DaVita (DVA) 10-K risk factor changes: FY2022 vs FY2021

- [the complex set of governmental laws, regulations and other requirements that impact us, including potential changes [removed: thereto](#i916f7af890114e55a87e260476560c60_2768);][added: thereto](#ib228226ec511491b87b183c6d217a21a_70);]

- [the various lawsuits, demands, [removed: claims,](#i916f7af890114e55a87e260476560c60_2763)] [added: claims,](#ib228226ec511491b87b183c6d217a21a_73)] *[qui [removed: tam](#i916f7af890114e55a87e260476560c60_2763)*] [added: tam](#ib228226ec511491b87b183c6d217a21a_73)*] [suits, governmental investigations and audits and other legal matters that we may be subject to from time to [removed: time](#i916f7af890114e55a87e260476560c60_2763);][added: time](#ib228226ec511491b87b183c6d217a21a_73);]

- [the number [removed: o](#i916f7af890114e55a87e260476560c60_2753)[r p](#i916f7af890114e55a87e260476560c60_2753)[ercentage] [added: or percentage] of patients with [removed: higher-paying](#i916f7af890114e55a87e260476560c60_2753) [commer](#i916f7af890114e55a87e260476560c60_2753)[cial insurance,](#i916f7af890114e55a87e260476560c60_2753) [the] [added: higher-paying commercial insurance, 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](#i916f7af890114e55a87e260476560c60_2753);][added: benefits](#ib228226ec511491b87b183c6d217a21a_76);]

- [our ability to successfully implement our strategy with respect [removed: to](#i916f7af890114e55a87e260476560c60_2897) [](#i916f7af890114e55a87e260476560c60_2897)[integrated ki](#i916f7af890114e55a87e260476560c60_2897)[d](#i916f7af890114e55a87e260476560c60_2897)[ney](#i916f7af890114e55a87e260476560c60_2897) [care, value-bas](#i916f7af890114e55a87e260476560c60_2897)[ed] [added: to integrated kidney care, value-based] care [removed: and](#i916f7af890114e55a87e260476560c60_2897) [home-based dialysis](#i916f7af890114e55a87e260476560c60_2897);][added: and home-based dialysis](#ib228226ec511491b87b183c6d217a21a_79);]

- [changes in the structure of and payment rates under government-based [removed: programs](#i916f7af890114e55a87e260476560c60_2748);][added: programs](#ib228226ec511491b87b183c6d217a21a_82);]

- [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; currently pending or future governmental laws, rules, regulations or initiatives; our ability to attract and retain key leadership talent or employees; or [removed: union organizing] [added: union](#ib228226ec511491b87b183c6d217a21a_85) [](#ib228226ec511491b87b183c6d217a21a_85)[organizing] activities or other legislative or other [removed: changes](#i916f7af890114e55a87e260476560c60_2802);][added: changes](#ib228226ec511491b87b183c6d217a21a_85);]

- [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](#i916f7af890114e55a87e260476560c60_2758);][added: attacks](#ib228226ec511491b87b183c6d217a21a_88);]

- [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, [removed: as well as] our ability to access new technology or superior products in a cost-effective [removed: manner](#i916f7af890114e55a87e260476560c60_2728);][added: manner and our increasing reliance on third party service providers](#ib228226ec511491b87b183c6d217a21a_91);]

- [changes in clinical practices, payment rates or regulations impacting [removed: pharmaceuticals](#i916f7af890114e55a87e260476560c60_2743);][added: pharmaceuticals](#ib228226ec511491b87b183c6d217a21a_94) [and/or devices](#ib228226ec511491b87b183c6d217a21a_94);]

- [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](#i916f7af890114e55a87e260476560c60_2738);][added: directors](#ib228226ec511491b87b183c6d217a21a_97);]

- [removed: [our](#i916f7af890114e55a87e260476560c60_2723) [U.S.](#i916f7af890114e55a87e260476560c60_2723) [ancillary] [added: [our U.S.](#ib228226ec511491b87b183c6d217a21a_100) [integrated kidney care, ancillary] services and [removed: strategic initiatives](#i916f7af890114e55a87e260476560c60_2723) [and](#i916f7af890114e55a87e260476560c60_2723) [our] [added: our] international [removed: operations](#i916f7af890114e55a87e260476560c60_2723) [and] [added: operations and] our ability to expand within markets or to new markets, or invest in new products or [removed: services](#i916f7af890114e55a87e260476560c60_2723);][added: services](#ib228226ec511491b87b183c6d217a21a_100);]

- [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](#i916f7af890114e55a87e260476560c60_2797)[,] [added: systems,] and our [removed: ability](#i916f7af890114e55a87e260476560c60_2797) [to] [added: ability to] adhere to federal and state data sharing and access requirements and [removed: regulations](#i916f7af890114e55a87e260476560c60_2797);][added: regulations](#ib228226ec511491b87b183c6d217a21a_103);]

- [our acquisitions, mergers, joint [removed: ventures] [added: ventures, noncontrolling interest investments] or [removed: dispositions](#i916f7af890114e55a87e260476560c60_2733);][added: dispositions](#ib228226ec511491b87b183c6d217a21a_106);]

- [our aspirations, goals [removed: and](#i916f7af890114e55a87e260476560c60_2792) [disclosures](#i916f7af890114e55a87e260476560c60_2792) [relat](#i916f7af890114e55a87e260476560c60_2792)[ed] [added: and disclosures related] to [removed: environment](#i916f7af890114e55a87e260476560c60_2792)[al](#i916f7af890114e55a87e260476560c60_2792)[, soc](#i916f7af890114e55a87e260476560c60_2792)[ial] [added: environmental, social] and governance (ESG) [removed: matters](#i916f7af890114e55a87e260476560c60_2792);][added: matters](#ib228226ec511491b87b183c6d217a21a_109);]

- [our ability to appropriately estimate the amount of dialysis revenues and related refund [removed: liabilities](#i916f7af890114e55a87e260476560c60_2807);][added: liabilities](#ib228226ec511491b87b183c6d217a21a_112);]

- [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: covenan](#i916f7af890114e55a87e260476560c60_2859)[ts](#i916f7af890114e55a87e260476560c60_2859);][added: covenants](#ib228226ec511491b87b183c6d217a21a_118);]

- [changes in tax laws, regulations and interpretations or challenges to our tax [removed: positions](#i916f7af890114e55a87e260476560c60_2885);][added: positions](#ib228226ec511491b87b183c6d217a21a_121);]

- [removed: [deterioration in economic conditions, general inflationary pressures, disruptions in the financial markets or the] [added: [the] effects of natural or other disasters, political instability, public health crises or adverse weather events such as hurricanes, earthquakes, fires or [removed: flooding, including as such events may be impacted by the effects of climate change](#i916f7af890114e55a87e260476560c60_2870);][added: flooding](#ib228226ec511491b87b183c6d217a21a_124);]

- [liability claims for damages and other expenses that are not covered by insurance or exceed our existing insurance [removed: coverage](#i916f7af890114e55a87e260476560c60_2880);][added: coverage](#ib228226ec511491b87b183c6d217a21a_127);]

- [our ability to successfully maintain an effective internal control over financial [removed: reporting](#i916f7af890114e55a87e260476560c60_2875);] [added: reporting](#ib228226ec511491b87b183c6d217a21a_130);] and

- [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](#i916f7af890114e55a87e260476560c60_2865).][added: interests](#ib228226ec511491b87b183c6d217a21a_133).]

[removed: The ultimate impact of COVID-19 on us will depend on] [added: With respect to COVID-19, these] future developments [removed: that are highly uncertain and difficult to predict, including] [added: include,] among other things, the [added: ultimate] severity and duration of the pandemic; [removed: further spread or resurgence of] the [removed: virus, including as a result of the emergence] [added: evolution] of new strains [added: or variants] of the virus [removed: such as the Delta and Omicron variants;] [added: that may present varying levels of infectivity or virulence;] COVID-19's impact on the chronic kidney disease (CKD) patient population and our patient [removed: population] [added: population,] including on the mortality of these patients; the availability, acceptance, impact and efficacy of COVID-19 vaccines, treatments and therapies; the pandemic’s continuing impact on our revenue and non-acquired growth due to lower treatment [removed: volumes, the U.S. and global economies, unemployment, labor market conditions, inflation and monetary policies;] [added: volumes;] the 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; the timing, scope and effectiveness of federal, state and local government responses; and any potential changes to the extensive set of federal, state and local laws, regulations and requirements that govern our business.

[removed: -] 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 of COVID-19 on the mortality rates of our patients, which has in turn impacted our patient [removed: census.][added: census, as well as the direct and indirect impact of COVID-19 on our missed treatment rate and new admissions.]

Because 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 has been higher in the dialysis population than in [removed: the general population, and COVID-19 also could impact the CKD population differently.]

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

[removed: -] 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.

[added: We have historically faced and expect to continue to face] difficulties in hiring and retaining caregivers due [added: in part] to a nationwide shortage of [removed: skilled] clinical personnel.

These challenges have been heightened by the increased demand for and demand upon such personnel by the ongoing [removed: pandemic.][added: pandemic and our COVID-19 response, as well as ongoing volatility and uncertainty in the labor market, particularly in healthcare.]

[removed: We have experienced staffing shortages and disruptions as a result of current labor market conditions and the current Omicron surge, and further] [added: In addition, potential] staffing shortages or disruptions, if material, could [added: ultimately] 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 [removed: conditions, including, among other things, due to inflationary pressures or evolving monetary policies,] [added: conditions] could have an adverse impact on our [added: growth and] ability to execute on our [added: other] strategic [removed: initiatives,] [added: initiatives] and [removed: ultimately could have] a material adverse impact on our labor costs, [removed: results of operations, financial condition and cash flows.][added: among other things.]

In the event [removed: such] a material reduction occurs in the share of our patients covered by commercial insurance plans, it would have a material adverse impact on our business, results of operations, financial condition and cash flows.

The extent of these effects will depend upon, among other things, the extent and duration of [removed: the] [added: any] increased unemployment levels for our patient population, any economic deterioration 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 coverage, all of which are highly uncertain and difficult to predict.

Prolonged strain on global supply chains may result in [removed: 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.

[removed: - Rulemaking] [added: The complex and highly regulated environment that we operate in, the novel nature of our COVID-19 response and rulemaking] responses to COVID-19 by certain state and federal agencies, including without limitation OSHA and CMS, [removed: have also impacted] [added: may increase] our [removed: costs and operations and generated certain] [added: exposure to legal, regulatory] compliance [added: and clinical] risks.

[removed: have on our business,] [added: financial condition,] results of [removed: operations, financial condition] [added: operations] and cash flows.

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

[removed: -] If we experience a failure of the fitness of our clinical laboratory, dialysis centers and related operations and/or other facilities as a result of [added: operational changes implemented in connection with] the COVID-19 pandemic or [removed: otherwise,] [added: for any other reason,] or [added: if] another event or occurrence adversely impacts the safety of our caregivers or patients (or is alleged to have done so), we could face adverse consequences, including without limitation, material negative impact on our brand, increased litigation, compliance or regulatory investigations, teammate unrest, work stoppages or other workforce disruptions.

Any governmental investigations or legal actions brought by patients, teammates, caregivers or others relating to the safety of our caregivers or [removed: patients] [added: patients,] or alleged exposure to COVID-19 at our facilities or by our [removed: caregivers] [added: caregivers,] may involve significant demands and require substantial legal defense costs, which may not be adequately covered by our professional and general liability insurance, and may materially harm our reputation.

[removed: -] If general economic conditions deteriorate further or remain uncertain for an extended period of time, we may incur future charges to recognize impairment in the carrying amount of our goodwill and other intangible assets.

We may experience an increased need for additional liquidity funded by accessing existing credit facilities, raising new debt in the capital markets, or other sources, and we may seek to refinance existing debt, which may be more difficult or costly [removed: as a result of the pandemic’s impact on capital markets] [added: in an uncertain] or [removed: on us.][added: declining economic environment.]

- [macroeconomic conditions and global events](#ib228226ec511491b87b183c6d217a21a_67);

- [political, economic, legal, operational and other risks as we expand our operations and offer our services in markets outside of the U.S., and utilizing third-party suppliers and service providers operating outside of the U.S.](#ib228226ec511491b87b183c6d217a21a_2792);

Macroeconomic conditions and global events have impacted and will continue to impact our business and cost structure in a variety of ways, and there can be no assurance that we will be able to successfully execute cost savings initiatives in a manner that will offset the impact of these challenging conditions, which could result in a material adverse impact on us.

We continue to be impacted by general conditions in the global economy and marketplace, many of which are interrelated.

These conditions relate to, among other things, the COVID-19 pandemic, inflation, rising interest rates, challenging labor market conditions and supply chain challenges.

Certain of these impacts could be further intensified by concurrent global events such as the ongoing conflict between Russia and Ukraine, which has continued to drive sociopolitical and economic uncertainty and volatility in Europe and across the globe.

The ultimate impact of these and other conditions on our business over time depends on future developments that are highly uncertain and difficult to predict.

COVID-19 has also intensified certain conditions and developments in the U.S. and global economies, labor market conditions, inflation and monetary policies that continue to impact our business as further described below.

the general population.

New admission rates, future revenues and non-acquired growth could also continue to be negatively impacted over time to the extent that the CKD population experiences elevated mortality levels due to the pandemic.

There remains significant uncertainty as to the ultimate impact of COVID-19 on our treatment volumes, in part due to, among other things, the indeterminate severity and duration of the pandemic and the complexity of factors that may drive new admissions and missed treatment rates over time.

For further information on our growth strategy and the rate of growth of the ESKD population, see the risk factor under the heading, "*If we are unable to compete successfully...*"

COVID-19 and other global conditions have also increased, and will continue to increase, our expenses, including, among others, staffing and labor costs.

In 2022, as part of our continuing efforts in this challenging and highly competitive labor market, we incurred higher than usual wage increases, and higher incentive pay.

For additional details on the substantial resources dedicated, and costs incurred in response to COVID-19, see the discussion under Part I, Item 1.

The staffing and labor cost inflation described above, in addition to higher equipment and clinical supply costs, among other things, have put pressure on our existing cost structure, and we expect that some of these increased costs will continue as labor market conditions remain challenging, global supply chains continue to experience volatility and disruptions and as inflationary pressures continue.

We continue to implement cost savings opportunities to help mitigate these cost and volume pressures.

These include, among other things, anticipated cost savings related to general and administrative cost efficiencies, such as ongoing initiatives that increase our use of third party service providers to perform certain activities, including financial reporting and information technology functions, initiatives relating to clinic optimization, initiatives for capacity utilization improvement, and procurement opportunities, such as our transition to a new erythropoiesis stimulating agent (ESA) contract.

We have incurred, and expect to continue to incur charges in connection with the continued implementation of these initiatives, and there can be no assurance that we will be able to successfully execute these initiatives or that they will achieve expectations or succeed in helping offset the impact of these challenging conditions.

Any failure on our part to adjust our business and operations in this manner, to adjust to other marketplace developments or dynamics or to appropriately implement these initiatives in accordance with applicable legal, regulatory or compliance requirements could adversely impact our ability to provide dialysis services or the cost of providing those services, among other things, and ultimately could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.

programs or being uninsured.

For additional information on risks regarding the potential impact of decreases to the percentage or number of our patients with commercial insurance, see the risk factor under the heading "*If the number or percentage of patients with higher-paying commercial insurance declines...*"

In addition, these conditions or developments each may heighten many of the other risks and uncertainties discussed herein.

- the No Surprises Act;

In addition, our novel response to the pandemic included implementing certain restrictive operational protocols for an extended period of time.

Moreover, the expected expiration of the federal government's national emergency and public health emergency declarations in May 2023 may impact the coverage for certain services for Medicare and Medicaid patients and will end waivers for the provision of certain services, and returning our services to a pre-pandemic regulatory state similarly may increase our exposure to legal, regulatory, compliance and clinical risks.

For example, as further described below, we have made substantial investments in and dedicated resources to our integrated care business, value-based care initiatives and home-based dialysis business to address recent regulatory developments that include innovative payment models, and there are risks to those investments, or additional investments may be required, in the event the regulatory environment changes and we do not adequately adapt to such changes.

In addition, access to healthcare has been both positively and negatively impacted over time by legal, regulatory and judicial action and changes to the political environment may increase the likelihood of regulatory or legislative changes that would impact us.

For example, CMS may consider opening for comment its established Medicare ESRD conditions for coverage.

In the event that this process results in reductions or other changes in minimum health and safety standards for the provision of dialysis services, it may change the marketplace in which we operate.

If we are unable to successfully adapt to

these marketplace developments in a timely and compliant manner, we may experience a material adverse reduction in our overall number of patients, among other things.

For additional detail on our evolving competitive environment, see the risk factor under the heading "*If we are unable to compete successfully...*" Broader changes to the regulatory landscape may also impact our business.

For example, in January 2023, the Federal Trade Commission proposed a new rule that would generally prohibit employers from using noncompete clauses in contracts with workers that extend beyond the termination of the employment or independent contractor relationship.

While the rule remains open for comment and the final rule has not been issued, we are monitoring these developments for any potential impact on our agreements with teammates, our arrangements with medical directors, joint venture operating agreements, or the terms of any of our existing agreements with physicians should the proposed rule be finalized and implemented.

For additional information on the impact of economic conditions or legislative or regulatory changes on the coverage and rates for our services and the percentage or number of our patients with commercial insurance, see the risk factor under the heading "*If the number or percentage of patients with higher-paying commercial insurance declines..."*

unviable, lead to the closure of certain centers, restrict the ability of dialysis patients to obtain and maintain optimal insurance coverage and reduce the number of patients that select commercial insurance plans or MA plans for their dialysis care, among other things.

The majority of these patients have insurance policies that pay us on terms and at rates that are generally significantly higher than Medicare rates.

There are a number of factors that could drive a decline in the number or percentage of our patients covered under commercial insurance plans, including, among

On June 21, 2022, the U.S. Supreme Court issued a decision in the matter of *Marietta Memorial Hospital Employee Health Benefit Plan, et al.

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

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

The disease caused by the novel coronavirus (COVID-19) is impacting the world and our business in many different ways.

The impact could come in many forms, including but not limited to those described below.

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 that may drive treatment volumes and new admissions over time, such as the number of transplants or deferred admissions.

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

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.

- 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.

These impacts could 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.

These effects may persist after the pandemic subsides as, among other things, our patients could experience permanent changes in their insurance coverage as a result of changes to their employment status.

- We have dedicated and continue to dedicate substantial resources in response to COVID-19.

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.

Among other things, our response to COVID-19 has resulted in higher salary and wage expense, and we have provided, and may provide in the future, substantial financial support to our teammates, which may include relief reimbursement.

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 increased our expenses and use of personal protective equipment (PPE).

These efforts are part of a wider Prepare, Prevent, Respond and Recover protocol that includes operational initiatives such as the redistribution of teammates, machines and supplies across the country as needed, increased investment in and utilization of telehealth capabilities and administration of COVID-19 vaccines.

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

- The effort and cost needed to procure certain of our equipment and clinical supplies, including PPE, have substantially increased, and we expect these increased costs will continue.

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.

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

- We operate in a complex and highly regulated environment, and the novel nature of our COVID-19 response, including, among other things, with respect to waivers of certain regulatory requirements, temporary clinical and operational changes and administration of COVID-19 vaccines, some of which are currently available under emergency use authorizations, as well as our efforts to comply with related evolving rules and regulations may increase our exposure to legal, regulatory and clinical risks.

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.

- State and local social distancing restrictions and guidance have required us to significantly increase the use of remote arrangements for our teammates and telehealth technology for our dialysis patients, which broadens our technology footprint for where and how protected health information is used or disclosed, and in turn increases our exposure to the various privacy and information security risks we face, such as the risk of "phishing" and other cybersecurity attacks and the risk of unauthorized dissemination of sensitive personal, proprietary or confidential information.

- Our need, ability and willingness to use and retain any provider relief or other funds or assistance from the government, the consequences of our decisions with respect thereto, our ability to operate within any restrictions on our business or operations that may be imposed as a condition to participation in any government assistance programs, and the impact of any such programs on our competitors, all will depend, among other things, on the magnitude, timing and nature of COVID-19’s impact on the Company as well as the requirements of any such programs, which are uncertain.

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.

- The global nature of the pandemic may have varying impacts on our ongoing operations outside the United States, and may impact our ability to expand our operations into other parts of the world.

The foregoing and other continued impacts and disruptions to our business in connection with 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.

In addition, the COVID-19 pandemic heightens many of the other risks and uncertainties discussed herein, and in many cases, may lead to impacts that persist even after the pandemic subsides.

For additional information related to COVID-19 and its impact on our business, see the discussion in Part I, Item 1.

For example, we have made substantial investments in and dedicated resources to our integrated care business, value-based care initiatives and home-based dialysis business to address the executive order issued in July 2019 (the 2019 Executive Order) that directed CMS to create payment models through CMMI to evaluate the effects of creating payment incentives for the greater use of home-based dialysis and kidney transplants for those already on dialysis, improve quality of care for kidney patients and reduce expenditures.

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.

For example, any change in CMMI’s authority to implement innovative payment models, as enacted by the ACA, could cause us to lose the substantial investments and resources we have dedicated to those programs.

These forward-looking statements could include, among other things, DaVita's response to and the expected future impacts of the [removed: novel] coronavirus (COVID-19), including statements about our balance sheet and liquidity, our expenses and expense offsets, revenues, billings and collections, [removed: 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 availability, acceptance, impact, administration and efficacy of COVID-19 vaccines, treatments and therapies, the continuing impact on the U.S. and global economies, [removed: 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 care, integrated kidney care and Medicare Advantage [added: (MA)] plan enrollment and our ongoing stock repurchase program.

*•the continuing impact of the [removed: dynamic and evolving] COVID-19 pandemic, [removed: including, without limitation,] [added: current macroeconomic and marketplace conditions, and global events, many of which are interrelated and which relate to, among other things, the impact of the COVID-19 pandemic] on our patients, teammates, physician partners, suppliers, business, operations, reputation, financial condition and results of operations; the [removed: government’s] [added: government's] response to the [removed: COVID-19 pandemic, including, among other things, federal, state and local vaccine mandates or surveillance testing requirements and the extent to which they may ultimately be applicable to us;] [added: ongoing pandemic;] the pandemic's continuing impact on the U.S. and global economies, [removed: unemployment,] labor market conditions, [added: interest rates,] inflation and evolving monetary policies; the availability, acceptance, impact and efficacy of COVID-19 vaccines, treatments and therapies; further spread or resurgence of the virus, including as a result of the emergence of new strains of the [removed: virus, such as the Delta and Omicron variants;] [added: virus;] the continuing impact of the pandemic on our [removed: revenue] [added: revenues] and non-acquired growth due to lower treatment volumes; COVID-19's impact on the chronic kidney disease (CKD) population and our patient population including on the mortality of these patients; any [removed: potential negative] [added: potential* *negative] impact on our commercial mix or the number of our patients covered by commercial insurance plans; continued increased COVID-19-related costs; [added: our ability to successfully implement cost savings initiatives;] supply chain challenges and [removed: disruptions, including with respect to our clinical supplies;] [added: disruptions;] and [added: elevated teammate turnover and training costs and] higher salary and wage [removed: expense] [added: expense, including, among other things, increased contract wages,] driven in part by [added: persisting] 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, [removed: lead to impacts that] [added: the impact of the pandemic and the aforementioned global economic conditions on our business may] persist even after the pandemic subsides;*

*•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 [removed: higher-paying commercial plans] or that [removed: are enrolled in or] select [removed: Medicare Advantage] [added: higher-paying commercial plans, including for example MA] plans or other material impacts to our business or operations; or our making incorrect assumptions about how our patients will respond to any such developments;*

*•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 without limitation those related to healthcare and/or labor [removed: matters, such as AB 290 in California;*][added: matters;*]

*•the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment [removed: rates, and] [added: rates;] a reduction in the number or percentage of our patients under such plans, including, without limitation, as a result of [removed: 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, [removed: or] [added: as a result of] our making incorrect assumptions about how our patients will respond to any change in financial assistance from charitable [removed: organizations;*][added: organizations; or as a result of payors’ implementing restrictive plan designs, including, without limitation, actions taken in response to the U.S. Supreme Court’s decision in Marietta Memorial Hospital Employee Health Benefit Plan, et al.]

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

*•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 [added: and highly competitive] labor market conditions, or other reasons;*

*•our aspirations, goals and disclosures related to environmental, social and governance (ESG) matters, [removed: including] [added: including, among other things,] 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 [removed: markets;*][added: markets; and*]

*•continued increased competition from dialysis providers and others, and other potential marketplace changes, including [added: without limitation] increased investment in and availability of funding to new entrants in the dialysis and pre-dialysis marketplace;*

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

We also operate our U.S. [added: integrated kidney care (IKC) business, our U.S. other] ancillary [removed: services and strategic initiatives] [added: services,] 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 prior DaVita Medical Group (DMG) business to Collaborative Care Holdings, LLC, a subsidiary of UnitedHealth Group Inc. [removed: As a result of this transaction, DMG's results] [added: The effects] of [removed: operations] [added: the DMG sale] have been reported [removed: as] [added: in] discontinued operations for all periods presented and DMG is not included below in this Management's Discussion and Analysis.

In addition our [removed: 2021] [added: 2022] financial performance benefited from lower pharmaceutical unit costs and intensity, [removed: advocacy costs and COVID-19-related compensation] [added: health benefits] expenses [added: and medical supply expense] as compared to the prior year.

- [removed: provision of integrated kidney care] [added: continued patient growth in IKC] to [removed: 16,000] [added: 42,000] patients in risk-based integrated care arrangements and an additional [removed: 7,000] [added: 15,000] patients in other integrated care arrangements; [added: and]

- repurchase of [removed: 13,877,193] [added: 8,094,661] shares of our common stock for aggregate consideration of [removed: $1.546 billion,] [added: $788 million,] and [added: a 7.1%] reduction [removed: of] [added: in] our share count [removed: by 11.5% year-over-year;][added: year-over-year.]

[removed: Item 1 "*Business"* and] [added: Business] under the [removed: heading] [added: headings,] "*COVID-19 and its impact on our [removed: business"* below.][added: business*" and "*Human Capital Management,*" as well as the risk factors in Part I Item 1A.]

In [removed: 2022,] [added: 2023,] we expect that COVID-19 [added: and certain macroeconomic conditions] will continue to impact our business and financial performance though the [added: cumulative] 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 [removed: "*COVID-19] [added: "*COVID-19, General Economic] and [removed: its impact on our business*."] [added: Marketplace Conditions, and Legal and Regulatory Developments*."] On treatment volume, we continue to face pressure primarily driven by the impact of COVID-19 on [added: the] mortality rates [removed: for] [added: of] dialysis [removed: patients due to recent surges] [added: patients, as well as the direct and indirect impact] of [removed: infections, which may be further compounded by any future surges, if such surges occur.][added: COVID-19 on our missed treatment rate and new admissions.]

We anticipate that this pressure also will be magnified by continued slowing industry growth and continued competitive activity in [removed: 2022.][added: 2023.]

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

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

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: 2022.][added: 2023.]

The discussion below includes analysis of our financial condition and results of operations for the years ended December 31, [removed: 2021] [added: 2022] compared to December 31, [removed: 2020.][added: 2021.]

Our Annual Report on Form 10-K for the year ended December 31, [removed: 2020,] [added: 2021,] includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, [removed: 2019,] [added: 2020,] in its Part II, Item 7, "*Management's Discussion and Analysis of Financial Condition and Results of Operations*".

As noted [removed: above,] [added: above and described in further detail below,] the continued impacts [removed: and disruptions to] [added: on] our business in connection with [removed: of] the COVID-19 pandemic [added: and general economic and market conditions] 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.

Prolonged strain on global supply chains may result in [removed: 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.

[removed: We have experienced staffing shortages and disruptions as a result of current labor market conditions and the current Omicron surge, and further] [added: In addition, potential] staffing shortages or disruptions, if material, could [added: ultimately] 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 [removed: conditions, including, among other things, due to inflationary pressures or evolving monetary policies,] [added: conditions] could [removed: also] have an adverse impact on our [added: growth and] ability to execute on our [added: other] strategic [removed: initiatives,] [added: initiatives] and [removed: ultimately could have] a material adverse impact on our labor [removed: costs, results of operations, financial condition and cash flows.][added: costs.]

The ultimate impact of [removed: COVID-19 on our commercial mix] [added: the pandemic and those economic and market conditions] will depend on future developments that are highly uncertain and difficult to predict.

As a result, we may not be able to accurately predict the nature, timing or extent of the impact of such changes on 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 [removed: business, including for example, the COVID-19 vaccine mandates and similar state and local mandates referenced above.][added: business.]

[removed: In addition,] [added: For example,] federal COVID-19 relief legislation suspended the 2% Medicare sequestration from May 1, 2020 through [removed: December] [added: March] 31, [removed: 2021.][added: 2022.]

While in effect, the suspension of sequestration [removed: has] significantly [removed: increased, and will continue to significantly increase,] [added: increased] our revenues.

[removed: We believe the ultimate impact of this public health crisis on the Company will depend on] [added: With respect to COVID-19, these] future developments [removed: that are highly uncertain and difficult to predict, including] [added: include,] among [removed: others] [added: other things,] the ultimate severity and duration of the pandemic; [removed: further spread or resurgence of] the [removed: virus, including as a result of the emergence] [added: evolution] of new strains [added: or variants] of the [removed: virus, such as the Delta and Omicron variants;] [added: virus that may present varying levels of infectivity or virulence;] COVID-19's impact on the [removed: chronic kidney disease (CKD)] [added: CKD] patient population and our patient population, including on the mortality of these patients; the availability, acceptance, impact and efficacy of COVID-19 vaccines, treatments and therapies; the pandemic’s continuing impact on our revenue and non-acquired growth due to lower treatment [removed: volumes, the U.S. and global economies, unemployment, labor market conditions, inflation and monetary policies;] [added: volumes;] the 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 [removed: disruptions;] [added: disruptions, including with respect to our clinical supplies;] the responses of our competitors to the pandemic and related changes in the marketplace; the timing, scope and effectiveness of federal, state and local government [removed: responses to the continuing pandemic;] [added: responses;] and any potential changes to the extensive set of federal, state and local laws, regulations and requirements that govern our business.

In [removed: many] [added: certain] cases, the impact of the pandemic on us may persist even after the pandemic [removed: subsidies.][added: subsides.]

For additional discussion of the COVID-19 pandemic and our response, [removed: including its] [added: the various general economic and marketplace conditions that may] impact [removed: on us] [added: our business,] and [removed: related] [added: the] risks and [removed: uncertainties,] [added: uncertainties related to each of these,] please see the discussion in Part I Item 1.

The following table summarizes our revenues, operating income [added: (loss)] and adjusted operating income [added: (loss)] by line of business.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | Amount | | | | | | Percent | | |

| U.S. dialysis | | | $ | [removed: 10,667] [added: 10,600] | | | | | $ | [removed: 10,660] [added: 10,667] | | | | | $ | [removed: 7] [added: (67)] | | | | | [removed: 0.1] [added: (0.6)] | | % |

| Other - Ancillary services | | | [removed: 1,047] [added: 1,101] | | | | | | [removed: 1,053] [added: 1,047] | | | | | | [removed: (6)] [added: 54] | | | | | | [removed: (0.6)] [added: 5.2] | | % |

| Elimination of intersegment revenues | | | [removed: (95)] [added: (91)] | | | | | | [removed: (162)] [added: (95)] | | | | | | [removed: 67] [added: 4] | | | | | | [removed: 41.4] [added: 4.2] | | % |

| Total consolidated revenues | | | $ | [removed: 11,619] [added: 11,610] | | | | | $ | [removed: 11,551] [added: 11,619] | | | | | $ | [removed: 68] [added: (9)] | | | | | [removed: 0.6] [added: (0.1)] | | % |

v.

DaVita Inc. et al.

("Marietta"); how and whether regulators and legislators will*

*respond to the Marietta decision including, without limitation, whether they will issue regulatory guidance or adopt new legislation; how courts will interpret other anti-discriminatory provisions that may apply to restrictive plan designs; whether there could be other potential negative impacts of the Marietta decision; and the timing of each of these items;*

*•U.S. and global economic and marketplace conditions, interest rates, inflation, unemployment, labor market conditions, and evolving monetary policies, and our ability to respond to these challenging conditions, including among other things our ability to successfully identify cost savings opportunities and to implement cost savings initiatives such as ongoing initiatives that increase our use of third-party service providers to perform certain activities, initiatives that relate to clinic optimization and capacity utilization improvement, and procurement opportunities, among other things;*

We continued to experience challenges related to the coronavirus pandemic (COVID-19) and certain interrelated macroeconomic developments and conditions which negatively impacted our year-over-year revenue and treatment volumes in 2022.

We also incurred higher compensation expense and advocacy spend in 2022, as well as increases in severance costs and center closures costs as we continue to focus on cost savings initiatives.

In addition, 2022 was negatively impacted by our increased investment in our integrated care support functions needed to support the IKC patient growth.

These negative trends were partially offset by increased U.S. dialysis average patient services revenue per treatment and continued growth in international businesses.

Operational and financial highlights for 2022 include, among other things:

- total U.S. dialysis revenue benefited from an increase in average patient services revenue per treatment growth of $6.00 per treatment offset by a decrease in the number of treatments primarily due to increased mortality due to COVID-19's impact on our patient population;

- total revenue growth of 8.3% in our IKC business and 3.6% in our international operations;

- operating income of $1,339 million and adjusted operating income of $1,450 million;

- operating cash flows of $1,565 million and free cash flows of $817 million; and

Additional highlights include:

- net decrease of 91 U.S. dialysis centers to improve center capacity and utilization, as well as a net increase of 11 international dialysis centers from acquisitions;

- the continued impact of COVID-19 and other macroeconomic conditions.

We expect to incur significantly less advocacy costs in 2023 than we experienced in 2022.

COVID-19, General Economic and Marketplace Conditions, and Legal and Regulatory Developments

Many of these external factors and conditions are interrelated, including, among other things, supply chain challenges, inflation, rising interest rates, labor market conditions and wage pressure.

Certain of these impacts could be further intensified by concurrent global events such as the ongoing conflict between Russia and Ukraine, which has continued to drive sociopolitical and economic uncertainty and volatility in Europe and across the globe.

In 2022 we continued to experience a negative impact on revenue and non-acquired growth from COVID-19 due to lower treatment volumes.

As noted above, these lower treatment volumes were driven primarily by the negative impact of COVID-19 on the mortality rates of our patients, which has in turn impacted our patient census, as well as the direct and indirect impact of COVID-19 on our missed treatment rate and new admissions.

During 2022, lower treatment volumes were also driven in part by declining new admissions and elevated missed treatment rates.

New admission rates, future revenues and non-acquired growth could also continue to be negatively impacted over time to the extent that the CKD population experiences elevated mortality levels due to the pandemic.

There remains significant uncertainty as to the ultimate impact of COVID-19 on our treatment volumes, in part due to, among other things, the indeterminate severity and duration of the pandemic and the complexity of factors that may drive new admissions and missed treatment rates over time.

COVID-19 and other global conditions have also increased, and will continue to increase, our expenses, including, among others, staffing and labor costs.

In 2022, we incurred higher than usual wage increases, and higher incentive pay.

During 2022 we also incurred increased costs due to an increased utilization of contract labor, inefficient productivity and increased investment in training expenses.

Each of those cost drivers were in turn primarily the result of the combination of our ongoing COVID-19-related clinical protocols and general labor, supply chain and inflationary pressures.

As noted above, we expect certain of these increased costs to continue, and the cumulative impact of these costs could be material.

In 2022, we also saw a continued increase, relative to pre-pandemic conditions, in the effort and cost needed to procure certain of our equipment and clinical supplies, including pharmaceuticals and personal protective equipment (PPE), and some of which have been substantial.

The staffing and labor cost inflation described above, in addition to higher equipment and clinical supply costs, have put pressure on our existing cost structure, and as noted above, we expect that certain of those increased costs will persist as global supply chains continue to experience volatility and disruptions and as inflationary pressures and challenging labor market conditions continue.

Moreover, to the extent that inflationary pressure persists, this may in turn continue to increase our labor and supply costs at a rate that outpaces the Medicare or any other rate increases we may receive.

In our value-based care and other programs where we assume financial accountability for total patient cost, an increase in COVID-19 rates among patients could have an impact on total cost of care.

This increase may in turn impact the profitability of those programs relative to their respective funding.

As referenced above, we continue to implement cost savings opportunities to help mitigate these cost and volume pressures.

These include, among other things, anticipated cost savings related to certain general and administrative cost efficiencies, such as ongoing initiatives that increase our use of third party service providers to perform certain activities, including, among others, finance and accounting functions as well as related information technology functions; initiatives relating to clinic optimization and initiatives for capacity utilization improvement; and procurement opportunities.

We have incurred, and expect to continue to incur, charges in connection with the continued implementation of these initiatives, and there can be no assurance that we will be able to successfully execute these initiatives or that they will achieve expectations or succeed in helping offset the impact of these challenging conditions.

Any failure on our part to adjust our business and operations in this manner, to adjust to other marketplace developments or dynamics or to appropriately implement these initiatives in accordance with applicable legal, regulatory or compliance requirements could adversely impact our ability to provide dialysis services or the cost of providing those services, among other things, and ultimately could have a material adverse effect on our business, reputation, results of operations, financial condition and cash flows.

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

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.

Drivers of our financial performance in 2021 included the following:

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

- revenue growth of 0.1% in U.S. dialysis and 19.9% in international operations;

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

- a net increase of 18 international dialysis centers;

- operating cash flows of $1.931 billion from continuing operations;

- 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

- impact of COVID-19 as further discussed in Part I.

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

COVID-19 and its impact on our business

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.

To that end, we have dedicated and continue to dedicate substantial resources in response to COVID-19, including the implementation of additional protocols and initiatives to help safely maintain continuity of care for our patients and help protect our caregivers.

For example, we implemented dedicated care shifts for patients with confirmed or suspected COVID-19 and other enhanced clinical practices, including procuring additional equipment and clinical supplies, such as personal protective equipment (PPE).

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.

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

We carefully monitor the efficacy of our response protocols and their impact on our operations and strategic priorities as the pandemic continues.

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

Due in part to these protocols and initiatives, we have incurred costs related to COVID-19 in 2021, and we 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.

Among other things, our response to COVID-19 has resulted in higher salary and wage expense, and we have provided, and may provide in the future, substantial financial support to our teammates, which may include relief reimbursement.

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.

On the other hand, our COVID-19 response has reduced certain other expenses, such as those related to teammate travel, though it remains uncertain how much of these reductions, if any, will persist after the pandemic subsides and more teammates return to their respective office locations.

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.

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.

Because ESKD patients may be older than the average American and generally have comorbidities, several of which are risk factors for COVID-19, we believe the mortality rate of infected patients has been higher in the dialysis population than in the general population, and COVID-19 also could impact the CKD population differently.

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

The first table below presents [added: scheduled] principal repayments and current weighted average interest rates on our debt obligations as of December 31, [removed: 2021.][added: 2022.]

The variable rates presented reflect the weighted average LIBOR rates in effect for all debt tranches plus [added: the] interest rate margins in effect as of December 31, [removed: 2021.][added: 2022.]

[removed: The] [added: At December 31, 2022, the] Term Loan A interest rate margin in effect [removed: at December 31, 2021,] was [removed: 1.50%.][added: 1.75% and the Term Loan B-1 interest rate margin in effect was also 1.75%.]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | Thereafter | | | | | | Total | | | | | | | | | | | | | | |

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | | | | | | | | | | | | |

| 2019 interest rate cap agreements | | | $ | 3,500 | | | | | $ | — | | | | | $ | [removed: —] [added: 3,500] | | | | | $ | [removed: 3,500] [added: —] | | | | | $ | — | | | | | $ | — | | | | | LIBOR above 2.0% | | | | | | $ | [removed: 12.2] [added: 139.8] | |

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

[removed: Under this model, with all else constant, it is estimated that] such an increase would have reduced net income by approximately [removed: $33.8] [added: $21.4] million, [removed: $34.8] [added: $33.8] million, and [removed: $32.4] [added: $34.8] million, net of [removed: tax,] [added: tax and the effect of our interest rate caps,] for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019,] [added: 2020,] respectively.

While our business is predominantly conducted in the U.S., we have developing operations in [removed: ten] [added: 11] other countries as well.

[added: 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: 2021,] [added: 2022,] our international operations have remained fairly small relative to the size of our consolidated financial statements, constituting approximately [removed: 9%] [added: 10%] of our consolidated assets and approximately 6% of our consolidated revenues for the year ended December 31, [removed: 2021,] [added: 2022,] with no single country constituting more than [removed: 3%] [added: 4%] of consolidated assets.

In addition, our unrealized foreign currency translation losses were approximately [removed: 5%, 0.4%,] [added: 2.2%, 4.7%,] and [removed: 1%] [added: 0.4%] of our consolidated operating income for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019.][added: 2020, respectively.]

As such, through December 31, [removed: 2021,] [added: 2022,] we have not engaged in transactions to hedge the exposure of our international transactions or net investments to foreign currency risk.

| Fixed rate | | | $ | 41 | | | | | $ | 32 | | | | | $ | 33 | | | | | $ | 43 | | | | | $ | 31 | | | | | $ | 4,418 | | | | | $ | 4,598 | | | | | 4.43 | | % | | | | $ | 3,414 | |

| Variable rate | | | $ | 190 | | | | | $ | 1,556 | | | | | $ | 35 | | | | | $ | 2,584 | | | | | $ | 4 | | | | | $ | 2 | | | | | $ | 4,371 | | | | | 4.61 | | % | | | | $ | 4,268 | |

The scheduled principal payments for all debt that bears a variable rate by its terms, including all of Term Loan B-1 and Term Loan A, have been included on the variable rate line of the schedule of expected maturities above.

Additionally, the principal amounts of Term Loan B-1 and Term Loan A have been included in the calculation of the average variable interest rate presented.

However, principal amounts of $2,661 million for Term Loan B-1 and $839 million of Term Loan A (the capped debt) are hedged by our 2019 interest rate cap agreements through June 30, 2024.

As of December 31, 2022, applicable LIBOR rates were above the 2.00% threshold of our cap agreements making the interest rates on this capped debt “economically fixed", unless or until applicable LIBOR rates were to fall back below 2.00% during the remaining term of the caps.

As a result, as of December 31, 2022, total fixed and economically fixed debt was $8,098 million, with an average interest rate of 4.28%, while total variable rate debt not subject to caps was $871 million with an average rate of 6.71%.

Under this model, with all else held constant, it is estimated that

At December 31, 2021, the Term Loan B-1 interest rate margin in effect was 1.75%.

| 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

We are one of the largest providers of kidney care services in the U.S. and have been a leader in clinical quality and innovation for [removed: over] [added: more than] 20 years.

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

[removed: Over the years, we] [added: We] have established a value-based culture with a philosophy of caring that is focused on both our patients and teammates.

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

[removed: Kidney] [added: Because kidney] failure is typically caused by Type I and Type II diabetes, hypertension, polycystic kidney disease, long-term autoimmune attack on the kidneys and prolonged urinary tract [removed: obstruction.][added: obstruction, slowing the progression generally involves working with nephrologists or dieticians to help control blood pressure, monitor blood glucose and maintain healthy diet and exercise routines, among other things.]

Patients suffering from ESKD generally require [added: regular life-sustaining] dialysis [removed: at least three times a week] [added: therapy] for the rest of their 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 failure, [removed: ESRD or] ESKD, in the United States, and is our largest line of business.

As of December 31, [removed: 2021,] [added: 2022,] we provided dialysis and administrative services [removed: and related laboratory services throughout] [added: in] the U.S. [removed: via] [added: through] a network of [removed: 2,815] [added: 2,724] outpatient dialysis centers [removed: and home programs] in 46 states and the District of Columbia, serving a total of approximately [removed: 203,100 patients, and have contracts to provide hospital inpatient dialysis services in approximately 850 hospitals.][added: 199,400 patients.]

In addition, as of December 31, [removed: 2021,] [added: 2022,] our international operations provided dialysis and administrative services to a total of [removed: 339] [added: 350] outpatient dialysis centers located in [removed: ten] [added: 11] countries outside of the U.S., serving approximately [removed: 39,900] [added: 45,600] patients.

Finally, our [removed: U.S ancillary services and strategic initiatives] [added: U.S. integrated kidney care (IKC) business] provided integrated care and disease management services to [removed: 16,000] [added: 42,000] patients in risk-based integrated care arrangements and to an additional [removed: 7,000] [added: 15,000] patients in other integrated care arrangements [added: across the United States] as of December 31, [removed: 2021.][added: 2022.]

[removed: Most] [added: A majority] of the patients served by our integrated care business are also our dialysis patients.

We [added: refer to our U.S. integrated kidney care business, U.S. other ancillary services and international operations as, collectively, our "ancillary services." We] also have a separate corporate administrative support function that supports our U.S. dialysis business and these ancillary services.

We believe that the flexibility we offer coupled with a focus on comprehensive kidney care supports our commitments to help improve [added: equitable] clinical outcomes and quality of life for our patients.

According to the most recently published data, for eight consecutive years, we [removed: are] [added: have continued as] 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 ESKD.

In addition, according to the most recently published data, for seven consecutive years, we [removed: are] [added: have] also [added: continued as] an industry leader 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.

Our quality clinical outcomes are driven by our experienced and knowledgeable [removed: teammates.][added: caregivers.]

In addition to our teammates at our dialysis facilities, as of December 31, [removed: 2021,] [added: 2022,] our domestic Chief Medical Officer [removed: lead] [added: leads] a team of [removed: 24 senior] [added: 23] nephrologists in our physician leadership team as part of our domestic Office of the Chief Medical Officer (OCMO).

Our international Chief Medical Officer [removed: lead] [added: leads] a team of [removed: 11 senior] [added: nine] nephrologists in our physician leadership team as part of our international OCMO as of December 31, [removed: 2021.][added: 2022.]

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

We also have a Physician Council that serves as an advisory body to senior management, which was composed of [removed: eight] [added: 10] physicians with extensive experience in clinical practice and [removed: seven] [added: five] Group Medical Directors as of December 31, [removed: 2021.][added: 2022.]

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

[removed: During this time of great and continued challenge, our] [added: 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 [removed: this crisis,] [added: the pandemic,] whether in the hospital, outpatient or home setting.

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

[removed: 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 "—*Human Capital [removed: Management*",] [added: Management,*"] the risk factor in Item 1A.

We also have contracts to provide hospital inpatient dialysis services in approximately [removed: 850] [added: 820] hospitals and related laboratory services throughout the U.S.

According to the United States Renal Data System (USRDS), there were over [removed: 569,000] [added: 562,000] ESKD dialysis patients in the U.S. in [removed: 2019.][added: 2020.]

Based on the most recent [removed: 2021] [added: 2022] annual data report from the USRDS, the underlying ESKD dialysis patient population [removed: has grown] [added: grew] at an approximate compound rate of [removed: 3.5%] [added: 3.0%] from [removed: 2009] [added: 2010] to [removed: 2019] [added: 2020] and [added: 2.1% from 2015 to 2020 as compared to] a [removed: compound rate] [added: decline in growth] of [removed: 3.1%] [added: (1.2)%] from [removed: 2014] [added: 2019] to [removed: 2019,] [added: 2020,] which suggests that the rate of growth of the ESKD patient population is declining relative to long term trends.

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

Certain of these factors, in particular mortality rates for dialysis [added: or CKD] patients, have been impacted by the COVID-19 pandemic.

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

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

Some ESKD patients [removed: who are healthier and more independent] may perform hemodialysis [added: with the help of a care partner] 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.

Although kidney transplantation, when successful, is [removed: generally] [added: considered] the most desirable form of therapeutic intervention, the shortage of suitable donors, side effects of immunosuppressive pharmaceuticals given to transplant recipients and dangers associated with transplant surgery for some patient populations have generally limited the use of this treatment option.

Our total patient turnover at centers we consolidate, which is based upon all causes, averaged approximately 27% in [removed: 2021] [added: both 2022] and [removed: 25% in 2020.][added: 2021.]

The overall number of patients to whom we provided services in the U.S. in [removed: 2021] [added: 2022] decreased by approximately [removed: 0.5%] [added: 1.8%] from [removed: 2020,] [added: 2021,] primarily due to an increase in mortality rates, which have been impacted by the COVID-19 pandemic.

As of December 31, [removed: 2021,] [added: 2022,] we have contracts to provide hospital inpatient hemodialysis services, excluding physician services, to patients in approximately [removed: 850] [added: 820] hospitals throughout the U.S. We render these services based on a contracted [removed: per-][added: per-treatment fee that is individually negotiated with each hospital.]

According to the most recent [removed: 2021] [added: 2022] annual data report from the USRDS, in [removed: 2019] [added: 2020] approximately [removed: 13%] [added: 14%] of ESKD dialysis patients in the U.S. perform home-based dialysis.

The following graph summarizes our U.S. dialysis treatments by modality and U.S. dialysis patient services revenues by modality for the year ended December 31, [removed: 2021.][added: 2022.]

[removed: ][added: ]

This specialized laboratory provides routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESKD [removed: patients which are integral components of the services we provide.][added: patients.]

We care for our patients at every stage and setting along their kidney health journey–including earlier diagnosis and prevention, supporting the transplant process, helping with end of life and ensuring they are supported at home, in our dialysis centers and in the hospital and/or skilled nursing facilities.

There are five stages of chronic kidney disease (CKD).

These stages are generally based on how well the kidneys work to filter waste and extra fluid out of the blood–with higher stages of CKD corresponding to progressing levels of kidney disease.

Stage 1 CKD is the closest to healthy kidney function.

Stage 5 classification indicates that a patient has severe kidney damage.

A patient diagnosed with Stage 5 CKD has kidneys that have lost nearly all functionality or have failed.

If the patient's kidneys fail, they are then diagnosed with end stage renal disease (ESRD), also known as end stage kidney disease (ESKD).

Because loss of kidney function is normally irreversible, ESKD patients require continued dialysis treatments or a kidney transplant to sustain life.

The treatment goal for CKD patients prior to Stage 5 is to manage and slow the progression of the disease to preserve kidney functionality.

*Our businesses*

We are one of the two largest dialysis providers in the United States.

We also maintain a few other ancillary services and investments outside of our U.S. dialysis, U.S. IKC, or international operations, which we refer to as our U.S. other ancillary services.

Each of our businesses are described in greater detail in the sections that follow.

*Our care model*

We are also among the early leaders in the ESRD Treatment Choices (ETC) Model, which was launched by the CMS Center for Medicare and Medicaid Innovation (CMMI) in January 2021 with the stated intent to "encourage greater use of home dialysis and kidney transplants for Medicare beneficiaries with ESKD, while reducing Medicare expenditures and preserving or enhancing the quality of care furnished to beneficiaries with ESKD."

Value-based arrangements are proliferating in the kidney health space.

These arrangements are allowing for a much larger degree of collaboration between nephrologists, providers, and transplant programs, resulting in a more complete understanding of each patient’s clinical needs, which we believe leads to better care coordination and earlier intervention.

Our IKC business is an active participant in CMMI’s Comprehensive Kidney Care Contracting (CKCC) model that seeks to manage the care of late stage CKD and ESKD patients to delay the progression of kidney disease, promote home dialysis, and incentivize transplants.

To that end, we have dedicated and continue to dedicate substantial resources in response to COVID-19, including the implementation of additional protocols and initiatives to help safely maintain continuity of care for our patients and help protect our caregivers and provide access to vaccinations.

These protocols and initiatives include, among other things, policies to implement dedicated care shifts for patients with confirmed or suspected COVID-19 and other enhanced clinical practices.

These efforts are part of our wider Prepare, Prevent, Respond and Recover protocol that includes operational initiatives such as the redistribution of teammates, machines and supplies across the country as needed, increased investment in and utilization of telehealth capabilities, and administration of COVID-19 vaccines.

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

For additional discussion of the COVID-19 pandemic and our response, including its impact

Risk Factors under the heading "*Macroeconomic conditions and global events...,*"and the discussion under the heading "*COVID-19, General Economic and Marketplace Conditions, and Legal and Regulatory Developments*" in Part II, Item 7.

As the USRDS only presents data through December 31, 2020, it does not yet reflect the continued and compounding impact of COVID-19 on this patient base.

*Medicare fee for service*

For scoring and payment adjustment purposes in the performance year 2022 ESRD QIP, CMS determined that circumstances caused by COVID-19 have significantly affected the validity and reliability of the measures and resulting performance scores.

The policies finalized in this rule are intended to ensure that these programs do not penalize facilities based on circumstances caused by COVID-19 that the measures were not designed to accommodate.

In this final rule, the CMS finalized its proposal to suppress the use of certain measures impacted by COVID-19.

Under these finalized policies, no facility will receive a payment reduction for 2022.

While in effect, the suspension of sequestration significantly increased our revenues.

either immediately or after a three-month waiting period.

In February 2023, CMS released the CY 2024 MA Advance Notice (the Notice).

Among other changes, the Notice contains information about potential future MA rate increases and updates certain policies associated with risk adjustments.

We are continuing to assess the impact of the Notice and related MA regulations on our business.

We are comprehensively contracted, and the vast majority of patients insured through commercial health plans are covered by one of our commercial contracts, though we also receive payments from a limited set of commercial patients that are covered by a health plan that considers us out-of-network.

revenues for the year ended December 31, 2022.

Risk Factors under the headings "*Our business is subject to a complex set of governmental laws, regulations and other requirements...;" "Changes in federal and state healthcare legislation or regulations...;" "If the number or percentage of patients with higher-paying commercial insurance declines...;"* and *"Macroeconomic conditions and global events..."*

In January 2023, the Federal Trade Commission proposed a new rule that would generally prohibit employers from using noncompete clauses in contracts with workers that extend beyond the termination of the employment or independent contractor relationship.

The proposed rule remains open for comment and a final rule has not been issued.

The loss of kidney function is normally irreversible.

End stage renal disease or end stage kidney disease (ESRD or ESKD) is the stage of advanced kidney impairment that requires continued dialysis treatments or a kidney transplant to sustain life.

We refer to our U.S. ancillary services and strategic initiatives and our international operations as, collectively, our "ancillary services".

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

clinical practice, and clinical research backgrounds.

DaVita’s caregiving teammates continue to be on the front lines of the ongoing COVID-19 pandemic providing critical, life-sustaining care for our patients.

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.

As of December 31, 2021, we provided dialysis and administrative services in the U.S. through a network of 2,815 outpatient dialysis centers in 46 states and the District of Columbia, serving a total of approximately 203,100 patients.

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 ESRD revenue*

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

The bundled payment rate is also adjusted for certain patient characteristics, a geographic usage index and certain other factors.

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

subsequently extended through fiscal year 2027.

In the years ended December 31, 2021 and 2020, our revenues significantly increased due to this suspension and we expect that this suspension will continue to significantly increase our revenues while it remains in effect.

When the temporary suspension is no longer in effect, we expect that the across-the-board spending cuts of the BCA will, once again, adversely affect our business, results of operations, financial condition and cash flows.

MA plans usually provide reimbursement to us at a negotiated rate that is generally higher than Medicare FFS rates.

Some of our commercial contracts pay us under a single bundled payment rate for all dialysis services provided to covered patients.

However, some of our commercial contracts

also pay us for certain other services and pharmaceuticals in addition to the bundled payment.

Risk Factors under the headings "*Our business is subject to a complex series of governmental laws, regulations and requirements and any failure to adhere to those requirements, or any changes in those requirements, could have a material adverse effect on our business, results of operations, financial condition and cash flows, could materially harm our stock price, and in some circumstances, could materially harm our reputation"; "Changes in federal and state healthcare legislation or regulations could have a material adverse effect on our business, results of operations, financial condition and cash flows"; "If the number or percentage of patients with higher-paying commercial insurance declines, if the average rates that commercial payors pay us decline, if patients in commercial plans are subject to restriction in plan designs, or if we are unable to maintain contracts with payors with competitive terms, including, without limitation, reimbursement rates, scope and duration of coverage and in-network benefits, it could have a material adverse effect on our business, results of operations, financial condition and cash flows";* and *"We face various risks related to the dynamic and evolving novel coronavirus pandemic, many of which may have a material adverse impact on us."*

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

Through a combination of

Additionally, NPS owns and operates nephrology practices in multiple states.

| | | | 339 | | |

Risk Factors under the headings, "*Our business is subject to a complex set of governmental laws, regulations and other requirements and any failure to adhere to those requirements, or any changes in those requirements, could have a material adverse effect on our business, results of operations, financial condition and cash flows, could materially harm stock price, and in some circumstances, could materially harm our reputation;"* and *"We are, and may in the future be, a party to various lawsuits, demands, claims, qui tam suits, governmental investigations and audits and other legal matters, any of which could result in, among other things, substantial financial penalties or awards against us, mandated refunds, substantial payments made by us, required changes to our business practices, exclusion from future participation in Medicare, Medicaid and other healthcare programs and possible criminal penalties, any of which could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and stock price."*

Alternate Fines Statute.

In addition, the ACA amended the federal Anti-Kickback Statute to provide that any claims for items or services resulting from a violation of the federal Anti-Kickback Statute are considered false or fraudulent for purposes of the False Claims Act (FCA) and can result in treble damages and other penalties under the FCA.

In addition, some referring physicians may own our common stock in reliance on the Anti-Kickback Statute safe harbor for investment interests in large publicly traded companies.

Agreements do not need to fit within a relevant federal Anti-Kickback Statute safe harbor provision to be permissible; however, we generally endeavor to structure our arrangements within applicable safe harbors.

Some of our arrangements are not structured fully within a safe harbor.

Amounts collected for prohibited claims must be reported and refunded generally within 60 days after the date on which the overpayment was identified.

On December 2, 2020, CMS released a final rule implementing modifications to the Stark Law.

We continue to assess the anticipated impact of these modifications on our business, results of operations and financial condition.

provider is required to follow certain notification and repayment processes.

In addition to California, other states have passed similar privacy laws, such as the Colorado Privacy Act and the Virginia Consumer Data Protection Act.

If we fail to comply with applicable privacy and security laws, regulations

For the Fiscal Year Ended December 31, [removed: 2021][added: 2022]

[removed: ][added: ]

As of June 30, [removed: 2021,] [added: 2022,] the aggregate market value of the registrant's common stock outstanding held by non-affiliates based upon the closing price on the New York Stock Exchange was approximately [removed: $12.7] [added: $7.4] billion.

As of January 31, [removed: 2022,] [added: 2023,] the number of shares of the registrant’s common stock outstanding was approximately [removed: 96.3] [added: 90.4] million shares.

Portions of the registrant’s proxy statement for its [removed: 2022] [added: 2023] annual meeting of stockholders are incorporated by reference in Part III of this Form 10-K.

| Item 1. | | | | | | [removed: [Business](#i916f7af890114e55a87e260476560c60_13)] [added: [Business](#ib228226ec511491b87b183c6d217a21a_13)] | | | | | | [removed: [2](#i916f7af890114e55a87e260476560c60_13)] [added: [2](#ib228226ec511491b87b183c6d217a21a_13)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i916f7af890114e55a87e260476560c60_58)] [added: Factors](#ib228226ec511491b87b183c6d217a21a_58)] | | | | | | [removed: [26](#i916f7af890114e55a87e260476560c60_58)] [added: [26](#ib228226ec511491b87b183c6d217a21a_58)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i916f7af890114e55a87e260476560c60_67)] [added: Comments](#ib228226ec511491b87b183c6d217a21a_136)] | | | | | | [removed: [54](#i916f7af890114e55a87e260476560c60_67)] [added: [53](#ib228226ec511491b87b183c6d217a21a_136)] | | |

| Item 2. | | | | | | [removed: [Properties](#i916f7af890114e55a87e260476560c60_70)] [added: [Properties](#ib228226ec511491b87b183c6d217a21a_139)] | | | | | | [removed: [54](#i916f7af890114e55a87e260476560c60_70)] [added: [53](#ib228226ec511491b87b183c6d217a21a_139)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i916f7af890114e55a87e260476560c60_73)] [added: Proceedings](#ib228226ec511491b87b183c6d217a21a_142)] | | | | | | [removed: [55](#i916f7af890114e55a87e260476560c60_73)] [added: [54](#ib228226ec511491b87b183c6d217a21a_142)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i916f7af890114e55a87e260476560c60_76)] [added: Disclosures](#ib228226ec511491b87b183c6d217a21a_145)] | | | | | | [removed: [55](#i916f7af890114e55a87e260476560c60_76)] [added: [54](#ib228226ec511491b87b183c6d217a21a_145)] | | |

| Item 5. | | | | | | [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i916f7af890114e55a87e260476560c60_82)] [added: Securities](#ib228226ec511491b87b183c6d217a21a_151)] | | | | | | [removed: [56](#i916f7af890114e55a87e260476560c60_82)] [added: [55](#ib228226ec511491b87b183c6d217a21a_151)] | | |

| Item 7. | | | | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i916f7af890114e55a87e260476560c60_88)] [added: Operations](#ib228226ec511491b87b183c6d217a21a_157)] | | | | | | [removed: [57](#i916f7af890114e55a87e260476560c60_88)] [added: [56](#ib228226ec511491b87b183c6d217a21a_157)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i916f7af890114e55a87e260476560c60_136)] [added: Risk](#ib228226ec511491b87b183c6d217a21a_205)] | | | | | | [removed: [77](#i916f7af890114e55a87e260476560c60_136)] [added: [76](#ib228226ec511491b87b183c6d217a21a_205)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i916f7af890114e55a87e260476560c60_139)] [added: Data](#ib228226ec511491b87b183c6d217a21a_208)] | | | | | | [removed: [78](#i916f7af890114e55a87e260476560c60_139)] [added: [77](#ib228226ec511491b87b183c6d217a21a_208)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i916f7af890114e55a87e260476560c60_142)] [added: Disclosure](#ib228226ec511491b87b183c6d217a21a_211)] | | | | | | [removed: [78](#i916f7af890114e55a87e260476560c60_142)] [added: [77](#ib228226ec511491b87b183c6d217a21a_211)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i916f7af890114e55a87e260476560c60_145)] [added: Procedures](#ib228226ec511491b87b183c6d217a21a_214)] | | | | | | [removed: [78](#i916f7af890114e55a87e260476560c60_145)] [added: [77](#ib228226ec511491b87b183c6d217a21a_214)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i916f7af890114e55a87e260476560c60_148)] [added: Information](#ib228226ec511491b87b183c6d217a21a_217)] | | | | | | [removed: [78](#i916f7af890114e55a87e260476560c60_148)] [added: [77](#ib228226ec511491b87b183c6d217a21a_217)] | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i916f7af890114e55a87e260476560c60_7146825583238)] [added: Inspections](#ib228226ec511491b87b183c6d217a21a_220)] | | | | | | [removed: [78](#i916f7af890114e55a87e260476560c60_7146825583238)] [added: [78](#ib228226ec511491b87b183c6d217a21a_220)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i916f7af890114e55a87e260476560c60_154)] [added: Governance](#ib228226ec511491b87b183c6d217a21a_226)] | | | | | | [removed: [79](#i916f7af890114e55a87e260476560c60_154)] [added: [79](#ib228226ec511491b87b183c6d217a21a_226)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i916f7af890114e55a87e260476560c60_157)] [added: Compensation](#ib228226ec511491b87b183c6d217a21a_229)] | | | | | | [removed: [79](#i916f7af890114e55a87e260476560c60_157)] [added: [79](#ib228226ec511491b87b183c6d217a21a_229)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i916f7af890114e55a87e260476560c60_160)] [added: Matters](#ib228226ec511491b87b183c6d217a21a_232)] | | | | | | [removed: [79](#i916f7af890114e55a87e260476560c60_160)] [added: [79](#ib228226ec511491b87b183c6d217a21a_232)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i916f7af890114e55a87e260476560c60_163)] [added: Independence](#ib228226ec511491b87b183c6d217a21a_235)] | | | | | | [removed: [80](#i916f7af890114e55a87e260476560c60_163)] [added: [80](#ib228226ec511491b87b183c6d217a21a_235)] | | |

| Item 14. | | | | | | [Principal Accounting Fees and [removed: Services](#i916f7af890114e55a87e260476560c60_166)] [added: Services](#ib228226ec511491b87b183c6d217a21a_238)] | | | | | | [removed: [80](#i916f7af890114e55a87e260476560c60_166)] [added: [80](#ib228226ec511491b87b183c6d217a21a_238)] | | |

| Item 15. | | | | | | [Exhibits, Financial Statement [removed: Schedules](#i916f7af890114e55a87e260476560c60_172)] [added: Schedules](#ib228226ec511491b87b183c6d217a21a_244)] | | | | | | [removed: [81](#i916f7af890114e55a87e260476560c60_172)] [added: [81](#ib228226ec511491b87b183c6d217a21a_244)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i916f7af890114e55a87e260476560c60_175)] [added: Summary](#ib228226ec511491b87b183c6d217a21a_247)] | | | | | | [removed: [81](#i916f7af890114e55a87e260476560c60_175)] [added: [81](#ib228226ec511491b87b183c6d217a21a_247)] | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| Item 6. | | | | | | [Reserved](#ib228226ec511491b87b183c6d217a21a_154) | | | | | | [55](#ib228226ec511491b87b183c6d217a21a_154) | | |

| | | | | | | [Exhibit Index](#ib228226ec511491b87b183c6d217a21a_382) | | | | | | [1 of 4](#ib228226ec511491b87b183c6d217a21a_382) | | |

| | | | | | | [Signatures](#ib228226ec511491b87b183c6d217a21a_385) | | | | | | [S-1](#ib228226ec511491b87b183c6d217a21a_385) | | |

KPMG LLP (185), Seattle, WA, USA

| Item 6. | | | | | | [Selected Financial Data](#i916f7af890114e55a87e260476560c60_85) | | | | | | [56](#i916f7af890114e55a87e260476560c60_85) | | |

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

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

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

We [removed: also] [added: regularly] own [removed: 16] [added: an insignificant population of] properties for development, including operating outpatient dialysis centers and properties we hold for sale.

[removed: Our remaining] [added: The vast majority of our U.S.] outpatient dialysis centers are located on premises that we lease.

Our leases are generally subject to [removed: periodic] [added: fixed escalation clauses, or contain] consumer price index [removed: increases, or contain fixed escalation clauses.][added: increases.]

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

[removed: We can usually] relocate existing centers to larger facilities or open new centers if existing centers reach capacity.

We can usually

For our U.S. dialysis business we own the land and buildings for five outpatient dialysis centers.

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

The closing price of our common stock on January 31, [removed: 2022] [added: 2023] was [removed: $108.37] [added: $82.39] per share.

According to Computershare, our registrar and transfer agent, as of January 31, [removed: 2022,] [added: 2023,] there were [removed: 7,232] [added: 6,987] holders of record of our common stock.

The following table summarizes our repurchases of our common stock during [removed: the fourth quarter of 2021:][added: 2022:]

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

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

As of February [removed: 9, 2022,] [added: 22, 2023,] we have a total of [removed: $2.225] [added: $1.596] billion available under the current repurchase authorization for additional share repurchases.

| January 1 - March 31, 2022 | | | 2,104 | | | | | | $ | 110.90 | | | | | 2,104 | | | | | | $ | 2,150,621 | |

| April 1 - June 30, 2022 | | | 3,869 | | | | | | 95.56 | | | | | | 3,869 | | | | | | $ | 1,780,881 | |

| July 1 - September 30, 2022 | | | 2,122 | | | | | | 87.10 | | | | | | 2,122 | | | | | | $ | 1,596,085 | |

| October 1 - December 31, 2022 | | | — | | | | | | — | | | | | | — | | | | | | $ | 1,596,085 | |

| Total | | | 8,095 | | | | | | $ | 97.33 | | | | | 8,095 | | | | | | | | |

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

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

| Period | | | Total number of shares purchased | | | | | | Average price paid per share | | | | | | Total number of shares purchased as part of publicly announced plans or programs | | | | | | Approximate dollar value of shares that may yet be purchased under the plans or programs | | |

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

| 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 | | | | | | | | |

The following table summarizes our repurchases of our common stock during 2021:

| 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 | | | | | | | | |

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.

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: 2021.][added: 2022.]

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: 2021] [added: 2022] that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

The other information required to be disclosed by this item will appear in, and is incorporated by reference from, the sections entitled "*Proposal 1 Election of Directors"*, "*Corporate Governance"*, and "*Security Ownership of Certain Beneficial Owners and Management"* to be included in our definitive proxy statement relating to our [removed: 2022] [added: 2023] 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: 2022] [added: 2023] 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 "*Compensation Committee Report"* to be included in our definitive proxy statement relating to our [removed: 2022] [added: 2023] 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 [added: units, performance stock] units and other rights under all of our existing equity compensation plans as of December 31, [removed: 2021,] [added: 2022,] which consist of our [added: DaVita Inc.] 2020 Incentive Award Plan, [added: DaVita Healthcare Partners Inc.] 2011 Incentive Award Plan and our [added: DaVita Inc.] Employee Stock Purchase Plan.

(1) Includes [removed: 829] [added: 536] shares of common stock reserved for issuance in connection with performance share units at the maximum number of shares issuable thereunder.

Other information required to be disclosed by Item 12 will appear in, and is incorporated by reference from, the section entitled "*Security Ownership of Certain Beneficial Owners and Management"* to be included in our definitive proxy statement relating to our [removed: 2022] [added: 2023] annual stockholder meeting.

| Equity compensation plans approved by shareholders | | | | | | 8,729 | | | | | | $ | 66.00 | | | | | 12,517 | | | | | | 21,246 | | |

| Total | | | | | | 8,729 | | | | | | $ | 66.00 | | | | | 12,517 | | | | | | 21,246 | | |

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

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

The information required by this item will appear in, and is incorporated by reference from, the section entitled "*Certain Relationships and Related Transactions"* and the section entitled "*Corporate Governance"* to be included in our definitive proxy statement relating to our [removed: 2022] [added: 2023] annual stockholder meeting.

The information required by this item will appear in, and is incorporated by reference from, the section entitled "*Proposal 2 Ratification of the Appointment of our Independent Registered Public Accounting Firm"* to be included in our definitive proxy statement relating to our [removed: 2022] [added: 2023] annual stockholder meeting.

Our independent registered public accounting firm is KPMG LLP, Seattle, WA, USA PCAOB ID: 185.

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#i916f7af890114e55a87e260476560c60_178)] [added: Reporting](#ib228226ec511491b87b183c6d217a21a_250)] | | | [removed: F-[1](#i916f7af890114e55a87e260476560c60_178)] [added: F-[1](#ib228226ec511491b87b183c6d217a21a_250)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i916f7af890114e55a87e260476560c60_181)] [added: Firm](#ib228226ec511491b87b183c6d217a21a_253)] | | | [removed: F-[2](#i916f7af890114e55a87e260476560c60_181)] [added: F-[2](#ib228226ec511491b87b183c6d217a21a_253)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i916f7af890114e55a87e260476560c60_184)] [added: Firm](#ib228226ec511491b87b183c6d217a21a_256)] | | | [removed: F-[4](#i916f7af890114e55a87e260476560c60_184)] [added: F-[4](#ib228226ec511491b87b183c6d217a21a_256)] | | |

| [Consolidated Statements of Income for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#i916f7af890114e55a87e260476560c60_187)] [added: 2020](#ib228226ec511491b87b183c6d217a21a_259)] | | | [removed: F-[5](#i916f7af890114e55a87e260476560c60_187)] [added: F-[5](#ib228226ec511491b87b183c6d217a21a_259)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#i916f7af890114e55a87e260476560c60_190)] [added: 2020](#ib228226ec511491b87b183c6d217a21a_262)] | | | [removed: F-[6](#i916f7af890114e55a87e260476560c60_190)] [added: F-[6](#ib228226ec511491b87b183c6d217a21a_262)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 2021, and 2020](#i916f7af890114e55a87e260476560c60_193)] [added: 2022](#ib228226ec511491b87b183c6d217a21a_265) [and 2021](#ib228226ec511491b87b183c6d217a21a_265)] | | | [removed: F-[7](#i916f7af890114e55a87e260476560c60_193)] [added: F-[7](#ib228226ec511491b87b183c6d217a21a_265)] | | |

| [Consolidated Statements of Cash Flow for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#i916f7af890114e55a87e260476560c60_199)] [added: 2020](#ib228226ec511491b87b183c6d217a21a_271)] | | | [removed: F-[8](#i916f7af890114e55a87e260476560c60_199)] [added: F-[8](#ib228226ec511491b87b183c6d217a21a_271)] | | |

| [Consolidated Statements of Equity for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#i916f7af890114e55a87e260476560c60_202)] [added: 2020](#ib228226ec511491b87b183c6d217a21a_274)] | | | [removed: F-[9](#i916f7af890114e55a87e260476560c60_202)] [added: F-[9](#ib228226ec511491b87b183c6d217a21a_274)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i916f7af890114e55a87e260476560c60_205)] [added: Statements](#ib228226ec511491b87b183c6d217a21a_277)] | | | [removed: F-[11](#i916f7af890114e55a87e260476560c60_205)] [added: F-[11](#ib228226ec511491b87b183c6d217a21a_277)] | | |

| [Schedule II—Valuation and Qualifying [removed: Accounts](#i916f7af890114e55a87e260476560c60_322)] [added: Accounts](#ib228226ec511491b87b183c6d217a21a_388)] | | | [removed: [S-](#i916f7af890114e55a87e260476560c60_322)3] [added: [S-](#ib228226ec511491b87b183c6d217a21a_388)3] | | |

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: 2021.][added: 2022.]

To the Stockholders and [added: the] Board of Directors

We have audited the accompanying consolidated balance sheets of DaVita Inc. and subsidiaries (the Company) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of income, comprehensive income, equity, and cash [removed: flow] [added: flows] for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] and the related notes and financial statement Schedule II - 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: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] 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: 2021,] [added: 2022,] 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: 11, 2022] [added: 22, 2023] 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: $10,642] [added: $10,575] million in U.S. dialysis patient service revenue for the year ended December 31, [removed: 2021.][added: 2022.]

We evaluated the Company’s key assumptions and inputs to estimate the transaction price the Company expects to collect as a result of satisfying its performance [removed: obligations] [added: obligation] by comparing key assumptions to historical collection experience, trends of refunds and payor payment adjustments, delays in the Company’s billing and collection process and regulatory compliance matters.

We developed an estimate of U.S. dialysis patient service revenue [removed: based on actual and expected cash collections and compared the estimate to U.S. dialysis patient service revenue] recorded by the Company for the year ended December 31, [removed: 2021.][added: 2022.]

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

The Company records accruals for certain legal proceedings and regulatory matters to the extent an unfavorable outcome is [removed: probable] [added: probable,] and the amount of the loss can be reasonably estimated.

We have audited DaVita Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] 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: 2021,] [added: 2022,] 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: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of income, comprehensive income, equity, and cash [removed: flow] [added: flows] for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February [removed: 11, 2022] [added: 22, 2023] expressed an unqualified opinion on those consolidated financial statements.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Dialysis patient service revenues | | | $ | [removed: 11,213,515] [added: 11,176,464] | | | | | $ | [removed: 11,026,251] [added: 11,213,515] | | | | | $ | [removed: 10,896,706] [added: 11,026,251] | |

| Other revenues | | | [removed: 405,282] [added: 433,430] | | | | | | [removed: 524,353] [added: 405,282] | | | | | | [removed: 491,773] [added: 524,353] | | |

| Total revenues | | | [removed: 11,618,797] [added: 11,609,894] | | | | | | [removed: 11,550,604] [added: 11,618,797] | | | | | | [removed: 11,388,479] [added: 11,550,604] | | |

| Patient care costs | | | [removed: 7,972,414] [added: 8,209,553] | | | | | | [removed: 7,988,613] [added: 7,972,414] | | | | | | [removed: 7,914,485] [added: 7,988,613] | | |

| General and administrative | | | [removed: 1,195,335] [added: 1,355,197] | | | | | | [removed: 1,247,584] [added: 1,195,335] | | | | | | [removed: 1,103,312] [added: 1,247,584] | | |

| Depreciation and amortization | | | [removed: 680,615] [added: 732,602] | | | | | | [removed: 630,435] [added: 680,615] | | | | | | [removed: 615,152] [added: 630,435] | | |

| Equity investment income, net | | | [removed: (26,937)] [added: (26,520)] | | | | | | [removed: (26,916)] [added: (26,937)] | | | | | | [removed: (12,679)] [added: (26,916)] | | |

| Loss on changes in ownership interest, net | | | — | | | | | | [removed: 16,252] [added: —] | | | | | | [removed: —] [added: 16,252] | | |

| Total operating expenses | | | [removed: 9,821,427] [added: 10,270,832] | | | | | | [removed: 9,855,968] [added: 9,821,427] | | | | | | [removed: 9,745,162] [added: 9,855,968] | | |

| Operating income | | | [removed: 1,797,370] [added: 1,339,062] | | | | | | [removed: 1,694,636] [added: 1,797,370] | | | | | | [removed: 1,643,317] [added: 1,694,636] | | |

| Debt expense | | | [removed: (285,254)] [added: (357,019)] | | | | | | [removed: (304,111)] [added: (285,254)] | | | | | | [removed: (443,824)] [added: (304,111)] | | |

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

| Other [added: (loss)] income, net | | | [removed: 6,378] [added: (15,765)] | | | | | | [removed: 16,759] [added: 6,378] | | | | | | [removed: 29,348] [added: 16,759] | | |

| Income from continuing operations before income taxes | | | [removed: 1,518,494] [added: 966,278] | | | | | | [removed: 1,318,262] [added: 1,518,494] | | | | | | [removed: 1,195,439] [added: 1,318,262] | | |

| Income tax expense | | | [removed: 306,732] [added: 198,087] | | | | | | [removed: 313,932] [added: 306,732] | | | | | | [removed: 279,628] [added: 313,932] | | |

| Net income from continuing operations | | | [removed: 1,211,762] [added: 768,191] | | | | | | [removed: 1,004,330] [added: 1,211,762] | | | | | | [removed: 915,811] [added: 1,004,330] | | |

| Net [removed: (loss)] income [added: (loss)] from discontinued operations, net of tax | | | [removed: —] [added: 13,452] | | | | | | [removed: (9,653)] [added: —] | | | | | | [removed: 105,483] [added: (9,653)] | | |

| Net income | | | [removed: 1,211,762] [added: 781,643] | | | | | | [removed: 994,677] [added: 1,211,762] | | | | | | [removed: 1,021,294] [added: 994,677] | | |

| Less: Net income attributable to noncontrolling interests | | | [removed: (233,312)] [added: (221,243)] | | | | | | [removed: (221,035)] [added: (233,312)] | | | | | | [removed: (210,313)] [added: (221,035)] | | |

| Net income attributable to DaVita Inc. | | | $ | [removed: 978,450] [added: 560,400] | | | | | $ | [removed: 773,642] [added: 978,450] | | | | | $ | [removed: 810,981] [added: 773,642] | |

| Basic net income from continuing operations | | | $ | [removed: 9.30] [added: 5.88] | | | | | $ | [removed: 6.54] [added: 9.30] | | | | | $ | [removed: 4.61] [added: 6.54] | |

| Basic net income | | | $ | [removed: 9.30] [added: 6.03] | | | | | $ | [removed: 6.46] [added: 9.30] | | | | | $ | [removed: 5.29] [added: 6.46] | |

| Diluted net income from continuing operations | | | $ | [removed: 8.90] [added: 5.71] | | | | | $ | [removed: 6.39] [added: 8.90] | | | | | $ | [removed: 4.60] [added: 6.39] | |

| Diluted net income | | | $ | [removed: 8.90] [added: 5.85] | | | | | $ | [removed: 6.31] [added: 8.90] | | | | | $ | [removed: 5.27] [added: 6.31] | |

| Basic shares | | | [removed: 105,230] [added: 92,992] | | | | | | [removed: 119,797] [added: 105,230] | | | | | | [removed: 153,181] [added: 119,797] | | |

| Diluted shares | | | [removed: 109,948] [added: 95,834] | | | | | | [removed: 122,623] [added: 109,948] | | | | | | [removed: 153,812] [added: 122,623] | | |

February 22, 2023

February 22, 2023

| Net income attributable to DaVita Inc. | | | $ | 560,400 | | | | | $ | 978,450 | | | | | $ | 773,642 | |

| | | | $ | 16,928,252 | | | | | $ | 17,121,488 | |

| | | | $ | 16,928,252 | | | | | $ | 17,121,488 | |

| Net income | | | $ | 781,643 | | | | | $ | 1,211,762 | | | | | $ | 994,677 | |

| Depreciation and amortization | | | 732,602 | | | | | | 680,615 | | | | | | 630,435 | | |

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

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

| Net income | | | 151,379 | | | | | | | | | | | | | | | | | | | | | | | | 560,400 | | | | | | | | | | | | | | | | | | | | | | | | 560,400 | | | | | | 69,864 | | |

| Stock purchase plan | | | | | | | | | 285 | | | | | | — | | | | | | 18,061 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 18,061 | | | | | | | | |

| Stock award plans | | | | | | | | | 932 | | | | | | 1 | | | | | | (55,921) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (55,920) | | | | | | | | |

| Distributions | | | (176,957) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (90,989) | | |

| Contributions | | | 10,962 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,835 | | |

| Acquisitions and divestitures | | | 2,392 | | | | | | | | | | | | | | | | | | 939 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 939 | | | | | | 866 | | |

| Partial purchases | | | (11,670) | | | | | | | | | | | | | | | | | | (6,586) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (6,586) | | | | | | (193) | | |

| Other | | | 457 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | (457) | | |

| Purchase of treasury stock | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,095) | | | | | | (787,854) | | | | | | | | | | | | (787,854) | | | | | | | | |

| Retirement of treasury stock | | | | | | | | | (8,095) | | | | | | (8) | | | | | | (47,596) | | | | | | (740,250) | | | | | | 8,095 | | | | | | 787,854 | | | | | | | | | | | | — | | | | | | | | |

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

| Balance at December 31, 2022 | | | $ | 1,348,908 | | | | | 90,411 | | | | | | $ | 90 | | | | | $ | 606,935 | | | | | $ | 174,487 | | | | | — | | | | | | $ | — | | | | | $ | (69,186) | | | | | $ | 712,326 | | | | | $ | 163,566 | |

provided based on these estimates.

Some of our commercial revenue contracts are also subject to certain quality or performance adjustments.

Property and equipment impairment assessments are performed at a location or market level, as applicable, based on the specific cash flows they support or protect.

If the Company commits to a plan to dispose of a long-lived asset before the end of its previously estimated useful life, cash flow estimates are revised accordingly, and the Company records an asset impairment, if applicable, or accelerates depreciation over the revised estimated useful life.

Upon sale or retirement of long-lived assets, the cost and related accumulated depreciation or amortization are removed from the balance sheet and any resulting gain or loss is included in current operating expenses.

Since most of the Company's leases do not provide an implicit rate of return, the Company uses its

Accretion of interest on finance lease liabilities is included in debt expense.

Rent expenses are included in patient care costs or general and administrative expense, as applicable, based on the business unit or corporate function for which the space is leased.

Amortizable intangible asset impairment assessments are performed on a location, market or business unit basis, as applicable, based on the specific cash flows they support or protect.

Income and expense from nonconsolidated dialysis partnerships accounted for as equity method investments are recorded within equity investment income, net.

For ownership interests accounted for as equity method investments other than dialysis partnerships, income and expense are included on up to a one quarter lag in other (loss) income, net.

assumptions and judgments required.

In December 2022, the FASB issued ASU No. 2022-06, *Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,* which extends the election date to December 31, 2024.

| Other government | | | 336,991 | | | | | | 464,921 | | | | | | 801,912 | | |

| Commercial | | | 3,437,306 | | | | | | 223,216 | | | | | | 3,660,522 | | |

| Commercial | | | | | | | | | 22,211 | | | | | | 22,211 | | |

| Other(1) | | | 24,437 | | | | | | 44,092 | | | | | | 68,529 | | |

| Eliminations of intersegment revenues | | | (87,035) | | | | | | (4,206) | | | | | | (91,241) | | |

| Total | | | $ | 10,512,774 | | | | | $ | 1,097,120 | | | | | $ | 11,609,894 | |

February 11, 2022

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

| Goodwill impairment charges | | | — | | | | | | — | | | | | | 124,892 | | |

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

| Impairment charges | | | — | | | | | | — | | | | | | 124,892 | | |

| Less: Net decrease in cash, cash equivalents and restricted cash from discontinued operations | | | — | | | | | | — | | | | | | (423,813) | | |

| Net increase (decrease) in cash, cash equivalents and restricted cash from continuing operations | | | 53,170 | | | | | | (706,928) | | | | | | 793,298 | | |

| Balance at December 31, 2018 | | | $ | 1,124,641 | | | | | 166,387 | | | | | | $ | 166 | | | | | $ | 995,006 | | | | | $ | 2,743,194 | | | | | — | | | | | | $ | — | | | | | $ | (34,924) | | | | | $ | 3,703,442 | | | | | $ | 204,956 | |

| Cumulative effect of change in accounting principle | | | (38) | | | | | | | | | | | | | | | | | | | | | | | | 39,876 | | | | | | | | | | | | | | | | | | | | | | | | 39,876 | | | | | | (6) | | |

| Net income | | | 143,413 | | | | | | | | | | | | | | | | | | | | | | | | 810,981 | | | | | | | | | | | | | | | | | | | | | | | | 810,981 | | | | | | 66,900 | | |

| Stock purchase plan | | | | | | | | | 315 | | | | | | 1 | | | | | | 16,569 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,570 | | | | | | | | |

| Distributions | | | (155,011) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (78,112) | | |

| Contributions | | | 35,572 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21,745 | | |

| Acquisitions and divestitures | | | (6,332) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (10,170) | | |

| Partial purchases | | | (11,394) | | | | | | | | | | | | | | | | | | (37,145) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (37,145) | | | | | | (19,480) | | |

| Purchase of treasury stock | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (41,020) | | | | | | (2,402,475) | | | | | | | | | | | | (2,402,475) | | | | | | | | |

| Retirement of treasury stock | | | | | | | | | (41,020) | | | | | | (41) | | | | | | (240,121) | | | | | | (2,162,313) | | | | | | 41,020 | | | | | | 2,402,475 | | | | | | | | | | | | — | | | | | | | | |

| Stock award plans | | | | | | | | | 345 | | | | | | — | | | | | | (17,801) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (17,801) | | | | | | | | |

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

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

Disposition gains and losses are included in current operating expenses.

compensation, as applicable.

*New standards recently adopted*

In December 2019, the FASB issued Accounting Standards Update (ASU) No. 2019-12*, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12)*.

ASU 2019-12 attempts to simplify aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year.

The amendments in this ASU became effective for the Company beginning on January 1, 2021.

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

(1)During the first quarter of 2021, the Company realigned the classification of revenue previously disclosed in the "Other government" category to the "Medicare and Medicare Advantage" category for certain government-reimbursed plans which have structure and payment characteristics similar to traditional Medicare Advantage plans.

| Other government(1) | | | 329,071 | | | | | | 352,765 | | | | | | 681,836 | | |

| Commercial | | | 3,286,089 | | | | | | 144,256 | | | | | | 3,430,345 | | |

| Commercial | | | | | | | | | 130,823 | | | | | | 130,823 | | |

| Other(2) | | | 32,021 | | | | | | 78,940 | | | | | | 110,961 | | |

| Eliminations of intersegment revenues | | | (132,325) | | | | | | (14,030) | | | | | | (146,355) | | |

| Total | | | $ | 10,430,581 | | | | | $ | 957,898 | | | | | $ | 11,388,479 | |

The classification of revenue for these plans for the year ended December 31, 2019 has also been recast to conform to the current period presentation.

The decrease in restricted cash and equivalents was primarily driven by the release of escrow funds in the third quarter of 2021 related to a resolved legal settlement.

See Note 16 for further details.

| | | | $ | 23,226 | | | | | $ | 48,598 | | | | | $ | 71,824 | | | | | $ | 8,217 | | | | | $ | 44,077 | | | | | $ | 52,294 | |

As a result, these investments were reclassified from equity method and other investments to short-term investments during that period.