of year 42,770,201 16,216,082
------------- -------------
Net assets available for benefits at end of year $ 58,218,120 $ 42,770,201
------------- -------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Description of Plan
The following description of the Total Renal Care, Inc. Retirement
Savings Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
General
The Plan is a defined contribution plan established effective October 1,
1994 and most recently amended effective December 1, 1998. Effective July
1, 1998, current employees of Total Renal Care Holdings, Inc. (the
"Company") became eligible to participate immediately. Employees hired
after July 1, 1998 become eligible to participate upon completing six
months of service with 500 hours of service and attaining the age of 21.
Prior to July 1, 1998, employees became eligible to participate upon
completing one year of service with 1,000 hours of service. The Plan is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Contributions
Effective July 1, 1998, participants may contribute an amount equal to
not less than 1 percent nor more than 20 percent of their compensation
for the contribution period. Prior to July 1, 1998, participants could
contribute an amount equal to not less than 1 percent nor more than 15
percent of their compensation for the contribution period. Participants
direct the investment of their contributions into various investment
options offered by the Plan. The Plan currently offers a general account,
12 pooled separate accounts and a Company common stock as investment
options for participants. Employee contributions are recorded in the
period during which the Company makes payroll deductions from the
participant's earnings.
The Company will make a matching contribution, where governed by Hawaii
union contracts, in an amount equal to $.50 for each $1.00 contributed by
an employee, up to a maximum of 5 percent of the participant's
compensation. The Company may also make discretionary non-elective
contributions and profit sharing contributions. There were no
discretionary non-elective contributions or profit sharing contributions
made in 1999 or 1998. Matching Company contributions are recorded
annually. Discretionary non-elective contributions and profit sharing
contributions, if any, are recorded annually.
4
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
Participant Accounts
Each participant's account is credited with the participant's
contribution and allocation of the Company's contribution and plan
earnings. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
Vesting
Participants are immediately vested in their voluntary contributions plus
actual earnings thereon. For participants hired after July 1, 1998, the
balance of vesting in the participants' accounts is based on years of
service. A participant becomes 25 percent vested after two years of
service, 50 percent vested after three years of service, 75 percent
vested after four years of service and 100 percent vested after five
years of service. However, if an active participant dies prior to
attaining the normal retirement age, the participant's account becomes
100 percent vested. Prior to July 1, 1998, all participants became 20
percent vested after one year of service, 40 percent vested after two
years of service, 60 percent vested after three years of service, 80
percent vested after four years of service and 100 percent vested after
five years of service. Employees hired before July 1, 1998 became fully
vested in their account balance.
Payment of Benefits
Effective July 1, 1998, on termination of service, a participant may
elect to receive either a lump-sum amount equal to the value of the
vested portion of his or her account installment payments, or a
distribution in the form of an annuity. Participants with an account
balance of less than $5,000 must elect a lump sum payment option. Prior
to July 1, 1998 participants could elect to receive either a lump sum
amount equal to the value of his or her account, a distribution in the
form of an annuity or a combination of both. Distributions are subject to
the applicable provisions of the Plan agreement. Benefit claims are
recorded as expenses when they have been approved for payment and paid by
the Plan.
Participant Notes Receivable
Participants may borrow up to a maximum of $50,000 or 50 percent of the
vested portion of his or her account balance, whichever is less. Loans
are treated as a transfer to/from the investment fund from/to Participant
Notes Receivable. A loan is secured by the balance in the participant's
account and bears interest at a rate commensurate with market rates for
similar loans, as defined (8.75% to 10.00% for the years ended December
31, 1999 and 1998).
5
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
2. Summary of Accounting Policies
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of
accounting. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and changes therein. Actual results could differ from those
estimates.
Amounts shown by investment fund option on the statement of net assets
available for benefits as of December 31, 1998 and the statement of
changes in net assets available for benefits for the year ended December
31, 1998 have been reclassified to be shown in total to conform to the
current year presentation in order to adopt AICPA Statement of Position
99-3, "Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters."
Investment Valuation
Investments in pooled separate accounts are recorded at fair value, as
determined by the unit value reported by Connecticut General Life
Insurance Company ("CG Life"). Investments in the general account are
non-fully benefit responsive and are recorded at fair value. Participant
notes receivable are valued at cost which approximates fair value. The
Company common stock is valued at its quoted market price.
6
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
3. Investments
Investments that represent 5 percent or more of the Plan's net assets are
separately identified below.
<TABLE>
<CAPTION>
December 31,
1999 1998
<S> <C> <C>
CIGNA Charter Guaranteed Long-Term Account $ 13,909,934 $ 11,974,617
interest rates, 5.75%; 5.95%
CIGNA Charter Large Company Stock - Growth Fund 7,126,493 4,736,775
units, 404,455; 346,255
CIGNA Charter Large Company Stock - Growth II Fund 10,472,976 6,305,605
units, 712,447; 594,308
CIGNA Charter Small Company Stock - Growth Fund 2,978,236 N/A
units, 191,280; N/A
CIGNA Charter Foreign Stock II Fund 3,943,064 2,561,882
units, 293,165; 246,809
CIGNA Lifetime40 Fund 7,466,777 5,720,653
units, 584,712; 530,181
Total Renal Care Holdings, Inc. Common Stock N/A 4,343,015
shares, N/A; 146,922
</TABLE>
7
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
Investment Performance
During 1999 and 1998, the Plan's investments (including interest and
gains and losses on investments bought and sold, as well as held during
the year) appreciated in value by $5,240,303 and $3,355,186,
respectively, as follows:
<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998
<S> <C> <C>
General Account:
CIGNA Charter Guaranteed Long-Term Account $ 707,114 $ 484,535
Pooled Separate Accounts:
CIGNA Charter Large Company Stock Fund 297,858 81,077
CIGNA Charter Large Company Stock - Growth Fund 1,538,883 412,505
CIGNA Charter Large Company Stock - Growth II Fund 2,738,641 230,311
CIGNA Charter Large Company Stock - Value I Fund 44,741 3,626
CIGNA Charter Small Company Stock - Growth Fund 1,053,779 (17,004)
CIGNA Charter Small Company Stock - Value I Fund 52,658 4,971
CIGNA Charter Foreign Stock II Fund 871,583 (49,194)
CIGNA Fidelity Advisor Balanced Fund - 414,640
CIGNA American Century - Twentieth Century
Ultra Fund - 1,121,842
CIGNA Warburg Pincus Advisor International
Equity Fund - 232,559
CIGNA Lifetime20 Fund 219,846 11,413
CIGNA Lifetime30 Fund 225,867 18,066
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CIGNA Lifetime40 Fund 1,129,447 127,315
CIGNA Lifetime50 Fund 100,813 15,420
CIGNA Lifetime60 Fund 7,771 3,277
------------ ------------
8,281,887 2,610,824
Company Stock:
Total Renal Care Holdings, Inc. Common Stock (3,948,802) 168,486
------------ ------------
Participant Notes Receivable 200,104 91,341
------------ ------------
Net appreciation $ 5,240,303 $ 3,355,186
------------ ------------
</TABLE>
9
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
4. Investment Contract with Insurance Company
The Plan participates in a contract with CG Life via an investment in the
CIGNA Charter Guaranteed Long-Term Account. CG Life commingles the assets
of the CIGNA Charter Guaranteed Long-Term Account with other assets. For
the Plan's investment in the CIGNA Charter Guaranteed Long-Term Account
the Plan is credited with interest at the rate specified in the contract
which was 5.75% and ranged from 6.05% to 5.95% for the years ended
December 31, 1999 and 1998, respectively, net of asset charges. CG Life
prospectively guaranteed the interest rates credited for the CIGNA
Charter Guaranteed Long-Term Account for six months. As discussed in Note
2, the CIGNA Charter Guaranteed Long-Term Account is included in the
financial statements at fair value which, principally because of the
periodic rate reset process, approximates contract value.
5. Related-Party Transactions
Plan assets include investments in funds managed by CG Life, a wholly
owned division of CIGNA. CIGNA is the Plan's trustee and as such,
transactions with the trustee qualify as party-in-interest transactions.
Personnel and facilities of the Company have been used to perform
administrative functions for the Plan at no charge to the Plan. In
addition, the Plan holds shares of Total Renal Care Holdings, Inc., the
Plan Sponsor, which also qualifies as a party-in-interest.
6. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their
accounts.
7. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated November 25, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code ("IRC"). The Plan has been amended since receiving the determination
letter, however, the Plan's administrator believes that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
10
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
Management has determined that nonexempt transactions occurred during
1999. These violations involved the submission of employee contributions
to the Plan later than the 15/th/ business day of the month following the
month of being withheld from compensation. Management is pursuing the
necessary corrective actions to ensure the continued tax-qualified status
of the Plan.
11
<PAGE>
Total Renal Care, Inc.
Retirement Savings Plan
Notes to Financial Statements
--------------------------------------------------------------------------------
8. Reconciliation of Plan Financial Statements to the Form 5500
Certain balances included on Schedule H (Part I and II) of the Annual
Return/Report of Employee Benefit Plan (the "Form 5500") have been
reclassified for purposes of presentation in these financial statements
to provide additional disclosure.
9. Transfer from Affiliated Plan
During 1999, loan principal was transferred to the Plan from the Western
Nephrology and Metabolic Bone Disease, P.C. Employee Profit Sharing Plan.
10. Plan Mergers
Effective September 1, 1998, assets of the Renal Treatment Center 401(k)
Plan were merged into the Plan and participants became eligible to
participate in the Plan subject to the provision of the Plan agreement.
Effective March 17, 1999, assets of the Western Nephrology and Metabolic
Bone Disease, P.C. Employee Profit Sharing Plan were merged into the Plan
and participants became eligible to participate in the Plan subject to
the provisions of the Plan agreement.
11. Forfeitures
The net change in forfeiture reserve represents the net change in the
available forfeiture reserve balance from the prior year plus the current
year forfeitures generated. Forfeitures result from nonvested benefit
payments remaining in the Plan for all terminated employees. Upon
reaching the break-in-service requirement, as defined in the Plan
agreement, forfeitures generated are added to the forfeiture reserve
balance. The forfeiture reserve of $259,820 and $87,069 at December 31,
1999 and 1998, respectively, is included in the CIGNA Charter Guaranteed
Long-Term Account and is available to offset contributions or to pay Plan
expenses, which would be otherwise payable by the Company, in accordance
with the Plan agreement. In 1999, Company cash contributions were offset
by $985 from forfeited nonvested accounts.
12. Subsequent Event
Subsequent to the Plan year-end the Company changed its name to DaVita.
12
<PAGE>
<TABLE>
<CAPTION>
Total Renal Care, Inc. Supplemental Schedule
Retirement Savings Plan Schedule I
Schedule H (Part IV) Form 5500 - Schedule of Assets Held for Investment Purposes
at End of Year
December 31, 1999
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(c)
(b) Description of investment including
Identity of Issue, borrower, maturity date, rate of interest, (d) (e)
(a) lessor, or similar party collateral, par or maturity value Cost Current value
* Connecticut General Life CIGNA Charter Guaranteed N/A** $ 13,909,934
Insurance Company Long-Term Account
* Connecticut General Life CIGNA Charter Large Company N/A** 2,653,115
Insurance Company Stock Fund
* Connecticut General Life CIGNA Charter Large Company N/A** 7,126,493
Insurance Company Stock - Growth Fund
* Connecticut General Life CIGNA Charter Large Company N/A** 10,472,976
Insurance Company Stock - Growth II Fund
* Connecticut General Life CIGNA Charter Large Company N/A** 567,444
Insurance Company Stock - Value I Fund
* Connecticut General Life CIGNA Charter Small Company N/A** 2,978,236
Insurance Company Stock - Growth Fund
* Connecticut General Life CIGNA Charter Small Company N/A** 468,768
Insurance Company Stock - Value I Fund
* Connecticut General Life CIGNA Charter Foreign Stock II Fund N/A** 3,943,064
Insurance Company
</TABLE>
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
13
<PAGE>
<TABLE>
<CAPTION>
Total Renal Care, Inc. Supplemental Schedule
Retirement Savings Plan Schedule I
Schedule H (Part IV) Form 5500 - Schedule of Assets Held for Investment Purposes
at End of Year
December 31, 1999 (continued)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(c)
(b) Description of investment including
Identity of Issue, borrower, maturity date, rate of interest, (d) (e)
(a) lessor, or similar party collateral, par or maturity value Cost Current value
* Connecticut General Life CIGNA Lifetime20 Fund N/A** $ 1,228,897
Insurance Company
* Connecticut General Life CIGNA Lifetime30 Fund N/A** 1,439,337
Insurance Company
* Connecticut General Life CIGNA Lifetime40 Fund N/A** 7,466,777
Insurance Company
* Connecticut General Life CIGNA Lifetime50 Fund N/A** 935,962
Insurance Company
* Connecticut General Life CIGNA Lifetime60 Fund N/A** 143,964
Insurance Company
* National Financial Total Renal Care Holdings, Inc. N/A** 2,576,561
Services Corporation Common Stock
* Plan Participants Participant Notes Receivable N/A** 2,289,995
* Connecticut General Life Cash Equivalents (CIGNA Charter N/A** 16,597
Insurance Company Guaranteed Short-Term Account)
</TABLE>
* Indicates an identified person known to be a party-in-interest to the Plan.
** Cost information has been omitted for participant directed investments.
14
<PAGE>
Total Renal Care, Inc. Supplemental Schedule
Retirement Savings Plan Schedule II
Schedule G (Part III) Form 5500 - Schedule of Nonexempt Transactions
Year Ended December 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(g)
(c) Expenses (j)
(b) Description of incurred Net gain
Relationship transactions including in (i) or (loss)
(a) to plan, employer, maturity date, rate of (d) (e) (f) connection (h) Current on
Identity of or other party-in- interest, collateral, par Purchase Selling Lease with Cost of value of each
party involved interest or maturity value price price rental transaction asset asset transaction
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Company Employer Failure to remit $ 428,475 N/A N/A N/A $ 428,475 $ 428,475 -*
employee
contributions to
the trust
on a timely basis
Company Employer Failure to remit 444,492 N/A N/A N/A 444,492 444,492 -*
employee
contributions to
the trust
on a timely basis
</TABLE>
* Department of Labor Reg. 2510.3-102 requires that employee contributions be
submitted to the Plan no later than 15 business days following the end of the
month in which amounts were withheld from compensation. Failure to remit
employee contributions into the Plan on a timely basis is considered a
nonexempt transaction with a party-in-interest. Management believes that this
transaction should not affect the tax-qualified status of the Plan as all
such required payments were subsequently paid upon discovery. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
15
