DaVita (DVA) 10-K risk factor changes: FY2021 vs FY2020

This summary is qualified in its entirety by reference to the more detailed descriptions of the risks and uncertainties included in this Item [removed: 1A below and you should read this summary together with those more detailed descriptions.][added: 1A.]

- [removed: the] [added: [the] dynamic and evolving novel coronavirus [removed: pandemic;][added: pandemic](#i916f7af890114e55a87e260476560c60_2773);]

- [removed: the] [added: [the] complex set of governmental laws, regulations and other requirements that impact us, including potential changes [removed: thereto;][added: thereto](#i916f7af890114e55a87e260476560c60_2768);]

- [removed: the] [added: [the] various lawsuits, demands, [removed: claims, *qui tam* suits,] [added: claims,](#i916f7af890114e55a87e260476560c60_2763) *[qui tam](#i916f7af890114e55a87e260476560c60_2763)* [suits,] governmental investigations and audits and other legal matters that we may be subject to from time to [removed: time;][added: time](#i916f7af890114e55a87e260476560c60_2763);]

- [removed: our] [added: [our] ability to comply with complex privacy and information security laws that impact us and/or our ability to properly maintain the integrity of our data, protect our proprietary rights to our systems or defend against cybersecurity [removed: attacks;][added: attacks](#i916f7af890114e55a87e260476560c60_2758);]

- [removed: our negotiations and arrangements with commercial payors, including] [added: [the number o](#i916f7af890114e55a87e260476560c60_2753)[r p](#i916f7af890114e55a87e260476560c60_2753)[ercentage of patients] with [removed: respect to value-based care and Medicare Advantage plans, the] [added: higher-paying](#i916f7af890114e55a87e260476560c60_2753) [commer](#i916f7af890114e55a87e260476560c60_2753)[cial insurance,](#i916f7af890114e55a87e260476560c60_2753) [the] average rates that commercial payors pay us, any restrictions in plan designs or other contractual terms, including, without limitation, the scope and duration of coverage and in-network [removed: benefits;][added: benefits](#i916f7af890114e55a87e260476560c60_2753);]

[removed: -] [added: Our arrangements and negotiations with payors also impact] the number or percentage of [removed: our] patients with higher-paying commercial [removed: insurance;][added: insurance.]

- [removed: our] [added: [our] ability to successfully implement our strategy with respect [removed: to home-based dialysis;][added: to](#i916f7af890114e55a87e260476560c60_2897) [](#i916f7af890114e55a87e260476560c60_2897)[integrated ki](#i916f7af890114e55a87e260476560c60_2897)[d](#i916f7af890114e55a87e260476560c60_2897)[ney](#i916f7af890114e55a87e260476560c60_2897) [care, value-bas](#i916f7af890114e55a87e260476560c60_2897)[ed care and](#i916f7af890114e55a87e260476560c60_2897) [home-based dialysis](#i916f7af890114e55a87e260476560c60_2897);]

- [removed: changes] [added: [changes] in the structure of and payment rates under government-based [removed: programs;][added: programs](#i916f7af890114e55a87e260476560c60_2748);]

- [removed: changes] [added: [changes] in clinical practices, payment rates or regulations impacting [removed: pharmaceuticals;][added: pharmaceuticals](#i916f7af890114e55a87e260476560c60_2743);]

- [removed: our] [added: [our] ability to compete successfully, including, without limitation, implementing our growth strategy and/or retaining patients and physicians willing to serve as medical [removed: directors;][added: directors](#i916f7af890114e55a87e260476560c60_2738);]

- [removed: our] [added: [our] acquisitions, mergers, joint ventures or [removed: dispositions;][added: dispositions](#i916f7af890114e55a87e260476560c60_2733);]

- [removed: our] [added: [our] ability to establish and maintain supply relationships that meet our needs at cost-effective prices or at prices that allow for adequate reimbursement as applicable, as well as our ability to access new technology or superior products in a cost-effective [removed: manner;][added: manner](#i916f7af890114e55a87e260476560c60_2728);]

- [removed: our ancillary] [added: [our](#i916f7af890114e55a87e260476560c60_2723) [U.S.](#i916f7af890114e55a87e260476560c60_2723) [ancillary] services and strategic [removed: initiatives, including without limitation, our] [added: initiatives](#i916f7af890114e55a87e260476560c60_2723) [and](#i916f7af890114e55a87e260476560c60_2723) [our] international [removed: operations and] [added: operations](#i916f7af890114e55a87e260476560c60_2723) [and] our ability to expand within markets or to new markets, or invest in new products or [removed: services;][added: services](#i916f7af890114e55a87e260476560c60_2723);]

- [removed: our] [added: [our] ability to appropriately estimate the amount of dialysis revenues and related refund [removed: liabilities;][added: liabilities](#i916f7af890114e55a87e260476560c60_2807);]

- [removed: increases] [added: [increases] in labor costs, including, without limitation, due to shortages, changes in certification requirements and/or higher than normal turnover rates in skilled clinical personnel; [removed: or] currently pending or future governmental laws, rules, regulations or initiatives; [added: our ability to attract and retain key leadership talent or employees; or union organizing activities or other legislative or other changes](#i916f7af890114e55a87e260476560c60_2802);]

- [removed: our] [added: [our] ability to effectively maintain, operate or upgrade our information systems or those of third-party service providers upon which we rely, including, without limitation, our clinical, billing and collections [removed: systems;][added: systems](#i916f7af890114e55a87e260476560c60_2797)[, and our ability](#i916f7af890114e55a87e260476560c60_2797) [to adhere to federal and state data sharing and access requirements and regulations](#i916f7af890114e55a87e260476560c60_2797);]

- [removed: our] [added: [our] current or future level of indebtedness, including, without limitation, our ability to generate cash to service our indebtedness and for other intended purposes and our ability to maintain compliance with debt [removed: covenants;][added: covenan](#i916f7af890114e55a87e260476560c60_2859)[ts](#i916f7af890114e55a87e260476560c60_2859);]

- [removed: changes] [added: [changes] in tax laws, regulations and interpretations or challenges to our tax [removed: positions;][added: positions](#i916f7af890114e55a87e260476560c60_2885);]

- [removed: liability] [added: [liability] claims for damages and other expenses that are not covered by insurance or exceed our existing insurance [removed: coverage;][added: coverage](#i916f7af890114e55a87e260476560c60_2880);]

- [removed: our] [added: [our] ability to successfully maintain an effective internal control over financial [removed: reporting;][added: reporting](#i916f7af890114e55a87e260476560c60_2875); and]

- [removed: deterioration] [added: [deterioration] in economic conditions, [added: general inflationary pressures,] disruptions in the financial markets or the effects of natural or other disasters, political instability, public health crises or adverse weather events such as hurricanes, earthquakes, fires or flooding, including as such events may be impacted by the effects of climate [removed: change; and][added: change](#i916f7af890114e55a87e260476560c60_2870);]

- [removed: provisions] [added: [provisions] in our organizational documents, our compensation programs and policies and certain requirements under Delaware law that may deter changes of control or make it more difficult for our stockholders to change the composition of our Board of Directors and take other corporate actions that our stockholders would otherwise determine to be in their best [removed: interests.][added: interests](#i916f7af890114e55a87e260476560c60_2865).]

We face various risks related to the dynamic and evolving novel coronavirus pandemic, [removed: any] [added: many] of which may have a material adverse impact on us.

The ultimate impact of COVID-19 on us will depend on future developments that are highly uncertain and difficult to predict, including among other things, the severity and duration of the pandemic; further spread or resurgence of the virus, including as a result of the emergence of new strains of the [removed: virus; its] [added: virus such as the Delta and Omicron variants; COVID-19's] impact on the chronic kidney disease (CKD) [added: patient] population and our patient [removed: population;] [added: population including on] the [added: mortality of these patients; the] availability, acceptance, impact and efficacy of COVID-19 [removed: treatments, therapies] [added: vaccines, treatments] and [removed: vaccines;] [added: therapies;] the pandemic’s continuing impact on [added: our revenue and non-acquired growth due to lower treatment volumes,] the U.S. and global [removed: economies] [added: economies, unemployment, labor market conditions, inflation] and [removed: unemployment;] [added: monetary policies;] the [added: potential negative impact on our commercial mix or the number of patients covered by commercial insurance plans; continued increased COVID-related costs; supply chain challenges and disruptions, including with respect to our clinical supplies; the] responses of our competitors to the pandemic and related changes in the marketplace; [removed: and] the timing, scope and effectiveness of federal, state and local [removed: governmental responses.][added: government responses; and any potential changes to the extensive set of federal, state and local laws, regulations and requirements that govern our business.]

- We have experienced and expect to continue to experience a negative impact on revenue and non-acquired growth from COVID-19 due to lower treatment volumes, including from the negative impact [added: of COVID-19] on [removed: our patient census that is] the [removed: result of changes in] [added: mortality] rates of [removed: mortality.][added: our patients, which has in turn impacted our patient census.]

Because [removed: ESRD] [added: ESKD] patients may be older and generally have comorbidities, several of which are risk factors for COVID-19, we believe the mortality rate of infected patients [removed: is, and will continue to be,] [added: has been] higher in the dialysis population than in the general population, and COVID-19 also could impact the CKD population [removed: differentially.][added: differently.]

Over the longer term, we believe that changes in mortality in both the CKD and [removed: ESRD] [added: ESKD] populations due to COVID-19 will [added: continue to] depend primarily on the infection rate, case fatality rate, the age and health status of affected patients, [removed: the] [added: and] access to and [added: continued] efficacy of vaccinations [added: or other treatments or therapies, particularly] as [added: it relates to variants of the virus, as] well as willingness to be vaccinated.

We expect that [removed: these changes are] [added: the impact of COVID-19 is] likely to continue to negatively impact our revenue and non-acquired growth [added: for a period of time] even as the pandemic [removed: subsides.][added: subsides due to the compounding impact of mortalities, among other things.]

However, determining the extent to which these impacts should be directly attributable to COVID-19 is difficult due to testing and reporting limitations, and other factors [added: that] may drive treatment volumes and new admissions over time, such as the number of transplants or deferred admissions.

[removed: The magnitude of these cumulative impacts has been substantial and, depending] [added: Depending] on the ultimate severity and duration of the [removed: pandemic] [added: pandemic, the magnitude of these cumulative impacts] could [removed: be material.][added: have a material adverse impact on our results of operations, financial condition and cash flows.]

[removed: - The COVID-19 pandemic and efforts to contain the virus have led to global economic deterioration and rapid and sharp increases in unemployment levels, which ultimately] [added: These impacts] could [added: ultimately] result in a materially reduced share of our patients being covered by commercial insurance plans, with more patients being covered by lower-paying government insurance programs or being uninsured.

The extent of these effects will depend upon, among other things, the extent and duration of the increased unemployment levels for our patient population, [added: any] economic deterioration [removed: and] [added: or] potential recession; the timing and scope of federal, state and local governmental responses to the ongoing pandemic; and patients’ ability to retain existing insurance and their individual choices with respect to their [removed: coverage.][added: coverage, all of which are highly uncertain and difficult to predict.]

- We have dedicated and continue to dedicate substantial resources in response to [removed: COVID-19 and have had, and expect to continue to have, extended and significant additional costs in connection with our response to] COVID-19.

[removed: The] [added: Additionally, the] steps we have taken designed to help safely maintain continuity of care for our patients and help protect our caregivers, such as our policies to implement dedicated care shifts for patients with confirmed or suspected COVID-19 and other enhanced clinical practices, have [removed: increased, and are expected to continue to increase,] [added: increased] our expenses and use of personal protective equipment (PPE).

[removed: Our] [added: Among other things, our] response to COVID-19 [removed: also] has resulted in higher salary and wage expense, and we have provided, and may provide in the future, substantial financial support [removed: associated with relief reimbursement] to our [removed: teammates.][added: teammates, which may include relief reimbursement.]

[removed: Furthermore, the] [added: - The] effort and cost needed to procure certain of our equipment and clinical supplies, including PPE, have [added: substantially] increased, and we expect these increased costs will [removed: continue while the pandemic persists.][added: continue.]

These efforts are part of a wider Prepare, Prevent, Respond and Recover protocol that [removed: we have implemented in connection with the pandemic, which also] includes operational initiatives such as the redistribution of teammates, machines and supplies across the country as [removed: needed and] [added: needed,] increased investment in and utilization of telehealth [removed: capabilities.][added: capabilities and administration of COVID-19 vaccines.]

If the pandemic requires us to maintain certain restrictive operational protocols for an extended period of time, it may adversely impact our strategic initiatives, such as our strategy to continue to build [removed: o] our abilities to offer home dialysis [removed: options.][added: options and expanding our integrated care capabilities.]

[removed: In addition, any] [added: Prolonged strain on global supply chains may result in additional] equipment [removed: or] [added: and] clinical supply shortages, [removed: disruptions or] [added: disruptions,] delays or associated price increases [added: that] could impact our ability to provide dialysis services or the cost of providing those [removed: services.][added: services, among other things.]

below and you should read this summary together with those more detailed descriptions.

- [our aspirations, goals and](#i916f7af890114e55a87e260476560c60_2792) [disclosures](#i916f7af890114e55a87e260476560c60_2792) [relat](#i916f7af890114e55a87e260476560c60_2792)[ed to environment](#i916f7af890114e55a87e260476560c60_2792)[al](#i916f7af890114e55a87e260476560c60_2792)[, soc](#i916f7af890114e55a87e260476560c60_2792)[ial and governance (ESG) matters](#i916f7af890114e55a87e260476560c60_2792);

- Our business is labor intensive and our financial and operating results have been and continue to be sensitive to variations in labor-related costs and productivity.

We have historically faced and expect to continue to face costs and

difficulties in hiring and retaining caregivers due to a nationwide shortage of skilled clinical personnel.

These challenges have been heightened by the increased demand for and demand upon such personnel by the ongoing pandemic.

The labor market is challenging and continues to experience volatility, uncertainty and labor supply shortages, particularly in healthcare.

In addition, federal and state agencies have announced or released rules relating to COVID-19 vaccination requirements that may impact our teammates, provider and patients.

The cumulative impact of these requirements, some of which have already gone into effect and some of which remain subject to legal challenge, as further described in Part I, Item 1.

Business of this Form 10-K under the heading "*Government Regulation—COVID-19 Response"*, contributes further to the volatility and uncertainty in the labor market and may ultimately further exacerbate labor shortages.

These conditions have adversely impacted, and may continue to adversely impact, our ability to attract and retain employees, particularly clinical personnel.

As part of our continuing efforts in this highly competitive market, we have provided our teammates with additional compensation, among other things.

In 2022, we expect to provide our teammates with higher than usual wage increases, which will put additional pressure on our cost structure going forward.

We have experienced staffing shortages and disruptions as a result of current labor market conditions and the current Omicron surge, and further staffing shortages or disruptions, if material, could lead to the unplanned closures of certain centers or adversely impact clinical operations, and may otherwise have a material adverse impact on our ability to provide dialysis services or the cost of providing those services, among other things.

Prolonged volatility, uncertainty, labor supply shortages and other challenging labor market conditions, including, among other things, due to inflationary pressures or evolving monetary policies, could have an adverse impact on our ability to execute on our strategic initiatives, and ultimately could have a material adverse impact on our labor costs, results of operations, financial condition and cash flows.

- The COVID-19 pandemic and efforts to contain the virus have impacted the global economy, resulting in, among other things, volatility and uncertainty in labor market conditions as discussed in more detail above.

We have incurred costs, and expect to continue to incur extended costs in the future in connection with our response to COVID-19, and the cumulative impact of these costs could be material.

These initiatives have increased our expenses and operational complexity, and also may involve execution and compliance risks.

Certain of these increased costs may persist due to the overall challenges and disruptions of global supply chains.

These global supply chain challenges have impacted the availability of certain of our equipment and clinical supplies.

- Rulemaking responses to COVID-19 by certain state and federal agencies, including without limitation OSHA and CMS, have also impacted our costs and operations and generated certain compliance risks.

These regulations, described in detail in Part I, Item 1.

Business of this Form 10-K under the heading "*Government Regulation—COVID-19 Response"* have resulted in increased costs related to, among other things, PPE, fit-testing, paid time off, surveillance testing of our teammates for COVID-19 and other increased obligations with which we must comply.

As these requirements are continuing to evolve and develop, at this time we cannot predict the ultimate impact they may

Compliance with COVID-19-related safety rules and regulations is enforced with sanctions and/or fines, and non-compliance also has the potential for negative publicity or reputational impact.

In addition, in the event any of our temporary clinical and operational changes in response to COVID-19 become permanent, it could have an adverse impact on our business to the extent such changes result in increased costs or otherwise negatively impact our operations.

Business of this Form 10-K under the heading "*Human Capital Management*" and in Part II, Item 7.

- Section 1115A of the Social Security Act, which, among other things, authorizes the Center for Medicare and Medicaid Innovation (CMMI) to test certain innovation models;

- laws and regulations regarding the storage, handling, shipment, disposal and/or dispensing of pharmaceuticals and blood products and other biological materials; and

If any of our personnel, representatives or operations are alleged to have violated these or other laws, regulations or requirements, we could experience material harm to our reputation and stock price, and it could impact our relationships and/or contracts related to our business, among other things.

- Enforcement actions, investigations, or audits by government agencies related to interoperability and related data sharing and access requirements and regulations;

In addition, the expanded access to healthcare developed under the Patient Protection and Affordable Care Act and the Health Care Reconciliation Act of 2010, as amended (collectively, the ACA) has been both positively and negatively impacted over time by subsequent legal, regulatory and judicial action.

Examples of such potential changes are described in more detail in Part I, Item 1.

In addition, to the extent that monetary policies or other factors contribute to an increase in inflationary pressures, this may in turn increase our labor and supply costs at a rate that outpaces the Medicare or any other rate increases we may receive.

On August 25, 2021, SEIU again proposed a California statewide ballot initiative with similar provisions.

In the event this proposal becomes eligible for the November 2022 election, we expect to again incur substantial costs to oppose it.

For additional information on risks associated with charitable premium assistance for ESRD patients and the potential impact of decreases to the percentage or number of our patients with commercial

Business of this Form 10-K under the heading "*Government Regulation.*"

Any allegations against us, our personnel or our representatives in such matters may among other things harm our reputation, stock price, and our various business relationships and/or contracts related to our business, and these impacts may be material.

In that regard, as further described in Note 16 to the consolidated financial statements included in this report, in the U.S. District Court, District of Colorado in 2021, a grand jury returned an indictment against the Company and its former chief executive officer in the matter of *U.S. v.

- changes in physician referrals to our dialysis centers, whether due to governmental laws, regulations or other requirements, new competition, a perceived decrease in the quality of service levels at our centers or other reasons;

- our ability to attract and retain key leadership talent;

- our ability to attract and retain employees or our ability to manage operating cost increase or productivity decreases whether due to union organizing activities or legislative or other changes;

Our response protocol generally has allowed us to maintain continuity of care for our patients.

Certain temporary changes made in response to the COVID-19 pandemic could become permanent, which could have an adverse impact on our business.

- We have had, and expect to continue to have, increased costs and risk associated with a high demand for our skilled clinical personnel.

Historically we have faced costs and difficulties in hiring and retaining nurses and other caregivers due to a nationwide shortage of skilled clinical personnel, and these challenges have been heightened by the increased demand for and demand upon such personnel by the ongoing pandemic, particularly the more recent resurgence of the virus that is more widespread geographically, which, among other things, makes it more difficult for us to reallocate our resources to affected geographies.

Any staffing shortages or disruptions could impact our ability to provide dialysis services or the cost of providing those services.

The government response to the pandemic has been wide-ranging and will continue to develop over time, particularly in light of the new federal administration.

As a result, we may not be able to accurately predict the nature, timing or extent of resulting changes to the markets in which we conduct business or on the other participants that operate in those markets, or any potential changes to the extensive set of federal, state and local laws, regulations and requirements that govern our business.

We believe that these changes may impact our business in a variety of ways, including but not limited to those described below.

- We have worked with certain government agencies and other kidney care providers to respond to the COVID-19 pandemic, and in certain cases have sought waivers of regulatory requirements.

For example, as part of our efforts to help cohort patients in line with guidance from the CDC, we have sought waivers of certain regulatory requirements related to the survey and acceleration of new clinics and entered into agreements with other kidney care providers to help ensure that patients can receive dialysis in an outpatient setting rather than a hospital.

In addition, we are also working to help make COVID-19 vaccines available to patients and teammates, including through coordination with state and federal governments on direct vaccine distribution so that we can administer vaccines to our patients and teammates.

These vaccines are currently available under emergency use authorizations and there can be no assurance that our patients and caregivers will choose to receive a COVID-19 vaccine or that the vaccines will prove to be as safe and effective as currently understood by the scientific community.

In addition, we may encounter difficulties with the availability, storage of the vaccine, or administration of the vaccines, some of which have multiple dose requirements.

In addition, we have been subject to a five-year Corporate Integrity Agreement (CIA) with Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS).

The term of the CIA expired on October 22, 2019, and we were notified on May 20, 2020 that the OIG had closed out its review.

The foregoing are each themselves comprised of numerous associated regulations or other requirements that have varying levels of impact on our business.

There have been multiple attempts to repeal or amend the ACA through legislative action and legal challenges, and the most recent challenge is currently before the U.S. Supreme Court.

The outcome of this U.S. Supreme Court proceeding will likely impact the future viability of ACA policies and programs that impact our business, including, among others, Medicaid expansion, CMMI and the health insurance exchanges.

Examples of such potential changes could include, among other things, legislative developments or administrative decisions such as moving to a universal health insurance or "single payor" system whereby health insurance is provided to all Americans by the government, the availability of a “public health insurance option” similar to Medicare, government programs that impact access to Medicaid expansion or impact funding provided to families to purchase plans through the health insurance exchanges

or changes to the eligibility age for Medicare beneficiaries.

To the extent that changes in statutes, regulations or related guidance or changes in other market conditions result in a reduction in the percentage of our patients with commercial insurance, limit the scope or nature of coverage through the exchanges or other health insurance programs or otherwise reduce reimbursement rates for our services from commercial and/or government payors, it could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The introduction of new or modified rules and regulations also generates continuous risks related to appropriate compliance.

These opportunities may be enhanced by disruptions or changes to the healthcare regulatory landscape resulting from the ongoing global health crisis.

For additional information on the impact of

requirements set forth in applicable laws and regulations.

For example, the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA) have been passed into law in the past several years, and they collectively expand our obligations related to the collection, use and sharing of consumer data and also permit additional penalties, grant additional enforcement authority and authorize private rights of action.

Scrutiny over cybersecurity standards in the health sector is also increasing.

In particular, the HHS Office for Civil Rights, in partnership with the Healthcare and Public Health Sector Coordinating Council (HSCC), recently issued cybersecurity guidelines for healthcare organizations that reflect consensus-based, voluntary practices to cost-effectively reduce cybersecurity risks for organizations of varying sizes.

Although these HHS-backed guidelines, entitled *"Health Industry Cybersecurity Practices: Managing Threats and Protecting Patients,"* are voluntary, they are likely to serve as an important reference point for the healthcare industry, and may cause us to invest additional resources in technology, personnel and programmatic cybersecurity controls as the cybersecurity risks we face continue to evolve.

Commercial payment rates could be materially lower in the future due to these or other factors.

Our negotiations with payors occur in a highly competitive environment and are also influenced by these marketplace dynamics, and we may experience decreased contracted rates with commercial payors or experience decreases in patient volume, including in instances where we are unable to come to agreement with commercial payors on rates, as our negotiations with commercial payors continue.

For example, the final rules for the Cures Act included a provision that, effective January 1, 2021, allows Medicare-eligible beneficiaries with ESRD to choose coverage under a MA managed care plan.

This provision could broaden patient access to certain enhanced benefits offered by MA plans.

MA plans usually provide reimbursement to us at a negotiated rate that is generally higher than Medicare fee-for-service rates.

We continue to evaluate the potential ultimate impact of this change in benefit eligibility, as there is significant uncertainty as to how many or which newly eligible ESRD patients will seek to enroll in MA plans for their ESRD benefits and how quickly any such changes would occur.

This uncertainty may be heightened by components of the aforementioned final rules, which include a provision that, among other things, removes the objective time and distance standards relating to network adequacy for outpatient dialysis centers for MA plans.

Certain of the requirements went into effect January 1, 2021 while others will go into effect January 1, 2024.

These forward-looking statements could include, among other things, DaVita's response to and the expected future impacts of the novel coronavirus (COVID-19), including statements about our balance sheet and liquidity, our expenses and expense offsets, revenues, billings and collections, potential need, ability or willingness to use any funds under government relief programs, availability or cost of supplies, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, the [removed: availability and] [added: availability, acceptance, impact,] administration [added: and efficacy] of COVID-19 vaccines, [added: treatments] and [added: therapies, the continuing impact on the U.S. and global economies, unemployment and labor market conditions, and] overall impact on our patients and teammates, as well as other statements regarding our future operations, financial condition and prospects, expenses, strategic initiatives, government and commercial payment rates, expectations related to value-based [added: care, integrated kidney] care and Medicare Advantage plan enrollment and our ongoing stock repurchase program.

Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe," [removed: "forecast," "guidance," "outlook," "goals,"] and similar expressions are intended to identify forward-looking statements.

*•the continuing impact of the dynamic and evolving COVID-19 pandemic, including, without limitation, on our patients, teammates, physician partners, suppliers, business, operations, reputation, financial condition and results of operations; the government’s response to the COVID-19 [removed: pandemic;] [added: pandemic, including, among other things, federal, state and local vaccine mandates or surveillance testing requirements and] the [added: extent to which they may ultimately be applicable to us; the pandemic's continuing impact on the U.S. and global economies, unemployment, labor market conditions, inflation and evolving monetary policies; the] availability, acceptance, impact and efficacy of COVID-19 [removed: treatments, therapies] [added: vaccines, treatments] and [removed: vaccines;] [added: therapies;] further spread or resurgence of the virus, including as a result of the emergence of new strains of the [removed: virus;] [added: virus, such as] the [added: Delta and Omicron variants; the] continuing impact of the pandemic on our revenue and non-acquired growth due to lower treatment volumes; [added: COVID-19's impact on] the [removed: consequences of an extended economic downturn resulting from] [added: chronic kidney disease (CKD) population and our patient population including on] the [removed: impacts] [added: mortality] of [removed: COVID-19, such as a] [added: these patients; any] potential negative impact on our commercial [removed: mix, which may persist even after] [added: mix or] the [removed: pandemic subsides; and continuing] [added: number of our patients covered by commercial insurance plans; continued increased] COVID-19-related [removed: costs, such as costs to procure equipment] [added: costs; supply chain challenges] and [added: disruptions, including with respect to our] clinical [removed: supplies] [added: supplies;] and higher salary and wage [removed: expense.][added: expense driven in part by labor market conditions and a high demand for our clinical personnel, any of which may also have the effect of heightening many of the other risks and uncertainties discussed below, and in many cases, lead to impacts that persist even after the pandemic subsides;*]

*•the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment rates, and a reduction in the number or percentage of our patients under such plans, including, without limitation, as a result of [added: restrictive plan designs,] restrictions or prohibitions on the use and/or availability of charitable premium assistance, which may result in the loss of revenues or patients, or our making incorrect assumptions about how our patients will respond to any change in financial assistance from charitable organizations;*

*•the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof or related litigation result in a reduction in coverage or reimbursement rates for our services, a reduction in the number of patients enrolled in higher-paying commercial plans or that are enrolled in or select Medicare Advantage plans or other material impacts to our [removed: business;] [added: business] or [added: operations; or] our making incorrect assumptions about how our patients will respond to any such developments;*

[removed: - *a] [added: *•a] reduction in government payment rates under the Medicare End Stage Renal Disease [removed: program] [added: program, state Medicaid] or other government-based programs and the impact of the Medicare Advantage benchmark structure;*

*•risks arising from potential changes in laws, regulations or requirements applicable to us, such as potential and proposed federal and/or state legislation, regulation, ballot, executive action or other initiatives, including [added: without limitation] those related to healthcare and/or labor matters, such as AB 290 in California;*

*•the impact of the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the [removed: future of the] Affordable Care Act, the exchanges and many other core [removed: aspects*][added: aspects of the current healthcare marketplace, as well as the composition of the U.S. Supreme Court and the current presidential administration and congressional majority;*]

[removed: - *changes] [added: *•changes] in pharmaceutical practice patterns, reimbursement and payment policies and processes, or pharmaceutical pricing, including with respect to hypoxia inducible [removed: factors;*][added: factors, among other things;*]

[removed: - *legal] [added: *•legal] and compliance risks, such as our continued compliance with [removed: complex] [added: complex, and at times, evolving] government [removed: regulations;*][added: regulations and requirements;*]

[removed: - *continued] [added: *•continued] increased competition from dialysis providers and others, and other potential marketplace [removed: changes;*][added: changes, including increased investment in and availability of funding to new entrants in the dialysis and pre-dialysis marketplace;*]

[removed: - *our] [added: *•our] ability to [added: develop and] maintain [removed: contracts] [added: relationships] with [removed: physician medical directors,] [added: physicians and hospitals,] changing affiliation models for physicians, and the emergence of new models of care [added: or other initiatives] introduced by the government or private sector [removed: that] [added: that, among other things,] may erode our patient base and [added: impact] reimbursement [removed: rates, such as accountable care organizations, independent practice associations and integrated delivery systems;*][added: rates;*]

[removed: - *our] [added: *•our] ability to complete acquisitions, [removed: mergers] [added: mergers, dispositions, joint ventures] or [removed: dispositions] [added: other strategic transactions] that we might announce or be considering, on terms favorable to us or at all, or to integrate and successfully operate any business we may acquire or have acquired, or to successfully expand our operations and services in markets outside the United States, or to businesses outside of dialysis;*

[removed: - *factors] [added: *•factors] that may impact our ability to repurchase stock under our stock repurchase program and the timing of any such stock repurchases, as well as our use of a considerable amount of available funds to repurchase stock;*

[removed: - *risks] [added: *•risks] arising from the use of accounting estimates, judgments and interpretations in our financial statements;*

[removed: - *impairment] [added: *•impairment] of our goodwill, investments or other assets; and*

[removed: - *uncertainties associated with the] [added: *•the] other risk [removed: factors] [added: factors, trends and uncertainties] set forth in Part I, Item 1A.

We also operate [removed: various] [added: our U.S.] ancillary services and strategic initiatives [removed: including] [added: and] our international operations, which we collectively refer to as our ancillary services, as well as our corporate administrative support.

On June 19, 2019, we completed the sale of our [added: prior] DaVita Medical Group (DMG) business to Collaborative Care Holdings, LLC, a subsidiary of UnitedHealth Group Inc. As a result of this transaction, DMG's results of operations have been reported as discontinued operations for all periods presented and DMG is not included below in this Management's Discussion and Analysis.

Notwithstanding the challenges of responding to the novel coronavirus pandemic (COVID-19), our year-over-year overall financial performance in [removed: 2020] [added: 2021] benefited from increased revenue, which was primarily due to higher average revenue per treatment in our U.S. dialysis business [removed: as well as] [added: and] acquired growth in our international business.

Drivers of our financial performance in [removed: 2020] [added: 2021] included the following:

- revenue growth of [removed: 0.9% in U.S. dialysis, 5.3%] [added: 0.1%] in U.S. [removed: ancillary services,] [added: dialysis] and [removed: 11.0%] [added: 19.9%] in international operations;

- operating cash flows of [removed: $1.979] [added: $1.931] billion from continuing operations;

- repurchase of [removed: 16,477,378] [added: 13,877,193] shares of our common stock for aggregate consideration of [removed: $1.447] [added: $1.546] billion, and reduction of our share count by [removed: 12.6%] [added: 11.5%] year-over-year;

Item 1 [removed: *“Business”*] [added: "*Business"*] and under the heading "*COVID-19 and its impact on our business"* below.

[removed: In 2021, we expect that COVID-19 will continue to impact our business and financial performance, as described in further detail below, though] [added: We believe] the [removed: magnitude] [added: ultimate impact] of [removed: these impacts remains difficult to predict] [added: this public health crisis on the Company will depend on future developments that are highly uncertain] and [removed: subject to significant uncertainty due] [added: difficult] to [removed: a number of factors, including,] [added: predict, including] among [removed: others,] [added: others] the [added: ultimate] severity and duration of the pandemic; further spread or resurgence of the virus, including as a result of the emergence of new strains of the [removed: virus; its] [added: virus, such as the Delta and Omicron variants; COVID-19's] impact on the [removed: CKD] [added: chronic kidney disease (CKD)] patient population and our patient [removed: population;] [added: population, including on] the [added: mortality of these patients; the] availability, acceptance, impact and efficacy of COVID-19 [removed: treatments, therapies] [added: vaccines, treatments] and [removed: vaccines;] [added: therapies;] the [removed: pandemics'] [added: pandemic’s] continuing impact on [added: our revenue and non-acquired growth due to lower treatment volumes,] the U.S. and global [removed: economies] [added: economies, unemployment, labor market conditions, inflation] and [removed: unemployment;] [added: monetary policies;] the [added: potential negative impact on our commercial mix or the number of patients covered by commercial insurance plans; continued increased COVID-related costs; supply chain challenges and disruptions; the] responses of our competitors to the pandemic and related changes in the marketplace; [removed: and] the timing, scope and effectiveness of federal, state and local government [removed: responses.][added: responses to the continuing pandemic; and any potential changes to the extensive set of federal, state and local laws, regulations and requirements that govern our business.]

[removed: The] [added: As noted above, the] continued impacts and disruptions to our business [removed: as a result] [added: in connection with] of the COVID-19 pandemic could have a material adverse impact on our patients, teammates, physician partners, suppliers, business, operations, reputation, financial condition, results of operations, cash flows and/or liquidity.

[removed: This] [added: We anticipate that this] pressure [removed: is] also [removed: influenced] [added: will be magnified] by [added: continued] slowing industry growth and [added: continued] competitive [removed: activity.][added: activity in 2022.]

On reimbursement rate, we expect [removed: modest] growth in aggregate, primarily due to the expected net market basket update for Medicare treatments as well as [removed: an] [added: a continuing] increase in [added: anticipated] Medicare Advantage enrollment due to the 21st Century Cures Act, [added: albeit less than what we experienced in 2021,] partially offset by the scheduled resumption of Medicare sequestration [added: later] in [removed: 2021.][added: 2022.]

On cost, we continue to expect [added: increasing] inflationary pressure on wage rates and other costs, [added: increased costs due to the challenging labor market conditions, and an increase in depreciation expenses due to the general release of our new clinical IT platform in 2022,] partially offset by continued [added: anticipated] savings on pharmaceutical costs.

We also expect to continue making investments to expand our ability to offer home-based dialysis service options and further advance our integrated care and value-based care initiatives in [removed: 2021.][added: 2022.]

Finally, [removed: the timing and scope of any potential changes to the regulatory landscape remain uncertain, particularly in light of the ongoing COVID-19 pandemic and the incoming new federal administration, and as such,] considerable uncertainty exists surrounding the continued development of the various governmental laws, regulations and other requirements that impact our business.

The discussion below includes analysis of our financial condition and results of operations for the years ended December 31, [removed: 2020] [added: 2021] compared to December 31, [removed: 2019.][added: 2020.]

Our Annual Report on Form 10-K for the year ended December 31, [removed: 2019,] [added: 2020,] includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, [removed: 2018,] [added: 2019,] in its Part [removed: II] [added: II,] Item 7, "*Management's Discussion and Analysis of Financial Condition and Results of Operations*".

[removed: We] [added: To that end, we] have dedicated and continue to dedicate substantial resources in response to COVID-19, [added: including the implementation of additional protocols and initiatives] to help safely maintain continuity of care for our patients [removed: throughout this crisis, whether in the hospital, outpatient or home setting,] and [removed: to] help protect our caregivers.

We also have maintained business process continuity during the pandemic by enabling most back office teammates to work [removed: remotely and implemented guidance early in the pandemic to help mitigate health and safety risks to our teammates imposed by COVID-19.][added: remotely.]

[removed: Our response protocol generally has allowed us to maintain continuity of care for our patients and we] [added: We] carefully monitor the efficacy of [removed: these] [added: our response] protocols and their impact on our operations and strategic [removed: initiatives] [added: priorities] as the pandemic continues.

Due in part to [removed: the] [added: these] protocols and [removed: initiatives described above,] [added: initiatives,] we [added: have] incurred [removed: significant] costs related to COVID-19 in [removed: 2020,] [added: 2021,] and we expect to continue to incur extended [removed: and significant additional] costs in [added: the future in] connection with our response to [removed: COVID-19.][added: COVID-19, and the cumulative impact of these costs could be material.]

[removed: Additionally, the steps] [added: For example,] we [removed: have taken designed to help safely maintain continuity of care for our patients and help protect our caregivers, such as our policies to implement] [added: implemented] dedicated care shifts for patients with confirmed or suspected COVID-19 and other enhanced clinical practices, [removed: have increased, and are expected to continue to increase, our expenses] [added: including procuring additional equipment] and [removed: use of] [added: clinical supplies, such as] personal protective equipment (PPE).

[removed: Our] [added: Among other things, our] response to COVID-19 [removed: also] has resulted in higher salary and wage expense, and we have provided, and may provide in the future, substantial financial support [removed: associated with relief reimbursement] to our [removed: teammates.][added: teammates, which may include relief reimbursement.]

*•our ability to successfully implement our strategies with respect to integrated kidney care and value-based care initiatives and home based dialysis in the desired time frame and in a complex, dynamic and highly regulated environment, including, among other things, maintaining our existing business; meeting growth expectations; recovering our investments; entering into agreements with payors, third party vendors and others on terms that are competitive and, as appropriate, prove actuarially sound; structuring operations, agreements and arrangements to comply with evolving rules and regulations; finding, training and retaining appropriate staff; and further developing our integrated care and other capabilities to provide competitive programs at scale;*

*•our ability to attract, retain and motivate teammates and our ability to manage operating cost increases or productivity decreases whether due to union organizing activities, legislative or other changes, demand for labor, volatility and uncertainty in the labor market, the current challenging labor market conditions, or other reasons;*

*•our aspirations, goals and disclosures related to environmental, social and governance (ESG) matters, including evolving regulatory requirements affecting ESG standards, measurements and reporting requirements; the availability of suppliers that can meet our sustainability standards; and our ability to recruit, develop and retain diverse talent in our labor markets;*

In addition our 2021 financial performance benefited from lower pharmaceutical unit costs and intensity, advocacy costs and COVID-19-related compensation expenses as compared to the prior year.

These benefits were partially offset by a decline in treatment volume and increases in compensation expense, including labor costs (both operating and overhead) and health benefits expense.

- improved certain key clinical outcomes in our U.S. dialysis business, including exceeding our pre-pandemic level of patients receiving kidney transplants;

- operating income growth of 3.0% in U.S. dialysis and 82.6% in international operations;

- a net increase of 18 international dialysis centers;

- provision of integrated kidney care to 16,000 patients in risk-based integrated care arrangements and an additional 7,000 patients in other integrated care arrangements;

- completion of an unregistered add-on offering of $1 billion aggregate principal amount to the existing 4.625% senior notes due June 1, 2030 (the Additional 2030 Notes); and

In 2022, we expect that COVID-19 will continue to impact our business and financial performance though the magnitude of these impacts remains difficult to predict and subject to significant uncertainty due to a number of factors, as described in further detail below under the heading "*COVID-19 and its impact on our business*." On treatment volume, we continue to face pressure primarily driven by the impact of COVID-19 on mortality rates for dialysis patients due to recent surges of infections, which may be further compounded by any future surges, if such surges occur.

We expect to incur elevated advocacy costs in 2022, in-line with our advocacy costs incurred in 2018 and 2020, respectively.

*Operational and Financial Impacts*

During this time of great and continued challenge, we continue our focus on the health, safety and well-being of our patients, teammates and physician partners and helping to ensure that our patients have the ability to maintain continuity of care throughout this crisis, whether in the hospital, outpatient or home setting.

These efforts are part of a wider Prepare, Prevent, Respond and Recover program that we have implemented in connection with the pandemic, which also includes operational protocols such as the redistribution of teammates, machines and supplies across the country as needed and continued investment in and utilization of telehealth capabilities and the administration of COVID-19 vaccines.

Certain temporary changes made in response to the COVID-19 pandemic could become permanent, which could have an adverse impact on our business.

We also continued to experience significant cost inflation on PPE in 2021, though certain other costs related to our COVID-19 response have decreased since the peak of the COVID-19 surge in the fourth quarter of 2020.

We believe that the cost of these medical supplies will remain elevated and as our COVID-19 response continues, we expect to continue to incur extended and significant additional costs for these supplies, and we expect that certain of these increased costs may persist due to the overall challenges and disruptions of global supply chains.

These global supply chain challenges have impacted the availability of certain of our equipment and clinical supplies.

Prolonged strain on global supply chains may result in additional equipment and clinical supply shortages, disruptions, delays or associated price increases that could impact our ability to provide dialysis services or the cost of providing those services, among other things.

Our business is labor intensive and our financial and operating results have been and continue to be sensitive to variations in labor-related costs and productivity.

We have historically faced and expect to continue to face costs and difficulties in hiring and retaining caregivers due to a nationwide shortage of skilled clinical personnel.

These challenges have been heightened by the increased demand for and demand upon such personnel attributed to the ongoing pandemic.

As referenced above, the labor market is challenging and continues to experience volatility, uncertainty and labor supply shortages, particularly in healthcare.

In addition, federal and state agencies have announced or released rules relating to COVID-19 vaccination requirements that relate to our teammates, providers and patients.

Certain of these regulations are subject to ongoing legal challenge as further described in Part I, Item 1.

Business of this Form 10-K under the heading "*Government Regulation—COVID-19 Response"*.

The cumulative impact of these mandates, some of which have already gone into effect, contributes further to the volatility and uncertainty in the labor market and may ultimately further exacerbate labor shortages.

These conditions have adversely impacted, and may continue to adversely impact, our ability to attract and retain employees, particularly clinical personnel.

As part of our efforts in this highly competitive market, we have provided our teammates with additional compensation, among other things.

In 2022, we expect to provide our teammates with higher than usual wage

increases, which will put additional pressure on our cost structure going forward.

We have experienced staffing shortages and disruptions as a result of current labor market conditions and the current Omicron surge, and further staffing shortages or disruptions, if material, could lead to the unplanned closures of certain centers or adversely impact clinical operations, and may otherwise have a material adverse impact on our ability to provide dialysis services or the cost of providing those services, among other things.

Prolonged volatility, uncertainty, labor supply shortages and other challenging labor market conditions, including, among other things, due to inflationary pressures or evolving monetary policies, could also have an adverse impact on our ability to execute on our strategic initiatives, and ultimately could have a material adverse impact on our labor costs, results of operations, financial condition and cash flows.

In 2021, treatment volumes reflected continued pressure primarily driven by the ongoing impact of COVID-19 on mortality rates for dialysis patients which has had a negative impact on our patient census.

The recent surges associated with the Delta and Omicron variants led to a significant increase in COVID‑19 cases in our patient population.

At the peak of the most recent surge in January 2022, the new case count was more than two times as high as the peak from winter 2020.

While the mortality rate associated with this latest surge preliminarily appears to be lower than in prior surges, it is too early to provide a comprehensive assessment.

The fourth quarter of 2021 saw a slight decrease in incremental mortality on an absolute basis compared to the third quarter of 2021.

In addition, the COVID-19 pandemic and efforts to contain the virus have impacted the global economy, resulting in, among other things, volatility and uncertainty in labor market conditions as noted above.

The aforementioned risks and uncertainties may also have the effect of heightening many of the other risks and uncertainties discussed below;*

*of the current healthcare marketplace, as well as the composition of the U.S. Supreme Court and the new presidential administration and congressional majority;*

*•our ability to successfully implement our strategies with respect to home-based dialysis, value-based care and/or integrated kidney care, including maintaining our existing business and further developing our capabilities in a complex and highly regulated environment;*

This was partially offset by increases in labor costs (both operating and overhead), lower margin on calcimimetics, increases in advocacy costs, and increased costs driven by the emergence of COVID-19, including increased costs related to compensation and medical supplies.

- improved key clinical outcomes in our U.S. dialysis business, including our recognition as an industry leader for the eighth consecutive year in CMS’ Quality Incentive Program and for the last seven years under the CMS Five-Star Quality Rating system;

- a net increase of 63 U.S. and 62 international dialysis centers, including entering a new country, the United Kingdom;

- refinancing transactions, including the redemption of our 5.125% and 5.0% senior notes, the issuance of our new 4.625% and 3.75% senior notes and the repricing of our Term Loan B-1 resulting in lower debt expense; and

On treatment volume, we continue to face pressure primarily driven by the impact of COVID-19 on mortality rates for dialysis patients.

We expect to incur significantly less advocacy costs in 2021 than we experienced in 2020.

As noted above and described in further detail in Part I Item 1, "*Business*," we continue to closely monitor the impact on our business of the pandemic and the resulting economic environment, including the impact on our patients, teammates, physician partners, suppliers, vendors and business partners.

Our COVID-19 response has included, among other things, the implementation of additional protocols and operational initiatives related to infection control and clinical best practices, redistribution of resources across geographies and increased investment in and utilization of telehealth capabilities.

For example, we have had, and expect to continue to have, increased costs associated with a high demand for our skilled clinical personnel.

Furthermore, the effort and cost needed to procure certain of our equipment and clinical supplies, including PPE, have increased, and we expect that these increased costs will continue while the pandemic persists.

We have experienced and expect to continue to experience a negative impact on revenue and non-acquired growth from COVID-19 due to lower treatment volumes, including from the negative impact on our patient census that is the result of changes in rates of mortality.

The extent of these effects will be dependent upon, among other things, the extent and duration of the increased unemployment levels for our patient population, economic deterioration and potential recession; the timing and scope of federal, state and local governmental responses to the ongoing pandemic; and patients’ ability to retain existing insurance and their individual choices with respect to their coverage.

Despite

the broader economic conditions in the U.S. in 2020, our commercial mix in 2020 was relatively flat as compared to our commercial mix in 2019, which we believe was largely due to the fact that older, higher-risk patients who tend to disproportionately have government health insurance coverage, have been more adversely impacted by COVID-19 to date, but the ultimate impact of COVID-19 on our commercial mix will depend on future developments that are highly uncertain and difficult to predict.

We also are working to help make COVID-19 vaccines available to our patients and teammates, including through coordination with state and federal governments on direct vaccine distribution so that we can administer vaccines to our patients and teammates.

Furthermore, a significant initial part of the federal government response to the COVID-19 pandemic was the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus package that was signed into law on March 27, 2020.

The CARES Act included a provision that suspended the 2% Medicare sequestration from May 1, 2020 through December 31, 2020, and in the year ended December 31, 2020 our revenues increased due to this suspension as further described below.

The Consolidated Appropriations Act 2021, signed into law on December 27, 2020, extended the suspension of the 2% Medicare sequestration until March 31, 2021.

In addition, the CARES Act authorized $100 billion in funding to be distributed to healthcare providers through the federal Public Health and Social Services Emergency Fund (Provider Relief Fund).

While we declined approximately $250 million of government funding received in the second quarter of 2020 from the Provider Relief Fund, certain of our competitors accepted such funds.

There can be no assurance that financial or other assistance will be available from the government if we have a need for such assistance in the future.

We believe the ultimate impact of this public health crisis on the Company will depend on future developments that are highly uncertain and difficult to predict, including among other things the severity and duration of the pandemic; further spread or resurgence of the virus including as a result of the emergence of new strains of the virus; its impact on the CKD patient population and our patient population; the availability, acceptance, impact and efficacy of COVID-19 treatments, therapies and vaccines; the pandemic’s continuing impact on the U.S. and global economies and unemployment; the responses of our competitors to the pandemic and related changes in the marketplace; and the timing, scope and effectiveness of federal, state and local governmental responses.

At this time, we cannot reasonably estimate the ultimate impact the COVID-19 pandemic will have on us, but the adverse impact could be material.

| Operating income | | | $ | 1,695 | | | | | $ | 1,643 | | | | | $ | 51 | | | | | 3.1 | | % |

We also provide hospital inpatient dialysis services in approximately 900 hospitals.

Effective January 1, 2018, both oral and intravenous forms of calcimimetics became the financial responsibility of our U.S. dialysis business for our Medicare patients and are reimbursed under Medicare Part B.

These separate reimbursement payments for calcimimetics were subject to change on an annual basis.

As expected, as of January 1, 2021, calcimimetics was added to the ESRD PPS bundled payment.

We therefore expect our operating income from calcimimetics to be more stable in the future as compared to the past three years under the TDAPA model.

- certain professional fees.

In 2020, the demand for skilled clinical personnel increased due to the demand of the pandemic on these resources, intensifying these competitive pressures; however, we managed to increase our overall clinical teammate retention in 2020.

| Dialysis treatments | | | 30,314,619 | | | | | | 30,172,699 | | | | | | 141,920 | | | | | | 0.5 | | % |

U.S. dialysis revenues in 2020 increased primarily due to an increase in dialysis treatments and an increase in our average patient service revenue per treatment.

Treatments were negatively impacted by higher mortality than experienced historically as well as a decline in new admissions.

U.S. dialysis patient care costs per treatment decreased primarily due to decreases in pharmaceutical unit costs, as well as decreased travel expenses due to COVID-19.

These decreases were partially offset by an increase in labor costs and COVID-19-related costs, including compensation, medical supplies and teammate relief reimbursement and benefit program expenses.

*General and administrative expenses.* U.S. dialysis general and administrative expenses in 2020 increased primarily due to an increase in advocacy costs incurred to counter union policy efforts, including those related to a California ballot initiative.

The first table below presents principal repayments and current weighted average interest rates on our debt obligations as of December 31, [removed: 2020.][added: 2021.]

The variable rates presented reflect the weighted average LIBOR rates in effect for all debt tranches plus interest rate margins in effect as of December 31, [removed: 2020.][added: 2021.]

The Term Loan A interest rate margin in effect at December 31, [removed: 2020,] [added: 2021,] was 1.50%.

At December 31, [removed: 2020,] [added: 2021,] the Term Loan B-1 interest rate margin in effect was 1.75%.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | Thereafter | | | | | | Total | | | | | | | | | | | | | | |

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | | | | | | | | | | | | |

| 2019 [added: interest rate] cap agreements | | | $ | 3,500 | | | | | $ | — | | | | | $ | — | | | | | $ | [removed: —] [added: 3,500] | | | | | $ | [removed: 3,500] [added: —] | | | | | $ | — | | | | | LIBOR above 2.0% | | | | | | $ | [removed: 2.7] [added: 12.2] | |

For a further discussion of our debt, see Note 13 to our consolidated financial statements at Part II Item 15, "*Exhibits, Financial Statement Schedules" – Note [removed: 13 – "Long-term debt*"] [added: 13*] as referred from Part II Item 8, "*Financial Statements and Supplementary Data.*"

Under this model, with all else constant, it is estimated that such an increase would have reduced net income by approximately [removed: $34.8] [added: $33.8] million, [removed: $32.4] [added: $34.8] million, and [removed: $37.8] [added: $32.4] million, net of tax, for the years ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018,] [added: 2019,] respectively.

[removed: Therefore, changes in the rate of] exchange between the U.S. dollar and the local currencies in which our international operations are conducted affect our results of operations and financial position as reported in our consolidated financial statements.

Through [removed: 2020,] [added: 2021,] our international operations have remained fairly small relative to the size of our consolidated financial statements, constituting approximately 9% of our consolidated assets [removed: as] [added: and approximately 6%] of [added: our consolidated revenues for the year ended] December 31, [removed: 2020,] [added: 2021,] with no single country constituting more than 3% of consolidated [removed: assets, and approximately 5% of our consolidated revenues for the year ended December 31, 2020.][added: assets.]

In addition, our [added: unrealized] foreign currency translation [removed: (losses) gains] [added: losses] were approximately [removed: (0.4)%, (1)%,] [added: 5%, 0.4%,] and [removed: (3)%] [added: 1%] of our consolidated operating income for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018.][added: 2019.]

As such, through December 31, [removed: 2020,] [added: 2021,] we have not engaged in transactions to hedge the exposure of our international transactions or net investments to foreign currency risk.

| Fixed rate | | | $ | 35 | | | | | $ | 40 | | | | | $ | 31 | | | | | $ | 32 | | | | | $ | 42 | | | | | $ | 4,447 | | | | | $ | 4,627 | | | | | 4.44 | | % | | | | $ | 4,363 | |

| Variable rate | | | $ | 144 | | | | | $ | 178 | | | | | $ | 1,394 | | | | | $ | 36 | | | | | $ | 2,583 | | | | | $ | 3 | | | | | $ | 4,338 | | | | | 2.20 | | % | | | | $ | 4,336 | |

Therefore, changes in the rate of

At December 31, 2020, we had an outstanding balance on our revolving line of credit bearing interest at an Alternate Base Rate (the Prime Rate) plus 0.50%.

On January 6, 2021 our revolving line of credit rate was converted to a LIBOR-based rate of LIBOR plus 1.50%.

| Fixed rate | | | $ | 31 | | | | | $ | 34 | | | | | $ | 48 | | | | | $ | 29 | | | | | $ | 33 | | | | | $ | 3,448 | | | | | $ | 3,623 | | | | | 4.32 | | % | | | | $ | 3,481 | |

| Variable rate | | | $ | 138 | | | | | $ | 136 | | | | | $ | 179 | | | | | $ | 1,468 | | | | | $ | 36 | | | | | $ | 2,584 | | | | | $ | 4,541 | | | | | 2.05 | | % | | | | $ | 4,518 | |

*Unless otherwise indicated in this [removed: Annual Report on Form 10-K “DaVita”, “the Company” “we”, “us”, “our”] [added: report "DaVita", "the Company" "we", "us", "our"] and other similar terms refer to DaVita Inc. and its consolidated subsidiaries.

DaVita is committed to bold, patient-centric care models, implementing the latest technologies and [removed: moving toward] [added: advancing] integrated care offerings.

This culture and philosophy fuel our continuous drive toward achieving our mission [removed: to] [added: "to] be the provider, partner and employer of [removed: choice] [added: choice"] and fulfilling our vision [removed: to "build] [added: "to build] the greatest healthcare community the world has ever [removed: seen."][added: seen".]

Patients suffering from [removed: ESRD] [added: ESKD] generally require dialysis at least three times a week for the rest of their [removed: lives.][added: lives or until they receive a kidney transplant.]

Our U.S. dialysis and related lab services (U.S. dialysis) business treats patients with chronic kidney [removed: failure and] [added: failure,] ESRD [added: or ESKD,] in the United States, and is our largest line of business.

As of December 31, [removed: 2020,] [added: 2021,] we provided dialysis and administrative services and related laboratory services throughout the U.S. via a network of [removed: 2,816] [added: 2,815] outpatient dialysis centers [added: and home programs] in 46 states and the District of Columbia, serving a total of approximately [removed: 204,200 patients] [added: 203,100 patients,] and [removed: provided] [added: have contracts to provide] hospital inpatient dialysis services in approximately [removed: 900] [added: 850] hospitals.

Our robust platform to deliver kidney care services also includes established nephrology and payor [removed: relationships as well as home programs.][added: relationships.]

In addition, as of December 31, [removed: 2020, we] [added: 2021, our international operations] provided dialysis and administrative services to a total of [removed: 321] [added: 339] outpatient dialysis centers located in ten countries outside of the U.S., serving approximately [removed: 36,200] [added: 39,900] patients.

[removed: The Company also consists of] [added: We refer to] our [added: U.S.] ancillary services and strategic [removed: initiatives, which include the aforementioned] [added: initiatives and our] international operations [removed: (collectively, our ancillary services), as well as] [added: as, collectively,] our [removed: corporate administrative support.][added: "ancillary services".]

[removed: For] [added: According to] the [removed: eighth] [added: most recently published data, for eight] consecutive [removed: year,] [added: years,] we are an industry leader in the Centers for Medicare & Medicaid Services’ (CMS) Quality Incentive Program (QIP), which promotes high quality services in outpatient dialysis facilities treating patients with [removed: ESRD.][added: ESKD.]

[removed: We] [added: In addition, according to the most recently published data, for seven consecutive years, we] are also an industry leader [removed: for the seventh consecutive year] under CMS’ Five-Star Quality Rating system, which rates eligible dialysis centers based on the quality of outcomes to help patients, their families, and caregivers make more informed decisions about where patients receive care.

According to the most recently collected [removed: data,] [added: data from Nephrology News and Issues,] we are an industry leader for the total number of patients in home-based dialysis services.

In addition to our teammates at our dialysis facilities, as of December 31, [removed: 2020,] [added: 2021,] our domestic Chief Medical Officer [removed: leads] [added: lead] a team of [removed: 18] [added: 24] senior nephrologists in our physician leadership team as part of our domestic Office of the Chief Medical Officer (OCMO).

Our international Chief Medical Officer [removed: leads] [added: lead] a team of 11 senior nephrologists in our physician leadership team as part of our international [removed: OCMO.][added: OCMO as of December 31, 2021.]

Our OCMO teammates represent a variety of academic, [removed: clinical practice, and clinical research backgrounds.]

We also have a Physician [removed: Counsel] [added: Council] that serves as an advisory body to senior management, which [removed: is] [added: was] composed of [removed: nine] [added: eight] physicians with extensive experience in clinical practice and [removed: have] seven Group Medical Directors as of December 31, [removed: 2020.][added: 2021.]

On June 19, 2019, we completed the sale of our [added: prior] DaVita Medical Group (DMG) business, a patient and physician-focused integrated healthcare delivery and management company, to Collaborative Care Holdings, LLC, a subsidiary of UnitedHealth Group Inc. As a result, the DMG business has been classified as discontinued operations and its results of operations are reported as discontinued operations for all periods presented in the consolidated financial statements included in this report.

As a caregiving organization, we [removed: are exposed to and will] continue to be impacted by the effects of the novel coronavirus (COVID-19) pandemic.

DaVita’s [added: caregiving] teammates [removed: include, among others, dialysis nurses, patient care technicians, social workers, dieticians and other caregivers who are] [added: continue to be] on the front lines of the ongoing COVID-19 pandemic providing critical, life-sustaining care for our patients.

We [removed: are] [added: continue to] closely [removed: monitoring] [added: monitor] the impact on our business of the pandemic and the resulting economic [added: and political] environment, including the [removed: impact] [added: various impacts] on our patients, teammates, physician partners, suppliers, vendors and business partners.

During this time of great [added: and continued] challenge, our top priorities continue to be the health, safety and well-being of our patients, teammates and physician partners and helping to ensure that our patients have the ability to maintain continuity of care throughout this crisis, whether in the hospital, outpatient or home setting.

To that end, we have dedicated and continue to dedicate substantial resources in response to COVID-19, including the implementation of additional protocols [removed: in coordination with the Centers for Disease Control] and [removed: Prevention (CDC) on infection control and clinical best practices] [added: initiatives] to help safely maintain continuity of care for our patients and help protect our caregivers.

[removed: In addition, the Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent] [added: Federal] COVID-19 relief legislation [removed: temporarily] suspended [removed: Medicare’s] [added: the] 2% [added: Medicare] sequestration from May 1, 2020 through December 31, [removed: 2020, and the Consolidated Appropriations Act subsequently extended this sequestration suspension until March 31,] 2021.

For additional discussion of the COVID-19 pandemic and our response, including its impact on us and related risks and uncertainties, please see the discussion below under the heading [removed: "Human] [added: "—*Human] Capital [removed: Management", as well as] [added: Management*",] the risk factor in Item [removed: 1A Risk Factors under the heading *“We face various risks related to the dynamic and evolving novel coronavirus pandemic, any of which may have a material adverse impact on us,*” and Item 7.][added: 1A.]

[removed: Management’s] [added: "*Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations.][added: Operations*."]

Our U.S. dialysis business is a leading provider of kidney dialysis services for patients suffering from [removed: ESRD.][added: ESKD.]

As of December 31, [removed: 2020,] [added: 2021,] we provided dialysis and administrative services in the U.S. through a network of [removed: 2,816] [added: 2,815] outpatient dialysis centers in 46 states and the District of Columbia, serving a total of approximately [removed: 204,200] [added: 203,100] patients.

We also [added: have contracts to] provide hospital inpatient dialysis services in approximately [removed: 900] [added: 850] hospitals and related laboratory services throughout the U.S.

According to the United States Renal Data System (USRDS), there were over [removed: 555,000 ESRD] [added: 569,000 ESKD] dialysis patients in the U.S. in [removed: 2018.][added: 2019.]

Based on the most recent [removed: 2020] [added: 2021] annual data report from the USRDS, the underlying [removed: ESRD] [added: ESKD] dialysis patient population has grown at an approximate compound rate of [removed: 3.7%] [added: 3.5%] from [removed: 2008] [added: 2009] to [removed: 2018] [added: 2019] and a compound rate of [removed: 3.5%] [added: 3.1%] from [removed: 2013] [added: 2014] to [removed: 2018,] [added: 2019,] which suggests that the rate of growth of the [removed: ESRD] [added: ESKD] patient population is declining relative to long term trends.

A number of factors may impact [removed: ESRD] [added: ESKD] growth rates, including, among others, the aging of the U.S. population, transplant rates, incidence rates for diseases that cause kidney failure such as diabetes and hypertension, mortality rates for dialysis patients and growth rates of minority populations with higher than average incidence rates of [removed: ESRD.][added: ESKD.]

For the year ended December 31, [removed: 2020,] [added: 2021,] approximately 90% of our total dialysis patients were covered under some form of government-based program, with approximately [removed: 74%] [added: 75%] of our dialysis patients covered under Medicare and Medicare Advantage plans.

*Treatment options for [removed: ESRD*][added: ESKD*]

Treatment options for [removed: ESRD] [added: ESKD] are dialysis and kidney transplantation.

Hemodialysis, the most common form of [removed: ESRD] [added: ESKD] treatment, is usually performed at a freestanding outpatient dialysis center, at a hospital-based outpatient center, or at the patient’s home.

While blood is circulated through one chamber, a pre-mixed [removed: fluid is circulated through the other chamber.]

Hospital inpatient hemodialysis services are required for patients with acute kidney failure primarily resulting from trauma, patients in early stages of [removed: ESRD] [added: ESKD] and [removed: ESRD] [added: ESKD] patients who require hospitalization for other reasons.

Some [removed: ESRD] [added: ESKD] patients who are healthier and more independent may perform [removed: home] hemodialysis in their home or residence through the use of a hemodialysis machine designed specifically for home therapy that is portable, smaller and easier to use.

An executive order signed in July 2019 (the 2019 Executive Order) directed [removed: the] HHS to develop policies addressing, among other things, the goal of making more kidneys available for transplant.

For more information regarding the 2019 Executive Order and these payment models, please see the discussion below under the heading [removed: “-*New models of care] [added: "—*Integrated Kidney Care] and Medicare and Medicaid program [removed: reforms*.”][added: reforms*."]

Finally, our U.S ancillary services and strategic initiatives provided integrated care and disease management services to 16,000 patients in risk-based integrated care arrangements and to an additional 7,000 patients in other integrated care arrangements as of December 31, 2021.

Most of the patients served by our integrated care business are also our dialysis patients.

We also have a separate corporate administrative support function that supports our U.S. dialysis business and these ancillary services.

clinical practice, and clinical research backgrounds.

We believe the ultimate impact of this public health crisis on the Company will depend on future developments that are highly uncertain and difficult to predict.

Risk Factors under the heading "*We face various risks related to the dynamic and evolving novel coronavirus pandemic, many of which may have a material adverse impact on us,*" and the discussion under the heading "*COVID-19 and its impact on our business*" in Part II, Item 7.

fluid is circulated through the other chamber.

treatment fee that is individually negotiated with each hospital.

In 2021, our laboratory performed COVID-19 testing for our patients and teammates.

The following table

| Medicare and Medicare Advantage plans | | | 58 | | % |

| Medicaid and managed Medicaid plans | | | 7 | | % |

| Other government-based programs | | | 3 | | % |

| Total government-based programs | | | 68 | | % |

| Commercial (including hospital dialysis services) | | | 32 | | % |

| Total U.S. dialysis patient service revenues | | | 100 | | % |

Due to the ongoing COVID-19 pandemic, CMS is not applying QIP payment reductions to facilities in 2022.

There was no material impact to us during 2021 related to the ETC.

Among other things, the rule updates payment rates under the ESRD PPS for renal dialysis services furnished to beneficiaries on or after January 1, 2022, finalizes updates to the Acute Kidney Injury (AKI) dialysis payment rate for dialysis services furnished by ESRD facilities and finalizes modifications to the ETC model policies.

subsequently extended through fiscal year 2027.

The Protecting Medicare and American Farmers from Sequester Cuts Act, signed into law on December 10, 2021, extended the suspension of the 2% Medicare sequestration from December 31, 2021 through March 31, 2022, with 1% Medicare sequestration beginning April 1, 2022 through June 30, 2022 and 2% Medicare sequestration beginning July 1, 2022.

However, some of our commercial contracts

For additional detail on these factors and other risks associated with on our commercial revenue, see the risk factors in Item 1A.

Effective January 1, 2021, both oral and intravenous forms of calcimimetics, a drug class taken by many patients with ESRD to treat mineral bone disorder, were added to the ESRD PPS bundled payment, and as a result we expect our operating income from calcimimetics to be more stable in the future as compared to the year ended December 31, 2020 under the transitional drug add-on payment adjustment (TDAPA) model.

The compensation of our medical directors is the result of arm’s length

We operated 2,815 outpatient dialysis centers in the U.S. as of December 31, 2021 and 2,758 of these centers are consolidated in our financial statements.

Our ancillary services relate primarily to our core business of providing kidney care services.

Through a combination of

DaVita IKC supported our ESKD seamless care organizations (ESCO) joint venture programs until their completion in 2021, and DaVita IKC has commenced participation in certain of the payment models administered by CMMI.

As further described below under the heading "*—Government regulation*—*CMMI Payment Models*", the Company has invested resources, and expects to continue to invest substantial resources in these models as part of the Company's overall plan to grow its integrated kidney care business and value-based care initiatives.

See Note 1, *Other revenue,* in the Company's consolidated financial statements for more information on how the Company accounts for its integrated care arrangements.

The Company is also developing, and has entered into, various forms of technology-based, administrative, financial and other collaboration and incentive arrangements with physician partners and other providers in support of our innovative, developing and expanding integrated kidney care programs and arrangements.

*•Transplant software business.* DaVita's new transplant software business, MedSleuth, which was acquired on December 31, 2021, works with transplant centers across the U.S. to provide greater connectivity among transplant candidates, transplant centers, physicians and care teams to help improve the experience and outcomes for kidney and liver transplant patients.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | 339 | | |

If any of our personnel, representatives or operations are alleged to have violated these or other laws, regulations or requirements, we could experience material harm to our reputation and stock price, and it could impact our relationships and/or contracts related to our business, among other things.

- Enforcement actions, investigations or audits by government agencies and/or initiated by qui tam relators related to interoperability and related data sharing and access requirements and regulations;

Alternate Fines Statute.

Examples of such arrangements include, among other things, medical director agreements, joint ventures, leases and subleases with entities in which physicians, hospitals or medical groups hold ownership interests, consulting agreements, hospital services agreements, discharge planning services agreements, acute dialysis services agreements, value based care arrangements, employment and coverage agreements, and incentive performance arrangements.

We also have been collaborating with the CDC, the U.S. Department of Health and Human Services (HHS), CMS, the American Society of Nephrology, and dialysis providers nationwide to help ensure that the dialysis community is able to support patients nationwide during this global health crisis.

The protocols and initiatives we have implemented in response to COVID-19 include steps designed to implement dedicated care shifts for patients with confirmed or suspected COVID-19 and other enhanced clinical practices, including procuring additional equipment and clinical supplies, including personal protective equipment (PPE) and providing financial support to our teammates associated with relief reimbursement.

These efforts are part of a wider Prepare, Prevent, Respond and Recover protocol that we have implemented in connection with the pandemic, which also includes operational protocols such as the redistribution of teammates, machines and supplies across the country as needed and increased investment in and utilization of telehealth capabilities.

We also have maintained business process continuity during the pandemic by enabling most back office teammates to work remotely.

Our response protocol generally has allowed us to maintain continuity of care for our patients and we carefully monitor the efficacy of these protocols and their impact on our operations and strategic priorities as the pandemic continues.

If we are required to maintain certain restrictive operational initiatives for an extended period of time, it may adversely impact our strategic initiatives, such as our strategy to continue to build on our abilities to offer home dialysis options.

Certain temporary changes made in response to the COVID-19 pandemic could become permanent, which could have an adverse impact on our business.

In addition, any staffing shortages or disruptions, or any equipment or clinical supply shortages, disruptions or delays or associated price increases, could impact our ability to provide dialysis services or the cost of providing those services.

Due in part to the protocols and initiatives described above, we have incurred significant costs related to COVID-19 in 2020, and we expect to continue to incur extended and significant additional costs in connection with our response to COVID-19.

We have worked with certain government agencies to respond to the COVID-19 pandemic, and in certain cases have sought waivers of regulatory requirements.

We also are working to help make COVID-19 vaccines available to our patients and teammates, including through coordination with state and federal governments on direct vaccine distribution so that we can administer vaccines to our patients and teammates.

These vaccines are currently available under emergency use authorizations, and there can be no assurance that our patients and caregivers will choose to receive a COVID-19 vaccine or that the vaccines will prove to be as safe and effective as currently understood by the scientific community.

In addition, we may encounter difficulties with the availability and storage of the vaccines, or administration of the vaccines, some of which have multiple dose requirements.

We operate in a complex and highly regulated environment, and the novel nature of our COVID-19 response, including, for example, with respect to regulatory waivers and our administration of the newly developed COVID-19 vaccines, may increase our exposure to legal, regulatory and clinical risks.

While in effect, this legislation, has increased, and will continue to increase, our revenues.

Furthermore, a significant initial part of the federal government response to the COVID-19 pandemic was the CARES Act's authorization of $100 billion in funding to be distributed to healthcare providers through the federal Public Health and Social Services Emergency Fund (Provider Relief Fund).

While we declined approximately $250 million of government funding received in the second quarter of 2020 from the

Provider Relief Fund, certain of our competitors accepted such funds.

There can be no assurance that financial or other assistance will be available from the government if we have a need for such assistance in the future.

We believe the ultimate impact of this public health crisis on the Company will depend on future developments that are highly uncertain and difficult to predict, including among other things the severity and duration of the pandemic; further spread or resurgence of the virus, including as a result of the emergence of new strains of the virus; its impact on the CKD patient population and our patient population; the availability, acceptance, impact and efficacy of COVID-19 vaccines and other treatments or therapies; the pandemic’s continuing impact on the U.S. and global economies and unemployment; the responses of our competitors to the pandemic and related changes in the marketplace; and the timing, scope and effectiveness of federal, state and local governmental responses.

For patients with Medicare coverage, all ESRD payments for dialysis treatments are made under a single bundled payment rate.

See page 7 for further details.

As of December 31, 2020, we operated or provided administrative services through a network of 2,816 outpatient dialysis centers in the U.S. that are designed specifically for outpatient hemodialysis.

In 2020, our overall network of U.S. outpatient dialysis centers increased by 63 primarily as a result of the opening of new dialysis centers and acquisitions, net of center closures, representing a total increase of approximately 2.3% from 2019.

Under Medicare regulations, we cannot promote, develop or maintain any kind of contractual relationship with our patients that would directly or indirectly obligate a patient to use or continue to use our dialysis services, or that would give us any preferential rights other than those related to collecting payments for our dialysis services.

Other sources of our U.S. dialysis patient services revenues for the year ended December 31, 2020, were from commercial payors (including hospital inpatient dialysis services) accounting for 32% of revenues, Medicaid and managed Medicaid plans accounting for 7% of our revenues and other government programs accounting for 4% of our revenues.

Prior to January 2021, calcimimetics, a drug class taken by many patients with ESRD to treat mineral bone disorder, was separately billable through a transitional drug add-on payment adjustment (TDAPA); however, since January 1, 2021 and as described more fully below, calcimimetics has been included in the ESRD bundled payment.

Among other things, the rule provided for the inclusion of calcimimetics in the ESRD bundled payment as described above; specified TDAPAs for certain new renal dialysis drugs and biological products; and amended the reporting measures in the ESRD QIP.

The CARES Act that was signed into law on March 27, 2020 included a provision that suspended the 2% Medicare sequestration from May 1, 2020 through December 31, 2020, and the Consolidated Appropriations Act, 2021 signed into law on December 27, 2020 extended the suspension of the 2% Medicare sequestration until March 31, 2021.

that patient shift from the commercial insurance plan rates to Medicare payment rates, which are on average significantly lower than commercial insurance rates.

In recent years, federal legislative and executive action has been focused on developing new models of kidney care for Medicare beneficiaries.

These factors include, among others, a highly competitive rate environment that shapes our ongoing negotiations with commercial payors; changes in commercial plan design; and the health of the U.S. economy including the continuing impact of COVID-19 and efforts to contain the virus.

In addition, changes in state and federal legislation, regulations, rules, laws, guidance or other requirements may impact the availability and scope of commercial insurance, including, among others, developments that impact the healthcare exchanges introduced by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (Affordable Care Act (ACA)) and commercial payor participation in that marketplace as well as developments that impact the availability of charitable premium assistance.

Effective January 1, 2018, both oral and intravenous forms of calcimimetics became the financial responsibility of our U.S. dialysis business for our Medicare patients and are reimbursed under Medicare Part B.

Since the effective date through December 31, 2020, the oral and intravenous forms of calcimimetics were separately reimbursed through a TDAPA and not as part of the ESRD PPS bundled payment.

These separate reimbursement payments for calcimimetics were subject to change on an annual basis.

As expected, as of January 1, 2021, calcimimetics was entered into the ESRD PPS bundled payment.

As of December 31, 2020, we operated or provided administrative services to a total of 2,816 U.S. outpatient dialysis centers.

A total of 2,763 of such centers are consolidated in our financial statements.

*Ancillary Services and Strategic Initiatives*

The information required by this Part I, Item 3 is incorporated herein by reference to the information set forth under the caption [removed: “*Contingencies*”] [added: "*Contingencies"*] in Note 16 to the consolidated financial statements included in this report.

For the Fiscal Year Ended December 31, [removed: 2020][added: 2021]

[removed: ][added: ]

As of June 30, [removed: 2020,] [added: 2021,] the aggregate market value of the [removed: Registrant's] [added: registrant's] common stock outstanding held by non-affiliates based upon the closing price on the New York Stock Exchange was approximately [removed: $9.7] [added: $12.7] billion.

As of January [removed: 29, 2021,] [added: 31, 2022,] the number of shares of the [removed: Registrant’s] [added: registrant’s] common stock outstanding was approximately [removed: 109.4] [added: 96.3] million shares.

Portions of the [removed: Registrant’s] [added: registrant’s] proxy statement for its [removed: 2021] [added: 2022] annual meeting of stockholders are incorporated by reference in Part III of this Form 10-K.

| Item 1. | | | | | | [removed: [Business](#i878840fee65247deaca27d2dd6a8246f_13)] [added: [Business](#i916f7af890114e55a87e260476560c60_13)] | | | | | | [removed: [2](#i878840fee65247deaca27d2dd6a8246f_13)] [added: [2](#i916f7af890114e55a87e260476560c60_13)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i878840fee65247deaca27d2dd6a8246f_55)] [added: Factors](#i916f7af890114e55a87e260476560c60_58)] | | | | | | [removed: [27](#i878840fee65247deaca27d2dd6a8246f_55)] [added: [26](#i916f7af890114e55a87e260476560c60_58)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i878840fee65247deaca27d2dd6a8246f_58)] [added: Comments](#i916f7af890114e55a87e260476560c60_67)] | | | | | | [removed: [53](#i878840fee65247deaca27d2dd6a8246f_58)] [added: [54](#i916f7af890114e55a87e260476560c60_67)] | | |

| Item 2. | | | | | | [removed: [Properties](#i878840fee65247deaca27d2dd6a8246f_61)] [added: [Properties](#i916f7af890114e55a87e260476560c60_70)] | | | | | | [removed: [54](#i878840fee65247deaca27d2dd6a8246f_61)] [added: [54](#i916f7af890114e55a87e260476560c60_70)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i878840fee65247deaca27d2dd6a8246f_64)] [added: Proceedings](#i916f7af890114e55a87e260476560c60_73)] | | | | | | [removed: [54](#i878840fee65247deaca27d2dd6a8246f_64)] [added: [55](#i916f7af890114e55a87e260476560c60_73)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i878840fee65247deaca27d2dd6a8246f_67)] [added: Disclosures](#i916f7af890114e55a87e260476560c60_76)] | | | | | | [removed: [54](#i878840fee65247deaca27d2dd6a8246f_67)] [added: [55](#i916f7af890114e55a87e260476560c60_76)] | | |

| Item 5. | | | | | | [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i878840fee65247deaca27d2dd6a8246f_73)] [added: Securities](#i916f7af890114e55a87e260476560c60_82)] | | | | | | [removed: [55](#i878840fee65247deaca27d2dd6a8246f_73)] [added: [56](#i916f7af890114e55a87e260476560c60_82)] | | |

| Item 6. | | | | | | [Selected Financial [removed: Data](#i878840fee65247deaca27d2dd6a8246f_76)] [added: Data](#i916f7af890114e55a87e260476560c60_85)] | | | | | | [removed: [56](#i878840fee65247deaca27d2dd6a8246f_76)] [added: [56](#i916f7af890114e55a87e260476560c60_85)] | | |

| Item 7. | | | | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i878840fee65247deaca27d2dd6a8246f_79)] [added: Operations](#i916f7af890114e55a87e260476560c60_88)] | | | | | | [removed: [58](#i878840fee65247deaca27d2dd6a8246f_79)] [added: [57](#i916f7af890114e55a87e260476560c60_88)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i878840fee65247deaca27d2dd6a8246f_121)] [added: Risk](#i916f7af890114e55a87e260476560c60_136)] | | | | | | [removed: [78](#i878840fee65247deaca27d2dd6a8246f_121)] [added: [77](#i916f7af890114e55a87e260476560c60_136)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i878840fee65247deaca27d2dd6a8246f_124)] [added: Data](#i916f7af890114e55a87e260476560c60_139)] | | | | | | [removed: [79](#i878840fee65247deaca27d2dd6a8246f_124)] [added: [78](#i916f7af890114e55a87e260476560c60_139)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i878840fee65247deaca27d2dd6a8246f_127)] [added: Disclosure](#i916f7af890114e55a87e260476560c60_142)] | | | | | | [removed: [79](#i878840fee65247deaca27d2dd6a8246f_127)] [added: [78](#i916f7af890114e55a87e260476560c60_142)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i878840fee65247deaca27d2dd6a8246f_130)] [added: Procedures](#i916f7af890114e55a87e260476560c60_145)] | | | | | | [removed: [79](#i878840fee65247deaca27d2dd6a8246f_130)] [added: [78](#i916f7af890114e55a87e260476560c60_145)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i878840fee65247deaca27d2dd6a8246f_133)] [added: Information](#i916f7af890114e55a87e260476560c60_148)] | | | | | | [removed: [79](#i878840fee65247deaca27d2dd6a8246f_133)] [added: [78](#i916f7af890114e55a87e260476560c60_148)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i878840fee65247deaca27d2dd6a8246f_139)] [added: Governance](#i916f7af890114e55a87e260476560c60_154)] | | | | | | [removed: [80](#i878840fee65247deaca27d2dd6a8246f_139)] [added: [79](#i916f7af890114e55a87e260476560c60_154)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i878840fee65247deaca27d2dd6a8246f_142)] [added: Compensation](#i916f7af890114e55a87e260476560c60_157)] | | | | | | [removed: [80](#i878840fee65247deaca27d2dd6a8246f_142)] [added: [79](#i916f7af890114e55a87e260476560c60_157)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i878840fee65247deaca27d2dd6a8246f_145)] [added: Matters](#i916f7af890114e55a87e260476560c60_160)] | | | | | | [removed: [80](#i878840fee65247deaca27d2dd6a8246f_145)] [added: [79](#i916f7af890114e55a87e260476560c60_160)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i878840fee65247deaca27d2dd6a8246f_148)] [added: Independence](#i916f7af890114e55a87e260476560c60_163)] | | | | | | [removed: [81](#i878840fee65247deaca27d2dd6a8246f_148)] [added: [80](#i916f7af890114e55a87e260476560c60_163)] | | |

| Item 14. | | | | | | [Principal Accounting Fees and [removed: Services](#i878840fee65247deaca27d2dd6a8246f_151)] [added: Services](#i916f7af890114e55a87e260476560c60_166)] | | | | | | [removed: [81](#i878840fee65247deaca27d2dd6a8246f_151)] [added: [80](#i916f7af890114e55a87e260476560c60_166)] | | |

| Item 15. | | | | | | [Exhibits, Financial Statement [removed: Schedules](#i878840fee65247deaca27d2dd6a8246f_157)] [added: Schedules](#i916f7af890114e55a87e260476560c60_172)] | | | | | | [removed: [82](#i878840fee65247deaca27d2dd6a8246f_157)] [added: [81](#i916f7af890114e55a87e260476560c60_172)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i878840fee65247deaca27d2dd6a8246f_160)] [added: Summary](#i916f7af890114e55a87e260476560c60_175)] | | | | | | [removed: [82](#i878840fee65247deaca27d2dd6a8246f_160)] [added: [81](#i916f7af890114e55a87e260476560c60_175)] | | |

KPMG LLP (185), Seattle, WA, USA

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i916f7af890114e55a87e260476560c60_7146825583238) | | | | | | [78](#i916f7af890114e55a87e260476560c60_7146825583238) | | |

| | | | | | | [Exhibit Index](#i916f7af890114e55a87e260476560c60_316) | | | | | | [1 of 4](#i916f7af890114e55a87e260476560c60_316) | | |

| | | | | | | [Signatures](#i916f7af890114e55a87e260476560c60_319) | | | | | | [S-1](#i916f7af890114e55a87e260476560c60_319) | | |

| | | | | | | [Exhibit Index](#i878840fee65247deaca27d2dd6a8246f_313) | | | | | | [1 of](#i878840fee65247deaca27d2dd6a8246f_313) 5 | | |

| | | | | | | [Signatures](#i878840fee65247deaca27d2dd6a8246f_316) | | | | | | [S-1](#i878840fee65247deaca27d2dd6a8246f_316) | | |

We lease five business offices located in California, Pennsylvania, Tennessee and Washington, [removed: as well as] [added: and] own one business office in Washington [removed: for our] [added: in the] U.S. [removed: dialysis business.][added: In addition, our international headquarters is located in the United Kingdom and consists of one leased business office.]

For our U.S. dialysis business we own the land and buildings for [removed: six] [added: five] outpatient dialysis centers.

We also own [removed: 21] [added: 16] properties for development, including operating outpatient dialysis centers and properties we hold for sale.

The majority of our leases for our U.S. dialysis business cover periods from five years to [removed: 20] [added: 15] years and typically contain renewal options of five years to ten years at the fair rental value at the time of renewal.

However, we believe that we have adequate capacity within most of our existing dialysis centers to accommodate additional patient volume through increased hours and/or [removed: days of operation, or, if additional space is available within an existing facility, by adding dialysis stations.]

days of operation, or, if additional space is available within an existing facility, by adding dialysis stations.

In addition, we lease a total of four owned properties to third-party tenants.

The closing price of our common stock on January [removed: 29, 2021] [added: 31, 2022] was [removed: $117.37] [added: $108.37] per share.

According to Computershare, our registrar and transfer agent, as of January [removed: 29, 2021,] [added: 31, 2022,] there were [removed: 7,594] [added: 7,232] holders of record of our common stock.

See [removed: “*Liquidity] [added: "*Liquidity] and capital [removed: resources*”] [added: resources"*] under Item 7.

"*Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations*”] [added: Operations"*] and the notes to the consolidated financial statements.

The following table summarizes our repurchases of our common stock during the fourth quarter of [removed: 2020:][added: 2021:]

The following table summarizes our repurchases of our common stock during [removed: 2020:][added: 2021:]

Effective [removed: as of the close of business] on [removed: November 4, 2019,] [added: December 10, 2020,] the Board terminated all remaining prior share repurchase authorizations available to us and approved a new share repurchase authorization of $2.0 billion.

As of February [removed: 10, 2021,] [added: 9, 2022,] we have a total of [removed: $1.807] [added: $2.225] billion available under the current repurchase authorization for additional share repurchases.

| October 1-31, 2021 | | | 1,229 | | | | | | $ | 113.54 | | | | | 1,229 | | | | | | $ | 890,970 | |

| November 1-30, 2021 | | | 1,517 | | | | | | 100.40 | | | | | | 1,517 | | | | | | $ | 738,680 | |

| December 1-31, 2021 | | | 3,381 | | | | | | 104.90 | | | | | | 3,381 | | | | | | $ | 2,383,939 | |

| Total | | | 6,127 | | | | | | $ | 105.52 | | | | | 6,127 | | | | | | | | |

| January 1 - March 31, 2021 | | | 2,949 | | | | | | $ | 109.28 | | | | | 2,949 | | | | | | $ | 1,607,622 | |

| April 1 - June 30, 2021 | | | 2,070 | | | | | | 116.38 | | | | | | 2,070 | | | | | | $ | 1,366,725 | |

| July 1 - September 30, 2021 | | | 2,731 | | | | | | 123.14 | | | | | | 2,731 | | | | | | $ | 1,030,508 | |

| October 1 - December 31, 2021 | | | 6,127 | | | | | | 105.52 | | | | | | 6,127 | | | | | | $ | 2,383,939 | |

| Total | | | 13,877 | | | | | | $ | 111.41 | | | | | 13,877 | | | | | | | | |

Effective on December 17, 2021, the Board increased the Company's existing authorization by $2.0 billion in additional share repurchasing authority.

| October 1-31, 2020 | | | 1,828 | | | | | | $ | 87.96 | | | | | 1,828 | | | | | | $ | 515,926 | |

| November 1-30, 2020 | | | 1,149 | | | | | | 105.54 | | | | | | 1,149 | | | | | | $ | 394,628 | |

| December 1-31, 2020 | | | 1,216 | | | | | | 111.91 | | | | | | 1,216 | | | | | | $ | 1,929,955 | |

| Total | | | 4,193 | | | | | | $ | 99.73 | | | | | 4,193 | | | | | | | | |

| January 1 - March 31, 2020 | | | 4,052 | | | | | | $ | 74.81 | | | | | 4,052 | | | | | | $ | 1,400,356 | |

| April 1 - June 30, 2020 | | | — | | | | | | — | | | | | | — | | | | | | $ | 1,400,356 | |

| July 1 - September 30, 2020(1) | | | 8,232 | | | | | | 88.13 | | | | | | 8,232 | | | | | | $ | 676,709 | |

| October 1 - December 31, 2020 | | | 4,193 | | | | | | 99.73 | | | | | | 4,193 | | | | | | $ | 1,929,955 | |

| Total | | | 16,477 | | | | | | $ | 87.80 | | | | | 16,477 | | | | | | | | |

(1)The total number of shares purchased and the aggregate amount paid for shares repurchased include shares repurchased pursuant to our modified Dutch auction tender offer at a clearing price of $88.00 per share plus related fees and expenses of $2.5 million.

Effective on December 10, 2020, the Board terminated all remaining prior share repurchase authorizations available to us under the aforementioned November 4, 2019 authorization and approved a new share repurchase authorization of $2.0 billion.

This item is no longer required as the Company has adopted the changes to Item 301 of Regulation S-K contained in the Securities and Exchange Commission's Release No. 33-10890.

The following financial and operating data should be read in conjunction with Item 7.

"*Management’s Discussion and Analysis of Financial Condition and Results of Operations*” and our consolidated financial statements filed as part of this report.

The following table presents selected consolidated financial and operating data for the periods indicated:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | |

| | | | (dollars and shares in thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Income statement data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total revenues(1) | | | $ | 11,550,604 | | | | | $ | 11,388,479 | | | | | $ | 11,404,851 | | | | | $ | 10,876,634 | | | | | $ | 10,707,467 | |

| Operating expenses and charges(2) | | | 9,855,968 | | | | | | 9,745,162 | | | | | | 9,879,027 | | | | | | 9,063,879 | | | | | | 8,677,757 | | |

| Operating income | | | 1,694,636 | | | | | | 1,643,317 | | | | | | 1,525,824 | | | | | | 1,812,755 | | | | | | 2,029,710 | | |

| Debt expense | | | (304,111) | | | | | | (443,824) | | | | | | (487,435) | | | | | | (430,634) | | | | | | (414,116) | | |

| Debt prepayment, refinancing and redemption charges | | | (89,022) | | | | | | (33,402) | | | | | | — | | | | | | — | | | | | | — | | |

| Other income, net | | | 16,759 | | | | | | 29,348 | | | | | | 10,089 | | | | | | 17,665 | | | | | | 7,511 | | |

| Income from continuing operations before income taxes | | | 1,318,262 | | | | | | 1,195,439 | | | | | | 1,048,478 | | | | | | 1,399,786 | | | | | | 1,623,105 | | |

| Income tax expense(3) | | | 313,932 | | | | | | 279,628 | | | | | | 258,400 | | | | | | 323,859 | | | | | | 431,761 | | |

| Net income from continuing operations | | | 1,004,330 | | | | | | 915,811 | | | | | | 790,078 | | | | | | 1,075,927 | | | | | | 1,191,344 | | |

| Net (loss) income from discontinued operations, net of tax(4) | | | (9,653) | | | | | | 105,483 | | | | | | (457,038) | | | | | | (245,372) | | | | | | (158,262) | | |

| Net income | | | 994,677 | | | | | | 1,021,294 | | | | | | 333,040 | | | | | | 830,555 | | | | | | 1,033,082 | | |

| Less: Net income attributable to noncontrolling interests | | | (221,035) | | | | | | (210,313) | | | | | | (173,646) | | | | | | (166,937) | | | | | | (153,208) | | |

| Net income attributable to DaVita Inc. | | | $ | 773,642 | | | | | $ | 810,981 | | | | | $ | 159,394 | | | | | $ | 663,618 | | | | | $ | 879,874 | |

| Earnings per share attributable to DaVita Inc.: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic income from continuing operations(5) | | | $ | 6.54 | | | | | $ | 4.61 | | | | | $ | 3.66 | | | | | $ | 4.78 | | | | | $ | 5.12 | |

| Diluted income from continuing operations(5) | | | $ | 6.39 | | | | | $ | 4.60 | | | | | $ | 3.62 | | | | | $ | 4.71 | | | | | $ | 5.04 | |

| Weighted average shares for earnings per share(5): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic shares | | | 119,797 | | | | | | 153,181 | | | | | | 170,786 | | | | | | 188,626 | | | | | | 201,641 | | |

| Diluted shares | | | 122,623 | | | | | | 153,812 | | | | | | 172,365 | | | | | | 191,349 | | | | | | 204,905 | | |

| Balance sheet data (as of period end): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Working capital | | | $ | 672,581 | | | | | $ | 1,318,072 | | | | | $ | 3,532,998 | | | | | $ | 5,703,181 | | | | | $ | 1,283,784 | |

| Total assets | | | $ | 16,988,516 | | | | | $ | 17,311,394 | | | | | $ | 19,110,252 | | | | | $ | 18,974,536 | | | | | $ | 18,755,776 | |

| Long-term debt | | | $ | 7,917,263 | | | | | $ | 7,977,526 | | | | | $ | 8,172,847 | | | | | $ | 9,158,018 | | | | | $ | 8,944,676 | |

| Total DaVita Inc. shareholders' equity(5) | | | $ | 1,383,566 | | | | | $ | 2,133,409 | | | | | $ | 3,703,442 | | | | | $ | 4,690,029 | | | | | $ | 4,648,047 | |

(1)On January 1, 2018, we adopted *Revenue from Contracts with Customers* (Topic 606) using the cumulative effect method for those contracts that were not substantially completed as of January 1, 2018.

See Notes 1 and 2 of the consolidated financial statements for further discussion of our adoption of Topic 606.

(2)The following table summarizes losses (gains) on changes in ownership interest, net, accruals for legal matters, impairment charges, restructuring charges and gain on settlement included in operating expenses and charges:

| | | | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Certain operating expenses and charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Loss (gain) on changes in ownership interests, net | | | $ | 16,252 | | | | | | | | | | | $ | (51,888) | | | | | $ | (6,273) | | | | | $ | (374,374) | |

| Accruals for legal matters | | | $ | 35,000 | | | | | | | | | | | | | | | | | | | | | | | $ | 15,770 | |

See the Index to Financial Statements and Index to Financial Statement Schedules included at Item 15, "*Exhibits, Financial Statement [removed: Schedules.*”][added: Schedules."*]

Management has established and maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that it files or submits pursuant to the Securities Exchange Act of 1934 (Exchange Act) as amended is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our Chief Executive Officer [removed: ("CEO")] [added: (CEO)] and Chief Financial Officer [removed: ("CFO")] [added: (CFO)] as appropriate to allow for timely decisions regarding required disclosures.

At the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures in accordance with the Exchange Act requirements as of December 31, [removed: 2020.][added: 2021.]

There was no change in the Company's internal control over financial reporting that was identified during the evaluation that occurred during the fourth fiscal quarter of [removed: 2020] [added: 2021] that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART III

Not applicable.

PART III

The other information required to be disclosed by this item will appear in, and is incorporated by reference from, the sections entitled [removed: “*Proposal] [added: "*Proposal] 1 Election of [removed: Directors*”, “*Corporate Governance*”,] [added: Directors"*, "*Corporate Governance"*,] and [removed: “*Security] [added: "*Security] Ownership of Certain Beneficial Owners and [removed: Management*”] [added: Management"*] to be included in our definitive proxy statement relating to our [removed: 2021] [added: 2022] annual stockholder meeting.

The information required by this item will appear in, and is incorporated by reference from, the sections entitled "*Executive Compensation*", "*Pay Ratio Disclosure*", "*Compensation of Directors*" and "*Compensation Committee Interlocks and Insider Participation*" included in our definitive proxy statement relating to our [removed: 2021] [added: 2022] annual stockholder meeting.

The information required by Item 407(e)(5) of Regulation S-K will appear in and is incorporated by reference from the section entitled [removed: “*Compensation] [added: "*Compensation] Committee [removed: Report*”] [added: Report"*] to be included in our definitive proxy statement relating to our [removed: 2021] [added: 2022] annual stockholder meeting; however, this information shall not be deemed to be filed.

The following table provides information about our common stock that may be issued upon the exercise of stock-settled stock appreciation rights, restricted stock units and other rights under all of our existing equity compensation plans as of December 31, [removed: 2020,] [added: 2021,] which consist of our 2020 Incentive Award Plan, 2011 Incentive Award Plan and our Employee Stock Purchase Plan.

[removed: 1.Includes 1,092] [added: (1) Includes 829] shares of common stock reserved for issuance in connection with performance share units at the maximum number of shares issuable thereunder.

[removed: 2.This] [added: (2) This] weighted average excludes full value awards such as restricted stock units and performance share units.

Other information required to be disclosed by Item 12 will appear in, and is incorporated by reference from, the section entitled [removed: “*Security] [added: "*Security] Ownership of Certain Beneficial Owners and [removed: Management*”] [added: Management"*] to be included in our definitive proxy statement relating to our [removed: 2021] [added: 2022] annual stockholder meeting.

| Equity compensation plans approved by shareholders | | | | | | 9,743 | | | | | | $ | 64.66 | | | | | 13,658 | | | | | | 23,401 | | |

| Total | | | | | | 9,743 | | | | | | $ | 64.66 | | | | | 13,658 | | | | | | 23,401 | | |

| Equity compensation plans approved by shareholders | | | | | | 12,167 | | | | | | $ | 63.64 | | | | | 14,263 | | | | | | 26,430 | | |

| Total | | | | | | 12,167 | | | | | | $ | 63.64 | | | | | 14,263 | | | | | | 26,430 | | |

The information required by this item will appear in, and is incorporated by reference from, the section entitled [removed: “*Certain] [added: "*Certain] Relationships and Related [removed: Transactions*”] [added: Transactions"*] and the section entitled [removed: “*Corporate Governance*”] [added: "*Corporate Governance"*] to be included in our definitive proxy statement relating to our [removed: 2021] [added: 2022] annual stockholder meeting.

The information required by this item will appear in, and is incorporated by reference from, the section entitled [removed: “*Proposal] [added: "*Proposal] 2 Ratification of the Appointment of our Independent Registered Public Accounting [removed: Firm*”] [added: Firm"*] to be included in our definitive proxy statement relating to our [removed: 2021] [added: 2022] annual stockholder meeting.

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#i878840fee65247deaca27d2dd6a8246f_163)] [added: Reporting](#i916f7af890114e55a87e260476560c60_178)] | | | [removed: [F-1](#i878840fee65247deaca27d2dd6a8246f_163)] [added: F-[1](#i916f7af890114e55a87e260476560c60_178)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i878840fee65247deaca27d2dd6a8246f_166)] [added: Firm](#i916f7af890114e55a87e260476560c60_181)] | | | [removed: [F-2](#i878840fee65247deaca27d2dd6a8246f_166)] [added: F-[2](#i916f7af890114e55a87e260476560c60_181)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i878840fee65247deaca27d2dd6a8246f_169)] [added: Firm](#i916f7af890114e55a87e260476560c60_184)] | | | [removed: [F-5](#i878840fee65247deaca27d2dd6a8246f_169)] [added: F-[4](#i916f7af890114e55a87e260476560c60_184)] | | |

| [Consolidated Statements of Income for the years ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018](#i878840fee65247deaca27d2dd6a8246f_172)] [added: 2019](#i916f7af890114e55a87e260476560c60_187)] | | | [removed: [F-6](#i878840fee65247deaca27d2dd6a8246f_172)] [added: F-[5](#i916f7af890114e55a87e260476560c60_187)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018](#i878840fee65247deaca27d2dd6a8246f_175)] [added: 2019](#i916f7af890114e55a87e260476560c60_190)] | | | [removed: [F-7](#i878840fee65247deaca27d2dd6a8246f_175)] [added: F-[6](#i916f7af890114e55a87e260476560c60_190)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 2020,] [added: 2021,] and [removed: 2019](#i878840fee65247deaca27d2dd6a8246f_178)] [added: 2020](#i916f7af890114e55a87e260476560c60_193)] | | | [removed: [F-8](#i878840fee65247deaca27d2dd6a8246f_178)] [added: F-[7](#i916f7af890114e55a87e260476560c60_193)] | | |

| [Consolidated Statements of Cash Flow for the years ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018](#i878840fee65247deaca27d2dd6a8246f_184)] [added: 2019](#i916f7af890114e55a87e260476560c60_199)] | | | [removed: [F-9](#i878840fee65247deaca27d2dd6a8246f_184)] [added: F-[8](#i916f7af890114e55a87e260476560c60_199)] | | |

| [Consolidated Statements of Equity for the years ended December 31, [added: 2021,] 2020, [removed: 2019,] and [removed: 2018](#i878840fee65247deaca27d2dd6a8246f_187)] [added: 2019](#i916f7af890114e55a87e260476560c60_202)] | | | [removed: [F-10](#i878840fee65247deaca27d2dd6a8246f_187)] [added: F-[9](#i916f7af890114e55a87e260476560c60_202)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i878840fee65247deaca27d2dd6a8246f_190)] [added: Statements](#i916f7af890114e55a87e260476560c60_205)] | | | [removed: [F-12](#i878840fee65247deaca27d2dd6a8246f_190)] [added: F-[11](#i916f7af890114e55a87e260476560c60_205)] | | |

| [Schedule II—Valuation and Qualifying [removed: Accounts](#i878840fee65247deaca27d2dd6a8246f_319)] [added: Accounts](#i916f7af890114e55a87e260476560c60_322)] | | | [removed: [S-](#i878840fee65247deaca27d2dd6a8246f_319)3] [added: [S-](#i916f7af890114e55a87e260476560c60_322)3] | | |

[removed: DAVITA INC.][added: DaVita Inc., et al*.]

This evaluation was completed based on the criteria established in the report titled [removed: “*Internal] [added: "*Internal] Control—Integrated Framework [removed: (2013)*”] [added: (2013)"*] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based upon our evaluation under the COSO framework, we have concluded that the Company’s internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

*Opinion on the [removed: Consolidated* *Financial] [added: Consolidated Financial] Statements*

We have audited the accompanying consolidated balance sheets of DaVita Inc. and subsidiaries (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, equity, and cash flow for each of the years in the three-year period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and financial statement Schedule II [removed: –] [added: -] Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2020,] [added: 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 12, 2021] [added: 11, 2022] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in Notes 1 and 2 to the consolidated financial statements, the Company recognized [removed: $10,619] [added: $10,642] million in U.S. dialysis patient service revenue for the year ended December 31, [removed: 2020.][added: 2021.]

We identified the [removed: evaluation of the] recognition of the transaction price the Company expects to collect as a result of satisfying its performance obligations related to U.S. dialysis patient service revenue as a critical audit matter because it involves estimation that requires complex auditor judgment.

We developed an estimate of U.S. dialysis patient service revenue based on actual and expected cash collections and compared [added: the estimate] to U.S. dialysis patient service revenue recorded by the Company for the [removed: year-ended] [added: year ended] December 31, [removed: 2020.][added: 2021.]

As discussed in [removed: Notes 1 and] [added: Note] 16 to the consolidated financial statements, the Company operates in a highly regulated industry and is a party to various lawsuits, demands, claims, *qui tam* suits, governmental investigations and audits (including, without limitation, investigations or other actions resulting from its obligation to self-report suspected violations of law) and other legal proceedings.

We have audited DaVita Inc. and [removed: subsidiaries’] [added: subsidiaries'] (the Company) internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control – Integrated Framework [removed: (2013)*] [added: (2013*)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, equity, and cash flow for each of the years in the three-year period ended December 31, [removed: 2020,] [added: 2021,] and the related notes and financial statement Schedule II [removed: –] [added: -] Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February [removed: 12, 2021] [added: 11, 2022] expressed an unqualified opinion on those consolidated financial statements.

| | | | [added: | | |] Year ended December 31, | | | | | | | | | | | | | | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Dialysis patient service revenues | | | [removed: 11,026,251] [added: $] | [added: 11,213,515] | | | | | [removed: 10,896,706] [added: $] | [added: 11,026,251] | | | | | [removed: 10,660,394] [added: $] | [added: 10,896,706] | |

| Other revenues | | | [removed: 524,353] [added: 405,282] | | | | | | [removed: 491,773] [added: 524,353] | | | | | | [removed: 744,457] [added: 491,773] | | |

| Total revenues | | | [removed: 11,550,604] [added: 11,618,797] | | | | | | [removed: 11,388,479] [added: 11,550,604] | | | | | | [removed: 11,404,851] [added: 11,388,479] | | |

| Operating [removed: expenses and charges:] [added: expenses:] | | | | | | | | | | | | | | | | | |

| Patient care costs | | | [removed: 7,988,613] [added: 7,972,414] | | | | | | [removed: 7,914,485] [added: 7,988,613] | | | | | | [removed: 8,195,513] [added: 7,914,485] | | |

| General and administrative | | | [removed: 1,247,584] [added: 1,195,335] | | | | | | [removed: 1,103,312] [added: 1,247,584] | | | | | | [removed: 1,135,454] [added: 1,103,312] | | |

| Depreciation and amortization | | | [removed: 630,435] [added: 680,615] | | | | | | [removed: 615,152] [added: 630,435] | | | | | | [removed: 591,035] [added: 615,152] | | |

| Equity investment [removed: (income) loss] [added: income, net] | | | [removed: (26,916)] [added: (26,937)] | | | | | | [removed: (12,679)] [added: (26,916)] | | | | | | [removed: 4,484] [added: (12,679)] | | |

| Goodwill impairment charges | | | — | | | | | | [removed: 124,892] [added: —] | | | | | | [removed: 3,106] [added: 124,892] | | |

| Loss [removed: (gain)] on changes in ownership interest, net | | | [removed: 16,252] [added: —] | | | | | | [removed: —] [added: 16,252] | | | | | | [removed: (60,603)] [added: —] | | |

| Total operating expenses [removed: and charges] | | | [removed: 9,855,968] [added: 9,821,427] | | | | | | [removed: 9,745,162] [added: 9,855,968] | | | | | | [removed: 9,879,027] [added: 9,745,162] | | |

| Operating income | | | [removed: 1,694,636] [added: 1,797,370] | | | | | | [removed: 1,643,317] [added: 1,694,636] | | | | | | [removed: 1,525,824] [added: 1,643,317] | | |

| Debt expense | | | [removed: (304,111)] [added: (285,254)] | | | | | | [removed: (443,824)] [added: (304,111)] | | | | | | [removed: (487,435)] [added: (443,824)] | | |

| Debt prepayment, refinancing and redemption charges | | | [removed: (89,022)] [added: —] | | | | | | [removed: (33,402)] [added: (89,022)] | | | | | | [removed: —] [added: (33,402)] | | |

| Other income, net | | | [removed: 16,759] [added: 6,378] | | | | | | [removed: 29,348] [added: 16,759] | | | | | | [removed: 10,089] [added: 29,348] | | |

| Income from continuing operations before income taxes | | | [removed: 1,318,262] [added: 1,518,494] | | | | | | [removed: 1,195,439] [added: 1,318,262] | | | | | | [removed: 1,048,478] [added: 1,195,439] | | |

| Income tax expense | | | [removed: 313,932] [added: 306,732] | | | | | | [removed: 279,628] [added: 313,932] | | | | | | [removed: 258,400] [added: 279,628] | | |

| Net income from continuing operations | | | [removed: 1,004,330] [added: 1,211,762] | | | | | | [removed: 915,811] [added: 1,004,330] | | | | | | [removed: 790,078] [added: 915,811] | | |

| Net (loss) income from discontinued operations, net of tax | | | [removed: (9,653)] [added: —] | | | | | | [removed: 105,483] [added: (9,653)] | | | | | | [removed: (457,038)] [added: 105,483] | | |

| Net income | | | [removed: 994,677] [added: 1,211,762] | | | | | | [removed: 1,021,294] [added: 994,677] | | | | | | [removed: 333,040] [added: 1,021,294] | | |

| Less: Net income attributable to noncontrolling interests | | | [removed: (221,035)] [added: (233,312)] | | | | | | [removed: (210,313)] [added: (221,035)] | | | | | | [removed: (173,646)] [added: (210,313)] | | |

| Net income attributable to DaVita Inc. | | | $ | [removed: 773,642] [added: 978,450] | | | | | $ | [removed: 810,981] [added: 773,642] | | | | | $ | [removed: 159,394] [added: 810,981] | |

| Basic net income from continuing operations | | | $ | [removed: 6.54] [added: 9.30] | | | | | $ | [removed: 4.61] [added: 6.54] | | | | | $ | [removed: 3.66] [added: 4.61] | |

| Basic net income | | | $ | [removed: 6.46] [added: 9.30] | | | | | $ | [removed: 5.29] [added: 6.46] | | | | | $ | [removed: 0.93] [added: 5.29] | |

February 11, 2022

February 11, 2022

| Net income attributable to DaVita Inc. | | | $ | 978,450 | | | | | $ | 773,642 | | | | | $ | 810,981 | |

| | | | $ | 17,121,488 | | | | | $ | 16,988,516 | |

| | | | $ | 17,121,488 | | | | | $ | 16,988,516 | |

| Net income | | | $ | 1,211,762 | | | | | $ | 994,677 | | | | | $ | 1,021,294 | |

| Depreciation and amortization | | | 680,615 | | | | | | 630,435 | | | | | | 615,152 | | |

| Other | | | (745) | | | | | | — | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2020 | | | $ | 1,330,028 | | | | | 109,933 | | | | | | $ | 110 | | | | | $ | 597,073 | | | | | $ | 852,537 | | | | | — | | | | | | $ | — | | | | | $ | (66,154) | | | | | $ | 1,383,566 | | | | | $ | 183,186 | |

| Net income | | | 160,359 | | | | | | | | | | | | | | | | | | | | | | | | 978,450 | | | | | | | | | | | | | | | | | | | | | | | | 978,450 | | | | | | 72,953 | | |

| Stock award plans | | | | | | | | | 1,030 | | | | | | 1 | | | | | | (80,642) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (80,641) | | | | | | | | |

| Distributions | | | (159,259) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (84,774) | | |

| Contributions | | | 22,672 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,082 | | |

| Acquisitions and divestitures | | | 5,903 | | | | | | | | | | | | | | | | | | (264) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (264) | | | | | | 1,250 | | |

| Partial purchases | | | (588) | | | | | | | | | | | | | | | | | | (13,853) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (13,853) | | | | | | (1,057) | | |

| Purchase of treasury stock | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (13,877) | | | | | | (1,546,016) | | | | | | | | | | | | (1,546,016) | | | | | | | | |

| Retirement of treasury stock | | | | | | | | | (13,877) | | | | | | (14) | | | | | | (69,352) | | | | | | (1,476,650) | | | | | | 13,877 | | | | | | 1,546,016 | | | | | | | | | | | | — | | | | | | | | |

| Deferred taxes from partnership buyouts | | | | | | | | | | | | | | | | | | | | | 62,736 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 62,736 | | | | | | | | |

| Balance at December 31, 2021 | | | $ | 1,434,832 | | | | | 97,289 | | | | | | $ | 97 | | | | | $ | 540,321 | | | | | $ | 354,337 | | | | | — | | | | | | $ | — | | | | | $ | (139,247) | | | | | $ | 755,508 | | | | | $ | 180,640 | |

Medicare Advantage revenues are reimbursed at negotiated contract rates that are generally higher than Medicare fee-for-service rates, but which generally have a slower payment frequency than Medicare fee-for-service payments.

Medicare Advantage revenues are subject to meaningful estimating risk based on factors similar to those described for commercial health plans below.

Other revenues are estimated in the period services are provided.

The Company's U.S. ancillary service revenues include revenues earned under risk-based arrangements in the Company's integrated care and disease management business, including value-based care (VBC) arrangements.

Under its VBC arrangements, the Company assumes full or shared financial risk for the total medical cost of care for patients below or above a benchmark.

The benchmarks against which the Company incurs profit or loss on these contracts are typically based on the underlying premiums paid to the insuring entity (our counterparty), with adjustments where applicable, or on trended and adjusted medical cost targets.

For some of the Company's risk-based arrangements (such as its special needs plans), the Company acts as a principal with respect to all medical services provided to the patient by effectively hosting or sponsoring the entire arrangement, and as a

result recognizes revenue and expense for all medical services provided to covered patients.

However, for most of its VBC arrangements, the Company provides health monitoring and care coordination services to patients but does not control or direct the medical services that patients receive from third party providers.

As a result, for most of its VBC arrangements the Company does not include third party medical costs in its reported revenues and expenses, but rather recognizes revenue only for the estimated amount of shared savings or shared losses or other revenues that are directly earned or incurred by the Company, and ultimately paid to or by the Company, under the arrangement.

See Note 4 for further details.

The criticality of a particular fair value estimate to the Company's consolidated financial statements depends upon the nature and size of the item being measured, the extent of uncertainties involved and the nature and magnitude or potential effect of assumptions and judgments required.

Certain fair value estimates can involve significant uncertainties and require significant judgment on various matters, some of which could be subject to reasonable disagreement.

compensation, as applicable.

Effective January 1, 2022 certain LIBOR tenors that do not affect the Company, including the one-week and two-month U.S. dollar LIBOR rate, ceased or became non-representative.

The remaining U.S. dollar LIBOR tenors will cease or become non-representative effective July 1, 2023.

This change will have no impact on the Company's ability to borrow.

The Company is currently assessing the other effects this guidance may have on its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, *Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities (ASU 2021-08)*.

ASU 2021-08 requires application of ASC 606, *Revenue from Contracts with Customers*, to recognize and measure assets and liabilities from contracts with customers acquired in a business combination.

*Change in Accounting Principle*

As discussed in Note 14 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of the Financial Accounting Standards Board’s Accounting Standards Codification Topic 842 *Leases*.

The following are the primary procedures we performed to address this critical audit matter.

*Evaluation of the goodwill impairment analyses for the Germany kidney care reporting unit*

As discussed in Note 10 to the consolidated financial statements, the Company performed annual and other impairment assessments for their reporting units throughout 2020.

As a result of these assessments, the Company has not recognized any goodwill impairment charges in the current year.

The goodwill balance for the Germany kidney care reporting unit as of December 31, 2020 was $323 million.

We have identified the evaluation of the goodwill impairment analyses for the Germany kidney care reporting unit as a critical audit matter.

The evaluations involved assessing the key assumptions used in estimating the fair value of the reporting unit, including non-acquired patient growth rate, projected number of treatments, projected revenue growth rate, discount rates, and revenue and clinical earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples.

Evaluation of these key assumptions involved a high degree of subjectivity and auditor judgment as changes to these assumptions could have a significant impact on any goodwill impairment charges recognized.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment assessment process, including controls over the development of key assumptions as described above.

We assessed the Company’s ability to forecast by comparing prior year actual results of the reporting unit to previously forecasted amounts for the reporting unit.

We evaluated the Company’s non-acquired patient growth rate, projected number of treatments, and projected revenue growth rate, for the reporting unit by comparing the projections to the Company’s underlying business strategies and operating plans for the reporting unit, and other industry and market data.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

- evaluating the projected revenue growth rate for the reporting unit by comparing projected rates with comparable companies

- evaluating the discount rate for the reporting unit, by comparing the inputs used to develop the discount rate to publicly available market data for comparable companies to assess whether the inputs used in the development of the discount rate are reasonable

- evaluating the revenue and clinical EBITDA multiples utilized in the Company’s valuation of the reporting unit by comparing the multiples selected to a range of multiples from comparable transactions.

February 12, 2021

(dollars and shares in thousands, except per share data)

| Dialysis patient service revenues before provision | | | $ | 11,039,709 | | | | | $ | 10,918,421 | | | | | $ | 10,709,981 | |

| Provision for uncollectible accounts | | | (13,458) | | | | | | (21,715) | | | | | | (49,587) | | |

| Provision for uncollectible accounts | | | — | | | | | | — | | | | | | (7,300) | | |

| Other asset impairments | | | — | | | | | | — | | | | | | 17,338 | | |

| | | | $ | 16,988,516 | | | | | $ | 17,311,394 | |

| Valuation adjustment on disposal group | | | — | | | | | | — | | | | | | 316,840 | | |

| Balance at December 31, 2017 | | | $ | 1,011,360 | | | | | 182,462 | | | | | | $ | 182 | | | | | $ | 1,042,899 | | | | | $ | 3,633,713 | | | | | — | | | | | | $ | — | | | | | $ | 13,235 | | | | | $ | 4,690,029 | | | | | $ | 196,037 | |

| Cumulative effect of change in accounting principle | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,368 | | | | | | | | | | | | | | | | | | (8,368) | | | | | | — | | | | | | | | |

| Net income | | | 105,531 | | | | | | | | | | | | | | | | | | | | | | | | 159,394 | | | | | | | | | | | | | | | | | | | | | | | | 159,394 | | | | | | 68,115 | | |

| Stock award plan | | | | | | | | | 371 | | | | | | 1 | | | | | | (5,335) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (5,334) | | | | | | | | |

| Distributions | | | (119,173) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (77,268) | | |

| Contributions | | | 32,918 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,393 | | |

| Acquisitions and divestitures | | | 79,078 | | | | | | | | | | | | | | | | | | 3,546 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,546 | | | | | | 318 | | |

| Partial purchases | | | (8,546) | | | | | | | | | | | | | | | | | | (17,897) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (17,897) | | | | | | (1,639) | | |

| Purchase of treasury stock | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (16,844) | | | | | | (1,153,511) | | | | | | | | | | | | (1,153,511) | | | | | | | | |

| Retirement of treasury stock | | | | | | | | | (16,844) | | | | | | (17) | | | | | | (95,213) | | | | | | (1,058,281) | | | | | | 16,844 | | | | | | 1,153,511 | | | | | | | | | | | | — | | | | | | | | |

| Balance at December 31, 2019 | | | $ | 1,180,376 | | | | | 125,843 | | | | | | $ | 126 | | | | | $ | 749,043 | | | | | $ | 1,431,738 | | | | | — | | | | | | $ | — | | | | | $ | (47,498) | | | | | $ | 2,133,409 | | | | | $ | 185,833 | |

On January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 606 *Revenue from Contracts with Customers* (Topic 606) using the cumulative effect method for those contracts that were not substantially completed as of January 1, 2018.

Results for reporting periods beginning on and after January 1, 2018 are presented under Topic 606.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

The adoption of this new standard primarily changed the Company’s presentation of revenues, provision for uncollectible accounts and allowance for doubtful accounts.