CFA Research Challenge analyzes DaVita HealthCare Partners

CFA Institute Research Challenge
Hosted by CFA Society Colorado
University of Northern Colorado, Monfort College of Business

University of Northern Colorado – Student Research
Healthcare Industry
New York Stock Exchange
DaVita HealthCare Partners Inc.
Date: 1/14/2016 Current Price: $67.48 (1/14/2016) Recommendation: Strong Sell
Ticker: DVA Headquarters: Denver, Colorado Target Price: $55.00
Key Stats
52-Week High/Low $85.17/$65.79
Market Cap 14,232.60
Dividend Yield 0%
Beta 1.1
Debt/Equity 62.4%/37.6%
Volume (mm) 1.77
Highlights
Under analysis and valuation, we have come to
the recommendation for DaVita HealthCare
Partners (DaVita HCP) as a Strong Sell, using
our target price of $55.00. We have come to this
determination for the following reasons:
• Lack of Growth Prospects
o HealthCare Partners 24% of
business
o International strategy lacking
• Demographic Issues
o Based on population and
obesity, future growth
prospects in the United States
Kidney Care is less than
average
• Government Compliance
o Highly regulated to inhibit high
revenue growth
o Costly to maintain them
o Several litigations and
Settlements for Unethical
Behavior
• Investment Risks
o Diabetes increasing at a
decreasing rate
o Governmental revenue cuts
Recent News
• “DaVita to Pay $389 Million to Settle
Federal Charges of Illegal Kickbacks” –
New York Times
• “DaVita way of giving” provides two
million dollars to local charities.
• HealthCare Partners recognized again
for high levels of Medicare advantage
quality treatment.
• The Everett Clinic Shareholders
approve merger with DaVita
HealthCare Partners
• DaVita HealthCare Partners named best
military friendly employer in Health
Care Industry
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DVA vs SPY
DVA
SPY
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2015 2016e2017e2018e2019e2020e
Free Cash Flow

Figure 1: Total Revenue ($ in millions)
Source: Company Data
Table 1: US Kidney Care Facilities
Year Facilities Growth %
2011 1812
2012 1954 7.84%
2013 2074 6.14%
2014 2179 5.06%
2015E 2104 -3.44%
2016E 2202 4.64%
2017E 2254 2.37%
2018E 2307 2.35%
2019E 2361 2.34%
2020E 2415 2.32%
Table 2: International Kidney Care
Facilities
Year Facilities Growth %
2011 8
2012 36 350%
2013 73 103%
2014 91 25%
2015E 104 14%
2016E 123 18%
2017E 142 16%
2018E 162 13%
2019E 181 12%
2020E 200 11%
Overview
The healthcare industry has been experiencing a shift from hospital-based care to
non-acute settings over the last decade. Healthcare markets transforming to a
value-based payment system accelerate this shift further. The increasing demand
requires physician practices and ancillary providers to be effective in their overall
operational performance of care delivery in order to stay profitable. Although
diverse in scope, all non-acute care organizations face similar challenges—rising
costs, margin pressures and shrinking reimbursements. Approximately 123,000
non-acute care providers, such as physician groups, outpatient medical and
surgery centers, diagnostic laboratories, home health and long-term care providers
currently leverage Med Assets technology solutions. By sourcing strategies and
collective purchasing power of thousands of hospitals, health systems and peers
are able to realize greater savings and an increased bottom line, while maintaining
quality and patient satisfaction.
DaVita HealthCare Partners Inc. (NYSE: DVA) was incorporated in 1994 and
is headquartered in Denver, CO. In 2011 DaVita then acquired HealthCare
Partners and now operates as two separate divisions: DaVita and HealthCare
Partners. DaVita is one of the main providers of kidney dialysis services for
comprehensive care for kidney failure and HealthCare Partners offering healthcare
management.
Revenue Drivers
A main revenue source for DaVita comes from their Kidney Care services,
bringing a high market share of kidney dialysis care at every stage. While holding
offices internationally, the lion’s share of revenue come from domestic operations.
More than 2,000 dialysis centers are currently under management, both
internationally and domestically. DaVita’s Kidney Care serves approximately
187,000 patients in 46 states, and 11 countries. Kidney Care operations have three
subsidiaries: VillageHealth, DaVita Rx, and Lifeline Vascular Access.
The acquisition of HealthCare Partners (HCP) strategically diversifies and updates
DaVita’s operations within healthcare management. This company holds 1,300
team physicians and extenders, and just under one million patients. HCP has 221
clinics and 240 affiliated (in network) hospitals. HCP focuses its strategy in
California, Nevada, New Mexico, Arizona, Colorado, Florida, and Pennsylvania.
HCP has three types of membership they manage, Medicare Advantage,
Commercial, and Medicaid. See Figure 1.0
Corporate Governance and Social Responsibility
DaVita’s corporate governance and corporate social responsibility (CSR) are
moderately rated overall
• We believe this area of the company remains strong and enhances growth
ultimately increasing long term value. The company’s ability to deliver
exceptional service within their industry is increasing with further
expansion. Their efforts to improve relations with clients, employees and
shareholders are making an impact through number of committees, which
provide a strong and effective chain of command. DaVita HCP is able to
accomplish goals with a strong executive management team. DaVita’s
quality of governance was measured in four important facets:
• Shareholder Rights – One vote per share policy; minority shareholders
have the ability to have their votes count, while larger shareholders are not
able to have a substantial input (Appendix 11)
• Board of Directors – Nine directors to serve one year terms, by majority
vote; responsibilities are to establish audit, compensation, nominating and
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$2,000.00
$4,000.00
$6,000.00
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$14,000.00
$16,000.00
2012 2013 2014 Q3
2015

Figure 2: 2014 US Dialysis Centers, Top 5
States
Figure 3: Historical Cap Structure: Book
Value
Figure 4: US Population Projections (in
000s)
governance compliance, public policy and clinical performance
committees. (Appendix 9)
• Audit and Oversight – audit committee is responsible for legal and
regulatory risk oversight, while the compliance committee’s primary
responsibility is to oversee healthcare legal and regulatory compliance.
Committees meet regularly with chief legal officer and chief compliance
officer to identify and lessen risk exposure. An audit officer is appointed
by audit committee and an independent registered Public Accounting
Firm, KPMG LLP. (Appendix 10&12)
• Compensation – reveals compensation polices and beneficial ownership
of management. Compensation for executive officers varies depending on
base salary as well as company and individual performance. These include
cash and stock options. (Appendix 16)
Corporate Social Responsibility (Sustainability)
DaVita HCP’s commitment to improving the lives of their patients and the
community are of great importance. Their CSR is effective in accomplishing its
goals. In order to be a leader in American healthcare, DaVita must involve the
corporate community.
• The Trilogy of Care- Caring for their patients, each other and the world- is
DVAHCP vision for social responsibility and is used as a philosophy for
balance business responsibility. DVA hosts a number of events that raise
money and provide dialysis service treatment to people around the world.
(Appendix 15)
• Improving health: Integrated care and Empowering patients
• Engaging Communities: Sustainability, philanthropy and community
service.
Industry Overview
Market Drivers
Key drivers for dialysis care providers derive from obesity rates along with age.
These are major factors in contracting diabetes and necessitate dialysis treatment.
The other major force affecting the profitability of dialysis treatment is the
reimbursement rates paid to dialysis care providers by the government and
commercial payers. New regulation in the healthcare industry depresses the
reimbursement rates paid by top payers like Medicare and Medicaid and reduce
the profitability of treatment forcing care providers to maximize operating
efficiency.
Increasing Rates of Diabetes Result in High Incidents of Dialysis Treatment
Projections show a 165 percent increase in patients diagnosed with diabetes from
approximately 11 million patients in 2000 to approximately 29 million patients in
2050.This startling increase fails to encompass the short-term growth of new
diagnosis of diabetes in the immediate term. Annual rates of new diagnosis of
diabetes show that for the first time in 25 years, there has been a gradual decline
of patients being diagnosed with diabetes from approximately 1.7 million new
diagnosed patients in 2009 to only 1.4 million in 2014 within the United States.
This captures a trend reflecting healthier lifestyles influenced by proper diet and
exercise. Another theory addressing the decline in new patients diagnosed with
diabetes is the possible peak in the diabetes population which can be projected to
remain stable instead of increase. While the amount of diabetes patients seems to
be increasing through 2050, the amount of newly diagnosed patients annually is
actually declining.
Ageing Population To Produce More Chronic Kidney Disorders
The average age of a patient undergoing dialysis treatment is 64 years old.[3] In
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California
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Ohio
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2012 2013 2014 Q3 2015
Total Minority Interest
Total Equity
Total Debt

Source: U.S. Census Bureau
Figure 5: US Average Obesity Projections
Source: Stateofobesity.org
Figure 6: DVA Countries of Interest 2014
Population (in 000s)
Source: CIA World Fact Book
2014, people of the age of 65 years or older made up approximately 14.5 percent
of the total US population. Forward projections show a 112 percent increase in
this age category for the domestic population. This could possibly be the most
attractive segment for dialysis care providers as an ageing population represents a
larger pool of possible patients that could suffer from chronic kidney disorders.
Government Reimbursement Policies for Dialysis Procedures
Sixty-six percent of DaVita Healthcare’s revenue is derived from Medicare and
Medicaid which makes up approximately 90 percent of their treatments.
Commercial payers represent more attractive options and prove to be significantly
more profitable than Medicare or Medicaid but represent only a small portion of
the patients being treated. Regulation has commercial payers make only 30
months of payments before reverting to the less profitable Medicare rates. (I’m
sure we’ll have some type of revenue breakdown visual here but it would be good
to include something else that shows how vulnerable DaVita is to rate decreases.)
Average Rates That Commercial Payers Pay Likely to Decline
In the 2nd
quarter of 2015, two planned mergers of large commercial payers were
announced and if completed would put increased pressure on dialysis rates that
DaVita and other dialysis care providers receive. It can be concluded that rates
will not likely increase in the future and only show signs of decreasing, forcing
major healthcare providers like DaVita to expand operations and further capture
economies of scale to reduce operating costs. Consolidation between commercial
payers gives them more leverage when negotiating future rates, further depressing
margins per treatment for DaVita.
Healthcare Partners Acquisition Step in Right Direction but Not Perfect
Solution
The 2011 strategic acquisition of HCP was a way for DaVita to capitalize on a
shifting healthcare system and gain more of a presence in healthcare management.
While a step in the right direction, HCP’s business model can be easily replicated
and represents a part of the managed healthcare market segment that is still in
infancy. In the short term horizon, HCP revenues make up only a small portion of
DaVita’s overall revenue and will remain that way for the next three to five years.
Competitive Positioning
With nearly 70 percent of the dialysis treatment market comprised of only two
companies, DaVita and Fresenius, a duopoly practically exists which gives DaVita
a favorable market position. By making up nearly a third of the market, DaVita is
able to accomplish economies of scale that smaller competitors are unable to
achieve. This sets DaVita up for expansion through both the construction of new
facilities as well as acquiring smaller ones, further increasing market share.
Because the dialysis treatment market is comprised of only two major players,
very few options exist domestically when seeking dialysis treatment. By owning a
vast number of facilities, operating within a market characterized by razor thin
margins and high barriers of entry, DaVita holds a favorable position amongst
other competitors. The major factor in remaining profitable for DaVita will be
their ability to expand operations domestically and abroad in order to combat
declining rates paid to them by payers.
Investment Summary
We issues a SELL recommendation on DaVita Health Care (DVA) with a target
price of $55 using a Free Cash flow Analysis and multiple Relative Valuations,
DVA does not pay a dividend so no dividend discount model could be used. This
valuation is supported by many concerns surrounding DaVita’s business
operational risks as well as a few merits.
Concerns
316,000
320,000
324,000
328,000
332,000
336,000
2016 2017 2018 2019 2020
28.5%
29.0%
29.5%
30.0%
30.5%
31.0%
31.5%
32.0%
2016 2017 2018 2019 2020
-
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
Malaysia
Colombia
Germany
India
Poland
Portugal
Taiwan
SaudiArabia
China
Singapore

Figure 7: DVA Countries of Interest
Obesity Rates
Source: WorldObesity.org
Figure 8: 2014 US Dialysis Revenues by
Source
Source: Team Calculations
Facility Growth
In the United States while increasing population provides opportunity for new
dialysis centers, Obesity rates have started to increase at slower rates. We believe
obesity is a key driver to open up new facilities, while this has started to flatten
out there will be insufficient patients to fill newly opened and acquired dialysis
centers. This is shown by the 75 centers that have been lost in the U.S. in 2015.
DVA has started to focus its growth internationally, while this sounds like a good
there is a strong competition and saturated markets around Europe and most of
Asia. We believe that DaVita has somewhat of an unorganized international
growth strategy because of the low correlation between facility growth and
country demographics. While HCP does provide a nice future revenue growth of
8%, they only account for 27% of revenue.
Litigations
DVA has incurred many lawsuits over the past few years, most recently to the
Atlanta whistle blowers case that cost them $495 million. While the lawsuits are
not substantially harmful for the bottom line, they generate large amounts of
negative publicity. DVA is operating in an industry and country where good
publicity, such as high quality services and engagement within the community
would be ignored by the public, but one single law suit can produce bad publicity
for several years.
Stability of Revenues
Even though dialysis facilities are starting to become saturated across the United
States and the world, kidney dialysis centers will always be needed and there is no
permanent cure known yet so revenues will always be stable. DaVita carries a
prestigious brand name based on ratings received.
Excellent Service
DVA’s quality of care is strong. 84% of DVA patients are in four or five star
facilities. This does two things for DVA, one is people hear about that and they
want to get the best quality of care, and in the United States DVA gets a five
percent bonus on four or five star ratings centers.
Financial Analysis
Financial Condition 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
Profitability
NOI / EBITDA Margin 52.1% 49.4% 47.8% 48.7% 48.7% 48.7% 48.7% 48.6%
Operating Profit Margin 15.8% 14.2% 13.7% 17.8% 17.7% 17.5% 17.3% 17.1%
Net profit margin 5.4% 5.7% 3.6% 5.7% 5.8% 5.8% 5.8% 5.8%
Return on Assets 3.7% 4.0% 3.4% 3.7% 3.8% 3.9% 4.0% 4.1%
Return on Equity 11.9% 11.7% 10.6% 11.5% 10.5% 9.7% 9.0% 8.4%
Liquidity
Current Ratio 1.41x 1.86x 1.97x 1.99x 2.x 2.x 2.01x 2.01x
Cash Ratio 0.38x 0.46x 0.43x 0.42x 0.42x 0.42x 0.42x 0.43x
Efficiency
Accounts Receivable Turnover
8.08 8.49 11.19 6.99 6.01 6.01 6.01 6.00
Total Asset Turnover 0.69x 0.71x 0.95x 0.64x 0.66x 0.67x 0.69x 0.7x
Fixed Asset Turnover 5.37x 5.18x 6.88x 4.87x 4.87x 4.87x 4.87x 4.87x
Financial Leverage
Long-term Debt to Assets 0.55x 0.54x 0.55x 0.56x 0.56x 0.57x 0.57x 0.57x
Long-term Debt to Equity 1.76x 1.56x 1.71x 1.74x 1.56x 1.41x 1.29x 1.19x
Debt to Equity 2.22x 1.9x 2.1x 2.11x 1.89x 1.72x 1.57x 1.45x
0.0%
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Malaysia
Colombia
Germany
India
Poland
Portugal
Taiwan
SaudiArabia
China
Singapore
58%
6%
3%
33%
Medicare and Medicare-assigned plans
Medicaid and Medicaid-assigned plans
Other government-based programs
Commercial

Figure 9: Cash Flow Coverage Ratio,
Projected
Figure 10: Long-term Debt to Assets
Figure 11: Profit Margin, Projected
Figure12: YoY Increasing Patient Care
Costs
Debt-to-Capitalization Ratio 1.21x 1.22x 1.22x 1.22x 1.22x 1.22x 1.22x 1.22x
Interest Coverage 4.36x 4.43x 4.6x 5.22x 5.29x 5.36x 5.41x 5.47x
Debt Service Coverage 0.75x 0.87x 1.02x 0.96x 0.96x 0.95x 0.95x 0.94x
Cash Flow
Cash Flow Coverage Ratio 9.80% 6.95% 5.02% 3.04% 4.77% 4.86% 4.94% 5.04%
Overview
The financial condition in the chart above shows DaVita Healthcare Partners’
prospects moving forward. These estimated ratios are derived from forecasted
financial statements found in the appendix.
Cash Flow Coverage Ratio
Cash Flow Coverage Ratio is key for the companies in the healthcare sector
because companies are often forced to wait long periods of time before they are
paid for their services by government or insurance agencies. Based on our
projections, DaVita HCP will have sufficient cash to cover obligations, but
projected levels are down from historical values.
Debt-to-Capitalization Ratio
DaVita HCP’s Debt-to-Capitalization ratio, another key identifier of financial
health for companies in this sector, is projected to stay constant at around 1.22
based on financial statement projections. Long-term debt is greater than total
capital available, which is demonstrated by a ratio greater than 1. Higher financial
risk can be explained by forecasted increasing long-term debt associated with the
Kidney Care segment only finding true growth by adding facilities.
Profit Margin
Profit margin is expected to increase based on financial statement projections. The
key assumption here is that we believe DaVita’s costs will grow at 0.25%
annually based on the uncertainty of healthcare payment plans. We do not see
many areas where the company will be able to cut costs while still providing a
high quality service to patients desperately in need. Any drastic changes in the
healthcare system unfavorable to DVA will cut into margins even further than
what is projected.
ROE Decomposition
ROE Decomposition 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
Net Profit Margin 5.39% 5.66% 3.57% 5.72% 5.75% 5.77% 5.78% 5.79%
Asset Turnover 69% 71% 95% 64% 66% 67% 69% 70%
Equity Multiplier
3.22 2.90 3.10 3.12 2.77 2.49 2.27 2.08
ROE 11.95% 11.68% 10.56% 11.47% 10.47% 9.66% 8.99% 8.41%
DaVita HCP ROE has TTM of 9.7%, much below the industry average at 20.3%.
We have forecasted that ROE will decline in 2015 when final reports are
published. From here, ROE will increase until 2016, followed by a strong decline.
It is also appropriate to compare the company to its major competitor, Fresenius,
which has a TTM ROE of 11.0%. The increase in ROE in 2016 is directly related
to profit margins returning to levels similar to prior years. The decrease after 2017
is caused by a decreasing equity multiplier from DaVita’s forecasted increasing
retained earnings based on their decision to not pay a dividend.
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2013
2014
2015E
2016E
2017E
2018E
2019E
2020E
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2013
2014
2015E
2016E
2017E
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2019E
2020E
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2020E

Figure 13: Debt-to-capitalization Ratio
Figure 12: 2014 Revenues by Company
Area
Investment Risk
Compliance Risk
The healthcare industry as a whole faces stringent compliance laws and must
operate in the best interest of their patients. We believe cautiousness and assiduity
are of utmost importance to enhance and preserve DaVita’s image, while
protecting the interests of its shareholders. The kidney care business is subject to a
number of investigations by the federal government and two party civil suits,
which could result in substantial penalties or awards against them, including
exclusions from future participation in the Medicare/Medicaid programs.
(Appendix 13-14) DaVita HCP entered into a five-year Corporate Integrity
Agreement in 2014, if they fail to comply can result to substantial penalties
affecting revenue, earnings and cash flows.
Operational Risk
The key component to DaVita’s operational risk is continuing to provide a high
quality service while future costs due to regulation may increase. This makes it
difficult for the company to cut costs because the outcome of poor quality may
cost a patient their life. In addition, forecasting the number of dialysis patients is a
key part of DaVita’s business. Failure to do so in the future would impact the
timing recognition of earnings and eventually affect the bottom line. DaVita is
investing in foreign dialysis centers, and while these centers provide opportunity
for growth they also may be risky if they are unable to attract clients and also
subjects the company to foreign currency risk, specifically fluctuations in the
LIBOR interest rate. The kidney care section relies heavily on highly-skilled
professionals, and if the company is to experience high turnover this could
negatively impact earnings.
Economic Risk
We believe DaVita HCP is a defensive stock; or less affected by market
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1.2x
1.21x
1.22x
1.23x
2013
2014
2015E
2016E
2017E
2018E
2019E
2020E
64.17%
27.37%
8.46%
Kidney Care Healthcare Partners Other
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10/31/1995
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DVA Share Pricing and News Flow
Total Renal
Care denies
allegations
asserted in
class action
lawsuits
DaVita plans
to buy 25M
shares of its
CS
Merger
with HCP
DaVita opens
1,500 facility
DaVita
introduces
Village
GreenDaVita closes
Gambro
Healthcare
acquisition
Atlanta
whistle-
blower
lawsuit

Table 3: Free Cash Flow Valuation
Table 4: WACC Analysis
WACC Analysis Years 1-2 Years 3-5
Risk Free Rate 2.37% 4.00%
Adjusted Beta 0.78 0.78
Market risk premium 7.00% 7.00%
Cost of Equity 7.83% 9.46%
Risk Free Yield 2.37% 4.00%
BB spread 3.99% 3.99%
Cost of Debt (after
tax) 2.50% 4.13%
Weight of Stock 63.00% 60.00%
Weight of Debt 37.00% 40.00%
WACC 5.86% 7.33%
Figure 15: YoY Revenue Growth
fluctuations. The majority of their business, Kidney Care, is an area where if
someone is in need of dialysis, price is going to play a small role. Most people
will spend everything they can to receive the highest quality of care to enhance
their living situation. HCP is more affected by economic cycles because there may
be less opportunities for acquisition.
Valuation
A number of different valuation methodologies were utilized in deriving a target
price for DVA. Included were a free cash flow valuation, and multiple relative
valuations. DVA does not pay out a dividend, so no dividend discount model
could be used.
Free Cash Flow Model
The main model used in determining the intrinsic value of DVA’s share price was
a free cash flow valuation. The model is forecasted five years out, mainly because
with the rapidly changing healthcare laws it would be difficult to forecast growth
any more than five years out. The model is driven by free cash flow which was
found by cash from operations and adding capital expenditures. This valuation
generated a target price of DVA stock at $55.03, an 18.45% discount. (Table 3)
The base case for this model was formulated using guidance from industry
outlook, DVA’s competitive positioning, historical performance, revenue growth,
and earnings growth. The free cash flow valuation is most sensitive to three
factors, all of which are explained below:
Weighted Average Cost of Capital (WACC)
To better estimate an appropriate discount rate, the WACC was split into two
tiers. The first tier ranges from 2016-2017 and is structured to more accurately
reflect DVA WACC before the expected interest rate hikes. The second tier is
adjusted for the normalization of the 10 year treasury rates from 2018-2020. A
beta of 0.78 is used, this was found by finding a raw beta and adjusting it upwards
due to less expected growth by taking a linear regressions of DVA's stock price
against the S&P 500 for 3 years on a weekly basis (Appendix 8). CAPM was used
to estimate the Cost of Equity, while a risk free rate plus a BB bond spread was
used to calculate Cost of Debt. A capital structure of 63% equity and 37% debt is
utilized for the first two years, but a target capital structure of 60% equity and
40% debt is used for years 3-5. (Figure 16)
Revenue Growth
Revenue growth for Kidney Care will be primarily based on the number of
facilities developed and acquired in the United States and internationally. Using
data from the U.S. census bureau and the fact that obesity rates are increasing at a
decreasing rate a regression of population, obesity rates, type II diabetes, and age
of population was run against DVA facility growth and population and obesity
rates were the only two variables that were significant in the regression (Appendix
4). Using this regression we forecasted where DVA is focusing facility growth
and how many facilities they plan to open up within the next five years.
International revenues had no significant variables, so a forecasted of ten to
twenty facilities were estimated to open every year. The sum of the forecasted
facilities for each year was multiplied by the average number of treatments per
year at each facility and average revenue per treatment.
HCP’s revenue growth did not have much of a trend to where or when they would
acquire facilities, so a historical rate, as well as DVA’s anticipated facility growth
of 8% per year was used.
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2019E
2020E

Figure 16: Capital Structure
Source: Bloomberg
Terminal Growth
As DVA continues to try and find unsaturated markets throughout a slowly
growing United States population and across a saturated market around the world
their growth will steadily decline to a terminal growth rate. The terminal growth
of 4.5% was used as it should be a little greater than the expected inflation rate of
3%.
Price Multiples
While the free cash flow valuation method was the main valuation approach, we
also analyzed trailing price relatives of DaVita’s main competitor, Fresenius
Medical Care. Fresenius was chosen to compare to because it is one of the only
companies that solely focuses on kidney dialysis.
P/E P/B ROE Operating Margin EV/EBITDA
DaVita 30.2 2.8 9.7 10.2 9.2
Fresenius 24.4 2.7 11.0 13.9 12.3
Source: Morning Star
When comparing the main key ratios, DVA is at a disadvantage compared to
Fresenius health care. DVA’s stock has a very high Price to Earnings (P/E) which
means that there upside is very limited and should correct more towards that of
Fresenius Medical Care. DVA also has a lower Return on Equity (ROE) than
Fresenius which could be deceiving because capital structure is has a lot to do
with the ROE, but DVA actually has about 60% equity in their capital structure
and Fresenius has about 70% equity in theirs, so even though DVA has less equity
they still have a worse of an ROE (Figure 16). Operating Margin and
EV/EBITDA were also very low compared to DVA’s main competitor.
Price Target and Range
The $55 target price was found by adjusting the free cash flow model a little
upward due to the fact that DaVita’s multiples were poor to their competitor, but
relatively close to most of them. The $55 target price results in a sell
recommendation. Because DVA does not pay a dividend, the yield for this would
be -16.83%.
0%
10%
20%
30%
40%
50%
60%
70%
80%
DaVita Fresenius
Capital Structure
Debt Equity

Disclosures:
Ownership and material conflicts of interest:
The author(s), or a member of their household, of this report does not hold a financial interest in the securities of this company.
The author(s), or a member of their household, of this report does not know of the existence of any conflicts of interest that might bias the content or
publication of this report.
Receipt of compensation:
Compensation of the author(s) of this report is not based on investment banking revenue.
Position as a officer or director:
The author(s), or a member of their household, does not serve as an officer, director or advisory board member of the subject company.
Market making:
The author(s) does not act as a market maker in the subject company’s securities.
Disclaimer:
The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be
reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not
intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an
offer or a solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by any individual affiliated
with CFA society Colorado, CFA Institute or the CFA Institute Research Challenge with regard to this company’s stock.
CFA Institute Research Challenge

Appendix 1: Balance Sheet
2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
ASSETS
Cash And Equivalents $533.75 $946.25 $965.24 $1,047.42 $1,125.78 $1,176.21 $1,229.02 $1,284.36 $1,339.46
Short Term Investments $7.14 $6.80 $337.40 $922.85 $141.56 $147.90 $154.54 $161.50 $168.43
Total Cash & ST Investments $540.89 $953.05 $1,302.64 $1,970.27 $1,267.34 $1,324.11 $1,383.56 $1,445.86 $1,507.89
Accounts Receivable $1,424.30 $1,485.16 $1,525.85 $1,699.89 $2,467.99 $2,578.56 $2,694.32 $2,815.64 $2,936.44
Other Receivables $301.15 $338.24 $468.04 $465.90 $508.12 $530.88 $554.71 $579.69 $604.56
Total Receivables $1,725.45 $1,823.40 $1,993.89 $2,165.79 $2,976.11 $3,109.43 $3,249.03 $3,395.34 $3,541.00
Inventory $78.13 $88.81 $136.09 $173.05 $508.12 $530.88 $554.71 $579.69 $604.56
Prepaid Expenses $75.85 $93.88 $102.47 $150.04 $131.86 $137.77 $143.95 $150.43 $156.89
Deferred Tax Assets, Current $324.15 $409.44 $240.63 $253.07 $311.42 $316.09 $320.84 $325.65 $330.53
Other Current Assets $142.59 $103.70 $101.10 $175.72 $178.35 $181.03 $183.74 $186.50 $189.29
Total Current Assets $2,887.05 $3,472.28 $3,876.80 $4,737.89 $5,373.19 $5,599.31 $5,835.82 $6,083.47 $6,330.17
Gross Property, Plant & Equipment $3,394.55 $3,967.67 $4,498.61 $4,927.06
Accumulated Depreciation ($1,522.20) ($1,778.30) ($2,029.50) ($2,305.10)
Net Property, Plant & Equipment $1,872.37 $2,189.41 $2,469.10 $2,621.92 $2,980.25 $3,113.77 $3,253.55 $3,400.07 $3,545.93
Long-term Investments $94.56 $81.51 $114.54 $160.50 $2,980.25 $3,113.77 $3,253.55 $3,400.07 $3,545.93
Goodwill $8,952.75 $9,212.97 $9,415.30 $9,487.58 $9,487.58 $9,487.58 $9,487.58 $9,487.58 $9,487.58
Other Intangibles $2,128.12 $2,024.37 $1,949.50 $1,826.78 $1,826.78 $1,826.78 $1,826.78 $1,826.78 $1,826.78
Other Long-Term Assets $79.79 $118.33 $117.49 $60.17 $60.17 $60.17 $60.17 $60.17 $60.17
Total Assets $16,014.63 $17,098.88 $17,942.72 $18,894.83 $22,708.23 $23,201.37 $23,717.46 $24,258.13 $24,796.56
LIABILITIES
Accounts Payable $414.14 $435.47 $445.45 $487.95 $559.20 $585.37 $612.88 $641.82 $670.66
Accrued Expenses $986.51 $1,070.59 $1,258.75 $1,175.66 $1,399.26 $1,464.75 $1,533.59 $1,606.01 $1,678.19
Current Portion of LT Debt $233.04 $286.77 $111.61 $111.53 $111.53 $111.53 $111.53 $111.53 $111.53
Current Portion of Capital Leases $0.00 $0.00 $10.00 $4.00 $4.00 $4.00 $4.00 $4.00 $4.00
Other Current Liabilities $382.73 $669.22 $262.84 $631.42 $630.74 $644.44 $658.77 $673.79 $688.75
Total Current Liabilities $2,016.43 $2,462.05 $2,088.65 $2,410.55 $2,704.73 $2,810.09 $2,920.77 $3,037.15 $3,153.13
Long-Term Debt $8,345.53 $8,141.23 $8,175.18 $8,830.20 $10,901.12 $11,137.86 $11,385.61 $11,645.16 $11,903.63
Capital Leases $0.00 $0.00 $208.10 $251.90 $275.00 $300.00 $325.00 $350.00 $375.00
Deferred Tax Liability, Non-Current $715.66 $812.42 $890.70 $906.81 $982.27 $1,064.01 $1,152.55 $1,248.46 $1,352.35
Other Non-Current Liabilities $439.41 $380.34 $389.81 $406.04 $527.37 $538.83 $550.81 $563.37 $575.87
Total Liabilities $11,517.02 $11,796.04 $11,752.44 $12,805.49 $15,390.49 $15,850.78 $16,334.74 $16,844.13 $17,359.98
Common Stock $0.27 $0.21 $0.22 $0.22 $0.22 $0.22 $0.22 $0.22 $0.22

Additional Paid In Capital $1,208.67 $1,070.92 $1,108.21 $1,106.34 $1,100.00 $1,100.00 $1,100.00 $1,100.00 $1,100.00
Retained Earnings $3,731.84 $3,363.99 $4,087.10 $4,362.84 $5,183.40 $6,045.75 $6,950.65 $7,898.95 $8,890.12
Treasury Stock ($1,162.30) $0.00 $0.00 ($424.70) ($200.00) ($200.00) ($200.00) ($200.00) ($200.00)
Comprehensive Inc. and Other ($15.30) ($2.60) ($25.00) ($54.30) ($30.00) ($30.00) ($30.00) ($30.00) ($30.00)
Total Common Equity $3,763.14 $4,432.48 $5,170.51 $4,990.35 $6,053.62 $6,915.97 $7,820.87 $8,769.17 $9,760.34
Minority Interest $734.48 $870.36 $1,019.76 $1,098.98 $1,240.06 $1,446.37 $1,662.85 $1,889.72 $2,126.84
Total Equity $4,497.62 $5,302.84 $6,190.28 $6,089.34 $7,293.68 $8,362.34 $9,483.72 $10,658.89 $11,887.18
Total Liabilities And Equity $16,014.63 $17,098.88 $17,942.72 $18,894.83 $22,684.18 $24,213.11 $25,818.46 $27,503.02 $29,247.16
Assumptions:
Each historical balance sheet item was found as a percentage of its given factor in the given year. These percentages were
averaged and then multiplied by the forecasted factor. They are broken down by factor below.
1) Items that fluctuate with sales (historical averages in parentheses)
a. Cash & ST Investments (8%)
b. Accounts Receivable (14%)
c. Other Receivables (4%)
d. Inventory (1%)
e. Prepaid Expenses (1%)
f. Net Property, Plant, and Equipment (1%)
g. Long-term Investments (1%)
2) Items that fluctuate with expenses (historical averages in parentheses)
a. Accounts Payable (5%)
b. Accrued Expenses (12%)
3) Items that fluctuate with Total Assets (historical averages in parentheses)
a. Other current liabilities (2%)
b. Long-term Debt (48%)
c. Other Non-current Liabilities (2%)
4) Items with steady growth (numerical growth in parentheses)
a. Capital leases ($25)
5) Items that grow with inflation projections (2.5%)
a. Deferred Tax Assets
b. Other Current Assets
6) Items left unchanged
a. Goodwill
b. Other Intangibles
c. Other Long-term assets
d. Current Portion of Long-term debt
e. Current Portion of Capital Leases
f. Common Stock
7) Items set to flat rate
a. Additional Paid-in Capital
b. Treasury Stock
c. Comprehensive Income
8) Minority Interest: historical average of 24%, multiplied by projected retained earnings

Appendix 2: Income Statement
2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
Revenue $7,593.68 $10,996.11 $11,748.29 $16,519.57 $13,219.45 $13,830.00 $14,470.63 $15,143.52 $15,812.77
Other Revenue $588.26 $763.09 $1,032.36 $1,521.87 $1,298.15 $1,337.97 $1,378.28 $1,419.09 $1,460.40
Total Revenue $8,181.94 $11,759.20 $12,780.65 $18,041.44 $14,517.60 $15,167.97 $15,848.91 $16,562.62 $17,273.17
Cost Of Goods Sold $5,583.55 $8,198.38 $9,119.31 $12,869.30 $9,215.06 $9,678.29 $10,165.57 $10,678.60 $11,190.04
Gross Profit $2,598.39 $3,560.82 $3,661.35 $5,172.15 $5,302.54 $5,489.68 $5,683.34 $5,884.02 $6,083.14
Selling General & Admin Expense $859.13 $1,176.49 $1,261.51 $1,866.40 $1,477.91 $1,544.12 $1,613.44 $1,686.10 $1,758.43
R & D Expense $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Depreciation & Amortization $341.97 $528.74 $590.94 $835.17 $672.77 $702.91 $734.46 $767.54 $800.47
Other Operating Expense/(Income) $0.00 $0.00 $0.00 $0.00 $577.15 $576.53 $575.90 $575.27 $574.62
Other Operating Expense, Total $1,201.10 $1,705.22 $1,852.44 $2,701.57 $2,727.83 $2,823.56 $2,923.81 $3,028.90 $3,133.52
Operating Income $1,397.30 $1,855.60 $1,808.91 $2,470.58 $2,574.71 $2,666.12 $2,759.53 $2,855.12 $2,949.62
Interest Expense ($288.60) ($429.90) ($410.30) ($539.71) ($500.17) ($511.04) ($522.40) ($534.31) ($546.17)
Interest and Investment Income $3.61 $3.99 $2.03 $2.71 $2.50 $2.50 $2.50 $2.50 $2.50
Net Interest Expense ($284.90) ($426.00) ($408.30) ($537.01) ($497.67) ($508.54) ($519.90) ($531.81) ($543.67)
Income/(Loss) from Affiliates $16.38 $34.56 $23.23 $20.30 $23.84 $24.20 $24.56 $24.93 $25.31
Other Non-Operating Income (Expense) - - - $6.03 $6.00 $6.00 $6.00 $6.00 $6.00
EBT Excluding Unusual Items $1,128.73 $1,464.20 $1,423.88 $1,959.90 $2,106.88 $2,187.79 $2,270.19 $2,354.24 $2,437.25
Merger & Related Restructure Charges ($30.80) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Impairment of Goodwill $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Gain (Loss) On Sale Of Investment $0.12 $0.80 $0.34 $0.82 $0.80 $0.80 $0.80 $0.80 $0.80
Legal Settlements ($85.80) ($397.00) ($17.00) ($658.35) ($500.00) ($500.00) ($500.00) ($500.00) ($500.00)
Other Unusual Items ($11.00) $56.98 ($97.50) ($63.97) ($25.28) ($25.66) ($26.04) ($26.43) ($26.83)
EBT Including Unusual Items $1,001.30 $1,124.98 $1,309.67 $1,238.40 $1,581.60 $1,662.13 $1,744.15 $1,827.80 $1,910.42
Income Tax Expense $359.85 $381.01 $446.34 $382.87 $490.30 $515.26 $540.69 $566.62 $592.23
Earnings from Continued Operations $641.46 $743.97 $863.33 $855.53 $1,091.30 $1,146.87 $1,203.46 $1,261.18 $1,318.19
Earnings of Discontinued Operations ($0.20) $13.24 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Extraordinary Item & Account Change $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Net Income to Company $641.24 $757.20 $863.33 $855.53 $1,091.30 $1,146.87 $1,203.46 $1,261.18 $1,318.19
Minority Interest in Earnings ($105.20) ($123.80) ($140.20) ($212.27) ($270.74) ($284.52) ($298.56) ($312.88) ($327.03)
Net Income $536.02 $633.45 $723.11 $643.27 $820.57 $862.35 $904.90 $948.30 $991.17
Assumptions:
Most historical income statement items was found as a percentage of its given factor in the given year. These percentages
were averaged and then multiplied by the forecasted factor. They are broken down by factor below. Alternate forms of
estimation are discussed under their own bullet.
1) Revenue, the sum of three components:
a. US Kidney Care: comprised of forecasted facilities found in Appendix F multiplied by the average revenue
per facility
b. International Kidney Care: comprised of forecasted facilities found in Appendix H multiplied by the average
revenue per facility
c. Healthcare Partners: historic revenues grown at 8%
2) Other Revenue: Q3 2015 revenue annulized and grown at same rate as US Kidney Care revenues
3) Cost of Goods Sold, sum of two components:
a. US Kidney Care: comprised of historical average (64.01%) of forecasted US sales; grown at 0.25% annually
due to projected increasing costs
b. International Kidney Care: comprised of historical average (64.01%) of forecasted sales; grown at 0.25%
annually due to projected increasing costs
4) Items that fluctuate with sales (historical averages in parentheses)
a. Selling General & Admin Expense (10%)
b. Other Operating Expense
5) Items that fluctuate with Net PPE
a. Depreciation (23%)
6) Items that fluctuate with Long-term debt
a. Interest expense (4.6%)
7) Other Operating expense: sum of equity investment income (-0.2% of sales), and Healthcare partners historic Equity
Investment Income grown at inflation projection
8) Items fixed at flat rate
a. Interest and Investment Income ($2.50)
b. Other Non-operating Income ($6)
c. Gain/Loss sale of Investment ($0.80)
d. Legal Settlements ($500)
9) Items grown with inflation
a. Income/Loss from Affiliates
b. Other Unusual Items
10) Income Tax Expense: EBT multiplied by 31% tax rate
11) Minority Interest: Net Income to company multiplied by historical minority interest average (25%)

Appendix 3: Historical Centers, Population, Obesity Rates by US State
2012
State Centers Population Obesity
Alabama 47
4,817,484
33.0%
Arizona 25
6,556,236
26.0%
Arkansas 32
2,949,300
34.5%
California 228
38,062,780
25.0%
Colorado 35
5,191,709
20.5%
Connecticut 23
3,594,362
25.6%
District of Columbia 10
635,040
21.9%
Florida 149
19,355,257
25.2%
Georgia 110
9,919,000
29.1%
Hawaii 0
1,392,766
23.6%
Idaho 9
1,595,590
26.8%
Illinois 74
12,873,763
28.1%
Indiana 50
6,537,632
31.4%
Iowa 22
3,075,935
30.4%
Kansas 24
2,885,966
29.9%
Kentucky 34
4,383,465
31.3%
Louisiana 27
4,604,744
34.7%
Maine 3
1,328,592
28.4%
Maryland 54
5,891,819
27.6%
Massachusetts 13
6,655,829
22.9%
Michigan 69
9,884,781
31.1%
Minnesota 39
5,380,615
25.7%
Mississippi 11
2,986,137
34.6%
2013
Alabama 53
4,833,996
32.4%
Arizona 25
6,634,997
26.8%
Arkansas 32
2,958,765
34.6%
California 244
38,431,393
24.1%
Colorado 37
5,272,086
21.3%
Connecticut 23
3,599,341
25.0%
649,111
22.9%
Florida 156
19,600,311
26.4%
Georgia 116
9,994,759
30.3%
Hawaii 0
1,408,987
21.8%
Idaho 9
1,612,843
29.6%
Illinois 81
12,890,552
29.4%
Indiana 54
6,570,713
31.8%
Iowa 22
3,092,341
31.3%
Kansas 26
2,895,801
30.0%
Kentucky 34
4,399,583
33.2%
Louisiana 28
4,629,284
33.1%
Maine 3
1,328,702
28.9%
Maryland 54
5,938,737
28.3%
Massachusetts 13
6,708,874
23.6%
Michigan 72
9,898,193
31.5%
Minnesota 44
5,422,060
25.5%
Mississippi 11
2,992,206
35.1%

Missouri 50
6,025,281
29.6%
Montana 0
1,005,163
24.3%
Nebraska 15
1,855,487
28.6%
Nevada 20
2,755,245
26.2%
New Hampshire 2
1,321,297
27.3%
New Jersey 38
8,876,000
24.6%
New Mexico 4
2,084,594
27.1%
New York 41
19,607,140
23.6%
North Carolina 65
9,748,181
29.6%
North Dakota 2
701,705
29.7%
Ohio 89
11,550,901
30.1%
Oklahoma 32
3,817,059
32.2%
Oregon 20
3,898,684
27.3%
Pennsylvania 84
12,770,043
29.1%
Rhode Island 1
1,052,637
25.7%
South Carolina 27
4,722,621
31.6%
South Dakota 3
834,504
28.1%
Tennessee 55
6,455,177
31.1%
Texas 164
26,094,422
29.2%
Utah 4
2,855,194
24.3%
Virginia 57
8,193,422
27.4%
Washington 27
6,896,325
26.8%
West Virginia 4
1,856,313
33.8%
Wisconsin 37
5,724,888
29.7%
Other 25 311,261,085 28.2%
1954
2014
Alabama 55
4,849,377
33.50%
Arizona 25
6,731,484
28.90%
Arkansas 33
2,966,369
35.90%
California 257
38,802,500
24.70%
Colorado 38
5,355,866
21.30%
Connecticut 23
3,596,677
26.30%
Missouri 52
6,044,917
30.4%
Montana 1
1,014,864
24.6%
Nebraska 15
1,868,969
29.6%
Nevada 20
2,791,494
26.2%
New Hampshire 3
1,322,616
26.7%
New Jersey 39
8,911,502
26.3%
New Mexico 4
2,086,895
26.4%
New York 42
19,695,680
25.4%
North Carolina 65
9,848,917
29.4%
North Dakota 2
723,857
31.0%
Ohio 106
11,572,005
30.4%
Oklahoma 35
3,853,118
32.5%
Oregon 21
3,928,068
26.5%
Pennsylvania 92
12,781,296
30.0%
Rhode Island 1
1,053,354
27.3%
South Carolina 30
4,771,929
31.7%
South Dakota 3
845,510
29.9%
Tennessee 55
6,497,269
33.7%
Texas 176
26,505,637
30.9%
Utah 4
2,902,787
24.1%
Virginia 60
8,270,345
27.2%
Washington 29
6,973,742
27.2%
West Virginia 5
1,853,595
35.1%
Wisconsin 38
5,742,953
29.8%
Other 29 313,624,954 28.7%
2074
Q3 2015
Alabama 28
4,833,722
33.5%
Arizona 31
6,626,624
28.9%
Arkansas 25
2,959,373
35.9%
California 266
38,332,521
24.7%
Colorado 36
5,268,367
21.3%
Connecticut 24
3,596,080
26.3%

658,893
21.70%
Florida 164
19,893,297
26.20%
Georgia 122
10,097,343
30.50%
Hawaii 0
1,419,561
22.10%
Idaho 9
1,634,464
28.90%
Illinois 84
12,880,580
29.30%
Indiana 58
6,596,855
32.70%
Iowa 25
3,107,126
30.90%
Kansas 25
2,904,021
31.30%
Kentucky 34
4,413,457
31.60%
Louisiana 29
4,649,676
34.90%
Maine 3
1,330,089
28.20%
Maryland 57
5,976,407
29.60%
Massachusetts 13
6,745,408
23.30%
Michigan 75
9,909,877
30.70%
Minnesota 47
5,457,173
27.60%
Mississippi 11
2,994,079
35.50%
Missouri 54
6,063,589
30.20%
Montana 1
1,023,579
26.40%
Nebraska 15
1,881,503
30.20%
Nevada 20
2,839,099
27.70%
New Hampshire 4
1,326,813
27.40%
New Jersey 47
8,938,175
26.90%
New Mexico 4
2,085,572
28.40%
New York 49
19,746,227
27.00%
North Carolina 66
9,943,964
29.70%
North Dakota 2
739,482
32.20%
Ohio 112
11,594,163
32.60%
Oklahoma 35
3,878,051
33.00%
Oregon 23
3,970,239
27.90%
Pennsylvania 96
12,787,209
30.20%
Rhode Island 1
1,055,173
27.00%
South Carolina 33
4,832,482
32.10%
South Dakota 3
853,175
29.80%
Tennessee 54
6,549,352
31.20%
Texas 195
26,956,958
31.90%
Utah 4 25.70%
676,122
21.1%
Florida 135
19,552,860
26.2%
Georgia 128
9,992,167
30.5%
Hawaii 1
1,404,054
22.1%
Idaho 9
1,612,136
28.9%
Illinois 93
12,882,135
29.3%
Indiana 51
6,570,902
32.7%
Iowa 25
3,090,416
30.9%
Kansas 25
2,893,957
31.3%
Kentucky 38
4,395,295
31.6%
Louisiana 25
4,625,470
34.9%
Maine 3
1,328,302
28.2%
Maryland 57
5,928,814
29.6%
Massachusetts 11
6,692,824
23.3%
Michigan 76
9,895,622
30.7%
Minnesota 50
5,420,380
27.6%
Mississippi 0
2,991,207
35.5%
Missouri 57
6,044,171
30.2%
Montana 1
1,015,165
26.4%
Nebraska 16
1,868,516
30.2%
Nevada 21
2,790,136
27.7%
New Hampshire 4
1,323,459
27.4%
New Jersey 43
8,899,339
26.9%
New Mexico 3
2,085,287
28.4%
New York 49
19,651,127
27.0%
North Carolina 66
9,848,060
29.7%
North Dakota 2
723,393
32.2%
Ohio 123
11,570,808
32.6%
Oklahoma 35
3,850,568
33.0%
Oregon 21
3,930,065
27.9%
Pennsylvania 102
12,773,801
30.2%
Rhode Island 1
1,051,511
27.0%
South Carolina 38
4,774,839
32.1%
South Dakota 3
844,877
29.8%
Tennessee 38
6,495,978
31.2%
Texas 167
26,448,193
31.9%
Utah 5 25.7%

2,942,902
Virginia 60
8,326,289
28.50%
Washington 30
7,061,530
27.30%
West Virginia 7
1,850,326
35.70%
Wisconsin 38
5,757,564
31.20%
Other 29 315,973,995 29.3%
2179
2,900,872
Virginia 60
8,260,405
28.5%
Washington 30
6,971,406
27.3%
West Virginia 4
1,854,304
35.7%
Wisconsin 40
5,742,713
31.2%
Other 29 313,288,343 29.3%
2104
Appendix 4: US Dialysis Center Regression Results
A linear regression was ran on each year, 2012-Q3 2015. Originally, the dependent variable (number of centers), was
hypothesized to be impacted by four variables: population, average age, obesity rate, and Type-II diabetes rate. Average age
and Type-II diabetes proved to be strongly insignificant and were omitted from the equation. Population and obesity rate by
state remained as the two explanatory variables for number of centers. The regression results are shown below:
2012
Regression Statistics
Multiple R 0.93
R Square 0.87
Adjusted R Square 0.87
Standard Error 16.63
Observations 47.00
ANOVA
df SS MS F Significance F
Regression 2.00 84088.10 42044.05 151.94 0.00
Residual 44.00 12175.82 276.72
Total 46.00 96263.91
Coefficients Standard Error t Stat
P-
value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -49.60 21.06 -2.36 0.02 -92.05 -7.16 -92.05 -7.16
Population 0.00 0.00 17.43 0.00 0.00 0.00 0.00 0.00
Obesity 178.65 72.74 2.46 0.02 32.05 325.25 32.05 325.25
2013
Multiple R 0.93
R Square 0.87
Observations 47.00
ANOVA
Regression 2.00 96488.86 48244.43 147.61 0.00

Residual 44.00 14380.88 326.84
Total 46.00 110869.74
P-
Intercept -50.51 22.50 -2.24 0.03 -95.86 -5.16 -95.86 -5.16
Population 0.00 0.00 17.18 0.00 0.00 0.00 0.00 0.00
Obesity 177.81 76.38 2.33 0.02 23.87 331.75 23.87 331.75
2014
Multiple R 0.94
R Square 0.88
Observations 47.00
ANOVA
Regression 2.00 110350.79 55175.40 159.97 0.00
Population 44.00 15176.15 344.91
Obesity 46.00 125526.94
P-
Intercept -49.65 23.63 -2.10 0.04 -97.26 -2.03 -97.26 -2.03
Population 0.00 0.00 17.88 0.00 0.00 0.00 0.00 0.00
Obesity 169.48 78.80 2.15 0.04 10.67 328.28 10.67 328.28
2015
Multiple R 0.93
R Square 0.86
Observations 47.00
ANOVA
Regression 2.00 104493.01 52246.51 138.48 0.00
Residual 44.00 16600.94 377.29
Total 46.00 121093.96
P-
Intercept -34.81 24.46 -1.42 0.16 -84.11 14.49 -84.11 14.49
X Variable 1 0.00 0.00 16.64 0.00 0.00 0.00 0.00 0.00

X Variable 2 117.02 81.64 1.43 0.16 -47.51 281.55 -47.51 281.55
The individual regression coefficients each year were averaged and summarized below:
Regression Summary
2012 2013 2014 2015 Average
Intercept -49.60 -50.51 -49.65 -34.81 -46.14
Population 0.00001 0.00001 0.00001 0.00001 0.00001
Obesity 178.65 177.81 169.48 117.02 160.74
The regression equation utilized in Appendix F is shown below (derived from the averages):
𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 = −46.14 + 0.00001𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 + 160.74𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂
Appendix 5: US Dialysis Centers Projected
Assumptions:
1) US Population: the percentage of US population was found for each state 2012-2015. Percentages were averaged to
and multiplied by projected national population increases from 2016-2020. National population projections are
according to the US Census Bureua. The regression coefficient was multiplied by each state’s estimated population.
2) Obesity Rates: Obesity rates are increased by historical trends, 2011-2015, but an additional 0.06% was subtracted
from the projected growth per state each year because of the belief that obesity rates are increasing at a decreasing
rate. These forecased rates are multiplied by individual state obesity rate projections.
The following summarizes number of dialysis centers by state and total for US, 2016-2020:
2016E
Alabama 41
5,003,252
33.9%
Arizona 47
6,844,727
30.1%
Arkansas 34
3,062,167
37.3%
California 252
39,659,476
24.9%
Colorado 24
5,432,146
21.4%
Connecticut 21
3,726,561
26.8%
671,441
20.5%
Florida 127
20,211,401
26.1%
Georgia 71
10,326,068
31.1%
Hawaii 1
1,451,718
22.2%
Idaho 12
1,666,288
29.4%
Illinois 89
13,346,915
29.9%
Indiana 53
6,797,603
34.3%
Iowa 25
3,198,630
31.4%
Kansas 24
2,995,293
31.7%
Kentucky 35
4,552,510
31.9%
2017E
Alabama 42
5,043,865
34.3%
Arizona 49
6,900,289
31.2%
Arkansas 36
3,087,023
38.7%
California 255
39,981,408
25.2%
Colorado 24
5,476,241
21.6%
Connecticut 22
3,756,811
27.2%
676,891
19.9%
Florida 128
20,375,464
26.0%
Georgia 73
10,409,889
31.8%
Hawaii 1
1,463,503
22.3%
Idaho 13
1,679,814
29.9%
Illinois 90
13,455,257
30.5%
Indiana 56
6,852,782
36.0%
Iowa 26
3,224,595
31.9%
Kansas 25
3,019,607
32.2%
Kentucky 36
4,589,464
32.2%

Louisiana 42
4,785,287
35.3%
Maine 8
1,377,198
28.3%
Maryland 42
6,131,413
29.9%
Massachusetts 37
6,926,516
23.4%
Michigan 70
10,253,697
30.5%
Minnesota 36
5,602,585
28.1%
Mississippi 31
3,097,410
35.6%
Missouri 43
6,257,847
30.2%
Montana 4
1,048,113
26.9%
Nebraska 16
1,931,221
30.7%
Nevada 19
2,879,985
28.6%
New Hampshire 7
1,370,688
27.7%
New Jersey 58
9,217,757
27.8%
New Mexico 14
2,160,173
29.0%
New York 131
20,360,522
27.7%
North Carolina 68
10,165,192
29.8%
North Dakota 12
740,664
33.4%
Ohio 86
11,988,405
33.4%
Oklahoma 34
3,976,811
33.5%
Oregon 26
4,061,655
28.2%
Pennsylvania 89
13,237,126
30.6%
Rhode Island 5
1,091,349
27.4%
South Carolina 38
4,928,050
32.4%
South Dakota 8
871,032
30.2%
Tennessee 49
6,715,235
31.8%
Texas 183
27,289,857
32.3%
Utah 15
2,988,272
26.0%
Virginia 55
8,531,900
28.3%
Washington 45
7,197,779
27.5%
West Virginia 25
1,921,558
36.6%
Wisconsin 44
5,944,507
32.1%
Other 30
323,996,000
2233
2018E
Alabama 43
5,084,479
34.6%
Arizona 51
6,955,850
32.5%
Louisiana 43
4,824,131
35.7%
Maine 9
1,388,377
28.4%
Maryland 43
6,181,184
30.3%
Massachusetts 37
6,982,742
23.6%
Michigan 70
10,336,930
30.4%
Minnesota 37
5,648,063
28.6%
Mississippi 32
3,122,553
35.8%
Missouri 43
6,308,644
30.1%
Montana 5
1,056,621
27.3%
Nebraska 17
1,946,897
31.1%
Nevada 20
2,903,363
29.4%
New Hampshire 8
1,381,814
28.0%
New Jersey 60
9,292,581
28.6%
New Mexico 15
2,177,708
29.5%
New York 133
20,525,796
28.4%
North Carolina 69
10,247,707
30.0%
North Dakota 14
746,676
34.6%
Ohio 88
12,085,719
34.2%
Oklahoma 35
4,009,093
34.0%
Oregon 26
4,094,625
28.5%
Pennsylvania 91
13,344,576
31.0%
Rhode Island 6
1,100,208
27.8%
South Carolina 39
4,968,052
32.7%
South Dakota 9
878,103
30.7%
Tennessee 50
6,769,745
32.3%
Texas 186
27,511,379
32.7%
Utah 16
3,012,529
26.4%
Virginia 55
8,601,157
28.2%
Washington 46
7,256,206
27.7%
West Virginia 27
1,937,156
37.4%
Wisconsin 46
5,992,761
33.1%
Other 30
326,626,000
2285
2019E
Alabama 44
5,125,061
35.0%
Arizona 54
7,011,369
33.8%

Arkansas 39
3,111,880
40.2%
California 257
40,303,339
25.4%
Colorado 25
5,520,335
21.7%
Connecticut 23
3,787,061
27.7%
682,341
19.3%
Florida 129
20,539,528
25.9%
Georgia 74
10,493,710
32.5%
Hawaii 1
1,475,287
22.4%
Idaho 14
1,693,340
30.5%
Illinois 92
13,563,599
31.1%
Indiana 60
6,907,961
37.8%
Iowa 27
3,250,559
32.4%
Kansas 26
3,043,921
32.6%
Kentucky 36
4,626,419
32.6%
Louisiana 44
4,862,975
36.1%
Maine 9
1,399,556
28.5%
Maryland 44
6,230,955
30.6%
Massachusetts 38
7,038,967
23.7%
Michigan 70
10,420,163
30.2%
Minnesota 38
5,693,541
29.1%
Mississippi 32
3,147,696
35.9%
Missouri 44
6,359,441
30.1%
Montana 6
1,065,129
27.8%
Nebraska 17
1,962,574
31.6%
Nevada 22
2,926,741
30.4%
New Hampshire 8
1,392,940
28.3%
New Jersey 62
9,367,405
29.6%
New Mexico 17
2,195,243
30.1%
New York 135
20,691,070
29.1%
North Carolina 70
10,330,222
30.1%
North Dakota 16
752,688
35.9%
Ohio 89
12,183,034
35.0%
Oklahoma 36
4,041,374
34.4%
Oregon 27
4,127,595
28.8%
Pennsylvania 92
13,452,027
31.4%
Rhode Island 6
1,109,067
28.2%
South Carolina 40 33.1%
Arkansas 41
3,136,718
41.8%
California 260
40,625,025
25.6%
Colorado 25
5,564,397
21.9%
Connecticut 24
3,817,288
28.2%
687,788
18.7%
Florida 130
20,703,467
25.8%
Georgia 76
10,577,466
33.2%
Hawaii 1
1,487,062
22.5%
Idaho 15
1,706,855
31.0%
Illinois 94
13,671,859
31.8%
Indiana 63
6,963,098
39.6%
Iowa 28
3,276,504
32.9%
Kansas 27
3,068,217
33.0%
Kentucky 37
4,663,345
32.9%
Louisiana 44
4,901,790
36.5%
Maine 9
1,410,727
28.6%
Maryland 44
6,280,688
30.9%
Massachusetts 38
7,095,149
23.9%
Michigan 71
10,503,333
30.1%
Minnesota 39
5,738,985
29.6%
Mississippi 32
3,172,820
36.0%
Missouri 44
6,410,200
30.0%
Montana 6
1,073,631
28.3%
Nebraska 18
1,978,238
32.0%
Nevada 23
2,950,101
31.3%
New Hampshire 9
1,404,058
28.6%
New Jersey 64
9,442,172
30.5%
New Mexico 18
2,212,765
30.7%
New York 138
20,856,219
29.8%
North Carolina 70
10,412,674
30.2%
North Dakota 19
758,696
37.3%
Ohio 91
12,280,274
35.9%
Oklahoma 37
4,073,631
34.9%
Oregon 28
4,160,540
29.1%
Pennsylvania 93
13,559,396
31.8%
Rhode Island 7
1,117,919
28.7%
South Carolina 40 33.4%

5,008,055
South Dakota 10
885,173
31.1%
Tennessee 51
6,824,255
32.9%
Texas 188
27,732,901
33.1%
Utah 17
3,036,786
26.7%
Virginia 55
8,670,414
28.0%
Washington 46
7,314,633
27.9%
West Virginia 28
1,952,754
38.3%
Wisconsin 48
6,041,015
34.1%
Other 30
329,256,000
2338
2020E
Alabama 44
5,165,504
35.4%
Arizona 56
7,066,698
35.1%
Arkansas 44
3,161,471
43.4%
California 262
40,945,610
25.9%
Colorado 26
5,608,307
22.0%
Connecticut 25
3,847,411
28.7%
693,215
18.2%
Florida 131
20,866,844
25.7%
Georgia 78
10,660,937
33.9%
Hawaii 1
1,498,797
22.6%
Idaho 16
1,720,325
31.6%
Illinois 96
13,779,748
32.4%
Indiana 66
7,018,046
41.6%
Iowa 29
3,302,360
33.4%
Kansas 28
3,092,429
33.5%
Kentucky 38
4,700,145
33.2%
Louisiana 45
4,940,471
36.9%
Maine 9
1,421,859
28.6%
Maryland 45
6,330,251
31.3%
Massachusetts 39
7,151,139
24.0%
Michigan 71
10,586,218
29.9%
Minnesota 40
5,784,273
30.2%
Mississippi 33
3,197,857
36.2%
Missouri 44
6,460,785
30.0%
5,048,028
South Dakota 10
892,238
31.6%
Tennessee 53
6,878,724
33.5%
Texas 190
27,954,255
33.5%
Utah 17
3,061,025
27.1%
Virginia 56
8,739,618
27.8%
Washington 47
7,373,016
28.1%
West Virginia 30
1,968,340
39.3%
Wisconsin 50
6,089,232
35.1%
Other 30
331,884,000
2392

Montana 7
1,082,103
28.8%
Nebraska 19
1,993,849
32.5%
Nevada 25
2,973,381
32.3%
New Hampshire 10
1,415,138
28.9%
New Jersey 66
9,516,683
31.5%
New Mexico 19
2,230,226
31.3%
New York 140
21,020,802
30.6%
North Carolina 71
10,494,843
30.4%
North Dakota 21
764,683
38.6%
Ohio 94
12,377,182
36.7%
Oklahoma 38
4,105,777
35.4%
Oregon 29
4,193,372
29.5%
Pennsylvania 95
13,666,398
32.2%
Rhode Island 8
1,126,741
29.1%
South Carolina 41
5,087,863
33.7%
South Dakota 11
899,279
32.0%
Tennessee 54
6,933,006
34.1%
Texas 192
28,174,851
33.9%
Utah 18
3,085,180
27.4%
Virginia 56
8,808,585
27.7%
Washington 48
7,431,199
28.3%
West Virginia 31
1,983,873
40.2%
Wisconsin 52
6,137,284
36.2%
Other 30
334,503,000
2447
Appendix 6: Historical International Dialysis Centers by Country
2012 2013 2014
Centers Population Centers Population Centers Population
Malaysia 3 29,240,000 21 29,720,000 24 30,073,353
Colombia 0 47,700,000 7 48,320,000 15 46,245,297
Germany 4 80,430,000 10 80,620,000 14 82,652,256
India 13 1,237,000,000 13 1,252,000,000 13 1,267,401,849
Poland 5 38,540,000 8 38,530,000 8 38,020,000
Portugal 4 10,487,289 4 10,427,301 5 10,394,000
Taiwan 0 23,316,000 4 23,374,000 4 23,434,000
Saudi
Arabia
3 28,290,000 2 28,830,000 4 27,345,986
China 2 1,354,040,000 2 1,360,720,000 2 1,367,820,000
Singapore 2
5,312,000
2
5,399,000
2
5,470,000

36 73 91
Appendix 7: International Dialysis Centers by Country, Projected
Projections based on historical trends by country.
2015E 2016E 2017E 2018E 2019E 2020E
Malaysia 28 34 39 45 50 56
Colombia 18 22 25 29 32 36
Germany 18 21 24 28 31 34
India 13 14 16 17 19 20
Poland 8 10 11 13 14 16
Portugal 6 7 8 10 11 12
Taiwan 4 5 6 6 7 8
Saudi
Arabia 5 6 7 8 9 10
China 2 2 3 3 4 4
Singapore 2 2 3 3 4 4
104 123 142 162 181 200
Appendix 8: Beta Analysis
Assumptions to Beta calculation-
• 3 year weekly regression was run against S&P 500
• Did not go back further than three years because of the merger with HCP
• As DVA and HCP move closer to maturity the beta will get closer to one so an adjusted beta was used and biased
upward to 0.78

Appendix 9 Corporate Officers
Officer Position Affiliates and Description
Kent J. Thiry Chairman & CEO • Chairman and CEO of DaVita HealthCare Partners, CEO,
HealthCare Partners
Javier J. Rodriguez CEO, Kidney Care • Served as president from February 2012-March 2014
Michael D. Staffieri COO, Kidney Care • Became chief operating officer, Kidney Care, in February
2014.
• From July 2011 to February 2014, he served as a senior
vice president, Kidney Care.
Dennis L. Kogod President, HealthCare Partners • Became president, HealthCare Partners, in January 2015.
• Mr. Kogod served as chief operating officer, HealthCare
Partners from March 2014 to December 2014.
Joseph C. Mello COO, HealthCare Partners • Became the chief operating officer, HealthCare
Partners, in January 2015 after two years as a private
investor and consultant.
• From 2009 through 2012, he served as a consultant
to DaVita. From 2000 to 2009, he served as DaVita’s
chief operating officer.
James K. Hilger Interim CFO and CAO of DaVita
HealthCare Partners Inc.
• Became interim chief financial officer in March 2015.
• Mr. Hilger continues to serve as the chief accounting
officer, a position he has held since April 2010.
• Prior to April 2010, Mr. Hilger served as the vice president
and controller since May 2006, after having served as our
vice president, finance beginning in September 2005.
Jeanine M. Jiganti CPO of DaVita HealthCare
Partners Inc
• Became the chief compliance officer in March 2013.
• From July 2012 to March 2013, she served as the vice
president, international chief compliance officer and
deputy chief compliance officer.
LeAnne M. Zumwalt Group Vice President,
Purchasing and Public Affairs of
DaVita HealthCare Partners Inc.
• Became the group vice president-purchasing and
government affairs in July 2011.
• From January 2000 to July 2011, Ms. Zumwalt served as
the vice president in many capacities. From January 2000
to October 2009, she served as our vice president,
investor relations while having other responsibilities.
Laura A. Mildenberger
Chief People Officer, Kidney
Care
• Became the chief people officer, Kidney Care, in March
2014.
• From July 2008 to March 2014, she served as chief people
officer.
• Ms. Mildenberger joined DaVita in October 2001 as vice
president of operations.

Dr. Allen R. Nissenson Chief Medical Officer, Kidney
Care
• Became chief medical officer, Kidney Care, in March 2014.
• From August 2008 to March 2014, he served as DaVita’s
chief medical officer.
• He is an emeritus professor of medicine at the David
Geffen School of Medicine at UCLA, where he served as
director of the dialysis program from 1977 to 2008 and
associate dean from 2005 to 2008.
Source: DaVita Investor Relations Management
Board of Directors
Director Position Held Since Affiliates/Other Work
Pamela M. Arway Director May 2009 • From 2005 to 2007 served as the
president of American Express
International.
• Served as advisor to the American
Express Company's chairman and
chief executive officer.
• On board of the Hershey Company,
since May 2010.
• currently serves as the Chair of the
Governance Committee and as a
member of the Audit and Executive
Committees of Hershey Company's
board
Charles G. Berg Director March 2007
Former Non-
Executive
Chairman of
WellCare
Health Plans,
Inc.
• Served as executive chairman and as
a member of the board of directors
of WellCare Health Plans, Inc. from
January 2008 to December 2010.
• Served as non-executive chairman of
the board of directors of WellCare
from January 2011 to May 2013.
• From January 2007 to April 2009, Mr.
Berg was a senior advisor to Welsh,
Carson, Anderson & Stowe, a private
equity firm.
• From April 1998 to July 2004, Mr.
Berg held various executive positions
with Oxford Health Plans, Inc.
("Oxford"), a health benefit plan
provider, which included chief
executive officer from November
2002 to July 2004 when Oxford was
acquired by UnitedHealth Group,
president and chief operating officer
from March 2001 to November 2002
and executive vice president,
medical delivery from April 1998 to
March 2001.

Carol Anthony "John" Davidson Director December 2010
• Served as the senior vice president,
controller and chief accounting
officer of Tyco International Ltd.
• Prior to joining Tyco in January 2004,
he spent six years at Dell Inc., where
he held various leadership roles,
including vice president, audit, risk
and compliance, and vice president,
corporate controller.
• He is also a director of Legg Mason
Inc., a global asset management
firm.
• Mr. Davidson is a member of the
Board of Trustees of the Financial
Accounting Foundation which
oversees financial accounting and
reporting standards setting
processes for the United States.
• Mr. Davidson is a CPA with more
than 30 years of leadership
experience across multiple industries
• previously spent 16 years at Eastman
Kodak Company, in a variety of
accounting and financial leadership
roles
Barbara J. Desoer Director April 2015 • Has been the Chief Executive Officer
and a member of the board of
directors of Citibank, N.A., a wholly
owned subsidiary of Citigroup Inc. a
diversified global financial services
company, since April 2014.
• Previously served as the Chief
Operating Officer of Citibank, N.A.
from October 2013 to April 2014.
• leads Citigroup's comprehensive
capital analysis and review process
• Spent 35 years at Bank of America,
most recently as President, Bank of
America Home Loans, where she led
the integration of Countrywide, the
largest mortgage originator and
servicer in the United States.
Paul J. Diaz
Director July 2007 • serves as the executive vice
chairman of Kindred Healthcare, Inc.
a position he has held since March
2015
• He served as chief executive officer
of Kindred from January 2004 to
March 2015, as well as president
from January 2002 to May 2012 and
as Chief Operating Officer from
January 2002 to December 2003.
• Prior to joining Kindred, Mr. Diaz was
the managing member of Falcon

Capital Partners, LLC
• Mr. Diaz serves on the board of
Kindred and the board of visitors of
Georgetown University Law Center
and previously served on the board
of PharMerica Corporation
Peter T. Grauer Independent
Director
August 1994
and lead
Independent
director since
2003
• Mr. Grauer has been chairman of the
board of Bloomberg, Inc., since April
2001, treasurer since March 2001
and was its chief executive officer
from March 2002 until July 2011.
• Mr. Grauer has also served as a non-
executive director of Glencore plc, a
global mining and commodities firm
listed on the London Stock Exchange,
since June 2013.
• Mr. Grauer was a managing director
of Credit Suisse First Boston, a
financial services firm
John M. Nehra Director November 2000 • From 1989 until his retirement in
August 2014, Mr. Nehra was
affiliated with New Enterprise
Associates ("NEA"), including, from
1993 until his retirement, as general
partner of several of its affiliated
venture capital limited partnerships.
• Mr. Nehra also served as managing
general partner of Catalyst Ventures
from 1989 to 2013.
• Mr. Nehra served on the boards of a
number of NEA's portfolio
companies until his retirement in
August 2014 and remains a retired
special partner of NEA.
• Mr. Nehra is an experienced
business leader with approximately
44 years of experience in investment
banking, research and capital
markets.
Dr. William L. Roper Director May 2001 • Dr. Roper has been chief executive
officer of the University of North
Carolina ("UNC") Health Care
System, dean of the UNC School of
Medicine and vice chancellor for
medical affairs of UNC since March
2004.
• Dr. Roper also continues to serve as
a professor of health policy and
administration in the UNC School of
Public Health and a professor of
pediatrics and of social medicine in
the UNC School of Medicine
• From 1997 until March 2004, he was
dean of the UNC School of Public
Health.

• Before joining UNC in 1997, Dr.
Roper served as senior vice president
of Prudential Health Care.
• He also served as director of the
Centers for Disease Control and
Prevention from 1990 to 1993, on
the senior White House staff in 1989
and 1990 and as the administrator of
Centers for Medicare & Medicaid
Services from 1986 to 1989.
Kent J. Thiry
Chairman &
CEO
CEO: October
1999, Co-
Chairman:
2012-2015
Chairman: 2015
• From June 1997 until he joined
DaVita in October 1999, Mr. Thiry
was chairman of the board and chief
executive officer of Vivra Holdings,
Inc., which was formed to operate
the non-dialysis business of Vivra
Incorporated (“Vivra”) after Gambro
AB acquired the dialysis services
business of Vivra in June 1997
• From April 1992 to August 1992, Mr.
Thiry was president and co-chief
executive officer of Vivra, and from
September 1991 to March 1992, he
was president and chief operating
officer of Vivra.
• From 1983 to 1991, Mr. Thiry was
associated with Bain & Company,
first as a consultant, and then as vice
president. Mr. Thiry previously
served on the board of Varian
Medical Systems, Inc. from August
2005 to February 2009 and served as
the non-executive chairman of
Oxford Health Plans, Inc. until it was
sold to UnitedHealth Group in July
2004
Roger J. Valine Director July 2006 • From 1993 to his retirement in July
2006, Mr. Valine served as the chief
executive officer of Vision Service
Plan (“VSP”), the nation’s largest
provider of eyecare wellness
benefits.
• From January 1991 to February
2006, Mr. Valine served as both the
president and chief executive officer
of VSP.
• Upon his retirement, Mr. Valine had
worked for VSP for 33 years and
provided consulting services to VSP
through January 2008.
• Mr. Valine previously served on the
boards of American Specialty Health
Incorporated and SureWest
Communications.

Source: DaVita Investor Relations, Board of Directors

Appendix 10: Committees of the Board
Committees of the Board
The following chart sets out the current members of DaVita HealthCare Partners Inc.’s Board Committees and describes the principal functions of each
committee of the Board. The charter for each committee is available under the Corporate Governance section of the company website, located at
http://www.DaVita.com/about/corporate-governance.
Name of Committee
and Members
Principal Functions
of the Committee
Meetings
in 2014
Audit1
Carol Anthony ("John")
Davidson Chair
Charles G. Berg
Roger J. Valine
• Assists the Board with oversight of the integrity of our financial
statements including the financial reporting and disclosure processes and
the integrity and effectiveness of our system of internal control over
financial reporting.
• Assists the Board with oversight of the independence, qualifications and
performance of our independent registered public accounting firm,
including a review of the scope and results of their audit, as well as our
internal audit function.
• Together with the Compliance Committee, assists the Board with
oversight of compliance with legal and regulatory requirements, including
those that may have a material impact on the Company's financial
statements.
• Appoints and engages our independent registered public accounting firm,
and pre-approves the firm's annual audit services (including related fees),
audit-related services, and all other services in accordance with our pre-
approval policy.
• Monitors our disclosure controls and procedures and compliance with
ethical standards.
11
Compensation2
Pamela M. Arway Chair
Paul J. Diaz
Peter T. Grauer
Roger J. Valine
• Reviews the performance of our chief executive officer and other
executives and makes decisions regarding their compensation.
• Establishes policies relating to the compensation of our executive officers
and other key employees that further the goal of ensuring that our
compensation system for our chief executive officer and our other
executives, as well as our philosophy for compensation for all employees
and the Board, is aligned with the long-term interests of our stockholders.
• Conducts an evaluation of our chief executive officer's performance and
the Company's performance and considers a self-assessment prepared
by our chief executive officer. Periodically, the Compensation Committee
engages an outside consultant to conduct an in-depth analysis of our
chief executive officer's performance as a manager during the year.
• Has sole authority and discretion to retain or replace its independent
compensation consultant.
• Annually determines and approves the compensation package for our
chief executive officer subject to ratification by the independent members
of the Board.
• Works closely with and considers the recommendations of our chief
executive officer to determine the compensation of our other executive
officers.
• When determining the compensation of the other executive officers,
considers the recommendations of the chief executive officer who
conducts a performance and compensation review of each other
executive officer and reviews his detailed assessments of the
performance of each of the other executive officers with the
Compensation Committee.
• Reviews the results of advisory stockholder votes and other stockholder
feedback on the compensation of our executive officers and considers
whether to make adjustments to our compensation policies and practices
5

as a result of such votes.
Name of Committee
and Members
Principal Functions
of the Committee
Meetings
in 2014
Nominating and
Governance3
Peter T. Grauer Chair
Pamela M. Arway
Davidson
Roger J. Valine
• Reviews and makes recommendations to the Board
about our governance processes.
• Assists in identifying and recruiting candidates for the
Board.
• Annually reviews the performance of the individual
members of the Board.
• Proposes a slate of nominees for election at the annual
meeting of stockholders.
• Makes recommendations to the Board regarding the
membership and chairs of the committees of the Board.
3
Compliance
Committee4
Charles G. Berg Chair
Paul J. Diaz
John M. Nehra
Dr. William L. Roper
• Reviews and oversees compliance with Federal health
care program requirements and the five-year Corporate
Integrity Agreement entered into with the Office of the
Inspector General.
• Oversees and monitors the effectiveness of our
healthcare regulatory compliance program, reviews
significant healthcare regulatory compliance risk areas,
and reviews the steps management is taking to monitor,
control and report these risk exposures.
• Together with the Audit Committee, assists the Board
with oversight of compliance with healthcare regulatory
requirements.
• Has primary responsibility for oversight of healthcare
regulatory requirements and for directing the Company's
response to certain pending governmental investigations.
• Meets regularly with our chief compliance officer.
8
Public Policy5
John M. Nehra Chair
Pamela M. Arway
Paul J. Diaz
Dr. Robert J. Margolis
• Advises the Board on public policy and makes
recommendations to the Board as to policies and
procedures relating to issues of public policy and
government relations.
• Oversees the Company's government affairs activity and
political spending.
2
Clinical Performance6
Dr. William L. Roper
Chair
Davidson
Dr. Robert J. Margolis
• Advises the Board on clinical performance issues facing
the Company.
• Makes recommendations to management and to the
Board as to policies and procedures relating to issues of
clinical performance.
2
1

Ms. Arway served on the Audit Committee until March 6, 2014.
2
Mr. Nehra served as the Chair of the Compensation Committee until January 14, 2014. Ms. Arway was appointed to the Compensation Committee on
January 14, 2014, and was appointed Chair of the Compensation Committee on January 14, 2014. Mr. Diaz was appointed to the Compensation Committee
on March 6, 2014.
3
Messrs. Berg, Diaz and Nehra and Dr. Roper served on the Nominating and Governance Committee until March 6, 2014.
4
Mr. Roper served as the Chair of the Compliance Committee until October 9, 2014. Ms. Arway and Mr. Grauer served on the Compliance Committee until
October 9, 2014. Messrs. Diaz and Nehra were appointed to the Compliance Committee on October 9, 2014. Mr. Berg was appointed Chair of the
Compliance Committee on October 9, 2014.
5
Mr. Diaz served as the Chair of the Public Policy Committee until March 6, 2014. Dr. Roper served on the Public Policy Committee until March 6, 2014.
Ms. Arway, Mr. Nehra, and Dr. Margolis were appointed to the Public Policy Committee on March 6, 2014, and Mr. Nehra was appointed Chair of the Public
Policy Committee on March 6, 2014.
6
Ms. Arway and Mr. Nehra served on the Clinical Performance Committee until March 6, 2014. Mr. Davidson was appointed to the Clinical Performance
Committee on March 6, 2014.
14
SOURCE: DaVita HealthCare Partners Inc. Proxy Statement 2015

APPENDIX 11: Shareholder Rights
Voting Information
Our only voting securities are the outstanding shares of our common stock. At the record date, we had approximately
214,941,142 shares of common stock outstanding. Each stockholder is entitled to one vote per share on each matter that we
will consider at this meeting. Stockholders are not entitled to cumulate votes. Under the rules of the New York Stock
Exchange, your bank, broker, or other nominee may not vote your uninstructed shares in the election of directors and certain
other matters on a discretionary basis. Accordingly, brokers holding shares of record for their customers generally are not
entitled to vote on these matters unless their customers give them specific voting instructions. If the broker does not receive
specific instructions, the broker will note this on the proxy form or otherwise advise us that it lacks voting authority. Thus, if
you hold your shares in "street name," meaning that your shares are registered in the name of your bank,
broker, or other nominee, and you do not instruct your bank, broker, or other nominee how to vote in the election of directors,
the proposal regarding the advisory vote on executive compensation, or on the stockholder proposal, if properly brought
before the annual meeting, no votes will be cast on your behalf. The votes that the brokers would have cast if their customers
had given them specific instructions are commonly called "broker non-votes." If the stockholders of record present in person
or represented by their proxies and entitled to vote at the annual meeting hold at least a majority of our shares of common
stock outstanding as of the record date, a quorum will exist for the transaction of business at the annual meeting. Stockholders
attending the annual meeting in person or represented by proxy at the annual meeting who abstain from voting and broker
non-votes are counted as present for quorum purposes.
Votes Required for Proposals
Directors are elected by a majority of votes cast, which means that the number of shares voted "for" each of the nine nominees
for election to the Board must exceed 50% of the number of votes cast with respect to each nominee's election. Abstentions
and broker non-votes will not be counted as votes cast and will have no effect on the election of directors. In the event that the
number of nominees exceeds the number of directors to be elected, which is a situation that we do not anticipate, directors will
be elected by a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the
election of directors.
The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2015,
the approval of the proposal regarding the advisory vote on executive compensation, and the stockholder proposal, if properly
brought before the annual meeting, each require the affirmative vote of a
majority of the shares of common stock present at the annual meeting in person or by proxy and entitled to vote thereon.
Because your vote on executive compensation and the stockholder proposal is advisory, the results of those votes will not be
binding on the Company or the Board. However, the Board and any applicable Board committee will consider the voting
results as appropriate when making future decisions regarding executive compensation and the topic of the stockholder
proposal. Abstentions are considered present and entitled to vote with respect to these proposals and will, therefore, have the
same effect as votes against these proposals. Broker non-votes with respect to the approval of the proposal regarding the
advisory vote on executive compensation, and the stockholder proposal will not be considered as present and entitled to vote
on these proposals, and will therefore have no effect on the number of affirmative votes needed to approve these proposals.
Proxy Solicitation Costs
We will pay for the cost of preparing, assembling, printing and mailing of the Notice of Internet Availability of Proxy
Materials, this Proxy Statement and the accompanying Notice of Meeting, Proxy Card, and Annual Report to Stockholders to
our stockholders, as well as the cost of our solicitation of proxies relating to
the annual meeting. We may request banks and brokers to solicit their customers who beneficially own our common stock
listed of record in names of nominees. We will reimburse these banks and brokers for their reasonable out-of-pocket expenses
regarding these solicitations. We have also retained MacKenzie
Partners, Inc. ("MacKenzie") to assist in the distribution and solicitation of proxies and to verify records related to the
solicitation at a fee of $15,000 plus reimbursement for all reasonable out-of-pocket expenses incurred during the solicitation.

MacKenzie and our officers, directors and employees may supplement the original solicitation by mail of proxies, by
telephone,
facsimile, e-mail and personal solicitation. We will pay no additional compensation to our officers, directors and employees
for these activities. We have agreed to indemnify MacKenzie against liabilities and expenses arising in connection with the
proxy solicitation unless caused by MacKenzie's negligence or intentional misconduct.
SOURCE: DaVita HealthCare Partners Inc. Proxy Statement 2015

Appendix 12: Risk & Oversight
The Board's involvement in risk oversight involves the Audit Committee, the Compliance Committee and the full Board. Each
of the Audit Committee and Compliance Committee are comprised of independent non-executive directors. The Audit
Committee is responsible for legal and regulatory risk oversight and the Compliance Committee has primary responsibility for
oversight of healthcare legal and regulatory compliance requirements. The Audit Committee and the Compliance Committee
meet regularly with our chief legal officer and chief compliance officer, and work together to assist the Board with oversight
of legal and compliance enterprise risk management and to ensure that management identifies, monitors, controls and reports
such compliance risk exposures. The Compliance Committee reviews significant healthcare legal and regulatory compliance
risk areas, and meets on a regular basis and reports directly to the Board on its findings. The Audit Committee receives
materials on enterprise risk management on an annual basis. These materials include identification of top
enterprise risks for the Company, the alignment of management's accountability and reporting for these risks, and mapping of
the Board's and Audit Committee's oversight responsibilities for key risks. In addition, the Audit Committee and the full
Board periodically receive materials to address the identification and status of major risks to the Company. The Audit
Committee discusses significant risk areas and the actions management has taken to monitor, control, and report such
exposures. The Audit Committee also reviews with the Company's chief legal officer legal matters that may have a material
impact on the Company's financial statements, the Company's compliance with applicable laws and regulations, and material
reports or inquiries received from governmental agencies, including such matters identified by the Compliance Committee or
the chief compliance officer. At each meeting of the full Board, the chairman of the Audit Committee reports on the activities
of the Audit Committee, including risks identified and risk oversight.
Independent Registered Public Accounting Firm
The Audit Committee has appointed KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2015.
Representatives of KPMG LLP are expected to attend the annual meeting in person and will be available to respond to appropriate questions and to make a
statement if they so desire. If KPMG LLP should decline to act or otherwise become incapable of acting, or if KPMG LLP's engagement is discontinued for
any reason, the Audit Committee will appoint another independent registered public accounting firm to serve as our independent registered public accounting
firm for 2015. Although we are not required to seek stockholder ratification of this appointment, the Board believes that doing so is consistent with corporate
governance best practices. If the appointment is not ratified, the Audit Committee will explore the reasons for stockholder rejection and will reconsider the
appointment.
The following table sets forth the aggregate professional fees billed to us for the years ended December 31,
2014 and 2013 by KPMG LLP, our independent registered public accounting firm:
2014
2013
Audit fees1 $4,760,714 $4,253,918
Audit-related fees2 487,185 1,158,435
Tax fees3 445,429 300,482
All other fees — —
$5,693,328 $5,712,835
1
Includes aggregate fees for the audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting and the
three quarterly reviews of our consolidated financial statements included in our Form 10-Q and other SEC filings. In addition, audit fees include statutory
audits in several international countries.
2
Includes fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not
reported as "Audit Fees." The audit-related fees in 2014 and 2013 include fees for audits of our employee benefit plans, audits of one and two of our majority-
owned entities, respectively, audits of HCP's risk bearing organizations, and fees of $264,297 and $627,253, respectively, for due diligence services relating
to potential acquisitions.
3
Includes fees for professional services rendered for tax advice and tax planning as well as $260,583 in 2013 for tax due diligence services. None of these
fees were for tax compliance or tax preparation services.
Pre-approval Policies and Procedures
The Audit Committee is required to pre-approve the audit, audit-related, tax and all other services provided by our independent registered public accounting
firm in order to assure that the provision of such services does not impair the auditor's independence. The Audit Committee's pre-approval policy provides for
pre-approval of all audit, audit-related, tax and all other services provided by the independent registered public accounting firm, KPMG LLP. The Audit
Committee
pre-approved all such services in 2014 and concluded that such services performed by KPMG LLP were compatible with the maintenance of that firm's
independence in the conduct of its auditing functions.
The Board recommends a vote FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for
fiscal year 2015.

Source: DaVita HealthCare Partners Inc. Proxy Statement 2014; Risk Oversight

Appendix 13: Kidney Care Compliance risk
Ifwefailtoadheretoallofthecomplexgovernmentregulationsthatapplytoourbusiness,wecouldsuffer severe consequences that would
substantially reduce our revenues, earnings, cash flows and stock price.
Our dialysis operations are subject to extensive federal, state and local government regulations, including MedicareandMedicaidpaymentrulesand
regulations,federalandstateanti-kickbacklaws,thephysician
self-referrallaw(StarkLaw)andanalogousstateself-referralprohibitionstatutes,FederalAcquisition Regulations,theFCAandfederaland
statelawsregardingthecollection,useanddisclosureofpatienthealth informationandthestorage,handlingandadministrationof
pharmaceuticals.TheMedicareandMedicaid reimbursement rules related to claims submission, enrollment and licensing requirements, cost
reporting, and paymentprocessesimposecomplexandextensiverequirementsupondialysisprovidersaswell.Aviolation ordeparturefromanyof
theselegalrequirementsmayresultingovernmentaudits,lowerreimbursements, significant fines and penalties, the potential loss of certification,
recoupment efforts or voluntary repayments.
Weendeavortocomplywithalllegalrequirements,however,thereisnoguaranteethatwewillbeable toadheretoallofthecomplexgovernment
regulationsthatapplytoourbusiness.Wefurtherendeavorto structureallofourrelationshipswithphysicianstocomplywithstateandfederal
anti-kickbackandphysician self-referrallaws.Weutilizeconsiderableresourcestomonitorthelawsandimplementnecessarychanges.
However,thelawsandregulationsintheseareasarecomplexandoftensubjecttovaryinginterpretations.For example,ifanenforcementagency
weretochallengethelevelofcompensationthatwepayourmedical directorsorthenumberofmedicaldirectorswhomweengage,wecouldbe
requiredtochangeourpractices, facecriminalorcivilpenalties,paysubstantialfinesorotherwiseexperienceamaterialadverseeffectasa result
ofachallengetothesearrangements.Inaddition,amendmentstotheFCAimposeseverepenaltiesfor theknowingandimproperretentionof
overpaymentscollectedfromgovernmentpayors.Theseamendments couldsubjectourproceduresforidentifyingandprocessingoverpayments
togreaterscrutiny.Wehavemade significantinvestmentsinnewresourcestodecreasethetimeittakestoidentifyandprocessoverpayments and
wemayberequiredtomakeadditionalinvestmentsinthefuture.Anaccelerationinourabilitytoidentify andprocessoverpaymentscouldresultin
usrefundingoverpaymentstogovernmentandotherpayorsmore rapidlythanwehaveinthepastwhichcouldhaveamaterialadverseeffectonour
operatingcashflows.
Additionally,amendmentstothefederalanti-kickbackstatuteinthehealthreformlawmakeanti-kickback violations subject to FCA prosecution,
including qui tam or whistleblower suits.
Ifanyofouroperationsarefoundtoviolatetheseorothergovernmentregulations,wecouldsuffer severeconsequencesthatwouldhaveamaterial
adverseeffectonourrevenues,earnings,cashflowsand stock price,including:
• Suspensionorterminationofourparticipationingovernmentpaymentprograms;
• Refundsofamountsreceivedinviolationoflaworapplicablepaymentprogramrequirements;
• Lossofrequiredgovernmentcertificationsorexclusionfromgovernmentpaymentprograms;
• Lossoflicensesrequiredtooperatehealthcarefacilitiesoradministerpharmaceuticalsinsomeof the states in which we operate;
• Reductionsinpaymentratesorcoveragefordialysisandancillaryservicesandrelated pharmaceuticals;
• Fines, damages or monetary penalties for anti-kickback law violations, Stark Law violations, FCA violations, civil or criminal
liabilitybasedonviolationsoflaw,orotherfailurestomeetregulatory requirements;

• Enforcementactionsbygovernmentalagenciesand/orstateclaimsformonetarydamagesby patients
whobelievetheirprotectedhealthinformationhasbeenused,disclosedornotproperly safeguardedin
violationoffederalorstatepatientprivacylaws,includingHealthInsurance Portabilityand
AccountabilityAct(HIPAA)of1996;
• Mandatedchangestoourpracticesorproceduresthatsignificantlyincreaseoperatingexpenses;
• Impositionofandcompliancewithcorporateintegrityagreementsthatcouldsubjectustoongoing auditsand
reportingrequirementsaswellasincreasedscrutinyofourbillingandbusinesspractices whichcould lead to
potential fines;
• Terminationofrelationshipswith medicaldirectors;and
• Harmtoourreputationwhichcouldimpactourbusinessrelationships,affectourabilitytoobtain financing
anddecreaseaccesstonewbusinessopportunities.
Wearethesubjectofanumberofinvestigationsbythefederalgovernmentandtwoprivatecivilsuits,any ofwhich
couldresultinsubstantialpenaltiesorawardsagainstus,theimpositionofcertainobligationson ourpracticesand
procedures,exclusionfromfutureparticipationintheMedicareandMedicaidprograms and possible criminal
penalties.
Wearethesubjectofanumberofinvestigationsbythefederalgovernment.Wehavereceived subpoenasorother
requestsfordocumentsfromthefederalgovernmentinconnectionwiththeVainer privatecivilsuit,theSwobenprivate
civilsuit,the2011U.S.AttorneyMedicaidinvestigationandthe2015U.S. Attorney Transportation Investigation.
IneachoftheVainerandSwobenprivatecivilsuits,arelatorfiledacomplaintagainstusinfederalcourt underthequitam
provisionsoftheFalseClaimsAct(FCA)(andintheSwobenmatter,provisionsofthe CaliforniaFalseClaimsAct,as
well)andpursuedtheclaimsindependentlyafterthegovernmentdeclinedto intervene.WithregardtotheVanierprivate
civilsuit,thepartiesareengagedinactivelitigation,andin August2014,thecourtreopenedfactdiscovery.Withregard
totheSwobenprivatecivilsuit,inJuly2013,the courtgrantedHCP’smotionanddismissedwithprejudicealloftheclaims
intheThirdAmendedComplaint, andinOctober2013theplaintifffiledanappealofthedismissal,whichiscurrently
pending.(SeeNote17to theconsolidatedfinancialstatementsofthisreportforadditionaldetailsregardingthesematters).
IfwefailtocomplywithourCorporateIntegrityAgreement,wecouldbesubjecttosubstantialpenalties and
exclusion from participation in federal health care programs that may adversely impact our revenues, earnings and
cashflows.
InOctober2014,weenteredintotheSettlementAgreementwiththeUnitedStatesandrelatorDavid Barbettatoresolve
thepending2010and2011U.S.AttorneyPhysicianRelationshipInvestigations.In connectionwiththeresolutionof
thesematters,andinexchangefortheOIG’sagreementnottoexcludeus fromparticipatinginthefederalhealthcare
programs,wehaveenteredintothefive-yearCorporateIntegrity Agreement(CIA)withtheOIG.TheCIA(i)requires
thatwemaintaincertainelementsofourcompliance programs,(ii)imposescertainexpandedcompliance-related
requirementsduringthetermoftheCIA,
(iv) requiresongoing monitoring, reporting, certification, recordsretention and training obligations, theformal allocationof
certainoversightresponsibilitytotheBoard’sComplianceCommittee,thecreationofa ManagementCompliance
CommitteeandtheretentionofanindependentcomplianceadvisortotheBoard, and(iv)containscertainbusiness
restrictionsrelatedtoasubsetofourjointventurearrangements,including ouragreeingto:(1)unwind11jointventure
transactionsthatwerecreatedthroughpartialdivestiturestoor partialacquisitionsfromnephrologistsandthatcover
26ofour2,119clinicsthatexistedatthetimewe enteredintotheSettlementAgreement;(2)notenterintocertaintypes
ofpartialdivestiturejointventure transactionswithnephrologistsduringthetermoftheCIA;and(3)certainother
restrictions.Thecosts associatedwithcompliancewiththeCIAcouldbesubstantialandmaybegreaterthanwe
currently anticipate. In addition, in the event of a breach of the CIA, we could become liable for payment of

certain stipulated penalties, or could be excluded from participation in federal health care programs. The
costs associated with compliance with the CIA, or any liability or consequences associated with its breach,
could have an adverse effect on our revenues, earnings and cash flows.
(v)
Source: DaVita Annual Report 2014

Appendix 14: HCP Compliance Risk
HCP is subject to many of the same risks to which our dialysis business is subject.
As a participant in the healthcare industry, HCP is subject to many of the same risks to which our dialysis
business is subject to as described in the risk factors set forth above, any of which could materially and
adversely affect HCP’s revenues, earnings or cash flows. Among these risks are the following:
• The healthcare business is heavily regulated and changes in laws, regulations, or government
programs could have a material impact on HCP;
• Failure to comply with complex governmental regulations could have severe consequences to
HCP, including, without limitation, exclusion from governmental payor programs like
Medicare and Medicaid;
• HCP could become the subject of governmental investigations, claims, and litigation;
• HCP may be unable to continue to explore potential acquisition candidates, make acquisitions
or successfully integrate such acquisitions into its business, and such acquisitions may include
liabilities of which HCP was not aware; and
• As a result of the broad scope of HCP’s medical practice, HCP is exposed to medical
malpractice claims, as well as claims for damages and other expenses, that may not be covered
by insurance or for which adequate limits of insurance coverage may not be available.
Laws regulating the corporate practice of medicine could restrict the manner in which HCP is permitted
to conduct its business and the failure to comply with such laws could subject HCP to penalties or require
a restructuring of HCP.
Some states have laws that prohibit business entities, such as HCP, from practicing medicine, employing
physicians to practice medicine, exercising control over medical decisions by physicians (also known
collectively as the corporate practice of medicine) or engaging in certain arrangements, such as fee-
splitting, with physicians. In some states these prohibitions are expressly stated in a statute or regulation,
while in other states the prohibition is a matter of judicial or regulatory interpretation. Of the states in
which HCP currently operates, California and Nevada prohibit the corporate practice of medicine.
In California and Nevada, HCP operates by maintaining long-term contracts with its associated physician
groups which are each owned and operated by physicians and which employ or contract with additional
physicians to provide physician services. Under these arrangements, HCP provides management services
and, receives a management fee for providing non-medical management services; however, HCP does
not represent that it offers medical services, and does not exercise influence or control over the practice
of medicine by the physicians or the associated physician groups.
In addition to the above management arrangements, HCP has certain contractual rights relating to the
orderly transfer of equity interests in certain of its associated California and Nevada physician groups
through succession agreements and other arrangements with their physician equity holders. However,
such equity interests cannot be transferred to or held by HCP or by any non-professional organization.
Accordingly, neither HCP nor HCP’s subsidiaries directly own any equity interests in any physician
groups in California and Nevada. In the event that any of these associated physician groups fails to
comply with the management arrangement or any management arrangement is terminated and/or HCP is
unable to enforce its contractual rights over the orderly transfer of equity interests in its associated

CFA Research Challenge analyzes DaVita HealthCare Partners

CFA Research Challenge analyzes DaVita HealthCare Partners

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