Improving Health, Health Care and Quality of Life

DaVita Inc. Reports 4th Quarter and 2000 Results
PRNewswire
TORRANCE, Calif.

DaVita Inc. , today announced results for the quarter and year ended December 31, 2000. Net earnings for the fourth quarter were $15.3 million or $0.18 per share. Continental U.S. EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter was $79.5 million.

  Financial and operating highlights include:

  -- Continental U.S. dialysis revenue per treatment (excluding lab,
     management fees and other revenue) in the fourth quarter was $266.51 as
     compared to $260.41 in the third quarter, or a 2.3% increase.
  -- Continental U.S. DSO at quarter end was 73 days, including Florida
     Medicare laboratory receivables.  This represents a 6-day improvement
     from the end of the third quarter.
  -- The continental U.S. EBITDA margin for the fourth quarter was 21.5% as
     compared to 21.4% for the third quarter.
  -- Operating cash flow for the three months and year ended
     December 31, 2000 was $113 million and $308 million, respectively.
  -- As of the date of this release our leverage ratio (the ratio of net
     debt to EBITDA) is 3.0x, down from 5.5x in late 1999.
  -- Total continental U.S. treatments for the fourth quarter were
     1,352,277.  Non-acquired treatment growth was 3.5%, which included same
     center treatment growth of 3.4%.
  -- At December 31, 2000 we operated 488 outpatient centers in the
     continental U.S. serving over 41,000 patients.  During the fourth
     quarter we closed 1 under-performing center, opened 1 de novo center
     and acquired 8 previously managed centers.  Included in our continental
     patient and facility count are 4,500 patients in 48 centers under
     management.

"This release marks the end of the first full year of our new company. We did what we said we would do, or more, for each of our stakeholders. I salute the significant clinical, operating and financial accomplishments of our team of 12,000 caregivers. We need to and intend to achieve similar progress in 2001. To do so will require significant investments, which we will make," stated Kent Thiry, Chairman and CEO.

  Other developments:

  -- On February 5, 2001, the Company announced that we would voluntarily
     cooperate with the Civil Division of the United States Attorney's
     Office for the Eastern District of Pennsylvania in a review of some of
     the Company's business practices.  No legal process has been initiated
     against the Company, nor are there any allegations of wrongdoing.  We
     cannot predict when this review will be concluded or what the final
     resolution might be.

This release contains forward-looking statements. Factors which could impact future results include the uncertainties associated with governmental regulation, general economic and other market conditions, and the "risk factors" set forth in the Company's SEC filings, including its Form 10-Q for the quarter ended September 30, 2000. These risks include those relating to (1) possible changes in private and government reimbursement rates, (2) the concentration of profits generated from private indemnity patients, (3) the ongoing payment suspension and review of the Company's Florida laboratory subsidiary by its Medicare carrier and the Department of Justice, (4) the inquiry from the Civil Division of the US Attorney's Office for the Eastern District of Pennsylvania and (5) the Company's ability to maintain contracts with physician medical directors. The forward-looking statements should be considered in light of these risks and uncertainties.

                               DAVITA INC.

                    CONSOLIDATED STATEMENTS OF INCOME
                  (in thousands, except per share data)

                                  Three months ended        Year ended
                                  December 31, 2000      December 31, 2000

  Net operating revenues              $ 372,746           $ 1,486,302
  Operating expenses
   Dialysis and lab facilities          256,407             1,032,153
   General and administrative            30,164               123,624
   Depreciation and amortization         27,290               111,605
   Provision for uncollectible
    accounts                              7,094                39,649
   Impairment and valuation losses          142                 4,556
    Total operating expenses            321,097             1,311,587
  Operating income                       51,649               174,715
  Other income (loss)                     1,970               (7,201)
  Debt expense                           22,620               116,637
  Minority interests in
   income of consolidated
   subsidiaries                         (2,774)               (5,942)
   Income before income taxes and
    extraordinary item change in
    accounting principle                 28,225                44,935
  Income tax expense                     12,892                27,960
  Income before extraordinary item       15,333                16,975
  Extraordinary loss related to
   early extinguishment of debt,
   net of tax of $2,222                                       (3,490)
   Net income                           $15,333               $13,485

  Earnings per common share-basic:
   Income before extraordinary item       $0.19                 $0.21
   Extraordinary loss, net of tax            --                (0.04)
   Net income                             $0.19                 $0.17

  Weighted average number of
   common shares outstanding             81,858                81,581

  Earnings per common share-assuming
   dilution:
   Income before extraordinary item       $0.18                 $0.20
   Extraordinary loss, net of tax            --                (0.04)
   Net income                             $0.18                 $0.16

  Weighted average number of common
   shares and equivalents
   outstanding-assuming dilution         85,625                83,157


  Supplemental information:
  Continental Treatments              1,352,277             5,353,636
  Continental EBITDA, pre-impairment
   (in 000's)                           $79,470              $281,055
  Continental EBITDA margin,
   pre-impairment                         21.5%                 19.9%

SOURCE: DaVita Inc.

Contact: LeAnne Zumwalt, Investor Relations of DaVita Inc.,
310-750-2072


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