Good evening. My name is Michelle, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the DaVita's Second Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period. [Operator Instructions] Thank you. Mr. Eliason, you may begin your conference.

Thank you and welcome to our second quarter conference call. We appreciate your continued interest in our company. I’m Nic Eliason, Group Vice President of Investor Relations and joining me today are Javier Rodriguez, our CEO; and Joel Ackerman, our CFO. Please note that during this call we may make forward-looking statements within the meaning of the federal securities laws. All of these statements are subject to known and unknown risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. For further details concerning these risks and uncertainties, please refer to our second quarter earnings press release and our SEC filings including our most recent annual report on Form 10-K, all subsequent quarterly reports on Form 10-Q and other subsequent filings that we may make with the SEC. Our forward-looking statements are based on information currently available to us and we do not intend and undertake no duty to update these statements except as may be required by law. Additionally, we’d like to remind you that during this call we will discuss some non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release furnished to the SEC and available on our website. I will now turn the call over to Javier Rodriguez.

Thank you, Nic and thank you all for joining our call today. On behalf of all the teammates who provide lifesaving care to our patients, I am grateful for the opportunity to report another positive quarter for DaVita. We continue to enhance our clinical capabilities while optimizing our revenue, operations and cost structure. Today, I will cover the details of our second quarter performance, comment on the CMS 2025 proposal, and wrap up with our outlook for the remaining of the year. But before I dive in, let me begin, as we always do, with a clinical highlight. As you know, every day, tens of thousands of DaVita caregivers work to give life to our patients. Nurses play a central role within our interdisciplinary care teams, serving as our patient's caregiver, sounding board and familiar face they see over 100 times per year. Unfortunately, thousands of nurses left the profession during the pandemic. As a result, the healthcare system is facing a critical nursing shortage. I am proud of the programs and initiatives we've implemented to support the next generation of dialysis nurses. I'll highlight three examples. First, we're collaborating with leading nursing universities on tailored nephrology specific nursing curriculum. We're also providing financial assistance to remove barriers to entry for prospective nursing students. Second, we've created a clinical internship program immersing students with hands on experience in DaVita Dialysis Centers. We have 700 clinical interns this year, with more than 2000 individuals participating since inception of the program. Third, we've built a nurse residency program to support new nurses from student to practicing registered nurse. Our goal is to help hundreds of nurses in the program to feel more confident during their first year of practice, which, among other things, can lead to better patient safety. We're excited to…

Thanks Javier. Our second quarter adjusted operating income was $506 million, adjusted EPS was $2.59 and free cash flow was $654 million. Before I dive into the specifics on our performance for the quarter, let me add some detail to the change in reporting presentation of our non-GAAP results that Javier mentioned. As a result of a recent common letter from the SEC to DaVita we will no longer treat center closure costs as an adjustment in our non-GAAP presentations. These center closure costs impact our patient care cost, G&A and depreciation and amortization expense lines. Our adjusted OI and adjusted EPS for Q2 now include center closure costs and our updated full-year 2024 guidance shared today follows the same methodology. To help with comparisons to prior periods, we are also now showing prior period results under the new methodology. In aggregate, these costs represent approximately $15 million per quarter in 2024 for a total of roughly $60 million expected this year. For comparison, center closure costs in 2023 were approximately $100 million. For 2025, we are forecasting $20 million to $30 million of center closure costs. These presentation changes have no impact on how we manage our business nor our overall profitability, cash flow, or long-term expectations. With that, let me break down each of the components of our Q2 performance starting with U.S. dialysis and specifically treatment volume. Sequentially, treatments per day were up 1.1% in Q2 versus Q1. This increase was primarily due to census gains in the quarter and a seasonal improvement in mistreatment rate. Compared to the same period last year second quarter treatments per day were up 50 basis points.

Second, U.S. net census gains were weaker than expected. Although new to dialysis admits grew for the sixth consecutive quarter, mortality was above our forecast. We expect both of these factors to negatively impact the second half of the year. For the full year, we now expect treatment volume growth will likely be between 0.5% and 1%. Revenue per treatment was up approximately $6 sequentially. This increase is primarily due to typical seasonality from higher patient coinsurance and deductibles in Q1. As Javier outlined, we now anticipate full-year revenue per treatment growth of 3.5% to 4% for 2024. Patient care costs per treatment were approximately flat quarter-over-quarter. Typical seasonal declines from items like higher payroll taxes in Q1 offset higher health benefit costs and other inflationary creases in the second quarter. Depreciation and amortization declined $12 million in Q2 versus Q1, partially as a result of a decline in center closure costs. Center closure costs in D&A were approximately $50 million in 2023, compared to $10 million in 2024. Since these costs are now included in our adjusted D&A numbers, we now expect a year-over-year adjusted D&A decline of approximately $40 million to $50 million. For Integrated Kidney Care or IKC, our value based care business, operating income declined $8 million sequentially. As we have seen in the past, we expect results in the second half of the year to be significantly stronger than the first half as a result of the timing of revenue recognition. International operating income was flat quarter-over-quarter. We have closed our acquisitions in Ecuador and Chile and expect our acquisitions in Colombia to close in Q3 and in Brazil by year-end. Moving now to capital structure, in the second quarter, we repurchased 2.7 million shares and to date in Q3 we have repurchased an additional…

Thank you, sir. [Operator Instructions] Pito Chickering with Deutsche Bank, you may go ahead sir.

Hey. Good afternoon, guys. Nice quarter and thanks for taking the questions. On the NAG, can you give us some color on what you saw through the quarter and what you saw in July? Just looking at the high end of your revised guidance, you get to grow like 1.5%, which is a big step up versus what you saw in the first half of the year. So just want to sort of see kind of what you guys are seeing to give you confidence in the high end of that.

Sure. Thanks, Pito. So through the quarter, what we really saw was mistreatments were elevated relative to what we expected and our census growth was below expectations. The pattern there has continued new to dialysis admits remain strong and the growth there is consistent with what we had seen pre-COVID and mortality remains elevated. In terms of the back half of the year, I'd point out one thing that gives us confidence, which is we've got an extra treatment day in the second half of the year relative to the second half of the year last year. So that in and of itself is about 30 bps of additional growth. Other than that, we really haven't modeled in a whole lot of changes for the back half of the year. We haven't built in much census growth, and we're expecting mistreatment rate to continue to be challenging. So if you really think about the back half of the year, year-over-year growth, it's really about treatment days rather than any change in any of the underlying assumptions.

Okay, fair enough. And you gave some of the moving parts, but if we exclude the $60 million of closure costs, you raised guidance by $95 million. Can you just bridge us the components of sort of how you raise guidance by $95 million versus previous guidance? I just want to understand that as I think about sort of 2025. Thanks.

Sure. So I'd start with revenue per treatment, where we moved the guide from what essentially last quarter was 3% now to 3.5% to 4%. So at the midpoint, 75 bps is worth roughly $85 million. So that's number one. And that's coming from a combination of continued success on the revenue operations, strength in contracting that we've seen through the year so far, and then a little bit of mix improvement, so that's the dominant factor and worth $85 million. Contributing to that as well is some improvement we're seeing in labor costs. I'd highlight two things there. First, some of the premium pay, whether it's overtime or spot bonuses, have come down. And second, we are seeing a little bit better productivity in the year than expected. Those two things combined are worth about $30 million. And offsetting that is about $20 million of OI headwind from the lower volume that we've called out. So plus $85 million from RPT, plus $30 million from labor minus $20 million from volume, that will get you to $95 million increase before taking into account the $60 million change in center closure cost.

Great. Thanks so much.

Thank you. Our next caller is Justin Lake with Wolfe Research. You may go ahead, sir.

Thanks. Let me just followup on Pito's question there. You said $20 million from lower volume?

That's right, Justin.

And you took down volume by what, 75 bps at the midpoint?

Yes. I would say, as we were thinking about it, we probably weren't internally modeling as of last quarter that we'd be at the midpoint. So you'd probably get to a little bit of a lower -- you'd have to start at a slightly lower volume number to bridge to that $20 million.

So maybe it's 50 basis points. I'm just trying to think about the relativity here volume to OI?

Yes, you're in the right ballpark yes.

So in your mind, 50 basis points of volume is about $20 million of OI on an annual basis?

Yes. If you had asked me, just stand alone, what's 50 basis points of volume worth? I probably would have told you $50 million to $60 million. So maybe use a slightly lower number.

[Indiscernible] it's not the same thing.

Oh, I'm sorry, I'm sorry. Correcting me, 1% is worth 50 to 60. So you're in the right ballpark there.

Okay. And then on center closures, did you say $20 million or $30 million for next year?

Yes for 2025, we think the number will be in that range.

Okay.

And just to be clear about that, when you're modeling center closure costs, it's important to realize that not all the costs come right when we close a clinic. Some of them, like lease acceleration costs for example, can have a delay from when we close the clinic. So I think by next year, our clinic closure rate should actually be back to what it was pre-COVID level, call it 20 clinics a year, somewhere in that range. But the costs we're calling out will be a holdover from what we've seen. Some of them will be a holdover from the clinic closures in 2024.

Got it. That's what I was trying to get to. So you think you'll be back to, like 2020 center closures next year?

Yes, something like that. This year, I think last quarter we had called out 50 for the year. We're probably running light. And I would guess at the end of the year, we'll probably have closed only about 40 for the year and getting back to a more normal pace for next year.

Okay. And then just a question before I jump off on revenue for treatment. One, I think you said in the release you had some offsets to pricing from mix pressure. What's mix in the second quarter versus Q1?

Mix was down a drop in Q2, but it's hanging right around 11%. It's right where it was at the beginning of the year. Our commercial mix at the end of Q1, which I don't think we disclosed, was a little bit harder to estimate because of some of the changes, some of the challenges with Change Healthcare as some of the claims were delayed. But I don't think there has been a lot of movement on commercial mix between Q1 and Q2 that would have any real financial impact.

And then lastly on the exchanges, so I assume that you were at 10.9 to end the year, if I remember the fourth quarter report. But let's say you're at 11. How much of that's coming from exchanges today and how much of that came from exchanges let's say pre-COVID.

Yes, the number is up about 200 basis points.

Okay, I'll take that. I appreciate it, guys. Thanks.

Thank you.

Thank you. Our next caller is AJ Rice with UBS. You may go ahead, sir.

Hi. Thanks for the question. On the IKC business, I guess year to date, the loss, if I've calculated rice, about 60 million. I know your target for the year is $50 million and as you did say in the prepared remarks, you think you'll see more positive in the back half of the year. Is 50 million still the expectation? And does that suggest you'll be positive in both the third and fourth quarter?

Thanks for the question, AJ. You've got the numbers right, meaning we're at negative $60 million and change for the up to year-to-date, and we still expect the year to come in in that $50 million range. But it's not necessarily because there's a big change in the business, but rather revenue recognition on the back end of the year and so that's the big difference there. And as you know, this business, and we've asked you to look at it more on an annual basis, because quarter to quarter fluctuation can be a bit more dramatic, but that still holds on the range.

Yes. And AJ, just on the quarterly spread between Q3 and Q4, it can be hard for us to predict when the revenue will land. That said I would expect Q3 to be a loss making quarter again and Q4 to be a much, much stronger quarter. Then again, depending on when we get information, some of the Q4 revenue could pull forward to Q3.

Okay. And obviously, it sounds like the comments on the volume are mostly around the storm impact and mistreatment, but you did sort of mention mortality. What did you see in mortality? And was that a significant contributor to your decision to adjust or that's just the normal fluctuations you see from quarter-to-quarter?

Yes. So the short answer is mortality is definitely higher than we expected and maybe it would be helpful to step back for a second and just give you a sense of how we're thinking structurally about where we are on volume for the year. And as we step back, the question we have been asking ourselves is, we are behind on volume growth, call it 150 bps relative to pre-COVID relative to where we'd like to be. And we've spent a lot of time trying to quantify that. We are limited by the information we have, both the quality of the data as well as the timeliness of the data, recognizing we're playing with relatively small numbers here, 100 bps, 150 bps with inputs that have a decent amount of volatility or variability. That said, as we try and quantify it, we think the $150 million gap between where our volume growth for the year is relative to where it was pre-COVID is really made up of two things. About 50 bps to 100 bps of that gap is related to mortality. Mortality is just running higher than it was. It's actually up this year relative to where it was six months ago. And we think structurally, that's the biggest component of why we're not 150 basis points higher. The second thing we believe relates to the capital efficient approach we took to managing our clinic footprint. You go back three or four years, volume for us and the whole industry was beginning to decline. We recognized that our capacity utilization was going down, and we were very focused on getting back to a healthy capacity utilization, one that could support our investment in our teams, in clinical quality and in information technology. And the result of that was we pulled back on de novos before others did, and we closed roughly 200 clinics over the last few years. The result of all that was a decline in our clinic share over the last few years, call it a point and a quarter, roughly. And with that, we believe we have lost some volume. It's hard to quantify, but if we had to put a range on, it would probably be somewhere in the range of 40 to 60 basis points. So you put those two things together, 50 to 100 basis points of mortality higher than historical, combined with 40 to 60 basis point impact from our clinics footprint management and we think that explains the majority of the 150 basis point gap. I will note one important thing new to dialysis admits is not on our list of the gap. As I've said before, those remain strong. The growth in new dialysis admits is consistent with the growth we saw pre-COVID and remains at a healthy level. So I hope at the beginning, I answered your question about the year and then gave you a bit more color on the bigger picture. Javier, anything to add?

Yes, I'll add one thing. First of all, at the beginning of the sentence, Joel inadvertently said 150 million, and he was talking about 150 basis points just to make sure that the record reflects that. The rest of the conversation, he was clear on the 150 basis points. But I think while he walked you through a lot of numbers, at the end of the day, the question that you and all of us are trying to ask ourselves is, is there a structural change that is going to change the growth rate? And to the best of our ability on the work that we've done the answer that we come up with is no. It appears that we are in a bit of just, let's call it a period of time where mortality is elevated, but we see through these new to dialysis patients that the volume should come back to normality over time.

Okay, great. Thanks so much.

Thank you.

Our next caller is Andrew Mok with Barclays. You may go ahead, sir.

Great, thank you. Maybe just to followup on that mortality point, I guess what's the working assumption on why mortality is elevated? Because I think the excess mortality dynamic during the early years of the pandemic would intuitively suggest there would be a tailwind in the aftermath. So what's your working assumption here on why it remains elevated? Thanks.

Yes. Your question is one that we've been asking a lot, and we've been talking to our physician community and trying to understand what is driving it. The reality is that people come up with hypotheses and you can actually support it a bit, a higher elevated flu season, et cetera. But the real quantifiable answer is not one that we could say with confidence. And if you were going to say on the other side of the equation, we're starting to see improvements on things that should have an impact on mortality, like the integrated kidney care, managing people upstream, new drugs, SGLT2 and GLP-1, et cetera. And so we are scratching our head and we will be working on it, and as soon as we get something with confidence, we will share with you.

Great. Okay, thank you. And then in the prepared remarks, I think you mentioned that the improvement in collections is a multiyear effort. And given the strong gains we've seen over the last six quarters, just where are we in this process and how much runway is left beyond 2024? Thanks.

Yes, I would say there's certainly going to be more in 2025, if from nothing else than just the annualization of the improvements we're anticipating in the back half of the year. Looking forward from there, I think it's safe to say that any benefits from this are going to decline over time. And what I mean by that is their contribution to RPT growth will combine over time. I think everything we've achieved so far is sustainable. That said, it's hard to predict how much more there is and over what time period we're likely to capture it. I think it is fair to say relative to when we started this a few years ago, and when we started talking about it with the street in Q2 of 2022, it has certainly exceeded our expectations.

Got it. If I could just followup on one more point. I think you called out the clinic closures as being a potential drag to volume growth as well. I think given you and your competitor, one of your big competitors, are closing clinics at the same time, where do you think, how much leakage do you think there is, therefore, where are those patients going to get their dialysis treatment if not one of the two large dialysis chains? Thanks.

Yes, so we've done a lot of work on this, and interestingly enough, the data we have on clinics is actually better. Clinic share is better than the data we have on treatment share. And we believe that the mid-size and smaller dialysis operators have actually gained share over the last few years. They have closed fewer clinics, they have built more clinics, and the result of that is probably picking up some volume as a result of that.

And the question on that, and we ask ourselves, is that good or bad? In general of course, you start to think of market share, and in this one, it's clinic share. And the way that we've looked at it, and of course, time will tell, is that we led the way in stopping de novos as the mortality escalated during the pandemic. So if you see DaVita build, it was very aggressively stopped, and then we led the way in right, sizing the capacity. And so if you were just going to do shorthand, you would say, we've closed roughly 200 centers. And depending on the math, you could say it's roughly $100 to $150 million of fixed expense reduction. And the loss of volume is roughly in that $50 million. So you would say that just with that math, it looks like we're making the right trade off. Of course, there's a lot of other dynamics of patient access, the local relationship with physicians, and all the normal considerations that we have to go into. But I'm just giving you the money side of it.

Great. Thanks for all the color.

Sure. Hey, before we take the next question, I just want to come back to an answer I gave to Justin on the exchanges. I talked about 200 basis point increase from the exchanges. I just wanted to clarify, that's 200 basis points of revenue, not 200 basis points of mix increase that came from the exchanges. So just wanted to make sure that was clear.

Thank you. [Operator Instructions] Our next caller is Kevin Fischbeck with Bank of America. You may go ahead, sir.

Great, thanks. Maybe just to follow up on that point, do you just have, like, the percent of revenue that comes from the exchanges year-to-date so far?

Yes, I'm not sure we're going to, I don't think we're going to give that number, Kevin.

And then you made a comment in the prepared remarks about leverage, and I think you said that you were looking to add debt that to ensure capacity would be in this range. Are you saying that you would look to potentially lever up to deploy more capital, I guess, on share repurchase, or were you just talking about something else?

Yes, so I wouldn't use the phrase lever up, because what we're really targeting here is maintaining the leverage range of three to 3.5 times. And if our goal was to get our leverage range or our leverage multiple above that, that's what I would characterize as levering up. I think the reality is, as our EBITDA grows, in order to maintain that leverage range of three to 3.5 times, recognizing we're at the low end of that range right now, we need more debt capacity, and it's just using the middle of the number. As EBITDA goes up, you multiply it by 3.25, and that's the capacity you need. So we're thinking about how much debt capacity, do we need to make sure we can stay in that range as EBITDA grows.

Okay. And in theory, that capacity would be used on share repurchase. Is that, or is there anything else?

I mean, it would be used using our capital allocation philosophy. So the first thing we would love to do would be to invest it in growth, recognizing it needs to be capital efficient growth, and hit our return thresholds. Barring that, share repurchases would certainly be on the, at the top of the list of how we would use excess capacity to maintain our leverage level.

Okay. And then I guess just on that point as well, the change line of credit, how do we think about that? That's going to be, I mean, in fact, I guess your free cash flow, but I guess that would be a use of free cash flow to pay that back or you just collect less from United.

No, I just think of it as debt, and it's included in our net debt number today. And if we had, if we drew an extra $400 million on the revolver or we did a bond deal and we used it to pay down the change debt, it's just one form of debt exchanging for another form of debt. So it wouldn't hit free cash flow. It wouldn't change our leverage ratio.

Okay. And then I guess just going back to the mortality point because it is hard to understand why it's such an issue now. And, I mean, I guess it's hard to say if you don't fully know the reasons behind it. It's hard to say when it would normalize. But is there any thought about why things wouldn't get back to normal over the next couple of quarters? And I guess, what is it that you're looking for to kind of know that you're on the other side of that?

Well, predicting it is not a good idea, I don't think, because the odds of being wrong are probably 100%. But the reality is that we do agree with you that we don't think it's structural and that it will revert back to normality. And again, I've highlighted some of the improvements that we think can happen from mortality. And many people say, well, why don't you know exactly what happened? And the assumption is that death happens while they're in dialysis.

Okay, maybe just last question. Since revenue for treatment seems to be like a big part of the guidance raise, it sounds like everything that's happened so far you think is sustainable. I guess next moves around a little bit. Can you talk a little bit more about the commercial contracting? It sounds like that has come in a little bit better maybe than you thought it was going to. As far as better capturing recent inflation, how should we think about commercial contracting in the 2025? Is that still going to be a tailwind similar to what you're seeing now, or is that going to normalize for some reason.

Well, on RPT, basically you have to think of three dynamics. You have mix, you have negotiations, and you have revenue cycle, and so you're asking about the negotiations. And I think to think about the future, you have to kind of put yourself into the future, which is what is the environment? Is it still inflationary, what contracts are up for negotiation, et cetera? As we've explained in the past, we are comprehensively contracted, and our big contracts usually come up every three to four years. bats:

Got it. I guess maybe, just maybe, ask a little differently. If you're getting a little bit of commercial contracting, do you feel like there's a shift at all in the negotiations? Whether managed care companies realize they need you more for network reasons or they are appreciating the value, you provide more, and that's giving you a stronger negotiating power, or it's just more. Inflation's higher, and so rising tide lifts all shifts.

I think the conversations are the same, meaning everybody's trying to do their fair share and containing costs. Everybody's trying to add value to the patient community and have an expansive network and just do the best we can. And of course, we have to take into account costs and inflation and all those type of things, but those dynamics haven't changed other than the consideration for inflation.

Great. Thanks.

Thank you.

And our next caller is Ryan Langston with TD Cowen. You may go ahead.

Hi. Good evening, thank you. Just a couple from me. On the lower census growth, maybe I missed it, but is that isolated to any particular geographies, or maybe are there just certain geographies that are maybe performing below kind of the average and maybe pulling that down a little bit?

No, Ryan, we're pretty much seeing that across the board.

Got it. And then just to clarify, maybe on the RPT improvement, sounds like obviously you're still working through that, and some of that will annualize into 2025. Is it fair to assume that may end up just from a year-on-year, maybe closer to 3.5% to 4%? You're guiding this year as opposed to maybe the 2.5% to 3%?

I'm sorry, are you asking about 2025 RPT?

Yes, I'm asking if you're guiding to 3.5% to 4% this year, but some of it will annualize into next year. Is it fair that the growth rate might be higher, closer to 3.5% to 4% in 2025 versus maybe prior? We would have thought maybe closer to 2.5% to 3%?

Yes. It's early for guidance, but I would not go to 3.5% to 4% for next year. I think that would be a real stretch to perform at this level for another year.

Okay, thanks.

Thank you.

Thank you. Pito Chickering with Deutsche Bank. You may go ahead, sir.

Hey, guys, just some quick follow ups here. What percent of your treatments were home treatments this quarter and what was your center liquidization this quarter and how to compare versus first quarter?

Yes, home utilization is still running in the mid to high 15s. In terms of capacity utilization, we're somewhere between 58.5 and 59 somewhere right around that.

Okay. And on the international business, the margin looks about 7% range, I guess. How do you think that evolves over the next couple of years?

I think growth in international for the next couple of years, especially next year, is likely to be higher than it's been in the past, largely driven by the acquisition that we've done in Latin America.

Sorry for the OI margins. Like the track. Around 7% [indiscernible], I guess. How does that evolve over time?

Yes, I think it will continue to tick up. I don't have a view on could it ever get to the U.S. margins, but I would say that's highly unlikely.

All right, last one, Frankie.

The margins internationally have a couple of dynamics. Number one, there is no such thing as international. There are 12 to 13 countries. And of course they weigh differently. And in some of these you have one payer, the government, and so they will go in periods where there's no increase and then they will have a lump increase and so it's got a little more unusual dynamics and harder to predict the margin.

So then if margin is, I guess, harder, I guess, why is that a better use of cash flow than doing share repo?

Well, we're confident on the adjusted return, but you're asking a different question, which is are we seeing margin increases?

Okay, fair enough. And the last one for IKC, you picked up about 3000 lives. This quarter was last quarter. But the medical spend per life is about half of what it was on the average the last quarter. So as you're bringing new patients on to IKC, you sort of talk about what type of patient dynamics they are versus who you have currently in there. Thanks so much.

Yes. I would be cautious with that ratio of medical cost per life. A lot of the lives you're talking about there, their medical costs don't actually flow through our P&L. It's only the snippet lives where the medical costs flow through. So I probably wouldn't go there with that calculation.

All right, fair enough. Thanks, guys.

Thank you, Pito.

And at this time, I'm no showing no further questions.

Okay. Thank you, Michelle and thank you all for the questions. To conclude, it was another strong quarter for DaVita resulting from our investments in recent years to build a great team, strong systems, and enhance our capabilities as we look ahead while it's a little early to offer guidance, we believe that the underperformance, the underpinnings of our margins are sustainable. With this foundation, we're excited about the future we can achieve to benefit our patients, partners and teammates. Thank you for your continued interest in DaVita. And be well.

Thank you. This concludes today's conference call. You may go ahead and disconnect at this time.