false2023Q1000092706612/310.0015,0000.001450,00090,65090,411nothttp://fasb.org/us-gaap/2022#InterestAndDebtExpensefive years2024-01-012028-12-31five years00009270662023-01-012023-03-3100009270662023-05-05xbrli:sharesiso4217:USD00009270662022-01-012022-03-31iso4217:USDxbrli:shares00009270662023-03-3100009270662022-12-3100009270662021-12-3100009270662022-03-310000927066dva:TemporaryEquityRedeemableNoncontrollingInterestsMember2022-12-310000927066us-gaap:CommonStockMember2022-12-310000927066us-gaap:AdditionalPaidInCapitalMember2022-12-310000927066us-gaap:RetainedEarningsMember2022-12-310000927066us-gaap:TreasuryStockCommonMember2022-12-310000927066us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000927066us-gaap:ParentMember2022-12-310000927066us-gaap:NoncontrollingInterestMember2022-12-310000927066dva:TemporaryEquityRedeemableNoncontrollingInterestsMember2023-01-012023-03-310000927066us-gaap:RetainedEarningsMember2023-01-012023-03-310000927066us-gaap:ParentMember2023-01-012023-03-310000927066us-gaap:NoncontrollingInterestMember2023-01-012023-03-310000927066us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310000927066us-gaap:CommonStockMember2023-01-012023-03-310000927066us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310000927066dva:TemporaryEquityRedeemableNoncontrollingInterestsMember2023-03-310000927066us-gaap:CommonStockMember2023-03-310000927066us-gaap:AdditionalPaidInCapitalMember2023-03-310000927066us-gaap:RetainedEarningsMember2023-03-310000927066us-gaap:TreasuryStockCommonMember2023-03-310000927066us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000927066us-gaap:ParentMember2023-03-310000927066us-gaap:NoncontrollingInterestMember2023-03-310000927066dva:TemporaryEquityRedeemableNoncontrollingInterestsMember2021-12-310000927066us-gaap:CommonStockMember2021-12-310000927066us-gaap:AdditionalPaidInCapitalMember2021-12-310000927066us-gaap:RetainedEarningsMember2021-12-310000927066us-gaap:TreasuryStockCommonMember2021-12-310000927066us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000927066us-gaap:ParentMember2021-12-310000927066us-gaap:NoncontrollingInterestMember2021-12-310000927066dva:TemporaryEquityRedeemableNoncontrollingInterestsMember2022-01-012022-03-310000927066us-gaap:RetainedEarningsMember2022-01-012022-03-310000927066us-gaap:ParentMember2022-01-012022-03-310000927066us-gaap:NoncontrollingInterestMember2022-01-012022-03-310000927066us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000927066us-gaap:CommonStockMember2022-01-012022-03-310000927066us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000927066us-gaap:TreasuryStockCommonMember2022-01-012022-03-310000927066dva:TemporaryEquityRedeemableNoncontrollingInterestsMember2022-03-310000927066us-gaap:CommonStockMember2022-03-310000927066us-gaap:AdditionalPaidInCapitalMember2022-03-310000927066us-gaap:RetainedEarningsMember2022-03-310000927066us-gaap:TreasuryStockCommonMember2022-03-310000927066us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000927066us-gaap:ParentMember2022-03-310000927066us-gaap:NoncontrollingInterestMember2022-03-310000927066dva:MedicareandMedicareAdvantageMemberdva:USDialysisAndRelatedLabServicesMember2023-01-012023-03-310000927066dva:MedicareandMedicareAdvantageMember2023-01-012023-03-310000927066dva:MedicareandMedicareAdvantageMemberdva:USDialysisAndRelatedLabServicesMember2022-01-012022-03-310000927066dva:MedicareandMedicareAdvantageMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMemberdva:MedicaidandManagedMedicaidMember2023-01-012023-03-310000927066dva:MedicaidandManagedMedicaidMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberdva:MedicaidandManagedMedicaidMember2022-01-012022-03-310000927066dva:MedicaidandManagedMedicaidMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMemberdva:OtherGovernmentPayorsMember2023-01-012023-03-310000927066dva:OtherGovernmentPayorsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066dva:OtherGovernmentPayorsMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberdva:OtherGovernmentPayorsMember2022-01-012022-03-310000927066dva:OtherGovernmentPayorsMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066dva:OtherGovernmentPayorsMember2022-01-012022-03-310000927066dva:CommercialPayorsMemberdva:USDialysisAndRelatedLabServicesMember2023-01-012023-03-310000927066dva:CommercialPayorsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066dva:CommercialPayorsMember2023-01-012023-03-310000927066dva:CommercialPayorsMemberdva:USDialysisAndRelatedLabServicesMember2022-01-012022-03-310000927066dva:CommercialPayorsMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066dva:CommercialPayorsMember2022-01-012022-03-310000927066dva:MedicareandMedicareAdvantageMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066dva:MedicareandMedicareAdvantageMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066dva:MedicaidandManagedMedicaidMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066dva:MedicaidandManagedMedicaidMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMemberdva:OtherSourcesofRevenueMember2023-01-012023-03-310000927066dva:OtherSourcesofRevenueMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066dva:OtherSourcesofRevenueMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberdva:OtherSourcesofRevenueMember2022-01-012022-03-310000927066dva:OtherSourcesofRevenueMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066dva:OtherSourcesofRevenueMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:IntersegmentEliminationMember2023-01-012023-03-310000927066us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2023-01-012023-03-310000927066us-gaap:IntersegmentEliminationMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310000927066us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310000927066us-gaap:IntersegmentEliminationMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMember2023-01-012023-03-310000927066us-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMember2022-01-012022-03-310000927066us-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066dva:CertificatesOfDepositCommercialPaperAndMoneyMarketFundsMember2023-03-310000927066dva:CertificatesOfDepositCommercialPaperAndMoneyMarketFundsMember2022-12-310000927066dva:MutualFundsAndCommonStockMember2023-03-310000927066dva:MutualFundsAndCommonStockMember2022-12-310000927066us-gaap:ShortTermInvestmentsMember2023-03-310000927066us-gaap:ShortTermInvestmentsMember2022-12-310000927066us-gaap:OtherLongTermInvestmentsMember2023-03-310000927066us-gaap:OtherLongTermInvestmentsMember2022-12-310000927066dva:USDialysisAndRelatedLabServicesMember2021-12-310000927066us-gaap:AllOtherSegmentsMember2021-12-310000927066dva:USDialysisAndRelatedLabServicesMember2022-01-012022-12-310000927066us-gaap:AllOtherSegmentsMember2022-01-012022-12-3100009270662022-01-012022-12-310000927066dva:USDialysisAndRelatedLabServicesMember2022-12-310000927066us-gaap:AllOtherSegmentsMember2022-12-310000927066dva:USDialysisAndRelatedLabServicesMember2023-03-310000927066us-gaap:AllOtherSegmentsMember2023-03-310000927066dva:OtherReportingUnitsMember2023-01-012023-03-31dva:segment0000927066dva:TermLoanAMember2023-03-310000927066dva:TermLoanAMember2022-12-310000927066dva:TermLoanAMember2023-01-012023-03-310000927066us-gaap:LondonInterbankOfferedRateLIBORMemberdva:TermLoanAMember2023-01-012023-03-310000927066dva:TermLoanB1Member2023-03-310000927066dva:TermLoanB1Member2022-12-310000927066dva:TermLoanB1Member2023-01-012023-03-310000927066us-gaap:LondonInterbankOfferedRateLIBORMemberdva:TermLoanB1Member2023-01-012023-03-310000927066us-gaap:RevolvingCreditFacilityMember2023-03-310000927066us-gaap:RevolvingCreditFacilityMember2022-12-310000927066us-gaap:RevolvingCreditFacilityMember2023-01-012023-03-310000927066us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:RevolvingCreditFacilityMember2023-01-012023-03-310000927066dva:SeniorNotesFourPointSixTwoFivePercentDueTwentyThirtyMember2023-03-310000927066dva:SeniorNotesFourPointSixTwoFivePercentDueTwentyThirtyMember2022-12-310000927066dva:SeniorNotesFourPointSixTwoFivePercentDueTwentyThirtyMember2023-01-012023-03-31xbrli:pure0000927066dva:SeniorNotesThreePointSevenFivePercentDueTwentyThirtyOneMember2023-03-310000927066dva:SeniorNotesThreePointSevenFivePercentDueTwentyThirtyOneMember2022-12-310000927066dva:SeniorNotesThreePointSevenFivePercentDueTwentyThirtyOneMember2023-01-012023-03-310000927066us-gaap:NotesPayableOtherPayablesMember2023-03-310000927066us-gaap:NotesPayableOtherPayablesMember2022-12-310000927066us-gaap:NotesPayableOtherPayablesMember2023-01-012023-03-310000927066dva:FinanceLeaseMember2023-03-310000927066dva:FinanceLeaseMember2022-12-310000927066dva:FinanceLeaseMember2023-01-012023-03-310000927066dva:SeniorSecuredCreditFacilitiesMember2023-03-310000927066us-gaap:SeniorNotesMember2023-03-310000927066dva:SeniorSecuredCreditFacilitiesMember2022-12-310000927066us-gaap:SeniorNotesMember2022-12-310000927066srt:MaximumMemberdva:A2019InterestRateCapAgreementsEffectiveJune302020Memberdva:TermLoanFacilityMember2023-03-310000927066srt:MaximumMemberdva:A2019InterestRateCapAgreementsEffectiveJune302020Memberdva:TermLoanFacilityMember2023-01-012023-03-310000927066dva:A2019InterestRateCapAgreementsEffectiveJune302020Member2023-01-012023-03-310000927066us-gaap:CashFlowHedgingMemberdva:A2019InterestRateCapAgreementsEffectiveJune302020Member2023-01-012023-03-310000927066us-gaap:OtherNoncurrentAssetsMemberdva:A2019InterestRateCapAgreementsEffectiveJune302020Member2023-03-310000927066us-gaap:OtherNoncurrentAssetsMemberdva:A2019InterestRateCapAgreementsEffectiveJune302020Member2022-12-310000927066us-gaap:LetterOfCreditMember2023-03-310000927066dva:BilateralSecuredLetterOfCreditFacilityMember2023-03-310000927066us-gaap:SubsequentEventMemberdva:A2023InterestRateCapAgreementsEffectiveJune28AndJune302024Memberdva:TermLoanFacilityMemberdva:TrancheOneMember2023-04-212023-04-210000927066dva:TrancheTwoMemberus-gaap:SubsequentEventMemberdva:A2023InterestRateCapAgreementsEffectiveJune28AndJune302024Memberdva:TermLoanFacilityMember2023-04-212023-04-2100009270662019-10-222019-10-220000927066dva:CommitmentsToProvideOperatingCapitalMember2023-03-310000927066us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310000927066us-gaap:SubsequentEventMember2023-04-012023-05-080000927066us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember2022-12-310000927066us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-12-310000927066us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-12-310000927066us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310000927066us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310000927066us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-12-310000927066us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember2023-01-012023-03-310000927066us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2023-01-012023-03-310000927066us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2023-01-012023-03-310000927066us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-03-310000927066us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-03-310000927066us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-01-012022-03-310000927066us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember2023-03-310000927066us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2023-03-310000927066us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2023-03-310000927066us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310000927066us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310000927066us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-03-310000927066us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMember2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateCapMember2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateCapMember2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Member2023-03-310000927066us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMember2023-03-310000927066srt:MaximumMember2023-01-012023-03-310000927066srt:MinimumMemberdva:OtherCompaniesMemberdva:EBITDAOperatingIncomePerformanceTargetsOrQualityMarginsMember2023-01-012023-03-310000927066srt:MaximumMemberdva:OtherCompaniesMemberdva:EBITDAOperatingIncomePerformanceTargetsOrQualityMarginsMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:OperatingSegmentsMemberdva:ExternalSourcesMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:OperatingSegmentsMemberdva:ExternalSourcesMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:IntersubsegmentEliminationsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:IntersubsegmentEliminationsMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310000927066dva:USDialysisAndRelatedLabServicesMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000927066us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066us-gaap:IntersubsegmentEliminationsMemberus-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310000927066us-gaap:IntersubsegmentEliminationsMemberus-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-01-012022-03-310000927066us-gaap:OperatingSegmentsMember2023-01-012023-03-310000927066us-gaap:OperatingSegmentsMember2022-01-012022-03-310000927066us-gaap:SubsequentEventMember2023-07-010000927066us-gaap:SubsequentEventMemberdva:AgreementWithMedtronicMember2023-04-012023-04-010000927066us-gaap:SubsequentEventMemberdva:AgreementWithMedtronicMember2023-04-010000927066us-gaap:SubsequentEventMemberdva:A2023InterestRateCapAgreementsEffectiveJune28AndJune302024Memberdva:TermLoanFacilityMember2023-04-212023-04-210000927066srt:MaximumMemberus-gaap:SubsequentEventMemberdva:A2023InterestRateCapAgreementsEffectiveJune28AndJune302024Memberdva:TermLoanFacilityMember2023-04-210000927066us-gaap:SubsequentEventMemberdva:TermLoanB1Member2023-04-032023-04-030000927066us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SubsequentEventMemberdva:TermLoanB1Member2023-04-032023-04-030000927066us-gaap:SubsequentEventMemberdva:TermLoanA1Member2023-04-282023-04-280000927066us-gaap:SubsequentEventMemberdva:TermLoanA1Member2023-04-280000927066us-gaap:SubsequentEventMemberus-gaap:RevolvingCreditFacilityMember2023-04-280000927066us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SubsequentEventMemberdva:TermLoanA1Member2023-04-282023-04-280000927066us-gaap:SubsequentEventMemberus-gaap:RevolvingCreditFacilityMember2023-04-282023-04-28



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 1-14106
logoa33.jpg
DAVITA INC.
Delaware 51-0354549
(State of incorporation) (I.R.S. Employer Identification No.)
2000 16th Street
Denver,CO80202
Telephone number (720631-2100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Trading symbol(s):Name of each exchange on which registered:
Common Stock, $0.001 par value DVANYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
    
Non-accelerated filer☐ Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes      No  ☒
As of May 5, 2023, the number of shares of the registrant’s common stock outstanding was approximately 90.7 million shares.



DAVITA INC.
INDEX

   Page No.
  PART I. FINANCIAL INFORMATION 
    
Item 1.  
  
  
  
  
  
  
Item 2. 
Item 3. 
Item 4. 
    
  PART II. OTHER INFORMATION 
Item 1. 
Item 1A. 
Item 2. 
Item 6. 
  
Note: Items 3, 4 and 5 of Part II are omitted because they are not applicable. 
i



DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share data)


Three months ended March 31,
 20232022
Dialysis patient service revenues$2,760,034 $2,716,281 
Other revenues112,665 101,274 
Total revenues2,872,699 2,817,555 
Operating expenses:  
Patient care costs2,058,189 2,018,529 
General and administrative331,614 294,820 
Depreciation and amortization178,071 172,944 
Equity investment income, net(6,820)(7,046)
Total operating expenses2,561,054 2,479,247 
Operating income311,645 338,308 
Debt expense(100,774)(73,791)
Other income (loss), net3,752 (1,786)
Income before income taxes214,623 262,731 
Income tax expense43,955 57,013 
Net income170,668 205,718 
Less: Net income attributable to noncontrolling interests(55,121)(43,596)
Net income attributable to DaVita Inc.$115,547 $162,122 
Earnings per share attributable to DaVita Inc.:  
Basic net income$1.28 $1.68 
Diluted net income$1.25 $1.61 
Weighted average shares for earnings per share:
Basic shares90,497 96,342 
Diluted shares92,483 100,503 
See notes to condensed consolidated financial statements.
1


DAVITA INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands)
Three months ended March 31,
 20232022
Net income$170,668 $205,718 
Other comprehensive income, net of tax:  
Unrealized (losses) gains on interest rate cap agreements:  
Unrealized (losses) gains(3,539)41,132 
Reclassifications of net realized (gains) losses into net income(15,742)1,033 
Unrealized gains on foreign currency translation:33,561 62,212 
Other comprehensive income14,280 104,377 
Total comprehensive income184,948 310,095 
Less: Comprehensive income attributable to noncontrolling interests(55,121)(43,596)
Comprehensive income attributable to DaVita Inc.$129,827 $266,499 
 See notes to condensed consolidated financial statements.

2


DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars and shares in thousands, except per share data)
March 31, 2023December 31, 2022
ASSETS  
Cash and cash equivalents$317,132 $244,086 
Restricted cash and equivalents94,265 94,903 
Short-term investments49,965 77,693 
Accounts receivable2,057,809 2,132,070 
Inventories106,770 109,122 
Other receivables324,405 413,976 
Prepaid and other current assets89,393 78,839 
Income tax receivable 4,603 
Total current assets3,039,739 3,155,292 
Property and equipment, net of accumulated depreciation of $5,395,966 and $5,265,372, respectively
3,216,373 3,256,397 
Operating lease right-of-use assets2,617,018 2,666,242 
Intangible assets, net of accumulated amortization of $40,945 and $49,772, respectively
186,758 182,687 
Equity method and other investments241,747 231,108 
Long-term investments44,520 44,329 
Other long-term assets291,321 315,587 
Goodwill7,090,311 7,076,610 
 $16,727,787 $16,928,252 
LIABILITIES AND EQUITY  
Accounts payable$447,969 $479,780 
Other liabilities796,742 802,469 
Accrued compensation and benefits618,931 692,654 
Current portion of operating lease liabilities394,607 395,401 
Current portion of long-term debt242,193 231,404 
Income tax payable64,651 18,039 
Total current liabilities2,565,093 2,619,747 
Long-term operating lease liabilities2,455,144 2,503,068 
Long-term debt8,417,532 8,692,617 
Other long-term liabilities100,229 105,233 
Deferred income taxes771,087 782,787 
Total liabilities14,309,085 14,703,452 
Commitments and contingencies
Noncontrolling interests subject to put provisions1,398,829 1,348,908 
Equity:  
Preferred stock ($0.001 par value, 5,000 shares authorized; none issued)
  
Common stock ($0.001 par value, 450,000 shares authorized; 90,650 and 90,411 shares issued
 and outstanding at March 31, 2023 and December 31, 2022, respectively)
91 90 
Additional paid-in capital590,251 606,935 
Retained earnings290,034 174,487 
Accumulated other comprehensive loss(54,906)(69,186)
Total DaVita Inc. shareholders' equity825,470 712,326 
Noncontrolling interests not subject to put provisions194,403 163,566 
Total equity1,019,873 875,892 
 $16,727,787 $16,928,252 
See notes to condensed consolidated financial statements.
3


DAVITA INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
(dollars in thousands)
Three months ended March 31,
 20232022
Cash flows from operating activities:  
Net income$170,668 $205,718 
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization178,071 172,944 
Stock-based compensation expense25,373 24,904 
Deferred income taxes(3,621)(41)
Equity investment loss, net3,044 664 
Other non-cash charges, net5,864 4,714 
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Accounts receivable81,850 (66,270)
Inventories2,758 849 
Other receivables and prepaid and other current assets66,595 (17,966)
Other long-term assets(615)3,520 
Accounts payable(20,535)21,402 
Accrued compensation and benefits(74,144)(95,927)
Other current liabilities(6,486)26,912 
Income taxes39,251 52,473 
Other long-term liabilities(5,516)(11,701)
Net cash provided by operating activities462,557 322,195 
Cash flows from investing activities: 
Additions of property and equipment(147,705)(123,108)
Acquisitions (5,166)
Proceeds from asset and business sales13,474 11,353 
Purchase of debt investments held-to-maturity(25,000)(5,070)
Purchase of other debt and equity investments(4,643)(2,726)
Proceeds from debt investments held-to-maturity50,258 5,070 
Proceeds from sale of other debt and equity investments3,856 3,773 
Purchase of equity method investments(7,904)(2,962)
Distributions from equity method investments1,120 470 
Net cash used in investing activities(116,544)(118,366)
Cash flows from financing activities:
Borrowings611,829 354,285 
Payments on long-term debt(880,552)(398,990)
Deferred financing and debt redemption costs(7) 
Purchase of treasury stock (236,232)
Distributions to noncontrolling interests(54,837)(65,452)
Net payments related to stock purchases and awards(7,902)(501)
Contributions from noncontrolling interests4,725 4,929 
Proceeds from sales of additional noncontrolling interests50,832 3,673 
Purchases of noncontrolling interests (3,283)
Net cash used in financing activities(275,912)(341,571)
Effect of exchange rate changes on cash, cash equivalents and restricted cash2,307 3,363 
Net increase (decrease) in cash, cash equivalents and restricted cash72,408 (134,379)
Cash, cash equivalents and restricted cash at beginning of the year338,989 554,960 
Cash, cash equivalents and restricted cash at end of the period$411,397 $420,581 
See notes to condensed consolidated financial statements.
4


DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(dollars and shares in thousands)
Three months ended March 31, 2023
 Non-
controlling
interests
subject to
put provisions
DaVita Inc. Shareholders’ EquityNon-
controlling
interests not
subject to
put provisions
 Common stockAdditional
paid-in
capital
Retained
earnings
Treasury stockAccumulated
other
comprehensive
loss
 SharesAmountSharesAmountTotal
Balance at December 31, 2022$1,348,908 90,411 $90 $606,935 $174,487  $ $(69,186)$712,326 $163,566 
Comprehensive income:
Net income36,692 115,547 115,547 18,429 
Other comprehensive income14,280 14,280 
Stock award plan239 1 (9,523)(9,522)
Stock-settled stock-based
 compensation expense
24,847 24,847 
Changes in noncontrolling
 interest from:
Distributions(35,550)(19,287)
Contributions3,748 977 
Acquisitions and divestitures13,023 13,023 30,718 
Fair value remeasurements45,031 (45,031)(45,031)
Balance at March 31, 2023$1,398,829 90,650 $91 $590,251 $290,034  $ $(54,906)$825,470 $194,403 
See notes to condensed consolidated financial statements.

Three months ended March 31, 2022
 Non-
controlling
interests
subject to
put provisions
DaVita Inc. Shareholders’ EquityNon-
controlling
interests not
subject to
put provisions
 Common stockAdditional
paid-in
capital
Retained
earnings
Treasury stockAccumulated
other
comprehensive
loss
 
 SharesAmountSharesAmountTotal
Balance at December 31, 2021$1,434,832 97,289 $97 $540,321 $354,337  $ $(139,247)$755,508 $180,640 
Comprehensive income:
Net income28,381 162,122 162,122 15,215 
Other comprehensive income104,377 104,377 
Stock award plan53(3,488)(3,488)
Stock-settled stock-based
 compensation expense
24,626 24,626 
Changes in noncontrolling
 interest from:
Distributions(42,881)(22,571)
Contributions3,197 1,732 
Acquisitions and divestitures2,421 883 883 
Partial purchases(822)(1,774)(1,774)
Fair value remeasurements(34,835)34,835 34,835 
Other464 (464)
Purchase of treasury stock(2,104)(233,318)(233,318)
Balance at March 31, 2022$1,390,757 97,342 $97 $595,403 $516,459 (2,104)$(233,318)$(34,870)$843,771 $174,552 
    

See notes to condensed consolidated financial statements.
5


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars and shares in thousands, except per share data)

Unless otherwise indicated in this Quarterly Report on Form 10-Q, "the Company", "we", "us", "our" and similar terms refer to DaVita Inc. and its consolidated subsidiaries.
1.     Condensed consolidated interim financial statements
The unaudited condensed consolidated interim financial statements included in this report are prepared by the Company. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations are reflected in these condensed consolidated interim financial statements. All significant intercompany accounts and transactions have been eliminated. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, contingencies and noncontrolling interests subject to put provisions. The most significant estimates and assumptions underlying these financial statements and accompanying notes generally involve revenue recognition and accounts receivable, certain fair value estimates, accounting for income taxes and loss contingencies. The results of operations reflected in these interim financial statements may not necessarily be indicative of annual operating results. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (2022 10-K). Prior period classifications conform to the current period presentation. The Company has evaluated subsequent events through the date these condensed consolidated interim financial statements were issued and has included all necessary adjustments and disclosures.
2.     Revenue recognition
The following tables summarize the Company's segment revenues by primary payor source:
Three months ended March 31, 2023Three months ended March 31, 2022
U.S. dialysisOther — Ancillary servicesConsolidatedU.S. dialysisOther — Ancillary servicesConsolidated
Dialysis patient service revenues:
Medicare and Medicare Advantage$1,482,767 $$1,482,767 $1,464,086 $$1,464,086 
Medicaid and Managed Medicaid205,776 205,776 189,655 189,655 
Other government82,044 121,585 203,629 80,800 116,895 197,695 
Commercial835,393 54,516 889,909 834,579 52,425 887,004 
Other revenues:
Medicare and Medicare Advantage93,238 93,238 83,596 83,596 
Medicaid and Managed Medicaid570 570 538 538 
Commercial1,206 1,206 1,338 1,338 
Other(1)
6,180 12,839 19,019 5,976 9,836 15,812 
Eliminations of intersegment revenues(22,047)(1,368)(23,415)(22,169)(22,169)
Total$2,590,113 $282,586 $2,872,699 $2,552,927 $264,628 $2,817,555 
(1)    Other primarily consists 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. integrated kidney care (IKC) and other ancillary services and international operations.
There are significant uncertainties 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 determination of applicable primary and secondary coverage, changes in patient insurance 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.
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 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 the fee schedule.
6


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

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 integrated kidney care (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 or adjusted medical cost targets.
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 the 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.
The reconciliations of the numerators and denominators used to calculate basic and diluted earnings per share were as follows:
Three months ended March 31,
 20232022
Net income attributable to DaVita Inc.$115,547 $162,122 
Weighted average shares outstanding:
Basic shares90,497 96,342 
Assumed incremental from stock plans1,986 4,161 
Diluted shares92,483 100,503 
Basic net income per share attributable to DaVita Inc.$1.28 $1.68 
Diluted net income per share attributable to DaVita Inc.$1.25 $1.61 
Anti-dilutive stock-settled awards excluded from calculation(1)
1,295 171 
(1)Shares associated with stock awards excluded from the diluted denominator calculation because they were anti-dilutive under the treasury stock method.
4.     Short-term and long-term investments
The Company’s short-term and long-term debt and equity investments, consisting of debt instruments classified as held-to-maturity and equity investments with readily determinable fair values or redemption values, were as follows:
 March 31, 2023December 31, 2022
Debt
securities
Equity
securities
TotalDebt
securities
Equity
securities
Total
Certificates of deposit and other time deposits$58,341 $ $58,341 $82,879 $ $82,879 
Investments in mutual funds and common stocks 36,144 36,144  39,143 39,143 
 $58,341 $36,144 $94,485 $82,879 $39,143 $122,022 
Short-term investments$43,338 $6,627 $49,965 $67,872 $9,821 $77,693 
Long-term investments15,003 29,517 44,520 15,007 29,322 44,329 
 $58,341 $36,144 $94,485 $82,879 $39,143 $122,022 
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
7


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(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 March 31, 2023 and December 31, 2022.
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.
5.     Goodwill
Changes in the carrying value of goodwill by reportable segment were as follows:
U.S. dialysisOther — Ancillary servicesConsolidated
Balance at December 31, 2021$6,400,162 $646,079 $7,046,241 
Acquisitions16,750 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 
Foreign currency and other adjustments 13,701 13,701 
Balance at March 31, 2023$6,416,825 $673,486 $7,090,311 
Balance at March 31, 2023:
Goodwill$6,416,825 $794,391 $7,211,216 
Accumulated impairment charges (120,905)(120,905)
$6,416,825 $673,486 $7,090,311 
The Company did not recognize any goodwill impairment charges during the three months ended March 31, 2023 and 2022.
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.
Developments, events, changes in operating performance and other changes in key circumstances since the dates of the Company’s last annual goodwill impairment assessments 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 March 31, 2023. Except for the Company's Germany kidney care reporting unit as described further in Note 10 to the Company's consolidated financial statements included in the 2022 10-K, none of the Company's various other reporting units were considered at risk of significant goodwill impairment as of March 31, 2023. 
8


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

6.     Long-term debt
Long-term debt was comprised of the following:
As of March 31, 2023
March 31,
2023
December 31, 2022Maturity dateInterest rate
Estimated fair value(1)
Senior Secured Credit Facilities(2):
  
Term Loan A$1,444,427 $1,498,438 8/12/2024LIBOR+1.75%$1,433,594 
Term Loan B-12,624,359 2,660,831 8/12/2026LIBOR+1.75%$2,584,994 
Revolving line of credit 165,000 8/12/2024LIBOR+1.75%$ 
Senior Notes:
4.625% Senior Notes2,750,000 2,750,000 6/1/20304.625 %$2,344,375 
3.75% Senior Notes1,500,000 1,500,000 2/15/20313.75 %$1,183,125 
Acquisition obligations and other notes payable(3)
117,856 120,562 2023-20366.82 %$117,856 
Financing lease obligations(4)
264,612 273,688 2024-20394.53 %
Total debt principal outstanding8,701,254 8,968,519 
Discount, premium and deferred financing costs(5)
(41,529)(44,498)
 8,659,725 8,924,021 
Less current portion(242,193)(231,404)
 $8,417,532 $8,692,617 
(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 approximate their estimated fair values, based on estimates of their present values using level 2 interest rate inputs.
(2)Term Loan A, Term Loan B-1 and the revolving line of credit have each been amended subsequent to March 31, 2023. See Note 14 for more information on these amendments.
(3)The interest rate presented for acquisition obligations and other notes payable is their weighted average interest rate based on the current fixed and variable interest rate components in effect as of March 31, 2023.
(4)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.
(5)As of March 31, 2023, the carrying amount of the Company's senior secured credit facilities have been reduced by a discount of $3,254 and deferred financing costs of $16,797, and the carrying amount of the Company's senior notes have been reduced by deferred financing costs of $35,024 and increased by a debt premium of $13,546. As of December 31, 2022, the carrying amount of the Company's senior secured credit facilities were reduced by a discount of $3,497 and deferred financing costs of $18,816, and the carrying amount of the Company's senior notes were reduced by deferred financing costs of $36,203 and increased by a debt premium of $14,018.
During the first three months of 2023, the Company made regularly scheduled and other principal payments under its senior secured credit facilities totaling $54,011 on Term Loan A and $36,472 on Term Loan B-1.
As of March 31, 2023, 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 $568,786 outstanding principal balance of Term Loan A is subject to LIBOR-based interest rate volatility. These cap agreements are designated as cash flow hedges and, as a result, changes in their fair values are reported in other comprehensive income. 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.
9


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

The following table summarizes the Company’s interest rate cap agreements outstanding as of March 31, 2023 and December 31, 2022, which are classified in other long-term assets on its consolidated balance sheet: 
 Three months ended
March 31, 2023
Fair value
Notional amountLIBOR maximum rateEffective dateExpiration dateDebt expense (offset)Recorded OCI lossMarch 31,
2023
December 31, 2022
2019 cap agreements$3,500,000 2.00%6/30/20206/30/2024$(20,975)$4,716 $112,687 $139,755 
See Note 9 for further details on amounts reclassified from accumulated other comprehensive loss and recorded as debt expense related to the Company’s interest rate cap agreements for the three months ended March 31, 2023 and 2022.
As a result of the LIBOR cap from the Company's 2019 interest rate cap agreements, the Company’s weighted average effective interest rate on its senior secured credit facilities at the end of the first quarter of 2023 was 4.60%, based on the current margins in effect for its senior secured credit facilities as of March 31, 2023, as detailed in the table above.
The Company’s weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, was 4.55% for the three months ended March 31, 2023 and 4.53% as of March 31, 2023.
As of March 31, 2023, the Company’s interest rates were fixed and economically fixed on approximately 53% and 93% of its total debt, respectively.
As of March 31, 2023, the Company had an undrawn $1,000,000 revolving line of credit under its senior secured credit facilities. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding under the facility, of which there were none as of March 31, 2023. The Company also had letters of credit of approximately $151,358 outstanding under a separate bilateral secured letter of credit facility as of March 31, 2023.
Subsequent to March 31, 2023, the Company amended its senior secured credit facilities and entered into several forward interest rate cap agreements that become effective June 28, 2024 and June 30, 2024. For additional information see Note 14.
7.    Commitments and 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 March 31, 2023 and December 31, 2022, 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.
10


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

The following is a description of certain lawsuits, claims, governmental investigations and audits and other legal proceedings to which the Company is subject.
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 conducted 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. After its investigation, the government and the named states declined to intervene in the matter, and on April 5, 2023, the U.S. District Court, Northern District of Texas, entered an order unsealing the complaint in the matter of U.S. ex rel. Grenon v. DaVita Rx, LLC et al. The complaint has not been served on the Company.
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.
2023 District of Columbia Office of Attorney General Investigation: In January 2023, the Office of the Attorney General for the District of Columbia issued a CID to the Company in connection with an antitrust investigation into the 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
11


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

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 7, or the timing of their resolution or the ultimate losses or impact of developments in those matters, which could have a material adverse effect on the Company’s revenues, earnings and cash flows. Further, any legal proceedings or regulatory matters involving the Company, whether meritorious or not, are time consuming, and often require management’s attention and result in significant legal expense, and may result in the diversion of significant operational resources, may impact the Company's various relationships and/or contracts related to the Company's business or otherwise harm the Company’s business, results of operations, financial condition, cash flows or reputation.
12


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

Resolved Matters
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 covered 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.
* * *
Other Commitments
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 $10,099.
8.    Shareholders' equity
Stock-based compensation
During the three months ended March 31, 2023, the Company granted 1,322 stock-settled restricted and performance stock units with an aggregate grant-date fair value of $101,467 and a weighted-average expected life of approximately 3.4 years.
As of March 31, 2023, the Company had $204,451 in 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 1.4 years.
Share repurchases
The Company has not repurchased any shares subsequent to December 31, 2022.
9.     Accumulated other comprehensive loss
Three months ended March 31, 2023Three months ended March 31, 2022
Interest
rate cap
agreements
Foreign
currency
translation
adjustments
Accumulated
other
comprehensive
loss
Interest
rate cap
agreements
Foreign
currency
translation
adjustments
Accumulated
other
comprehensive
loss
Beginning balance$98,685 $(167,871)$(69,186)$(1,178)$(138,069)$(139,247)
Unrealized (losses) gains(4,716)33,561 28,845 54,806 62,212 117,018 
Related income tax1,177  1,177 (13,674) (13,674)
 (3,539)33,561 30,022 41,132 62,212 103,344 
Reclassification into net income(20,975) (20,975)1,377  1,377 
Related income tax5,233  5,233 (344) (344)
 (15,742) (15,742)1,033  1,033 
Ending balance$79,404 $(134,310)$(54,906)$40,987 $(75,857)$(34,870)
The interest rate cap agreement net realized losses reclassified into net income are recorded as debt expense in the corresponding consolidated statements of income. See Note 6 for further details.
10.    Variable interest entities (VIEs)
At March 31, 2023, these condensed consolidated financial statements include total assets of VIEs of $308,455 and total liabilities and noncontrolling interests of VIEs to third parties of $178,382. There have been no material changes in the nature of the Company's arrangements with VIEs or its judgments concerning them from those described in Note 23 to the Company's consolidated financial statements included in the 2022 10-K.
13


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

11.    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 equities that are measured at fair value on a recurring basis into the appropriate fair value hierarchy levels as defined by the Financial Accounting Standards Board (FASB).
The following table summarizes the Company’s assets, liabilities and temporary equities measured at fair value on a recurring basis as of March 31, 2023: 
TotalQuoted 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$36,144 $36,144 $ $ 
Interest rate cap agreements$112,687 $ $112,687 $ 
Liabilities   
Contingent earn-out obligations$25,098 $ $ $25,098 
Temporary equity    
Noncontrolling interests subject to put provisions$1,398,829 $ $ $1,398,829 
For a reconciliation of changes in noncontrolling interests subject to put provisions during the three months ended March 31, 2023, see the consolidated statement of equity.
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 4 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 6 for further discussion.
As of March 31, 2023, the Company had 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 $59,351 if certain performance targets or quality margins are met over the next one year to five years. 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 values of these contingent earn-out obligations are remeasured as of each reporting date and could fluctuate based upon any significant changes in key assumptions, such as changes in the Company's credit risk adjusted rate that is used to discount obligations to present value.
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 March 31, 2023, 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 $175,000. See Notes 17 and 24 to the Company's consolidated financial statements included in the 2022 10-K for further discussion of the Company’s methodology for estimating the fair value of noncontrolling interests subject to put obligations.
14


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)

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 6 for further discussion of the Company's debt.
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 these condensed consolidated financial statements at March 31, 2023 at their approximate fair values due to the short-term nature of their settlements.
12.    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. 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 separate operating segments include its U.S. dialysis and related lab services business, its U.S. IKC business, its U.S. other ancillary services, its kidney care operations in each foreign sovereign jurisdiction, and its equity method investment in the Asia Pacific joint venture (APAC JV). 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. See Note 25 to the Company's consolidated financial statements included in the 2022 10-K for further description of how the Company determines and measures results for its operating segments.
15


DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(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 before income taxes:
Three months ended March 31,
 2023