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 Senior 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 Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For twelve months ended December 31, 2017
Dialysis and related lab patient service revenues	$	—		$	6,884,750		$	3,393,026		$	(184,106	)	$	10,093,670
Less: Provision for uncollectible accounts	—			(340,586		)	(151,982		)	7,170			(485,398		)
Net dialysis and related lab patient service revenues	—			6,544,164			3,241,044			(176,936		)	9,608,272
Other revenues	793,751			1,204,501			68,322			(798,212		)	1,268,362
Total net revenues	793,751			7,748,665			3,309,366			(975,148		)	10,876,634
Operating expenses and charges	527,942			6,475,550			3,035,535			(975,148		)	9,063,879
Operating income	265,809			1,273,115			273,831			—			1,812,755
Debt expense	(426,149		)	(209,612		)	(34,831		)	239,958			(430,634		)
Other income, net	411,731			11,169			18,467			(423,702		)	17,665
Income tax expense	65,965			237,670			20,224			—			323,859
Equity earnings in subsidiaries	478,192			74,375			—			(552,567		)	—
Net income from continuing operations	663,618			911,377			237,243			(736,311		)	1,075,927
Net (loss) income from discontinued operations, net of tax	—			(433,185		)	4,069			183,744			(245,372		)
Net income	663,618			478,192			241,312			(552,567		)	830,555
Less: Net income attributable to noncontrolling interests	—			—			—			(166,937		)	(166,937		)
Net income attributable to DaVita Inc.	$	663,618		$	478,192		$	241,312		$	(719,504	)	$	663,618

For twelve months ended December 31, 2016
Dialysis and related lab patient service revenues	$	—		$	6,665,601		$	3,215,085		$	(153,326	)	$	9,727,360
Less: Provision for uncollectible accounts	—			(272,430		)	(158,878		)	—			(431,308		)
Net dialysis and related lab patient service revenues	—			6,393,171			3,056,207			(153,326		)	9,296,052
Other revenues	767,791			1,378,956			30,184			(765,516		)	1,411,415
Total net revenues	767,791			7,772,127			3,086,391			(918,842		)	10,707,467
Operating expenses and charges	493,175			6,907,469			2,195,955			(918,842		)	8,677,757
Operating income	274,616			864,658			890,436			—			2,029,710
Debt expense	(407,925		)	(191,083		)	(40,434		)	225,326			(414,116		)
Other income, net	396,797			3,726			7,694			(400,706		)	7,511
Income tax expense	77,334			238,446			115,981			—			431,761
Equity earnings in subsidiaries	693,720			667,278			—			(1,360,998		)	—
Net income from continuing operations	879,874			1,106,133			741,715			(1,536,378		)	1,191,344
Net (loss) income from discontinued operations, net of tax	—			(412,413		)	78,771			175,380			(158,262		)
Net income	879,874			693,720			820,486			(1,360,998		)	1,033,082
Less: Net income attributable to noncontrolling interests	—			—			—			(153,208		)	(153,208		)
Net income attributable to DaVita Inc.	$	879,874		$	693,720		$	820,486		$	(1,514,206	)	$	879,874

Consolidating Statements of Income - (continued)



	DaVita Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For twelve months ended December 31, 2015
Dialysis and related lab patient service revenues	$	—		$	6,471,702		$	2,814,909		$	(131,164	)	$	9,155,447
Less: Provision for uncollectible accounts	—			(281,976		)	(130,929		)	—			(412,905		)
Net dialysis and related lab patient service revenues	—			6,189,726			2,683,980			(131,164		)	8,742,542
Other revenues	727,887			1,208,607			24,013			(720,804		)	1,239,703
Total net revenues	727,887			7,398,333			2,707,993			(851,968		)	9,982,245
Operating expenses and charges	488,595			6,925,234			2,283,618			(851,968		)	8,845,479
Operating income	239,292			473,099			424,375			—			1,136,766
Debt (expense) and refinancing charges	(449,598		)	(178,389		)	(32,450		)	203,985			(456,452		)
Other income, net	365,752			1,261			6,921			(365,861		)	8,073
Income tax expense (benefit)	60,671			163,401			(16,562		)	—			207,510
Equity earnings in subsidiaries	174,957			322,022			—			(496,979		)	—
Net income from continuing operations	269,732			454,592			415,408			(658,855		)	480,877
Net (loss) income from discontinued operations, net of tax	—			(279,635		)	64,292			161,876			(53,467		)
Net income	269,732			174,957			479,700			(496,979		)	427,410
Less: Net income attributable to noncontrolling interests	—			—			—			(157,678		)	(157,678		)
Net income attributable to DaVita Inc.	$	269,732		$	174,957		$	479,700		$	(654,657	)	$	269,732

Consolidating Statements of Comprehensive Income



	DaVita Inc.			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2017
Net income	$	663,618		$	478,192	$	241,312		$	(552,567	)	$	830,555
Other comprehensive income	3,106			—		99,770			—			102,876
Total comprehensive income	666,724			478,192		341,082			(552,567		)	933,431
Less: Comprehensive income attributable to noncontrolling interest	—			—		—			(166,935		)	(166,935		)
Comprehensive income attributable to DaVita Inc.	$	666,724		$	478,192	$	341,082		$	(719,502	)	$	766,496

For the year ended December 31, 2016
Net income	$	879,874		$	693,720	$	820,486		$	(1,360,998	)	$	1,033,082
Other comprehensive loss	(290		)	—		(29,337		)	—			(29,627		)
Total comprehensive income	879,584			693,720		791,149			(1,360,998		)	1,003,455
Less: Comprehensive income attributable to noncontrolling interest	—			—		—			(153,398		)	(153,398		)
Comprehensive income attributable to DaVita Inc.	$	879,584		$	693,720	$	791,149		$	(1,514,396	)	$	850,057

For the year ended December 31, 2015
Net income	$	269,732		$	174,957	$	479,700		$	(496,979	)	$	427,410
Other comprehensive loss	(10,920		)	—		(23,889		)	—			(34,809		)
Total comprehensive income	258,812			174,957		455,811			(496,979		)	392,601
Less: Comprehensive income attributable to noncontrolling interest	—			—		—			(157,678		)	(157,678		)
Comprehensive income attributable to DaVita Inc.	$	258,812		$	174,957	$	455,811		$	(654,657	)	$	234,923

Consolidating Balance Sheets



	DaVita Inc.		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Total
As of December 31, 2017
Cash and cash equivalents	$	149,305	$	—	$	358,929	$	—		$	508,234
Accounts receivable, net	—		1,208,715		506,035		—			1,714,750
Other current assets	68,027		604,450		87,255		—			759,732
Current assets held for sale	—		4,992,067		769,575		—			5,761,642
Total current assets	217,332		6,805,232		1,721,794		—			8,744,358
Property and equipment, net	408,010		1,560,390		1,180,813		—			3,149,213
Intangible assets, net	250		50,971		62,606		—			113,827
Investments in subsidiaries	10,009,874		3,085,722		—		(13,095,596		)	—
Intercompany receivables	3,677,947		—		1,313,213		(4,991,160		)	—
Other long-term assets and investments	47,297		68,344		214,875		—			330,516
Goodwill	—		4,732,320		1,877,959		—			6,610,279
Total assets	$	14,360,710	$	16,302,979	$	6,371,260	$	(18,086,756	)	$	18,948,193
Current liabilities	$	238,706	$	1,181,139	$	436,262	$	—		$	1,856,107
Current liabilities held for sale	—		739,294		445,776		—			1,185,070
Total current liabilities	238,706		1,920,433		882,038		—			3,041,177
Intercompany payables	—		3,690,042		1,301,118		(4,991,160		)	—
Long-term debt and other long-term liabilities	8,857,373		682,630		469,587		—			10,009,590
Noncontrolling interests subject to put provisions	574,602		—		—		436,758			1,011,360
Total DaVita Inc. shareholders' equity	4,690,029		10,009,874		3,085,722		(13,095,596		)	4,690,029
Noncontrolling interests not subject to put provisions	—		—		632,795		(436,758		)	196,037
Total equity	4,690,029		10,009,874		3,718,517		(13,532,354		)	4,886,066
Total liabilities and equity	$	14,360,710	$	16,302,979	$	6,371,260	$	(18,086,756	)	$	18,948,193

Consolidating Balance Sheets - (continued)



	DaVita Inc.		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Total
As of December 31, 2016
Cash and cash equivalents	$	549,921	$	—	$	124,855	$	—		$	674,776
Accounts receivable, net	—		1,048,580		455,370		—			1,503,950
Other current assets	277,911		462,684		114,471		—			855,066
Current assets held for sale	—		514,407		446,549		—			960,956
Total current assets	827,832		2,025,671		1,141,245		—			3,994,748
Property and equipment, net	337,200		1,444,248		1,082,673		—			2,864,121
Intangible assets, net	487		42,037		30,980		—			73,504
Investments in subsidiaries	9,717,728		2,021,062		—		(11,738,790		)	—
Intercompany receivables	3,250,692		—		866,955		(4,117,647		)	—
Other long-term assets and investments	39,994		73,466		442,433		—			555,893
Goodwill	—		4,480,344		1,535,031		—			6,015,375
Long-term assets held for sale	—		5,066,453		185,682		—			5,252,135
Total assets	$	14,173,933	$	15,153,281	$	5,284,999	$	(15,856,437	)	$	18,755,776
Current liabilities	$	303,840	$	1,343,748	$	256,143	$	—		$	1,903,731
Current liabilities held for sale	—		533,250		273,983		—			807,233
Total current liabilities	303,840		1,876,998		530,126		—			2,710,964
Intercompany payables	—		2,382,428		1,735,219		(4,117,647		)	—
Long-term debt and other long-term liabilities	8,614,445		835,845		342,638		—			9,792,928
Long-term liabilities held for sale	—		340,282		88,603		—			428,885
Noncontrolling interests subject to put provisions	607,601		—		—		365,657			973,258
Total DaVita Inc. shareholders' equity	4,648,047		9,717,728		2,021,062		(11,738,790		)	4,648,047
Noncontrolling interests not subject to put provisions	—		—		567,351		(365,657		)	201,694
Total equity	4,648,047		9,717,728		2,588,413		(12,104,447		)	4,849,741
Total liabilities and equity	$	14,173,933	$	15,153,281	$	5,284,999	$	(15,856,437	)	$	18,755,776

Consolidating Statements of Cash Flow



	DaVita Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2017
Cash flows from operating activities:
Net income	$	663,618		$	478,192		$	241,312		$	(552,567	)	$	830,555
Changes in operating assets and liabilities and non-cash items included in net income	(534,302		)	366,947			691,682			552,567			1,076,894
Net cash provided by operating activities	129,316			845,139			932,994			—			1,907,449
Cash flows from investing activities:
Additions of property and equipment, net	(155,972		)	(490,800		)	(258,478		)	—			(905,250		)
Acquisitions	—			(693,522		)	(110,357		)	—			(803,879		)
Proceeds from asset sales, net of cash divested	—			90,340			1,996			—			92,336
Investments and other items	211,619			(9,003		)	47,446			—			250,062
Net cash provided by (used in) investing activities	55,647			(1,102,985		)	(319,393		)	—			(1,366,731		)
Cash flows from financing activities:
Long-term debt and related financing costs, net	173,529			(12,662		)	(6,019		)	—			154,848
Intercompany borrowing	22,589			218,980			(241,569		)	—			—
Other items	(781,697		)	(2,493		)	(136,915		)	—			(921,105		)
Net cash (used in) provided by financing activities	(585,579		)	203,825			(384,503		)	—			(766,257		)
Effect of exchange rate changes on cash	—			—			254			—			254
Net (decrease) increase in cash and cash equivalents	(400,616		)	(54,021		)	229,352			—			(225,285		)
Less: Net decrease in cash and cash equivalents from discontinued operations	—			(54,021		)	(4,722		)	—			(58,743		)
Net (decrease) increase in cash and cash equivalents from continuing operations	(400,616		)	—			234,074			—			(166,542		)
Cash and cash equivalents of continuing operations at beginning of the year	549,921			—			124,855			—			674,776
Cash and cash equivalents of continuing operations at end of the year	$	149,305		$	—		$	358,929		$	—		$	508,234

Consolidating Statements of Cash Flow - (continued)



	DaVita Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2016
Cash flows from operating activities:
Net income	$	879,874		$	693,720		$	820,486		$	(1,360,998	)	$	1,033,082
Changes in operating assets and liabilities and non-cash items included in net income	(612,706		)	350,684			(168,614		)	1,360,998			930,362
Net cash provided by operating activities	267,168			1,044,404			651,872			—			1,963,444
Cash flows from investing activities:
Additions of property and equipment, net	(139,303		)	(382,305		)	(307,487		)	—			(829,095		)
Acquisitions	—			(472,413		)	(91,443		)	—			(563,856		)
Proceeds from asset and business sales, net of cash divested	—			70,342			(5,617		)	—			64,725
Investments and other items	153,031			(29,038		)	2,565			—			126,558
Net cash provided by (used in) investing activities	13,728			(813,414		)	(401,982		)	—			(1,201,668		)
Cash flows from financing activities:
Long-term debt and related financing costs, net	(92,460		)	(27,830		)	(4,152		)	—			(124,442		)
Intercompany borrowing	236,052			(231,800		)	(4,252		)	—			—
Other items	(1,061,203		)	(21,525		)	(144,811		)	—			(1,227,539		)
Net cash used in financing activities	(917,611		)	(281,155		)	(153,215		)	—			(1,351,981		)
Effect of exchange rate changes on cash	—			—			4,276			—			4,276
Net (decrease) increase in cash and cash equivalents	(636,715		)	(50,165		)	100,951			—			(585,929		)
Less: Net (decrease) increase in cash and cash equivalents from discontinued operations	—			(50,165		)	34,377			—			(15,788		)
Net (decrease) increase in cash and cash equivalents from continuing operations	(636,715		)	—			66,574			—			(570,141		)
Cash and cash equivalents of continuing operations at beginning of the year	1,186,636			—			58,281			—			1,244,917
Cash and cash equivalents of continuing operations at end of the year	$	549,921		$	—		$	124,855		$	—		$	674,776

Consolidating Statements of Cash Flow - (continued)



	DaVita Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
For the year ended December 31, 2015
Cash flows from operating activities:
Net income	$	269,732		$	174,957		$	479,700		$	(496,979	)	$	427,410
Changes in operating assets and liabilities and non-cash items included in net income	(125,981		)	684,760			74,032			496,979			1,129,790
Net cash provided by operating activities	143,751			859,717			553,732			—			1,557,200
Cash flows from investing activities:
Additions of property and equipment, net	(115,269		)	(319,695		)	(273,034		)	—			(707,998		)
Acquisitions	—			(76,983		)	(19,486		)	—			(96,469		)
Proceeds from asset sales	—			19,715			—			—			19,715
Investments and other items	(74,474		)	(2,144		)	(20,414		)	—			(97,032		)
Net cash used in investing activities	(189,743		)	(379,107		)	(312,934		)	—			(881,784		)
Cash flows from financing activities:
Long-term debt and related financing costs, net	640,009			(11,953		)	(8,358		)	—			619,698
Intercompany borrowing	466,038			(370,839		)	(95,199		)	—			—
Other items	(572,295		)	(66,382		)	(119,991		)	—			(758,668		)
Net cash provided by (used in) financing activities	533,752			(449,174		)	(223,548		)	—			(138,970		)
Effect of exchange rate changes on cash	—			—			(2,571		)	—			(2,571		)
Net increase in cash and cash equivalents	487,760			31,436			14,679			—			533,875
Less: Net increase (decrease) in cash and cash equivalents from discontinued operations	—			31,436			(5,581		)	—			25,855
Net increase in cash and cash equivalents from continuing operations	487,760			—			20,260			—			508,020
Cash and cash equivalents of continuing operations at beginning of the year	698,876			—			38,021			—			736,897
Cash and cash equivalents of continuing operations at end of the year	$	1,186,636		$	—		$	58,281		$	—		$	1,244,917