Item 16. Form 10-K Summary.

None.

DAVITA INC.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and which includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

During the last fiscal year, the Company conducted an evaluation, under the oversight of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s internal control over financial reporting. This evaluation was completed based on the criteria established in the report titled "Internal Control—Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based upon our evaluation under the COSO framework, we have concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022.

The Company’s independent registered public accounting firm, KPMG LLP, has issued an attestation report on the Company’s internal control over financial reporting, which report is included in this Annual Report.

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

DaVita Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of DaVita Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 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, 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 22, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

U.S. dialysis patient service revenue recognition

As discussed in Notes 1 and 2 to the consolidated financial statements, the Company recognized $10,575 million in U.S. dialysis patient service revenue for the year ended December 31, 2022. There are uncertainties associated with estimating U.S. dialysis patient service revenue, which generally take several years to resolve. As these estimates are refined over time, both positive and negative adjustments are recognized in the current period.

We identified the recognition of the transaction price the Company expects to collect as a result of satisfying its performance obligations related to U.S. dialysis patient service revenue as a critical audit matter because it involves estimation that requires complex auditor judgment. The key assumptions and inputs used to estimate the transaction price relate to ongoing insurance coverage changes, differing interpretations of contract coverage, determination of applicable primary and secondary coverage, coordination of benefits, and varying patient characteristics impacting Medicare reimbursements. Changes to the key assumptions and inputs used in the application of the methodology may have a significant effect on the Company’s determination of the estimate.

F-2

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s U.S. dialysis patient service revenue recognition process, including controls related to the application of the methodology used to estimate the transaction price, and the key assumptions and inputs. 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 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. Additionally, we compared U.S. dialysis patient service revenue related to the transaction price estimates recognized in prior periods to actual cash collections related to performance obligations satisfied in prior periods to analyze the Company’s ability to estimate the transaction price the Company expects to collect as a result of satisfying its performance obligations. We developed an estimate of U.S. dialysis patient service revenue recorded by the Company for the year ended December 31, 2022.

Evaluation of legal proceedings and regulatory matters

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, qui tam suits, governmental investigations and audits (including, without limitation, investigations or other actions resulting from its obligation to self-report suspected 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 probable, and the amount of the loss can be reasonably estimated.

We identified the evaluation of legal proceedings and regulatory matters as a critical audit matter. Due to the nature of the legal proceedings and regulatory matters, a high degree of subjectivity was required in evaluating the completeness of the Company’s population of legal proceedings and regulatory matters. Additionally, complex auditor judgment was required in evaluating the Company’s probability of outcome assessment, and related disclosures.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s legal proceedings and regulatory matters process. This includes controls over the Company’s determination of the completeness of the population of legal proceedings and regulatory matters, as well as controls over the Company’s probability of outcome assessment, and related disclosures. We tested existing legal proceedings and regulatory matters by reading certain written correspondence received from outside parties as well as reading certain written responses provided to outside parties. We read letters received directly from the Company’s external and internal legal counsel that described certain legal proceedings and regulatory matters. We involved forensic professionals with specialized skills and knowledge who inspected the Company’s compliance case log. Additionally, we assessed the completeness of the population of legal proceedings and regulatory matters and related disclosures by 1) inquiring of certain key executives and directors and 2) evaluating information received through procedures described above and through publicly available information about the Company, its competitors, and the industry.

/s/ KPMG LLP

We have served as the Company’s auditor since 2000.

Seattle, Washington

February 22, 2023

F-3

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

DaVita Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited DaVita Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (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, 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, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement Schedule II - Valuation and Qualifying Accounts (collectively, the consolidated financial statements), and our report dated February 22, 2023 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Seattle, Washington

February 22, 2023

F-4

DAVITA INC.

CONSOLIDATED STATEMENTS OF INCOME

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

			Year ended December 31,
			2022						2021						2020
Dialysis patient service revenues			$	11,176,464					$	11,213,515					$	11,026,251
Other revenues			433,430						405,282						524,353
Total revenues			11,609,894						11,618,797						11,550,604
Operating expenses:
Patient care costs			8,209,553						7,972,414						7,988,613
General and administrative			1,355,197						1,195,335						1,247,584
Depreciation and amortization			732,602						680,615						630,435
Equity investment income, net			(26,520)						(26,937)						(26,916)
Loss on changes in ownership interest, net			—						—						16,252
Total operating expenses			10,270,832						9,821,427						9,855,968
Operating income			1,339,062						1,797,370						1,694,636
Debt expense			(357,019)						(285,254)						(304,111)
Debt prepayment, refinancing and redemption charges			—						—						(89,022)
Other (loss) income, net			(15,765)						6,378						16,759
Income from continuing operations before income taxes			966,278						1,518,494						1,318,262
Income tax expense			198,087						306,732						313,932
Net income from continuing operations			768,191						1,211,762						1,004,330
Net income (loss) from discontinued operations, net of tax			13,452						—						(9,653)
Net income			781,643						1,211,762						994,677
Less: Net income attributable to noncontrolling interests			(221,243)						(233,312)						(221,035)
Net income attributable to DaVita Inc.			$	560,400					$	978,450					$	773,642
Earnings per share attributable to DaVita Inc.:
Basic net income from continuing operations			$	5.88					$	9.30					$	6.54
Basic net income			$	6.03					$	9.30					$	6.46
Diluted net income from continuing operations			$	5.71					$	8.90					$	6.39
Diluted net income			$	5.85					$	8.90					$	6.31
Weighted average shares for earnings per share:
Basic shares			92,992						105,230						119,797
Diluted shares			95,834						109,948						122,623
Amounts attributable to DaVita Inc.:
Net income from continuing operations			$	546,948					$	978,450					$	783,295
Net income (loss) from discontinued operations			13,452						—						(9,653)
Net income attributable to DaVita Inc.			$	560,400					$	978,450					$	773,642

See notes to consolidated financial statements.

F-5

DAVITA INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(dollars in thousands)

			Year ended December 31,
			2022						2021						2020
Net income			$	781,643					$	1,211,762					$	994,677
Other comprehensive income, net of tax:
Unrealized gains (losses) on interest rate cap agreements:
Unrealized gains (losses)			108,669						7,155						(16,346)
Reclassification of net realized (gains) losses into net income			(8,806)						4,133						5,313
Unrealized losses on foreign currency translation			(29,802)						(84,381)						(7,623)
Other comprehensive income (loss)			70,061						(73,093)						(18,656)
Total comprehensive income			851,704						1,138,669						976,021
Less: Comprehensive income attributable to noncontrolling interests			(221,243)						(233,312)						(221,035)
Comprehensive income attributable to DaVita Inc.			$	630,461					$	905,357					$	754,986

See notes to consolidated financial statements.

F-6

DAVITA INC.

CONSOLIDATED BALANCE SHEETS

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

			December 31, 2022						December 31, 2021
ASSETS
Cash and cash equivalents			$	244,086					$	461,900
Restricted cash and equivalents			94,903						93,060
Short-term investments			77,693						22,310
Accounts receivable			2,132,070						1,957,583
Inventories			109,122						107,428
Other receivables			413,976						427,321
Prepaid and other current assets			78,839						72,517
Income tax receivable			4,603						25,604
Total current assets			3,155,292						3,167,723
Property and equipment, net of accumulated depreciation			3,256,397						3,479,972
Operating lease right-of-use assets			2,666,242						2,824,787
Intangible assets, net of accumulated amortization			182,687						177,693
Equity method and other investments			231,108						238,881
Long-term investments			44,329						49,514
Other long-term assets			315,587						136,677
Goodwill			7,076,610						7,046,241
			$	16,928,252					$	17,121,488
LIABILITIES AND EQUITY
Accounts payable			$	479,780					$	402,049
Other liabilities			802,469						709,345
Accrued compensation and benefits			692,654						659,960
Current portion of operating lease liabilities			395,401						394,357
Current portion of long-term debt			231,404						179,030
Income tax payable			18,039						53,792
Total current liabilities			2,619,747						2,398,533
Long-term operating lease liabilities			2,503,068						2,672,713
Long-term debt			8,692,617						8,729,150
Other long-term liabilities			105,233						119,158
Deferred income taxes			782,787						830,954
Total liabilities			14,703,452						14,750,508
Commitments and contingencies
Noncontrolling interests subject to put provisions			1,348,908						1,434,832
Equity:
Preferred stock ($0.001 par value, 5,000 shares authorized; none issued)			—						—
Common stock ($0.001 par value, 450,000 shares authorized; 90,411 and 97,289 shares issued and outstanding at December 31, 2022, and 2021, respectively)			90						97
Additional paid-in capital			606,935						540,321
Retained earnings			174,487						354,337
Accumulated other comprehensive loss			(69,186)						(139,247)
Total DaVita Inc. shareholders' equity			712,326						755,508
Noncontrolling interests not subject to put provisions			163,566						180,640
Total equity			875,892						936,148
			$	16,928,252					$	17,121,488

See notes to consolidated financial statements.

F-7

DAVITA INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

(dollars in thousands)

			Year ended December 31,
			2022						2021						2020
Cash flows from operating activities:
Net income			$	781,643					$	1,211,762					$	994,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			732,602						680,615						630,435
Debt prepayment, refinancing and redemption charges			—						—						86,957
Stock-based compensation expense			95,427						102,209						91,458
Deferred income taxes			(75,669)						60,483						240,848
Equity investment income, net			8,773						5,215						13,830
Loss on sales of business interests, net			—						—						24,248
Other non-cash charges, net			21,693						11,231						747
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Accounts receivable			(148,394)						(138,140)						(21,087)
Inventories			(757)						5,720						(12,349)
Other receivables and prepaid and other current assets			27,533						128,661						(79,277)
Other long-term assets			(50,549)						(26,387)						(6,123)
Accounts payable			87,481						(30,320)						37,200
Accrued compensation and benefits			34,536						(16,717)						(20,931)
Other current liabilities			89,955						(93,645)						105,637
Income taxes			(24,103)						36,921						(87,391)
Other long-term liabilities			(15,601)						(6,732)						(19,851)
Net cash provided by operating activities			1,564,570						1,930,876						1,979,028
Cash flows from investing activities:
Additions of property and equipment			(603,429)						(641,465)						(674,541)
Acquisitions			(57,308)						(187,050)						(182,013)
Proceeds from asset and business sales			117,582						61,464						50,139
Purchase of debt investments held-to-maturity			(129,803)						(30,849)						(150,701)
Purchase of other debt and equity investments			(3,590)						(2,987)						(3,757)
Proceeds from debt investments held-to-maturity			71,125						15,849						151,213
Proceeds from sale of other debt and equity investments			3,781						12,030						3,491
Purchase of equity method investments			(31,885)						(13,924)						(22,341)
Distributions from equity method investments			3,962						2,944						3,139
Other			(782)						(745)						—
Net cash used in investing activities			(630,347)						(784,733)						(825,371)
Cash flows from financing activities:
Borrowings			2,393,116						1,615,370						4,046,775
Payments on long-term debt			(2,404,395)						(861,115)						(4,110,304)
Deferred financing and debt redemption costs			(3)						(9,091)						(105,848)
Purchase of treasury stock			(802,228)						(1,538,626)						(1,458,442)
Distributions to noncontrolling interests			(267,946)						(244,033)						(253,118)
Net payments related to stock purchases and awards			(37,367)						(60,001)						(975)
Contributions from noncontrolling interests			14,797						31,754						42,966
Proceeds from sales of additional noncontrolling interests			3,673						2,880						—
Purchases of noncontrolling interests			(20,775)						(20,104)						(7,831)
Net cash used in financing activities			(1,121,128)						(1,082,966)						(1,846,777)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(29,066)						(10,007)						(13,808)
Net (decrease) increase in cash, cash equivalents and restricted cash			(215,971)						53,170						(706,928)
Cash, cash equivalents and restricted cash at beginning of the year			554,960						501,790						1,208,718
Cash, cash equivalents and restricted cash at end of the year			$	338,989					$	554,960					$	501,790

See notes to consolidated financial statements.

F-8

DAVITA INC.

CONSOLIDATED STATEMENTS OF EQUITY

(dollars and shares in thousands)

			Non-controlling interests subject to put provisions						DaVita Inc. Shareholders' Equity																																																Non-controlling interests not subject to put provisions
																		Additional paid-in capital						Retained earnings																		Accumulated other comprehensive income (loss)
						Common stock																		Treasury stock
						Shares						Amount												Shares						Amount									Total
Balance at December 31, 2019			$	1,180,376					125,843						$	126					$	749,043					$	1,431,738					—						$	—					$	(47,498)					$	2,133,409					$	185,833
Comprehensive income:
Net income			141,879																								773,642																								773,642						79,156
Other comprehensive income																																													(18,656)						(18,656)
Stock purchase plan									222						—						17,148																														17,148
Stock award plan									345						—						(17,801)																														(17,801)
Stock-settled stock-based compensation expense																					90,007																														90,007
Changes in noncontrolling interest from:
Distributions			(163,175)																																																						(89,943)
Contributions			30,154																																																						12,812
Acquisitions and divestitures			(3,215)																																																						(248)
Partial purchases			(7,771)																		4,364																														4,364						(4,424)
Fair value remeasurements			151,780																		(151,780)																														(151,780)
Purchase of treasury stock																																	(16,477)						(1,446,767)												(1,446,767)
Retirement of treasury stock									(16,477)						(16)						(93,908)						(1,352,843)						16,477						1,446,767												—
Balance at December 31, 2020			$	1,330,028					109,933						$	110					$	597,073					$	852,537					—						$	—					$	(66,154)					$	1,383,566					$	183,186
Comprehensive income:
Net income			160,359																								978,450																								978,450						72,953
Other comprehensive income																																													(73,093)						(73,093)
Stock purchase plan									203						—						19,626																														19,626
Stock award plans									1,030						1						(80,642)																														(80,641)
Stock-settled stock-based compensation expense																					100,714																														100,714
Changes in noncontrolling interest from:
Distributions			(159,259)																																																						(84,774)
Contributions			22,672																																																						9,082
Acquisitions and divestitures			5,903																		(264)																														(264)						1,250
Partial purchases			(588)																		(13,853)																														(13,853)						(1,057)
Fair value remeasurements			75,717																		(75,717)																														(75,717)
Purchase of treasury stock																																	(13,877)						(1,546,016)												(1,546,016)
Retirement of treasury stock									(13,877)						(14)						(69,352)						(1,476,650)						13,877						1,546,016												—
Deferred taxes from partnership buyouts																					62,736																														62,736
Balance at December 31, 2021			$	1,434,832					97,289						$	97					$	540,321					$	354,337					—						$	—					$	(139,247)					$	755,508					$	180,640

F-9

DAVITA INC.

CONSOLIDATED STATEMENTS OF EQUITY - continued

(dollars and shares in thousands)

			Non-controlling interests subject to put provisions						DaVita Inc. Shareholders' Equity																																																Non-controlling interests not subject to put provisions
															Additional paid-in capital						Retained earnings																		Accumulated other comprehensive income (loss)
			Common stock																		Treasury stock
			Shares						Amount												Shares						Amount									Total
Balance at December 31, 2021			$	1,434,832					97,289						$	97					$	540,321					$	354,337					—						$	—					$	(139,247)					$	755,508					$	180,640
Comprehensive income:
Net income			151,379																								560,400																								560,400						69,864
Other comprehensive income																																													70,061						70,061
Stock purchase plan									285						—						18,061																														18,061
Stock award plans									932						1						(55,921)																														(55,920)
Stock-settled stock-based compensation expense																					95,230																														95,230
Changes in noncontrolling interest from:
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)
Fair value remeasurements			(62,487)																		62,487																														62,487
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

See notes to consolidated financial statements.

F-10

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

1. Organization and summary of significant accounting policies

Organization

The Company's operations are comprised of its dialysis and related lab services to patients in the United States (its U.S. dialysis business), its U.S. integrated kidney care (IKC) business, its U.S. other ancillary services and its international operations (collectively, its ancillary services), as well as its corporate administrative support.

The Company’s largest line of business is its U.S. dialysis business, which operates kidney dialysis centers in the U.S. for patients suffering from chronic kidney failure, also known as end stage renal disease or end stage kidney disease (ESRD or ESKD). As of December 31, 2022, the Company operated or provided administrative services through a network of 2,724 U.S. outpatient dialysis centers in 46 states and the District of Columbia, serving a total of approximately 199,400 patients. In addition, as of December 31, 2022, the Company operated or provided administrative services to a total of 350 outpatient dialysis centers serving approximately 45,600 patients located in 11 countries outside of the U.S.

On June 19, 2019, the Company completed the sale of its prior DaVita Medical Group (DMG) business to Collaborative Care Holdings, LLC (Optum), a subsidiary of UnitedHealth Group Inc. The effects of the DMG sale on the Company's consolidated financial statements have been reported in discontinued operations for all periods presented. For information on how the DMG sale has affected these results, see Note 22.

The Company’s U.S. dialysis and related lab services business qualifies as a separately reportable segment, and all other operating segments have been combined and disclosed in the other segments category.

Basis of presentation

These consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The financial statements include DaVita Inc. and its subsidiaries, partnerships and other entities in which it maintains a majority voting or other controlling financial interest (collectively, the Company). All significant intercompany transactions and balances have been eliminated. Equity investments in investees over which the Company has significant influence are recorded on the equity method, while investments in other equity securities are recorded at fair value or on the adjusted cost method, as applicable. For the Company’s international subsidiaries, local currencies are considered their functional currencies. Translation adjustments result from translating the financial statements of the Company’s international subsidiaries from their functional currencies into the Company’s reporting currency (the U.S. dollar, or USD). Prior year classifications have been conformed to the current year presentation.

The Company has evaluated subsequent events through the date these consolidated financial statements were issued and has included all necessary adjustments and disclosures.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, contingencies and noncontrolling interests subject to put provisions. Although actual results in subsequent periods will differ from these estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time. All significant assumptions and estimates underlying the amounts reported in the financial statements and accompanying notes are regularly reviewed and updated when necessary. Changes in estimates are reflected in the financial statements based upon on-going actual experience trends or subsequent settlements and realizations depending on the nature and predictability of the estimates and contingencies.

The most significant assumptions and estimates underlying these consolidated financial statements and accompanying notes involve revenue recognition and accounts receivable, impairments of goodwill, accounting for income taxes, certain fair value estimates and loss contingencies. Specific estimating risks and contingencies are further addressed within these notes to the consolidated financial statements.

Revenues

Dialysis patient service revenues

Revenues are recognized based on the Company’s estimate of the transaction price the Company expects to collect as a result of satisfying its performance obligations. Dialysis patient service revenues are recognized in the period services are

F-11

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

provided based on these estimates. Revenues consist primarily of payments from government and commercial health plans for dialysis services provided to patients. The Company maintains a usual and customary fee schedule for its dialysis treatments and related lab services; however, actual collectible revenue is normally recognized at a discount from this fee schedule.

Revenues associated with Medicare and Medicaid programs are estimated based on: (a) the payment rates that are established by statute or regulation for the portion of payment rates paid by the government payor (e.g., 80% for Medicare patients) and (b) for the portion not paid by the primary government payor, estimates of the amounts ultimately collectible from other government programs providing secondary coverage (e.g., Medicaid secondary coverage), the patient’s commercial health plan secondary coverage, or the patient.

Under Medicare’s bundled payment rate system, services covered by Medicare are subject to estimating risk, whereby reimbursements from Medicare can vary significantly depending upon certain patient characteristics and other variable factors. Even with the bundled payment rate system, Medicare payments for bad debt claims as established by cost reports require evidence of collection efforts. As a result, billing and collection of Medicare bad debt claims can be delayed significantly and final payment is subject to audit. The Company’s revenue recognition is estimated based on its judgment regarding its ability to collect, which depends upon its ability to effectively capture, document and bill for Medicare’s base payment rate as well as these other variable factors.

Medicare Advantage revenues are reimbursed at negotiated contract rates that are generally higher than Medicare fee-for-service rates, but which generally have a slower payment frequency than Medicare fee-for-service payments, and some of which are subject to certain quality or performance adjustments. Medicare Advantage revenues are subject to meaningful estimating risk based on factors similar to those described for commercial health plans below.

Medicaid payments, when Medicaid coverage is secondary, can also be difficult to estimate. For many states, Medicaid payment terms and methods differ from Medicare, and may prevent accurate estimation of individual payment amounts prior to billing.

Revenues associated with commercial health plans are estimated based on contractual terms for the patients under healthcare plans with which the Company has formal agreements, non-contracted health plan coverage terms if known, estimated secondary collections, historical collection experience, historical trends of refunds and payor payment adjustments (retractions), inefficiencies in the Company’s billing and collection processes that can result in denied claims for payments, delays in collections due to payor payment inefficiencies, and regulatory compliance matters.

Commercial revenue recognition also involves significant estimating risks. With many larger commercial insurers, the Company has several different contracts and payment arrangements, and these contracts often include only a subset of the Company’s centers. Some of our commercial revenue contracts are also subject to certain quality or performance adjustments. In certain circumstances, it may not be possible to determine which contract, if any, should be applied prior to billing. In addition, for services provided by non-contracted centers, final collection may require specific negotiation of a payment amount, typically at a significant discount from the Company’s usual and customary rates.

Other revenues

Other revenues consist of revenues earned by the Company's non-dialysis ancillary services as well as fees for management and administrative services to outpatient dialysis businesses that the Company does not consolidate. Other revenues are estimated in the period services are provided.

The Company's IKC revenues include revenues earned under risk-based arrangements, including value-based care (VBC) arrangements. Under its VBC arrangements, the Company assumes full or shared financial risk for the total medical cost of care for patients below or above a benchmark. The benchmarks against which the Company incurs profit or loss on these contracts are typically based on the underlying premiums paid to the insuring entity (the Company's counterparty), with adjustments where applicable, or on trended and adjusted medical cost targets.

For some of the Company's risk-based arrangements (such as its special needs plans), the Company acts as a principal with respect to all medical services provided to the patient by effectively hosting or sponsoring the entire arrangement, and as a result recognizes revenue and expense for all medical services provided to covered patients. However, for most of its VBC arrangements, the Company provides health monitoring and care coordination services to patients but does not control or direct the medical services that patients receive from third party providers. As a result, for most of its VBC arrangements the Company does not include third party medical costs in its reported revenues and expenses, but rather recognizes revenue only for the estimated amount of shared savings or shared losses or related revenues that are directly earned or incurred by the Company, and ultimately paid to or by the Company, under the arrangement.

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DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Other income

Other income includes interest income on cash and cash equivalents and short- and long-term investments, realized and unrealized gains and losses recognized on investments, impairments on investments, and foreign currency transaction gains and losses.

Cash and cash equivalents

Cash equivalents are short-term highly liquid investments readily convertible to known amounts of cash that typically mature within three months or less at date of purchase.

Restricted cash and equivalents

Restricted cash and cash equivalents include funds held in trust to satisfy insurer and state regulatory requirements related to wholly-owned captive insurance companies that bear professional and general liability and workers' compensation risks for the Company as well as funds held in escrow. See Note 4 for further details.

Investments in debt and equity securities

The Company classifies certain debt securities as held-to-maturity and records them at amortized cost based on the Company’s intentions and strategies concerning those investments. Equity securities that have readily determinable fair values or redemption values are recorded at estimated fair value with changes in fair value recognized in current earnings within other income. These debt and equity investments are classified as short-term investments or long-term investments on the Company's consolidated balance sheet. See Note 5 for further details.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consist principally of pharmaceuticals and dialysis-related supplies. Rebates related to inventory purchases are recorded when earned and are based on certain qualification requirements which are dependent on a variety of factors including future pricing levels and purchase volume levels from the manufacturer and related data submission.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation and amortization and is further reduced by any impairments. Maintenance and repairs are charged to expense as incurred. Property and equipment assets are reviewed for possible impairment whenever significant events or changes in circumstances indicate that an impairment may have occurred. 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.

Leases

The Company leases substantially all of its U.S. dialysis facilities. The majority of the Company’s facilities are leased under non-cancellable operating leases which contain renewal options. These renewal options are included in the Company's determination of the right-of-use assets and related lease liabilities when renewal is considered reasonably certain at the commencement date.The Company's leases are generally subject to fixed escalation clauses or contain consumer price index increases.

The Company categorizes leases with contractual terms longer than twelve months as either operating or finance leases. Finance leases are generally those leases that allow the Company to substantially utilize or pay for the entire asset over its estimated life. All other leases are categorized as operating leases. The Company has elected the practical expedient to not separate lease components from non-lease components for its financing and operating leases. For short-term leases with a term of less than 12 months, the Company does not recognize right-of-use assets or lease liabilities and instead recognizes short-term lease costs as rent expense directly as incurred.

Financing and operating lease liabilities are measured at the net present value of lease payments over the lease term as of the commencement date. Since most of the Company's leases do not provide an implicit rate of return, the Company uses its

F-13

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

incremental borrowing rate based on information available at the commencement date or remeasurement date in determining the present value of lease payments.

Assets acquired under finance leases are recorded on the balance sheet within property and equipment, net and liabilities for finance lease obligations are recorded within long-term debt. Finance lease assets are amortized to depreciation expense on a straight-line basis over the shorter of their estimated useful lives or the expected lease term. Accretion of interest on finance lease liabilities is included in debt expense.

Rights to use assets under operating leases are recorded on the balance sheet as operating lease right-of-use assets and liabilities for operating lease obligations are recorded as operating lease liabilities. Both amortization of operating lease right-of-use assets, and interest accretion on operating lease liabilities, are recorded to rent expense over the lease term. 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 intangibles

Amortizable intangible assets include noncompetition agreements, hospital service contracts, and customer relationships arising from other service contracts, each of which have finite useful lives. Amortization expense is computed using the straight-line method over the useful lives of the assets estimated as follows: noncompetition agreements and hospital acute service contracts over the contract term, and customer relationships from other service contracts over the remaining contract term plus expected renewal periods. Amortizable intangible assets are reviewed for possible impairment whenever significant events or changes in circumstances indicate that an impairment may have occurred. 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.

Indefinite-lived intangibles

Indefinite-lived intangible assets include international licenses and accreditations that allow the Company to be reimbursed for providing dialysis services to patients, each of which has an indefinite useful life. Indefinite-lived intangibles are not amortized, but are assessed for impairment at least annually and whenever significant events or changes in circumstances indicate that an impairment may have occurred. Costs to renew indefinite-lived intangible assets are expensed as incurred.

Equity method and other investments

Equity investments that do not have readily determinable fair values are carried on the equity method if the Company maintains significant influence over the investee unless the fair value option is elected. Equity investments without readily determinable fair values for which the Company does not maintain significant influence over the investee are carried either on the adjusted cost method or at estimated fair value, as determined on an investment-specific basis. The adjusted cost method represents the Company's cost for an investment, net of any impairments, as adjusted for any subsequent observable price changes. These equity investments are classified as equity method and other investments on the Company's consolidated balance sheet. See Note 9 for further details.

Equity method investments are assessed for other-than-temporary impairment when significant events or changes in circumstances indicate that an other-than-temporary impairment may have occurred. An other-than-temporary impairment charge is recorded when the fair value of an investment has fallen below its carrying amount and the shortfall is expected to be indefinitely or permanently unrecoverable.

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.

Goodwill

Goodwill represents the difference between the fair value of businesses acquired and the fair value of the identifiable tangible and intangible net assets acquired. Goodwill is not amortized, but is assessed by individual reporting unit for impairment as circumstances warrant and at least annually. An impairment charge is recognized when and to the extent a reporting unit's carrying amount is determined to exceed its fair value. The Company operates multiple reporting units. See Note 10 for further details.

F-14

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Self-insurance

The Company predominantly self-insures its professional and general liability, workers' compensation and automobile risks, and a portion of its employment liability practice risks, through its wholly-owned captive insurance companies, with excess or reinsurance coverage for additional protection. The Company is also predominantly self-insured with respect to employee medical and other health benefits. The Company records insurance liabilities for the professional and general liability, workers’ compensation, automobile, employee health benefit and portion of employment liability practice risks that it retains and estimates its liability for those risks using third party actuarial calculations that are based upon historical claims experience and expectations for future claims.

Income taxes

Federal, state and foreign income taxes are computed at currently enacted tax rates less tax credits using the asset and liability method. Deferred taxes are adjusted both for items that do not currently have tax consequences and for the cumulative effect of any changes in tax rates from those previously used to determine deferred tax assets or liabilities. Tax provisions include amounts that are currently payable, changes in deferred tax assets and liabilities that arise because of temporary differences between the timing of when items of income and expense are recognized for financial reporting and income tax purposes, changes in the recognition of tax positions and any changes in the valuation allowance caused by a change in judgment about the realizability of the related deferred tax assets. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.

The Company uses a recognition threshold of more-likely-than-not and a measurement attribute on all tax positions taken or expected to be taken in a tax return in order to be recognized in the financial statements. Once the recognition threshold is met, the tax position is then measured to determine the actual amount of benefit to recognize in the financial statements.

Stock-based compensation

The Company’s stock-based compensation expense for stock-settled awards is measured at the estimated fair value of awards on the date of grant and recognized on a cumulative straight-line basis over the vesting terms of the awards, unless the stock awards are based on non-market-based performance metrics, in which case expense is adjusted for the ultimate number of shares expected to be issued as of the end of each reporting period. Stock-based compensation expense for cash-settled awards is based on their estimated fair values as of the end of each reporting period. The expense for all stock-based awards is recognized net of expected forfeitures.

Stock-based compensation to be settled in shares is recorded to the Company’s shareholders’ contributed capital, while stock-based compensation to be settled in cash is recorded as a liability. Shares issued upon exercise or, when applicable, vesting of stock awards, are issued from authorized but unissued shares.

Interest rate cap agreements

The Company often carries a combination of current or forward interest rate caps on portions of its variable rate debt as a means of hedging its exposure to changes in LIBOR interest rates as part of its overall interest rate risk management strategy. These interest rate caps are not held for trading or speculative purposes and are designated as qualifying cash flow hedges. See Note 13 for further details.

Noncontrolling interests

Noncontrolling interests represent third-party equity ownership interests in entities which are consolidated by the Company for financial statement reporting purposes. As of December 31, 2022, third parties held noncontrolling equity interests in 689 consolidated legal entities.

Fair value estimates

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are determined based on the principal or most advantageous market for the item being measured, assume that buyers and sellers are independent, willing and able to transact, and knowledgeable, with access to all information customarily available in such a transaction, and are based on assumptions that market participants would use in pricing the item, not assumptions specific to the reporting entity. The criticality of a particular fair value estimate to the Company's consolidated financial statements depends upon the nature and size of the item being measured, the extent of uncertainties involved and the nature and magnitude or potential effect of

F-15

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

assumptions and judgments required. Certain fair value estimates can involve significant uncertainties and require significant judgment on various matters, some of which could be subject to reasonable disagreement. See Note 24 for further details.

The Company relies on fair value measurements and estimates for purposes that require the recording, reassessment, or adjustment of the carrying amounts of certain assets, liabilities, and noncontrolling interests subject to put provisions (redeemable equity interests classified as temporary equity). These purposes can include the accounting for business combination transactions; impairment assessments for goodwill, other intangible assets, or other long-lived assets; recurrent revaluation of investments in debt and equity securities, contingent earn-out obligations, interest rate cap agreements, and noncontrolling interests subject to put provisions; and the accounting for equity method and other investments and stock-based compensation, as applicable. The Company has classified its assets, liabilities and temporary equity into the fair value hierarchy levels defined by the Financial Accounting Standards Board (FASB) reflecting their differing degrees of uncertainty. See Note 24 for further details.

New accounting standards

New standards not yet adopted

In March 2020, the FASB issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. The amendments in this ASU were effective beginning on March 12, 2020, and the Company could elect to apply the amendments prospectively through December 31, 2022. 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. Effective January 1, 2022 certain LIBOR tenors that do not affect the Company, including the one-week and two-month U.S. dollar LIBOR rate, ceased or became non-representative. The remaining U.S. dollar LIBOR tenors will cease or become non-representative effective July 1, 2023. This change will have no impact on the Company's ability to borrow. The Company is currently assessing the other effects this guidance may have on its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities (ASU 2021-08). ASU 2021-08 requires application of ASC 606, Revenue from Contracts with Customers, to recognize and measure assets and liabilities from contracts with customers acquired in a business combination. This ASU creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

F-16

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

2. Revenue recognition and accounts receivable

The Company's revenues by segment and primary payor source were as follows:

			Year ended December 31, 2022
			U.S. dialysis						Other - Ancillary services						Consolidated
Patient service revenues:
Medicare and Medicare Advantage			$	6,041,496											$	6,041,496
Medicaid and Managed Medicaid			759,579												759,579
Other government			336,991						464,921						801,912
Commercial			3,437,306						223,216						3,660,522
Other revenues:
Medicare and Medicare Advantage									345,340						345,340
Medicaid and Managed Medicaid									1,546						1,546
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

(1)Other consists primarily of management service fees earned in the respective Company line of business as well as other non-patient service revenue from the Company's U.S. IKC and other ancillary services and international operations.

			Year ended December 31, 2021
			U.S. dialysis						Other - Ancillary services						Consolidated
Patient service revenues:
Medicare and Medicare Advantage			$	6,133,235					$						$	6,133,235
Medicaid and Managed Medicaid			782,430												782,430
Other government			328,256						463,385						791,641
Commercial			3,397,697						199,024						3,596,721
Other revenues:
Medicare and Medicare Advantage									326,696						326,696
Medicaid and Managed Medicaid									1,321						1,321
Commercial									15,553						15,553
Other(1)			25,345						40,945						66,290
Eliminations of intersegment revenues			(90,796)						(4,294)						(95,090)
Total			$	10,576,167					$	1,042,630					$	11,618,797

(1)Other consists primarily of management service fees earned in the respective Company line of business as well as other non-patient service revenue from the Company's U.S. IKC and other ancillary services and international operations.

F-17

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

			Year ended December 31, 2020
			U.S. dialysis						Other - Ancillary services						Consolidated
Patient service revenues:
Medicare and Medicare Advantage(1)			$	6,169,226					$						$	6,169,226
Medicaid and Managed Medicaid			744,862												744,862
Other government(1)			334,714						380,584						715,298
Commercial			3,370,562						170,394						3,540,956
Other revenues:
Medicare and Medicare Advantage									419,662						419,662
Medicaid and Managed Medicaid									1,227						1,227
Commercial									33,246						33,246
Other(2)			40,571						47,585						88,156
Eliminations of intersegment revenues			(145,286)						(16,743)						(162,029)
Total			$	10,514,649					$	1,035,955					$	11,550,604

(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. The classification of revenue for these plans for the year ended December 31, 2020 has also been recast to conform to this presentation.

(2)Other consists primarily of management service fees earned in the respective Company line of business as well as other non-patient revenue from the Company's U.S. IKC and other ancillary services and international operations.

The majority of the Company's non-patient service revenues from Medicare and Medicare Advantage, Medicaid and Managed Medicaid, and commercial sources represent risk-based revenues earned by the Company's U.S. integrated care and disease management business.

As described in Note 1, there are significant risks associated with estimating revenue, many of which take several years to resolve. These estimates are subject to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payor issues, as well as patient issues including determining applicable primary and secondary coverage, changes in patient coverage and coordination of benefits. As these estimates are refined over time, both positive and negative adjustments to revenue are recognized in the current period.

No single commercial payor accounted for more than 10% of consolidated revenues or consolidated accounts receivable for the periods presented in these consolidated financial statements or at their period-ends, respectively.

Dialysis services accounts receivable and other receivables from Medicare, including Medicare Advantage plans, and Medicaid, including managed Medicaid plans, were approximately $1,113,499 and $1,174,123 as of December 31, 2022 and 2021, respectively. Approximately 18% and 16% of the Company’s patient services accounts receivable balances as of December 31, 2022 and 2021, respectively, were more than six months old. There were no significant balances over one year old at December 31, 2022. The Company's accounts receivable are principally due from Medicare and Medicaid programs and commercial insurance plans.

3. Earnings per share

Basic earnings per share is calculated by dividing net income attributable to the Company by the weighted average number of common shares outstanding. Weighted average common shares outstanding include restricted stock unit awards that are no longer subject to forfeiture because the recipients have satisfied either their explicit vesting terms or retirement eligibility requirements.

Diluted earnings per share includes the dilutive effect of outstanding stock-settled stock appreciation rights and unvested stock units as computed under the treasury stock method.

F-18

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

The reconciliations of the numerators and denominators used to calculate basic and diluted earnings per share were as follows:

			Year ended December 31,
			2022						2021						2020
Net income (loss) attributable to DaVita Inc.:
Continuing operations			$	546,948					$	978,450					$	783,295
Discontinued operations			13,452						—						(9,653)
Net income attributable to DaVita Inc.			$	560,400					$	978,450					$	773,642
Weighted average shares outstanding:
Basic shares			92,992						105,230						119,797
Assumed incremental from stock plans			2,842						4,718						2,826
Diluted shares			95,834						109,948						122,623
Basic net income (loss) attributable to DaVita Inc.:
Continuing operations per share			$	5.88					$	9.30					$	6.54
Discontinued operations per share			0.15						—						(0.08)
Basic net income per share attributable to DaVita Inc.			$	6.03					$	9.30					$	6.46
Diluted net income (loss) attributable to DaVita Inc.:
Continuing operations per share			$	5.71					$	8.90					$	6.39
Discontinued operations per share			0.14						—						(0.08)
Diluted net income per share attributable to DaVita Inc.			$	5.85					$	8.90					$	6.31
Anti-dilutive stock-settled awards excluded from calculation(1)			1,058						116						2,301

(1)Shares associated with stock awards excluded from the diluted denominator calculation because they were anti-dilutive under the treasury stock method.

4. Restricted cash and equivalents

The Company had restricted cash and cash equivalents of $94,903 and $93,060 at December 31, 2022 and 2021, respectively. Substantially all of the restricted cash and equivalents balance at December 31, 2022 is held in trust to satisfy insurer and state regulatory requirements related to the wholly-owned captive insurance companies that bear professional and general liability and workers' compensation risks for the Company and the remaining restricted cash and cash equivalents held at December 31, 2022 represents cash pledged to third parties in connection with the Company's ancillary operations.

5. Short-term and long-term investments

The Company’s short-term and long-term investments, consisting of debt instruments classified as held-to-maturity and equity investments with readily determinable fair values or redemption values, were as follows:

			December 31, 2022																		December 31, 2021
			Debt securities						Equity securities						Total						Debt securities						Equity securities						Total
Certificates of deposit and other time deposits			$	82,879					$	—					$	82,879					$	23,226					$	—					$	23,226
Investments in mutual funds and common stock			—						39,143						39,143						—						48,598						48,598
			$	82,879					$	39,143					$	122,022					$	23,226					$	48,598					$	71,824
Short-term investments			$	67,872					$	9,821					$	77,693					$	8,227					$	14,083					$	22,310
Long-term investments			15,007						29,322						44,329						14,999						34,515						49,514
			$	82,879					$	39,143					$	122,022					$	23,226					$	48,598					$	71,824

Debt securities: The Company's short-term debt investments are principally bank certificates of deposit with contractual maturities longer than three months but shorter than one year. The Company's long-term debt investments are bank time

F-19

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

deposits with contractual maturities longer than one year. These debt securities are accounted for as held-to-maturity and recorded at amortized cost, which approximated their fair values at December 31, 2022 and 2021.

Equity securities: The Company holds certain equity investments that have readily determinable fair values from public

markets. The Company's remaining short-term and long-term equity investments are held within a trust to fund existing obligations associated with the Company’s non-qualified deferred compensation plans.

6. Other receivables

Other receivables were comprised of the following:

			December 31,
			2022						2021
Supplier rebates and non-trade receivables			$	303,225					$	294,574
Medicare bad debt claims			110,751						132,747
			$	413,976					$	427,321

7. Property and equipment

Property and equipment were comprised of the following:

			December 31,
			2022						2021
Land			$	32,656					$	34,009
Buildings			427,962						496,455
Leasehold improvements			3,925,244						3,828,404
Equipment and information systems, including internally developed software			3,759,274						3,292,176
New center and capital asset projects in progress			376,633						592,063
			8,521,769						8,243,107
Less accumulated depreciation			(5,265,372)						(4,763,135)
			$	3,256,397					$	3,479,972

Depreciation and amortization expenses are computed using the straight-line method over the useful lives of the assets estimated as follows: buildings, 25 years to 40 years; leasehold improvements, the shorter of ten years or the expected lease term; and equipment and information systems, including internally developed software, principally three years to 15 years. Depreciation expense on property and equipment was $721,133, $667,755 and $616,626 for 2022, 2021 and 2020, respectively.

Interest on debt incurred during the development of new centers and other capital asset projects is capitalized as a component of the asset cost based on the respective in-process capital asset balances. Interest capitalized was $12,677, $15,275 and $17,944 for 2022, 2021 and 2020, respectively.

8. Intangible assets

Intangible assets other than goodwill were comprised of the following:

			December 31,
			2022						2021
Indefinite-lived licenses			$	127,271					$	104,214
Noncompetition agreements			51,408						70,495
Customer relationships and other			53,779						63,714
			232,458						238,423
Accumulated amortization:
Noncompetition agreements			(39,745)						(52,813)
Customer relationships and other			(10,027)						(7,917)
			$	182,687					$	177,693

F-20

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Noncompetition agreements are generally amortized over three years to 10 years and customer relationships are principally amortized over 10 years to 20 years. The weighted average renewal or extension period of customer relationships was two years and three years as of December 31, 2022 and 2021, respectively. Amortization expense from amortizable intangible assets was $11,469, $12,860, and $13,809 for 2022, 2021 and 2020, respectively.

For the years ended December 31, 2022, 2021 and 2020, the Company recognized no impairment charges on any intangible assets.

Scheduled amortization expenses from amortizable intangible assets as of December 31, 2022 were as follows:

			Noncompetition agreements						Customer relationships and other
2023			$	4,742					$	4,084
2024			2,849						3,956
2025			1,721						3,489
2026			1,092						3,489
2027			730						3,382
Thereafter			529						25,352
Total			$	11,663					$	43,752

9. Equity method and other investments

The Company maintains equity method and other minor investments in the private securities of certain other healthcare and healthcare-related businesses, comprised as follows:

			December 31,
			2022						2021
APAC joint venture			$	99,141					$	109,153
Other equity method partnerships			116,403						115,185
Adjusted cost method and other investments			15,564						14,543
			$	231,108					$	238,881

During 2022, 2021 and 2020, the Company recognized equity investment income of $26,520, $26,937 and $26,916, respectively, from its equity method investments in nonconsolidated dialysis partnerships. The Company also recognized equity investment losses from other equity method investments of $4,703 and $1,292 in other (loss) income during 2022 and 2021, respectively. There were no equity investment losses from other equity method investments in 2020.

The Company's largest equity method investment is its ownership interest in DaVita Care Pte. Ltd. (the APAC joint venture, or APAC JV). The Company holds a 75% voting and economic interest in the APAC JV and an unrelated noncontrolling investor holds the other 25% voting and economic interest in the joint venture, however the Company does not control or consolidate the APAC JV as a result of substantive participating rights retained by the unrelated investor over certain key operating decisions for the joint venture.

The Company's other equity method investments include 23 legal entities over which the Company has significant influence but in which it does not maintain a controlling financial interest. Almost all of these are U.S. dialysis partnerships in the form of limited liability companies. The Company's ownership interests in these partnerships vary, and are often subject to blocking rights on certain key operating decisions held by outside investors, but mostly range from 30% to 65%.

For the year ended December 31, 2022, the Company recognized impairments and other valuation adjustments on the Company's adjusted cost method and other investments of $20,154 in other (loss) income, net. There were no significant investment impairments or other valuation adjustments for the years ended December 31, 2021 and 2020.

F-21

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

10. Goodwill

Changes in the carrying value of goodwill by reportable segment were as follows:

			U.S. dialysis						Other - Ancillary services						Consolidated
Balance at December 31, 2020			$	6,309,928					$	609,181					$	6,919,109
Acquisitions			91,979						81,265						173,244
Divestitures			(1,745)						—						(1,745)
Foreign currency and other adjustments			—						(44,367)						(44,367)
Balance at December 31, 2021			$	6,400,162					$	646,079					$	7,046,241
Acquisitions			16,750						32,297						49,047
Divestitures			(87)						(3,263)						(3,350)
Foreign currency and other adjustments			—						(15,328)						(15,328)
Balance at December 31, 2022			$	6,416,825					$	659,785					$	7,076,610
Balance at December 31, 2022:
Goodwill			$	6,416,825					$	778,774					$	7,195,599
Accumulated impairment charges			—						(118,989)						(118,989)
			$	6,416,825					$	659,785					$	7,076,610

The Company's operations continue to be impacted by the effects of the coronavirus (COVID-19) pandemic. While the Company does not currently expect a material adverse impact to its business as a result of the ongoing COVID-19 pandemic, there can be no assurance that the magnitude of the cumulative impacts of the COVID-19 pandemic, including certain conditions and developments in the U.S. and global economies, labor market conditions, inflation and monetary policies that may have been intensified by the pandemic, will not have a material adverse impact on one or more of the Company's businesses.

Each of the Company’s operating segments described in Note 25 to these consolidated financial statements represents an individual reporting unit for goodwill impairment assessment purposes.

Within the U.S. dialysis operating segment, the Company considers each of its dialysis centers to constitute an individual business for which discrete financial information is available. However, since these dialysis centers have similar operating and economic characteristics, and the allocation of resources and significant investment decisions concerning these businesses are highly centralized and the benefits broadly distributed, the Company has aggregated these centers and deemed them to constitute a single reporting unit.

The Company has applied a similar aggregation to the physician practices in its physician services reporting units, to the dialysis centers and other health operations within each international reporting unit, and to the vascular access service centers in its former vascular access services reporting unit. For the Company’s other operating segments, discrete business components below the operating segment level constitute individual reporting units.

When performing quantitative goodwill impairment assessments, the Company estimates fair value using either appraisals developed with an independent third party valuation firm which consider both discounted cash flow estimates for the subject business and observed market multiples for similar businesses, or offer prices received for the subject business that would be acceptable to the Company.

F-22

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Based on its most recent assessments, the Company determined that changes in its forecast concerning expected patient census, the timing or amount of expected reimbursement rate increases, expected treatment growth rates, or other significant adverse changes in expected future cash flows or other valuation assumptions could result in goodwill impairment charges in the future for the following reporting unit, which remains at risk of goodwill impairment as of December 31, 2022:

Reporting unit						Goodwill balance						Carrying amount coverage**(1)**						Sensitivities
Operating income**(2)**						Discount rate**(3)**
Germany kidney care						$	281,781					18.9		%				(2.0)		%				(9.2)		%

(1)Excess of estimated fair value of the reporting unit over its carrying amount as of the latest assessment date.

(2)Potential impact on estimated fair value of a sustained, long-term reduction of 3% in operating income as of the latest assessment date.

(3)Potential impact on estimated fair value of an increase in discount rates of 100 basis points as of the latest assessment date.

Except as described above, none of the Company’s other reporting units were considered at risk of significant goodwill impairment as of December 31, 2022. Since the dates of the Company’s last annual goodwill impairment assessments, there have been certain developments, events, changes in operating performance and other changes in key circumstances that have affected the Company’s businesses. However, these have not caused management to believe it is more likely than not that the fair values of any of the Company’s reporting units would be less than their respective carrying amounts as of December 31, 2022.

11. Other liabilities

Other liabilities were comprised of the following:

			December 31,
			2022						2021
Payor refunds and retractions			$	475,195					$	410,038
Insurance and self-insurance accruals			68,440						55,548
Accrued interest			34,162						32,926
Accrued non-income tax liabilities			42,806						41,784
Other			181,866						169,049
			$	802,469					$	709,345

12. Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Income before income taxes from continuing operations consisted of the following:

			Year ended December 31,
			2022						2021						2020
Domestic			$	926,604					$	1,463,029					$	1,287,976
International			39,674						55,465						30,286
			$	966,278					$	1,518,494					$	1,318,262

F-23

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Income tax expense for continuing operations consisted of the following:

			Year ended December 31,
			2022						2021						2020
Current:
Federal			$	201,932					$	216,539					$	47,171
State			55,593						15,601						21,442
International			16,253						14,247						17,481
Total current income tax			273,778						246,387						86,094
Deferred:
Federal			(66,400)						59,528						198,623
State			(12,289)						5,342						27,206
International			2,998						(4,525)						2,009
Total deferred income tax			(75,691)						60,345						227,838
			$	198,087					$	306,732					$	313,932

Income taxes are allocated between continuing and discontinued operations as follows:

			Year ended December 31,
			2022						2021						2020
Continuing operations			$	198,087					$	306,732					$	313,932
Discontinued operations			—						—						1,657
			$	198,087					$	306,732					$	315,589

The reconciliation between the Company’s effective tax rate from continuing operations and the U.S. federal income tax rate is as follows:

			Year ended December 31,
			2022						2021						2020
Federal income tax rate			21.0		%				21.0		%				21.0		%
State income taxes, net of federal benefit			3.8						3.0						3.4
Equity compensation			(1.6)						(2.4)						—
Federal and international tax rate adjustments			—						1.3						—
Nondeductible executive compensation			1.1						0.8						1.2
Political advocacy costs			2.2						0.2						1.7
Unrecognized tax benefits			(1.1)						(0.1)						0.4
Change in international valuation allowance			1.2						(1.0)						1.5
Credits			(1.2)						(0.7)						(0.7)
Other			1.1						1.7						0.1
Impact of noncontrolling interests primarily attributable to non-tax paying entities			(6.0)						(3.6)						(4.8)
Effective tax rate			20.5		%				20.2		%				23.8		%

F-24

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Deferred tax assets and liabilities arising from temporary differences for continuing operations were as follows:

			December 31,
			2022						2021
Receivables			$	18,304					$	8,430
Accrued liabilities			71,346						67,993
Operating lease liabilities			563,972						581,199
Net operating loss carryforwards			173,531						162,987
Other			58,827						52,434
Deferred tax assets			885,980						873,043
Valuation allowance			(106,775)						(100,616)
Net deferred tax assets			779,205						772,427
Intangible assets			(690,914)						(644,039)
Property and equipment			(181,704)						(283,913)
Operating lease assets			(515,026)						(530,839)
Investments in partnerships			(80,876)						(84,407)
Other			(65,766)						(37,274)
Deferred tax liabilities			(1,534,286)						(1,580,472)
Net deferred tax liabilities			$	(755,081)					$	(808,045)
Reported as:
Deferred tax liabilities			$	(782,787)					$	(830,954)
Deferred tax assets (included in Other long-term assets)			27,706						22,909
			$	(755,081)					$	(808,045)

At December 31, 2022, the Company had federal net operating loss carryforwards of approximately $71,049 that expire through 2036, although a substantial amount expire by 2029. The Company also had state net operating loss carryforwards of $618,883, some of which have an indefinite life, although a substantial amount expire by 2042 and international net operating loss carryforwards of $357,266, some of which will begin to expire in 2023 though the majority have an indefinite life. The Company has a state capital loss carryover of $306,949, the majority of which expires in 2024. The utilization of a portion of these losses may be limited in future years based on the profitability of certain entities. A valuation allowance is recorded to account for the unrealizable balances in the table above. The net increase of $6,159 in the valuation allowance is primarily due to newly created net operating loss carryforwards in state and foreign jurisdictions that the Company does not anticipate being able to utilize.

During the year ended December 31, 2021, the Company recorded a true-up to recognize net deferred tax assets related to historical purchases of noncontrolling interests in consolidated partnerships. The effect of this adjustment was an increase of $46,692 to net deferred tax assets, a charge of $16,044 to income tax expense, and an increase of $62,736 to additional paid-in capital. The Company’s prior purchases of this type have not generated significant pre-tax adjustments to additional paid-in capital in any single prior year. The majority of the $16,044 recorded to income tax expense was due to the decrease in the corporate tax rate in 2017.

The Company remains indefinitely reinvested in a majority of the foreign jurisdictions in which it operates as of December 31, 2022. As a result of the passage of the Tax Cuts and Jobs Act (2017 Tax Act), the Company does not expect any significant taxes to be incurred if such earnings were remitted.

F-25

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Unrecognized tax benefits

A reconciliation of the beginning and ending liability for unrecognized tax benefits that do not meet the more-likely-than-not threshold is as follows:

			Year ended December 31,
			2022						2021
Beginning balance			$	73,024					$	70,202
Additions for tax positions related to current year			3,858						3,335
Additions for tax positions related to prior years			24,683						22,616
Reductions related to lapse of applicable statute			(6,073)						(751)
Reductions related to settlements with taxing authorities			(31,507)						(22,378)
Ending balance			$	63,985					$	73,024

As of December 31, 2022, the Company’s total liability for unrecognized tax benefits relating to tax positions that do not meet the more-likely-than-not threshold is $63,985, of which $45,825 would impact the Company’s effective tax rate if recognized.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognized an expense of $10,459 and a benefit of $2,589 related to interest and penalties net of federal tax benefit within tax expense in 2022 and 2021, respectively. At December 31, 2022 and 2021, the Company had approximately $8,208 and $15,275, respectively, accrued for interest and penalties related to unrecognized tax benefits, net of federal tax benefit.

The Company and its subsidiaries are under examination in various state, local and foreign tax jurisdictions. The Company's federal tax returns are under examination by the Internal Revenue Service (IRS) for the years 2016 and 2017. In 2022, the Company was able to reach a settlement with the IRS for tax years 2014 and 2015. Subsequent to the settlement, the Company filed a 2014 refund claim with respect to a contested issue that was included in the IRS examination. The refund claim is currently subject to IRS review. The Company is also open to U.S. federal examination for 2019 onward, and is no longer subject to U.S. state examinations by tax authorities for years before 2014.

13. Long-term debt

Long-term debt was comprised of the following:

			December 31,																		As of December 31, 2022
			2022						2021						Maturity date						Interest rate						Estimated fair value**(1)**
Senior Secured Credit Facilities:
Term Loan A			$	1,498,438					$	1,596,875					8/12/2024						LIBOR + 1.75%						$	1,468,469
Term Loan B-1			2,660,831						2,688,263						8/12/2026						LIBOR + 1.75%						$	2,587,658
Revolving line of credit			165,000						—						8/12/2024						LIBOR + 1.75%						$	165,000
Senior Notes:
4.625% Senior Notes			2,750,000						2,750,000						6/1/2030						4.625		%				$	2,224,063
3.75% Senior Notes			1,500,000						1,500,000						2/15/2031						3.75		%				$	1,115,625
Acquisition obligations and other notes payable(2)			120,562						130,599						2023-2036						6.56		%				$	120,562
Financing lease obligations(3)			273,688						299,128						2023-2038						4.51		%
Total debt principal outstanding			8,968,519						8,964,865
Discount and deferred financing costs(4)			(44,498)						(56,685)
			8,924,021						8,908,180
Less current portion			(231,404)						(179,030)
			$	8,692,617					$	8,729,150

(1)For the Company's senior secured credit facilities and senior notes, fair value estimates are based upon bid and ask quotes, typically a level 2 input. For acquisition obligations and other notes payable, the carrying values presented here approximate their estimated fair values, based on estimates of their present values using level 2 interest rate inputs.

F-26

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

(2)The interest rate presented for acquisition obligations and other notes payable is their weighted average interest rate based on the current fixed and LIBOR interest rate components in effect as of December 31, 2022.

(3)Financing lease obligations are measured at their approximate present values at inception. The interest rate presented is the weighted average discount rate embedded in financing leases outstanding.

(4)As of December 31, 2022, the carrying amount of the Company's senior secured credit facilities have been reduced by a discount of $3,497 and deferred financing costs of $18,816 and the carrying amount of the Company's senior notes have been reduced by deferred financing costs of $36,203 and increased by a debt premium of $14,018. As of December 31, 2021, the carrying amount of the Company's senior secured credit facilities was reduced by a discount of $4,473 and deferred financing costs of $27,207, and the carrying amount of the Company's senior notes was reduced by deferred financing costs of $40,914 and increased by a debt premium of $15,909.

Scheduled maturities of long-term debt at December 31, 2022 were as follows:

2023			$	231,404
2024			$	1,587,867
2025			$	67,112
2026			$	2,627,310
2027			$	35,176
Thereafter			$	4,419,650

During the year ended December 31, 2022, the Company made regularly scheduled mandatory principal payments under its senior secured credit facilities totaling $98,437 on Term Loan A and $27,432 on Term Loan B-1.

Senior Secured Credit Facilities

Borrowings under the Company's senior secured credit facilities are guaranteed and secured by substantially all of DaVita Inc.'s and certain of the Company's domestic subsidiaries' assets and are senior to all unsecured indebtedness. Borrowings under this facility's Term Loan A, Term Loan B-1 and revolving line of credit rank equal in priority for that security and related subsidiary guarantees under the facility's terms. Borrowings under this credit facility are based on the London Interbank Offered Rate (LIBOR), unless another base rate is elected. This facility also provides a mechanism for transition to an alternative variable base rate upon cessation of LIBOR.

Outstanding borrowings under Term Loan A and Term Loan B-1 consist of tranches that can range in maturity from one month to 12 months. As of December 31, 2022, all outstanding term loan tranches are one month in duration. For Term Loan A and Term Loan B-1, each tranche bears interest at a LIBOR rate determined by the duration of such tranche plus an interest rate margin. The LIBOR variable component of the interest rate for each tranche is reset as the tranche matures and a new tranche is established.

At December 31, 2022, the overall weighted average interest rate for Term Loan A and Term Loan B-1 was determined based upon the LIBOR interest rates in effect for all of their individual tranches plus the respective interest rate margins presented in the table above.

As of December 31, 2022, the Company had $165,000 outstanding on the $1,000,000 revolving line of credit under its senior secured credit facilities. Each of these borrowings were priced on one-month LIBOR variable base rates as well. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding thereunder, of which there were none as of December 31, 2022. The Company also had letters of credit of approximately $108,826 outstanding under a separate bilateral secured letter of credit facility as of December 31, 2022.

As of December 31, 2022, the Company's 2019 interest rate cap agreements described below had the economic effect of capping the Company's maximum exposure to LIBOR variable interest rate changes on equivalent amounts of the Company's floating rate debt, including all of Term Loan B-1 and a portion of Term Loan A. The remaining $659,269 outstanding principal balance of Term Loan A and the $165,000 balance outstanding on the revolving line of credit are subject to LIBOR-based interest rate volatility.

Senior Notes

The Senior Notes are unsecured obligations, rank equally in right of payment with the Company’s existing and future unsecured senior indebtedness and require semi-annual interest payments. The Company may redeem some or all of the Senior Notes at any time on or after certain specific dates and at certain specific redemption prices as outlined in each senior note agreement. Interest rates on the Senior Notes are fixed by their terms.

F-27

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Interest rate cap agreements

The Company's interest rate cap agreements are designated as cash flow hedges and, as a result, changes in their fair values are reported in other comprehensive income. These cap agreements have variable legs priced at LIBOR to match the variable rates incurred on the senior secured credit facility borrowings that they hedge. Like the senior secured credit facilities, these interest rate cap agreements include a mechanism for transition to an alternative variable base rate upon cessation of LIBOR. The original premiums paid for the caps are amortized to debt expense on a straight-line basis over the term of each cap agreement starting from its effective date. These cap agreements do not contain credit-risk contingent features.

The following table summarizes the Company’s interest rate cap agreements outstanding as of December 31, 2022 and December 31, 2021, which are classified in other long-term assets on its consolidated balance sheet:

																											Year ended												December 31,
									LIBOR maximum rate																		December 31, 2022												2022						2021
			Notional amount									Effective date						Expiration date						Debt expense						Recorded OCI gain						Fair value
2019 interest rate cap agreements			$	3,500,000					2.00%						6/30/2020						6/30/2024						$	(11,732)					$	144,793					$	139,755					$	12,203

The following table summarizes the effects of the Company’s interest rate cap agreements for the years ended December 31, 2022, 2021 and 2020:

						Amount of unrealized gains (losses) in OCI on interest rate cap agreements																		Location of losses						Reclassification from accumulated other comprehensive income into net income
						Year ended December 31,																					Year ended December 31,
Derivatives designated as cash flow hedges						2022						2021						2020									2022						2021						2020
Interest rate cap agreements						$	144,793					$	9,532					$	(21,781)					Debt expense						$	(11,732)					$	5,509					$	7,081
Related income tax						(36,124)						(2,377)						5,435						Related income tax						2,926						(1,376)						(1,768)
Total						$	108,669					$	7,155					$	(16,346)											$	(8,806)					$	4,133					$	5,313

See Note 20 for further details on amounts recorded and reclassified from accumulated other comprehensive (loss) income.

The Company’s weighted average effective interest rate on its senior secured credit facilities at the end of 2022 was 4.59%, based upon the current margins in effect for its senior secured credit facilities as of December 31, 2022.

The Company’s weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, was 3.96% for the year ended December 31, 2022 and 4.52% as of December 31, 2022.

As of December 31, 2022, the Company’s interest rates were fixed on approximately 51.3% of its total debt.

Debt expense

Debt expense consisted of interest expense of $339,247, $267,049 and $282,932 and the amortization and accretion of debt discounts and premiums, amortization of deferred financing costs and the amortization of interest rate cap agreements of $17,772, $18,205 and $21,179 for 2022, 2021 and 2020, respectively. These interest expense amounts are net of capitalized interest.

14. Leases

The Company leases substantially all of its U.S. dialysis facilities. The majority of the Company’s facilities are leased under non-cancellable operating leases which range in terms from five years to 15 years and which contain renewal options of five years to ten years at the fair rental value at the time of renewal. The Company's leases are generally subject to fixed escalation clauses or contain consumer price index increases. See Note 1 for further information on how the Company accounts for leases.

As of December 31, 2022 and December 31, 2021, assets recorded under finance leases were $319,546 and $322,060, respectively, and accumulated amortization associated with finance leases was $101,361 and $75,252, respectively, included in property and equipment, net, on the Company's consolidated balance sheet.

In certain markets, the Company acquires and develops dialysis centers. Upon completion, the Company sells the center to a third party and leases the space back with the intent of operating the center on a long term basis. Both the sale and

F-28

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

leaseback terms are generally market terms. The lease terms are consistent with the Company's other operating leases with the majority of the leases under non-cancellable operating leases ranging in terms from five years to 15 years and which contain renewal options of five years to ten years at the fair rental value at the time of renewal.

The components of lease expense were as follows:

						Year ended December 31,
Lease cost						2022						2021						2020
Operating lease cost(1):
Fixed lease expense						$	552,194					$	547,923					$	541,090
Variable lease expense						127,621						125,981						122,729
Financing lease cost:
Amortization of leased assets						27,079						26,846						24,720
Interest on lease liabilities						12,776						13,988						14,421
Net lease cost						$	719,670					$	714,738					$	702,960

(1) Includes short-term lease expense and sublease income, which are immaterial.

Other information related to leases was as follows:

						Year ended December 31,
Lease term and discount rate						2022						2021						2020
Weighted average remaining lease term (years):
Operating leases						8.2						8.3						8.7
Finance leases						9.4						10.5						10.5
Weighted average discount rate:
Operating leases						3.6		%				3.5		%				3.8		%
Finance leases						4.5		%				4.5		%				5.1		%

						Year ended December 31,
Other information						2022						2021						2020
Gains on sale leasebacks, net						$	28,005					$	17,137					$	34,301
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases						$	696,291					$	684,186					$	661,318
Operating cash flows for finance leases						$	20,103					$	21,343					$	20,981
Financing cash flows for finance leases						$	24,329					$	22,445					$	24,780
Net operating lease assets obtained in exchange for new or modified operating lease liabilities						$	278,108					$	361,101					$	401,559

Future minimum lease payments under non-cancellable leases as of December 31, 2022 are as follows:

						Operating leases						Finance leases
2023						$	492,566					$	37,442
2024						500,422						37,951
2025						452,080						38,125
2026						400,879						36,908
2027						333,580						35,569
Thereafter						1,175,340						145,987
Total future minimum lease payments						3,354,867						331,982
Less portion representing interest						(456,398)						(58,294)
Present value of lease liabilities						$	2,898,469					$	273,688

Rent expense under all operating leases for 2022, 2021 and 2020 was $679,815, $673,904 and $663,819, respectively. Rent expense is recorded on a straight-line basis over the term of the lease, including leases that contain fixed escalation clauses

F-29

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

or include abatement provisions. Leasehold improvement incentives reduce the carrying value of right-of-use assets and are amortized to rent expense over the term of the lease. Finance lease obligations are included in long-term debt. See Note 13 for further details on long-term debt.

15. Employee benefit plans

The Company has a 401(k) retirement savings plan for substantially all of its U.S. employees which has been established pursuant to applicable provisions of the Internal Revenue Code (IRC). The plan allows for employees to contribute a percentage of their base annual salaries on a tax-deferred basis not to exceed IRC limitations. The Company maintains a 401(k) matching program under which the Company matches 50% of the employee's contribution up to 6% of the employee's salary, subject to certain limitations. The matching contributions are subject to certain eligibility and vesting conditions. For the years ended December 31, 2022, 2021 and 2020, the Company accrued matching contributions totaling approximately $70,084, $68,658 and $70,180, respectively.

The Company also maintains a voluntary compensation deferral plan, the Deferred Compensation Plan, as well as other legacy deferral plans. The Deferred Compensation Plan is non-qualified and permits certain employees whose annualized base salary equals or exceeds a minimum annual threshold amount as set by the Company to elect to defer all or a portion of their annual bonus payment and up to 50% of their base salary into a deferral account maintained by the Company. Total contributions to this plan in 2022, 2021 and 2020 were $3,573, $2,962 and $3,637, respectively. Deferred amounts are generally paid out in cash at the participant’s election either in the first or second year following retirement or in a specified future period at least three to four years after the deferral election was effective. During 2022, 2021 and 2020 the Company distributed $3,731, $11,887 and $3,139, respectively, to participants from its deferred compensation plans. Participants are credited with their proportional amount of annual earnings from the plans. The assets of these plans are held in rabbi trusts subject to the claims of the Company’s general creditors in the event of its bankruptcy. As of December 31, 2022 and 2021, the total fair value of assets held in these plans' trusts was $32,944 and $38,019, respectively. The assets of these plans are recorded at fair value with changes in fair value recorded in other income. See Note 5 for further details. Any fair value changes to the corresponding liability balance are recorded as compensation expense.

16. Contingencies

The majority of the Company’s revenues are from government programs and may be subject to adjustment as a result of: (i) examination by government agencies or contractors, for which the resolution of any matters raised may take extended periods of time to finalize; (ii) differing interpretations of government regulations by different Medicare contractors or regulatory authorities; (iii) differing opinions regarding a patient’s medical diagnosis or the medical necessity of services provided; and (iv) retroactive applications or interpretations of governmental requirements. In addition, the Company’s revenues from commercial payors may be subject to adjustment as a result of potential claims for refunds, as a result of government actions or as a result of other claims by commercial payors.

The Company operates in a highly regulated industry and is a party to various lawsuits, demands, claims, qui tam suits, governmental investigations (which frequently arise from qui tam suits) and audits (including, without limitation, investigations or other actions resulting from its obligation to self-report suspected violations of law) and other legal proceedings, including, without limitation, those described below. The Company records accruals for certain legal proceedings and regulatory matters to the extent that the Company determines an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. As of December 31, 2022 and December 31, 2021, the Company’s total recorded accruals with respect to legal proceedings and regulatory matters, net of anticipated third party recoveries, were immaterial. While these accruals reflect the Company’s best estimate of the probable loss for those matters as of the dates of those accruals, the recorded amounts may differ materially from the actual amount of the losses for those matters, and any anticipated third party recoveries for any such losses may not ultimately be recoverable. Additionally, in some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal proceedings and regulatory matters, which also may be impacted by various factors, including, without limitation, that they may involve indeterminate claims for monetary damages or may involve fines, penalties or non-monetary remedies; present novel legal theories or legal uncertainties; involve disputed facts; represent a shift in regulatory policy; are in the early stages of the proceedings; or may result in a change of business practices. Further, there may be various levels of judicial review available to the Company in connection with any such proceeding.

The following is a description of certain lawsuits, claims, governmental investigations and audits and other legal proceedings to which the Company is subject.

F-30

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Certain Governmental Inquiries and Related Proceedings

2016 U.S. Attorney Texas Investigation: In February 2016, DaVita Rx, LLC (DaVita Rx), a wholly-owned subsidiary of the Company, received a Civil Investigative Demand (CID) from the U.S. Attorney’s Office, Northern District of Texas. The government is conducting a federal False Claims Act (FCA) investigation concerning allegations that DaVita Rx presented or caused to be presented false claims for payment to the government for prescription medications, as well as an investigation into the Company’s relationships with pharmaceutical manufacturers. The government's investigation covers the period from January 1, 2006 through December 31, 2018. In December 2017, the Company finalized and executed a settlement agreement that resolved certain of the issues in the government's investigation and that included total monetary consideration of $63,700, as previously disclosed, of which $41,500 was an incremental cash payment and $22,200 was for amounts previously refunded, and all of which was previously accrued. The government’s investigation is ongoing with respect to issues related to DaVita Rx's historic relationships with certain pharmaceutical manufacturers, and in July 2018 the Office of Inspector General (OIG) served the Company with a subpoena seeking additional documents and information relating to those relationships. On September 15, 2021, the U.S. Attorney’s Office notified the U.S. District Court, Northern District of Texas, of its decision and the decision of 31 states not to elect to intervene at this time in the matter of U.S. ex rel. Doe v. DaVita Inc., et al. The court then unsealed the complaint, which alleges violations of the FCA, by order dated September 17, 2021. The complaint was not served on the Company. In December 2021, the private party relator filed a notice of voluntary dismissal of all claims and the court entered an order dismissing the claims without prejudice. The Company is continuing to cooperate with the government in this investigation.

2017 U.S. Attorney Colorado Investigation: In November 2017, the U.S. Attorney’s Office, District of Colorado informed the Company of an investigation it was conducting into possible federal healthcare offenses involving DaVita Kidney Care, as well as several of the Company’s wholly-owned subsidiaries. In addition to DaVita Kidney Care, the matter currently includes an investigation into DaVita Rx, DaVita Laboratory Services, Inc. (DaVita Labs), and RMS Lifeline Inc. (Lifeline). In each of August 2018, May 2019, and July 2021, the Company received a CID pursuant to the FCA from the U.S. Attorney's Office relating to this investigation. In May 2020, the Company sold its interest in Lifeline, but the Company retained certain liabilities of the Lifeline business, including those related to this investigation. The Company is continuing to cooperate with the government in this investigation.

2020 U.S. Attorney New Jersey Investigation: In March 2020, the U.S. Attorney’s Office, District of New Jersey served the Company with a subpoena and a CID relating to an investigation being conducted by that office and the U.S. Attorney’s Office, Eastern District of Pennsylvania. The subpoena and CID request information on several topics, including certain of the Company’s joint venture arrangements with physicians and physician groups, medical director agreements, and compliance with its five-year Corporate Integrity Agreement, the term of which expired October 22, 2019. In November 2022, the Company learned that, on April 1, 2022, the U.S. Attorney’s Office for the District of New Jersey notified the U.S. District Court for the District of New Jersey of its decision not to elect to intervene in the matter of U.S. ex rel. Doe v. DaVita, Inc. and filed a Stipulation of Dismissal. On April 13, 2022, the U.S. District Court for the District of New Jersey dismissed the case without prejudice. On October 12, 2022, the U.S. Attorney’s Office for the Eastern District of Pennsylvania notified the U.S. District Court, Eastern District of Pennsylvania, of its decision not to elect to intervene at this time in the matter of U.S. ex rel. Bayne v. DaVita Inc., et al. The court then unsealed an amended complaint, which alleges violations of federal and state False Claims Acts, by order dated October 14, 2022. In January 2023, the private party relator served the Company with the amended complaint. The Company is continuing to cooperate with the government in this investigation.

2020 California Department of Insurance Investigation: In April 2020, the California Department of Insurance (CDI) sent the Company an Investigative Subpoena relating to an investigation being conducted by that office. CDI issued a superseding subpoena in September 2020, and an additional subpoena in September 2021. Those subpoenas request information on a number of topics, including but not limited to the Company’s communications with patients about insurance plans and financial assistance from the American Kidney Fund (AKF), analyses of the potential impact of patients’ decisions to change insurance providers, and documents relating to donations or contributions to the AKF. The Company is continuing to cooperate with CDI in this investigation.

2020 Department of Justice Investigation: In October 2020, the Company received a CID from the Department of Justice pursuant to an FCA investigation concerning allegations that DaVita Medical Group (DMG) may have submitted undocumented or unsupported diagnosis codes in connection with Medicare Advantage beneficiaries. The CID covers the period from January 1, 2015 through June 19, 2019, the date the Company completed the divestiture of DMG to Collaborative Care Holdings, LLC. In February 2023, the Department of Justice notified the Company that it had closed its investigation.

2023 District of Columbia Office of Attorney General Investigation: In January 2023, the Company received a CID from the Office of the Attorney General for the District of Columbia in connection with an antitrust investigation concerning the

F-31

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

American Kidney Fund (AKF). The CID covers the period from January 1, 2016 to the present. The CID requests information on a number of topics, including but not limited to the Company’s communications with AKF, documents relating to donations to the AKF, and communications with patients, providers, and insurers regarding the AKF. The Company is cooperating with the government in this investigation.

---

Although the Company cannot predict whether or when proceedings might be initiated or when these matters may be resolved (other than as may be described above), it is not unusual for inquiries such as these to continue for a considerable period of time through the various phases of document and witness requests and ongoing discussions with regulators and to develop over the course of time. In addition to the inquiries and proceedings specifically identified above, the Company frequently is subject to other inquiries by state or federal government agencies, many of which relate to qui tam complaints filed by relators. Negative findings or terms and conditions that the Company might agree to accept as part of a negotiated resolution of pending or future government inquiries or relator proceedings could result in, among other things, substantial financial penalties or awards against the Company, substantial payments made by the Company, harm to the Company’s reputation, required changes to the Company’s business practices, an impact on the Company's various relationships and/or contracts related to the Company's business, exclusion from future participation in the Medicare, Medicaid and other federal health care programs and, if criminal proceedings were initiated against the Company, members of its board of directors or management, possible criminal penalties, any of which could have a material adverse effect on the Company.

Other Proceedings

2021 Antitrust Indictment and Putative Class Action Suit: On July 14, 2021, an indictment was returned by a grand jury in the U.S. District Court, District of Colorado against the Company and its former chief executive officer in the matter of U.S. v. DaVita Inc., et al. alleging that purported agreements entered into by DaVita's former chief executive officer not to solicit senior-level employees violated Section 1 of the Sherman Act. On April 15, 2022, a jury returned a verdict in the Company’s favor, acquitting both the Company and its former chief executive officer on all counts. On April 20, 2022, the court entered judgments of acquittal and closed the case. On August 9, 2021, DaVita and its former chief executive officer were added as defendants in a consolidated putative class action complaint in the matter of In re Outpatient Medical Center Employee Antitrust Litigation in the U.S. District Court, Northern District of Illinois. This class action complaint asserts that the defendants violated Section 1 of the Sherman Act and seeks to bring an action on behalf of certain groups of individuals employed by the Company between February 1, 2012 and January 5, 2021. On September 26, 2022, the court denied the Company's motion to dismiss. The Company disputes the allegations in the class action complaint, as well as the asserted violations of the Sherman Act, and intends to defend this action accordingly.

Marietta Memorial Hospital Employee Health Benefit Plan, et al. v. DaVita Inc. et al. No. 20-1641: On November 5, 2021, the United States Supreme Court granted certiorari of an appeal by an employer group health plan, the plan sponsor, and the plan’s advisor of the U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit) decision in the Company's favor. The questions presented involved whether the health plan violates the Medicare Secondary Payor Act (MSPA) by "taking into account" that plan beneficiaries are eligible for Medicare and/or by "differentiating" between the benefits that the plan offers to patients with dialysis versus others. On December 23, 2021, the Solicitor General on behalf of the United States filed an amicus brief supporting the petitioners' request to overturn the Sixth Circuit decision. On January 19, 2022, the Company filed its brief in support of the Sixth Circuit decision. On June 21, 2022, the United States Supreme Court reversed the Sixth Circuit decision and held that the employee health plan for Marietta Memorial Hospital did not violate the MSPA. The case has been remanded back to the lower court for resolution of the outstanding claims.

Additionally, from time to time the Company is subject to other lawsuits, demands, claims, governmental investigations and audits and legal proceedings that arise due to the nature of its business, including, without limitation, contractual disputes, such as with payors, suppliers and others, employee-related matters and professional and general liability claims. From time to time, the Company also initiates litigation or other legal proceedings as a plaintiff arising out of contracts or other matters.

---

Other than as may be described above, the Company cannot predict the ultimate outcomes of the various legal proceedings and regulatory matters to which the Company is or may be subject from time to time, including those described in this Note 16, or the timing of their resolution or the ultimate losses or impact of developments in those matters, which could have a material adverse effect on the Company’s revenues, earnings and cash flows. Further, any legal proceedings or regulatory matters involving the Company, whether meritorious or not, are time consuming, and often require management’s attention and result in significant legal expense, and may result in the diversion of significant operational resources, may impact

F-32

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

the Company's various relationships and/or contracts related to the Company's business or otherwise harm the Company’s business, results of operations, financial condition, cash flows or reputation.

17. Noncontrolling interests subject to put provisions and other commitments

Noncontrolling interests subject to put provisions

The Company has potential obligations to purchase the equity interests held by third parties in many of its majority-owned dialysis partnerships and other nonconsolidated entities. These noncontrolling interests subject to put provisions constitute redeemable equity interests and are therefore classified as temporary equity and carried at estimated fair value on the Company's balance sheet.

Specifically, these obligations are in the form of put provisions that are exercisable at the third-party owners’ discretion within specified periods outlined in each specific put provision. If these put provisions were exercised, the Company would be required to purchase the third-party owners’ equity interests, generally at the appraised fair market value of the equity interests or in certain cases at a predetermined multiple of earnings or cash flows attributable to the equity interests put to the Company, intended to approximate fair value. The methodology the Company uses to estimate the fair values of noncontrolling interests subject to put provisions assumes the higher of either a liquidation value of net assets or an average multiple of earnings, based on historical earnings, patient mix and other performance indicators that can affect future results, as well as other factors. The estimated fair values of noncontrolling interests subject to put provisions are a critical accounting estimate that involves significant judgments and assumptions and may not be indicative of the actual values at which the noncontrolling interests may ultimately be settled, which could vary significantly from the Company’s current estimates. The estimated fair values of noncontrolling interests subject to put provisions can fluctuate and the implicit multiple of earnings at which these noncontrolling interests obligations may be settled will vary significantly depending upon market conditions including potential purchasers’ access to the capital markets, which can impact the level of competition for dialysis and non-dialysis related businesses, the economic performance of these businesses and the restricted marketability of the third-party owners’ equity interests. The amount of noncontrolling interests subject to put provisions that employ a contractually predetermined multiple of earnings rather than fair value is immaterial.

Certain consolidated dialysis partnerships are originally contractually scheduled to dissolve after terms ranging from ten years to 50 years. While noncontrolling interests in these limited life entities qualify as mandatorily redeemable financial instruments, they are subject to a classification and measurement scope exception from the accounting guidance generally applicable to other mandatorily redeemable financial instruments. Future distributions upon dissolution of these entities would be valued below the related noncontrolling interest carrying balances in the consolidated balance sheet.

Other commitments

The Company has agreements with various suppliers to purchase established amounts of dialysis equipment, parts, pharmaceuticals and supplies. As of December 31, 2022, the remaining minimum purchase commitments under these arrangements were approximately $712,802, $469,760, $362,431 and $379,832 for the years 2023, 2024, 2025 and 2026, respectively. If the Company fails to meet the minimum purchase commitments under these contracts during any year, it is required to pay the difference to the supplier.

The Company also has certain potential commitments to provide working capital funding, if necessary, to certain nonconsolidated dialysis businesses that the Company manages and in which the Company owns a noncontrolling equity interest or which are wholly-owned by third parties of approximately $9,038.

Other than the letters of credit disclosed in Note 13 to these consolidated financial statements, and the arrangements as described above, the Company has no off balance sheet financing arrangements as of December 31, 2022.

18. Stock-based compensation

Stock-based compensation

Stock-based compensation consists primarily of stock-settled stock appreciation rights, restricted stock units and performance stock units. Stock-based compensation, which is primarily general and administrative in nature, is attributed to the Company’s U.S. dialysis business, its corporate administrative support, and its ancillary services. See Note 1 "Organization and summary of significant accounting policies" for more information on how the Company measures and recognizes stock-based compensation expense.

F-33

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Long-term incentive compensation plans

The DaVita Inc. 2020 Incentive Award Plan (the 2020 Plan) is the Company’s current omnibus equity compensation plan and provides for grants of stock-based awards to employees, directors and other individuals providing services to the Company, except that incentive stock options may only be awarded to employees. The 2020 Plan provides for the grant of stock appreciation rights, nonqualified stock options, incentive stock options, restricted stock units, restricted stock, performance stock awards, dividend equivalents, stock payments, deferred stock unit awards, deferred stock awards and performance cash awards. The 2020 Plan mandates a maximum award term of 10 years for stock appreciation rights and stock options and stipulates that awards of these types be granted with a base or exercise price per share of not less than the fair market value of the Company's common stock on the date of grant. Shares available under the 2020 Plan are also stated on a full value share basis rather than on an option-equivalent basis. The 2020 Plan therefore provides that shares available for issuance under the plan are reduced by one share available for every four shares underlying stock appreciation rights and stock options, and are reduced by one share available for every one share underlying stock-based awards other than stock appreciation rights and stock options. At December 31, 2022, there were 6,815 shares available for future grants under the 2020 Plan. The Company’s stock awards granted under the 2020 Plan generally vest over 36 months to 48 months from the date of grant.

The DaVita Healthcare Partners Inc. 2011 Incentive Award Plan (the 2011 Plan) was the Company’s prior omnibus equity compensation plan and authorized the Company to award stock options, stock appreciation rights, restricted stock units, restricted stock, and other stock-based or performance-based awards. The 2011 Plan mandated a maximum award term of five years and stipulated that stock appreciation rights and stock options be granted with prices not less than fair market value on the date of grant. The 2011 Plan also required that full value share awards such as restricted stock units reduce shares available under the 2011 Plan at a ratio of 3.5:1. The Company’s stock appreciation rights and stock units awarded under the 2011 Plan generally vest over 36 months to 48 months from the date of grant. The 2011 Plan was terminated with respect to any new awards upon stockholder approval of the 2020 Plan.

A combined summary of the status of the Company’s stock-settled awards under both the 2020 Plan and 2011 Plan, including base shares for stock-settled stock appreciation rights (SSARs) and stock-settled stock unit awards is as follows:

			Year ended December 31, 2022
			Stock appreciation rights																		Stock units
			Awards						Weighted average exercise price						Weighted average remaining contractual life						Awards						Weighted average remaining contractual life
Outstanding at beginning of year			5,943						$	64.66											3,385
Granted			130						$	110.63											1,152
Added by performance factor																					136
Exercised/Vested			(619)						$	63.59											(1,269)
Canceled			(64)						$	55.53											(332)
Outstanding at end of period			5,390						$	66.00					1.62						3,072						1.93
Exercisable at end of period			2,618						$	64.93					1.32						—						—
Weighted-average fair value of grants:
2022			$	35.13																	$	107.60
2021			$	32.15																	$	109.50
2020			$	26.70																	$	77.83

						Awards Outstanding						Weighted average exercise price						Awards exercisable						Weighted average exercise price
Range of SSARs base prices
$50.01–$60.00						1,397						$	52.41					401						$	52.41
$60.01–$70.00						3,462						$	67.41					2,212						$	67.18
$70.01–$80.00						269						$	75.85					5						$	70.32
$100.01–$110.00						132						$	108.93					—						$	—
$110.01–$120.00						130						$	110.63					—						$	—
Total						5,390						$	66.00					2,618						$	64.93

F-34

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

For the years ended December 31, 2022, 2021 and 2020, the aggregate intrinsic value of stock-based awards exercised was $149,442, $208,585 and $49,258, respectively. At December 31, 2022, the aggregate intrinsic value of stock-based awards outstanding was $289,942 and the aggregate intrinsic value of stock awards exercisable was $25,508.

Estimated fair value of stock-based compensation awards

The Company has estimated the grant-date fair value of stock-settled stock appreciation rights awards using the Black-Scholes-Merton valuation model and stock-settled stock unit awards at intrinsic value on the date of grant, except for portions of the Company’s performance stock unit awards for which a Monte Carlo simulation was used to estimate the grant-date fair value. The following assumptions were used in estimating these values and determining the related stock-based compensation expense attributable to the current period:

Expected term of the awards: The expected term of awards granted represents the period of time that they are expected to remain outstanding from the date of grant. The Company determines the expected term of its stock awards based on its historical experience with similar awards, considering the Company’s historical exercise and post-vesting termination patterns.

Expected volatility: Expected volatility represents the volatility anticipated over the expected term of the award. The Company determines the expected volatility for its awards based on the volatility of the price of its common stock over the most recent retrospective period commensurate with the expected term of the award, considering the volatilities expected by peer companies in near industries.

Expected dividend yield: The Company has not paid dividends on its common stock and does not currently expect to pay dividends during the term of stock awards granted.

Risk-free interest rate: The Company bases the expected risk-free interest rate on the implied yield currently available on stripped interest coupons of U.S. Treasury issues with a remaining term equivalent to the expected term of the award.

A summary of the weighted average valuation inputs described above used for estimating the grant-date fair value of SSAR awards granted in the periods indicated is as follows:

			Year ended December 31,
			2022						2021						2020
Expected term			4.5						4.5						4.8
Expected volatility			34.3		%				34.3		%				28.2		%
Expected dividend yield			—		%				—		%				—		%
Risk-free interest rate			2.1		%				0.7		%				1.5		%

The Company estimates expected forfeitures based upon historical experience with separate groups of employees that have exhibited similar forfeiture behavior in the past. Stock-based compensation expense is recorded only for awards that are expected to vest.

Employee stock purchase plan

The Employee Stock Purchase Plan entitles qualifying employees to purchase up to $25 of the Company’s common stock during each calendar year. The amounts used to purchase stock are accumulated through payroll withholdings or through optional lump sum payments made in advance of the first day of the purchase right period. This compensatory plan allows employees to purchase stock for the lesser of 100% of its fair market value on the first day of the purchase right period or 85% of its fair market value on the last day of the purchase right period. Purchase right periods begin on January 1 and July 1, and end on December 31. Contributions used to purchase the Company’s common stock under this plan for the 2022, 2021 and 2020 purchase periods were $18,061, $19,626 and $17,148, respectively. Shares purchased pursuant to the plan’s 2022, 2021 and 2020 purchase periods were 285, 203 and 222, respectively. At December 31, 2022, there were 5,702 shares remaining available for future grants under this plan.

The fair value of participants’ purchase rights was estimated as of the beginning dates of the purchase right periods using the Black-Scholes-Merton valuation model with the following weighted average assumptions for purchase right periods in 2022, 2021 and 2020, respectively: expected volatility of 31.7%, 39.0% and 40.4%; risk-free interest rates of 1.3%, 0.1% and 1.0%; and no dividends. Using these assumptions, the weighted average estimated per share fair value of each purchase right was $26.50, $34.94 and $22.06 for 2022, 2021 and 2020, respectively.

F-35

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Stock-based compensation expense and proceeds

For the years ended December 31, 2022, 2021 and 2020, the Company recognized $95,427, $102,209 and $91,458 in stock-based compensation expense for stock appreciation rights, stock units and discounted employee stock purchase plan purchases, which are primarily included in general and administrative expenses. The estimated tax benefits recorded for stock-based compensation in 2022, 2021 and 2020 were $14,723, $13,853 and $11,775, respectively. As of December 31, 2022, there was $149,081 of total estimated but unrecognized stock-based compensation expense under the Company’s equity compensation and employee stock purchase plans. The Company expects to recognize this expense over a weighted average remaining period of 1.3 years.

For the years ended December 31, 2022, 2021 and 2020, the Company received $24,805, $46,990 and $8,957, respectively, in actual tax benefits upon the exercise or vesting of stock awards. Since the Company issues stock-settled stock appreciation rights rather than stock options, there were no cash proceeds from stock option exercises.

19. Shareholders’ equity

Stock repurchases

The following table summarizes the Company's repurchases of its common stock during the years ended December 31, 2022, 2021 and 2020:

			2022						2021						2020
Open market repurchases
Shares			8,095						13,877						8,495
Amounts paid			$	787,854					$	1,546,016					$	741,850
Average paid per share			$	97.33					$	111.41					$	87.32
Tender offer (1)
Shares			—						—						7,982
Amounts paid			$	—					$	—					704,917
Average paid per share			$	—					$	—					88.32
Total
Shares			8,095						13,877						16,477
Amounts paid			$	787,854					$	1,546,016					$	1,446,767
Average paid per share			$	97.33					$	111.41					$	87.80

(1)The aggregate amounts paid for shares repurchased pursuant to the Company's 2020 tender offer for its shares during the year ended 2020, include the clearing price of $88.00 per share, plus related fees and expenses of $2,529.

Subsequent to December 31, 2022 through February 22, 2023, the Company did not repurchase any shares.

Effective on December 10, 2020, the Board terminated all remaining prior share repurchase authorizations available to the Company and approved a new share repurchase authorization of $2,000,000. Effective on December 17, 2021, the Board increased the Company's existing authorization by $2,000,000. The Company is authorized to make purchases from time to time in the open market or in privately negotiated transactions, including without limitation, through accelerated share repurchase transactions, derivative transactions, tender offers, Rule 10b5-1 plans or any combination of the foregoing, depending upon market conditions and other considerations.

As of February 22, 2023, the Company has a total of $1,596,085 available under the current authorization for additional share repurchases. Although this share repurchase authorization does not have an expiration date, the Company remains subject to share repurchase limitations, including under the terms of its senior secured credit facilities.

The Company retired all shares held in its treasury effective as of December 31, 2022 and December 31, 2021.

F-36

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Charter documents & Delaware law

The Company’s charter documents include provisions that may deter hostile takeovers, delay or prevent changes of control or changes in management, or limit the ability of stockholders to approve transactions that they may otherwise determine to be in their best interests. These include provisions prohibiting stockholders from acting by written consent, requiring 90 days advance notice for director nominations and stockholder proposals and granting the Company's Board of Directors the authority to issue up to 5,000 shares of preferred stock and to determine the rights and preferences of the preferred stock without the need for further stockholder approval.

The Company is also subject to Section 203 of the Delaware General Corporation Law which, subject to exceptions, prohibits the Company from engaging in any business combinations with any interested stockholder, as defined in that section, for a period of three years following the date on which that stockholder became an interested stockholder. The provisions described above may discourage, delay or prevent an acquisition of the Company at a price that stockholders may find attractive.

Changes in DaVita Inc.’s ownership interests in consolidated subsidiaries

The effects of changes in DaVita Inc.’s ownership interests in consolidated subsidiaries on the Company’s consolidated equity were as follows:

			Year ended December 31,
			2022						2021						2020
Net income attributable to DaVita Inc.			$	560,400					$	978,450					$	773,642
Changes in paid-in capital for:
Purchases of noncontrolling interests			(6,586)						(13,853)						4,364
Sales of noncontrolling interest			939						(264)						—
Net transfers in noncontrolling interests			(5,647)						(14,117)						4,364
Net income attributable to DaVita Inc. net of transfers in noncontrolling interests			$	554,753					$	964,333					$	778,006

The Company acquired additional ownership interests in several existing majority-owned partnerships for $20,775, $20,104 and $7,831 in 2022, 2021 and 2020, respectively.

F-37

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

20. Accumulated other comprehensive loss

Charges and credits to other comprehensive (loss) income have been as follows:

			Interest rate cap agreements						Foreign currency translation adjustments						Accumulated other comprehensive (loss) income
Balance at December 31, 2019			$	(1,433)					$	(46,065)					$	(47,498)
Unrealized losses			(21,781)						(7,080)						(28,861)
Related income tax			5,435						(543)						4,892
			(16,346)						(7,623)						(23,969)
Reclassification of loss into net income			7,081						—						7,081
Related income tax			(1,768)						—						(1,768)
			5,313						—						5,313
Balance at December 31, 2020			$	(12,466)					$	(53,688)					$	(66,154)
Unrealized gains (losses)			9,532						(83,375)						(73,843)
Related income tax			(2,377)						(1,006)						(3,383)
			7,155						(84,381)						(77,226)
Reclassification of loss into net income			5,509						—						5,509
Related income tax			(1,376)						—						(1,376)
			4,133						—						4,133
Balance at December 31, 2021			$	(1,178)					$	(138,069)					$	(139,247)
Unrealized gains (losses)			144,793						(30,554)						114,239
Related income tax			(36,124)						752						(35,372)
			108,669						(29,802)						78,867
Reclassification of income into net income			(11,732)						—						(11,732)
Related income tax			2,926						—						2,926
			(8,806)						—						(8,806)
Balance at December 31, 2022			$	98,685					$	(167,871)					$	(69,186)

The reclassification of net interest rate cap realized losses into income are recorded as debt expense in the corresponding consolidated statements of income. See Note 13 for further details.

21. Acquisitions and divestitures

Routine acquisitions

During 2022, 2021 and 2020, the Company acquired dialysis businesses and other businesses, including a transplant software company, as follows:

			Year ended Year ended December 31,
			2022						2021						2020
Cash paid, net of cash acquired			$	57,308					$	187,050					$	182,013
Contingent earn-out obligations			4,261						14,854						14,042
Deferred purchase price and liabilities assumed			15,076						10,226						20,415
Non-cash gain			—						—						1,821
Aggregate consideration			$	76,645					$	212,130					$	218,291
Number of dialysis centers acquired — U.S.			5						19						8
Number of dialysis centers acquired — International			11						17						66

The assets and liabilities for these acquisitions were recorded at their estimated fair values at the dates of the acquisitions and are included in the Company’s consolidated financial statements, as are their operating results, from the designated effective dates of the acquisitions.

F-38

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

The initial purchase price allocations for these transactions have been recorded at estimated fair values based on information available to management and will be finalized when certain information arranged to be obtained has been received. For several of the 2022 acquisitions, certain income tax amounts are pending final evaluation and quantification of any pre-acquisition tax contingencies. In addition, valuation of contingent earn-outs, intangibles, fixed assets, leases and certain working capital items relating to several of these acquisitions are pending final quantification.

The following table summarizes the assets acquired and liabilities assumed in these transactions and recognized at their acquisition dates at estimated fair values, as well as the estimated fair value of noncontrolling interests assumed in these transactions:

			Year ended December 31,
			2022						2021						2020
Current assets			$	6,389					$	9,134					$	23,607
Property and equipment			7,481						9,277						37,457
Customer relationships			—						17,200						34,625
Noncompetition agreements and other long-term assets			1,066						9,964						10,168
Indefinite-lived licenses			19,610						11,432						22,136
Goodwill			49,047						173,244						130,057
Deferred income taxes			—						—						(3,962)
Liabilities assumed			(6,081)						(14,200)						(34,068)
Noncontrolling interests assumed			(867)						(3,921)						(1,729)
			$	76,645					$	212,130					$	218,291

The following summarizes weighted-average estimated useful lives of amortizable intangible assets acquired during 2022, 2021 and 2020, as well as goodwill deductible for tax purposes associated with these acquisitions:

			Year ended December 31,
			2022						2021						2020
Weighted-average estimated useful lives (in years):
Customer relationships			—						10						18
Noncompetition agreements			4						6						5
Goodwill deductible for tax purposes			$	49,047					$	169,014					$	94,318

Pro forma financial information (unaudited)

The following summary, prepared on a pro forma basis, combines the results of operations as if all acquisitions within continuing operations in 2022 and 2021 had been consummated as of the beginning of 2021, including the impact of certain adjustments such as amortization of intangibles, interest expense on acquisition financing and income tax effects.

			Year ended December 31,
			2022						2021
			(unaudited)
Pro forma total revenues			$	11,624,270					$	11,706,823
Pro forma net income from continuing operations attributable to DaVita Inc.			$	545,859					$	984,227
Pro forma basic net income per share from continuing operations attributable to DaVita Inc.			$	5.87					$	9.35
Pro forma diluted net income per share from continuing operations attributable to DaVita Inc.			$	5.70					$	8.95

Sale of RMS Lifeline

The Company divested its prior vascular access business, RMS Lifeline, Inc., effective May 1, 2020 and recognized a loss on sale of approximately $16,252.

F-39

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Contingent earn-out obligations

The Company has contingent earn-out obligations associated with acquisitions that could result in the Company paying the former owners of acquired businesses a total of up to approximately $58,947 if certain performance targets or quality margins are met over the next one year to five years.

Contingent earn-out obligations are remeasured to fair value at each reporting date until the contingencies are resolved with changes in the liability due to the remeasurement recognized in earnings. See Note 24 for further details. As of December 31, 2022, the Company estimated the fair value of these contingent earn-out obligations to be $25,422, of which a total of $11,308 is included in other current liabilities, and the remaining $14,114 is included in other long-term liabilities in the Company’s consolidated balance sheet.

The following is a reconciliation of changes in contingent earn-out liabilities for the years ended December 31, 2022 and 2021:

			Year ended December 31,
			2022						2021
Beginning balance			$	33,600					$	30,248
Acquisitions			4,261						14,854
Foreign currency translation			840						(1,674)
Fair value remeasurements			(5,921)						(1,292)
Payments or other settlements			(7,358)						(8,536)
Ending balance			$	25,422					$	33,600

22. Discontinued operations previously held for sale

DaVita Medical Group (DMG)

On June 19, 2019, the Company completed the sale of its prior DMG business to Optum, a subsidiary of UnitedHealth Group Inc. At close, the Company's ultimate net proceeds from this sale remained subject to resolution of certain post-closing adjustments.

Shortly after December 31, 2022, Optum made an additional purchase price payment of $13,452 to the Company after resolution of one such post-closing matter, which represented a contingent gain to the Company for the fourth quarter of 2022. Upon resolution of certain prior post-closing adjustments with Optum in 2020, the Company recognized an additional loss on sale of $17,976, which was partially offset by $9,980 in additional tax benefits recognized under the Coronavirus Aid, Relief and Economic Security Act related to the Company's period of DMG ownership, and a related income tax benefit to the Company of $1,657.

The Company recognized no DMG operating, financing or investing cash flows for the years ended December 31, 2022, 2021 and 2020.

Under the equity purchase agreement, the Company also has certain continuing indemnification obligations that could require payments to the buyer relating to the Company's previous ownership and operation of the DMG business. Potential payments under these provisions, if any, remain subject to continuing uncertainties and the amounts of such payments could be significant to the Company.

23. Variable interest entities

The Company manages or maintains an ownership interest in certain legal entities subject to the consolidation guidance applicable to variable interest entities (VIEs). Almost all of the VIEs the Company consolidates are either U.S. dialysis partnerships encumbered by guaranteed debt, U.S. dialysis limited partnerships, U.S. integrated care subsidiaries, or other legal entities subject to nominee ownership arrangements.

Under U.S. GAAP, VIEs typically include entities for which (i) the entity’s equity is not sufficient to finance its activities without additional subordinated financial support; (ii) the equity holders as a group lack the power to direct the activities that most significantly influence the entity’s economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected returns; or (iii) the voting rights of some investors are not proportional to their obligations to absorb the entity’s losses.

F-40

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

The substantial majority of VIEs the Company is associated with are U.S. dialysis partnerships which the Company manages and in which it maintains a controlling majority ownership interest. These U.S. dialysis partnerships are considered VIEs either because they are (i) encumbered by debt guaranteed proportionately by the partners that is considered necessary to finance the partnership's activities, or (ii) in the form of limited partnerships for which the limited partners are not considered to have substantive kick-out or participating rights. The Company consolidates virtually all such U.S. dialysis partnerships.

Also, certain wholly-owned entities employed in the Company's integrated kidney care business constitute VIEs since by design these entities require additional subordinated financial support. The Company wholly owns but does not wholly control these entities. However, the Company believes it has the most power over these entities' most significant activities, and the Company is fully exposed to their expected losses. The Company therefore consolidates these wholly-owned entities as its subsidiaries.

Finally, one of the Company's business units relies on the operating activities of certain nominee-owned legal entities in which it does not maintain a controlling ownership interest but over which it has indirect influence and of which it is considered the primary beneficiary. These entities are subject to transfer restriction, management and other agreements that effectively transfer substantial ultimate powers over, and economic responsibility for, these entities to the Company. The Company consolidates all of the nominee-owned entities with which it is most closely associated.

In addition to the consolidated entities described above, the Company maintains minor equity method or other venture capital investments in certain development-stage investees which qualify as VIEs based on their capitalization. The Company has concluded that it is not the primary beneficiary of any of these investees.

For the VIEs described above, these consolidated financial statements include total assets of $316,639 and total liabilities and noncontrolling interests to third parties of $191,357 at December 31, 2022.

The Company also sponsors certain non-qualified deferred compensation plans whose trusts qualify as VIEs and the Company consolidates these plans as their primary beneficiary. The assets of these plans are recorded in short-term or long-term investments with related liabilities recorded in accrued compensation and benefits and other long-term liabilities. See Notes 5 and 15 for disclosures concerning the assets of these consolidated non-qualified deferred compensation plans.

24. Fair values of financial instruments

The Company measures the fair value of certain assets, liabilities, and noncontrolling interests subject to put provisions (redeemable equity interests classified as temporary equity) based upon certain valuation techniques that include observable or unobservable inputs and assumptions that market participants would use in pricing these assets, liabilities, temporary equity and commitments. The Company has also classified assets, liabilities and temporary equity that are measured at fair value on a recurring basis into the appropriate fair value hierarchy levels as defined by the FASB.

F-41

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

The following table summarizes the Company’s assets, liabilities and temporary equity measured at fair value on a recurring basis as of December 31, 2022 and 2021:

December 31, 2022			Total						Quoted prices in active markets for identical assets (Level 1)						Significant other observable inputs (Level 2)						Significant unobservable inputs (Level 3)
Assets
Investments in equity securities			$	39,143					$	39,143					$	—					$	—
Interest rate cap agreements			$	139,755					$	—					$	139,755					$	—
Liabilities
Contingent earn-out obligations			$	25,422					$	—					$	—					$	25,422
Temporary equity
Noncontrolling interests subject to put provisions			$	1,348,908					$	—					$	—					$	1,348,908
December 31, 2021
Assets
Investments in equity securities			$	48,598					$	48,598					$	—					$	—
Interest rate cap agreements			$	12,203					$	—					$	12,203					$	—
Liabilities
Contingent earn-out obligations			$	33,600					$	—					$	—					$	33,600
Temporary equity
Noncontrolling interests subject to put provisions			$	1,434,832					$	—					$	—					$	1,434,832

For reconciliations of changes in contingent earn-out obligations and noncontrolling interests subject to put provisions during the year ended at December 31, 2022 and 2021, see Note 21 and the consolidated statements of equity, respectively.

Investments in equity securities represent investments in various open-ended registered investment companies (mutual funds) and common stocks and are recorded at fair value estimated based on reported market prices or redemption prices, as applicable. See Note 5 for further discussion.

Interest rate cap agreements are recorded at fair value estimated from valuation models utilizing the income approach and commonly accepted valuation techniques that use inputs from closing prices for similar assets and liabilities in active markets as well as other relevant observable market inputs at quoted intervals such as current interest rates, forward yield curves, implied volatility and credit default swap pricing. The Company does not believe the ultimate amount that could be realized upon settlement of these interest rate cap agreements would be materially different from the fair value estimates currently reported. See Note 13 for further discussion.

The estimated fair value measurements of contingent earn-out obligations are primarily based on unobservable inputs, including projected earnings before interest, taxes, depreciation, and amortization (EBITDA), revenue and key performance indicators. The estimated fair value of these contingent earn-out obligations is remeasured as of each reporting date and could fluctuate based upon any significant changes in key assumptions, such as changes in the Company credit risk adjusted rate that is used to discount obligations to present value. See Note 21 for further discussion.

The estimated fair value of noncontrolling interests subject to put provisions is based principally on the higher of either estimated liquidation value of net assets or a multiple of earnings for each subject dialysis partnership, based on historical earnings, revenue mix, and other performance indicators that can affect future results. The multiples used for these valuations are derived from observed ownership transactions for dialysis businesses between unrelated parties in the U.S. in recent years, and the specific valuation multiple applied to each dialysis partnership is principally determined by its recent and expected revenue mix and contribution margin. As of December 31, 2022, an increase or decrease in the weighted average multiple used in these valuations of one times EBITDA would change the estimated fair value of these noncontrolling interests by approximately $168,000. See Note 17 for a discussion of the Company’s methodology for estimating the fair values of noncontrolling interests subject to put obligations.

The Company's fair value estimates for its senior secured credit facilities and senior notes are based upon quoted bid and ask prices for these instruments, typically a level 2 input. See Note 13 for further discussion of the Company's debt.

F-42

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Other financial instruments consist primarily of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable, other accrued liabilities, lease liabilities and debt. The balances of financial instruments other than debt and lease liabilities are presented in the consolidated financial statements at December 31, 2022 and 2021 at their approximate fair values due to the short-term nature of their settlements.

25. Segment reporting

The Company's operating divisions are comprised of its U.S. dialysis and related lab services business (its U.S. dialysis business), its U.S. integrated kidney care business, its U.S. other ancillary services and its international operations (collectively, its ancillary services), as well as its corporate administrative support. See Note 1 "Organization" for a summary description of the Company's businesses.

On June 19, 2019, the Company completed the sale of its prior DMG business to Optum. As a result of this transaction, DMG's results of operations have been reported as discontinued operations for all periods presented.

The Company’s operating segments have been defined based on the separate financial information that is regularly produced and reviewed by the Company’s chief operating decision maker in making decisions about allocating resources to and assessing the financial performance of the Company’s various operating lines of business. The chief operating decision maker for the Company is its Chief Executive Officer.

The Company’s separate operating segments include its U.S. dialysis and related lab services business, its U.S. integrated kidney care business, its U.S. other ancillary services, its kidney care operations in each foreign sovereign jurisdiction, and its equity method investment in the APAC joint venture. The U.S. dialysis and related lab services business qualifies as a separately reportable segment, and all other operating segments have been combined and disclosed in the other segments category.

The Company’s operating segment financial information included in this report is prepared on the internal management reporting basis that the chief operating decision maker uses to allocate resources and assess the financial performance of the Company's operating segments. For internal management reporting, segment operations include direct segment operating expenses but generally exclude corporate administrative support costs, which consist primarily of indirect labor, benefits and long-term incentive compensation expenses of certain departments which provide support to all of the Company’s various operating lines of business.

F-43

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

The following is a summary of segment revenues, segment operating margin (loss), and a reconciliation of segment operating margin to consolidated income from continuing operations before income taxes:

			Year ended December 31,
			2022						2021						2020
Segment revenues:
U.S. dialysis
Patient service revenues:
External sources			$	10,488,327					$	10,551,106					$	10,475,273
Intersegment revenues			87,045						90,512						144,091
U.S. dialysis patient service revenues			10,575,372						10,641,618						10,619,364
Other revenues
External sources			24,447						25,061						39,376
Intersegment revenues			(10)						284						1,195
Total U.S. dialysis revenues			$	10,599,809					$	10,666,963					$	10,659,935
Other - Ancillary services
Net patient service revenues			688,137						662,409						550,978
Other external sources			408,983						380,221						484,977
Intersegment revenues			4,206						4,294						16,743
Total ancillary services			1,101,326						1,046,924						1,052,698
Total net segment revenues			11,701,135						11,713,887						11,712,633
Elimination of intersegment revenues			(91,241)						(95,090)						(162,029)
Consolidated revenues			$	11,609,894					$	11,618,797					$	11,550,604
Segment operating margin (loss):
U.S. dialysis			$	1,565,310					$	1,974,988					$	1,917,604
Other - Ancillary services(1)			(96,579)						(66,003)						(76,261)
Total segment margin			1,468,731						1,908,985						1,841,343
Reconciliation of segment operating margin to consolidated income from continuing operations before income taxes:
Corporate administrative support			(129,669)						(111,615)						(146,707)
Consolidated operating income			1,339,062						1,797,370						1,694,636
Debt expense			(357,019)						(285,254)						(304,111)
Debt prepayment, refinancing and redemption charges			—						—						(89,022)
Other (loss) income, net			(15,765)						6,378						16,759
Income from continuing operations before income taxes			$	966,278					$	1,518,494					$	1,318,262

(1)Includes equity investment income of $1,898, $3,177 and $5,866 in 2022, 2021 and 2020, respectively.

Depreciation and amortization expense by reportable segment was as follows:

			Year ended December 31,
			2022						2021						2020
U.S. dialysis			$	690,949					$	642,711					$	594,552
Other - Ancillary services			41,653						37,904						35,883
			$	732,602					$	680,615					$	630,435

F-44

DAVITA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

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

Expenditures for property and equipment by reportable segment were as follows:

			Year ended December 31,
			2022						2021						2020
U.S. dialysis			533,600						$	589,662					$	646,870
Other - Ancillary services			69,829						51,803						27,671
			$	603,429					$	641,465					$	674,541

Summary of assets by reportable segment was as follows:

			Year ended December 31,
			2022						2021
Segment assets
U.S. dialysis(1)			$	15,084,454					$	15,375,000
Other - Ancillary services(2)			1,843,798						1,746,488
Consolidated assets			$	16,928,252					$	17,121,488

(1)Includes equity method and other investments of $113,781 and $112,500 in 2022 and 2021, respectively.

(2)Includes equity method and other investments of $117,327 and $126,381 in 2022 and 2021, respectively and includes approximately $207,162 and $190,029 in 2022 and 2021, respectively, of net property and equipment related to the Company’s international operations.

26. Supplemental cash flow information

The table below provides supplemental cash flow information:

			Year ended December 31,
			2022						2021						2020
Cash paid:
Income taxes, net			$	344,430					$	209,754					$	154,850
Interest, net			$	350,999					$	279,002					$	326,165
Non-cash investing and financing activities:
Fixed assets under financing lease obligations			$	1,928					$	31,690					$	22,042

F-45

EXHIBIT INDEX

2.1						Equity Purchase Agreement, dated as of December 5, 2017, by and among DaVita Inc., Collaborative Care Holdings, LLC, and solely with respect to Section 9.3 and Section 9.18 thereto, UnitedHealth Group Incorporated.(2)
2.2						Amendment No. 1 dated as of September 20, 2018, to that certain Equity Purchase Agreement, dated as of December 5, 2017, by and among DaVita Inc., a Delaware corporation, Collaborative Care Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Optum, Inc., and solely with respect to Section 9.3 and Section 9.18 thereto, UnitedHealth Group Incorporated, a Delaware corporation.(14)
2.3						Second Amendment to Equity Purchase Agreement by and between DaVita Inc., a Delaware corporation, and Collaborative Care Holdings, LLC, a Delaware limited liability company, dated as of December 11, 2018, amending that certain Equity Purchase Agreement, dated as of December 5, 2017, by and among DaVita Inc., Collaborative Care Holdings, LLC, and, solely with respect to Section 9.3 and Section 9.18 thereto, UnitedHealth Group Incorporated (as previously amended).(9)
3.1						Restated Certificate of Incorporation of DaVita Inc., as filed with the Secretary of State of Delaware on November 1, 2016.(1)
3.2						Amended and Restated Bylaws for DaVita Inc. adopted on October 14, 2022.(23)
4.1						Indenture for the 4.625% Senior Notes due 2030, dated as of June 9, 2020, by and among DaVita Inc., the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee.(13)
4.2						Form of 4.625% Senior Notes due 2030 and related Guarantee (included in Exhibit 4.1).(13)
4.3						Indenture for the 3.750% Senior Notes due 2031, dated August 11, 2020, by and among DaVita Inc., the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee.(11)
4.4						Form of 3.750% Senior Notes due 2031 and related Guarantee (included in Exhibit 4.3).(11)
4.5						Description of Securities.(20)
10.1						Credit Agreement, dated August 12, 2019, by and among DaVita Inc., certain subsidiary guarantors party thereto, the lenders party thereto, Credit Agricole Corporate and Investment Bank, JPMorgan Chase Bank, N.A. and MUFG Bank Ltd., as co-syndication agents, Bank of America, N.A., Barclays Bank PLC, Credit Suisse Loan Funding LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc. and Suntrust Bank, as co-documentation agents, and Wells Fargo Bank, National Association, as administrative agent, collateral agent and swingline lender.(16)
10.2						First Amendment, dated as of February 13, 2020, to that certain Credit Agreement, dated as of August 12, 2019, by and among DaVita Inc., certain subsidiary guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent, collateral agent and swingline lender.(20)
10.3						Employment Agreement, dated as of April 29, 2019, by and between Javier J. Rodriguez and DaVita Inc.(10)*
10.4						Stock Appreciation Rights Agreement, effective November 4, 2019, by and between Javier J. Rodriguez and DaVita Inc.(19)*
10.5						Employment Agreement, effective February 21, 2017, by and between DaVita Inc. and Joel Ackerman.(6)*
10.6						Employment Agreement, effective April 27, 2016, by and between DaVita HealthCare Partners Inc. and Kathleen A. Waters.(4)*

Page 1 of 4

10.7						Employment Agreement, effective April 29, 2015, by and between DaVita HealthCare Partners Inc. and Michael Staffieri.(20)*
10.8						Form of Indemnity Agreement.(8)*
10.9						Form of Indemnity Agreement.(5)*
10.10						DaVita Inc. Deferred Compensation Plan.(6)*
10.11						Amended and Restated Employee Stock Purchase Plan.(18)*
10.12						DaVita Inc. Severance Plan for Directors and Above.(3)*
10.13						DaVita Inc. Non-Employee Director Compensation Policy.ü*
10.14						Amended and Restated DaVita Inc. 2011 Incentive Award Plan.(7)*
10.15						Amendment No. 1 to the Amended and Restated DaVita Inc. 2011 Incentive Award Plan.(19)*
10.16						DaVita Inc. 2020 Incentive Award Plan.(21)*
10.17						DaVita Inc. Rule of 65 Policy, adopted on August 19, 2018.(15)*
10.18						Form of Stock Appreciation Rights Agreement-Board members (DaVita Inc. 2011 Incentive Award Plan).(24)*
10.19						Form of Stock Appreciation Rights Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(12)*
10.20						Form of Long-Term Incentive Program Award Agreement (For 162(m) designated teammates) (DaVita Inc. 2011 Incentive Award Plan).(12)*
10.21						Form of Long-Term Incentive Program Award Agreement (DaVita Inc. 2011 Incentive Award Plan).(12)*
10.22						Form of Restricted Stock Units Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(17)*
10.23						Form of Performance Stock Units Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(17)*
10.24						Form of Stock Appreciation Rights Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(17)*
10.25						Form of Restricted Stock Units Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(17)*
10.26						Form of Performance Stock Units Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(17)*
10.27						Form of Stock Appreciation Rights Agreement-Executives (DaVita Inc. 2011 Incentive Award Plan).(17)*
10.28						Form of Stock Appreciation Rights Agreement (DaVita Inc. 2020 Incentive Award Plan).(22)*
10.29						Form of Performance-Based Restricted Stock Unit Agreement (DaVita Inc. 2020 Incentive Award Plan).(22)*
10.30						Form of Restricted Stock Unit Agreement (DaVita Inc. 2020 Incentive Award Plan).(22)*
10.31						Form of Performance Award Agreement (DaVita Inc. 2020 Incentive Award Plan).ü*

Page 2 of 4

21.1						List of our subsidiaries.ü
23.1						Consent of KPMG LLP, independent registered public accounting firm.ü
24.1						Powers of Attorney with respect to DaVita Inc. (Included on Page S-1).
31.1						Certification of the Chief Executive Officer, dated February 22, 2023, pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.ü
31.2						Certification of the Chief Financial Officer, dated February 22, 2023, pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.ü
32.1						Certification of the Chief Executive Officer, dated February 22, 2023, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.ü
32.2						Certification of the Chief Financial Officer, dated February 22, 2023, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.ü
101.INS						XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.ü
101.SCH						Inline XBRL Taxonomy Extension Schema Document.ü
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.ü
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.ü
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.ü
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.ü
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).ü

ü			Included in this filing.
*			Management contract or executive compensation plan or arrangement.

(1)Filed on November 2, 2016 as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.

(2)Filed on December 6, 2017 as an exhibit to the Company’s Current Report on Form 8-K.

(3)Filed on October 28, 2021 as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.

(4)Filed on May 2, 2017 as an exhibit to the Company’s Quarterly Report on 10-Q for the quarter ended March 31, 2017.

(5)Filed on March 3, 2005 as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

(6)Filed on February 24, 2017 as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

(7)Filed on April 28, 2014 as an appendix to the Company's Definitive Proxy Statement on Schedule 14A.

(8)Filed on December 20, 2006 as an exhibit to the Company’s Current Report on Form 8-K.

(9)Filed on December 17, 2018 as an exhibit to the Company’s Current Report on Form 8-K.

(10)Filed on April 29, 2019 as an exhibit to the Company's Current Report on Form 8-K.

(11)Filed on August 11, 2020 as an exhibit to the Company’s Current Report on Form 8-K.

(12)Filed on March 1, 2013 as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Page 3 of 4

(13)Filed on June 9, 2020 as an exhibit to the Company's Current Report on Form 8-K.

(14)Filed on September 24, 2018 as an exhibit to the Company’s Current Report on Form 8-K.

(15)Filed on August 23, 2018 as an exhibit to the Company’s Current Report on Form 8-K.

(16)Filed on August 14, 2019 as an exhibit to the Company’s Current Report on Form 8-K.

(17)Filed on July 22, 2019 as an exhibit to the Company’s Tender Offer Statement on Schedule TO-I.

(18)Filed on May 10, 2016 as an appendix to the Company's Proxy Statement on DEF 14A.

(19)Filed on December 6, 2019 as an appendix to the Company's Proxy Statement on DEF 14A.

(20)Filed on February 21, 2020 as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

(21)Filed on April 27, 2020 as an appendix to the Company's Proxy Statement on DEF 14A.

(22)Filed on August 17, 2020 as an exhibit to the Company’s Tender Offer Statement on Schedule TO-I.

(23)Filed on October 18, 2022 as an exhibit to the Company’s Current Report on Form 8-K.

(24)Filed on August 1, 2018 as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.

Page 4 of 4

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this Annual Report on Form 10-K to be signed on our behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on February 22, 2023.

DAVITA INC.
By:						/S/ JAVIER J. RODRIGUEZ
						Javier J. Rodriguez Chief Executive Officer

KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Javier J. Rodriguez, Joel Ackerman, and Kathleen Waters, and each of them his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

S-1

Signature						Title						Date
/S/ JAVIER J. RODRIGUEZ						Chief Executive Officer and Director						February 22, 2023
Javier J. Rodriguez						(Principal Executive Officer)
/S/ JOEL ACKERMAN						Chief Financial Officer and Treasurer						February 22, 2023
Joel Ackerman						(Principal Financial Officer)
/S/ JOHN D. WINSTEL						Chief Accounting Officer						February 22, 2023
John D. Winstel						(Principal Accounting Officer)
/S/ PAMELA M. ARWAY						Director						February 22, 2023
Pamela M. Arway
/S/ CHARLES G. BERG						Director						February 22, 2023
Charles G. Berg
/S/ BARBARA J. DESOER						Director						February 22, 2023
Barbara J. Desoer
/S/ PAUL J. DIAZ						Director						February 22, 2023
Paul J. Diaz
/S/ JASON M. HOLLAR						Director						February 22, 2023
Jason M. Hollar
/S/ GREGORY J. MOORE						Director						February 22, 2023
Gregory J. Moore
/S/ JOHN M. NEHRA						Director						February 22, 2023
John M. Nehra
/S/ ADAM H. SCHECHTER						Director						February 22, 2023
Adam H. Schechter
/S/ PHYLLIS R. YALE						Director						February 22, 2023
Phyllis R. Yale

S-2

DAVITA INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

						Balance at beginning of year						Acquisitions						Amounts charged to income						Amounts written off						Balance at end of year
Description
						(dollars in thousands)
Allowance for uncollectible accounts:
Year ended December 31, 2022						$	—					$	—					$	—					$	—					$	—
Year ended December 31, 2021						$	—					$	—					$	—					$	—					$	—
Year ended December 31, 2020						$	8,328					$	—					$	13,458					$	21,786					$	—

S-3