Cash Flow: For the rolling twelve months ended June 30, 2013, operating cash flow was $1,253 million and free cash flow was $871 million. For the three months ended June 30, 2013, operating cash flow was $307 million and free cash flow was $218 million. For a definition of free cash flow see Note 4 to the reconciliations of non-GAAP measures.

Operating Income: Adjusted operating income for the three and six months ended June 30, 2013 was $465 million and $932 million, respectively, excluding a contingent earn-out obligation adjustment. In addition, adjusted operating income for the six months ended June 30, 2013 excluded a pre-tax loss contingency reserve. Operating income for the three and six months ended June 30, 2013 including these items was $522 million and $689 million, respectively.

Contingent Earn-out Obligation Adjustment: As of June 30, 2013, we remeasured the estimated fair value of HCP’s 2013 contingent earn-out obligation at approximately $69 million. This represents a decrease in the obligation’s carrying value of approximately $57 million, which was recorded as operating income in our consolidated statements of income during the second quarter of 2013. This adjustment was based upon HCP’s operating results for the second quarter of 2013 and expected operating performance for the remainder of the year.

Adjusted Diluted Income from Continuing Operations: Adjusted diluted income from continuing operations attributable to DaVita HealthCare Partners Inc. for the three and six months ended June 30, 2013, was $221.5 million and $442.6 million, or $2.06 and $4.13 per share, respectively, net of tax. These amounts excluded amortization of intangible assets associated with acquisitions and a contingent earn-out obligation adjustment. In addition, adjusted diluted income from continuing operations for the six months ended June 30, 2013, excluded a loss contingency reserve, net of tax.

Volume: Total U.S. dialysis treatments for the second quarter of 2013 were 5,867,973, or 75,230 treatments per day, representing a per day increase of 7.6% over the second quarter of 2012. Non-acquired treatment growth, as well as normalized non-acquired treatment growth in the quarter were 5.0% over the prior year’s second quarter.

Effective Tax Rate: Our effective tax rate was 31.3% and 30.4% for the three and six months ended June 30, 2013, 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 HealthCare Partners Inc. was 33.6% and 34.7% for the three and six months ended June 30, 2013, respectively. The effective tax rate attributable to DaVita HealthCare Partners Inc. for the three and six months ended June 30, 2013, excluding the contingent earn-out obligation adjustment and the loss contingency reserve, was 39.5% and 40.1%, respectively. We expect our 2013 effective tax rate attributable to DaVita HealthCare Partners Inc. to be in the range of 37.0% to 38.0%. In addition, we expect our 2013 effective tax rate attributable to DaVita HealthCare Partners Inc. excluding the contingent earn-out obligation adjustment and the loss contingency reserve to be in the range of 39.0% to 40.0%.

Center Activity: As of June 30, 2013, we provided dialysis services to a total of approximately 163,000 patients at 2,058 outpatient dialysis centers, of which 2,010 centers are located in the United States and 48 centers are located in ten countries outside of the United States. During the second quarter of 2013, we acquired three dialysis centers and opened a total of 18 dialysis centers in the United States. We also acquired eight dialysis centers outside of the United States.

We are raising our consolidated operating income guidance for 2013 to now be in the range of $1,830 million to $1,930 million. Our previous consolidated operating income guidance for 2013 was in the range of $1,800 million to $1,900 million.

In addition, we are raising our operating income guidance for our dialysis services and related ancillary businesses for 2013 to now be in the range of $1,450 million to $1,500 million. Our previous operating income guidance for our dialysis services and related ancillary businesses for 2013 was in the range of $1,400 million to $1,450 million.

We are also lowering our operating income guidance for HCP for 2013 which is now expected to be in the range of $380 million to $430 million. Our previous operating income guidance for HCP for 2013 was in the range of $400 million to $450 million.

In addition, we have increased the bottom end of our range for our consolidated operating cash flows for 2013 to now be in the range of $1,400 million to $1,500 million. Our previous consolidated operating cash flows guidance for 2013 was in the range of $1,350 million to $1,500 million.

the concentration of profits generated by the continued downward pressure on average realized payment rates from, and a reduction in the number of patients under higher-paying commercial payor plans, which may result in the loss of revenues or patients,

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,

the impact of the Center for Medicare and Medicaid Services (CMS) 2014 Medicare Advantage benchmark structure,

the impact of the American Taxpayer Relief Act,

the impact of the sequester that went into effect on April 1, 2103,

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

legal compliance risks, including our continued compliance with complex government regulations and current or potential investigations by various government entities and related government or private-party proceedings, including risks relating to the resolution of the 2010 and 2011 U.S. Attorney Physician Relationship Investigations,

our ability to maintain contracts with physician medical directors, changing affiliation models for physicians, and the emergence of new models of care introduced by the government or private sector, that may erode our patient base and reimbursement rates,

our ability to complete any acquisitions, mergers or dispositions that we might be considering or announce, or to integrate and successfully operate any business we may acquire or have acquired, including HCP, or to expand our operations and services to markets outside the United States,

risks arising from the use of accounting estimates, judgments and interpretations in our financial statements,

the risk that the cost of providing services under HCP’s agreements may exceed our compensation,

the risk that reductions in reimbursement rates, including Medicare Advantage rates, and future regulations may negatively impact HCP’s business, revenue and profitability,

the risk that HCP may not be able to successfully establish a presence in new geographic regions or successfully address competitive threats that could reduce its profitability,

the risk that a disruption in HCP’s healthcare provider networks could have an adverse effect on HCP’s business operations and profitability,

the risk that reductions in the quality ratings of health maintenance organization plan customers of HCP could have an adverse effect on HCP’s business, or

the risk that health plans that acquire health maintenance organizations may not be willing to contract with HCP or may be willing to contract only on less favorable terms.

Patient service revenues

Less: Provision for uncollectible accounts

Net patient service revenues

HCP capitated revenues

Other revenues

Total net revenues

Operating expenses and charges:

Patient care costs and other costs

General and administrative

Depreciation and amortization

Provision for uncollectible accounts

Equity investment income

Loss contingency reserve and other legal settlements

Contingent earn-out obligation adjustment

Total operating expenses and charges

Operating income

Debt expense

Other (expense) 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

Gain on disposal of discontinued operations, net of tax

Net income

Less: Net income attributable to noncontrolling interests

Net income attributable to DaVita HealthCare Partners Inc.

Earnings per share:

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

Basic net income per share attributable to DaVita HealthCare Partners Inc.

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

Diluted net income per share attributable to DaVita HealthCare Partners Inc.

Weighted average shares for earnings per share:

Basic

Diluted

Amounts attributable to DaVita HealthCare Partners Inc.:

Income from continuing operations

Discontinued operations

Net income

Net income

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on interest rate swap and cap agreements:

Unrealized gain (loss) on interest rate swap and cap agreements

Reclassifications of net swap and cap agreements realized loss into net income

Unrealized gain (loss) on investments:

Unrealized gain (loss) on investments

Reclassification of net investment realized gains into net income

Foreign currency translation adjustments

Other comprehensive income (loss)

Total comprehensive income

Less: Comprehensive income attributable to noncontrolling interests

Comprehensive income attributable to DaVita HealthCare Partners Inc.

Cash flows from operating activities:

Net income

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

Loss contingency reserve

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

Other non-cash charges and loss on disposal of assets

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 and business 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 intangible assets

Distributions received on equity investments

Net cash used in investing activities

Cash flows from financing activities:

Borrowings

Payments on long-term debt and other contingent obligations

Interest rate cap premiums and other deferred financing costs

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

Effect of exchange rate changes on cash and cash equivalents

Net increase (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 $229,745 and $245,122

Inventories

Other receivables

Other current assets

Income tax receivable

Deferred income taxes

Total current assets

Property and equipment, net of accumulated depreciation of $1,618,789 and $1,522,183

Intangibles, net of accumulated amortization of $394,169 and $304,323

Equity investments

Long-term investments

Other long-term assets

Goodwill

Accounts payable

Other liabilities

Accrued compensation and benefits

Medical payables

Loss contingency reserve

Current portion of long-term debt

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; 106,239,986 and 105,498,575 shares outstanding)

Additional paid-in capital

Retained earnings

Treasury stock, at cost (28,622,297 and 29,363,708 shares)

Accumulated other comprehensive loss

Total DaVita HealthCare Partners Inc. shareholders’ equity

Noncontrolling interests not subject to put provisions

Total equity

1. Consolidated Financial Results:

Consolidated net revenues

Operating income

Operating income margin

Operating income excluding a contingent earn-out obligation adjustment, a loss contingency reserve, transaction expenses associated with the acquisition of HCP and a legal settlement and related expenses⁽¹⁾

Operating income margin excluding a contingent earn-out obligation adjustment, a loss contingency reserve, transaction expenses associated with the acquisition of HCP and a legal settlement and related expenses⁽¹⁾

Income from continuing operations attributable to DaVita HealthCare Partners Inc.

Income from continuing operations attributable to DaVita HealthCare Partners Inc. excluding a contingent earn-out obligation adjustment, a loss contingency reserve, transaction expenses associated with the acquisition of HCP and a legal settlement and related expenses, which are all net of related tax⁽¹⁾

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

Diluted income from continuing operations per share attributable to DaVita HealthCare Partners Inc. excluding a contingent earn-out obligation adjustment, a loss contingency reserve, transaction expenses associated with the acquisition of HCP and a legal settlement and related expenses, which are all net of related tax⁽¹⁾

2. Consolidated Business Metrics:

Expenses

General and administrative expenses as a percent of consolidated net revenues⁽²⁾

Consolidated effective tax rate

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

3. Summary of Segment Financial Results:

Net revenues

Net dialysis and related lab services revenues

Net HCP revenues

Net ancillary services and strategic initiatives revenues

Total net segment revenues

Elimination of intersegment revenues

Total net consolidated revenues

3. Segment Financial Results: (continued)

Operating income

Dialysis and related lab services operating income

HCP operating income

Other – Ancillary services and strategic initiatives, including international dialysis operations operating losses

Total segment operating income

Reconciling items:

Contingent earn-out obligation adjustment

Corporate support and related long-term incentive compensation

Transaction expenses

Consolidated operating income

Dialysis and Related Lab Services

Revenue:

Patient services revenues

Provision for uncollectible accounts

Net patient service operating revenues

Other revenues

Total net operating revenues

Operating expenses:

Patient care cost

General and administrative

Depreciation and amortization

Equity investment income

Loss contingency reserve and a legal settlement and related expenses

Total operating expenses

Segment operating income

HCP

Revenue:

HCP capitated revenues

Patient services revenues

Provision for uncollectible accounts

Net patient service operating revenues

Other revenues

Total net operating revenues

Operating expenses:

Patient care cost

General and administrative

Depreciation and amortization

Equity investment income

Total operating expenses