28.

Consolidating financial statements

The following information is presented in accordance with Rule 3-10 of Regulation S-X. The operating and investing activities of the separate legal entities included in the Company’s consolidated financial statements are fully interdependent and integrated. Revenues and operating expenses of the separate legal entities include intercompany charges for management and other services. The Company’s senior notes are guaranteed by substantially all of its domestic subsidiaries. Each of the guarantor subsidiaries has guaranteed the notes on a joint and several basis. However, the guarantor subsidiaries can be released from their obligations in the event of a sale or other disposition of all or substantially all of the assets of such subsidiary, including by merger or consolidation or the sale of all equity interests in such subsidiary owned by the Company, if such subsidiary guarantor is designated as an unrestricted subsidiary or otherwise ceases to be a restricted subsidiary, and if such subsidiary guarantor no longer guaranties any other indebtedness of the Company. Certain domestic subsidiaries, foreign subsidiaries, joint ventures, partnerships and third parties are not guarantors of the senior notes.

Consolidating Statements of Income


	DaVita HealthCare Partners Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2013
Patient services revenues	$	—		$	5,989,658		$	2,344,614		$	(27,077	)	$	8,307,195
Less: Provision for uncollectible accounts		—			(177,415	)		(116,131	)		—			(293,546	)

Net patient service revenues		—			5,812,243			2,228,483			(27,077	)		8,013,649
Capitated revenues		—			1,427,321			1,560,244			(250	)		2,987,315
Other revenues		616,155			1,534,310			94,228			(1,481,607	)		763,086

Total net revenues		616,155			8,773,874			3,882,955			(1,508,934	)		11,764,050
Operating expenses and charges		434,776			7,843,476			3,444,598			(1,508,934	)		10,213,916

Operating income		181,379			930,398			438,357			—			1,550,134
Debt (expense)		(427,141	)		(366,188	)		(39,413	)		402,799			(429,943	)
Other income, net		402,910			1,903			2,773			(402,799	)		4,787
Income tax expense		59,716			303,603			17,694			—			381,013
Equity earnings in subsidiaries		536,014			260,268			—			(796,282	)		—

Income from continuing operations		633,446			522,778			384,023			(796,282	)		743,965
Discontinued operations net of gain on disposal of discontinued operations		—			—			13,236			—			13,236

Net income		633,446			522,778			397,259			(796,282	)		757,201
Less: Net income attributable to noncontrolling interests		—			—			—			(123,755	)		(123,755	)

Net income attributable to DaVita HealthCare Partners Inc.	$	633,446		$	522,778		$	397,259		$	(920,037	)	$	633,446

Consolidating Statements of Income


	DaVita HealthCare Partners Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2012
Patient services revenues	$	—		$	5,417,800		$	1,988,508		$	(54,406	)	$	7,351,902
Less: Provision for uncollectible accounts		—			(124,592	)		(110,626	)		—			(235,218	)

Net patient service revenues		—			5,293,208			1,877,882			(54,406	)		7,116,684
Capitated revenues		—			232,744			248,592			—			481,336
Other revenues		514,190			745,920			27,106			(698,956	)		588,260

Total net revenues		514,190			6,271,872			2,153,580			(753,362	)		8,186,280
Operating expenses and charges		365,680			5,479,531			1,797,347			(753,362	)		6,889,196

Operating income		148,510			792,341			356,233			—			1,297,084
Debt (expense) and refinancing charges		(331,944	)		(207,499	)		(27,193	)		267,119			(299,517	)
Other income, net		265,508			4,305			1,043			(267,119	)		3,737
Income tax expense		32,912			320,267			6,666			—			359,845
Equity earnings in subsidiaries		486,855			218,197			—			(705,052	)		—

Income from continuing operations		536,017			487,077			323,417			(705,052	)		641,459
Discontinued operations		—			—			(222	)		—			(222	)

Net income		536,017			487,077			323,195			(705,052	)		641,237
Less: Net income attributable to noncontrolling interests		—			—			—			(105,220	)		(105,220	)

Net income attributable to DaVita HealthCare Partners Inc.	$	536,017		$	487,077		$	323,195		$	(810,272	)	$	536,017

For the year ended December 31, 2011
Patient services revenues	$	—		$	5,047,701		$	1,471,910		$	(49,071	)	$	6,470,540
Less: Provision for uncollectible accounts		—			(127,049	)		(63,185	)		—			(190,234	)

Net patient service revenues		—			4,920,652			1,408,725			(49,071	)		6,280,306
Capitated revenues		—			45,133			—			—			45,133
Other revenues		457,460			434,754			9,534			(495,381	)		406,367

Total net revenues		457,460			5,400,539			1,418,259			(544,452	)		6,731,806
Operating expenses and charges		301,255			4,699,956			1,120,334			(544,452	)		5,577,093

Operating income		156,205			700,583			297,925			—			1,154,713
Debt (expense)		(242,730	)		(218,182	)		(9,215	)		229,037			(241,090	)
Other income, net		229,658			1,583			778			(229,037	)		2,982
Income tax expense		56,681			248,210			20,401			—			325,292
Equity earnings in subsidiaries		391,549			184,475			—			(576,024	)		—

Income from continuing operations		478,001			420,249			269,087			(576,024	)		591,313
Discontinued operations net of loss on disposal of discontinued operations		—			(4,191	)		(13,727	)		—			(17,918	)

Net income		478,001			416,058			255,360			(576,024	)		573,395
Less: Net income attributable to noncontrolling interests		—			—			—			(95,394	)		(95,394	)

Net income attributable to DaVita HealthCare Partners Inc.	$	478,001		$	416,058		$	255,360		$	(671,418	)	$	478,001

Consolidating Statements of Comprehensive Income


	DaVita HealthCare Partners Inc.			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2013
Net income	$	633,446		$	522,778	$	397,259	$	(796,282	)	$	757,201
Other comprehensive income		12,652			—		—		—			12,652

Total comprehensive income		646,098			522,778		397,259		(796,282	)		769,853
Less: Comprehensive income attributable to noncontrolling interest		—			—		—		(123,755	)		(123,755	)

Comprehensive income attributable to DaVita HealthCare Partners Inc.	$	646,098		$	522,778	$	397,259	$	(920,037	)	$	646,098

For the year ended December 31, 2012
Net income	$	536,017		$	487,077	$	323,195	$	(705,052	)	$	641,237
Other comprehensive income		4,187			—		—		—			4,187

Total comprehensive income		540,204			487,077		323,195		(705,052	)		645,424
Less: Comprehensive income attributable to noncontrolling interest		—			—		—		(105,220	)		(105,220	)

Comprehensive income attributable to DaVita HealthCare Partners Inc.	$	540,204		$	487,077	$	323,195	$	(810,272	)	$	540,204

For the year ended December 31, 2011
Net income	$	478,001		$	416,058	$	255,360	$	(576,024	)	$	573,395
Other comprehensive loss		(19,987	)		—		—		—			(19,987	)

Total comprehensive income		458,014			416,058		255,360		(576,024	)		553,408
Less: Comprehensive income attributable to noncontrolling interest		—			—		—		(95,394	)		(95,394	)

Comprehensive income attributable to DaVita HealthCare Partners Inc.	$	458,014		$	416,058	$	255,360	$	(671,418	)	$	458,014

Consolidating Balance Sheets


	DaVita HealthCare Partners Inc.		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Total
As of December 31, 2013
Cash and cash equivalents	$	602,188	$	175,004	$	169,057	$	—		$	946,249
Accounts receivable, net		—		939,543		545,620		—			1,485,163
Other current assets		27,910		904,852		108,104		—			1,040,866

Total current assets		630,098		2,019,399		822,781		—			3,472,278
Property and equipment, net		177,633		1,378,017		633,761		—			2,189,411
Intangible assets, net		77,531		1,882,685		64,157		—			2,024,373
Investments in subsidiaries		8,231,059		1,391,655		—		(9,622,714	)		—
Intercompany receivables		3,983,214		—		480,993		(4,464,207	)		—
Other long-term assets and investments		61,391		70,728		67,722		—			199,841
Goodwill		—		7,850,910		1,362,064		—			9,212,974

Total assets	$	13,160,926	$	14,593,394	$	3,431,478	$	(14,086,921	)	$	17,098,877

Current liabilities	$	328,875	$	1,776,419	$	356,755	$	—		$	2,462,049
Intercompany payables		—		3,426,433		1,037,774		(4,464,207	)		—
Long-term debt and other long-term liabilities		7,948,390		1,159,483		226,114		—			9,333,987
Noncontrolling interests subject to put provisions		451,182		—		—		246,118			697,300
Total DaVita HealthCare Partners Inc. shareholders’ equity		4,432,479		8,231,059		1,391,655		(9,622,714	)		4,432,479
Noncontrolling interests not subject to put provisions		—		—		419,180		(246,118	)		173,062

Total equity		4,432,479		8,231,059		1,810,835		(9,868,832	)		4,605,541

Total liabilities and equity	$	13,160,926	$	14,593,394	$	3,431,478	$	(14,086,921	)	$	17,098,877

As of December 31, 2012
Cash and cash equivalents	$	195,037	$	166,107	$	172,604	$	—		$	533,748
Accounts receivable, net		—		963,854		460,449		—			1,424,303
Other current assets		13,928		786,710		128,361		—			928,999

Total current assets		208,965		1,916,671		761,414		—			2,887,050
Property and equipment, net		143,684		1,237,166		491,520		—			1,872,370
Intangible assets, net		96,472		1,995,372		36,274		—			2,128,118
Investments in subsidiaries		7,444,676		1,313,621		—		(8,758,297	)		—
Intercompany receivables		4,871,310		—		423,626		(5,294,936	)		—
Other long-term assets and investments		52,787		67,000		54,558		—			174,345
Goodwill		—		7,730,020		1,222,730		—			8,952,750

Total assets	$	12,817,894	$	14,259,850	$	2,990,122	$	(14,053,233	)	$	16,014,633

Current liabilities	$	362,727	$	1,281,305	$	372,393	$	—		$	2,016,425
Intercompany payables		—		4,598,960		695,976		(5,294,936	)		—
Long-term debt and other long-term liabilities		8,326,266		990,303		184,022		—			9,500,591
Noncontrolling interests subject to put provisions		365,764		—		—		214,928			580,692
Total DaVita HealthCare Partners Inc. shareholders’ equity		3,763,137		7,389,282		1,369,015		(8,758,297	)		3,763,137
Noncontrolling interests not subject to put provisions		—		—		368,716		(214,928	)		153,788

Total equity		3,763,137		7,389,282		1,737,731		(8,973,225	)		3,916,925

Total liabilities and equity	$	12,817,894	$	14,259,850	$	2,990,122	$	(14,053,233	)	$	16,014,633

Consolidating Statements of Cash Flows


	DaVita HealthCare Partners Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2013
Cash flows from operating activities:
Net income.	$	633,446		$	522,778		$	397,259		$	(796,282	)	$	757,201
Changes in operating assets and liabilities and non cash items included in net income		(443,071	)		652,374			10,555			796,282			1,016,140

Net cash provided by operating activities		190,375			1,175,152			407,814			—			1,773,341

Cash flows from investing activities:
Additions of property and equipment, net		(55,252	)		(337,042	)		(225,303	)		—			(617,597	)
Acquisitions		—			(156,830	)		(153,564	)		—			(310,394	)
Proceeds from asset sales		60,650			1,608			—			—			62,258
Purchase of investments and other items		(4,944	)		(3,502	)		(2,703	)		—			(11,149	)

Net cash provided by (used in) by investing activities		454			(495,766	)		(381,570	)		—			(876,882	)

Cash flows from financing activities:
Long-term debt and related financing costs, net		(421,739	)		(11,061	)		(5,207	)		—			(438,007	)
Intercompany borrowing		585,441			(664,154	)		78,713			—			—
Other items		52,620			4,726			(102,330	)		—			(44,984	)

Net cash provided by (used in) financing activities		216,322			(670,489	)		(28,824	)		—			(482,991	)

Effect of exchange rate changes on cash		—			—			(967	)		—			(967	)
Net increase (decrease) in cash and cash equivalents		407,151			8,897			(3,547	)		—			412,501
Cash and cash equivalents at beginning of the year		195,037			166,107			172,604			—			533,748

Cash and cash equivalents at the end of the year	$	602,188		$	175,004		$	169,057		$	—		$	946,249

For the year ended December 31, 2012
Cash flows from operating activities:
Net income.	$	536,017		$	487,077		$	323,195		$	(705,052	)	$	641,237
Changes in operating assets and liabilities and non cash items included in net income		(383,619	)		15,693			122,485			705,052			459,611

Net cash provided by operating activities		152,398			502,770			445,680			—			1,100,848

Cash flows from investing activities:
Additions of property and equipment, net		(72,125	)		(305,885	)		(172,136	)		—			(550,146	)
Acquisitions		(3,645,760	)		(564,499	)		(83,818	)		—			(4,294,077	)
Proceeds from asset sales		—			3,559			—			—			3,559
Proceeds from investment sales and other items		2,841			(1,761	)		7,134			—			8,214

Net cash used in by investing activities		(3,715,044	)		(868,586	)		(248,820	)		—			(4,832,450	)

Cash flows from financing activities:
Long-term debt and related financing costs, net		3,909,760			(23,805	)		18,938			—			3,904,893
Intercompany borrowing		(586,050	)		580,825			5,225			—			—
Other items		68,697			(25,097	)		(76,109	)		—			(32,509	)

Net cash provided by (used in) financing activities		3,392,407			531,923			(51,946	)		—			3,872,384

Effect of exchange rate changes on cash		—			—			(786	)		—			(786	)
Net (decrease) increase in cash and cash equivalents		(170,239	)		166,107			144,128			—			139,996
Cash and cash equivalents at beginning of the year		365,276			—			28,476			—			393,752

Cash and cash equivalents at the end of the year	$	195,037		$	166,107		$	172,604		$	—		$	533,748

Consolidating Statements of Cash Flows


	DaVita HealthCare Partners Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2011
Cash flows from operating activities:
Net income.	$	478,001		$	416,058		$	255,360		$	(576,024	)	$	573,395
Changes in operating assets and liabilities and non cash items included in net income		(230,599	)		287,537			(26,311	)		576,024			606,651

Net cash provided by operating activities		247,402			703,595			229,049			—			1,180,046

Cash flows from investing activities:
Additions of property and equipment, net		(52,653	)		(232,540	)		(114,963	)		—			(400,156	)
Acquisitions		—			(1,048,136	)		(29,306	)		—			(1,077,442	)
Proceeds from asset sales		—			75,183			—			—			75,183
Proceeds from investment sales and other items		(6,077	)		9,264			—			—			3,187

Net cash used in by investing activities		(58,730	)		(1,196,229	)		(144,269	)		—			(1,399,228	)

Cash flows from financing activities:
Long-term debt and related financing costs, net		113,762			(1,896	)		15,794			—			127,660
Intercompany borrowing		(502,763	)		498,532			4,231			—			—
Other items		(291,198	)		(4,002	)		(79,643	)		—			(374,843	)

Net cash (used in) provided by financing activities		(680,199	)		492,634			(59,618	)		—			(247,183	)

Net (decrease) increase in cash and cash equivalents		(491,527	)		—			25,162			—			(466,365	)
Cash and cash equivalents at beginning of the year		856,803			—			3,314			—			860,117

Cash and cash equivalents at the end of the year	$	365,276		$	—		$	28,476		$	—		$	393,752