2024 Q2 Form 10-Q Financial Statement

#000092706624000090 Filed on May 02, 2024

View on sec.gov

Income Statement

Concept 2024 Q2 2024 Q1 2023 Q4
Revenue $3.187B $3.071B $3.146B
YoY Change 6.21% 6.89% 7.85%
Cost Of Revenue $2.142B $2.079B $2.138B
YoY Change 4.21% 1.01% 2.38%
Gross Profit $1.044B $991.6M $1.007B
YoY Change 10.58% 21.74% 21.63%
Gross Profit Margin 32.77% 32.29% 32.02%
Selling, General & Admin $367.8M $362.5M $401.5M
YoY Change 1.05% 9.31% 5.73%
% of Gross Profit 35.22% 36.56% 39.85%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $175.7M $187.1M $195.3M
YoY Change -4.36% 5.06% 0.62%
% of Gross Profit 16.82% 18.87% 19.38%
Operating Expenses $543.5M $549.6M $596.7M
YoY Change -0.76% 7.82% 4.0%
Operating Profit $506.4M $483.8M $410.6M
YoY Change 24.95% 55.26% 61.39%
Interest Expense -$92.27M -$92.74M -$90.83M
YoY Change -2.93% -1.3% -8.38%
% of Operating Profit -18.22% -19.17% -22.12%
Other Income/Expense, Net -$27.48M -$12.64M -$4.652M
YoY Change -2101.38% -436.91% -40.34%
Pretax Income $371.4M $371.8M $289.1M
YoY Change 25.83% 73.23% 95.99%
Income Tax $71.69M $65.81M $58.50M
% Of Pretax Income 19.3% 17.7% 20.24%
Net Earnings $222.7M $239.6M $150.7M
YoY Change 24.62% 107.4% 121.23%
Net Earnings / Revenue 6.99% 7.8% 4.79%
Basic Earnings Per Share $2.56 $2.73
Diluted Earnings Per Share $2.50 $2.65 $1.62
COMMON SHARES
Basic Shares Outstanding 87.70M shares 87.70M shares 91.30M shares
Diluted Shares Outstanding 88.95M shares 90.55M shares

Balance Sheet

Concept 2024 Q2 2024 Q1 2023 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $469.0M $403.5M $439.6M
YoY Change 21.51% -1.98% 20.06%
Cash & Equivalents $416.5M $345.1M $380.1M
Short-Term Investments $52.47M $58.34M $59.50M
Other Short-Term Assets $169.9M $191.1M $187.2M
YoY Change -8.08% 4.07% 7.76%
Inventory $126.8M $145.8M $143.1M
Prepaid Expenses
Receivables $2.303B $2.595B $1.987B
Other Receivables $420.6M $396.4M $422.7M
Total Short-Term Assets $3.467B $3.684B $3.138B
YoY Change 15.49% 21.19% -0.55%
LONG-TERM ASSETS
Property, Plant & Equipment $2.982B $3.026B $3.074B
YoY Change -5.58% -5.91% -5.62%
Goodwill $7.201B $7.230B $7.113B
YoY Change 1.34% 1.97% 0.51%
Intangibles $191.5M $201.4M $203.2M
YoY Change -0.19% 7.86% 11.24%
Long-Term Investments $485.5M $540.3M $593.7M
YoY Change -24.06% 88.73% 115.56%
Other Assets $240.5M $262.4M $271.3M
YoY Change -23.41% -9.91% -14.05%
Total Long-Term Assets $13.56B $13.75B $13.76B
YoY Change -2.85% 0.43% -0.13%
TOTAL ASSETS
Total Short-Term Assets $3.467B $3.684B $3.138B
Total Long-Term Assets $13.56B $13.75B $13.76B
Total Assets $17.03B $17.43B $16.89B
YoY Change 0.39% 4.2% -0.2%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $493.5M $489.9M $514.5M
YoY Change 15.34% 9.36% 7.24%
Accrued Expenses $1.050B $1.023B $1.147B
YoY Change 2.43% 0.98% 5.42%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $538.0M $127.6M $123.3M
YoY Change 432.07% -47.31% -46.72%
Total Short-Term Liabilities $2.995B $2.583B $2.642B
YoY Change 24.61% 0.7% 0.86%
LONG-TERM LIABILITIES
Long-Term Debt $8.452B $9.001B $8.268B
YoY Change -1.71% 6.93% -4.88%
Other Long-Term Liabilities $179.0M $179.8M $183.1M
YoY Change -2.25% 79.4% 73.97%
Total Long-Term Liabilities $179.0M $179.8M $183.1M
YoY Change -2.25% 79.4% 73.97%
TOTAL LIABILITIES
Total Short-Term Liabilities $2.995B $2.583B $2.642B
Total Long-Term Liabilities $179.0M $179.8M $183.1M
Total Liabilities $14.60B $14.79B $14.15B
YoY Change 1.89% 3.4% -3.76%
SHAREHOLDERS EQUITY
Retained Earnings $1.061B $837.9M $598.3M
YoY Change 126.28% 188.91% 242.88%
Common Stock $383.3M $428.3M $509.9M
YoY Change -31.03% -27.45% -16.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $615.9M $240.1M $0.00
YoY Change
Treasury Stock Shares
Shareholders Equity $632.9M $926.0M $1.056B
YoY Change
Total Liabilities & Shareholders Equity $17.03B $17.43B $16.89B
YoY Change 0.39% 4.2% -0.2%

Cashflow Statement

Concept 2024 Q2 2024 Q1 2023 Q4
OPERATING ACTIVITIES
Net Income $222.7M $239.6M $150.7M
YoY Change 24.62% 107.4% 121.23%
Depreciation, Depletion And Amortization $175.7M $187.1M $195.3M
YoY Change -4.36% 5.06% 0.62%
Cash From Operating Activities $798.8M -$134.8M $485.2M
YoY Change 77.48% -129.15% 41.16%
INVESTING ACTIVITIES
Capital Expenditures $124.7M $121.0M $159.0M
YoY Change 0.18% -18.07% -18.07%
Acquisitions
YoY Change
Other Investing Activities -$37.03M -$94.19M -$9.322M
YoY Change -83.36% -402.27% -51.51%
Cash From Investing Activities -$161.8M -$215.2M -$168.3M
YoY Change -53.4% 84.66% -21.09%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -563.3M $319.3M -403.2M
YoY Change 481.7% -215.73% 74.64%
NET CHANGE
Cash From Operating Activities 798.8M -$134.8M 485.2M
Cash From Investing Activities -161.8M -$215.2M -168.3M
Cash From Financing Activities -563.3M $319.3M -403.2M
Net Change In Cash 73.79M -$33.85M -86.34M
YoY Change 1098.33% -146.75% -14.04%
FREE CASH FLOW
Cash From Operating Activities $798.8M -$134.8M $485.2M
Capital Expenditures $124.7M $121.0M $159.0M
Free Cash Flow $674.1M -$255.9M $326.2M
YoY Change 107.03% -181.26% 117.95%

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<span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Commitments and</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">contingencies</span><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The majority of the Company’s revenues are from government programs and may be subject to adjustment as a result of: (i) examination by government agencies or contractors, for which the resolution of any matters raised may take extended periods of time to finalize; (ii) differing interpretations of government regulations by different Medicare contractors or regulatory authorities; (iii) differing opinions regarding a patient’s medical diagnosis or the medical necessity of services provided; and (iv) retroactive applications or interpretations of governmental requirements. In addition, the Company’s revenues from commercial payors may be subject to adjustment as a result of potential claims for refunds, as a result of government actions or as a result of other claims by commercial payors.</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company operates in a highly regulated industry and is a party to various lawsuits, demands, claims, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">qui tam</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> suits, governmental investigations (which frequently arise from </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">qui tam</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> suits) and audits (including, without limitation, investigations or other actions resulting from its obligation to self-report suspected violations of law) and other legal proceedings, including, without limitation, those described below. The Company records accruals for certain legal proceedings and regulatory matters to the extent that the Company determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. As of March 31, 2024 and December 31, 2023, the Company’s total recorded accruals with respect to legal proceedings and regulatory matters, net of anticipated third party recoveries, were immaterial. While these accruals reflect the Company’s best estimate of the probable loss for those matters as of the dates of those accruals, the recorded amounts may differ materially from the actual amount of the losses for those matters, and any anticipated third party recoveries for any such losses may not ultimately be recoverable. Additionally, in some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal proceedings and regulatory matters, which also may be impacted by various factors, including, without limitation, that they may involve indeterminate claims for monetary damages or may involve fines, penalties or non-monetary remedies; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; are in the early stages of the proceedings; or may result in a change of business practices. Further, there may be various levels of judicial review available to the Company in connection with any such proceeding.</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following is a description of certain lawsuits, claims, governmental investigations and audits and other legal proceedings to which the Company is subject.</span></div><div style="margin-top:9pt;padding-left:13.5pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Certain Governmental Inquiries and Related Proceedings</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline">2017 U.S. Attorney Colorado Investigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: In November 2017, the U.S. Attorney’s Office, District of Colorado informed the Company of an investigation it was conducting into possible federal healthcare offenses involving DaVita Kidney Care, as well as several of the Company’s wholly-owned subsidiaries. In addition to DaVita Kidney Care, the matter currently includes an investigation into DaVita Rx, DaVita Laboratory Services, Inc. (DaVita Labs), and RMS Lifeline Inc. (Lifeline). In each of August 2018, May 2019, and July 2021, the Company received a Civil Investigative Demand (CID) pursuant to the FCA from the U.S. Attorney's Office relating to this investigation. In May 2020, the Company sold its interest in Lifeline, but the Company retained certain liabilities of the Lifeline business, including those related to this investigation. The Company is engaged in discussions with the U.S. Attorney's Office and the Civil Division of the United States Department of Justice to resolve this matter. The Company can make no assurance as to the final outcome. The Company has reserved $40,000 for this matter, which includes any potential payment of attorneys' fees. </span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline">2020 U.S. Attorney New Jersey Investigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: In March 2020, the U.S. Attorney’s Office, District of New Jersey served the Company with a subpoena and a CID relating to an investigation being conducted by that office and the U.S. Attorney’s Office, Eastern District of Pennsylvania. The subpoena and CID request information on several topics, including certain of the Company’s joint venture arrangements with physicians and physician groups, medical director agreements, and compliance with its five-year Corporate Integrity Agreement, the term of which expired October 22, 2019. In November 2022, the Company learned that, on April 1, 2022, the U.S. Attorney’s Office for the District of New Jersey notified the U.S. District Court for the District of New Jersey of its decision not to elect to intervene in the matter of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">U.S. ex rel. Doe v. DaVita Inc. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">and filed a Stipulation of Dismissal. On April 13, 2022, the U.S. District Court for the District of New Jersey dismissed the case without prejudice. On October 12, 2022, the U.S. Attorney’s Office for the Eastern District of Pennsylvania notified the U.S. </span></div><div style="margin-top:9pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">District Court, Eastern District of Pennsylvania, of its decision not to elect to intervene at this time in the matter of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">U.S. ex rel. Bayne v. DaVita Inc., et al.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> The court then unsealed an amended complaint, which alleges violations of federal and state False Claims Acts, by order dated October 14, 2022. On November 8, 2023, the private party relator filed a fourth amended complaint. On November 29, 2023, the Company filed a motion to dismiss the fourth amended complaint. </span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline">2020 California Department of Insurance Investigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: In April 2020, the California Department of Insurance (CDI) sent the Company an Investigative Subpoena relating to an investigation being conducted by that office. CDI issued a superseding subpoena in September 2020 and an additional subpoena in September 2021. Those subpoenas request information on a number of topics, including but not limited to the Company’s communications with patients about insurance plans and financial assistance from the American Kidney Fund (AKF), analyses of the potential impact of patients’ decisions to change insurance providers, and documents relating to donations or contributions to the AKF. The Company is continuing to cooperate with CDI in this investigation.</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline">2023 District of Columbia Office of Attorney General Investigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: In January 2023, the Office of the Attorney General for the District of Columbia issued a CID to the Company in connection with an antitrust investigation into the AKF. The CID covers the period from January 1, 2016 to the present. The CID requests information on a number of topics, including but not limited to the Company’s communications with AKF, documents relating to donations to the AKF, and communications with patients, providers, and insurers regarding the AKF. The Company is cooperating with the government in this investigation.</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline">2024 Federal Trade Commission Investigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: In April 2024, the Company received from the Federal Trade Commission (FTC) two CIDs in connection with an industry investigation under Section 5 of the Federal Trade Commission Act regarding the acquisition of Medical Director services and provision of dialysis services. The CIDs cover the period from January 1, 2016 to the present and generally seek information relating to restrictive covenants, such as non-competes, with physicians. The Company is cooperating with the government in this investigation.</span></div><div style="margin-top:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">* * *</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Although the Company cannot predict whether or when proceedings might be initiated or when these matters may be resolved (other than as may be described above), it is not unusual for inquiries such as these to continue for a considerable period of time through the various phases of document and witness requests and ongoing discussions with regulators and to develop over the course of time. In addition to the inquiries and proceedings specifically identified above, the Company frequently is subject to other inquiries by state or federal government agencies, many of which relate to </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">qui tam</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> complaints filed by relators. Negative findings or terms and conditions that the Company might agree to accept as part of a negotiated resolution of pending or future government inquiries or relator proceedings could result in, among other things, substantial financial penalties or awards against the Company, substantial payments made by the Company, harm to the Company’s reputation, required changes to the Company’s business practices, an impact on the Company's various relationships and/or contracts related to the Company's business, exclusion from future participation in the Medicare, Medicaid and other federal health care programs and, if criminal proceedings were initiated against the Company, members of its board of directors or management, possible criminal penalties, any of which could have a material adverse effect on the Company.</span></div><div style="margin-top:9pt;padding-left:13.5pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Other Proceedings</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline">2021 Antitrust Indictment and Putative Class Action Suit</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">: On July 14, 2021, an indictment was returned by a grand jury in the U.S. District Court, District of Colorado against the Company and its former chief executive officer in the matter of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">U.S. v. DaVita Inc., et al.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> alleging that purported agreements entered into by DaVita's former chief executive officer not to solicit senior-level employees violated Section 1 of the Sherman Act. On April 15, 2022, a jury returned a verdict in the Company’s favor, acquitting both the Company and its former chief executive officer on all counts. On April 20, 2022, the court entered judgments of acquittal and closed the case. On August 9, 2021, DaVita Inc. and its former chief executive officer were added as defendants in a consolidated putative class action complaint in the matter of </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">In re Outpatient Medical Center Employee Antitrust Litigation</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> in the U.S. District Court, Northern District of Illinois. This class action complaint asserts that the defendants violated Section 1 of the Sherman Act and seeks to bring an action on behalf of certain groups of individuals employed by the Company between February 1, 2012 and January 5, 2021. On September 26, 2022, the court denied the </span></div><div style="margin-top:9pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Company's motion to dismiss. The Company disputes the allegations in the class action complaint, as well as the asserted violations of the Sherman Act, and intends to defend this action accordingly.</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Additionally, from time to time the Company is subject to other lawsuits, demands, claims, governmental investigations and audits and legal proceedings that arise due to the nature of its business, including, without limitation, contractual disputes, such as with payors, suppliers and others, employee-related matters and professional and general liability claims. From time to time, the Company also initiates litigation or other legal proceedings as a plaintiff arising out of contracts or other matters.</span></div><div style="margin-top:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">* * *</span></div><div style="margin-top:9pt;text-indent:27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Other than as may be described above, the Company cannot predict the ultimate outcomes of the various legal proceedings and regulatory matters to which the Company is or may be subject from time to time, including those described in this Note 8, or the timing of their resolution or the ultimate losses or impact of developments in those matters, which could have a material adverse effect on the Company’s revenues, earnings and cash flows. Further, any legal proceedings or regulatory matters involving the Company, whether meritorious or not, are time consuming, and often require management’s attention and result in significant legal expense, and may result in the diversion of significant operational resources, may impact the Company's various relationships and/or contracts related to the Company's business or otherwise harm the Company’s business, results of operations, financial condition, cash flows or reputation.</span></div><div style="margin-top:9pt;text-align:center"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">* * *</span></div>
CY2019Q4 dva Corporate Integrity Agreement Expiration Date
CorporateIntegrityAgreementExpirationDate
2019-10-22
CY2024Q1 us-gaap Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized
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OperatingIncomeLoss
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CY2024Q1 us-gaap Interest And Debt Expense
InterestAndDebtExpense
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CY2023Q1 us-gaap Interest And Debt Expense
InterestAndDebtExpense
100774000 usd
CY2024Q1 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
-12641000 usd
CY2023Q1 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
3752000 usd
CY2024Q1 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2024Q1 us-gaap Depreciation And Amortization
DepreciationAndAmortization
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CY2023Q1 us-gaap Depreciation And Amortization
DepreciationAndAmortization
178071000 usd
CY2024Q1 us-gaap Segment Expenditure Addition To Long Lived Assets
SegmentExpenditureAdditionToLongLivedAssets
121015000 usd
CY2023Q1 us-gaap Segment Expenditure Addition To Long Lived Assets
SegmentExpenditureAdditionToLongLivedAssets
147705000 usd
CY2024Q1 ecd Rule10b51 Arr Trmntd Flag
Rule10b51ArrTrmntdFlag
false
CY2024Q1 ecd Non Rule10b51 Arr Adopted Flag
NonRule10b51ArrAdoptedFlag
false
CY2024Q1 ecd Non Rule10b51 Arr Trmntd Flag
NonRule10b51ArrTrmntdFlag
false
CY2024Q1 ecd Rule10b51 Arr Adopted Flag
Rule10b51ArrAdoptedFlag
false

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