<SEC-DOCUMENT>0001193125-17-176365.txt : 20170628
<SEC-HEADER>0001193125-17-176365.hdr.sgml : 20170628
<ACCEPTANCE-DATETIME>20170519133855
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-17-176365
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20170519

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DAVITA INC.
		CENTRAL INDEX KEY:			0000927066
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090]
		IRS NUMBER:				510354549
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2000 16TH STREET
		CITY:			DENVER
		STATE:			CO
		ZIP:			80202
		BUSINESS PHONE:		310-536-2668

	MAIL ADDRESS:	
		STREET 1:		2000 16TH STREET
		CITY:			DENVER
		STATE:			CO
		ZIP:			80202

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DAVITA HEALTHCARE PARTNERS INC.
		DATE OF NAME CHANGE:	20121107

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DAVITA INC
		DATE OF NAME CHANGE:	20001005

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TOTAL RENAL CARE HOLDINGS INC
		DATE OF NAME CHANGE:	19950524
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<TITLE>CORRESP</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FOIA Confidential Treatment Request by DaVita Inc. Pursuant to Rule 83
(17&nbsp;C.F.R.&nbsp;200.83) </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


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 </P> <P STYLE="margin-top:24pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">May 19, 2017 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange
Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attention: Mr.&nbsp;Craig Arakawa </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>DaVita Inc.</B> </TD></TR></TABLE>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2016</B> </TD></TR></TABLE>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><B>Filed February&nbsp;24, 2017</B> </TD></TR></TABLE>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;001-14106</FONT></B> </TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Thank you for your letter dated May&nbsp;5, 2017, addressed to Joel Ackerman, Chief Financial Officer of DaVita Inc. (&#147;DaVita&#148; or
the &#147;Company&#148;), setting forth the comment of the staff of the Division of Corporation Finance (the &#147;Staff&#148;) on the Company&#146;s <FONT STYLE="white-space:nowrap">Form&nbsp;10-K</FONT> for the fiscal year ended December&nbsp;31,
2016 filed on February&nbsp;24, 2017 (the &#147;2016 Form <FONT STYLE="white-space:nowrap">10-K&#148;).</FONT> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Due to the commercially
sensitive nature of certain information contained herein, this response letter includes a request for confidential treatment of the portions of this letter highlighted and bracketed below pursuant to Rule 83 of the Commission&#146;s Rules on
Information and Requests (17 C.F.R. &#167; 200.83) (&#147;Rule 83&#148;). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In accordance with Rule 83, the Company requests confidential
treatment of the highlighted and bracketed portions (the &#147;Confidential Material&#148;) of this response letter. Please inform the following person of any request for disclosure of the Confidential Material made pursuant to the Freedom of
Information Act, Privacy Act or otherwise so that the undersigned may substantiate the foregoing request for confidential treatment in accordance with Rule 83: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">DaVita Inc. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">2000 16th Street
</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Denver, Colorado 80202 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Attention: General Counsel </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Telephone number (303) <FONT STYLE="white-space:nowrap">405-2100</FONT> </P>
<P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center">2000 16th Street, Denver, CO 80202&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;P (303)
<FONT STYLE="white-space:nowrap">876-6000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F</FONT> (310)
<FONT STYLE="white-space:nowrap">536-2675&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DaVita.com</FONT></TD></TR>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FOIA Confidential Treatment Request by DaVita Inc. Pursuant to Rule 83
(17&nbsp;C.F.R.&nbsp;200.83) </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">To facilitate the Staff&#146;s review, we have reproduced the Staff&#146;s comment in italics below. Our
response then follows the Staff&#146;s comment. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Year Ended December&nbsp;31, 2016
</U></I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Item 15. Exhibits, Financial Statement Schedules </U></I></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Note 21. Acquisitions and divestitures, page <FONT STYLE="white-space:nowrap">F-39</FONT> </U></I></P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>1.</I></TD>
<TD ALIGN="left" VALIGN="top"><I>We note on August&nbsp;1, 2016 you consummated an agreement with Khazanah Nasional Berhad (Khazanah) and Mitsui and Co., Ltd (Mitsui) whereby Khazanah and Mitsui subscribed to invest a total of $300&nbsp;million over
three years in exchange for a 40% total equity interest in your Asia Pacific JV. Each of the parties made related initial investments of $50&nbsp;million in this business on August&nbsp;1, 2016. Please provide the following:</I> </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><I>In the transcript from your earnings call on November</I><I></I><I>&nbsp;2, 2016, you state &#147;</I><I>&#133;</I><I>at closing, each partner made their first investment tranche of $50</I><I></I><I>&nbsp;million in
return for a 6.7% ownership in the joint venture.&#148; Please tell us and revise to disclose the percentage of ownership interest you held after transferring the 6.7% ownership to each of the joint venture partners on August</I><I></I><I>&nbsp;1,
2016 and clarify why you believe you were no longer the primary beneficiary and no longer held a controlling financial interest of the joint venture at August</I><I></I><I>&nbsp;1, 2016.</I> </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><I>Please clarify your accounting for the remaining $250</I><I></I><I>&nbsp;million you expect to receive over the three year term and provide any other salient terms to the agreement with your joint venture
partners.</I> </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><I>You indicate that the gain of $374,374 on your retained investment was net of contingent obligations. Please explain the nature of the contingent obligations that were considered in your calculation of this gain and
explain how they were valued.</I> </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"><I>Please provide your calculation of the gain recorded upon deconsolidation of the joint venture of $374,374</I><I></I><I>&nbsp;million, including the inputs and valuation techniques used to measure the fair value of
the retained investment in the joint venture. Please also tell us how you considered the $250</I><I></I><I>&nbsp;million to be received in future periods in the gain calculation.</I> </TD></TR></TABLE>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Summary</U>: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On August&nbsp;1, 2016 (the &#147;Closing&#148;), subsidiaries of Khazanah and Mitsui (each an &#147;investor&#148;) subscribed to invest a total of
$300&nbsp;million into our existing Asia Pacific holding company (the &#147;Asia Pacific JV&#148;, &#147;APAC JV&#148; or &#147;joint venture&#148;) over three years in exchange for a 40% equity interest therein. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As described in our May&nbsp;4, 2016 press release announcing the creation of this joint venture, we consider Khazanah and Mitsui to be valuable strategic
partners for development of our Asia Pacific dialysis business. This strategic value includes but is not limited to Khazanah and Mitsui&#146;s knowledge of the Asia Pacific healthcare environment, existing healthcare investments, strategic
relationships, market presence, access to transaction opportunities, and brand and reputation developed with potential strategic partners, targets and employees. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FOIA Confidential Treatment Request by DaVita Inc. Pursuant to Rule 83
(17&nbsp;C.F.R.&nbsp;200.83) </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Specifically, on August&nbsp;1, 2016 the Asia Pacific JV issued voting shares constituting 40% of its total voting
interests to Khazanah and Mitsui in exchange for i) initial equity contributions of $50&nbsp;million from each investor ($100&nbsp;million in total) paid at Closing, and ii) subscriptions for additional equity contributions from each investor on the
first three anniversaries of the Closing (for an additional $200&nbsp;million in total). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The following table summarizes the amounts and timing of these
subscribed capital contributions and the expected voting and economic interests of Khazanah and Mitsui as of each date indicated below: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">[***] </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">DaVita&#146;s current economic interest in the joint venture is 86.67%, while Khazanah and Mitsui each hold a 6.67% current economic interest in the joint
venture (13.33% in total). However, as shown above, the parties&#146; economic interests will adjust to match their voting interests as the subscribed contributions are completed, which subscriptions have been contractually determined at an
established price and are outside of DaVita&#146;s discretion. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">[***] </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In addition to the 40% voting interests issued to the investors at Closing, the shareholders&#146; agreement among DaVita, Khazanah and Mitsui also reserves a
number of substantive participating rights and powers to positive approval of each of Khazanah and Mitsui, including: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">[***] </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>First bullet &#150; Consolidation</U>: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">DaVita considered
consolidation of the Asia Pacific JV on both the voting interest and variable interest routes. While we determined that the voting interest route is most appropriate for this arrangement, we believe that the outcome would be the same on either
route. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To summarize our analysis, pursuant to Accounting Standards Codification <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT
STYLE="white-space:nowrap">Section&nbsp;810-10-15-14,</FONT></FONT></FONT> we determined that: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">a)</TD>
<TD ALIGN="left" VALIGN="top"><I>The APAC JV&#146;s total equity investment at risk is considered sufficient to permit the entity to finance its activities without additional subordinated financial support</I>. [***]; </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">b)</TD>
<TD ALIGN="left" VALIGN="top"><I>As a group the holders of the equity investment at risk do not lack the power to direct the significant activities of the entity, the obligation to absorb the expected losses of the entity, or the right to receive
the expected residual returns of the entity.</I> The substantive participating rights reserved to Khazanah and Mitsui arise directly from and relate solely to their <FONT STYLE="white-space:nowrap">at-risk</FONT> equity interests and are not
detachable therefrom; and </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">c)</TD>
<TD ALIGN="left" VALIGN="top"><I>It is not the case that substantially all of the APAC JV&#146;s activities involve or are conducted on behalf of an investor with disproportionately few voting rights.</I> While DaVita&#146;s 60% voting interest will
be less than its economic interest in the APAC JV&#146;s equity until the subscribed contributions are complete, those subscriptions have been contractually determined at an established price and their effect on DaVita&#146;s economic interest is
outside of DaVita&#146;s discretion. As such, it is not the case that substantially all activities are conducted for the ultimate benefit of either DaVita or of Khazanah or Mitsui. This arrangement is not a disguised attempt to avoid consolidation
by organizing a joint venture with nonsubstantive voting rights. </TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FOIA Confidential Treatment Request by DaVita Inc. Pursuant to Rule 83
(17&nbsp;C.F.R.&nbsp;200.83) </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Given the above, we determined that the APAC JV does not constitute a variable interest entity, but rather is a voting
interest entity. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As a voting interest entity, the participating rights reserved to the investors (as described on page 3) are considered to provide
Khazanah and Mitsui with substantive participation in certain significant financial and operating decisions to be made in the APAC JV&#146;s ordinary course of business. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">These investor participating rights are also not substantively defeased by call options at fair value or less or other rights under which it would be possible
or feasible for DaVita to, directly or indirectly, revoke or override these substantive participating rights. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As a result, we determined that DaVita no
longer holds a unilateral controlling financial interest in the operations or assets of the APAC JV and as such should no longer consolidate the joint venture as of August&nbsp;1, 2016. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In response to your request that we revise our disclosure to clarify the percentage interests of the parties involved, we propose to include a disclosure
statement substantially in the form below within the notes to the financial statements included in our Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarter ended June&nbsp;30, 2017, subsequent Form
<FONT STYLE="white-space:nowrap">10-Qs</FONT> following any change in these percentages, and in our Form <FONT STYLE="white-space:nowrap">10-Ks,</FONT> each at least until such time as the voting and economic interests in the Asia Pacific JV have
become the same for DaVita and its counterparty investors: </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>Proposed disclosure: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>The Company holds a 60% voting interest and an 86.7% current economic interest in DaVita Care Pte. Ltd. (the &#147;APAC JV&#148;), an entity which was
previously a wholly-owned subsidiary of the Company. Based on the governance structure and voting rights established for the APAC JV, certain key decisions affecting the joint venture&#146;s operations are no longer at the unilateral discretion of
the Company, but rather are shared with other noncontrolling investors. </I></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>These other noncontrolling investors collectively hold a 40% voting
interest and a 13.3% current economic interest in the APAC JV. The economic interests of these other noncontrolling investors are expected to increase to match their voting interests in the APAC JV as they make additional subscribed capital
contributions through August&nbsp;1, 2019. Each of these other noncontrolling investors also holds reserved approval rights over certain key decisions affecting the joint venture&#146;s operations. As a result, the Company has no longer consolidated
the APAC JV since its formation on August&nbsp;1, 2016. </I></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Second bullet &#150; Accounting for remaining contributions</U>: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Asia Pacific JV will receive the remaining $200&nbsp;million in subscribed capital contributions directly (see the table of subscribed contributions on
page 3), and will record them as additional <FONT STYLE="white-space:nowrap">paid-in</FONT> capital at the time received. Other salient features of the joint venture are as described under the section titled &#147;Summary&#148; on page 2. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Since DaVita no longer consolidates the APAC JV, the joint venture&#146;s receipt of these contributions will not directly affect DaVita&#146;s consolidated
financial statements. However, from and after each incremental capital contribution, DaVita&#146;s share of equity investment income will be adjusted prospectively to reflect its declining economic interest in the joint venture, as shown in the
table on page 3. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">4 </P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FOIA Confidential Treatment Request by DaVita Inc. Pursuant to Rule 83
(17&nbsp;C.F.R.&nbsp;200.83) </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Third bullet &#150; Contingent obligations</U>: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The gain of $374.4&nbsp;million that we recognized on our retained investment in the Asia Pacific JV upon deconsolidation was net of $20.9&nbsp;million in
contingent obligations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">These contingent obligations represented our retained obligations to fund the buyout of
<FONT STYLE="white-space:nowrap">pre-existing</FONT> noncontrolling interests in principally two of the Asia Pacific JV&#146;s subsidiaries. We estimated the fair value of these contingent buyout obligations internally. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">For one of these two subsidiaries, we estimated the fair value of the retained buyout obligation based on information from then-recent negotiations on the
buyout itself, and for the other subsidiary we estimated the fair value of the retained buyout obligation based on a prior external valuation of the business performed for goodwill impairment testing purposes. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As of March&nbsp;31, 2017, we had completed these two principal noncontrolling interest buyouts for total consideration of approximately $13.6&nbsp;million,
resulting in a $6.3&nbsp;million gain on changes in ownership recognized as a change in estimate in our income statement for the first quarter of 2017. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As of March&nbsp;31, 2017, we also had $1&nbsp;million remaining accrued for one minor retained noncontrolling interest buyout obligation that remains
outstanding, which we also estimated the fair value of internally. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Fourth bullet &#150; Gain calculation</U>: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The following summarizes our calculation of the $374.4&nbsp;million gain that we recognized on our retained investment in the Asia Pacific JV upon its
deconsolidation in the third quarter of 2016: </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" ALIGN="center">


<TR>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>


<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">&nbsp;</TD>
<TD VALIGN="top" ALIGN="right">$445.4&nbsp;million</TD>
<TD NOWRAP VALIGN="top">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&#150; &nbsp;&nbsp;estimated fair value of our retained investment in the APAC JV</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">&nbsp;</TD>
<TD VALIGN="top" ALIGN="right">&nbsp;&nbsp;(20.9&nbsp;million</TD>
<TD NOWRAP VALIGN="top">)&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&#150; &nbsp;&nbsp;estimated fair value of contingent obligations retained (discussed above)</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">&nbsp;</TD>
<TD VALIGN="top" ALIGN="right">(50.1&nbsp;million</TD>
<TD NOWRAP VALIGN="top">)&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&#150; &nbsp;&nbsp;estimated carrying value of our investment in the APAC JV prior to deconsolidation*</TD></TR>
<TR STYLE="font-size:1px; ">
<TD VALIGN="bottom"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">&nbsp;</TD>
<TD VALIGN="top" ALIGN="right">$374.4&nbsp;million</TD>
<TD NOWRAP VALIGN="top">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&#150; &nbsp;&nbsp;gain recognized on our retained investment in the APAC JV upon deconsolidation</TD></TR>
</TABLE> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">*</TD>
<TD ALIGN="left" VALIGN="top">As disclosed in Note 21 to our consolidated financial statements included in our 2016 Form <FONT STYLE="white-space:nowrap">10-K,</FONT> the computation of this gain remains subject to certain post-closing separation
adjustments that may result from audits of the APAC JV&#146;s financial statements that are not yet completed. Any such remaining adjustments are expected to be insignificant. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We estimated the fair value of our retained investment in the Asia Pacific JV with the assistance of an independent third party valuation firm. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">To estimate the fair value of our retained investment, we first estimated the total equity fair value of the Asia Pacific JV at $742.4&nbsp;million based on
the <FONT STYLE="white-space:nowrap">DaVita-Khazanah-Mitsui</FONT> transaction. DaVita&#146;s 60% share of this $742.4&nbsp;million total equity value was $445.4&nbsp;million. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The total equity fair value estimate of $742.4&nbsp;million was interpolated using an option-pricing framework. Specifically, we used a three-year lattice
model which incorporated the terms of the Khazanah-Mitsui investment, including each of their initial $50&nbsp;million contributions, their remaining subscribed capital contributions, and the related forfeiture options. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">5 </P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>FOIA Confidential Treatment Request by DaVita Inc. Pursuant to Rule 83
(17&nbsp;C.F.R.&nbsp;200.83) </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The key inputs in the lattice model included: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The initial $50&nbsp;million contribution from each investor ($100&nbsp;million in total), </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The terms of the remaining subscribed capital contributions and related forfeiture options, </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The three-year constant maturity treasury rate of 0.78%, and </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">A volatility estimate of 20%, derived based on the equity volatility of companies in the healthcare sector in the Asia Pacific region. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are available to discuss any of our responses above at your convenience. Please do not hesitate to contact the undersigned at <FONT
STYLE="white-space:nowrap">(253)&nbsp;733-4500.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt">


<TR>
<TD WIDTH="100%"></TD></TR>


<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Sincerely,</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">/s/ James K. Hilger</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">James K. Hilger</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Chief Accounting
Officer</P></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">6 </P>

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