Slide 1: Investor Presentation
Investor Presentation September 10, 2019 © 2019 DaVita Inc.
Slide 2: Context, Non-GAAP Measures and Forward-Looking Statements
Context, Non-GAAP Measures and Forward-Looking Statements Context. DaVita is a Fortune 500® health care provider focused on transforming care delivery to improve quality of life for patients. We are committed to patient-centric care and achieving strong clinical outcomes for our patients. This is a
Slide 3: © 2019 DaVita Inc.
3 © 2019 DaVita Inc.
Slide 4: Overview
Overview Our Platform FAQs Key Financial Drivers / Outlook Closing 4 © 2019 DaVita Inc.
Slide 5: Our mission: Provider, partner, and employer of choice
Our mission: Provider, partner, and employer of choice Better quality Stronger partner Differentiated of care for patients for physicians workplace Leading the industry toward comprehensive kidney care 5 © 2019 DaVita Inc.
Slide 6: 2022 guidance
2022 guidance $11.5B to $12.5B $6.25 to $7.25 $750M to $1,000M Revenue Adjusted EPS1 Free cash flow (new definition)2 1) Adjusted EPS is a non-GAAP measure, defined as adjusted earnings per share from continuing operations attributable to DaVita Inc. (EPS) Excludes impact of any ballot initiatives.
Slide 7: Our Platform
Overview Our Platform FAQs Key Financial Drivers / Outlook Closing 7 © 2019 DaVita Inc.
Slide 8: A leading platform
A leading platform 7,600+ 900+ 2,900+ nephrologist hospital partners clinics relationships1 1,700+ $1.7B 500+ Home programs medical cost under payor relationships management 1.4M+ longitudinal patient data to date 1) Includes nephrologists with medical director agreements, JVs, and attending physici
Slide 9: Significant reduction in mortality rate
Significant reduction in mortality rate DaVita’s gross mortality rate 19% -26% 14% 2001 2018 9 © 2019 DaVita Inc.
Slide 10: Improvement in hospitalization rate
Improvement in hospitalization rate Since 2017, 5% improvement in hospitalization rate1 100K more days at home for our patients 1) Between H1’17 and H1’19 10 © 2019 DaVita Inc.
Slide 11: Patient journey
Patient journey In-center dialysis ESRD Home dialysis treatment modalities Hospital dialysis Transplant 11 © 2019 DaVita Inc.
Slide 12: Patient journey
Patient journey Hospital start In-center dialysis ESRD Home dialysis Chronic kidney disease treatment (CKD) patient modalities Hospital dialysis Transplant Outpatient start Nephrologists 12 © 2019 DaVita Inc.
Slide 13: Effective CKD care management
Effective CKD care management Keys to success: Our assets: Identifying patients • Large scale data sets to enable predictive analytics Managing CKD and • Patient education at scale co-morbidities • Network of engaged nephrologists Enabling smooth transition • CKD-ESRD care continuum to dialysis (if
Slide 14: Two ways patients progress to dialysis
Two ways patients progress to dialysis Hospital start Unexpected changes Outpatient start Smoother transition 14 © 2019 DaVita Inc.
Slide 15: Predictive analytics in CKD
Predictive analytics in CKD 10% transition to ESRD1 Focus on identifying and risk- stratifying CKD patients: ~1.2M CKD • Highest risk of transition to ESRD Stages 4-5 • Hospitalization risk patients1 • CKD patient identification 1) 2018 USRDS annual report 15 © 2019 DaVita Inc.
Slide 16: Empowering our patients for optimal starts
Empowering our patients for optimal starts ~95% Patients have a nephrologist1 CKD management Improvement in outpatient ~70% starts2 6x Home starts Education programs3 38% Fewer hospitalizations 1) During transition month versus 20% during first month on program 2) 72% of patients in our program have
Slide 17: ESRD care
ESRD care Hospital start In-center dialysis ESRD Home dialysis Chronic kidney disease treatment (CKD) patient modalities Hospital dialysis Transplant Outpatient start Nephrologists 17 © 2019 DaVita Inc.
Slide 18: Typical DaVita chronic dialysis center
Typical DaVita chronic dialysis center 17+ Teammates 1 Medical director 80+ Patients, 4-hour treatments, 3x weekly 2 Home training rooms 18 Machines and chairs Dietary and social support Serving 178,000+ ICHD patients in the U.S.1 1) As of 6/30/2019 18 © 2019 DaVita Inc.
Slide 19: Leading Home platform
Leading Home platform Hospital start In-center dialysis ESRD Home dialysis Chronic kidney disease treatment (CKD) patient modalities Hospital dialysis Transplant Outpatient start Nephrologists 19 © 2019 DaVita Inc.
Slide 20: Types of Home modality options
Types of Home modality options Peritoneal Dialysis (PD) Home Hemodialysis (HHD) • Uses abdominal wall to dialyze • Smaller version of machine used in-center • Needle free treatment less invasive • Needles required for treatments most patients have care partner assistance Patients are educated to
Slide 21: Typical DaVita Home Program
Typical DaVita Home Program 4+ Teammates 1 Medical director 15+ Patients 2-6 Weeks of Home training programs In-center dialysis support nearby Remote monitoring Largest U.S. provider of Home dialysis, growing Home at 4x ICHD1 1) Based on comparative growth rates for twelve month periods ended June 2
Slide 22: Leader in Home dialysis
Leader in Home dialysis Largest Home census by provider1 Significant interdependence between Home and in-center dialysis 26.1K 24.6K HHD PD of our PD patients ~50% converted from ICHD of our PD patients 2.9K 1.9K 1.6K 1.7K ~60% transfer to ICHD DaVita FMC US DCI ARA Satellite Renal 1) 2019 NN&I Prov
Slide 23: How does the U.S. PD penetration rate compare to others?
How does the U.S. PD penetration rate compare to others? PD penetration rate for countries with comparable GDP per capita to the U.S.1 22% 21% 20% 19% 14% 13% 11% 10% 7% 6% 3% Sweden Denmark Canada Australia Netherlands United Italy United France Germany2 Japan Kingdom States 1) 2018 USRDS annual re
Slide 24: Challenges to achieving higher PD penetration
Challenges to achieving higher PD penetration Patient • ~2 years average time on therapy1 • ~60% of patients are hospital starts2 Physician • 44% of surveyed nephrologists do not feel well-trained on PD3 • 87% of surveyed program directors for nephrology fellowship programs believe that PD training
Slide 25: DaVita's annual Home growth
DaVita’s annual Home growth 26K 24K 7K 11K ~3% ICHD 6K conversion to Home ~48% loss ~11% new rate starts Beginning of 2018 Losses from therapy Home new starts ICHD to Home End of 2018 conversions 25 © 2019 DaVita Inc.
Slide 26: Home technology and innovation
Home technology and innovation ● Home Remote Monitoring captures and wirelessly transmits patients’ biometrics to the care team for proactive intervention ● Care Connect App enhances patient engagement through features such as secure messaging, care reminders and access to educational resources ● Te
Slide 27: Dialysis patients are often in and out of hospitals
Dialysis patients are often in and out of hospitals Hospital start In-center dialysis ESRD Home dialysis Chronic kidney disease treatment (CKD) patient modalities Hospital dialysis Transplant Outpatient start Nephrologists 27 © 2019 DaVita Inc.
Slide 28: Importance of maintaining continuity of care with hospitals
Importance of maintaining continuity of care with hospitals Home therapy Admits per ESRD Readmitted to loss associated 1-2 patient per year 35% the hospital1 ~28% with hospital on average1 admission2 1) 2018 USRDS annual report 2) Internal DaVita data 28 © 2019 DaVita Inc.
Slide 29: Our platform includes hospitals
Our platform includes hospitals Inpatient dialysis services 900+ hospital services partners 57 hospital system joint ventures First provider to receive Joint Commission accreditation Discharge planning program Provider-neutral discharge planning and placement program 29 © 2019 DaVita Inc.
Slide 30: Transplant is the best modality for patients
Transplant is the best modality for patients Hospital start In-center dialysis ESRD Home dialysis Chronic kidney disease treatment (CKD) patient modalities Hospital dialysis Transplant Outpatient start Nephrologists 30 © 2019 DaVita Inc.
Slide 31: Supply constraints remain a challenge to more transplants
Supply constraints remain a challenge to more transplants Increasing transplants in recent years1… …but time on the waitlist is still long • Relaxing donor criteria • Opioid crisis ~4 years average wait time to transplant 1 0% +5% 22K 18K 18K ~95K patients on transplant waitlist 2 2010 2014 2018 1)
Slide 32: Our role is to help ensure patients are transplant ready
Our role is to help ensure patients are transplant ready ~1 year ~4 years ~1 year ~4 years ~24 hours 1. Patient 3. Patient gets on and 5. Kidney referred stays active on waitlist matched 7. Transplant 2. Patient 4. Kidney 6. Patient evaluated sourced decision • Patient education • Waitlist support 3
Slide 33: Transplant advocate for our patients
Transplant advocate for our patients Comparable transplant Continue to help ensure our Helping to optimize our rate to industry1 patients are transplant ready patients’ chances for transplant Transplant Smart 6,600+ ~34% ~95% DaVita patients received Of patients on the waitlist are Patients educated
Slide 34: Interplay between modalities
Interplay between modalities In-center dialysis (ICHD) Back to dialysis if transplant fails Patient Conversion turnover to Home Home dialysis ESRD Transition to Hospital treatment ICHD/Home admits modalities Hospital dialysis Transplant 34 © 2019 DaVita Inc.
Slide 35: Nephrologists form the foundation of delivering care
Nephrologists form the foundation of delivering care Hospital start In-center dialysis ESRD Home dialysis Chronic kidney disease treatment (CKD) patient modalities Hospital dialysis Transplant Outpatient start Nephrologists 35 © 2019 DaVita Inc.
Slide 36: Extensive partnerships with nephrologists
Extensive partnerships with nephrologists Nephrologist relationships1, 7,600+ representing ~70% of practicing nephrologists2 700+ Joint venture centers Physicians on CKD 400+ Electronic Health Record 1) Includes nephrologists with medical director agreements, JVs, and attending physicians 2) 2016 AS
Slide 37: Partner of choice across all areas of nephrologists' practices
Partner of choice across all areas of nephrologists’ practices Office CKD EHR Predictive analytics CKD Care Community Education Management Hospital Transitional Care Mobile Suite HIE Integration Discharge planning Dialysis Clinic IT Platform Modality Integrated Telehealth Management Care 37 © 2019 D
Slide 38: Comprehensive kidney care is more than just dialysis
Comprehensive kidney care is more than just dialysis 38 © 2019 DaVita Inc.
Slide 39: Why? ESRD patients experience highly fragmented care
Why? ESRD patients experience highly fragmented care Dietary Social determinants restrictions Financial stability, surroundings Specialist 12-15 hrs/week visits at dialysis 1-2 hospital 19+ admits/year pills a day 4+ comorbidities Dialysis Insurance changes (i.e. diabetes, hypertension) Medicare eli
Slide 40: Established platform for integrated care
Established platform for integrated care Routine touchpoints Dietitian Customized clinical with same care team pathways & protocols Renal Physician nurse Predictive analytics & Care management risk stratification Social worker technology platform 40 © 2019 DaVita Inc.
Slide 41: DaVita's integrated care programs
DaVita’s integrated care programs Commercial/ Chronic Special Needs ESRD Seamless Care MA value-based Plans (C-SNPs) Organizations (ESCOs) contracts Total DaVita risk lives1 ~4,000 ~6,0002 ~7,000 Example partnerships 1) Excludes ~10,000 patients under disease management programs not part of value-ba
Slide 42: Potential future integrated care programs
Potential future integrated care programs Commercial/ CMMI1 voluntary PATIENTS Act MA value-based models contracts 1) Center for Medicare & Medicaid Innovation (CMMI) 42 © 2019 DaVita Inc.
Slide 43: Proven impact of DaVita's integrated care
Proven impact of DaVita’s integrated care Enhanced Patient Experience Improved Clinical Outcomes In patient satisfaction Hospitalization Rate Catheter Rate Top 5 among all California DaVita 22% 67% C-SNP plans1 SNPs Better than national ESRD average2 Reduced Cost3 15% lower non-dialysis ~$8,000 savi
Slide 44: What would integrated care economics look like at scale?
What would integrated care economics look like at scale? ~$17B Likely low single Incremental revenue digit operating income Capital efficient potential for industry1 (OI) margin2 Industry hard at work in DC, strong bipartisan support 1) 2018 USRDS annual report: assumes 300K Medicare FFS patients fo
Slide 45: A leading platform for comprehensive kidney care
A leading platform for comprehensive kidney care 7,600+ 900+ 2,900+ nephrologist hospital partners clinics relationships1 1,700+ $1.7B 500+ Home programs medical cost under payor relationships management 1.4M+ longitudinal patient data to date 1) Includes nephrologists with medical director agreemen
Slide 46: Overview
Overview Our Platform FAQs Key Financial Drivers / Outlook Closing 46 © 2019 DaVita Inc.
Slide 47: Key Financial Drivers
Volume Growth Revenue Dynamics Team and Culture Executive Order International 47 © 2019 DaVita Inc.
Slide 48: Industry prevalence growth
Industry prevalence growth1 Increasing incidence rate Steady incidence rate 6% Declining mortality rate Flat mortality rate Flat transplant volume More transplants 5% Outlook 4% • 1.5-2.0% industry prevalence 3% growth 2% • 1.5-2.5% DaVita non-acquired growth 1% 0% 2011 2012 2013 2014 2015 2016 2017
Slide 49: Revenue Dynamics
Volume Growth Revenue Dynamics Team and Culture Executive Order International 49 © 2019 DaVita Inc.
Slide 50: Industry structure
Industry structure Commercial ~10% coverage Government ~90% coverage 70% Patient mix1 1) Internal DaVita data 50 © 2019 DaVita Inc.
Slide 51: Industry structure: Two-way subsidy
Industry structure Commercial ~10% coverage Negotiated ~30% rates Two-way subsidy • Near-universal Medicare Government ~90% eligibility coverage Government ~70% set rates • Government underfunding, commercial rate premium Patient mix1 Revenue mix1 1) Internal DaVita data 51 © 2019 DaVita Inc.
Slide 52: Revenue per treatment (RPT) summary
Revenue per treatment (RPT) summary Improving dynamics Similar dynamics 1 Medicare rates return to statutory 2 Contracting environment (Similar to increases historical) 3 Outlier segment reduced 4 Commercial mix headwinds penetration penetrations 5 Affordable Care Act (ACA) impact 6 Continue to expe
Slide 53: Medicare rates: Return to statutory increases
1 Medicare rates: Return to statutory increases Annual Medicare ESRD rate update Anticipate 1.5%-2% in future years 2.1-2.3% Updates resumed 1.7% 1.2% Rebasing 0 – 0.5% 2012 - ’13 2014 - ’18 2019 2020 proposed 53 © 2019 DaVita Inc.
Slide 54: Commercial rates: Normal dynamics
2 Commercial rates: Normal dynamics ~30% 500+ 94%+ Of total revenue Payor relationships Commercial revenue contracted 54 © 2019 DaVita Inc.
Slide 55: Outlier segment reduced
3 Outlier segment reduced 60% reduction over past decade: out-of-network, narrowing the band Remaining portfolio fragmented Expect continuing, slowing reduction 55 © 2019 DaVita Inc.
Slide 56: Commercial mix: Ongoing headwinds
4 Commercial mix: Ongoing headwinds Headwinds How are we responding? Operational and educational Aging of baby boomers improvements: • Efficiency of admissions process Likelihood of commercial insurance • Clinical benefits of working significantly lower among new patients over 65 • Right modality fo
Slide 57: ACA: Net negative over last five years, now stabilizing
5 ACA: Net negative over last five years, now stabilizing States’ decisions Product designs Medicaid expansion Metal tiers, subsidies Payors’ choices Patients’ options Level of participation Prevalence of secondary insurance Minimal volume impact but complex mix and rate effects 57 © 2019 DaVita Inc
Slide 58: MA Choice: Positive, but gradual adoption
6 MA Choice: Positive, but gradual adoption What it is MA penetration • Starting 2021 25% • Congressionally of total Medicare mandated patients1 • Reinforces principle of “Freedom of Choice” Expect to approximate broader MA market2 ~30-35% 1) Internal DaVita data as of 6/30/2019 2) Modern Healthcare
Slide 59: Revenue per treatment summary and outlook
Revenue per treatment summary and outlook 3 Outlook: Net growth up 2 slightly from recent levels Some improvement in 1 drivers Complex dynamics 0% to 1% RPT increase in 2020, excluding calcimimetics 59 © 2019 DaVita Inc.
Slide 60: Charitable premium assistance (CPA)
Charitable premium assistance (CPA) A program created 20 years ago with patients in mind… Ensures low-income dialysis and transplant patients can afford health insurance – American Kidney Foundation Enhances patient freedom of choice in health care providers – Office of Inspector General Advisory Op
Slide 61: Charitable premium assistance developments
Charitable premium assistance developments Policy developments Exchange plans • Federal rule • Stable enrollment • AB290 – CPA bill in California • Improved payors’ profitability • Normal ESRD prevalence 61 © 2019 DaVita Inc.
Slide 62: Team and Culture
Volume Growth Revenue Dynamics Team and Culture Executive Order International 62 © 2019 DaVita Inc.
Slide 63: Creating a Special Place
Creating a Special Place 8th consecutive year 63 © 2019 DaVita Inc.
Slide 64: Distinctive work environment in a challenging labor market
Distinctive work environment in a challenging labor market DaVita’s field teammate retention above healthcare benchmark 100% DaVita1 Industry2 80% 82% • Of teammates are engaged3 60% • Approaching 75th percentile of U.S. 40% healthcare benchmark for engagement4 20% 0% 2014 2015 2016 2017 2018 2019 1
Slide 65: Executive Order
Volume Growth Revenue Dynamics Team and Culture Executive Order International 65 © 2019 DaVita Inc.
Slide 66: 3 major goals of new CMMI initiative
3 major goals of new CMMI initiative 80% of new 25% reduction in ESRD patients in number of 2x kidneys 2025 either receive Americans available for dialysis at home or developing ESRD transplant by 2030 receive a transplant by 2030 DaVita is aligned and well-positioned 66 © 2019 DaVita Inc.
Slide 67: Proposed mandatory model
Proposed mandatory model Impacts 50% of the country Emphasis on Home and transplant Estimates ~$20-25M reduction to industry’s dialysis reimbursement annually 67 © 2019 DaVita Inc.
Slide 68: Our comments to CMS regarding the mandatory model
Our comments to CMS regarding the mandatory model • Supportive of spirit and goals • Patient choice and physician judgment • Waivers for initiatives to effectuate change • Involve all relevant transplant stakeholders • Changes to scope and payment methodology 68 © 2019 DaVita Inc.
Slide 69: International
Volume Growth Revenue Dynamics Team and Culture Executive Order International 69 © 2019 DaVita Inc.
Slide 70: Our international footprint
Our international footprint Poland Germany Portugal China Taiwan Colombia Saudi Arabia Malaysia Brazil Singapore 26,000+ patients in 10 countries 70 © 2019 DaVita Inc.
Slide 71: Achieving clinical outcomes abroad
Achieving clinical outcomes abroad Since 2018… 20% reduction in mortality rate1 22% reduction in hospitalization rate2 1) Portugal, Brazil, KSA, Colombia, Taiwan, Malaysia 2) Portugal, KSA, Colombia, Taiwan, Malaysia 71 © 2019 DaVita Inc.
Slide 72: Evolution of international
Evolution of international Expectations through 2012-2017 2018-2019 2022 Plant seeds Refine the portfolio Disciplined growth • 11 countries • New team • Accretion to U.S. operating • Mixed results as expected • Consolidated above-country income growth G&A • Focused capital investment • Shift to prof
Slide 73: Key Financial Drivers / Outlook
Overview Our Platform FAQs Key Financial Drivers / Outlook Closing 73 © 2019 DaVita Inc.
Slide 74: Guidance philosophy
Guidance philosophy Earnings per share replaces operating income Operating income margin replaces per treatment metrics New definition of free cash flow Does not incorporate potential ballot initiative costs 74 © 2019 DaVita Inc.
Slide 75: Capital efficient growth outlook
Capital efficient growth outlook 1 Growing patient demand Organic revenue growth 2 Strong operators and cost management Improving margin trajectory 3 Declining capital expenditure Increasing cash flow 4 Disciplined capital allocation Earnings per share growth 75 © 2019 DaVita Inc.
Slide 76: Revenue outlook of $11.5B - $12.5B in 2022
Revenue outlook of $11.5B - $12.5B in 2022 $ in millions $12,500 $900 - $1,700 $100 - $300 $11,405 $11,500 ($922) 2018 Less one-time U.S. Dialysis & Lab International 2022F adjustments1 1) Includes $354M of DaVita Rx, $23M of DaVita Health Solutions, $36M of Medicare Bad Debt adjustment, and $509M o
Slide 77: Adjusted OI margin trends
Adjusted OI margin trends Adjusted actual OI margin1 20% Adjusted margin guidance2 15% 14% 13.3% 13% 10% 5% 2008 2010 2012 2014 2016 2018 2022F 1) Adjusted OI Margin is a non-GAAP measure that is calculated by dividing adjusted OI by revenue. See appendix for a definition of adjusted OI and a reconc
Slide 78: Estimated impact of flat Medicare fee-for-service rates
Estimated impact of flat Medicare fee-for-service rates Rebasing Adjusted OI impact Margin impact ~8% ~$330M 250 bps 2014 to 2018 In 2018 In 2018 78 © 2019 DaVita Inc.
Slide 79: Disciplined cost management
Disciplined cost management 2013 – 2018 2019 – 2022 Wage rate Outpace inflation Anemia management Costs down G&A Disciplined cost management Depreciation Outpace revenue growth In line with revenue growth 79 © 2019 DaVita Inc.
Slide 80: International performance
International performance 2013 to 2018 2019 to 2022 • Opportunistic growth • Disciplined growth • Multiple administrative centers • G&A leverage • Subscale • Economies of scale International 80 © 2019 DaVita Inc.
Slide 81: Capital efficient growth
Capital efficient growth CapEx1, $ in millions D&A Expenditure for property and equipment $902 $750 $700 $700 $600 2018 2020F 2022F CapEx coming down as a result of fewer in-center de novos 1) CapEx from continuing operations 81 © 2019 DaVita Inc.
Slide 82: New definition better reflects discretionary cash
New definition better reflects discretionary cash 2018 Free Cash Flow (FCF), $ in millions $8691 $800 $487 $52 $4802 $45 FCF$211 Development Sale leaseback Contributions from FCF (old definition)1 CapEx proceeds noncontrolling (new definition)2 interests 1) Free cash flow (old definition) is a non-G
Slide 83: Drivers of higher free cash flow
Drivers of higher free cash flow Free Cash Flow (new definition), $ in millions $200 - $300 $1,000 $150 - $250 ($80) - ($30) $750 $480 2018 FCF1 Earnings CapEx Other 2022 Guidance2 1) Free cash flow (new definition) is a non-GAAP measure. Free cash flow (new definition) is defined as operating cash
Slide 84: Disciplined capital allocation
Disciplined capital allocation Capital Efficient Growth Optimize Capital Structure 3.0 to 3.5x target leverage, Dialysis Acquisitions flexible to be above or below Capital return to Adjacent Verticals shareholders 84 © 2019 DaVita Inc.
Slide 85: Track record of consistent long-term leverage ratio
Track record of consistent long-term leverage ratio Leverage Ratio 4.5x 3.5x 3.6x 3.4x 3.1x 3.0x 3.2x 3.0x 2.7x 2011 20121 2013 2014 2015 2016 2017 20182 6/30/2019 As adjusted3 Note: Leverage Ratio as defined in Credit Agreement, which is a non-GAAP measure. See appendix for reconciliation of this n
Slide 86: New financing enhances financial flexibility
New financing enhances financial flexibility Credit Agreement and Bond Debt outstanding post refinancing and call of 5.75% Sr. Notes, $ in millions Term Loan A Term Loan B 5.125% Sr. Notes 5.000% Sr. Notes $3,134 $2,571 6/30/19 LTM Consolidated EBITDA1 $1,356 $2,224 $1,528 $1,750 $1,500 $82 $115 $12
Slide 87: How we have historically allocated capital
How we have historically allocated capital 2014 to 2018 $4.8B $4.8B Change in debt Acquisitions $1.2B $1.7B $2.0B $2.9B $3.6B Free cash flow1 Share (new definition) repurchases Other $0.2B Capital Generated Capital Deployed 1) Free cash flow (new definition) is a non-GAAP measure. See appendix for r
Slide 88: Adjusted earnings per share outlook
Adjusted earnings per share outlook $7.25 $5.50 $6.25 $3.57 $5.00 20181 20202 20222 1) Adjusted earnings per share is a non-GAAP measure. See the appendix for reconciliation of this non-GAAP measure to the most comparable GAAP measure. 2) Adjusted earnings per share is a non-GAAP measure. Excludes i
Slide 89: Closing
Overview Our Platform FAQs Key Financial Drivers / Outlook Closing 89 © 2019 DaVita Inc.
Slide 90: Summary
Summary Differentiated Capital Earnings per platform efficiency share growth 90 © 2019 DaVita Inc.
Slide 91: © 2019 DaVita Inc.
91 © 2019 DaVita Inc.
Slide 92: Non-GAAP Financial Measures
Non-GAAP Financial Measures As used in this presentation, the term “adjusted” refers to non-GAAP measures as follows, each as reconciled to its most comparable GAAP measure as presented in the non- GAAP reconciliations in this appendix. For income measures, the term “adjusted” refers to operating pe
Slide 93: Free cash flow (new definition)
Free cash flow (new definition) (in millions) 2014 2015 2016 2017 2018 Cash provided by operating activities from continuing operations $ 1,135 $ 1,192 $ 1,685 $ 1,556 $ 1,481 Less: Distributions to noncontrolling interests from continuing operations (149) (175) (192) (211) (196) Plus: Contributions
Slide 94: Free cash flow (old definition)
Free cash flow (old definition) 2018 (in millions) Cash provided by operating activities from continuing operations $ 1,481 Less: Distributions to noncontrolling interests from continuing operations (196) Cash provided by operating activities from continuing operations attributable to DaVita Inc. $
Slide 95: Adjusted operating income
Adjusted operating income 2008 2009 2010 2011 2012 2013 ($ in millions) Operating income from continuing operations $ 867 $ 935 $ 994 $ 1,155 $ 1,261 $ 1,116 Accruals for legal matters 86 397 Noncontrolling interest expense (47) Adjusted operating income from continuing operations $ 820 $ 935 $ 994
Slide 96: Adjusted operating income (continued)
Adjusted operating income (continued) Six months ended 2014 2015 2016 2017 2018 June 30, 2019 ($ in millions) Operating income from continuing operations $ 1,600 $ 1,137 $ 2,030 $ 1,813 $ 1,526 $ 802 Accruals for legal matters 17 518 16 Gain on settlement, net (527) Goodwill and other asset impairme
Slide 97: Adjusted net income from continuing operations per share
Adjusted net income from continuing operations per share attributable to DaVita Inc. 2018 ($ in millions, except for per share data) Amount Per share Net income from continuing operations attributable to DaVita Inc. $ 624 $ 3.62 Goodwill and other asset impairment charges 20 0.12 Restructuring charg
Slide 98: Leverage ratio
Leverage ratio Under the senior secured credit facilities (Credit Agreement), the leverage ratio is defined as all funded debt plus the face amount of all letters of credit issued, minus cash and cash equivalents, including short-term investments, divided by “Consolidated EBITDA”. The leverage ratio
Slide 99: Leverage ratio (continued)
Leverage ratio (continued) Adjusted ($ in millions) 2016 2017 2018 June 30, 2019 Adjustments June 30, 2019 Net income attributable to DaVita Inc. $ 880 $ 664 $ 159 $ 548 $ 548 Income taxes 456 (41) 358 236 236 Interest expense 385 395 451 477 477 Depreciation and amortization 720 777 591 602 602 Goo