Cash Flow: For the rolling twelve months ended September 30, 2011 operating cash flow was $1,150 million and free cash flow was $835 million. For the three months ended September 30, 2011 operating cash flow was $495 million and free cash flow was $408 million.

Operating Income: Operating income for the three and nine months ended September 30, 2011 was $319 million and $825 million, respectively, which for the nine months ended September 30, 2011 excludes the pre-tax non-cash goodwill impairment charge of $24 million. Operating income for the nine months ended September 30, 2011 including this item was $801 million.

Volume: Total treatments for the third quarter of 2011 were 5,008,094, or 63,394 treatments per day, representing a per day increase of 9.6% over the third quarter of 2010. Non-acquired treatment growth in the quarter was 5.0% over the prior year’s third quarter. Our normalized non-acquired treatment growth in the quarter was 4.6% over the prior year’s third quarter.

Effective Tax Rate: Our effective tax rate was 36.4% and 35.9% for the three and nine months ended September 30, 2011, respectively. This effective tax rate is impacted by the amount of third party owners’ income attributable to non-tax paying entities. The effective tax rate attributable to DaVita Inc. was 40.5% and 40.2% for the three and nine months ended September 30, 2011, respectively. We still expect our effective tax rate attributable to DaVita Inc. for 2011 to be in the range of 39.0% to 40.0%.

Center Activity: As of September 30, 2011, we operated or provided administrative services at 1,777 outpatient dialysis centers serving approximately 138,000 patients, of which 1,745 centers are consolidated in our financial statements. During the third quarter of 2011, we acquired and opened a total of 138 centers, including 113 centers associated with the acquisition of DSI and divested a total of 28 centers in order to complete the acquisition of DSI.

Debt Transactions: On August 26, 2011, we entered into an Increase Joinder Agreement under our existing Senior Secured Credit Agreement. Pursuant to the Increase Joinder Agreement, we increased the revolving credit facility by $100 million, to a total of $350 million, and entered into an additional $200 million Term Loan A-2. The Term Loan A-2 matures in October 2016.

the concentration of profits generated from commercial payor plans,

continued downward pressure on average realized payment rates from commercial payors, which may result in the loss of revenue or patients,

a reduction in the number of patients under higher-paying commercial plans,

a reduction in government payment rates under the Medicare End Stage Renal Disease program or other government-based programs,

the impact of health care reform legislation that was enacted in the United States in March 2010,

changes in pharmaceutical or anemia management practice patterns, payment policies, or pharmaceutical pricing,

our ability to maintain contracts with physician medical directors,

legal compliance risks, including our continued compliance with complex government regulations,

current or potential investigations by various governmental entities and related government or private-party proceedings,

continued increased competition from large and medium-sized dialysis providers that compete directly with us,

our ability to complete any acquisitions, mergers or dispositions that we might be considering or announce, or integrate and successfully operate any business we may acquire, and

expansion of our operations and services to markets outside the United States, or to businesses outside of dialysis.

Net operating revenues

Operating expenses and charges:

Patient care costs

General and administrative

Depreciation and amortization

Provision for uncollectible accounts

Equity investment income

Goodwill impairment charge

Total operating expenses and charges

Operating income

Debt expense

Debt redemption charges

Other income

Income from continuing operations before income taxes

Income tax expense

Income from continuing operations

Discontinued operations:

Income (loss) from operations of discontinued operations, net of tax

Loss on disposal of discontinued operations, net of tax

Net income.

Less: Net income attributable to noncontrolling interests

Net income attributable to DaVita Inc.

Earnings per share:

Basic income from continuing operations per share attributable to DaVita Inc.

Basic net income per share attributable to DaVita Inc.

Diluted income from continuing operations per share attributable to DaVita Inc.

Diluted net income per share attributable to DaVita Inc.

Weighted average shares for earnings per share:

Basic

Diluted

Amounts attributable to DaVita Inc.:

Income from continuing operations

Discontinued operations

Net income

Cash flows from operating activities:

Net income

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

Stock-based compensation expense

Tax benefits from stock award exercises

Excess tax benefits from stock award exercises

Deferred income taxes

Equity investment income, net

Loss on disposal of assets and other non-cash charges

Goodwill impairment charge

Debt redemption charges

Changes in operating assets and liabilities, other than from acquisitions and divestitures:

Accounts receivable

Inventories

Other receivables and other current assets

Other long-term assets

Accounts payable

Accrued compensation and benefits

Other current liabilities

Income taxes

Other long-term liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Additions of property and equipment, net

Acquisitions

Proceeds from asset sales

Purchase of investments available for sale

Purchase of investments held-to-maturity

Proceeds from sale of investments available for sale

Proceeds from maturities of investments held-to-maturity

Purchase of equity investments and other assets

Distributions received on equity investments

Net cash used in investing activities

Cash flows from financing activities:

Borrowings

Payments on long-term debt

Interest rate cap premiums and other deferred financing costs

Debt call premium

Purchase of treasury stock

Distributions to noncontrolling interests

Stock award exercises and other share issuances, net

Excess tax benefits from stock award exercises

Contributions from noncontrolling interests

Proceeds from sales of additional noncontrolling interests

Purchases from noncontrolling interests

Net cash used in financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Cash and cash equivalents

Short-term investments

Accounts receivable, less allowance of $231,666 and $235,629

Inventories

Other receivables

Other current assets

Income tax receivables

Deferred income taxes

Total current assets

Property and equipment, net

Amortizable intangibles, net

Equity investments

Long-term investments

Other long-term assets

Goodwill

Accounts payable

Other liabilities

Accrued compensation and benefits

Current portion of long-term debt

Income tax payable

Total current liabilities

Long-term debt

Other long-term liabilities

Alliance and product supply agreement, net

Deferred income taxes

Total liabilities

Commitments and contingencies

Noncontrolling interests subject to put provisions

Equity:

Preferred stock ($0.001 par value, 5,000,000 shares authorized; none issued) Common stock ($0.001 par value, 450,000,000 shares authorized; 134,862,283 shares issued; 93,442,783 and 96,001,535 shares outstanding)

Additional paid-in capital

Retained earnings

Treasury stock, at cost (41,419,500 and 38,860,748 shares)

Accumulated other comprehensive (loss) income

Total DaVita Inc. shareholders’ equity

Noncontrolling interests not subject to put provisions

Total equity

1. Consolidated Financial Results:

Revenues

Operating income

Operating income, excluding the pre-tax non-cash goodwill impairment charge⁽¹⁾

Operating income margin

Operating income margin, excluding the pre-tax non-cash goodwill impairment charge⁽¹⁾

Income from continuing operations attributable to DaVita Inc.

Income from continuing operations attributable to DaVita Inc., excluding the after-tax non-cash goodwill impairment charge⁽¹⁾

Diluted earnings per share from continuing operations attributable to DaVita Inc.

Diluted earnings per share from continuing operations attributable to DaVita Inc., excluding the after-tax non-cash goodwill impairment charge⁽¹⁾

2. Consolidated Business Metrics:

Expenses

Patient care costs as a percent of consolidated revenue⁽²⁾

General and administrative expenses as a percent of consolidated revenue ^{( 2)}

Bad debt expense as a percent of consolidated revenue

Consolidated effective tax rate attributable to DaVita Inc.⁽¹⁾

3. Segment Financial Results: (dollar amounts rounded to nearest million)

Revenues

Dialysis and related lab services

Other – Ancillary services and strategic initiatives

Total segment revenue

Less elimination of intersegment revenue

Total consolidated revenue

Operating Income

Dialysis and related lab services

Other – Ancillary services and strategic initiatives

Total segment operating income

Reconciling items:

Stock-based compensation

Equity investment income

Consolidated operating income

4. Segment Business Metrics:

Dialysis and related lab services

Volume

Treatments

Number of treatment days

Treatments per day

Per day year over year increase

Non-acquired growth year over year

Revenue

Dialysis and related lab services revenue per treatment

Per treatment increase from previous quarter

Per treatment decrease from previous year

Percent of consolidated revenue

Expenses

Patient care costs

Percent of segment revenue

Per treatment

Per treatment (decrease) increase from previous quarter

Per treatment decrease from previous year

General and administrative expenses

Percent of segment revenue

Per treatment

Per treatment increase from previous quarter

Per treatment increase from previous year

5. Cash Flow:

Operating cash flow

Operating cash flow, last twelve months

Free cash flow⁽¹⁾

Free cash flow, last twelve months⁽¹⁾

Capital expenditures:

Routine maintenance/IT/other

Development and relocations

Acquisition expenditures

6. Accounts Receivable:

Net receivables

DSO

7. Debt and Capital Structure:

Total debt⁽³⁾

Net debt, net of cash⁽³⁾

Leverage ratio (see Note 1 on page 9)

Overall weighted average effective interest rate during the quarter

Overall weighted average effective interest rate at end of the quarter

Weighted average effective interest rate on the Senior Secured Credit Facilities at end of the quarter

Effectively fixed interest rates as a percentage of our total debt at September 30, 2011⁽⁴⁾ and June 30, 2011⁽⁴⁾ and fixed interest rates at September 30, 2010

Share repurchases

8. Clinical: (quarterly averages)

Dialysis adequacy -% of patients with Kt/V > 1.2 at the end of the quarter

Patients with arteriovenous fistulas placed

Net income attributable to DaVita Inc.

Income taxes

Interest expense

Depreciation and amortization

Non-cash goodwill impairment charge

Debt refinancing and redemption charges

Noncontrolling interests

Equity investment income, net

Amortization of deferred financing costs

Other, including pro-forma EBITDA associated with acquisitions

Stock-based compensation expense

“Consolidated EBITDA”

Total debt, excluding debt discount of $8.3 million

Letters of credit issued

Less: cash and cash equivalents

Consolidated net debt

Last twelve months “Consolidated EBITDA”

Leverage ratio

Income from continuing operations attributable to DaVita Inc. excluding an after-tax non-cash goodwill impairment charge and debt redemption charges:

Net income attributable to DaVita Inc.

Discontinued operations attributable to DaVita Inc.

Income from continuing operations attributable to DaVita Inc.

Add: Non-cash goodwill impairment charge