DAVITA INC. (DVA)

CIK: 0000927066. SIC: 8090 Services-Misc Health & Allied Services, NEC. Latest 10-K as of: 2026-02-11.

SIC breadcrumb: Services > SIC Major Group 80 > SIC 8090 Services-Misc Health & Allied Services, NEC

SEC company page: https://www.sec.gov/edgar/browse/?CIK=927066. Latest filing source: 0000927066-26-000012.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000927066.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-11. Report date: 2025-12-31.

Item 7.        Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking statements

This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are forward-looking statements within the meaning of the federal securities laws and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements could include, among other things, statements about our balance sheet and liquidity, our expenses, revenues, billings and collections, patient census, the impact of the cybersecurity incident experienced by the Company in 2025, the potential impact of the One Big Beautiful Bill Act (OBBBA) and federal government policy changes or shutdowns, including with respect to federal funding and reimbursement rates of Medicare, Medicare Advantage, Medicaid and other government programs, availability or cost of supplies, including without limitation the impact of evolving trade policies and tariffs and any reduction in clinical and other supplies due to any disruptions experienced by third party vendors, including with respect to our ability to provide home dialysis services, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, including potential impacts to such mix as a result of U.S. administration policies, current macroeconomic, marketplace and labor market conditions, and overall impact on our patients and teammates, as well as other statements regarding our future operations, financial condition and prospects, capital allocation plans, expenses, cost saving initiatives, other strategic initiatives, use of contract labor, government and commercial payment rates, expectations related to value-based care (VBC), integrated kidney care (IKC), Medicare Advantage (MA) plan enrollment and our international operations, expectations regarding increased competition and marketplace changes, including those related to new or potential entrants in the dialysis and pre-dialysis marketplace and the potential impact of innovative technologies, drugs, or other treatments on the dialysis industry, and expectations regarding our share repurchase program. All statements in this report, other than statements of historical fact, are forward-looking statements. Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on DaVita's current expectations and are based solely on information available as of the date of this report. DaVita undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. Actual future events and results could differ materially from any forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things:

•external conditions, including those related to general economic, political and global health conditions, including without limitation, the impact of global events and political or governmental volatility; the impact of the domestic political environment and related developments on the current healthcare marketplace, our patients and on our business, including without limitation, developments related to domestic policy initiatives and guidance or potential government shutdowns; the continuing impact of infectious diseases on the chronic kidney disease population and our patient population; supply chain challenges and disruptions, including without limitation, with respect to certain key services, critical clinical supplies and equipment we obtain from third parties, and including any impacts on our supply chain and cost of supplies as a result of natural disasters or evolving trade policies, including tariffs; the potential impact on our patients and industry of new or potential entrants in the dialysis and pre-dialysis marketplace and innovative technologies, drugs, or other treatments; elevated teammate turnover or labor costs; the impact of continued increased competition from dialysis providers and others; and our ability to respond to challenging U.S. and global economic and marketplace conditions, including, among other things, our ability to successfully identify cost saving opportunities;

•the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment rates; our ability to negotiate and maintain contracts with these payors on competitive terms or at all; a reduction in the number or percentage of our patients under commercial plans, including, without limitation, as a result of healthcare, immigration or other policies implemented by the U.S. administration, continuing legislative efforts to restrict or prohibit the use and/or availability of charitable premium assistance, as a result of payors implementing restrictive plan designs or resulting from negotiations with large commercial payors that we have in the past, and currently are, conducting on a concurrent basis;

•risks arising from laws, regulations or requirements applicable to us or changes thereto, including, without limitation, the OBBBA and those related to trade policy, healthcare, privacy, antitrust matters, and acquisition, merger, joint venture or similar transactions and/or labor matters, and potential impacts of changes in interpretation or enforcement thereof or related litigation impacting, among other things, coverage or reimbursement rates for our services or the number of patients enrolled in or that select higher-paying commercial plans, and the risk that we make incorrect assumptions about how our patients will respond to any such developments;

50

•our ability to successfully implement strategic and operational initiatives in a complex, evolving and highly regulated environment, including, without limitation, with respect to IKC and VBC initiatives and home based dialysis;

•a reduction in government payment rates under the Medicare End Stage Renal Disease program, state Medicaid or other government-based programs and the impact of the MA benchmark structure and adjustment methodologies;

•our reliance on significant suppliers, service providers and other third party vendors to provide key support to our business operations and enable our provision of services to patients, including, among others, suppliers of certain pharmaceuticals, administrative or other services or critical clinical products; and risks resulting from a closure, reduction or other disruption in the services or products provided to us by such suppliers, service providers and third party vendors;

•our ability to successfully maintain, operate or upgrade our information systems or those of third-party service providers upon which we rely and our ability to successfully adopt or adapt to new technologies, treatments or therapies;

•legal and compliance risks, such as compliance with complex, and at times, evolving government regulations and requirements, and with additional laws that may apply to our operations as we expand geographically or enter into new lines of business;

•noncompliance by us or our business associates with any privacy or security laws or any security breach by us or a third party, such as the cybersecurity incident experienced by the Company in 2025, including, among other things, any such non-compliance or breach involving the misappropriation, loss or other unauthorized use or disclosure of confidential information;

•our ability to attract, retain and motivate teammates, including key leadership personnel, and our ability to manage potential disruptions to our business and operations, including potential work stoppages, operating cost increases or productivity decreases whether due to union organizing activities, political unrest or legislative or other changes, demand for labor, volatility and uncertainty in the labor market, the current challenging and highly competitive labor market conditions, including due to the ongoing nationwide shortage of skilled clinical personnel, or other reasons;

•changes in practice patterns related to pharmaceuticals, medical equipment or supplies, reimbursement and payment policies and processes, or pricing, including with respect to oral phosphate binders, among other things;

•our ability to develop and maintain relationships with physicians and hospitals, changing affiliation models for physicians, and the emergence of new models of care or other initiatives that, among other things, may erode our patient base and impact reimbursement rates;

•our ability to complete and successfully integrate and operate acquisitions, mergers, dispositions, joint ventures or other strategic transactions on terms favorable to us or at all; and our ability to continue to successfully expand our operations and services in markets outside the United States, or to businesses or products outside of dialysis services;

•the variability of our cash flows, including, without limitation, any extended billing or collections cycles including, without limitation, due to defects or operational issues in our billing systems, the impact of the cybersecurity incident experienced by the Company in 2025 or defects or operational issues in the billing systems or services of third parties on which we rely; the risk that we may not be able to generate or access sufficient cash in the future to service our indebtedness or to fund our other liquidity needs;

•the effects on us or others of natural or other disasters, public health crises or severe adverse weather events such as hurricanes, earthquakes, fires or flooding;

•factors that may impact our ability to repurchase stock under our share repurchase program and the timing of any such stock repurchases, as well as any use by us of a considerable amount of available funds to repurchase stock;

•our goals and disclosures related to sustainability matters, including, among other things, evolving regulatory requirements affecting environmental, social and governance standards, measurements and reporting requirements; and

•the other risk factors, trends and uncertainties set forth in Part I Item 1A. of this Annual Report on Form 10-K, and the other risks and uncertainties discussed in any subsequent reports that we file or furnish with the Securities and Exchange Commission (SEC) from time to time.

The following should be read in conjunction with our consolidated financial statements.

51

Company overview

Our principal business is to provide dialysis and related lab services to patients in the United States, which we refer to as our U.S. dialysis business. We also operate our U.S. integrated kidney care (IKC) business, our U.S. other ancillary services, and our international operations, which we collectively refer to as our ancillary services, as well as our corporate administrative support functions. Our U.S. dialysis business is a leading provider of kidney dialysis services in the U.S. for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD) or end stage kidney disease (ESKD).

Operational and financial highlights for 2025 include, among other things:

•U.S. dialysis revenue growth of 3.5% from an increase in average patient services revenue per treatment of $18.24;

•revenue growth of 27.3% in our other ancillary businesses, primarily in our international operations;

•operating income of $2,044 million and adjusted operating income of $2,094 million;

•operating cash flows of $1,887 million and free cash flows of $1,024 million;

•repurchase of 12,678,623 shares of our common stock for aggregate consideration of $1,788 million, and a 14.9% net reduction in our outstanding share count year-over-year;

•entry into a new Term Loan A-2 facility in the aggregate principal amount of $2,000 million and a revolving line of credit in an aggregate principal amount up to $1,500 million, and entry into a new Term Loan B-2 facility in the aggregate principal amount of $1,878 million. A portion of the proceeds from these transactions was used to pay-off the principal balances outstanding on our Term Loan A-1 and Term Loan B-1;

•issuance of an aggregate principal amount of $1,000 million of 6.75% senior notes due 2033;

•we purchased an additional $4,750 million notional amount of forward interest rate caps to shield our exposure to significant interest rate increases through 2029; and

•leverage ratio, as a multiple of Consolidated EBITDA, each as defined by our credit agreement, remained within our target range of 3.0x to 3.5x throughout 2025.

Additional highlights include:

•a net increase in consolidated patient growth of 4.9%, primarily driven by 17.6% in international patient growth as of December 31, 2025; and

•a net increase of 76 international dialysis centers primarily from acquisitions.

We assess our revenue and operating performance for our U.S. dialysis business based upon several principal metrics including, among others, treatment volume, revenue per treatment and patient care costs. Each of these metrics may be impacted by a number of factors that change from period to period and over time. In 2026 in our U.S. dialysis business, we expect approximately flat treatment volumes due to the net impact of a number of factors. These include, among other things, mortality levels that remain elevated relative to pre-pandemic periods, but assuming a slight improvement in flu impact compared to 2025; and admissions levels consistent with 2025 excluding the impact of the recent cyber incident. We expect operating income growth resulting from revenue per treatment improvements, primarily driven by rate increases and improvements in collections efforts impacted by the cyber incident, partially offset by the expiration of enhanced premium tax credits for exchange plans. We expect an increase in costs per treatment due to inflationary increases in labor and other costs, partially offset by a continued decline in depreciation and amortization costs as well as a decline in costs associated with the cyber incident. In addition, we expect the impact of phosphate binders on operating income to be approximately flat year-over-year. We also expect operating income growth in our international business and our integrated kidney care business. We expect a decrease in debt expense in 2026 due in part to the financing transactions announced in 2025, as described below. We expect positive other income in 2026 as the result of decreased losses from our investment of Mozarc Medical Holding LLC (Mozarc). Finally, considerable uncertainty remains surrounding the continued implementation and development of the various governmental laws, regulations and other requirements that may impact our business, including the extent to which such developments impact the behavior of other health care market participants such as payors, employers, charitable organizations and government agencies.

52

On June 19, 2019, we completed the sale of our prior DaVita Medical Group (DMG) business to a subsidiary of Optum, Inc., a subsidiary of UnitedHealth Group Inc. The effects of the DMG sale have been reported in discontinued operations for all periods presented and DMG is not included below in this Management's Discussion and Analysis.

The discussion below includes analysis of our financial condition and results of operations for the years ended December 31, 2025 compared to December 31, 2024. Our Annual Report on Form 10-K for the year ended December 31, 2024, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023, in its Part II Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

References to the "Notes" in the discussion below refer to the notes to the Company's consolidated financial statements included in this Annual Report on Form 10-K at Part IV Item 15, "Exhibits, Financial Statement Schedules" as referred from Part II Item 8, "Financial Statements and Supplementary Data."

General Economic, Political and Global Health Conditions

We continue to be impacted by external conditions, including, but not limited to, those related to general economic, political and global health conditions, changing population or demographic trends and severe weather events or natural disasters. These conditions can impact our business in a variety of ways, including, among other things, by affecting our patient census, treatment volumes, revenues, results of operations and operating and other costs. These conditions are generally outside of our control and none of which we can reasonably predict and are interrelated or have interdependent complex consequences. As a result, the ultimate impact of these conditions on our business over time will depend on a myriad of future developments and is highly uncertain and difficult to predict. For additional discussion of these external conditions and the impact they may have on our business, see Part I Item 1. "Business" and Part I Item 1A. "Risk Factors."

53

Consolidated results of operations

The following table summarizes our revenues, operating income and adjusted operating income by line of business. See the discussion of our results for each line of business following this table. When multiple drivers are identified in the following discussion of results, they are listed in order of magnitude:

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions)

Revenues:

U.S. dialysis

$

11,793 

$

11,391 

$

402 

3.5 

%

Other - Ancillary services

1,922 

1,510 

412 

27.3 

%

Elimination of intersegment revenues

(72)

(86)

14 

16.3 

%

Total consolidated revenues

$

13,643 

$

12,816 

$

827 

6.5 

%

Operating income:

U.S. dialysis

$

2,084 

$

2,121 

$

(37)

(1.7)

%

Other - Ancillary services

92 

83 

9 

10.8 

%

Corporate administrative support

(133)

(113)

(20)

(17.7)

%

Operating income

$

2,044 

$

2,090 

$

(46)

(2.2)

%

Adjusted operating income:(1)

U.S. dialysis

$

2,109 

$

2,086 

$

23 

1.1 

%

Other - Ancillary services

117 

8 

109 

1,362.5 

%

Corporate administrative support

(133)

(113)

(20)

(17.7)

%

Adjusted operating income

$

2,094 

$

1,981 

$

113 

5.7 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

(1)For a reconciliation of adjusted operating income by reportable segment, see the "Reconciliations of non-GAAP measures" section below.

U.S. dialysis business

Our U.S. dialysis business is a leading provider of kidney dialysis services, which as of December 31, 2025, operated 2,657 outpatient dialysis centers serving approximately 200,500 patients, and contracted to provide hospital inpatient dialysis services in approximately 740 hospitals. We estimate that we have approximately a 36% share of the U.S. dialysis market based upon the number of patients we serve.

Approximately 86% of our 2025 consolidated revenues were derived directly from our U.S. dialysis business. The principal drivers of our U.S. dialysis revenues include    :

•our number of treatments, which is primarily a function of the number of chronic patients requiring approximately three in-center treatments per week as well as, to a lesser extent, the number of treatments for home-based dialysis and hospital inpatient dialysis; and

•our average dialysis patient service revenue per treatment, including the mix of patients with commercial plans and government programs as primary payor.

Within our U.S. dialysis business, our home-based dialysis and hospital inpatient dialysis services are operationally integrated with our outpatient dialysis centers and related laboratory services. Our outpatient, home-based and hospital inpatient dialysis services comprise approximately 76%, 18% and 6% of our U.S. dialysis revenues, respectively.

In the U.S., government dialysis-related payment rates are principally determined by federal Medicare and state Medicaid policy. For 2025, approximately 68% of our total U.S. dialysis patient service revenues were generated from government-based programs for services to approximately 89% of our total U.S. patients. These government-based programs are principally Medicare and MA, Medicaid and managed Medicaid plans, and other government plans, representing approximately 57%, 7% and 3% of our U.S. dialysis patient service revenues, respectively.

54

In November 2025, the Centers for Medicare & Medicaid Services (CMS) issued a final rule to update the Medicare ESRD Prospective Payment System payment rate and policies for calendar year 2026. CMS has finalized ESRD freestanding facilities' average reimbursement by an increase of 2.2% in 2026.

In addition, from time-to-time CMS identifies drugs to be added to the ESRD PPS bundled payment. On January 1, 2025, phosphate binders, a drug class taken orally by many ESKD patients to reduce absorption of dietary phosphate, were incorporated into the ESRD PPS bundle. Phosphate binders are not considered accounted for in the ESRD PPS base rate at this time and will be reimbursed through a Transitional Drug Add-on Payment Adjustment (TDAPA). The TDAPA period currently is set to expire at the end of 2026. Currently, phosphate binders are offered in both generic and branded forms and are produced by multiple manufacturers. During this TDAPA period, our operating results could be materially impacted by certain factors, including physician prescribing patterns, the terms of supplier and other vendor contracts, the mix of branded and generic forms of the drug used by our patients, whether the drug enters into the ESRD PPS and becomes part of its bundled payment following TDAPA and, if so, at what rate and how payors will treat reimbursement of the drug at the conclusion of the TDAPA period.

Dialysis payment rates from commercial payors vary and a major portion of our commercial rates are set at contracted amounts with payors and are subject to intense negotiation pressure. On average, dialysis-related payment rates from contracted commercial payors are significantly higher than Medicare, Medicaid and other government program payment rates, and therefore the percentage of commercial patients in relation to total patients represents a significant driver of our total average dialysis patient service revenue per treatment. Commercial payors (including hospital dialysis services) represent approximately 32% of U.S. dialysis patient service revenues.

For a discussion of government reimbursement, the Medicare ESRD bundled payment system, MA and commercial reimbursement, see Part I Item 1."Business" under the heading "U.S. dialysis business – Sources of revenue-concentrations and risks." For a discussion of operational, clinical and financial risks and uncertainties that we face in connection with the Medicare ESRD bundled payment system, see the risk factor in Part I Item 1A. "Risk Factors" under the heading "Our business is subject to a complex set of governmental laws, regulations and other requirements..." For a discussion of operational, clinical and financial risks and uncertainties that we face in connection with commercial payors, including with respect to our MA business, see the risk factor in Part I Item 1A. "Risk Factors" under the headings "If the number or percentage of patients with higher-paying commercial insurance declines..." and "If we are unable to negotiate and maintain contracts with private payors on competitive terms..."

We anticipate that we will continue to experience increases in our operating costs in 2026 that may outpace any net Medicare, commercial or other rate increases that we may receive, which could significantly impact our operating results. In particular, we expect to continue experiencing increases in operating costs that are subject to inflation, such as labor and supply costs, including increases in maintenance costs, regardless of whether there is a compensating inflation-based increase in Medicare, commercial or other payor payment rates. In addition, we expect to continue to incur capital expenditures and associated depreciation and amortization costs to improve, renovate and maintain our facilities, equipment and information technology to provide improved clinical care, improve operating efficiency, and meet evolving regulatory requirements and otherwise.

U.S. dialysis patient care costs are those costs directly associated with operating and supporting our dialysis centers, home-based dialysis programs and hospital inpatient dialysis programs. The principal drivers of our U.S. dialysis patient care costs include:

•labor costs, including clinical hours per treatment, labor rates and benefit costs;

•vendor pricing and utilization levels of pharmaceuticals and medical supplies; and

•business infrastructure costs, which include the operating costs of our dialysis centers.

Other cost categories that can present significant variability include insurance costs and professional fees. In addition, proposed ballot initiatives or referendums, legislation, regulations or policy changes could cause us to incur substantial costs to prepare for, or implement changes required. Any such changes could result in, among other things, increases in our labor costs or limitations on the amount of revenue that we can retain. For additional information on risks associated with potential and proposed ballot initiatives, referendums, legislation, regulations or policy changes, see the risk factor in Part I Item 1A. "Risk Factors" under the heading "Our business is subject to a complex set of governmental laws, regulations and other requirements..."

Our average clinical hours per treatment decreased in 2025 compared to 2024 primarily due to a decrease in turnover as described below. We are always striving for improved productivity levels, however, changes in factors such as federal and state

55

policies or regulatory billing requirements can lead to increased labor costs as can increases in turnover. In 2025, the demand for skilled clinical personnel continued, exacerbated by the nationwide shortage of these resources. In both 2025 and 2024, we experienced increases in our clinical labor wage rates, which includes contract labor, of approximately 3.8%. We expect to continue to see higher clinical labor rates in 2026 due to labor market conditions, including changes in local minimum wage laws, and the continued competition for skilled clinical personnel. In 2025, our overall clinical teammate turnover decreased from 2024, but remains elevated from historical pre-COVID levels. We also continue to experience increases in the infrastructure and operating costs of our dialysis centers and general increases in utilities and repairs and maintenance. In 2025, we continued to implement certain cost control initiatives to help manage our overall operating costs, including labor productivity, and we expect to continue these initiatives in 2026.

Our U.S. dialysis general and administrative expenses represented 10.6% and 10.3% of our U.S. dialysis revenues in 2025 and 2024, respectively. Increases in general and administrative expenses over the last several years were primarily related to strengthening our dialysis business and related compliance and operational processes, responding to certain legal and compliance matters and professional fees. We expect that these levels of general and administrative expenses will be impacted by continued investment in developing our capabilities and executing on our strategic priorities, among other things.

U.S. dialysis results of operations

Treatment volume:    

Year ended December 31,

Annual change

2025

2024

Amount

Percent

Dialysis treatments

28,733,980 

29,046,346 

(312,366)

(1.1)

%

Average treatments per day

91,802 

92,534 

(732)

(0.8)

%

Treatment days

313.0 

313.9 

(0.9)

(0.3)

%

Average treatments per normalized day

91,743 

92,563 

(820)

(0.9)

%

Number of normalized treatment days(1)

313.2 

313.8 

(0.6)

(0.2)

%

Normalized non-acquired treatment growth(2)

(0.8)

%

— 

%

(0.8)

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers

(1)Normalized treatment days reflect treatment days adjusted to normalize for the mix of days of the week in a given period.

(2)Normalized non-acquired treatment growth reflects year over year growth in treatment volume, adjusted to exclude acquisitions and other similar transactions, and further adjusted to normalize for the number and mix of treatment days in a given period versus the prior period.

Our U.S. dialysis operating revenues and expenses are directly driven by treatment volume. The decrease in our U.S. dialysis treatments in 2025 was primarily driven by a decrease in average treatments per day due to higher mortality and missed treatments from a more severe flu season, as well as fewer treatment days.

Revenues:    

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions, except per treatment data)

Total revenues

$

11,793 

$

11,391 

$

402 

3.5 

%

Average patient service revenue per treatment

$

409.56 

$

391.32 

$

18.24 

4.7 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers

U.S. dialysis average patient service revenue per treatment increased primarily driven by the incorporation of phosphate binders into the ESRD PPS bundle and an increase in average reimbursement rates from normal annual rate increases, including Medicare base rate.

56

Operating expenses and charges:

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions, except per treatment data)

Patient care costs

$

7,854 

$

7,498 

$

356 

4.7 

%

General and administrative

1,253 

1,174 

79 

6.7 

%

Depreciation and amortization

633 

661 

(28)

(4.2)

%

Equity investment income

(32)

(28)

(4)

(14.3)

%

Gain on changes in ownership interests

— 

(35)

35 

(100.0)

%

Total operating expenses and charges

$

9,709 

$

9,270 

$

439 

4.7 

%

Patient care costs per treatment

$

273.34 

$

258.12 

$

15.22 

5.9 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers

Charges impacting operating income

Cybersecurity incident-related charges. During the second quarter of 2025, we experienced a cybersecurity incident that impacted certain elements of our network and resulted in a temporary disruption of our operations, as described above. As a result of our efforts to remediate the incident and restore systems with the assistance of third-party cybersecurity professionals, we incurred patient care charges of approximately $1.0 million and general and administrative expenses of approximately $24.2 million during the year ended December 31, 2025. These costs do not include the impact related to business interruption on our results.

Patient care costs. U.S. dialysis patient care costs per treatment increased primarily due to increases in pharmaceutical costs, driven by the administration of phosphate binders, and increased compensation expenses, including increased wage rates partially offset by increased productivity. Other drivers of this increase include increased medical supplies expense and health benefits expense.

General and administrative expenses. U.S. dialysis general and administrative expenses increased primarily due to increases in costs related to information technology (IT) and the cybersecurity incident, as described above, as well as increased compensation expenses, including increased wage rates and headcount. These increases were partially offset by decreased center closure costs.

Depreciation and amortization. Depreciation and amortization expense is directly impacted by the number of our dialysis centers and the information technology that we develop and acquire as well as changes in useful lives of assets. U.S. dialysis depreciation and amortization expense decreased in 2025 primarily due to decreases in capital IT projects and accelerated depreciation related to center closures.

Equity investment income. U.S. dialysis equity investment income increased due to increased profitability at certain nonconsolidated dialysis partnerships.

Gain on changes in ownership interests. During 2024, we acquired a controlling interest in a previously nonconsolidated dialysis partnership for which we recognized a non-cash gain of $35.1 million on our prior investment upon consolidation.

Operating income and adjusted operating income

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions)

Operating income

$

2,084 

$

2,121 

$

(37)

(1.7)

%

Adjusted operating income(1)

$

2,109 

$

2,086 

$

23 

1.1 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

(1)For a reconciliation of adjusted operating income by reportable segment, see the "Reconciliations of non-GAAP measures" section below.

U.S. dialysis operating income for 2025 compared to 2024 was negatively impacted by the cybersecurity incident-related charges in 2025 and a gain on changes in ownership interest in 2024, each described above. U.S. dialysis operating income and adjusted operating income for 2025 compared to 2024 were impacted by the factors discussed above.

57

Other - Ancillary services

Our other operations include ancillary services that are primarily aligned with our core business of providing dialysis services to our network of patients. As of December 31, 2025, these consisted primarily of our U.S. IKC business, certain U.S. other ancillary businesses (including our clinical research programs, transplant software business, and venture investment group), and our international operations. In the first quarter of 2025, we reallocated the revenues and costs associated with an internal software product from the U.S. IKC business to the U.S. other ancillary business. Prior periods have been recast to reflect this change.

These ancillary services, including our international operations, generated revenues of approximately $1.922 billion in 2025, representing approximately 14% of our consolidated revenues.

As of December 31, 2025, DaVita IKC provided integrated care and disease management services to approximately 66,000 patients in risk-based integrated care arrangements and to an additional 9,400 patients in other integrated care arrangements. We also expect to add additional service offerings to our business and pursue additional strategic initiatives in the future as circumstances warrant, which could include, among other things, healthcare services not related to kidney disease.

For a discussion of the risks related to IKC and our ancillary services, see the discussion in the risk factors in Part I Item 1A. "Risk Factors" under the heading "We invest in strategic and operational initiatives to maintain our business and expand our capabilities in a complex, evolving and highly regulated environment."

As of December 31, 2025, our international dialysis business owned or operated 585 outpatient dialysis centers located in 14 countries outside of the U.S. For 2025, total revenues generated from our international operations were approximately 10% of our consolidated revenues.

Ancillary services results of operations

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions)

Revenues:

U.S. IKC

$

542 

$

504 

$

38 

7.5 

%

U.S. other ancillary

34 

29 

5 

17.2 

%

International

1,346 

977 

369 

37.8 

%

Total ancillary services revenues

$

1,922 

$

1,510 

$

412 

27.3 

%

Operating income (loss):

U.S. IKC

$

22 

$

(18)

$

40 

222.2 

%

U.S. other ancillary

(18)

(26)

8 

30.8 

%

International(1)

89 

127 

(38)

(29.9)

%

Total ancillary services operating income

$

92 

$

83 

$

9 

10.8 

%

Adjusted operating income (loss)(2):

U.S. IKC

$

22 

$

(18)

$

40 

222.2 

%

U.S. other ancillary

(18)

(26)

8 

30.8 

%

International(1)

114 

52 

62 

119.2 

%

Total adjusted operating income:

$

117 

$

8 

$

109 

1,362.5 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

(1)The reported operating income and adjusted operating income for the year ended December 31, 2024 includes foreign currency gains embedded in equity method income recognized from our Asia Pacific (APAC) joint venture, which was consolidated in the fourth quarter of 2024, of approximately $0.6 million.

(2)For a reconciliation of adjusted operating income (loss) by reportable segment, see the "Reconciliations of non-GAAP measures" section below.

58

Items impacting operating income

Gain on changes in ownership interests. During 2024, we acquired a controlling interest in the previously nonconsolidated partnership known as the Company's APAC joint venture, for which we recognized a non-cash gain of $74.3 million on our prior investment upon consolidation.

Accruals for legal matters. During 2025, we recorded a charge of $25 million for a legal matter within our international line of business.

Operating income (loss) and adjusted operating income (loss):

Our IKC operating income and adjusted operating income were impacted by a net increase in shared savings and increased revenues related to our special needs plans, partially offset by decreased revenues related to the divestiture of our physician services business in 2024. IKC operating income and adjusted operating income were also impacted by decreased operating expenses related to the divestiture of our physician services business in 2024 and medical claims expense related to our special needs plans, partially offset by increased professional fees.

Our U.S. other ancillary services operating loss and adjusted operating loss was impacted by favorable results in our clinical research business and a reduction of the earn-out obligations related to our transplant software business in the first quarter of 2025.

Our international operating income was impacted by a gain on a change in business ownership interests in 2024 and a legal accrual in 2025, as described above. International operating income and adjusted operating income were impacted by acquired and non-acquired treatment growth.

Corporate administrative support

Corporate administrative support consists primarily of labor, benefits and long-term incentive compensation expense, as well as professional fees, for departments which provide support to more than one of our various operating lines of business. Corporate administrative support expenses are included in general and administrative expenses on our consolidated income statement.

Corporate administrative support expenses increased $20 million due to increased long-term incentive compensation expenses, partially offset by decreased professional fees.

Corporate-level charges

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions)

Debt expense

$

580 

$

470 

$

110 

23.4 

%

Debt extinguishment and modification costs

$

14 

$

20 

$

(6)

(30.0)

%

Weighted average effective interest rate(1)

5.51 

%

5.68 

%

(0.17)

%

Other loss, net

$

(103)

$

(70)

$

(33)

(47.1)

%

Effective income tax rate

21.8 

%

18.3 

%

3.5 

%

Effective income tax rate from continuing operations attributable to DaVita Inc.(2)

29.1 

%

22.9 

%

6.2 

%

Net income attributable to noncontrolling interests

$

332 

$

314 

$

18 

5.7 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

(1)Represents our overall weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, premium and deferred financing charges as of the dates presented.

(2)For a reconciliation of our effective income tax rate from continuing operations attributable to DaVita Inc., see the "Reconciliations of non-GAAP measures" section below.

59

Debt expense

Debt expense increased primarily due to an increase in our long-term debt balance related to the third quarter 2024 issuance of 6.875% senior notes due 2032 and the second quarter 2025 issuance of 6.75% senior notes due 2033, as well as the expiration of our 2019 interest rate cap agreements on June 30, 2024, which had lower rates than our currently effective interest rate caps. These increases were partially offset by decreases in the interest rate margins on our senior secured credit facilities as a result of the Term Loan A-2 and Term Loan B-2 transactions. See Note 12 to the consolidated financial statements for further information on the components of our debt and changes in them since 2024.

Debt extinguishment and modification costs

Debt extinguishment and modification costs were $14 million in 2025 composed partially of fees incurred in connection with the Term Loan A-2 and Term Loan B-2 transactions and partially of deferred financing costs written off for the extinguishment of Term Loan A-1 and prior revolving credit facility, and deferred financing costs and original issue discount written off for the extinguishment of Term Loan B-1. Comparatively, debt extinguishment and modification costs were $20 million in 2024 composed of fees incurred in connection with the additional incremental borrowing on our Term Loan A-1, the extension of the maturity date of a portion of our Term Loan B-1 from August 2026 to May 2031, and deferred financing costs and original issue discount written off for the extinguishment of the non-extended Term Loan B-1. See Note 12 to the consolidated financial statements for further information on the Term Loan A-2, Term Loan B-2 and the components of our debt.

Other loss, net 

Other loss increased primarily due to increased equity investment losses at Mozarc which included impairment and restructuring charges of $46.4 million, partially offset by gain on remeasurement of contingent consideration of $12.6 million, as well as decreased interest income.

Provision for income taxes 

Our effective income tax rate and effective income tax rate from continuing operations attributable to DaVita Inc. increased in 2025 primarily due to a one-time benefit recognized in 2024 related to non-taxable non-cash gains for previously nonconsolidated businesses, a write down of a 2014 tax refund claim recognized in 2025 and increases in non-deductible executive compensation. Additionally, our effective income tax rate was impacted by the portion of earnings attributable to our non-controlling interests.

Net income attributable to noncontrolling interests

The increase in income attributable to noncontrolling interests was due to an increase in earnings at certain U.S. dialysis partnerships.

U.S. dialysis accounts receivable

Our U.S. dialysis accounts receivable balances at December 31, 2025 and December 31, 2024 were $1.610 billion and $1.615 billion, respectively, representing approximately 49 days and 52 days of revenue (DSO), respectively. The decrease in DSO was primarily due to continued collections improvements. Our DSO calculation is based on the most recent quarter’s average revenues per day. There were no significant changes during 2025 from 2024 in the carrying amount of accounts receivable outstanding over one year old or in the amounts pending approval from third-party payors.

As of December 31, 2025 and 2024, our U.S. dialysis accounts receivable balances that are more than six months old represented approximately 18% and 23% of our U.S. dialysis accounts receivable balances outstanding, respectively. Substantially all revenue realized for patient services is received from government and commercial payors, as discussed above. Approximately 1% of our revenues in both periods were not covered by insurance and payment was the responsibility of the patient.

Amounts pending approval from third-party payors associated with Medicare bad debt claims as of December 31, 2025 and 2024, other than the standard monthly billing, were approximately $132 million and $107 million, respectively, and are classified within contract assets and other receivables. A significant portion of our Medicare bad debt claims are typically paid to us before the Medicare fiscal intermediary audits the claims but are subject to subsequent adjustment based upon the actual results of those audits. Such audits typically occur one to four years after the claims are filed.

60

Liquidity and capital resources

The following table summarizes our major sources and uses of cash, cash equivalents and restricted cash:

Year ended December 31,

Annual change

2025

2024

Amount

Percent

(dollars in millions)

Net cash provided by operating activities:

Net income

$

1,079 

$

1,251 

$

(172)

(13.7)

%

Non-cash items in net income

1,071 

801 

270 

33.7 

%

Other working capital changes

(230)

44 

(274)

(622.7)

%

Other

(33)

(74)

41 

55.4 

%

$

1,887 

$

2,022 

$

(135)

(6.7)

%

Net cash provided by investing activities:

Maintenance capital expenditures(1)

$

(412)

$

(394)

$

(18)

(4.6)

%

Development capital expenditures(2)

(164)

(162)

(2)

(1.2)

%

Acquisition expenditures

(117)

(246)

129 

52.4 

%

Proceeds from sale of self-developed properties

31 

18 

13 

72.2 

%

Other

8 

12 

(4)

(33.3)

%

$

(655)

$

(771)

$

116 

15.0 

%

Net cash provided by financing activities:

Debt proceeds (payments), net

$

820 

$

1,095 

$

(275)

(25.1)

%

Deferred and debt related financing costs

(54)

(51)

(3)

(5.9)

%

Distributions to noncontrolling interests

(324)

(337)

13 

3.9 

%

Contributions from noncontrolling interests

7 

14 

(7)

(50.0)

%

Stock award exercises and other share issuances

(12)

(114)

102 

89.5 

%

Share repurchases

(1,793)

(1,386)

(407)

(29.4)

%

Other

(19)

(39)

20 

51.3 

%

$

(1,375)

$

(817)

$

(558)

(68.3)

%

Total number of shares repurchased

12,678,623 

9,832,705 

2,845,918 

28.9 

%

Free cash flow(3)

$

1,024 

$

1,162 

$

(138)

(11.9)

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

(1)Maintenance capital expenditures represent capital expenditures to maintain the productive capacity of the business and include those made for investments in information technology, dialysis center renovations, capital asset replacements, and any other capital expenditures that are not development or acquisition expenditures.

(2)Development capital expenditures principally represent capital expenditures (other than acquisition expenditures) made to expand the productive capacity of the business and include those for new U.S. and international dialysis center developments, dialysis center expansions and relocations, and new or expanded contracted hospital operations.

(3)For a reconciliation of our free cash flow, see the "Reconciliations of Non-GAAP measures" section below.

Consolidated cash flows

Consolidated cash flows from operating activities for 2025 and 2024 were $1,887 million and $2,022 million, respectively. The decrease in operating cash flows was principally due to a decrease in operating results and timing in other working capital items partially offset by a decrease in cash taxes.

Cash flows used for investing activities in 2025 decreased compared to 2024 principally due to a decrease in acquisitions spend in our international business.

61

Cash flows used in financing activities increased $558 million in 2025 compared to 2024. Significant sources of cash during the period included the refinancing of Term Loan A-1 with a secured Term Loan A-2 facility in the aggregate principal amount of $2,000 million, the refinancing of Term Loan B-1 with a secured Term Loan B-2 facility in the aggregate principal amount of $1,878 million and the issuance of 6.75% senior notes due 2033 in the amount of $1,000 million (the 6.75% Senior Notes). Significant uses of cash during that same period included the pay-off of the remaining principal balance outstanding on our Term Loan B-1 in the amount of $1,628 million, the pay-off of the remaining principal balance outstanding on our Term Loan A-1 in the aggregate amount of $2,200 million and repayment of $93 million in interest-free funding made available by UnitedHealth Group and its affiliates following the cybersecurity breach that affected Change Healthcare (CHC), a subsidiary of UnitedHealth Group. Other significant uses of cash during the period included regularly scheduled principal payments under our senior secured credit facilities totaling approximately $59 million on our Term Loan A-1, $8 million on Term Loan B-1 and $9 million on Term Loan B-2, as well as additional required payments under other debt arrangements. Additionally, we recognized financing cash outflows of $33 million in deferred financing costs related to the 6.75% Senior Notes transaction and refinancing of Term Loan A-1 and Term Loan B-1, as well as $21 million in cap premium fees for our 2025 forward interest rate cap agreements. During the year ended December 31, 2025 we also used cash to repurchase 12,678,623 shares of our common stock.

By comparison, the same period in 2024 included the extension of the maturity date from August 2026 to May 2031 for a portion of our Term Loan B-1 (the Extended Term Loan B-1 transaction) in the aggregate principal amount of approximately $1,640 million, (such portion referred to as the Extended Term Loan B-1), the incurrence of an incremental Term Loan A-1 tranche in the aggregate principal amount of $1,100 million (such portion referred to as the Incremental Term Loan A-1), the issuance of 6.875% senior notes due 2032 in the amount of $1,000 million (the 6.875% Senior Notes) and CHC temporary funding assistance, as described above, of $93 million, net, during the year ended December 31, 2024. Significant uses of cash during that same period included debt prepayments on Term Loan B-1 in the aggregate amount of approximately $2,590 million as part of the Extended Term Loan B-1, Incremental Term Loan A-1 and 6.875% Senior Notes transactions, and regularly scheduled principal payments under our senior secured credit facilities totaling approximately $75 million on our Term Loan A-1, $14 million on Term Loan B-1 and $4 million on Extended Term Loan B-1, as well as additional required payments under other debt arrangements. Additionally, we recognized financing cash outflows of $36 million in deferred financing costs and discount related to the Fourth and Sixth Amendments to the Senior Secured Credit Agreement and 6.875% Senior Notes transaction, as well as $15 million in cap premium fees for our 2024 forward interest rate cap agreements. During the year ended December 31, 2024 we also used cash to repurchase 9,832,705 shares of our common stock.

Dialysis center capacity and growth

We are typically able to increase our capacity by extending hours at our existing dialysis centers, expanding our existing dialysis centers, relocating our dialysis centers, developing new dialysis centers and by acquiring dialysis centers. The development of a typical new outpatient dialysis center generally requires approximately $2 million for leasehold improvements and other capital expenditures. Based on our experience, a new outpatient dialysis center typically opens within a year after the property lease is signed, normally achieves operating profitability in the second year after Medicare certification, and normally reaches maturity within three to five years. Acquiring an existing outpatient dialysis center requires a substantially greater initial investment, but profitability and cash flows are generally accelerated and more predictable. To a limited extent, we enter into agreements to provide management and administrative services to outpatient dialysis centers in which we own a noncontrolling interest or which are wholly-owned by third parties in return for management fees.

The table below shows the growth in our dialysis operations by number of dialysis centers owned or operated:

U.S.

International

2025

2024

2025

2024

Number of centers operated at beginning of year

2,657 

2,675 

509 

367 

Acquired centers

3 

12 

62 

198 

Developed centers

12 

13 

7 

5 

Net change in non-owned managed or administered centers(1)

— 

(7)

28 

(47)

Sold and closed centers(2)

(3)

(12)

(13)

(6)

Closed centers(3)

(12)

(24)

(8)

(8)

Number of centers operated at end of year

2,657 

2,657 

585 

509 

(1)Represents the change in the number of dialysis centers which we manage or provide administrative services to but in which we own a noncontrolling equity interest or which are wholly-owned by third parties, including our APAC joint venture centers which were consolidated in the fourth quarter of 2024.

62

(2)Represents dialysis centers that were sold and/or closed for which the majority of patients were not retained.

(3)Represents dialysis centers that were closed for which the majority of patients were retained and transferred to one of our other existing outpatient dialysis centers.

Stock repurchases

The following table summarizes our common stock repurchases during the years ended December 31, 2025 and 2024:

Year ended December 31,

2025

2024

Shares repurchased

Amount paid(1)

Average price(2)

Shares repurchased

Amount paid(1)

Average price(2)

(dollars in millions and shares in thousands, except per share data)

Open market

9,292 

$

1,304 

$

138.98 

9,833 

$

1,389 

$

140.06 

Berkshire

3,387 

485 

$

143.11 

— 

— 

$

— 

12,679 

$

1,788 

$

140.09 

9,833 

$

1,389 

$

140.06 

Certain columns may not sum or recalculate due to the presentation of rounded numbers

(1)Includes commissions and applicable excise tax. The excise tax is recorded as part of the cost basis of treasury shares repurchased and, as such, is included in stockholders’ equity.

(2)Average price paid per share excludes commissions and excise tax.

We retired all shares of common stock held in treasury effective December 31, 2025.

Subsequent to December 31, 2025, we have repurchased 1,772,872 shares of our common stock for $217 million at an average price paid of $122.08 per share through February 6, 2026, including repurchases from Berkshire Hathaway Inc. (Berkshire) pursuant to our previously disclosed share repurchase agreement.

See further discussion of our share repurchase activity, authorizations and information on our share repurchase agreement with Berkshire in Note 18 to the consolidated financial statements.

Available liquidity

As of December 31, 2025, our cash balance was $676 million and we held approximately $24 million in short-term investments. At that time we also had undrawn capacity on the revolving line of credit under our senior credit facilities of $1.5 billion. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding thereunder, of which there were none as of December 31, 2025. As of December 31, 2025 we separately had approximately $195 million in letters of credit outstanding under a separate bilateral secured letter of credit facility.

See Note 12 to the consolidated financial statements for components of our long-term debt and their interest rates.

We believe that our cash flows from operations and other sources of liquidity, including from amounts available under our senior secured credit facilities and our access to the capital markets, will be sufficient to fund our scheduled debt service under the terms of our debt agreements and other obligations for the foreseeable future, including the next 12 months. From time to time, depending on market conditions, our capital requirements and the availability of financing, among other things, we may seek to refinance our existing debt and may incur additional indebtedness. Our primary recurrent sources of liquidity are cash from operations and cash from borrowings, which are subject to general, economic, financial, competitive, regulatory and other factors that are beyond our control, as described in Part I Item 1A. "Risk Factors" under the heading "We have a substantial amount of indebtedness outstanding and may incur substantial additional indebtedness in the future..."

Reconciliations of non-GAAP measures

The following tables provide reconciliations of adjusted operating income (loss) to operating income (loss) as presented on a U.S. generally accepted accounting principles (GAAP) basis for our U.S. dialysis reportable segment as well as for our U.S. IKC business, our U.S. other ancillary services, our international business, and for our total ancillary services which combines them and is disclosed as our other segments category, in addition to our corporate administrative support.

These non-GAAP or "adjusted" measures are presented because management believes these measures are useful adjuncts to, but not alternatives for, our GAAP results. Specifically, management uses adjusted operating income (loss) to compare and evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe this non-GAAP measure is also useful to investors and analysts in evaluating our performance over time and relative to competitors, as well as in analyzing

63

the underlying trends in our business. We also believe this presentation enhances a user's understanding of our normal operating income by excluding certain items which we do not believe are indicative of our ordinary results of operations.

In addition, our effective income tax rate on income from continuing operations attributable to DaVita Inc. excludes noncontrolling owners' income, which primarily relates to non-tax paying entities. We believe this adjusted effective income tax rate is useful to management, investors and analysts in evaluating our performance and establishing expectations for income taxes incurred on our ordinary results attributable to DaVita Inc.

Finally, our free cash flow from continuing operations represents net cash provided by operating activities from continuing operations less distributions to noncontrolling interests, development capital expenditures, and maintenance capital expenditures; plus contributions from noncontrolling interests and proceeds from the sale of self-developed properties. Management uses this measure to assess our ability to fund acquisitions and meet our debt service obligations and we believe this measure is equally useful to investors and analysts as an adjunct to cash flows from operating activities from continuing operations and other measures under GAAP.

It is important to bear in mind that these non-GAAP "adjusted" measures are not measures of financial performance under GAAP and should not be considered in isolation from, nor as substitutes for, their most comparable GAAP measures.

Year ended December 31, 2025

U.S.

dialysis

Ancillary services

Corporate

administration

U.S. IKC

U.S. Other

International

Total

Consolidated

(dollars in millions)

Operating income (loss)

$

2,084 

$

22 

$

(18)

$

89 

$

92 

$

(133)

$

2,044 

Cybersecurity incident-related

 charges(1)

25 

— 

— 

— 

— 

— 

25 

Legal matter(2)

— 

— 

— 

25 

25 

— 

25 

Adjusted operating income (loss)

$

2,109 

$

22 

$

(18)

$

114 

$

117 

$

(133)

$

2,094 

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

Year ended December 31, 2024

U.S.

dialysis

Ancillary services

Corporate

administration

U.S. IKC

U.S. Other

International

Total

Consolidated

(dollars in millions)

Operating income (loss)

$

2,121 

$

(18)

$

(26)

$

127 

$

83 

$

(113)

$

2,090 

Gain on changes in ownership

 interests(3)

(35)

— 

— 

(74)

(74)

— 

(109)

Adjusted operating income (loss)

$

2,086 

$

(18)

$

(26)

$

52 

$

8 

$

(113)

$

1,981 

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

(1)Represents charges recognized to remediate a cybersecurity incident and restore systems following the occurrence of the incident in the second quarter of 2025. We have excluded these charges from our non-GAAP metrics as we do not believe they are indicative of our ordinary results of operations. See additional discussion above under the heading "Cybersecurity incident-related charges" within "U.S. dialysis results of operations".

(2)Represents an accrual for potential third-party judgment costs for certain legal matters. We have excluded this charge from our non-GAAP metrics because, among other things, we do not believe it is indicative of our ordinary results of operations because the charge is significant and may obscure analysis of underlying trends and financial performance of our current business.

(3)Represents non-cash gains recognized on the acquisitions of controlling financial interests in previously nonconsolidated partnerships in 2024. See additional discussion above under the heading "Gain on changes in ownership interests" within "U.S. dialysis results of operations" and "Ancillary services results of operation" for the $35 million and $74 million, respectively. These gains were to mark our prior investments in these businesses to fair value before consolidation and to recognize related foreign currency gains from translation adjustments previously deferred in accumulated other comprehensive loss. Gains on changes in business ownership interests do not represent a normal and recurring requirement of operating our business or generating revenues and may obscure analysis of underlying trends and financial performance.

64

Year ended December 31,

2025

2024

(dollars in millions)

Income from continuing operations before income taxes

$

1,347 

$

1,530 

Less: Noncontrolling owners’ income primarily attributable to non-tax paying entities

(329)

(315)

Income from continuing operations before income taxes attributable to DaVita Inc.

$

1,018 

$

1,215 

Income tax expense for continuing operations

$

293 

$

280 

Income tax attributable to noncontrolling interests

3 

(1)

Income tax expense from continuing operations attributable to DaVita Inc.

$

296 

$

279 

Effective income tax rate on income from continuing operations attributable to DaVita Inc.

29.1 

%

22.9 

%

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

Year ended December 31,

2025

2024

(dollars in millions)

Net cash provided by operating activities

$

1,887 

$

2,022 

Adjustments to reconcile net cash provided by operating activities to free cash flow:

Distributions to noncontrolling interests

(324)

(337)

Contributions from noncontrolling interests

7 

14 

Maintenance capital expenditures

(412)

(394)

Development capital expenditures

(164)

(162)

Proceeds from sale of self-developed properties

31 

18 

Free cash flow

$

1,024 

$

1,162 

Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.

65

Off-balance sheet arrangements and aggregate contractual obligations

In addition to the debt obligations and operating lease liabilities reflected on our balance sheet, we have commitments associated with letters of credit as well as certain working capital funding obligations associated with our equity investments in nonconsolidated dialysis ventures that we manage and some we manage that are wholly-owned by third parties.

We also have potential obligations to purchase the noncontrolling interests held by third parties in many of our majority-owned dialysis partnerships and other nonconsolidated entities. These obligations are in the form of put provisions that are exercisable at the third-party owners’ discretion within specified periods as outlined in each specific put provision. For additional information see Notes 16 and 23 to the consolidated financial statements.

The following is a summary of these cash contractual obligations and commitments as of December 31, 2025:

2026

2027-2028

2029-2030

Thereafter

Total

(dollars in millions)

Debt and leases:

Long-term debt(1):

Principal payments

$

82 

$

200 

$

4,590 

$

5,288 

$

10,160 

Interest payments on credit facilities and senior notes

538 

1,044 

947 

402 

2,931 

Finance leases(2)

27 

60 

38 

60 

185 

Operating leases, including imputed interest(2)

528 

1,002 

703 

768 

3,001 

$

1,175 

$

2,306 

$

6,278 

$

6,518 

$

16,277 

Partnership interests subject to put provisions:(3)

On-balance sheet:

Noncontrolling interests subject to put provisions

1,408 

58 

38 

28 

1,532 

Off-balance sheet:

Non-owned and minority owned put provisions

66 

— 

— 

— 

66 

$

1,474 

$

58 

$

38 

$

28 

$

1,598 

(1)See Note 12 to the consolidated financial statements for components of our long-term debt and related interest rates.

(2)See Note 13 to the consolidated financial statements for components of our leases and related interest rates.

(3)Represents amounts for which we are contractually committed, should the outside partner exercise its put option.

As of December 31, 2025 we had outstanding letters of credit in the aggregate amount of approximately $195 million under a separate bilateral secured letter of credit facility.

As of December 31, 2025 we have outstanding purchase agreements with various suppliers for multi-year contracts or to purchase set amounts of dialysis equipment, parts, pharmaceuticals, supplies and technology services. If we fail to meet the minimum purchase commitments under certain contracts during any year, we are required to pay the difference to the supplier. For additional information see Note 16 to the consolidated financial statements.

We also have certain potential commitments associated with letters of credit, working capital funding or other financing, if necessary, to certain nonconsolidated businesses that we manage and in which we own a noncontrolling equity interest or which are wholly-owned by third parties. Additionally, the Company has agreed to future investments in particular equity method and other investments if certain milestones are achieved or funding calls are made, as applicable. For additional information see Note 16 to the consolidated financial statements.

We expect our 2026 capital expenditures to increase compared to our 2025 capital expenditures driven by continued investment in our international markets and reinvestment in our existing domestic centers.

In addition, we have approximately $21 million of existing long-term income tax liabilities for unrecognized tax benefits, including interest and penalties, which are excluded from the table above as reasonably reliable estimates of their timing cannot be made.

Contingencies

The information in Note 15 to the consolidated financial statements included in this report is incorporated by reference in response to this item.

66

Critical accounting policies, estimates and judgments

Our consolidated financial statements and accompanying notes are prepared in accordance with United States generally accepted accounting principles. These accounting principles require us to make estimates, judgments and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, contingencies and noncontrolling interests subject to put provisions (redeemable equity interests). All significant estimates, judgments and assumptions are developed based on the best information available to us at the time made and are regularly reviewed and updated when necessary. Actual results will generally differ from these estimates, and such differences may be material. Changes in estimates are reflected in our financial statements in the period of change based upon on-going actual experience trends or subsequent settlements and realizations depending on the nature and predictability of the estimates and contingencies. Certain accounting estimates, including those concerning revenue recognition and accounts receivable, fair value estimates for goodwill and noncontrolling interests, accounting for income taxes, and loss contingencies are considered to be critical to evaluating and understanding our financial results because they involve inherently uncertain matters and their application requires the most difficult and complex judgments and estimates. For additional information, see Part IV Item 15, "Exhibits, Financial Statement Schedules" – Note 1 – "Organization and summary of significant accounting policies" as referred from Part II Item 8, "Financial Statements and Supplementary Data."

Revenue recognition and accounts receivable for our U.S. dialysis patient services. There are significant estimating risks associated with the amount of U.S. dialysis patient service revenue that we recognize in a given reporting period. Payment rates are often subject to significant uncertainties related to wide variations in the coverage terms of the commercial healthcare plans under which we receive payments. In addition, ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage, and other payor issues complicate the billing and collection process. The measurement and recognition of revenue requires the use of estimates of the amounts that will ultimately be realized considering, among other items, retroactive adjustments that may be associated with regulatory reviews, audits, billing reviews and other matters.

Revenues associated with Medicare and Medicaid programs are recognized based on (a) the payment rates that are established by statute or regulation for the portion of the payment rates paid by the government payor (e.g., 80% for Medicare patients) and (b) for the portion not paid by the primary government payor, the estimated amounts that will ultimately be collectible from other government programs providing secondary coverage (e.g., Medicaid secondary coverage), the patient’s commercial health plan secondary coverage, or the patient. Our dialysis-related reimbursements from Medicare are subject to certain variations under Medicare’s single bundled payment rate system whereby our reimbursements can be adjusted for certain patient characteristics and other variable factors. Our revenue recognition depends upon our ability to effectively capture, document and bill for Medicare’s base payment rate and these other factors. In addition, as a result of the potential range of variations that can occur in our dialysis-related reimbursements from Medicare under the single bundled payment rate system, our revenue recognition is subject to a greater degree of estimating risk.

Commercial healthcare plans, including contracted managed-care payors, are billed at our usual and customary rates; however, revenue is recognized based on estimated net realizable revenue for the services provided. Net realizable revenue is estimated based on contractual terms for the patients covered under commercial healthcare plans with which we have formal agreements, non-contracted commercial healthcare plan coverage terms if known, estimated secondary collections, historical collection experience, historical trends of refunds and payor payment adjustments (retractions), inefficiencies in our billing and collection processes that can result in denied claims for payments, the estimated timing of collections, changes in our expectations of the amounts that we expect to collect and regulatory compliance matters. Determining applicable primary and secondary coverage for our approximately 200,500 U.S. dialysis patients at any given point in time, together with the changes in patient coverages that occur each month, requires complex, resource-intensive processes. Collections, refunds and payor retractions typically continue to occur for up to three years or longer after services are provided.

We generally expect the range of our U.S. dialysis revenue estimating risk to be within 1% of revenue, which can represent as much as approximately 5% of our U.S. dialysis business’s operating income and adjusted operating income. Changes in estimates are reflected in the then-current financial statements based on on-going actual experience trends, or subsequent settlements and realizations depending on the nature and predictability of the estimates and contingencies. Changes in revenue estimates for prior periods are separately disclosed and reported if material to the current reporting period and longer term trend analyses, and have not been significant.

Revenues for laboratory services, which are integrally related to our dialysis services, are recognized in the period services are provided at the estimated net realizable amounts to be received.

Certain fair value estimates. Fair value measurements and estimates affect, or potentially affect, a variety of elements in the Company's financial statements. Two of the elements most significantly impacted by fair value estimates are the Company's goodwill impairment assessments and remeasurements of its noncontrolling interests subject to put provisions balance.

67

Goodwill is not amortized, but is assessed for impairment at least annually, or when changes in circumstances warrant. An impairment charge is recorded when and to the extent a reporting unit's carrying amount is determined to exceed its estimated fair value. Changes in circumstance that may trigger a goodwill impairment assessment for one of our business units can include, among others, changes in the legal environment, addressable market, business strategy, development or business plans, reimbursement structure or rates, operating performance, future prospects, relationships with partners, interest rates and/or market value indications for the subject business. We use a variety of factors to assess changes in the financial condition, future prospects and other circumstances for businesses subject to goodwill impairment assessment. However, these assessments and the related valuations can involve significant uncertainties and require significant judgment on various matters.

The Company is also required to remeasure its noncontrolling interests subject to put provisions to estimated fair value each reporting period. These estimates also require substantive judgment on meaningful uncertainties concerning this significant balance. See Notes 16 and 23 to the consolidated financial statements for a summary of the Company's approach to these valuations, the variables and uncertainties involved, and the sensitivity of these valuations to changes in a primary aggregate valuation metric.

Accounting for income taxes. Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in the United States and numerous state and foreign jurisdictions, and changes in tax laws or regulations may be proposed or enacted that could adversely affect our overall tax liability. The actual impact of any such laws or regulations could be materially different from our current estimates.

Significant judgments and estimates are required in determining our consolidated income tax expense. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets within the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, results of recent operations, and assumptions about the amount of future federal, state, and foreign pre-tax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgments and are consistent with the plans and estimates we use to manage the underlying businesses. To the extent that recovery is not likely, a valuation allowance is established. The allowance is regularly reviewed and updated for changes in circumstances that would cause a change in judgment about the realizability of the related deferred tax assets.

Loss contingencies. As discussed in Notes 1 and 15 to the consolidated financial statements, we operate in a highly regulated industry and are party to various lawsuits, claims, qui tam suits, governmental investigations and audits (including, without limitation, investigations or other actions resulting from our obligation to self-report suspected violations of law), contract disputes and other legal proceedings. Assessments of such matters can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. We record accruals for loss contingencies on such matters to the extent that we determine an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. See Note 15 to the consolidated financial statements included in this report for further discussion.

Significant new accounting standards

See Note 1 to the consolidated financial statements included in this report for information regarding certain recent financial accounting standards that have been issued by the Financial Accounting Standards Board (FASB).