American Renal Associates : Q4 Earnings Presentation

ARA Investor Presentation

Q4 2019

Disclaimers

Forward-Looking Statements

Statements in this press release that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our outlook for Adjusted EBITDA-NCI, are based upon currently available information, operating plans and projections about future events and trends. Terminology such as "anticipate," "believe," "contemplate," "estimate," "expect," "forecast," "intend," "may," "objective," "outlook," "plan," "potential," "project," "seek," "should," "strategy," "target" or "will" or variations of such words or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms.

Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, among others, the effect of the restatement of our previously issued financial results and the related securities and derivative litigation and related matters; our ability to remediate material weaknesses in our internal controls over financial reporting; continuing decline in the number of patients with commercial insurance, including as a result of changes to the healthcare exchanges or changes in regulations or enforcement of regulations regarding the healthcare exchanges and challenges from commercial payors or any regulatory or other changes leading to changes in the ability of patients with commercial insurance coverage to receive charitable premium support; decline in commercial payor reimbursement rates, including with respect to Medicare Advantage plans; the ultimate resolution of the Centers for Medicare and Medicaid Services Interim Final Rule published December 14, 2016 related to dialysis facilities Conditions for Coverage (CMS 3337-IFC), including an issuance of a different but related Final Rule; reduction of government-based payor reimbursement rates or insufficient rate increases or adjustments that do not cover all of our operating costs; our ability to successfully develop de novo clinics, acquire existing clinics and attract new nephrologist partners; our ability to compete effectively in the dialysis services industry; the performance of our joint venture subsidiaries and their ability to make distributions to us; changes to the Medicare end-stage renal disease ("ESRD") program that could affect reimbursement rates and evaluation criteria, as well as changes in Medicaid or other non-Medicare government programs or payment rates, including the ESRD prospective payment rate system final rule for 2020 issued October 31, 2019; federal or state healthcare laws that could adversely affect us; our ability to comply with all of the complex federal, state and local government regulations that apply to our business, including those in connection with federal and state anti-kickback laws and state laws prohibiting the corporate practice of medicine or fee-splitting; heightened federal and state investigations and enforcement efforts; the impact of the SEC investigation; changes in the availability and cost of erythropoietin- stimulating agents and other pharmaceuticals used in our business; changes in the reimbursement rates of the calcimimetics pharmaceutical class reimbursed under the Medicare Transitional Drug Add-on Payment Adjustment; development of new technologies or government regulation that could decrease the need for dialysis services or decrease our in-center patient population; our ability to timely and accurately bill for our services and meet payor billing requirements; claims and losses relating to malpractice, professional liability and other matters; the sufficiency of our insurance coverage for those claims and rising insurances costs, and negative publicity or reputational damage arising from such matters; loss of any members of our senior management; damage to our reputation or our brand and our ability to maintain brand recognition; our ability to maintain relationships with our medical directors and renew our medical director agreements; shortages of qualified skilled clinical personnel, or higher than normal turnover rates; competition and consolidation in the dialysis services industry; deterioration in economic conditions, particularly in states where we operate a large number of clinics, or disruptions in the financial markets or the effects of natural or other disasters, public health crises or adverse weather events; the participation of our physician partners in material strategic and operating decisions and our ability to favorably resolve any disputes; our ability to honor obligations under the joint venture operating agreements with our physician partners were they to exercise certain put rights and other rights; unauthorized disclosure of personally identifiable, protected health or other sensitive or confidential information; our ability to meet our obligations and comply with restrictions under our substantial level of indebtedness; and the ability of our principal stockholder, whose interests may conflict with yours, to strongly influence or effectively control our corporate decisions.

For additional information and other factors that could cause ARA's actual results to materially differ from those set forth herein, please see ARA's filings with the SEC. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. ARA undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") provided throughout this press release, the Company has presented the following Non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA less noncontrolling interests, Adjusted net income attributable to American Renal Associates Holdings, Inc., Adjusted cash provided by operating activities and Adjusted owned net debt, which exclude various items detailed in the attached "Reconciliation of Non-GAAP Financial Measures."

These Non-GAAP financial measures are not intended to replace financial performance and liquidity measures determined in accordance with GAAP. Rather, they are presented as supplemental measures of the Company's performance and liquidity that management believes may enhance the evaluation of the Company's ongoing operating results. Please see "Reconciliation of Non-GAAP Financial Measures" for additional reasons why these measures are provided.

2

Our Core Values

Take good care of the patients and the financial success will follow

Enable the nephrologist to practice as he / she deems appropriate

Provide the nephrologist the autonomy to make operational decisions

Acknowledge that clinic staff members are a critical and valuable asset; do everything possible to hire and retain the best possible staff

Listen to the practitioners and provide the tools needed to take excellent care of their patients

The Corporate office works for our staff, our doctors and our patients

3

At a Glance: Largest Dialysis Services Provider in the U.S. Focused on the Physician Partnership Model

American Renal Associates at a Glance(1)		American Renal Associates Financial Profile
246 Clinics Serving more than 17,300 Patients		Net Revenue: $823 million (2019A)
Partnerships with ~400 Local Nephrologists		Adj. EBITDA-NCI: $88 million (2019A)*
Operating in 27 States and the District of Columbia		Normalized Treatment Growth: 7.3% & NAG: 5.3% (2019A)(2)

1. As of December 31, 2019.
2. Normalized for clinic sales and treatment days. NAG represents normalizednon-acquired treatment growth.

*See Appendix for Definitions and Reconciliations of Non-GAAP Financial Measures.

4

American Renal Associates' Senior Management Team

Joseph A. Carlucci		Syed T. Kamal		Don Williamson,		Mark Herbers		Darren Lehrich
		M.D.

Co-Founder,

CEO and Chairman

• Co-foundedARA in 1999
• President and CEO of Optimal Renal Care
• VP of Administration, Fresenius Medical Care
• Director of U.S. Operations, Fresenius Medical Care
• Regional Manager, Fresenius Medical Care
• Facility Administrator, Fresenius Medical Care

Co-Founder,

President and Director

• Co-foundedARA in 1999
• President, Southern Business Unit, Fresenius Medical Care
• VP of Operations, N. America, Fresenius Medical Care
• Director of Operations, International, Fresenius Medical Care
• Regional Manager,Mid-Atlantic & Southeast, Fresenius Medical Care

EVP and COO

• ARA Physician Partner since 2002
• ARA Chief Medical Officer since 2011
• Practicing Nephrologist for 26 years
• President, CEO, and Managing Partner of Nephrology Associates P.C.
• Co-founder,CEO, and Managing Partner of Kinetic Decision Solutions
  LLC
• Member of ESRD Advisory Council

Interim CFO

• Joined ARA in 2019
• Director, Alix Partners since 2014
• Managing Director FTI Consulting from2004-2014
• Significant consulting, revenue cycle, reimbursement and financial leadership experience in other health care organizations

SVP, Strategy &

Investor Relations

• Joined ARA in 2015
• Managing Director, Deutsche Bank
• Managing Director, Piper Jaffray & Co.
• Vice President, SunTrust Robinson Humphrey
• Vice President, Furman Selz

5

Treatment Volume Growth

Normalized Total Treatment Growth		Normalized Non-Acquired Treatment Growth

(1)

(2)

(1)

(1)

(1)

(2)

(1)

(1)

1.	Normalized for clinic sales and treatment days.
2.	Normalized for clinic sales, treatment days, and 2017 Hurricanes.	6

Why Patients Choose ARA Clinics

Relationship with high quality nephrologists

Well trained and compassionate clinical staff

Convenient location and flexible scheduling capability

Continuity of staff that enhances trust and patient interaction State of the art amenities and cleanliness of facilities

7

Strong Patient Satisfaction - ICH-CAHPS Survey Results

Press-GaneyICH-CAHPS Patient Satisfaction Survey Results

(May 2019 - July 2019)

Note: Figures may not sum due to rounding.

Source: Press-GaneyIn-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH-CAHPS) Index Survey Data. Surveys received

October 2018 - January 2019. Industry average based on n=2,739 dialysis facilities. Press-Ganey: Top Rating is a 9-10 Score, based on a scale of 0-10.

8

Strong Quality Outcomes Driven By Low Staff Turnover

Strong Culture Drives Low Voluntary Dialysis

Clinic Staff Turnover

Low Staff

Turnover

Drives:

•Operating

Efficiency

•Clinical

Outcomes

ARA out-performs industry in Medicare's ESRD Quality Incentive Program ("QIP"), which is CMS' largest value-based program in dialysis segment(1)

Average for Performance Years

2016-2018

(1) Source: QIP data from CMS

9

Revenue per Treatment and Mix Trends

Net Patient Service Operating

Revenues Per Treatment

Accelerated Contracting Efforts

• In-networktreatment volume represents 79% of commercial treatments in 2019, up from 62% in 2018

2018A Commercial Treatment Mix

2019A Commercial Treatment Mix

Note: Commercial treatment mix includes Veterans Affairs (VA) treatments.

10

Financial and Operational Review

Q4 2019

De Novo Clinics

Existing Physician Partners		New Physician Partners
Partner Satisfaction		Brand Recognition in Nephrology Community
Attractive Growth		Clinical Autonomy
Patient Satisfaction		Comprehensive Clinic Management Services

Success with De Novo Clinic Openings

Total: 71 Clinics

Note: Figures for clinic openings are January 1, 2015 through December 31, 2019.

12

Development Track Record

• ARA's development is driven by its reputation in the Nephrology community:
• • Through De Novo growth in new markets
  • Through De Novo expansion in existing local markets
  • Through selectively acquiring majority ownership in other dialysis clinics

1	8	19	27	31	43	53	64	75	83	93	108	129	150	175	192	214	228	241	246
												Cumulative Clinic Growth Since Inception
												De Novo				204
												Acquired				64
												Sold				(11)
												Closed				(1)
												Merged				(10)
										13		Total				246

Historical Net Revenue and Adjusted EBITDA

Net Patient Service Operating Revenues		Adjusted EBITDA *

Notes:
$ in millions.
Figures may not sum due to rounding.	14
* See Appendix for Definitions and Reconciliations of Non-GAAP Financial Measures.

Annual Operating Performance Trends: 2015A - 2019A

Patients		Operating Net Revenue & Cost per Treatment
	(1)

Treatments		Normalized Non-Acquired Treatment Growth

(2)

(3)

(2)

1. Cost per treatment (CPT) includes patient care expense and G&A expense and excludes executive severance and expense related to the modification of options, other transactions at the time of the IPO ("Modification Expense"), and gains or losses on sales.
2. Normalized for clinic sales and treatment days.
3. Normalized for clinic sales, treatment days, and 2017 Hurricanes.15

Quarterly Operating Performance Trends:

Q4 2019A vs. Q4 2018A and 2019A vs. 2018A

Normalized Treatment Growth		Operating Net Revenue & Cost per Treatment
	(2)

(1)

(1)

(1)

(1)

Net Revenue ($ in 000s)		Adjusted EBITDA-NCI * ($ in 000s)

1. Normalized for clinic sales and treatment days.
2. Cost per treatment (CPT) includes patient care expense and G&A expense, excludes executive severance and expense related to the modification of options, other

transactions at the time of the IPO ("Modification Expense"), and gains or losses on sales.

* See Appendix for Definitions and Reconciliations of Non-GAAP Financial Measures.

16

Cash Flow

Cash Flow

from

Operations

Distributions

to Non-

Controlling

Interests

Routine

Capital

Expenditures

Development

Capital

Expenditures

Net Revenue ($ in 000s)		Adjusted EBITDA-NCI * ($ in 000s)

• Restatement process impacted 2019 CFFO due to higher legal and professional fees, credit agreement amendment costs, as well as other factors.
• Should closely approximate NCI from the income statement overlong-term.
• Routine capex 0.5% to 1% of net revenue (expected 2020).
• Development capex ~2% of net revenue (expected 2020).

17

Selected Balance Sheet Highlights

Leverage Ratio (1) *

($ in millions)	Leverage Ratio *
	as of December 31, 2019
	Total ARA	ARA "Owned"
Cash (other than clinic-level cash)	$10.9	$10.9
Clinic-level cash	23.6	12.7
Total Cash	$34.5	$23.6
Debt (other than clinic-level debt)	$493.5	$493.5
Clinic-level debt	106.6	57.6
Unamortized debt discount and fees	(12.5)	(12.4)
Total Debt	$587.6	$538.7
Adjusted Owned Net Debt (total debt - total
cash)		$515.2
Adjusted EBITDA less NCI, LTM *		$87.6
Leverage Ratio (1) *		5.9x

Note: Numbers may not add due to rounding.

1. Leverage Ratio defined as (Total Owned Debt - Total Owned Cash) / LTM Adjusted EBITDA - NCI. Owned debt includes ARA's guaranteed portion of clinic-

level debt and owned cash includes ARA's proportionate interest of clinic-level cash.	18
* See Appendix for Definitions and Reconciliations of Non-GAAP Financial Measures.

Appendix

Appendix

Historical Quarterly Financial and Operating Data

Summary Quarterly
Financial Data:								Three Months Ended
				2018							2019
$ in millions		March 31		June 30	September 30		December 31		March 31		June 30	September 30		December 31
Net patient service operating revenues	$	186.3	$	206.0	$	205.7	$	207.8	$	191.8	$	213.3	$	211.4	$	206.1
Net income (loss)		7.2		(8.4)		12.5		11.2		(5.1)		5.1		17.0		9.1
Adjusted EBITDA including
noncontrolling interests(1)		28.3		40.0		36.5		36.5		19.2		37.6		38.7		32.0
Less: Noncontrolling interests		(11.0)		(15.3)		(13.2)		(11.7)		(5.3)		(13.3)		(12.3)		(9.0)
Adjusted EBITDA-NCI(2)		17.3		24.8		23.3		24.7		13.9		24.3		26.5		23.0
Summary Quarterly
Operating Data:								Three Months Ended
				2018							2019
		March 31		June 30	September 30	December 31		March 31		June 30	September 30	December 31
Treatments		558,936		572,929		578,982		600,190		591,365		614,844		625,684		628,817
Normalized total treatment growth		6.3 %		6.3 %		6.1 %		5.6 %		7.2 %		7.9 %		7.9 %		6.0 %
Net patient service operating revenues
per treatment:	$	333	$	359	$	355	$	346	$	324	$	347	$	338	$	328
Adjusted patient care costs per
treatment(2):	$	240	$	247	$	252	$	247	$	251	$	249	$	247		246
Adjusted general and administrative
expenses per treatment(3):	$	45	$	46	$	43	$	42	$	44	$	39	$	32	$	34
Total adjusted costs per treatment	$	285	$	293	$	295	$	289	$	294	$	287	$	279	$	280

Note: Figures may not sum due to rounding.

1. See "Use ofNon-GAAP Financial Measures."
2. The three months ended September 30, 2019 excludes severance expenses.
3. The three months ended March 31, 2018 excludes a gain on sale of clinics, the three months ended March 31, 2019 excludes severance expense and a gain on sale of clinics, the three months ended June 30, 2019 excludes severance expense, the three months ended September 30, 2019 excludes a bonus adjustment for prior years, a gain on sale of clinics, and severance expense adjustments, and the three months ended December 31, 2019 excludes loss on sale of clinics.

20

Appendix

Reconciliation of Non-GAAP Financial Measures

In addition to the results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") provided throughout this press release, the Company has presented the following Non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA less noncontrolling interests, Adjusted net income attributable to American Renal Associates Holdings, Inc., Adjusted cash provided by operating activities and Adjusted owned net debt, which exclude various items detailed in the attached "Reconciliation of Non-GAAP Financial Measures."

These Non-GAAP financial measures are not intended to replace financial performance and liquidity measures determined in accordance with GAAP. Rather, they are presented as supplemental measures of the Company's performance and liquidity that management believes may enhance the evaluation of the Company's ongoing operating results. Please see "Reconciliation of Non-GAAP Financial Measures" for additional reasons why these measures are provided.

We use Adjusted EBITDA and Adjusted EBITDA-NCI to track our performance. "Adjusted EBITDA" is defined as net income before stock-based compensation and associated payroll taxes, depreciation, amortization and impairment, interest expense, net, income taxes and other non-income-based tax, transaction-related costs, change in fair value of income tax receivable agreement, certain legal and other matters, executive and management severance costs and loss (gain) on sale or closure of clinics. "Adjusted EBITDA-NCI" is defined as Adjusted EBITDA less net income attributable to noncontrolling interests. We believe Adjusted EBITDA and Adjusted EBITDA-NCI provide information useful for evaluating our business and a further understanding of our results of operations from management's perspective. We believe Adjusted EBITDA is helpful in highlighting trends because Adjusted EBITDA excludes certain expenses that can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure and investments, and the tax jurisdictions in which companies operate, or that we believe do not reflect our core business operations. We believe Adjusted EBITDA-NCI is helpful in highlighting the amount of Adjusted EBITDA that is available to us after reflecting the interests of our joint venture partners. Adjusted EBITDA and Adjusted EBITDA-NCI are not measures of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income, net income, cash flows from operations, or other statement of operations or cash flow data prepared in conformity with GAAP, or as measures of profitability or liquidity. In addition, Adjusted EBITDA and Adjusted EBITDA-NCI may not be comparable to similarly titled measures of other companies and differ from the calculation of "Consolidated EBITDA" under our credit agreement. Adjusted EBITDA and Adjusted EBITDA-NCI may not be indicative of historical operating results, and we do not mean for these items to be predictive of future results of operations or cash flows. Adjusted EBITDA and Adjusted EBITDA-NCI have limitations as analytical tools, and they should not be considered in isolation, or as substitutes for an analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA and Adjusted EBITDA-NCI:do not include stock-based compensation expense and associated payroll taxes; do not include depreciation, amortization and impairment-because construction and operation of our dialysis clinics requires significant capital expenditures, depreciation and amortization are a necessary element of our costs and our ability to generate profits; do not include interest expense-as we have borrowed money for general corporate and facility purposes, interest expense is a necessary element of our costs and ability to generate profits and cash flows;do not include income tax expense or benefits and other non-income-based taxes; do not include transaction-related costs;do not include change in fair value of income tax receivable agreement; do not include costs related to certain legal and other matters; do not include executive and management severance costs; and do not reflect the loss (gain) on sale or closure of clinics.

In addition, Adjusted EBITDA is not adjusted for the portion of earnings that we distribute to our joint venture partners.

We use Adjusted net income attributable to American Renal Associates Holdings, Inc. because it is a useful measure to evaluate our performance by excluding the impact of certain items that we believe are not related to our normal business operations and/or are a result of changes in our liabilities from period to period. See the notes to the tables below for further explanation of the exclusion of certain items. By excluding these items, we believe Adjusted net income allows us and investors to evaluate our net income on a more consistent basis. "Adjusted net income attributable to American Renal Associates Holdings, Inc." is defined as Net income (loss) attributable to American Renal Associates Holdings, Inc. plus or minus, as applicable, certain legal and other matters costs, executive and management severance costs, (gain) loss on sale or closure of assets, bonus compensation reduction, change in fair value of income tax receivable agreement, tax valuation allowance, and accounting changes in fair value of non-controlling interest puts, net of taxes. We use the Adjusted weighted average number of diluted shares to calculate Adjusted net income attributable to American Renal Associates Holdings, Inc. per share.

We use Adjusted cash (used in) provided by operating activities less distributions to NCI because it is a useful measure to evaluate the cash flow that is available to the Company for investment in property, plant and equipment, debt service, growth and other general corporate purposes. "Adjusted cash (used in) provided by operating activities less distributions to NCI" is defined as cash provided by operating activities plus transaction- related costs less distributions to noncontrolling interests.

We use Adjusted owned net debt because we believe it is a useful metric to evaluate the Company's share of interests in the cash on our consolidated balance sheet and the debt of the Company. "Adjusted owned net debt" is defined as debt (other than clinic-level debt) plus clinic-level debt guaranteed by our wholly owned subsidiaries less unamortized debt discounts and fees less cash (other than clinic-level cash) less the Company's pro rata

interest in clinic-level cash.

21

Appendix

Quarterly Reconciliation of Adjusted EBITDA and Adjusted EBITDA less NCI

Reconciliation of Net																			LTM (1)December
income (loss) to								Three Months Ended
Adjusted EBITDA				2018								2019						31, 2019
(Dollars in millions)		March 31		June 30	September 30	December 31			March 31		June 30	September 30	December 31
Net income (loss)	$	7.2	$	(8.4)	$	12.5	$	11.2	$	(5.1)	$	5.1	$	17.0	$	9.1		$	26.1
Stock-based compensation and
associated payroll taxes		1.4		1.7		1.3		1.6			1.4		0.9		1.0		1.5			4.8
Depreciation and amortization		9.6		9.8		10.0		10.3			10.1		10.3		10.2		13.2			43.8
Interest expense, net		7.5		8.1		8.2		8.8			8.8		11.5		12.2		11.1			43.6
Income tax expense (benefit) and
other non-income based tax		(3.1)		(2.0)		(0.1)		8.6			0.8		0.9		(11.2)		(7.6)			(17.2)
Transaction-related costs		0.9		-		-		-			-		-		-		-		-
Change in fair value of income tax
receivable		1.0		(1.7)		3.5		(5.4)			(1.7)		0.3		-		1.1			(0.2)
Certain legal and other matters (2)		4.1		32.5		1.0		1.4			5.3		8.4		9.6		2.5			25.8
Executive and management
severance costs		-		-		-		-			0.2		0.2		-		-		0.5
(Gain) loss on sale or closure of
clinics		(0.3)		-		-		-			(0.5)		-		(0.3)		1.1			0.3
Adjusted EBITDA (including
noncontrolling interests)		28.3		40.0		36.5		36.5			19.2		37.6		38.7		32.0			127.6
Less: Net income attributable to
noncontrolling interests		(11.0)		(15.3)		(13.2)		(11.7)			(5.3)		(13.3)		(12.3)		(9.0)			(39.9)
Adjusted EBITDA-NCI	$	17.3	$	24.8	$	23.3	$	24.7	$	13.9	$	24.3	$	26.5	$	23.0		$	87.6

Note: Figures may not sum due to rounding.

1. Last twelve months ("LTM") is the period beginning January 1, 2019 through December 31, 2019.
2. Certain legal and other matters include legal fees and other expenses associated with matters that we believe do not reflect our core business operations, including, but not limited to, our handling of, and response to the following: the United litigation and settlement; the SEC investigation and related Audit Committee review and restatement process; the securities and derivative litigation related to the foregoing; our internal review and analysis of factual and legal issues relating to the aforementioned matters; and legal fees and other expenses relating to matters that we believe do not reflect our core business operations.

22

Appendix

Annual Reconciliation of Adjusted EBITDA and Adjusted EBITDA less NCI

Reconciliation of Net income (loss) to
Adjusted EBITDA		Year Ended December 31,
(Dollars in millions)	2015		2016	2017	2018	2019
			101.
Net income (loss)	$ 99.9	$	7	$58.1	$ 22.5	$ 26.1
Stock-based compensation and associated payroll taxes	1.5		40.3	16.4	5.9	4.8
Depreciation and amortization	31.8		33.9	37.6	39.8	43.8
Interest expense, net	45.4		36.0	29.3	32.6	43.6
Income tax expense (benefit) and other non-income based tax	19.0		2.8	9.8	3.4	(17.2)
Transaction-related costs	2.1		2.2	0.7	0.9	-
Loss on early extinguishment of debt	-		4.7	0.5	-	-
Change in fair value of income tax receivable	-		(1.3)	(7.2)	(2.7)	(0.2)
Certain legal and other matters (1)	-		6.8	15.2	39.1	25.8
Executive and management severance costs	-		1.7	0.9	-	0.5
(Gain) loss on sale or closure of clinics	-		-	(0.5)	(0.3)	0.3
Management fees	1.8		0.5	-	-	-
Adjusted EBITDA (including noncontrolling interests)	201.4		229.2	160.9	141.3	127.6
Less: Net income attributable to noncontrolling interests	(80.5)		(98.5)	(62.7)	(51.2)	(39.9)
	120.		130.
Adjusted EBITDA-NCI	$ 9	$	7	$98.1	$ 90.0	$ 87.6

Note: Figures may not sum due to rounding.

1. Certain legal and other matters include legal fees and other expenses associated with matters that we believe do not reflect our core business operations, including, but not limited to, our handling of, and response to the following: the United litigation and settlement; the SEC Investigation and related Audit Committee review and restatement process; the securities and derivative litigation related to the foregoing; our internal review and analysis of factual and legal issues relating to the aforementioned matters; and legal fees and other expenses relating to matters that we believe do not reflect our core business operations.

23

Appendix

Reconciliation of Adjusted Net Income Attributable to American Renal Associates Holdings, Inc.

	Reconciliation of Net income (Loss) to Attributable to American Renal Associates
	Holdings, Inc. to Adjusted Net Income (Loss) Attributable to American Renal
	Associates Holdings, Inc.:				Three Months Ended					Year Ended
	(dollars in thousands, except per share data)		March 31, 2019		June 30, 2019	September 30, 2019	December 31, 2019		December 31, 2019
	Net (loss) income attributable to American Renal Associates Holdings, Inc.	$	(10,479)	$	(8,178)		4,777	$	90	$	(13,790)
	Change in the difference between the redemption value and estimated fair value for
	accounting purposes of the related noncontrolling interests(1)		(741)		1,025		(1,161)		(7,122)			(7,999)
	Net (loss) income attributable to common shareholders	$	(11,220)	$	(7,153)	$	3,616	$	(7,032)	$	(21,789)
	Adjustments:
	Certain legal and other matters(2)		5,291		8,381		9,634		2,518			25,824
	Executive and management severance costs		212		243		25		-			480
	(Gain) loss on sale or closure of clinics		(512)		-		(264)		1,119			343
	Bonus compensation reduction(3)		-		-		(808)		-			(808)
	Impairment for held for sale assets		0		270		675		4,225			5,170
	Total pre-tax adjustments	$	4,991	$	8,894	$	9,262	$	7,862	$	31,009
	Tax effect		1,298		2,312		2,408		2,044			8,062
	Net taxable adjustments	$	3,693	$	6,582	$	6,854	$	5,818	$	22,947
	Change in fair value of income tax receivable agreement		(1,682)		304		30		1,127			(221)
	Tax valuation allowance(4)		-		-		-		(515)			(515)
	Change in the difference between the redemption value and estimated fair value for
	accounting purposes of the related noncontrollling interests(1)		(741)		1,025		(1,161)		(7,122)			(7,999)
	Total adjustments, net	$	2,752	$	5,861	$	8,045	$	13,552	$	30,210
	Adjusted net (loss) income attributable to American Renal Associates Holdings, Inc.	$	(8,468)	$	(1,292)	$	11,661	$	6,520	$	8,421
	Basic Shares outstanding		32,187,715		32,275,807		32,281,818		32,351,067			32,248,791
	Adjusted effect of dilutive stock options		-		-		1,336,905		1,447,887			696,198
	Adjusted weighted average number of diluted shares used to compute adjusted net income
	attributable to American Renal Associates Holdings, Inc. per share		32,187,715		32,275,807		33,618,723		33,798,954			32,944,989
	Adjusted net (loss) income attributable to American Renal Associates Holdings, Inc.
	per share	$	(0.26)	$	(0.04)	$	0.35	$	0.19	$	0.26

Note: Figures may not sum due to rounding.

1. Changes in fair values of contractual noncontrolling interest put provisions are related to certain put rights that were accelerated as a result of the IPO.
2. Certain legal and other matters include legal fees and other expenses associated with matters that we believe do not reflect our core business operations, including, but not limited to, our handling of, and response to the following: the United litigation and settlement; the Restatement and related SEC investigation and Audit Committee review; the securities and derivative litigation related to the foregoing; our internal review and analysis of factual and legal issues relating to the aforementioned matters; and legal fees and other expenses relating to matters that we believe do not reflect our core business operations.
3. Reduction of bonus compensation related to prior years as reflected in the Consolidated Statements of Operations for the three months ended September 30, 2019 for certain executives in light of the Restatement.
4. The Company has established an additional valuation allowance for certain tax items that began expiring in 2019.

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