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Fresenius Medical Care AG & Co. KGaA | Fresenius Medical Care Deutschland GmbH | |
(Exact name of Registrant as specified in charter) | (Exact name of Registrant as specified in charter) | |
Germany | Fresenius Medical Care Germany Co. | |
(State or other jurisdiction of incorporation or organization) | (Translation of Registrant’s name into English) | |
3841 | Germany | |
(Primary Standard Industrial Classification Number) | (State or other jurisdiction of incorporation or organization) | |
N/ A | 3841 | |
(IRS Employer Identification Number) | (Primary Standard Industrial Classification Number) | |
Else-Kröner-Strasse 1 | N/A | |
61352 Bad Homburg v.d.H | (IRS Employer Identification Number) | |
Germany | Else-Kröner-Strasse 1 | |
Telephone: 011-49-6172-609-0 | 61352 Bad Homburg v.d.H | |
(Address, Including Zip Code, and Telephone Number, | Germany | |
Including Area Code, of Registrant’s Principal Executive Offices) | Telephone: 011-49-6172-609-0 | |
Fresenius Medical Care Holdings, Inc. | (Address, Including Zip Code, and Telephone Number, | |
(Exact name of Registrant as specified in charter) | Including Area Code, of Registrant’s Principal Executive Offices) | |
New York | FMC Finance III S.A. | |
(State or other jurisdiction of incorporation or organization) | (Exact name of Registrant as specified in charter) | |
3841 | Luxembourg | |
(Primary Standard Industrial Classification Number) | (State or other jurisdiction of incorporation or organization) | |
13-3461988 | N/A | |
(IRS Employer Identification Number) | (IRS Employer Identification Number) | |
920 Winter Street | 204, route de Luxembourg | |
Waltham MA 02451-1457 | L-7241 Bereldange | |
Telephone: 781 699-9000 | Luxembourg | |
(Address, Including Zip Code, and Telephone Number, | Telephone: 011-352 26 33 75-901 | |
Including Area Code, of Registrant’s Principal Executive Offices) | (Address, Including Zip Code, and Telephone Number, | |
Including Area Code, of Registrant’s Principal Executive Offices) |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||
Title of Each Class of | Amount | Offering | Aggregate | Registration | ||||||||
Securities to be Registered | to be Registered | Price per Unit | Offering Price(1) | Fee | ||||||||
67/8% Senior Notes due 2017 | $500,000,000 | 100% | $500,000,000 | $15,350.00 | ||||||||
(1) | Estimated solely for purposes of calculating the Registration Fee |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
• | FMC Finance III S.A., a wholly-owned subsidiary of Fresenius Medical Care AG & Co. KGaA organized under the laws of Luxembourg. |
• | Fresenius Medical Care AG & Co. KGaA is the world’s largest kidney dialysis company, operating in both the field of dialysis products and the field of dialysis services. Our dialysis business is vertically integrated, providing dialysis treatment at our own dialysis clinics and supplying these clinics with a broad range of products. In addition, we sell dialysis products to other dialysis service providers. At September 30, 2007, we provided dialysis treatment to approximately 172,227 patients in 2,221 clinics worldwide located in over 25 countries. In the U.S. we also perform clinical laboratory testing and provide inpatient dialysis services and other services under contract to hospitals. Our common stock is listed on the Frankfurt Stock Exchange under the ticker “FME”; in addition, our ADRs are listed on the New York Stock Exchange under the ticker “FMS”. |
• | The exchange offer expires 5:00 p.m., New York City time, , 2007, unless extended by us. You should carefully review the procedures for tendering outstanding notes beginning on page 30 of this prospectus. If you fail to tender your outstanding notes, you will continue to hold unregistered securities and your ability to transfer the outstanding notes will be restricted. The exchange of notes will not be a taxable event for U.S. federal income tax purposes. The exchange offer is not subject to any conditions other than (1) that the exchange offer does not violate any applicable law or SEC staff interpretations and (2) that no action or proceeding shall have been instituted in any court or by or before any governmental agency with respect to the exchange offer which, in our judgment, would reasonably be expected to prevent us and our subsidiary guarantors from proceeding with or completing the exchange offer. No public market currently exists for the notes. We intend to apply to include the notes on the official list of the Luxembourg Stock Exchange for trading on the Euro MTF market. |
• | Key Terms: The terms of the notes we are issuing will be substantially identical to the outstanding 67/8% Senior Notes due 2017 that we issued on July 2, 2007, except for the elimination of certain transfer restrictions, registration rights and the conditional right to receive additional interest payments. |
• | Maturity: The notes will mature on July 15, 2017. |
• | Interest Payments: The notes will bear interest at the rate of 67/8% per year. We will pay interest semi-annually in cash in arrears on January 15 and July 15 of each year, beginning on January 15, 2008. |
• | Guarantees: The notes will be guaranteed by Fresenius Medical Care AG & Co. KGaA and by Fresenius Medical Care Holdings, Inc., the holding company for our North American operations, and Fresenius Medical Care Deutschland GmbH, our principal German subsidiary. |
• | Ranking: The notes and guarantees will be unsecured senior obligations of the issuers. The guarantees of the notes will rank equally with the existing and future unsecured obligations that do not expressly provide that they are subordinated to the notes. The guarantees of the notes will rank equally with indebtedness under our 2006 Credit Agreement but will be effectively subordinated to such indebtedness to the extent of the collateral securing such indebtedness. The guarantees of the notes will also be effectively subordinated to the indebtedness of our subsidiaries (including indebtedness under our 2006 Credit Agreement) that are not guarantors of the notes. |
• | Optional Redemption: We may redeem the notes, in whole or in part, at any time at a price equal to 100% of the principal amount thereof, together with accrued and unpaid interest to the redemption date, plus a “make-whole” premium. |
• | Change of Control: Upon the occurrence of a Change of Control and a Ratings Decline (each as defined herein), you have the right to require us to redeem all or any part of your notes at a redemption price in cash equal to 101% of their principal amount plus any accrued and unpaid interest. See “Description of the Notes — Change of Control.” |
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• | changes in governmental and commercial insurer reimbursement for our products and services; | |
• | a possible decline in erythropoietin, or EPO, utilization or EPO reimbursement; | |
• | dependence on government reimbursements for dialysis services; | |
• | the outcome of ongoing government investigations; | |
• | the influence of private insurers and managed care organizations and health care reforms; | |
• | product liability risks and patent litigation; | |
• | risks relating to the integration of acquisitions and our dependence on additional acquisitions; | |
• | the impact of currency fluctuations; and | |
• | changes in pharmaceutical utilization patterns. |
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2006 | 2005 | 2004 | |||||||||||
(in millions) | |||||||||||||
North America | |||||||||||||
Dialysis Care | $ | 5,464 | $ | 4,054 | $ | 3,802 | |||||||
Dialysis Products | 561 | 523 | 446 | ||||||||||
$ | 6,025 | $ | 4,577 | $ | 4,248 | ||||||||
International | |||||||||||||
Dialysis Care | $ | 913 | $ | 813 | $ | 699 | |||||||
Dialysis Products | 1,561 | 1,382 | 1,281 | ||||||||||
$ | 2,474 | $ | 2,195 | $ | 1,980 |
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• | increased general life expectancy and the overall aging of the general U.S. and European population; | |
• | shortage of donor organs for kidney transplants; | |
• | improved dialysis technology that makes life-prolonging dialysis available to a larger patient population; | |
• | greater access to treatment in developing countries; and | |
• | better treatment and survival of patients with hypertension, diabetes and other illnesses that lead to ESRD. |
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2004 | 2005 | 2006 | GOAL 2010 | |||||||||||||
Revenue ($ in millions) | $ | 6,228 | $ | 6,772 | $ | 8,499 | $ | ,11,500 | ||||||||
Annual revenue growth at constant currency | 10% | 8% | 25% | ,6-9% | ||||||||||||
Share of dialysis market* | ,12% | ,13% | ,15% | ,18% | ||||||||||||
Market volume* ($ in billions) | $ | ,50 | $ | ,52 | $ | ,55 | $ | ,67 | ||||||||
Annual net income growth** | 21% | 17% | 24% | >10% |
* | Company estimates |
** | 2005 excluding one-time effects and 2006 excluding one-time effects and FAS 123(R) |
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• | our reputation for quality patient care and treatment; | |
• | our reputation for technologically advanced products for dialysis treatment; and |
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• | our extensive network of dialysis clinics, which enables physicians to refer their patients to conveniently located clinics. |
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No minimum condition | We are not conditioning the exchange offer on the tender of any aggregate minimum principal amount of restricted notes. | |
Expiration date | The exchange offer will expire at 5:00 p.m., New York City time, on , 2007 unless we decide to extend the exchange offer. | |
Withdrawal rights | You may withdraw your tender at any time before the exchange offer expires. | |
Conditions to the exchange offer | The exchange offer is not subject to any condition other than that (1) the exchange offer does not violate any applicable law or applicable SEC staff interpretations and (2) no action or proceeding shall have been instituted in any court or by or before any governmental agency with respect to the exchange offer which, in our judgment, would reasonably be expected to prevent us, the Issuer, and the other guarantors from proceeding with or completing the exchange offer. We reserve the right to terminate or end the exchange offer at any time before the expiration date if either of the foregoing conditions occurs. For additional information, see “The Exchange Offer — Certain conditions to the exchange offer.” | |
Procedures for tendering restricted notes | If you are a holder of restricted notes who wishes to accept the exchange offer, you must: | |
• arrange for Depository Trust Company to transmit certain required information, including an agent’s message forming part of a book-entry transfer in which you agree to be bound by the terms of the accompanying letter of transmittal, to the exchange agent in connection with a book-entry transfer; or | ||
• complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, and mail or otherwise deliver the letter of transmittal to the exchange agent at the address provided in the section “The Exchange Offer — Exchange agent.” |
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Resale without further registration | We believe that you may resell or otherwise transfer the notes that you receive in the exchange offer without complying with the registration and prospectus delivery provisions of the Securities Act so long as you meet the following conditions: | |
• any notes to be received by you in the exchange offer will be acquired in the ordinary course of your business; | ||
• you have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the notes; | ||
• you are not an affiliate (as defined in Rule 405 under the Securities Act) of us, the Issuer or any of the other guarantors; | ||
• you are not engaged in, and do not intend to engage in, the distribution (within the meaning of the Securities Act) of the notes; | ||
• if you are a broker-dealer, you will receive notes in exchange for restricted notes that were acquired for your own account as a result of market-making activities or other trading activities and you acknowledge that you will deliver a prospectus in connection with any resale of such notes; | ||
• if you are a broker-dealer, you did not purchase the restricted notes being tendered in the exchange offer directly from us for resale pursuant to Rule 144A or Regulation S under the Securities Act or any other available exemption from registration under the Securities Act; and | ||
• you are not acting on behalf of any person who could not truthfully make the foregoing representations. | ||
By tendering your restricted notes, you will be making representations to this effect. You may incur liability under the Securities Act if: | ||
• any of the representations listed above are not true; and | ||
• you transfer any note issued to you in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act, unless the transfer otherwise meets an exemption from the registration requirements under the Securities Act. | ||
We, the trustee and the exchange agent do not assume, or indemnify you against, liability under these circumstances which means that we, the trustee and the exchange agent will not protect you from any loss you incur as a result of any such liability. | ||
Restrictions on resale by broker-dealers | Each broker-dealer that receives notes pursuant to this exchange offer in exchange for restricted notes that were acquired for its own account as a result of market-making or other trading activities (a “participating broker- dealer”), must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in |
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connection with any resale of those notes. Participating broker-dealers who notify us may use this prospectus in connection with any resale until the earlier of (a) 180 days from the date on which the exchange offer registration statement is declared effective or (b) the date on which a broker-dealer is no longer required to deliver a prospectus, subject to exceptions, including all rights to suspend the use of this prospectus as described under “Plan of Distribution.” Each participating broker-dealer will be subject to certain of the civil liability provisions under the Securities Act in connection with resales made pursuant to this prospectus. | ||
Special procedures for beneficial owners | If you beneficially own restricted notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your restricted notes in the exchange offer, you should contact the registered holder promptly and instruct it to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal, either arrange to have your restricted notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take a considerable amount of time and might not be possible to complete before the exchange offer expires. | |
Guaranteed delivery procedures | If you wish to tender your restricted notes and time will not permit your required documents to reach the exchange agent by the expiration date, or the procedures for book-entry transfer cannot be completed on time, you may tender your restricted notes according to the guaranteed delivery procedures described in the section “The Exchange Offer — Procedures for tendering restricted notes.” | |
Acceptance of restricted notes and delivery of notes | We will accept for exchange all restricted notes that are properly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date. The notes issued in the exchange offer will be delivered promptly following the expiration date. For additional information, see “The Exchange Offer — Acceptance of restricted notes for exchange; delivery of notes.” | |
Use of proceeds | We will not receive any proceeds from the issuance of notes in the exchange offer. We will pay for our expenses incident to the exchange offer. | |
Income tax considerations | The exchange of restricted notes for notes to be issued pursuant to the exchange offer will not be a taxable exchange for U.S. federal income tax purposes, or German income tax purposes, nor do we believe that the exchange will require that gain be recognized for Luxembourg tax purposes. For additional information, see “Certain Income Tax Considerations” in this prospectus. | |
Consequences of failure to exchange notes | Any restricted notes that are not tendered in exchange for notes to be issued pursuant to the exchange offer will remain restricted following the exchange offer and will continue to be subject to transfer restrictions and to bear interest at the same per annum rate of |
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interest, but will not be entitled to any additional interest or registration rights under the registration rights agreement relating to the restricted notes. If restricted notes are tendered and accepted by us in the exchange offer, a holder’s ability to sell any restricted notes that remain restricted could be adversely affected and there may be no trading market for the restricted notes. See “Risk Factors — There is currently no public market for the notes being offered in the exchange offer” and “Risk Factors — The exchange offer could adversely affect any market for restricted notes that are not exchanged.” | ||
Exchange agent | U.S. Bank National Association is serving as exchange agent in connection with the exchange offer. |
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Issuer | FMC Finance III S.A., a wholly owned subsidiary of Fresenius Medical Care AG & Co. KGaA, organized under the laws of Luxembourg. FMC Finance III S.A. has been organized for the purpose of issuing and selling the notes. | |
Notes Offered | $500,000,000 aggregate principal amount of 67/8% Senior Notes due 2017. | |
Maturity | July 15, 2017. | |
Interest Rate | Interest on the notes will accrue at the rate of 67/8% per annum, payable semi-annually in cash in arrears. | |
Interest Payment Dates | January 15 and July 15 of each year, beginning January 15, 2008. Holders whose restricted notes are accepted for exchange will be deemed to have waived the right to receive any interest accrued on the restricted notes; provided, that if the expiration date of the exchange offer falls after a record date for payment of interest on the restricted notes but on or before the applicable interest payment date, the interest payable on such interest payment date shall be payable to the persons who were the record holders of the restricted notes as of such record date. | |
Guarantees | Fresenius Medical Care AG & Co. KGaA will unconditionally guarantee the obligations of the Issuer under the notes. Fresenius Medical Care Holdings, Inc. and Fresenius Medical Care Deutschland GmbH, both of which are subsidiaries of Fresenius Medical Care AG & Co. KGaA, will each unconditionally guarantee, jointly and severally with Fresenius Medical Care AG & Co. KGaA, the obligations of the Issuer under the notes. At a time when a guarantor (other than the Company) is no longer an obligor under our 2006 Credit Agreement (as amended, modified, renewed, refunded, replaced, restated or refinanced from time to time), such guarantor will no longer be a guarantor of the notes. Each subsidiary guarantee will not exceed the maximum amount that can be guaranteed by the applicable subsidiary guarantor without rendering the subsidiary guaranty, as it relates to the subsidiary guarantor, voidable or unenforceable under applicable laws affecting the rights of creditors generally or, in the case of Fresenius Medical Care Deutschland GmbH, under applicable law of Germany. | |
Ranking | The notes will be unsecured senior obligations of the Issuer. The notes will rank equally with all of the Issuer’s existing and future unsecured obligations that do not expressly provide that they are subordinated to the notes. |
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The Company’s guarantee, and the guarantees of the two subsidiary guarantors, will be unsecured senior obligations of the guarantors. The guarantees will: | ||
• rank equally with all of the Company’s and the subsidiary guarantors’ respective obligations that do not expressly provide that they are subordinated to the guarantees; | ||
• rank equally with the indebtedness under our 2006 Credit Agreement but will be effectively subordinated to such indebtedness to the extent of the collateral securing such indebtedness; and | ||
• be effectively subordinated to the indebtedness of our subsidiaries that are not guarantors of the notes (including indebtedness of such subsidiaries under our 2006 Credit Agreement). | ||
Each of our subsidiaries that is an obligor under our 2006 Credit Agreement is jointly and severally liable with the other borrowers and guarantors of the facility for the entire outstanding indebtedness under that facility, up to the maximum amount that can be guaranteed by the subsidiary without rendering any such guaranty void or unenforceable under applicable laws. | ||
Optional Redemption | The notes may be redeemed, in whole or in part, at any time at a price equal to 100% of the principal amount thereof, together with accrued and unpaid interest to the redemption date, plus a “make-whole” premium. | |
Change of Control | Upon the occurrence of a Change of Control and a Ratings Decline (each as defined herein), you have the right to require us to redeem all or any part of your notes at a redemption price in cash equal to 101% of their principal amount plus any accrued and unpaid interest. See “Description of the Notes — Change of Control.” | |
Certain Covenants | The indenture governing the notes contains various covenants that will limit our ability and the ability of our subsidiaries to, among other things: | |
• incur debt; | ||
• incur liens; | ||
• engage in sale-leaseback transactions; and | ||
• merge or consolidate with other companies or sell our or our subsidiaries’ assets. | ||
We will also be required to provide periodic financial reports to the trustee. | ||
For more details, see “Description of the Notes — Certain Covenants.” | ||
Use of Proceeds | We used the net proceeds from the offering of the restricted notes to repay indebtedness outstanding under the term loan portion of our 2006 Credit Agreement and under our accounts receivable facility (“A/R Facility”). We will not receive any cash proceeds from the issuance of the notes in the exchange offer. | |
Risk Factors | Investing in the notes involves substantial risks. See “Risk Factors” for a description of some of the risks you should carefully consider before investing in the notes. |
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Nine Months Ended | |||||||||||||||||||||||||||||
September 30, | Year Ended December 31, | ||||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||||
(in millions except Operating Data) | |||||||||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||||||
Net revenues | $ | 7,151 | $ | 6,147 | $ | 8,499 | $ | 6,772 | $ | 6,228 | $ | 5,528 | $ | 5,084 | |||||||||||||||
Cost of revenues | 4,691 | 4,089 | 5,621 | 4,564 | 4,266 | 3,793 | 3,494 | ||||||||||||||||||||||
Gross profit | 2,460 | 2,058 | 2,878 | 2,208 | 1,962 | 1,735 | 1,590 | ||||||||||||||||||||||
Selling, general and administrative | 1,264 | 1,097 | 1,549 | 1,218 | 1,059 | 928 | 848 | ||||||||||||||||||||||
Gain on sale of dialysis clinics | — | (40 | ) | (40 | ) | — | — | — | — | ||||||||||||||||||||
Research and development | 44 | 37 | 51 | 51 | 51 | 50 | 47 | ||||||||||||||||||||||
Operating income | 1,152 | 964 | 1,318 | 939 | 852 | 757 | 695 | ||||||||||||||||||||||
Interest expense, net | 281 | 255 | 351 | 173 | 183 | 211 | 226 | ||||||||||||||||||||||
Income before income taxes and minority interest | 871 | 709 | 967 | 766 | 669 | 546 | 469 | ||||||||||||||||||||||
Net income | $ | 520 | $ | 385 | $ | 537 | $ | 455 | $ | 402 | $ | 331 | $ | 290 | |||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||||||
EBITDA(1) | $ | 1,412 | $ | 1,186 | $ | 1,627 | $ | 1,190 | $ | 1,085 | $ | 974 | $ | 906 | |||||||||||||||
Net cash provided by operating activities | 890 | 465 | 908 | 670 | 828 | 754 | 550 | ||||||||||||||||||||||
Net cash used in investing activities | (474 | ) | (3,955 | ) | (4,241 | ) | (422 | ) | (365 | ) | ( 369 | ) | (281 | ) | |||||||||||||||
Net cash (used in) provided by financing activities | (344 | ) | 3,512 | 3,383 | (220 | ) | (452 | ) | (416 | ) | (265 | ) | |||||||||||||||||
Depreciation and amortization | 260 | 221 | 309 | 251 | 233 | 216 | 211 | ||||||||||||||||||||||
Capital expenditures | 386 | 288 | 467 | 315 | 279 | 291 | 239 | ||||||||||||||||||||||
Rental expenses (operating leases only) | 344 | 296 | 414 | 335 | 323 | 303 | 270 | ||||||||||||||||||||||
Ratio of earnings to fixed charges | 3.6 | 3.4 | 3.3 | 4.6 | 4.0 | 3.2 | 2.6 | ||||||||||||||||||||||
Operating Data: | |||||||||||||||||||||||||||||
No. of treatments | 19,623,252 | 17,433,465 | 23,739,733 | 19,732,753 | 18,794,109 | 17,830,000 | 16,385,000 | ||||||||||||||||||||||
No. of patients | 172,227 | 161,483 | 163,517 | 131,485 | 124,400 | 119,250 | 112,000 | ||||||||||||||||||||||
No. of clinics | 2,221 | 2,085 | 2,108 | 1,680 | 1,610 | 1,560 | 1,480 | ||||||||||||||||||||||
Average revenue/treatment (U.S.) | $ | 327 | $ | 318 | $ | 321 | $ | 297 | $ | 289 | $ | 278 | $ | 285 |
September 30, | December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||||||
Working capital | $ | 836 | $ | 894 | $ | 1,036 | $ | 883 | $ | 508 | $ | 794 | $ | 526 | ||||||||||||||
Total assets | 13,762 | 12,667 | 13,045 | 7,983 | 7,962 | 7,503 | 6,780 |
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September 30, | December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Total long-term debt (excluding current portion) | 4,680 | 5,130 | 5,083 | 1,895 | 1,824 | 2,354 | 2,234 | |||||||||||||||||||||
Shareholders’ equity | 5,328 | 4,634 | 4,870 | 3,974 | 3,635 | 3,244 | 2,807 | |||||||||||||||||||||
Capital stock — Preference shares — Nominal Value | 4 | 3 | 4 | 91 | 85 | 85 | 85 | |||||||||||||||||||||
Capital stock — Ordinary shares — Nominal Value | 361 | 302 | 360 | 271 | 271 | 271 | 271 |
(1) | EBITDA (operating income plus depreciation and amortization) is the basis for determining compliance with certain covenants contained in our 2006 Credit Agreement, our Euro Notes and the indentures relating to the Senior Notes and our outstanding Trust Preferred Securities. You should not consider EBITDA to be an alternative to net earnings determined in accordance with U.S. GAAP or to cash flow from operations, investing activities or financing activities. In addition, not all funds depicted by EBITDA are available for management’s discretionary use. For example, a substantial portion of such funds are subject to contractual restrictions and functional requirements for debt service, to fund necessary capital expenditures and to meet other commitments from time to time as described in more detail elsewhere in our public filings with the Securities and Exchange Commission. A reconciliation of cash flow provided by operating activities to EBITDA is as follows: |
For the Nine | ||||||||
Months Ended | ||||||||
September 30, | ||||||||
2007 | 2006 | |||||||
in millions | ||||||||
Total EBITDA | $ | 1,412 | $ | 1,186 | ||||
Settlement of shareholder proceedings | — | (1 | ) | |||||
Interest Expense (net of interest income) | (281 | ) | (255 | ) | ||||
Income tax expense, net | (331 | ) | (314 | ) | ||||
Change in deferred taxes, net | 14 | 19 | ||||||
Changes in operating assets and liabilities | 45 | (115 | ) | |||||
Tax payments related to divestitures and acquisitions | — | (75 | ) | |||||
Stock-based compensation | 16 | 12 | ||||||
Other items, net | 15 | 8 | ||||||
Net cash provided by operations | $ | 890 | $ | 465 | ||||
For the Years Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
in millions | ||||||||||||||||||||
Total EBITDA | $ | 1,627 | $ | 1,190 | $ | 1,085 | $ | 974 | $ | 906 | ||||||||||
Settlement of shareholder proceedings | (1 | ) | 7 | — | — | — | ||||||||||||||
Interest expense (net of interest income) | (351 | ) | (173 | ) | (183 | ) | (211 | ) | (226 | ) | ||||||||||
Income tax expense, net | (413 | ) | (309 | ) | (265 | ) | (213 | ) | (175 | ) | ||||||||||
Change in deferred taxes, net | 11 | (4 | ) | 34 | 91 | 58 | ||||||||||||||
Changes in operating assets and liabilities | 58 | (45 | ) | 142 | (18 | ) | (47 | ) | ||||||||||||
Tax payments related to divestitures and acquisitions | (64 | ) | — | — | — | — | ||||||||||||||
Stock-based compensation | 17 | 1 | 2 | 1 | 1 | |||||||||||||||
Cash flow from Hedging | 11 | — | 15 | 132 | 25 | |||||||||||||||
Loss on early redemption of trust preferred securities, net of tax | — | — | — | — | 12 | |||||||||||||||
Other items, net | 13 | 3 | (2 | ) | (2 | ) | (4 | ) | ||||||||||||
Net cash provided by operations | $ | 908 | $ | 670 | $ | 828 | $ | 754 | $ | 550 | ||||||||||
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• | a portion of our business that is currently reimbursed by private insurers or hospitals may become reimbursed by managed care organizations, which generally have lower rates for our services; or | |
• | a portion of our business that is currently reimbursed by private insurers at rates based on our billed charges may become reimbursed under a contract at lower rates. |
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• | the dosing volumes of Aranesp® or CERA® required to treat anemia in dialysis patients may be less than the corresponding volume of Epogen®, without an offsetting adjustment in relative reimbursement rates; | |
• | our margins realized from the administration of Aranesp® or CERA® could be lower than the margins realized on the administration of Epogen®; or | |
• | a shift in the method or site for administration of Aranesp® or CERA® to patients that excludes our Company from such administration and the related reimbursement for such products. |
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• | the economic situation in developing countries could deteriorate; | |
• | fluctuations in exchange rates could adversely affect profitability; | |
• | we could face difficulties in enforcing and collecting accounts receivable under some countries’ legal systems; | |
• | local regulations could restrict our ability to obtain a direct ownership interest in dialysis clinics or other operations; | |
• | political and economic instability, especially in developing and newly industrializing countries, could disrupt our operations; | |
• | some customers and governments could have longer payment cycles, with resulting adverse effects on our cash flow; and | |
• | some countries could impose additional taxes or restrict the import of our products. |
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• | the quality, safety and efficacy of medical and pharmaceutical products and supplies; | |
• | the operation of manufacturing facilities, laboratories and dialysis clinics; | |
• | accurate reporting and billing for government and third-party reimbursement; and | |
• | compensation of medical directors and other financial arrangements with physicians and other referral sources. |
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As of September 30, 2007 | ||||
(in millions) | ||||
Total debt, including Trust Preferred Securities and current maturities | $ | 5,513 | ||
Shareholders’ equity | 5,328 | |||
Total debt to shareholders’ equity | 1.0 | x | ||
Ratio of earnings to fixed charges | 3.6 |
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• | make it more difficult for us to satisfy our obligations under our debt securities, including the notes; | |
• | increase our vulnerability to general adverse economic conditions; | |
• | limit our ability to obtain necessary financing and to fund future working capital, capital expenditures and other general corporate requirements; | |
• | require us to dedicate a substantial portion of our cash flow from operations, as well as the proceeds of certain financings and asset dispositions, to payments on our indebtedness, thereby reducing the availability of our cash flow and such proceeds to fund working capital, capital expenditures and for other general corporate purposes; | |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; | |
• | place us at a competitive disadvantage compared to our competitors that have less debt; | |
• | limit our ability to pursue acquisitions and sell assets; and | |
• | limit our ability to borrow additional funds. |
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• | the guarantee was incurred with fraudulent intent; or | |
• | the guarantor did not receive fair consideration or reasonably equivalent value for issuing its guarantee and |
— | was insolvent at the time of the guarantee; | |
— | was rendered insolvent by reason of the guarantee; |
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— | was engaged in a business or transaction for which its assets constituted unreasonably small capital to carry on its business; or | |
— | intended to incur, or believed that it would incur, debt beyond its ability to pay such debt as it matured. |
• | the sum of the company’s debts, including contingent, unliquidated and unmatured liabilities, is greater than all of such company’s property at a fair valuation; or | |
• | if the present fair saleable value of the company’s assets is less than the amount that will be required to pay the probable liability on its existing debts as they become absolute and matured. |
• | a transaction by the debtor that is directly detrimental to insolvency creditors if it was effected (i) during the three-month period prior to the petition for commencement of the insolvency proceedings and the debtor was unable to make payments when due at the time of the transaction and the beneficiary of the transaction had positive knowledge thereof at such time, or (ii) after a petition for the commencement of insolvency proceedings and the beneficiary of the transaction had knowledge of either the debtor’s inability to make payments when due or of the petition for commencement of insolvency proceedings at the time of the transaction; | |
• | the transaction was entered into during the ten-year period prior to a petition for the commencement of insolvency proceedings over the assets of the debtor with the actual intent to hinder, delay, prejudice, damage or defraud creditors of the debtor, provided that the beneficiary of such transaction had positive knowledge of the debtor’s intend at the time of the transaction; |
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• | the transaction granting an insolvency creditor security or satisfaction to which such creditor had no right or no right to claim in such manner or at such time it was entered into and such transaction took place (i) within the month prior to the petition or the commencement of insolvency proceedings over the assets of the debtor; (ii) within the second or third month preceding such a petition and the debtor (i.e. the grantor of the guarantee or security) was unable to make payments when due at the time of such transaction; or (iii) within the second and third month prior to the petition for commencement and the creditor had positive knowledge at the time of the transaction that it was detrimental and disadvantageous to the creditors of the grantor of such guarantee or security; | |
• | the transaction granting an insolvency creditor security or satisfaction was entered into (i) within the three-month period prior to the petition for the commencement of insolvency proceedings over the assets of the debtor and the debtor was insolvent or was rendered insolvent because of the transaction and the creditor had positive knowledge thereof or (ii) following a petition for the commencement of the insolvency proceedings and the creditor had positive knowledge of either the debtor’s inability to make payments when due or of the petition for commencement at the time of the transaction; or | |
• | the transaction was entered into within the last three months prior to the petition for the commencement of insolvency proceedings over the assets of the debtor and the debtor did not receive fair consideration or reasonably equivalent value in the transaction and was (i) insolvent or was rendered insolvent because of the transaction; (ii) undercapitalized or became undercapitalized because of the transaction; or (iii) intended to incur, or believed that it would incur, indebtedness beyond its ability to pay at maturity. |
• | issuing and selling the notes; | |
• | advancing the proceeds of the notes to us and our subsidiaries; | |
• | becoming a guarantor under our 2006 Credit Agreement; | |
• | conducting an exchange offer; and | |
• | engaging in only those other activities necessary, convenient or incidental thereto. |
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The exchange offer could adversely affect any market for restricted notes that are not exchanged. |
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• | issuing and selling the notes; | |
• | advancing the proceeds of the notes to us and our subsidiaries; | |
• | becoming a guarantor under our 2006 Credit Agreement; | |
• | conducting the exchange offer; and | |
• | engaging in only those other activities necessary, convenient or incidental thereto. |
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September 30, | |||||
2007 | |||||
Actual | |||||
(in millions) | |||||
Cash and cash equivalents | $ | 238 | |||
Revolving credit facility | $ | 32 | |||
Term Loan A | 1,550 | ||||
Term Loan B | 1,578 | ||||
Senior Notes | 491 | ||||
Euro Notes | 284 | ||||
EIB Agreements | 85 | ||||
Other long-term debt | 58 | ||||
A/R Facility | — | ||||
Other short-term debt | 122 | ||||
Total debt (excluding Trust Preferred Securities) | 4,200 | ||||
Company-obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiaries due 2008 and 2011 | 1,313 | ||||
Minority interest | 108 | ||||
Total shareholders equity | 5,328 | ||||
Total capitalization | $ | 10,949 | |||
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• | file a registration statement providing for the exchange offer with the SEC on or prior to the 180th day after the date that the restricted notes were first issued; | |
• | use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act no later than the 240th day after the date the restricted notes were first issued; and | |
• | use our reasonable best efforts to consummate the exchange offer no later than the 280th day after the date the restricted notes were first issued. |
• | applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer; or | |
• | for any other reason the exchange offer is not consummated within 280 days after July 2, 2007, the issue date of the restricted notes; or | |
• | prior to the 20th day following consummation of the exchange offer: |
• | the initial purchasers so request with respect to restricted notes not eligible to be exchanged for notes in the exchange offer; | |
• | any holder of restricted notes notifies us that it is not eligible to participate in the exchange offer; or | |
• | an initial purchaser notifies us that it will not receive freely tradeable exchange notes in exchange for restricted notes constituting any portion of an unsold allotment, |
• | as promptly as practicable, file a shelf registration statement covering resales of the restricted notes or the exchange notes, as the case may be; | |
• | use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or before the 280th day after the issue date of the restricted notes; and | |
• | use our reasonable best efforts to keep the shelf registration statement continuously effective for a period of two years from the effective date of the shelf registration statement or such shorter period that will terminate when all notes registered thereunder are disposed of in accordance therewith or cease to be outstanding. |
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• | within 180 days after the issue date of the restricted notes, neither the exchange offer registration statement nor the shelf registration statement has been filed with the SEC; | |
• | within 240 days after the issue date of the restricted notes, the exchange offer registration statement has not been declared effective; | |
• | within 280 days after the issue date of the restricted notes, neither the exchange offer has been consummated nor the shelf registration statement has been declared effective; or | |
• | after either the exchange offer registration statement or the shelf registration statement has been declared effective, such registration statement thereafter ceases to be effective or usable (subject to certain exceptions) in connection with resales of restricted notes or notes in accordance with and during the periods specified in the registration rights agreements |
• | the notes to be issued pursuant to the exchange offer will have been registered under the Securities Act, will not contain transfer restrictions, and will not bear legends restricting their transfer; and | |
• | the notes to be issued pursuant to the exchange offer will not contain terms providing for the payment of additional interest due to a default in the performance of certain of our obligations under the registration rights agreement and will not be entitled to registration rights under the registration rights agreement. |
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• | extend the exchange offer from time to time; | |
• | terminate or amend the exchange offer and not accept for exchange any restricted notes not previously accepted for exchange upon the occurrence of any of the events specified in this section under the subheading “Certain conditions to the exchange offer”; and | |
• | amend the terms of the exchange offer in any manner, whether before or after any tender of the restricted notes. |
• | complying with the procedure for book-entry transfer described below or properly completing and signing the letter of transmittal; | |
• | properly completing any required signature guarantees; | |
• | properly completing any other documents required by the letter of transmittal; and | |
• | delivering all of the above to the exchange agent at its address set forth below at or prior to 5:00 p.m., New York City time on the expiration date; or | |
• | complying with the guaranteed delivery procedures described below. |
• | tendered restricted notes are registered in the name of the signer of the letter of transmittal; | |
• | the notes to be issued in exchange for the restricted notes are to be issued in the name of the registered holder of the restricted notes; and | |
• | any untendered restricted notes are to be reissued in the name of the registered holder of the restricted notes. |
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• | accompanied by written instruments of transfer in form satisfactory to us; | |
• | duly executed by the registered holder of the restricted notes; and | |
• | the signature on the instrument of transfer must be guaranteed by a bank, broker, dealer, credit union, savings association, clearing agency or other institution (each, an “eligible institution”) that is a member of a recognized signature guarantee program within the meaning of Rule 17Ad-15 under the Exchange Act. |
• | is transmitted by DTC; | |
• | is received by the exchange agent and forms part of the book-entry transfer; | |
• | states that DTC has received an express acknowledgment from a participant in DTC that is tendering restricted notes which are the subject of the book-entry transfer; | |
• | states that the participant has received and agrees to be bound by all of the terms of the letter of transmittal; and | |
• | states that we may enforce the agreement against the participant. |
• | the name and address of the tendering holder; | |
• | the names in which the restricted notes are registered; | |
• | the principal amount of restricted notes being tendered; and |
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• | a statement that the tender is being made thereby and guaranteeing that within three business days after the expiration date a confirmation of book-entry transfer of such restricted notes into the exchange agent’s account at the book-entry transfer facility and an agent’s message or a properly completed and duly executed letter of transmittal, together with any other required documents will be delivered to the exchange agent. |
• | a properly transmitted agent’s message or the tendering holder’s properly completed and duly signed letter of transmittal, in each case together with a confirmation of book-entry transfer of the restricted notes into the exchange agent’s account at the book-entry transfer facility and any other required documentation, is received by the exchange agent; or | |
• | a properly completed and duly executed notice of guaranteed delivery is received by the exchange agent by facsimile transmission, mail or hand delivery from an eligible institution. |
• | any notes to be received by you in the exchange offer will be acquired in the ordinary course of your business; | |
• | you have no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the notes; | |
• | you are not an affiliate (within the meaning of Rule 405 under the Securities Act) of us, the Issuer, or any of the other guarantors; | |
• | you are not engaged in, and do not intend to engage in, the distribution (within the meaning of the Securities Act) of the notes; |
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• | if you are a broker-dealer, you will receive the notes in exchange for restricted notes that were acquired for your own account as a result of market-making activities or other trading activities and you acknowledge that you will deliver a prospectus in connection with any resale of such notes; | |
• | if you are a broker-dealer, you did not purchase the restricted notes being tendered in the exchange offer directly from us for resale pursuant to Rule 144A or Regulation S under the Securities Act or any other available exemption from registration under the Securities Act; and | |
• | you are not acting on behalf of any person who could not truthfully make the foregoing representations. |
• | specify the name of the person having tendered the restricted notes to be withdrawn; | |
• | identify the restricted notes to be withdrawn, including the principal amount of such restricted notes; | |
• | include a statement that the holder is withdrawing the holder’s election to have the restricted notes exchanged; | |
• | be signed by the holder in the same manner as the original signature on the letter of transmittal by which the restricted notes were tendered or as otherwise described above, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee under the indenture register the transfer of the restricted notes into the name of the person withdrawing the tender; and |
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• | specify the name in which any such restricted notes are to be registered, if different from that of the person who tendered the restricted notes (in which case the signature of the holder must be guaranteed by an eligible institution). |
• | a timely book-entry confirmation of the transfer of the restricted notes into the exchange agent’s account at the book-entry transfer facility; | |
• | a properly completed and duly executed letter of transmittal, or a properly transmitted agent’s message; and | |
• | timely receipt by the exchange agent of all other required documents. |
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• | the exchange offer violates any applicable law or any SEC staff interpretation of the staff of the SEC; or | |
• | any action or proceeding has been instituted in any court or by or before any governmental agency with respect to the exchange offer which, in our judgment, would reasonably be expected to prevent us and the guarantors from proceeding with or consummating the exchange offer. |
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• | notes, or restricted notes that are tendered for exchange in part only or that are not accepted for exchange, are to be issued in the name of any person other than the registered holder of the restricted notes tendered; or | |
• | tendered restricted notes are registered in the name of any person other than the person signing the letter of transmittal; or | |
• | a transfer tax is imposed for any reason other than the exchange of restricted notes for notes pursuant to the exchange offer. |
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Nine Months Ended | |||||||||||||||||||||||||||||
September 30, | Year Ended December 31, | ||||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||||||
Net revenues | $ | 7,151 | $ | 6,147 | $ | 8,499 | $ | 6,772 | $ | 6,228 | $ | 5,528 | $ | 5,084 | |||||||||||||||
Cost of revenues | 4,691 | 4,089 | 5,621 | 4,564 | 4,266 | 3,793 | 3,494 | ||||||||||||||||||||||
Gross profit | 2,460 | 2,058 | 2,878 | 2,208 | 1,962 | 1,735 | 1,590 | ||||||||||||||||||||||
Selling, general and administrative | 1,264 | 1,097 | 1,549 | 1,218 | 1,059 | 928 | 848 | ||||||||||||||||||||||
Gain on sale of dialysis clinics | — | (40 | ) | (40 | ) | — | — | — | — | ||||||||||||||||||||
Research and development | 44 | 37 | 51 | 51 | 51 | 50 | 47 | ||||||||||||||||||||||
Operating income | 1,152 | 964 | 1,318 | 939 | 852 | 757 | 695 | ||||||||||||||||||||||
Interest expense, net | 281 | 255 | 351 | 173 | 183 | 211 | 226 | ||||||||||||||||||||||
Income before income taxes and minority interest | 871 | 709 | 967 | 766 | 669 | 546 | 469 | ||||||||||||||||||||||
Net income | $ | 520 | $ | 385 | $ | 537 | $ | 455 | $ | 402 | $ | 331 | $ | 290 | |||||||||||||||
Weighted average of: | |||||||||||||||||||||||||||||
Preference shares outstanding | 3,728,265 | 3,548,433 | 3,575,376 | 80,369,448 | 78,729,177 | 78,573,033 | 78,555,534 | ||||||||||||||||||||||
Ordinary shares outstanding | 291,721,451 | 290,367,524 | 290,621,904 | 210,000,000 | 210,000,000 | 210,000,000 | 210,000,000 | ||||||||||||||||||||||
Basic earnings per Ordinary share(2) | $ | 1.76 | $ | 1.31 | $ | 1.82 | $ | 1.56 | $ | 1.39 | $ | 1.14 | $ | 1.00 | |||||||||||||||
Fully diluted earnings per Ordinary share(2) | 1.75 | 1.30 | 1.81 | 1.55 | 1.38 | 1.14 | 1.00 | ||||||||||||||||||||||
Basic earnings per Preference share(2) | 1.78 | 1.33 | 1.85 | 1.58 | 1.41 | 1.16 | 1.02 | ||||||||||||||||||||||
Fully diluted earnings per Preference share(2) | 1.77 | 1.32 | 1.84 | 1.57 | 1.40 | 1.16 | 1.02 | ||||||||||||||||||||||
Dividends declared per Ordinary share(€)(3) | — | — | 0.47 | 0.41 | 0.37 | 0.34 | 0.31 | ||||||||||||||||||||||
Dividends declared per Preference share(€)(3) | — | — | 0.49 | 0.43 | 0.39 | 0.36 | 0.33 | ||||||||||||||||||||||
Dividends declared per Ordinary share($)(3) | — | — | 0.64 | 0.52 | 0.47 | 0.42 | 0.37 | ||||||||||||||||||||||
Dividends declared per Preference share($)(3) | — | — | 0.67 | 0.55 | 0.49 | 0.44 | 0.39 | ||||||||||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||||||
EBITDA(1) | $ | 1,412 | $ | 1,186 | $ | 1,627 | $ | 1,190 | $ | 1,085 | $ | 974 | $ | 906 | |||||||||||||||
Ratio of earnings to fixed charges | 3.6 | 3.4 | 3.3 | 4.6 | 4.0 | 3.2 | 2.6 |
September 30, | December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||||||
Working capital | $ | 836 | $ | 894 | $ | 1,036 | $ | 883 | $ | 508 | $ | 794 | $ | 526 | ||||||||||||||
Total assets | 13,762 | 12,667 | 13,045 | 7,983 | 7,962 | 7,503 | 6,780 |
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September 30, | December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
Total long-term debt (excluding current portion) | 4,680 | 5,130 | 5,083 | 1,895 | 1,824 | 2,354 | 2,234 | |||||||||||||||||||||
Shareholders’ equity | 5,328 | 4,634 | 4,870 | 3,974 | 3,635 | 3,244 | 2,807 | |||||||||||||||||||||
Capital stock — Preference shares — Nominal Value | 4 | 4 | 4 | 91 | 85 | 85 | 85 | |||||||||||||||||||||
Capital stock — Ordinary shares — Nominal Value | 361 | 359 | 360 | 271 | 271 | 271 | 271 |
(1) | EBITDA (operating income plus depreciation and amortization) is the basis for determining compliance with certain covenants contained in our 2006 Credit Agreement, our Euro Notes and the indentures relating to the Senior Notes and our outstanding Trust Preferred Securities. You should not consider EBITDA to be an alternative to net earnings determined in accordance with U.S. GAAP or to cash flow from operations, investing activities or financing activities. In addition, not all funds depicted by EBITDA are available for management’s discretionary use. For example, a substantial portion of such funds are subject to contractual restrictions and functional requirements for debt service, to fund necessary capital expenditures and to meet other commitments from time to time as described in more detail elsewhere in our public filings with the Securities and Exchange Commission. A reconciliation of cash flow provided by operating activities to EBITDA is as follows: |
For the Nine | ||||||||
Months Ended | ||||||||
September 30, | ||||||||
2007 | 2006 | |||||||
in millions | ||||||||
Total EBITDA | $ | 1,412 | $ | 1,186 | ||||
Settlement of shareholder proceedings | — | (1 | ) | |||||
Interest Expense (net of interest income) | (281 | ) | (255 | ) | ||||
Income tax expense, net | (331 | ) | (314 | ) | ||||
Change in deferred taxes, net | 14 | 19 | ||||||
Changes in operating assets and liabilities | 45 | (115 | ) | |||||
Tax payments related to divestitures and acquisitions | — | (75 | ) | |||||
Stock-based compensation | 16 | 12 | ||||||
Other items, net | 15 | 8 | ||||||
Net cash provided by operations | $ | 890 | $ | 465 | ||||
For the Years Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
in millions | ||||||||||||||||||||
Total EBITDA | $ | 1,627 | $ | 1,190 | $ | 1,085 | $ | 974 | $ | 906 | ||||||||||
Settlement of shareholder proceedings | (1 | ) | 7 | — | — | — | ||||||||||||||
Interest expense (net of interest income) | (351 | ) | (173 | ) | (183 | ) | (211 | ) | (226 | ) | ||||||||||
Income tax expense, net | (413 | ) | (309 | ) | (265 | ) | (213 | ) | (175 | ) | ||||||||||
Change in deferred taxes, net | 11 | (4 | ) | 34 | 91 | 58 | ||||||||||||||
Changes in operating assets and liabilities | 58 | (45 | ) | 142 | (18 | ) | (47 | ) | ||||||||||||
Tax payments related to divestitures and acquisitions | (64 | ) | — | — | — | — | ||||||||||||||
Stock-based compensation | 17 | 1 | 2 | 1 | 1 | |||||||||||||||
Cash flow from Hedging | 11 | — | 15 | 132 | 25 | |||||||||||||||
Loss on early redemption of trust preferred securities, net of tax | — | — | — | — | 12 | |||||||||||||||
Other items, net | 13 | 3 | (2 | ) | (2 | ) | (4 | ) | ||||||||||||
Net cash provided by operations | $ | 908 | $ | 670 | $ | 828 | $ | 754 | $ | 550 | ||||||||||
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(2) | Earnings per Ordinary American Depositary Share (“ADS”) and per Preference ADS are not shown separately. As a result of the Company’s three-for-one share split of both the Ordinary shares and the Preference shares and the contemporaneous change of the ratio of ADSs to shares, one Ordinary ADS represents one Ordinary share and one Preference ADSs represents one Preference share. |
(3) | Amounts shown for each year from 2002 to 2006 represent dividends paid with respect to such year. The actual declaration and payment of the dividend was made in the following year, after approval of the dividend at our Annual General Meeting. |
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Composition of Trade Accounts Receivables | ||||||||
in %, December 31 | 2006 | 2005 | ||||||
U.S. Medicare and Medicaid Programs | 22% | 22% | ||||||
U.S. Commercial Payors | 26% | 24% | ||||||
U.S. Hospitals | 4% | 3% | ||||||
Self-Pay of U.S. patients | 1% | 1% | ||||||
Other U.S. | 3% | 4% | ||||||
International product customers and dialysis payors | 44% | 46% | ||||||
Total | 100% | 100% | ||||||
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For the Three Months | For the Nine Months | For the Years Ended | ||||||||||||||||||||||||||||
Ended September 30, | Ended September 30, | December 31, | ||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||
(In millions) | (In millions) | (In millions) | ||||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||||||
North America | $ | 1,660 | $ | 1,613 | $ | 4,958 | $ | 4,368 | $ | 6,026 | $ | 4,578 | $ | 4,250 | ||||||||||||||||
International | 783 | 638 | 2,250 | 1,824 | 2,534 | 2,250 | 2,019 | |||||||||||||||||||||||
Totals | 2,443 | 2,251 | 7,208 | 6,192 | 8,560 | 6,828 | 6,269 | |||||||||||||||||||||||
Inter-segment revenue | ||||||||||||||||||||||||||||||
North America | — | — | 1 | 1 | 1 | 1 | 2 | |||||||||||||||||||||||
International | 17 | 17 | 56 | 44 | 60 | 55 | 39 | |||||||||||||||||||||||
Totals | 17 | 17 | 57 | 45 | 61 | 56 | 41 | |||||||||||||||||||||||
Total net revenue | ||||||||||||||||||||||||||||||
North America | 1,660 | 1,613 | 4,957 | 4,367 | 6,025 | 4,577 | 4,248 | |||||||||||||||||||||||
International | 766 | 621 | 2,194 | 1,780 | 2,474 | 2,195 | 1,980 | |||||||||||||||||||||||
Totals | 2,426 | 2,234 | 7,151 | 6,147 | 8,499 | 6,772 | 6,228 | |||||||||||||||||||||||
Amortization and depreciation | ||||||||||||||||||||||||||||||
North America | 54 | 51 | 159 | 137 | 187 | 140 | 129 | |||||||||||||||||||||||
International | 34 | 29 | 99 | 83 | 120 | 109 | 102 | |||||||||||||||||||||||
Corporate | 1 | — | 2 | 2 | 2 | 2 | 2 | |||||||||||||||||||||||
Totals | 89 | 80 | 260 | 222 | 309 | 251 | 233 | |||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||||||
North America | 283 | 257 | 826 | 704 | 965 | 644 | 587 | |||||||||||||||||||||||
International | 135 | 113 | 386 | 318 | 440 | 362 | 300 | |||||||||||||||||||||||
Corporate | (21 | ) | (21 | ) | (60 | ) | (58 | ) | (87 | ) | (67 | ) | (35 | ) | ||||||||||||||||
Totals | 397 | 349 | 1,152 | 964 | 1,318 | 939 | 852 | |||||||||||||||||||||||
Interest income | 9 | 4 | 19 | 15 | 21 | 18 | 14 | |||||||||||||||||||||||
Interest expense | (104 | ) | (104 | ) | (300 | ) | (270 | ) | (372 | ) | (191 | ) | (197 | ) | ||||||||||||||||
Income tax expense | (115 | ) | (105 | ) | (331 | ) | (314 | ) | (413 | ) | (309 | ) | (266 | ) | ||||||||||||||||
Minority interest | (6 | ) | (5 | ) | (20 | ) | (10 | ) | (17 | ) | (2 | ) | (1 | ) | ||||||||||||||||
Net Income | $ | 181 | $ | 139 | $ | 520 | $ | 385 | $ | 537 | $ | 455 | $ | 402 | ||||||||||||||||
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Key Indicators for Consolidated Financial Statements | ||||||||||||||||
Change in % | ||||||||||||||||
Three Months | Three Months | |||||||||||||||
Ended | Ended | At Constant | ||||||||||||||
September 30, | September 30, | As | Exchange | |||||||||||||
2007 | 2006 | Reported | Rates | |||||||||||||
Number of treatments | 6,625,215 | 6,251,385 | 6% | |||||||||||||
Same market treatment growth in % | 3.6 | % | 3.5 | % | ||||||||||||
Revenue in $ million | 2,426 | 2,234 | 9% | 6% | ||||||||||||
Gross profit as a % of revenue | 34.5 | % | 33.6 | % | ||||||||||||
Selling, general and administrative costs as a % of revenue | 17.5 | % | 17.5 | % | ||||||||||||
Net income in $ million | 181 | 139 | 30% |
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Key Indicators for North America Segment | ||||||||||||
Three Months | Three Months | |||||||||||
Ended | Ended | |||||||||||
September 30, | September 30, | |||||||||||
2007 | 2006 | Change in % | ||||||||||
Number of treatments | 4,621,343 | 4,498,590 | 3% | |||||||||
Same market treatment growth in % | 3.0 | % | 1.8 | % | ||||||||
Revenue in $ million | 1,660 | 1,613 | 3% | |||||||||
Depreciation and amortization in $ million | 54 | 51 | 7% | |||||||||
Operating income in $ million | 283 | 257 | 10% | |||||||||
Operating income margin in % | 17.0 | % | 15.9 | % |
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Key Indicators for International Segment | ||||||||||||||||
Change in % | ||||||||||||||||
Three Months | Three Months | |||||||||||||||
Ended | Ended | At Constant | ||||||||||||||
September 30, | September 30, | As | Exchange | |||||||||||||
2007 | 2006 | Reported | Rates | |||||||||||||
Number of treatments | 2,003,872 | 1,752,795 | 14% | |||||||||||||
Same market treatment growth in % | 4.9 | % | 7.1 | % | ||||||||||||
Revenue in $ million | 766 | 621 | 23% | 14% | ||||||||||||
Depreciation and amortization in $ million | 34 | 29 | 21% | |||||||||||||
Operating income in $ million | 135 | 113 | 19% | |||||||||||||
Operating income margin in % | 17.6 | % | 18.2 | % |
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Key Indicators for Consolidated Financial Statements | ||||||||||||||||
Change in % | ||||||||||||||||
Nine Months | Nine Months | |||||||||||||||
Ended | Ended | At Constant | ||||||||||||||
September 30, | September 30, | As | Exchange | |||||||||||||
2007 | 2006 | Reported | Rates | |||||||||||||
Number of treatments | 19,623,252 | 17,433,465 | 13% | |||||||||||||
Same market treatment growth in % | 3.9 | % | 4.1 | % | ||||||||||||
Revenue in $ million | 7,151 | 6,147 | 16% | 14% | ||||||||||||
Gross profit as a % of revenue | 34.4 | % | 33.5 | % | ||||||||||||
Selling, general and administrative costs as a % of revenue | 17.7 | % | 17.8 | % | ||||||||||||
Net income in $ million | 520 | 385 | 35% |
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Key Indicators for North America Segment | ||||||||||||
Nine Months | Nine Months | |||||||||||
Ended | Ended | |||||||||||
September 30, | September 30, | |||||||||||
2007 | 2006 | Change in % | ||||||||||
Number of treatments | 13,698,684 | 12,337,114 | 11% | |||||||||
Same market treatment growth in % | 2.9 | % | 2.0 | % | ||||||||
Revenue in $ million | 4,957 | 4,367 | 14% | |||||||||
Depreciation and amortization in $ million | 159 | 137 | 16% | |||||||||
Operating income in $ million | 826 | 704 | 17% | |||||||||
Operating income margin in % | 16.7 | % | 16.1 | % |
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Key Indicators for International Segment | ||||||||||||||||
Change in % | ||||||||||||||||
Nine Months | Nine Months | |||||||||||||||
Ended | Ended | At Constant | ||||||||||||||
September 30, | September 30, | As | Exchange | |||||||||||||
2007 | 2006 | Reported | Rates | |||||||||||||
Number of treatments | 5,924,568 | 5,096,351 | 16% | |||||||||||||
Same market treatment growth in % | 6.2 | % | 8.4 | % | ||||||||||||
Revenue in $ million | 2,194 | 1,780 | 23% | 15% | ||||||||||||
Depreciation and amortization in $ million | 99 | 83 | 20% | |||||||||||||
Operating income in $ million | 386 | 318 | 21% | |||||||||||||
Operating income margin in % | 17.6 | % | 17.8 | % |
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For the Years Ended December 31, | ||||||||||||
2006 | 2005 | Change in % | ||||||||||
(in millions) | ||||||||||||
Operating income | $ | 1,318 | $ | 939 | 40 | % | ||||||
Transformation & Settlement | 2 | 22 | ||||||||||
Restructuring costs and in-process R&D | 35 | — | ||||||||||
Gain from FTC-related clinic divestment | (40 | ) | — | |||||||||
Stock option compensation expense (FAS 123(R)) | 14 | — | ||||||||||
Operating income excluding one time effects and FAS 123(R) | $ | 1,329 | $ | 961 | 38 | % | ||||||
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For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2006 | 2005 | Change in % | ||||||||||
(in millions) | ||||||||||||
Net income | $ | 537 | $ | 455 | 18 | % | ||||||
Transformation & Settlement | 1 | 17 | ||||||||||
Restructuring costs and in-process R&D | 23 | — | ||||||||||
Write-off FME prepaid financing fees | 9 | — | ||||||||||
Loss from FTC-related clinic divestment | 4 | — | ||||||||||
Stock option compensation expense (FAS 123(R)) | 10 | — | ||||||||||
Net income excluding one time effects and FAS 123(R) | $ | 584 | $ | 472 | 24 | % | ||||||
Change in % | ||||||||||||||||
At Constant | ||||||||||||||||
As | Exchange | |||||||||||||||
2006 | 2005 | Reported | Rates | |||||||||||||
Number of treatments | 23,739,733 | 19,732,753 | 20 | % | ||||||||||||
Same market treatment growth in % | 4.2 | % | 4.6 | % | ||||||||||||
Revenue in $ million | 8,499 | 6,772 | 26 | % | 25 | % | ||||||||||
Gross profit in % of revenue | 33.9 | % | 32.6 | % | ||||||||||||
Selling, general and administrative costs in % of revenue | 18.2 | % | 18.0 | % | ||||||||||||
Net income in $ million | 537 | 455 | 18 | % |
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2006 | 2005 | Change in % | ||||||||||
Number of treatments | 16,877,911 | 13,471,158 | 25 | % | ||||||||
Same market treatment growth in % | 2.1 | % | 3.3 | % | ||||||||
Revenue in $ million | 6,025 | 4,577 | 32 | % | ||||||||
Depreciation and amortization in $ million | 187 | 140 | 34 | % | ||||||||
Operating income in $ million | 965 | 644 | 50 | % | ||||||||
Operating income margin in % | 16.0 | % | 14.1 | % |
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Change in % | ||||||||||||||||
as | at constant | |||||||||||||||
2006 | 2005 | reported | exchange rates | |||||||||||||
Number of treatments | 6,861,822 | 6,261,595 | 10 | % | ||||||||||||
Same market treatment growth in % | 8.6 | % | 7.6 | % | ||||||||||||
Revenue in $ million | 2,474 | 2,195 | 13 | % | 12 | % | ||||||||||
Depreciation and amortization in $ million | 120 | 109 | 9 | % | ||||||||||||
Operating income in $ million | 440 | 362 | 22 | % | ||||||||||||
Operating income margin in % | 17.8 | % | 16.5 | % |
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Change in % | ||||||||||||||||
as | at constant | |||||||||||||||
2005 | 2004 | reported | exchange rates | |||||||||||||
Number of treatments | 19,732,753 | 18,794,109 | 5 | % | ||||||||||||
Same store treatment growth in % | 4.6 | % | 3.6 | % | ||||||||||||
Revenue in $ million | 6,772 | 6,228 | 9 | % | 8 | % | ||||||||||
Gross profit in % of revenue | 32.6 | % | 31.5 | % | ||||||||||||
Selling, general and administrative costs in % of revenue | 18.0 | % | 17.0 | % | ||||||||||||
Net income in $ million | 455 | 402 | 13 | % |
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2005 | 2004 | Change in % | ||||||||||
Number of treatments | 13,471,158 | 12,998,661 | 4 | % | ||||||||
Same store treatment growth in % | 3.3 | % | 3.2 | % | ||||||||
Revenue in $ million | 4,577 | 4,248 | 8 | % | ||||||||
Depreciation and amortization in $ million | 140 | 129 | 9 | % | ||||||||
Operating income in $ million | 644 | 587 | 10 | % | ||||||||
Operating income margin in % | 14.1 | % | 13.8 | % |
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Change in % | ||||||||||||||||
as | at constant | |||||||||||||||
2005 | 2004 | reported | exchange rates | |||||||||||||
Number of treatments | 6,261,595 | 5,795,448 | 8 | % | ||||||||||||
Same store treatment growth in % | 7.6 | % | 4.1 | % | ||||||||||||
Revenue in $ million | 2,195 | 1,980 | 11 | % | 9 | % | ||||||||||
Depreciation and amortization in $ million | 109 | 102 | 8 | % | ||||||||||||
Operating income in $ million | 362 | 300 | 21 | % | ||||||||||||
Operating income margin in % | 16.5 | % | 15.2 | % |
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September 30, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
North America | 57 | 59 | 63 | |||||||||
International | 114 | 119 | 120 | |||||||||
Total | 74 | 76 | 82 | |||||||||
• | a5-year $1 billion revolving credit facility (of which up to $0.25 billion is available for letters of credit, up to $0.3 billion is available for borrowings in certainnon-U.S. currencies, up to $0.15 billion is available as swing line loans in U.S. dollars, up to $0.25 billion is available as a competitive loan facility and up to $0.05 billion is available as swing line loans in certainnon-U.S. currencies, the total of all of which cannot exceed $1 billion) which will be due and payable on March 31, 2011. | |
• | a5-year term loan facility (“Term Loan A”) of $1.85 billion also scheduled to mature on March 31, 2011. Until July 2, 2007, the 2006 Credit Agreement required 19 quarterly payments on Term Loan A of $30 million each that permanently reduce the term loan facility. The repayments began on June 30, 2006 and continue through December 31, 2010. The remaining amount outstanding is due on March 31, 2011. | |
• | a7-year term loan facility (“Term Loan B”) of $1.75 billion scheduled to mature on March 31, 2013. Until July 2, 2007, the 2006 Credit Agreement required 28 quarterly payments on Term Loan B that permanently reduce the term loan facility. The repayment began June 30, 2006. The first 24 quarterly payments will be equal to one quarter of one percent (0.25%) of the original principal balance outstanding, payments 25 though 28 will be equal to twenty-three and one half percent (23.5%) of the original principal balance outstanding with the final payment due on March 31, 2013, subject to an early repayment requirement on March 1, 2011 if the Trust Preferred Securities due June 15, 2011 are not repaid or refinanced or their maturity is not extended prior to that date. |
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Payments due by period of | ||||||||||||||||
Contractual Cash Obligations | Total | 1 Year | 2-5 Years | Over 5 Years | ||||||||||||
in millions | ||||||||||||||||
Trust Preferred Securities(a) | $ | 1,516 | $ | 96 | $ | 1,420 | $ | — | ||||||||
Long Term Debt(b) | 5,013 | 379 | 2,805 | 1,829 | ||||||||||||
Capital Lease Obligations | 8 | 2 | 4 | 2 | ||||||||||||
Operating Leases | 1,698 | 308 | 882 | 508 | ||||||||||||
Unconditional Purchase Obligations | 235 | 131 | 95 | 9 | ||||||||||||
Other Long-term Obligations | 16 | 10 | 6 | — | ||||||||||||
Letters of Credit | 85 | 85 | — | — | ||||||||||||
$ | 8,571 | $ | 1,011 | $ | 5,212 | $ | 2,348 | |||||||||
(a) | Interest payments are determined on these debt instruments until their respective maturity dates and based on the applicable balances and fixed interest rates for each period presented. |
(b) | Interest payments are based upon the principal repayment schedules and fixed interest rates or estimated variable interest rates considering the applicable interest rates (e.g. Libor, Prime), the applicable margins, and the effects of related interest rate swaps. |
Expiration per period of | ||||||||||||||||
Available Sources of Liquidity | Total | 1 Year | 2-5 Years | Over 5 Years | ||||||||||||
in millions | ||||||||||||||||
A/R Facility(a) | $ | 384 | $ | 384 | $ | — | $ | — | ||||||||
Unused Senior Credit Lines | 932 | — | 932 | — | ||||||||||||
Other Unused Lines of Credit | 87 | 87 | — | — | ||||||||||||
$ | 1,403 | $ | 471 | $ | 932 | $ | — | |||||||||
(a) | Subject to availability of sufficient accounts receivable meeting funding criteria. |
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2007 | 2008 | |||
Revenue growth | greater than $9.5 billion (at least 12%) | 6% - 9% | ||
Net Income | $685 - $705 million | |||
Net Income growth | 28 - 31% | >10% | ||
Net Income adjusted* growth | 19 - 23% | >10% | ||
Acquisitions and capital expenditures | approximately $650 million | |||
Effective tax rate | approximately 38 - 39% | approximately 38 - 39% | ||
Debt/EBITDA | under 3.0 | under 3.0 | ||
Dividend | continuing increases | continuing increases |
* | For purposes of this outlook, 2006 net income was adjusted to exclude the one time effects of gains of certain items as shown in the reconciliation table below: |
For year ended | |||
December 31, | |||
2006 | |||
(Amounts in millions) | |||
Net Income | 537 | ||
Transformation and settlement costs | 1 | ||
Restructuring costs and in-process R&D | 23 | ||
Write-off of unamortized prepaid financing fees | 9 | ||
Loss from FTC mandated clinic divestures | 4 | ||
2006 Net Income excluding effects of one-time items (Net Income adjusted) | 574 | ||
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For the Nine Months | ||||||||
Ended September 30, | ||||||||
2007 | 2006 | |||||||
in thousands | ||||||||
Total EBITDA | $ | 1,412,313 | $ | 1,185,682 | ||||
Settlement of shareholder proceedings | — | (880 | ) | |||||
Interest expense (net of interest income) | (281,319 | ) | (255,070 | ) | ||||
Income tax expense, net | (331,097 | ) | (314,401 | ) | ||||
Change in deferred taxes, net | 13,911 | 19,324 | ||||||
Changes in operating assets and liabilities | 45,425 | (115,295 | ) | |||||
Tax payments related to divestitures and acquisitions | — | (74,605 | ) | |||||
Stock-based compensation | 16,305 | 11,617 | ||||||
Other items, net | 14,665 | 8,619 | ||||||
Net cash provided by operating activities | $ | 890,203 | $ | 464,991 | ||||
For the Years Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
in thousands | ||||||||||||
Total EBITDA | $ | 1,626,825 | $ | 1,190,370 | $ | 1,084,931 | ||||||
Settlement of shareholder proceedings | (888 | ) | 7,335 | — | ||||||||
Interest expense (net of interest income) | (351,246 | ) | (173,192 | ) | (183,746 | ) | ||||||
Income tax expense, net | (413,489 | ) | (308,748 | ) | (265,415 | ) | ||||||
Change in deferred taxes, net | 10,904 | (3,675 | ) | 34,281 | ||||||||
Changes in operating assets and liabilities | 58,294 | (45,088 | ) | 141,979 | ||||||||
Tax payments related to divestitures and acquisitions | (63,517 | ) | — | — | ||||||||
Stock-based compensation | 16,610 | 1,363 | 1,751 | |||||||||
Cash inflow from Hedging | 10,908 | — | 14,514 | |||||||||
Other items, net | 13,429 | 1,939 | (452 | ) | ||||||||
Net cash provided by operating activities | $ | 907,830 | $ | 670,304 | $ | 827,843 | ||||||
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1. | May be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; | |
2. | Is irrevocable (unless a new election date occurs); and | |
3. | Is applied only to entire instruments and not to portions of instruments. |
• | changes in reimbursement rates; | |
• | intense competition; | |
• | foreign exchange rate fluctuations; | |
• | varying degrees of acceptance of new product introductions; | |
• | technological developments in our industry; | |
• | uncertainties in litigation or investigative proceedings and regulatory developments in the health care sector; and | |
• | the availability of financing. |
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Fair | Credit | |||||||||||||||||||
2007 | 2008 | Total | Value | Risk | ||||||||||||||||
Purchase of EUR against USD | $ | 611,607 | 16,858 | $ | 628,465 | $ | 1,256 | $ | 2,590 | |||||||||||
Sale of EUR against USD | 8,258 | — | 8,258 | (99 | ) | 6 | ||||||||||||||
Purchase of EUR against others | 306,845 | 30,775 | 337,620 | 1,718 | 4,675 | |||||||||||||||
Sale of EUR against others | 32,014 | — | 32,014 | (192 | ) | 10 | ||||||||||||||
Others | 58,650 | 17,185 | 75,835 | (70 | ) | 1,719 | ||||||||||||||
Total | $ | 1,017,374 | 64,818 | $ | 1,082,192 | $ | 2,613 | $ | 9,000 | |||||||||||
Year’s | Year’s | Year’s | Year’s | |||||||||||||
Year ending December 31, | High | Low | Average | Close | ||||||||||||
2002 $ per€ | 1.0487 | 0.8578 | 0.9454 | 1.0487 | ||||||||||||
2003 $ per€ | 1.2630 | 1.0377 | 1.1312 | 1.2630 | ||||||||||||
2004 $ per€ | 1.3633 | 1.1802 | 1.2439 | 1.3621 | ||||||||||||
2005 $ per€ | 1.3507 | 1.1667 | 1.2442 | 1.1797 | ||||||||||||
2006 $ per€ | 1.3331 | 1.1826 | 1.2558 | 1.3170 |
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Fair Value | |||||||||||||||||||||||||||||||||
Dec. 31, | |||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Totals | 2006 | ||||||||||||||||||||||||||
Principal payments on 2006 Credit Agreement | 137 | 137 | 137 | 137 | 1,367 | 1,650 | $ | 3,565 | $ | 3,565 | |||||||||||||||||||||||
Variable interest rate = 6,52% | |||||||||||||||||||||||||||||||||
Accounts receivable securitization programs | 266 | $ | 266 | $ | 266 | ||||||||||||||||||||||||||||
Variable interest rate = 5.36% | |||||||||||||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||||||||||||
Notional amount | 350 | 615 | 450 | 250 | 1,000 | 500 | $ | 3,165 | $ | 60 | |||||||||||||||||||||||
Average fixed pay rate = 4.50% | 5.29 | % | 4.69 | % | 4.84 | % | 4.28 | % | 4.10 | % | 4.31 | % | 4.50 | % | |||||||||||||||||||
Receive rate = 3-month $LIBOR | |||||||||||||||||||||||||||||||||
Company obligated mandatorily redeemable preferred securities of subsidiaries Fresenius Medical Care Capital Trusts | |||||||||||||||||||||||||||||||||
Fixed interest rate = 7.875 %/issued in 1998 | 435 | $ | 435 | $ | 472 | ||||||||||||||||||||||||||||
Fixed interest rate = 7.375 %/issued in 1998 (denominated in DEM) | 202 | $ | 202 | $ | 207 | ||||||||||||||||||||||||||||
Fixed interest rate = 7.875 %/issued in 2001 | 223 | $ | 223 | $ | 233 | ||||||||||||||||||||||||||||
Fixed interest rate = 7.375 %/issued in 2001 (denominated in EUR) | 394 | $ | 394 | $ | 435 | ||||||||||||||||||||||||||||
Interest rate swaps | |||||||||||||||||||||||||||||||||
Notional amount | 450 | $ | 450 | $ | (15 | ) | |||||||||||||||||||||||||||
Average fixed receive rate = 3.50% | 3.50 | % | 3.50 | % | |||||||||||||||||||||||||||||
Pay rate = 6-month $LIBOR |
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2006 | 2005 | 2004 | |||||||||||
(in millions) | |||||||||||||
North America | |||||||||||||
Dialysis Care | $ | 5,464 | $ | 4,054 | $ | 3,802 | |||||||
Dialysis Products | 561 | 523 | 446 | ||||||||||
6,025 | 4,577 | 4,248 | |||||||||||
International | |||||||||||||
Dialysis Care | 913 | 813 | 699 | ||||||||||
Dialysis Products | 1,561 | 1,382 | 1,281 | ||||||||||
2,474 | 2,195 | 1,980 |
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• | increased general life expectancy and the overall aging of the general U.S. and European population; | |
• | shortage of donor organs for kidney transplants; | |
• | improved dialysis technology that makes life-prolonging dialysis available to a larger patient population; | |
• | greater access to treatment in developing countries; and | |
• | better treatment and survival of patients with hypertension, diabetes and other illnesses that lead to ESRD. |
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2004 | 2005 | 2006 | GOAL 2010 | |||||||||||||
Revenue ($ in million) | $ | 6,228 | $ | 6,772 | $ | 8,499 | $ | Y11,500 | ||||||||
Annual revenue growth at constant currency | 10% | 8% | 25% | Y6–9% | ||||||||||||
Share of dialysis market* | Y12% | Y13% | Y15% | Y18% | ||||||||||||
Market volume* ($ in billion) | $ | Y50 | $ | Y52 | $ | Y55 | $ | Y67 | ||||||||
Annual net income growth** | 21% | 17% | 24% | >10% |
* | Company estimates |
** | 2005 excluding one-time effects and 2006 excluding one-time effects and FAS 123(R) |
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• | our reputation for quality patient care and treatment; | |
• | our extensive network of dialysis clinics, which enables physicians to refer their patients to conveniently located clinics; and | |
• | our reputation for technologically advanced products for dialysis treatment. |
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• | Improvement of risk management systems in dialysis clinics. | |
• | Extension of the matrix certification of the quality management system to Germany and Romania. | |
• | Extension of matrix certification of environmental management system to France. |
Year Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Medicare ESRD program | 54.5% | 56.0% | 58.3% | |||||||||
Private/ alternative payors | 34.4% | 31.6% | 30.0% | |||||||||
Medicaid and other government sources | 3.9% | 4.2% | 4.1% | |||||||||
Hospitals | 7.2% | 8.2% | 7.6% | |||||||||
Total | 100.0% | 100.0% | 100.0% | |||||||||
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• | HD machines and PD cyclers; | |
• | dialyzers, our largest product group; | |
• | PD solutions in flexible bags; | |
• | HD concentrates, solutions and granulates; | |
• | bloodlines; and | |
• | systems for water treatment. |
Year Ended December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Total | Total | Total | ||||||||||||||||||||||
Product | % of | Product | % of | Product | % of | |||||||||||||||||||
Revenues | Total | Revenues | Total | Revenues | Total | |||||||||||||||||||
(U.S. dollars in millions) | ||||||||||||||||||||||||
Hemodialysis Products | $ | 1,775.0 | 84 | $ | 1,588.6 | 83 | $ | 1,453.0 | 84 | |||||||||||||||
Peritoneal Dialysis Products | 307.8 | 14 | 275.5 | 15 | 242.9 | 14 | ||||||||||||||||||
Adsorbers | 38.8 | 2 | 40.9 | 2 | 30.9 | 2 | ||||||||||||||||||
Total | $ | 2,121.6 | 100 | $ | 1,905.0 | 100 | $ | 1,726.8 | 100 | |||||||||||||||
• | volumetric dialysate balancing and ultrafiltration control system. This system, which we introduced in 1977, provides for safe and more efficient use of highly permeable dialyzers, permitting efficient dialysis with controlled rates of fluid removal; |
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• | proven hydraulic systems, providing reliable operation and servicing flexibility; | |
• | compatibility with all manufacturers’ dialyzers and a wide variety of blood-lines and dialysis solutions, permitting maximum flexibility in both treatment and disposable products usage; | |
• | modular design, which permits us to offer dialysis clinics a broad range of options to meet specific patient or regional treatment requirements. Modular design also allows upgrading through module substitution without replacing the entire machine; | |
• | specialized modules that provide monitoring and response capability for selected bio-physical patient parameters, such as body temperature and relative blood volume. This concept, known as physiological dialysis, permits hemodialysis treatments with lower incidence of a variety of symptoms or side effects, which still occur frequently in standard hemodialysis; | |
• | sophisticated microprocessor controls, and display and readout panels that are adaptable to meet local language requirements; | |
• | battery backup, which continues operation of the blood circuit and all protective systems up to 20 minutes following a power failure; | |
• | online clearance, measurement of dialyzer clearance for quality assurance with On-Line Clearance Monitoring, providing immediate effective clearance information, real time treatment outcome monitoring, and therapy adjustment during dialysis without requiring invasive procedures or blood samples; | |
• | in the series 5008 and 4008H, ONLINE-Hemodiafilitration; and | |
• | on-line data collection capabilities and computer interfacing with our FINESSE/ TDMS module and FDS08 system. Our systems enable us to: |
— | monitor and assess prescribed therapy; | |
— | connect a large number of hemodialysis machines and peripheral devices, such as patient scales, blood chemistry analyzers and blood pressure monitors, to a personal computer network; | |
— | enter nursing records automatically at bedside to register and document patient treatment records, facilitate billing, and improve record-keeping and staff efficiency; | |
— | adapt to new data processing devices and trends; | |
— | perform home hemodialysis with remote monitoring by a staff caregiver; and | |
— | record and analyze trends in medical outcome factors in hemodialysis patients. |
• | higher biological compatibility, resulting in reduced incidence of adverse reactions to the fibers; | |
• | greater capacity to clear uremic toxins from patient blood during dialysis, permitting more thorough, more rapid dialysis, resulting in shorter treatment time; and | |
• | a complete range of permeability, or membrane pore size, which permits dialysis at prescribed rates — high flux and low flux, as well as ultra flux for acute dialysis, and allows tailoring of dialysis therapy to individual patients. |
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• | Fewer possibilities for touch contamination. Our unique PIN and DISC technology was designed to reduce the number of steps in the fluid exchange process and by doing so has lessened the risk of infection, particularly in the disconnection step in which the patient connector is closed automatically without the need for manual intervention. | |
• | Improved biocompatibility. The newbalanceand bicaVera® solutions are pH neutral and have very low glucose degradation products providing greater protection for the peritoneal membrane. | |
• | Environmentally friendly material: Ourstay•safe® system is made of Biofine®, a material, developed by Fresenius, which upon combustion is reduced to carbon dioxide and water and does not contain any plasticizers. |
• | Improved quality of life. The patient is treated at night and can lead a more normal life during the day without fluid exchange every few hours. | |
• | Improved adequacy of dialysis. By adjusting the parameters of treatment it is possible to provide more dialysis to the patient compared to conventional CAPD therapy. This therapy offers important options to physicians such as improving the delivered dose of dialysis for certain patients. |
• | sleep•safe: Thesleep•safemachine has been used since 1999. It has automated connection technology thus further reducing the risk on touch contamination. Another key safety feature is the barcode recognition system for the types of solution bags used. This improves compliance and ensures that the prescribed dosage is administered to the patient. There is also a pediatric option for the treatment of infants. | |
• | North American cycler portfolio: This includes the (a) Freedom® and 90/2® cyclers for pediatric and acute markets, (b) the Freedom® Cycler PD+ with IQ card™ and (c) the Newton IQ® Cycler. The credit card-sized IQcard™ can provide actual treatment details and results for compliance monitoring to the physician and, when used with the Newton IQ™ Cycler, can upload the patient’s prescription into the machine. The Newton IQ™ Cycler also pumps waste dialysate directly into a receptacle. |
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• | failure to receive required licenses, certifications or other approvals for new facilities or products or significant delays in such receipt; | |
• | complete or partial loss of various federal certifications, licenses, or other permits required under the laws of any state or other governmental authority by withdrawal, revocation, suspension, or termination or restrictions of such certificates and licenses by the imposition of additional requirements or conditions, or the initiation of proceedings possibly leading to such restrictions or the partial or complete loss of the required certificates, licenses or permits; and | |
• | changes resulting from health care reform or other government actions that reduce reimbursement or reduce or eliminate coverage for particular services we provide. |
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• | future changes in the EPO reimbursement methodology and/or rate; | |
• | inclusion of EPO in the Medicare composite rate without offsetting increases to such rate; |
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• | reduction in the typical dosage per administration; | |
• | increases in the cost of EPO without offsetting increases in the EPO reimbursement rate; or | |
• | reduction by the manufacturer of EPO of the amount of overfill in the EPO vials. |
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Employees |
2006 | 2005 | 2004 | |||||||||||
North America | |||||||||||||
Dialysis Care | 31,431 | 24,737 | 23,389 | ||||||||||
Dialysis Products | 6,110 | 5,392 | 5,229 | ||||||||||
37,541 | 30,129 | 28,618 | |||||||||||
International | |||||||||||||
Dialysis Care | 11,663 | 10,626 | 9,608 | ||||||||||
Dialysis Products | 7,599 | 6,766 | 6,300 | ||||||||||
19,262 | 17,392 | 15,908 | |||||||||||
Total Company | 56,803 | 47,521 | 44,526 | ||||||||||
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Currently | ||||||||||||
Owned | ||||||||||||
Floor Area | or Leased | |||||||||||
(Approximate | by Fresenius | Lease | ||||||||||
Location | Square Meters) | Medical Care | Expiration | Use | ||||||||
Bad Homburg, Germany | 15,646 | leased | December 2016 | Corporate headquarters and administration | ||||||||
St. Wendel, Germany | 58,767 | leased | December 2016 | Manufacture of polysulfone membranes, dialyzers and peritoneal dialysis solutions; research and development | ||||||||
Schweinfurt, Germany | 24,900 | leased | December 2016 | Manufacture of hemodialysis machines and peritoneal dialysis cyclers; research and development |
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Currently | ||||||||||||
Owned | ||||||||||||
Floor Area | or Leased | |||||||||||
(Approximate | by Fresenius | Lease | ||||||||||
Location | Square Meters) | Medical Care | Expiration | Use | ||||||||
Bad Homburg (OE) | 10,304 | leased | December 2016 | Manufacture of hemodialysis concentrate solutions/ Technical Services/ Logistics services Amgen | ||||||||
Darmstadt | 21,597 | leased | November 2010 | Regional Distribution Center Central Europe | ||||||||
Gernsheim, Germany | 32,307 | leased | December 2009 | Regional Distribution A4/WE/AP/LA | ||||||||
Palazzo Pignano, Italy | 19,990 | owned | Manufacture of bloodlines and tubing | |||||||||
L’Arbresle, France | 13,524 | owned | Manufacture of polysulfone dialyzers, special filters and dry hemodialysis concentrates | |||||||||
Nottinghamshire, UK | 5,110 | owned | Manufacture of hemodialysis concentrate solutions | |||||||||
Vrsac, Serbia | 2,642 | owned | Production area, Laboratory, lobby, maintenance, administration, logistics | |||||||||
Barcelona, Spain | 2,000 | owned | Manufacture of hemodialysis concentrate solutions | |||||||||
Antalya, Turkey | 8,676 | leased | December 2022 | Manufacture of bloodlines | ||||||||
Casablanca, Morocco | 2,823 | owned | Manufacture of hemodialysis concentrate solutions | |||||||||
Guadalajara, México | 26,984 | owned | Manufacture of peritoneal dialysis bags | |||||||||
Buenos Aires, Argentina | 10,500 | owned | Manufacture of hemodialysis concentrate solutions, dry hemodialysis concentrates, bloodlines and desinfectants | |||||||||
São Paulo, Brazil | 8,566 | owned | Manufacture of hemodialysis concentrate solutions, dry hemodialysis concentrates, peritoneal dialysis bags, intravenous solutions bags, peritoneal dialysis and blood lines sets | |||||||||
Bogotá, Colombia | 11,825 | owned | Manufacture of hemodialysis concentrate solutions, peritoneal dialysis bags, intravenous solutions, administration | |||||||||
Valencia, Venezuela | 3,562 | leased | May 2008 | Head Office and Warehouse | ||||||||
Hong Kong | 3,588 | leased | November 2007 — November 2009 | various leases of Warehouse facility | ||||||||
Smithfield, Australia | 5,350 | owned | Manufacture of hemodialysis concentrate | |||||||||
Altona VIC, Australia | 2,400 | leased | May 2009 | Warehouse | ||||||||
Yongin, South Korea | 2,645 | leased | December 2009 | Warehouse | ||||||||
Seoul, South Korea | 1,925 | leased | January 2012 | Administration | ||||||||
Oita, Japan (Inukai Plant) | 30,647 | owned | Manufacture of polysulfone filters | |||||||||
Oita, Japan | 7,925 | owned | Warehouse and Building | |||||||||
Fukuoka, Japan (Buzen Plant) | 37,092 | owned | Manufacture of peritoneal dialysis bags | |||||||||
Saga, Japan | 4,972 | leased | March 2010 | Warehouse | ||||||||
Waltham, Massachusetts | 19,045 | leased | April 2017 — July 2017 with a 10 year renewal and a second 5 year renewal option | Corporate headquarters and administration — North America | ||||||||
Lexington, Massachusetts | 1,883 | leased | December 2007 | Corporate/FMS administration — North America | ||||||||
Lexington, Massachusetts | 6,425 | leased | October 2012 with 5 year renewal option | IT headquarters and administration — North America | ||||||||
Nashville, Tennessee | 3,053 | leased | April 2009 | IT administration |
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Currently | ||||||||||||
Owned | ||||||||||||
Floor Area | or Leased | |||||||||||
(Approximate | by Fresenius | Lease | ||||||||||
Location | Square Meters) | Medical Care | Expiration | Use | ||||||||
Walnut Creek, California | 9,522 | leased | June 2012 with 5-year renewal option | Manufacture of Hemodialysis machines and peritoneal dialysis cyclers; research and development; warehouse space | ||||||||
Ogden, Utah | 63,639 | owned | Manufacture polysulfone membranes and dialyzers and peritoneal dialysis solutions; research and development | |||||||||
Ogden, Utah | 13,008 | leased | December 2010 | Warehouse | ||||||||
Ogden, Utah | 2,072 | leased | December 2007 | Warehouse | ||||||||
Oregon, Ohio | 13,934 | leased | April 2019 | Manufacture of liquid hemodialysis concentrate solutions | ||||||||
Perrysburg, Ohio | 3,252 | leased | August 2008 | Manufacture of dry hemodialysis concentrates | ||||||||
Livingston, California | 3,716 | leased | October 2011 with a 5-year renewal option | Manufacture and distribution of liquid hemodialysis concentrates and resupply | ||||||||
Freemont, California | 6,645 | leased | August 2007 with 2-year renewal option | Clinical laboratory testing — 3 Buildings | ||||||||
Rockleigh, New Jersey | 9,727 | leased | May 2012 | Clinical laboratory testing | ||||||||
Irving, Texas | 6,506 | leased | December 2010 | Manufacture of liquid hemodialysis solution | ||||||||
Reynosa, Mexico | 13,936 | leased | June 2013 | Manufacture of bloodlines | ||||||||
Reynosa, Mexico | 4,645 | owned | Warehouse | |||||||||
Redmond, Washington | 1,944 | leased | December 2008 | Manufacture of Prosorba Columns | ||||||||
Province of Quebec, Canada | 1,914 | leased | April 2012 | Plant Building #1 — Manufacture of dry and liquid concentrates |
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Accrued Special Charge for Legal Matters |
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Age as of | ||||
December 31, | ||||
Name | 2006 | |||
Dr. Ulf M. Schneider, Chairman | 41 | |||
Dr. Dieter Schenk, Deputy Chairman | 54 | |||
Dr. Gerd Krick(1) | 68 | |||
Walter L. Weisman(1)(2) | 71 | |||
John Gerhard Kringel(1)(2) | 67 | |||
William P. Johnston(1)(2)(since August 30, 2006) | 62 | |||
Prof. Dr. Bernd Fahrholz(1)(until August 30, 2006) | 59 |
(1) | Members of the Audit Committee | |
(2) | Independent director for purposes of our pooling agreement |
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Age as of | Year | |||||||||
Dec 31, | Term | |||||||||
Name | 2006 | Position | Expires | |||||||
Dr. Ben J. Lipps | 66 | Chairman of the Management Board, Chief Executive Officer of FMC-AG & Co. KGaA | 2008 | |||||||
Roberto Fusté | 54 | Chief Executive Officer for Asia Pacific | 2011 | |||||||
Dr. Emanuele Gatti | 51 | Chief Executive Officer for Europe, Middle East, Africa and Latin America | 2010 | |||||||
Lawrence Rosen | 49 | Chief Financial Officer | 2011 | |||||||
Dr. Rainer Runte | 47 | General Counsel and Chief Compliance Officer | 2010 | |||||||
Rice Powell | 51 | Co-Chief Executive Officer, Fresenius Medical Care North America and President Products & Hospital Group | 2011 | |||||||
Mats Wahlstrom | 52 | Co-Chief Executive Officer, Fresenius Medical Care North America and President Fresenius Medical Services North America | 2011 |
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• | non-performance-related compensation (basic salary) | |
• | performance-related compensation (variable bonus) | |
• | long-term incentive elements (stock options, convertible bonds) |
Performance | Cash Compensation | |||||||||||||||
Non-Performance | Related | (without long-term | ||||||||||||||
Related Compensation | Compensation | incentive components) | ||||||||||||||
Salary(1), (2) | Other(3) | Bonus(1), (2) | ||||||||||||||
($000’S) | ($000’S) | ($000’S) | ($000’S) | |||||||||||||
Dr. Ben Lipps | 1,050 | 189 | 2,043 | 3,282 | ||||||||||||
Roberto Fusté | 370 | 221 | 421 | 1,012 | ||||||||||||
Dr. Emanuele Gatti | 584 | 48 | 1,177 | 1,809 | ||||||||||||
Rice Powell | 700 | 20 | 1,267 | 1,987 | ||||||||||||
Lawrence A. Rosen | 424 | 105 | 935 | 1,464 | ||||||||||||
Dr. Rainer Runte | 414 | 39 | 760 | 1,213 | ||||||||||||
Mats Wahlstrom | 800 | 17 | 1,448 | 2,265 | ||||||||||||
Total: | 4,342 | 639 | 8,051 | 13,032 |
(1) | Up to February 9, 2006 payment by Fresenius Medical Care AG. |
(2) | From February 9, 2006 payment by Fresenius Medical Care Management AG as general partner in Fresenius Medical Care AG & Co. KGaA. |
(3) | Includes, insurance premiums, private use of company cars, contributions to pension and health insurance and other. |
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Components with | ||||||||||||
Long-term Incentive Effect | ||||||||||||
Share-price | ||||||||||||
Related | ||||||||||||
Stock Options | Compensation | |||||||||||
Value | Value | |||||||||||
Number | ($000’s) | ($000’s) | ||||||||||
Dr. Ben Lipps | 99,600 | 1,237 | 993 | |||||||||
Roberto Fusté | 49,800 | 619 | 0 | |||||||||
Dr. Emanuele Gatti | 49,800 | 619 | 360 | |||||||||
Rice Powell | 49,800 | 619 | 568 | |||||||||
Lawrence A. Rosen | 49,800 | 619 | 401 | |||||||||
Dr. Rainer Runte | 49,800 | 619 | 392 | |||||||||
Mats Wahlstrom | 49,800 | 619 | 648 | |||||||||
Total: | 398,400 | 4,951 | 3,362 |
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Cash Compensation | Expenses 2006 for | Compensation (including | ||||||||||
(without long-term | Long-term Incentive | Long-term Incentive | ||||||||||
incentive components) | Components | Components) Total | ||||||||||
Dr. Ben Lipps | 3,282 | 483 | 3,765 | |||||||||
Roberto Fusté | 1,012 | 265 | 1,277 | |||||||||
Dr. Emanuele Gatti | 1,809 | 265 | 2,074 | |||||||||
Rice Powell | 1,987 | 224 | 2,211 | |||||||||
Lawrence A. Rosen | 1,464 | 246 | 1,710 | |||||||||
Dr. Rainer Runte | 1,213 | 264 | 1,477 | |||||||||
Mats Wahlstrom | 2,265 | 278 | 2,543 | |||||||||
Total: | 13,032 | 2,025 | 15,057 |
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• | the term “we (or us) and our affiliates” refersonlyto Fresenius Medical Care AG & Co. KGaA and its subsidiaries; and | |
• | the term “Fresenius SE and its affiliates” refersonlyto Fresenius SE and affiliates of Fresenius SEother thanFresenius Medical Care AG & Co. KGaA and its subsidiaries. |
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• | to use the “Fresenius Medical Care” mark in the then current National Medical Care non-renal business if it is used as part of “Fresenius Medical Care” together with one or more descriptive words, such as “Fresenius Medical Care Home Care” or “Fresenius Medical Care Diagnostics”; | |
• | to use the “F” logo mark in the National Medical Care non-renal business, with the consent of Fresenius SE. That consent will not be unreasonably withheld if the mark using the logo includes one or more additional descriptive words or symbols; and | |
• | to use “Fresenius Medical Care” as a trade name in both the renal business and the National Medical Care non-renal business. |
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• | a 5-year $1,000,000,000 revolving credit facility (of which up to $250,000,000 is available for letters of credit, up to $300,000,000 is available for borrowings in certain non-U.S. currencies, up to $150,000,000 is available as swing line loans in U.S. dollars, up to $250,000,000 is available as a competitive loan facility and up to$50,000,000 is available as swing line loans in certain non-U.S. currencies, the total of which cannot exceed $1,000,000,000) which will be due and payable on March 31, 2011; | |
• | a 5-year term loan facility (“Term Loan A”) of $1,850,000,000, also scheduled to mature on March 31, 2011. Until July 2, 2007, the 2006 Credit Agreement required 19 quarterly payments on Term Loan A of $30,000,000 each that permanently reduce the term loan facility which began June 30, 2006 and continue through December 31, 2010. The remaining amount outstanding is due on March 31, 2011; and | |
• | a 7-year term loan facility (“Term Loan B”) of $1,750,000,000 scheduled to mature on March 31, 2013. Until July 2, 2007, the terms of the 2006 Credit Agreement required 28 quarterly payments on Term Loan B that permanently reduce the term loan facility. The repayment began June 30, 2006. The first 24 quarterly payments will be equal to one quarter of one percent (0.25%) of the original principal balance outstanding, payments 25 through 28 will be equal to twenty-three and one half percent (23.5%) of the original principal balance outstanding with the final payment due on March 31, 2013, subject to an early repayment requirement on March 1, 2011 if the Trust Preferred Securities due June 15, 2011 are not repaid or refinanced or their maturity is not extended prior to that date. |
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• | are general unsecured, senior obligations of the Issuer; | |
• | are being offered in an aggregate principal amount of $500 million; | |
• | mature on July 15, 2017; | |
• | will be issued in denominations of $75,000 and integral multiples of $1,000 in excess thereof; | |
• | will be represented by one or more registered Notes in global form, but in certain circumstances may be represented by registered Notes in definitive form. See “Book-Entry, Delivery, and Form”; | |
• | rank equally in right of payment to any existing and future senior Indebtedness of the Issuer; and | |
• | will be repaid at par in U.S. dollars at maturity and not be subject to any sinking fund provision. |
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• | accrue at the rate of 67/8% per annum; | |
• | in the case of New Notes accrue from July 2, 2007; | |
• | be payable in cash semi-annually in arrears on January 15 and July 15 and, commencing on January 15, 2008 with respect to New Notes; | |
• | be payable to the holders of record on January 1 and July 1, as the case may be, immediately preceding the related interest payment dates; and | |
• | be computed on the basis of a 360-day year comprised of twelve 30-day months. |
• | rankpari passu in right of payment with all other Indebtedness of the Issuer and the Guarantors, as applicable, that is not by its terms expressly subordinated to other Indebtedness of the Issuer and the Guarantors, as applicable; | |
• | rank senior in right of payment to all Indebtedness of the Issuer and the Guarantors, as applicable, that is, by its terms, expressly subordinated to the senior Indebtedness of the Issuer and the Guarantors, as applicable; and | |
• | be effectively subordinated to the Secured Indebtedness of the Issuer and the Guarantors, as applicable, to the extent of the value of the collateral securing such Indebtedness, and to the Indebtedness of the Subsidiaries that are not Guarantors of the Notes. |
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• | as determined by the calculation agent (which shall initially be the Trustee), the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed not including any portion of such payment of interest accrued on the date of redemption, from the redemption date to |
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the maturity date, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points; over | ||
• | 100% of the principal amount of the Notes being redeemed. |
(a) | a change in or an amendment to the laws (including any regulations promulgated under such laws) of (1) the United States, Germany, Luxembourg, the United Kingdom or any political subdivision or governmental authority thereof or therein having the power to tax, (2) any jurisdiction from or through which payment on the Notes is made, or any political subdivision or governmental authority thereof or therein having the power to tax or (3) any other jurisdiction in which the payor is organized or otherwise considered to be a resident for tax purposes, or any political subdivision or governmental authority thereof or therein having the power to tax; or |
(b) | any change in or amendment to any official position regarding the application, administration or interpretation of such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction); |
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(1) | that a Change of Control Triggering Event has occurred and that such holder has the right to require the Issuer to purchase such holder’s Notes, at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest on the relevant interest payment date); | |
(2) | the circumstances and relevant facts regarding such Change of Control Triggering Event (including information with respect to pro forma historical income, cash flow and capitalization after giving effect to such Change of Control Triggering Event); | |
(3) | the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); | |
(4) | that each Note will be subject to repurchase only in the amount of $75,000 or integral multiples of $1,000 in excess thereof; and | |
(5) | the instructions determined by the Issuer, consistent with the covenant described hereunder, that a holder must follow in order to have its Notes purchased. |
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(a) | The Issuer and the Company shall not, and shall not permit any of their Subsidiaries to, Incur, directly or indirectly, any Indebtedness;provided, however, that the Company and any Subsidiary may Incur Indebtedness (and the Company and any Subsidiary may Incur Acquired Indebtedness) if on the date thereof: |
(1) | the Consolidated Coverage Ratio of the Company is at least 2.0 to 1.0; and | |
(2) | no Default or Event of Default will have occurred and be continuing or would occur as a consequence of Incurring the Indebtedness. |
(b) | The foregoing limitations contained in paragraph (a) do not apply to the Incurrence of any of the following Indebtedness: |
(1) | Indebtedness Incurred under the Revolving Credit Facility in an aggregate amount not to exceed $1.0 billion; | |
(2) | Indebtedness in respect of Receivables Financings in an aggregate principal amount which, together with all other Indebtedness in respect of Receivables Financings outstanding on the date of such Incurrence (other than Indebtedness permitted by paragraph (a) or clause (3) of this paragraph (b)), does not exceed 85% of the sum of (1) the total amount of accounts receivables shown on the Company’s most recent consolidated quarterly balance sheet, plus (2) without duplication, the total amount of accounts receivable already subject to a Receivables Financing; | |
(3) | Indebtedness of the Company owed to and held by another Guarantor, Indebtedness of a Wholly Owned Subsidiary owed to and held by another Wholly Owned Subsidiary or Indebtedness of a Wholly Owned Subsidiary owing to and held by the Company;provided, however, that any subsequent issuance or transfer of any Capital Stock that results in any such Indebtedness being held by a Person other than the Company or another Wholly Owned Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or another Wholly Owned Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the Company or the Subsidiary, as the case may be; | |
(4) | Indebtedness in respect of the Notes issued on the Issue Date, and the related Note Guarantees by the Company and the other Guarantors; | |
(5) | Capital Lease Obligations and Indebtedness Incurred, in each case, to provide all or a portion of the purchase price or cost of construction of an asset or, in the case of a Sale and Leaseback Transaction, to finance the value of such asset owned by the Company or a Subsidiary; | |
(6) | Indebtedness outstanding on the Issue Date after giving effect to the application of proceeds from the Notes; | |
(7) | Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (4) or (6) of this paragraph (b); | |
(8) | Hedging Obligations entered into in the ordinary course of the business and not for speculative purposes as determined in good faith by the Company; |
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(9) | customer deposits and advance payments received from customers for goods purchased in the ordinary course of business; |
(10) | Indebtedness arising under the Cash Management Arrangements; and | |
(11) | Indebtedness Incurred by the Company or a Subsidiary in an aggregate principal amount which, together with all other Indebtedness of the Company and its Subsidiaries outstanding on the date of such Incurrence (other than Indebtedness permitted by paragraph (a) or clauses (1) through (10) of this paragraph (b)), does not exceed $900 million. |
(c) | For purposes of determining compliance with the foregoing covenant: |
(1) | in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify and from time to time may reclassify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of the above clauses, provided that any Indebtedness outstanding on the Issue Date and Indebtedness Incurred under clause (b)(5) above may not be reclassified to clause (a) above, and | |
(2) | an item of Indebtedness may be divided and classified, or reclassified, in more than one of the types of Indebtedness described above, provided that any Indebtedness outstanding on the Issue Date and Indebtedness Incurred under clause (b)(5) above may not be reclassified to clause (a) above. |
(d) | If during any period the Notes have achieved and continue to maintain Investment Grade Status and no Event of Default has occurred and is continuing (such period is referred to herein as an “Investment Grade Status Period”), then upon notice by the Company to the Trustee by the delivery of an Officers’ Certificate that it has achieved Investment Grade Status, this covenant will be suspended and will not during such period be applicable to the Company and its Subsidiaries and shall only be applicable if such Investment Grade Status Period ends. |
(1) | the Surviving Person is an entity organized and existing under the laws of Germany, the United Kingdom, any other member state of the European Union (as of December 31, 2003), Luxembourg, Switzerland, the United States of America, or any State thereof or the District of Columbia, or the jurisdiction of formation of the Issuer or any Guarantor; or, if the Surviving Person is an entity |
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organized and existing under the laws of any other jurisdiction, the Issuer delivers to the Trustee an Opinion of Counsel to the effect that the rights of the holders of the Notes, would not be affected adversely as a result of the law of the jurisdiction of organization of the Surviving Person, insofar as such law affects the ability of the Surviving Person to pay and perform its obligations and undertakings in connection with its Note Guarantee or the ability of the Surviving Person to obligate itself to pay and perform such obligations and undertakings or the ability of the holders to enforce such obligations and undertakings; | ||
(2) | the Surviving Person (if other than the Issuer or a Guarantor) shall expressly assume, (A) in a transaction or series of transactions involving the Issuer, by a supplemental indenture in a form satisfactory to the Trustee, all of the obligations of the Issuer under the Indenture, or (B) in a transaction or series of transactions not involving the Issuer, by a Guarantee Agreement, in a form satisfactory to the Trustee, all of the obligations of such Guarantor under its Note Guarantee; | |
(3) | at the time of and immediately after such transaction, no Default or Event of Default shall have occurred and be continuing, and | |
(4) | the Issuer or such Guarantor delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, transfer, assignment, sale, lease or other disposition and such supplemental indenture and Guarantee Agreement, if any, comply with the Indenture. |
(1) | the Issuer or such Guarantor or Subsidiary, as the case may be, receives consideration at the time of such Sale and Leaseback Transaction at least equal to the fair market value (as evidenced by an Officers’ Certificate of a Responsible Officer, or, if the value exceeds $25 million, a resolution of the Board of Directors of the Issuer or such Guarantor or Subsidiary), of the property subject to such transaction; | |
(2) | the Issuer or such Guarantor or Subsidiary, as the case may be, could have created a Lien on the property subject to such Sale and Leaseback Transaction if such transaction was financed with Indebtedness without securing the Notes by the covenant described under “— Limitation on Liens”; and | |
(3) | the Issuer or such Guarantor or Subsidiary, as the case may be, can Incur an amount of Indebtedness equal to the Attributable Debt in respect of such Sale and Leaseback Transaction. |
(1) | its annual financial statements and related notes thereto for the most recent two fiscal years prepared in accordance with U.S. GAAP (or IFRS or any other internationally generally acceptable accounting standard in the event the Company is required by applicable law to prepare its financial statements in accordance with IFRS or such other standard or is permitted and elects to do so, with appropriate reconciliation to U.S. GAAP, unless not then required under the rules of the SEC) and including segment data, together with an audit report thereon, together with a discussion of the “Operating Results” and “Liquidity” for such fiscal years prepared in a manner substantially consistent with the “Operating and Financial Review and Prospects” required by Form 20-F under the Exchange Act (or any replacement or successor form) appearing herein and a “Business Summary of the Financial Year” and discussion of “Business Segments” provided in a manner consistent with its annual report, a description of “Related Party Transaction”, and a description of Indebtedness, within 90 days of the end of each fiscal year; and | |
(2) | quarterly financial information as of and for the period from the beginning of each year to the close of each quarterly period (other than the fourth quarter), together with comparable information for the corresponding period of the preceding year, and a summary “Management’s Discussion and Analysis |
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of Financial Condition and Results of Operations” to the extent and in the form required under the Exchange Act providing a brief discussion of the results of operations for the period within 45 days following the end of the fiscal quarter. |
(1) | failure for 30 days to pay interest on the Notes, including any Additional Amounts in respect thereof, when due; or | |
(2) | failure to pay principal of or premium, if any, on the Notes when due, whether at maturity, upon redemption, by declaration or otherwise; or | |
(3) | failure to observe or perform any other covenant contained in the Indenture for 60 days after notice as provided in the Indenture; or | |
(4) | default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by us or any of our Subsidiaries (or the payment of which is Guaranteed by us), whether such Indebtedness or Guarantee now exists or is Incurred after the Issue Date, if (A) such default results in the acceleration of such Indebtedness prior to its express maturity or will constitute a default in the payment of such Indebtedness and (B) the principal amount of any such Indebtedness that has been accelerated or not paid at maturity, when added to the aggregate principal amount of all other such Indebtedness, at such time, that has been accelerated or not paid at maturity, exceeds $100 million; or | |
(5) | any final judgment or judgments (not covered by insurance) which can no longer be appealed for the payment of money in excess of $100 million shall be rendered against the Issuer or the Company or any of its Subsidiaries and shall not be discharged for any period of 60 consecutive days during which a stay of enforcement shall not be in effect; or | |
(6) | any Note Guarantee shall cease to be in full force and effect in accordance with its terms for any reason except pursuant to the terms of the Indenture governing the release of Note Guarantees or the satisfaction in full of all the obligations thereunder or shall be declared invalid or unenforceable other than as contemplated by its terms, or any Guarantor shall repudiate, deny or disaffirm any of its obligations thereunder; or | |
(7) | certain events in bankruptcy, insolvency or reorganization of the Company, the Guarantors, the Issuer or any of the Company’s Significant Subsidiaries. |
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(1) | reduce the percentage of principal amount of Notes whose holders must consent to an amendment; | |
(2) | reduce the stated rate of or extend the stated time for payment of interest on any Note; | |
(3) | reduce the principal of or extend the Stated Maturity of any Note; | |
(4) | reduce the premium payable upon the redemption of any such Note or change the time at which any Note may be redeemed as described above under “Optional Redemption”; | |
(5) | reduce the premium payable upon the repurchase of any Note, change the time at which any Note may be repurchased, or change any of the associated definitions related to the provisions of “Change of Control” once the obligation to repurchase the Notes has arisen; |
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(6) | make any Note payable in money other than that stated in the Note; | |
(7) | impair the right of any holder to receive payment of premium, if any, principal of and interest on such holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes; | |
(8) | make any change in the amendment provisions which require each holder’s consent or in the waiver provisions; or | |
(9) | release the Company from its Note Guarantee. |
(1) | cure any ambiguity, omission, defect or inconsistency; | |
(2) | provide for the assumption by an entity of the obligations of the Issuer under the Indenture or of a Guarantor (other than the Company) under the Note Guarantees; | |
(3) | provide for uncertificated Notes in addition to or in place of certificated Notes; | |
(4) | add Note Guarantees with respect to the Notes; | |
(5) | secure the Notes; | |
(6) | add to the covenants of the Issuer and the Guarantors for the benefit of the holders or surrender any right or power conferred upon the Issuer; | |
(7) | evidence and provide the acceptance and appointment of a successor trustee; | |
(8) | comply with the rules of any applicable securities depositary; | |
(9) | issue Additional Notes in accordance with the Indenture; or | |
(10) | make any change that does not adversely affect the rights of any holder. |
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(a) | an Opinion of Counsel (subject to customary exceptions and exclusions) to the effect that holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. In the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable U.S. Federal income tax law; and |
(b) | an Opinion of Counsel in the Federal Republic of Germany (subject to customary exceptions and exclusions) to the effect that holders of the Notes will not recognize income, gain or loss for income tax purposes of the Federal Republic of Germany as a result of such deposit and defeasance and will be subject to income tax in the Federal Republic of Germany on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. |
(c) | an Opinion of Counsel in Luxembourg (or the jurisdiction of organization of any successor to the Issuer, subject to customary exceptions and exclusions) to the effect that holders of the Notes will not recognize income, gain or loss for income tax purposes of Luxembourg as a result of such deposit and defeasance and will be subject to income tax in Luxembourg on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. |
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• | file a registration statement providing for the exchange offer with the SEC on or prior to the 180th day after the date that the Restricted Notes were first issued; | |
• | use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act no later than the 240th day after the date the Restricted Notes were first issued; and | |
• | use our reasonable best efforts to consummate the exchange offer no later than the 280th day after the date the restricted notes were first offered. |
“Accounting Principles”means U.S. GAAP, or, upon adoption thereof by the Company and notice to the Trustee, IFRS or any other accounting standards which are generally acceptable in the jurisdiction of organization of the Company, approved by the relevant regulatory or other accounting bodies in that jurisdiction and internationally generally acceptable and, in the case of IFRS or such other accounting standards, as in effect from time to time. | |
“Acquired Indebtedness”means Indebtedness of a Person existing at the time such Person becomes a Subsidiary or is merged into or consolidated with any other Person or that is assumed in connection with the acquisition of assets from such Person and, in each case, not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary or such merger, consolidation or acquisition. | |
“A/ R Facility”means the accounts receivable facility established pursuant to the Third Amended and Restated Transfer and Administration Agreement dated as of October 23, 2003 by and among Paradigm Funding LLC, other conduit investors named therein, NMC Funding Corporation, as transferor, National Medical Care, Inc., as collection agent, the financial institutions names therein, and WestLB AG, New York Branch, as an administrative agent and the agent (as amended, modified, renewed, refunded, replaced, restated or refinanced from time to time). |
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“Affiliate”of any specified Person means: |
(1) | any other Person, directly or indirectly, controlling or controlled by, or | |
(2) | under direct or indirect common control with such specified Person, |
For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. |
“Asset Disposition”means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Wholly Owned Subsidiary of the Company, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of: |
(1) | any shares of Capital Stock of any Subsidiary (other than directors qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Subsidiary), | |
(2) | all or substantially all the assets of any division or line of business of the Company or any Subsidiary, or | |
(3) | any other assets of the Company or any Subsidiary outside of the ordinary course of business of the Company or such Subsidiary, |
other than, in the case of (1), (2) and (3) above, |
(A) | a disposition of assets or issuance of Capital Stock by a Subsidiary to the Company or by the Company or a Subsidiary to a Wholly Owned Subsidiary, | |
(B) | transactions permitted under “Certain Covenants — Limitation on Mergers and Sales of Assets”, and | |
(C) | dispositions in connection with Permitted Liens, foreclosures on assets and any release of claims which have been written down or written off. |
“Attributable Debt”means, in respect of any Sale and Leaseback Transaction, as of the time of determination, the total obligation (discounted to present value at the rate per annum equal to the discount rate which would be applicable to a Capital Lease Obligation with the like term in accordance with Accounting Principles) of the lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, water rates and other items which do not constitute payments for property rights) during the remaining portion of the initial term of the lease included in such Sale and Leaseback Transaction. | |
“Average Life”means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing: |
(1) | the sum of the products of numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by | |
(2) | the sum of all such payments. |
“Board of Directors”means, with respect to the Issuer or any Guarantor, as the case may be, the Board of Directors (or other body performing functions similar to any of those performed by a Board of Directors including those performed, in the case of a German stock corporation, by the management board, or in the case of a KGaA, by the General Partner) of such Person or any committee thereof duly authorized to act on behalf of such Board (or other body). |
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“Business Day”means any day other than: |
(1) | a Saturday or Sunday, | |
(2) | a day on which banking institutions in New York City, Frankfurt am Main or the jurisdiction of organization of the Issuer are authorized or required by law or executive order to remain closed, or | |
(3) | a day on which the corporate trust office of the Trustee is closed for business. |
“Capital Lease Obligations”means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with Accounting Principles, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with Accounting Principles; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. | |
“Capital Stock”of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. | |
“Cash Management Arrangements”means the cash management arrangements of the Company and its Affiliates (including any Indebtedness arising thereunder) which arrangements are in the ordinary course of business consistent with past practice. | |
“Change of Control”means the occurrence of one or more of the following events: |
(1) | so long as the Company is organized as a KGaA, if the General Partner of the Company charged with management of the Company shall at any time fail to be a Subsidiary of Fresenius AG, or if Fresenius AG shall fail at any time to own and control more than 25% of the capital stock with ordinary voting power in the Company; | |
(2) | if the Company is no longer organized as a KGaA, any event the result of which is that (A) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and13d-5 under the Exchange Act, except that such Person or group shall be deemed to have “beneficial ownership” of all shares that any such Person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company and (B) the Permitted Holders do not “beneficially own” (as defined in Rules 13d-3 and13d-5 of the Exchange Act), directly or indirectly, in the aggregate a greater percentage of the total voting power of the Voting Stock of the Company; | |
(3) | any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any Affiliates thereof (whether or not otherwise in compliance with the provisions of the Indenture). |
“Change of Control Triggering Event”means the occurrence of a Change of Control and a Ratings Decline. | |
“Consolidated Coverage Ratio”of any Person as of any date of determination means the ratio of (x) the aggregate amount of EBITDA for such Person’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such determination to (y) Consolidated Interest Expense for such four fiscal quarters;provided, however,that: |
(1) | if such Person or any of its Subsidiaries has Incurred or repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness under any revolving credit facility unless such Indebtedness has been permanently repaid and any related commitment has been |
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terminated) any Indebtedness since the beginning of such period that remains outstanding or discharged or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence or discharge of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred or discharged on the first day of such period and the Incurrence or discharge of any other Indebtedness as if such Incurrence or discharge had occurred on the first day of such period, | ||
(2) | if since the beginning of such period such Person or any of its Subsidiaries shall have made any Asset Disposition, the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to the EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of such Person or any of its Subsidiaries repaid, repurchased, defeased or otherwise discharged with respect to such Person and its continuing Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Subsidiary is sold, the Consolidated Interest Expense for such period of credit and directly attributable to the Indebtedness of such Subsidiary to the extent such Person and its continuing Subsidiaries are no longer liable for such Indebtedness after such Asset Disposition), | |
(3) | if since the beginning of such period such Person or any of its Subsidiaries (by merger or otherwise) shall have made an Investment in any Subsidiary (or any Person which becomes a Subsidiary) or an acquisition of assets, which constitutes all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period, and | |
(4) | if since the beginning of such period any Person (that subsequently became a Subsidiary or was merged with or into such Person or any of its Subsidiaries since the beginning of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (2) or (3) above if made by such Person or a Subsidiary of such Person during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition occurred on the first day of such period. |
For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in good faith by a responsible financial or accounting officer of the Company, as applicable. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest of such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). |
“Consolidated Interest Expense”means, with respect to any Person for any period, the total interest expense of such Person and its consolidated Subsidiaries, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component (if any) under any Receivables Financing, in each case on a consolidated basis determined in accordance with Accounting Principles. | |
“Consolidated Net Income”means, with respect to any Person for any period, the net income of such Person and its consolidated Subsidiaries, determined on a consolidated basis in accordance with Accounting Principles;provided that extraordinary gains and losses shall be excluded from Consolidated Net Income. | |
“Consolidated Net Tangible Assets”means, as of any date of determination, the total amount of all assets of the Company and its Subsidiaries, determined on a consolidated basis in accordance with |
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Accounting Principles, as of the end of the most recent fiscal quarter for which the Company’s financial statements are available, less the sum of: |
(1) | the Company’s consolidated current liabilities as of such quarter end, determined on a consolidated basis in accordance with Accounting Principles; and | |
(2) | the Company’s consolidated assets that are properly classified as intangible assets as of such quarter end, determined on a consolidated basis in accordance with Accounting Principles. |
“Credit Facility”means (i) the bank credit agreement entered into as of March 31, 2006 among the Company, Fresenius Medical Care Holdings, Inc., the other borrowers identified therein, the guarantors identified therein, the lenders party thereto and Bank of America, N.A., as administrative agent, as amended, modified, renewed, refunded, replaced, restated or refinanced from time to time (the “Revolving Credit Facility”) and (ii) the term loan credit agreement entered into as of March 31, 2006 among the Company, Fresenius Medical Care Holdings, Inc., the other borrowers identified therein, the guarantors identified therein, the lenders party thereto and Bank of America, N.A., as administrative agent, as amended, modified, renewed, refunded, replaced, restated or refinanced from time to time. | |
“Currency Agreement”means any foreign currency exchange contract, currency swap agreement or other similar agreement or arrangement. | |
“Default”means any event that is, or after notice or passage of time or both would be, an Event of Default (as defined herein). | |
“Designated Government Obligations”means direct non-callable and non-redeemable obligations (in each case, with respect to the issuer thereof) of any member state of the European Union that is a member of the European Union as of the Issue Date or of the United States of America (including, in each case, any agency or instrumentality thereof), as the case may be, the payment of which is secured by the full faith and credit of the applicable member state or of the United States of America, as the case may be. | |
“Disqualified Stock”means, with respect to any Person, any Capital Stock that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event: |
(1) | matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, | |
(2) | is convertible or exchangeable for Indebtedness or Disqualified Stock; or | |
(3) | is redeemable at the option of the holder thereof, in whole or in part, |
in each case on or prior to the first anniversary of the Stated Maturity of the Notes;provided, however,that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the first anniversary of the Stated Maturity of the Notes shall not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the provisions described under “— Change of Control”. |
“EBITDA”for any Person for any period means the sum of Consolidated Net Income of such Person, plus Consolidated Interest Expense of such Person plus the following to the extent deducted in calculating such Consolidated Net Income: |
(1) | all income tax expense of such Person and its Subsidiaries, | |
(2) | depreciation expense, and | |
(3) | amortization expense, in each case for such period. |
Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization of, a Subsidiary that is not a Wholly Owned Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net |
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income of such Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to such Person by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Subsidiary or its stockholders. |
“Exchange Act”means the U.S. Securities Exchange Act of 1934, as amended. | |
“General Partner”means Fresenius Medical Care Management AG, a German stock corporation, including its successors and assigns and other Persons, in each case who serve as the general partner (persönlich haftender Gesellschaft) of the Company from time to time. | |
“Guarantee”means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any Person (other than, in the case of Subsidiaries, obligations which would not constitute Indebtedness) and any obligation, direct or indirect, contingent or otherwise, of such Person: |
(1) | to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise), or | |
(2) | entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); |
provided, however,that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. The term “guarantor” shall mean any Person Guaranteeing any obligation. |
“Guarantee Agreement”means, in the context of a consolidation, merger or sale of all or substantially all of the assets of a Guarantor, an agreement by which the Surviving Person from such a transaction expressly assumes all of the obligations of such Guarantor under its Note Guarantee. | |
“Hedging Obligations”of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement. | |
“IFRS” means international financial reporting standards and interpretations issued by the International Accounting Standards Board and adopted by the European Commission, as in effect from time to time. | |
“Incur”means issue, assume, guarantee, incur or otherwise become liable for;provided, however,that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. The accretion of principal of a non-interest bearing or other discount security shall be deemed the Incurrence of Indebtedness. | |
“Indebtedness”means, with respect to any Person on any date of determination (without duplication): |
(1) | the principal of and premium (if any) in respect of (A) Indebtedness of such Person for money borrowed and (B) Indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, | |
(2) | all Capital Lease Obligations of such Person, | |
(3) | all obligations of such Person issued or assumed as the deferred purchase price of property or services, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (other than (x) customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business, (y) trade debt Incurred in the ordinary course of business and not overdue by 90 days or more and (z) obligations |
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Incurred under a pension, retirement or deferred compensation program or arrangement regulated under the Employee Retirement Income Security Act of 1974, as amended, or the laws of a foreign government), | ||
(4) | all obligations of such Person for the reimbursement of any obligor on any letter of credit, bank guarantee, banker’s acceptance or similar credit transaction (except to the extent such reimbursement obligation relates to trade debt in the ordinary course of business and such reimbursement obligation is paid within 30 days after payment of the trade debt), | |
(5) | the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends), | |
(6) | all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee, | |
(7) | all obligations of the type referred to in clauses (1) through (6) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured, and | |
(8) | to the extent not otherwise included in this definition, Hedging Obligations of such Person. |
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date. For the avoidance of doubt, the following will not be treated as Indebtedness: |
(1) | Indebtedness Incurred in respect of workers’ compensation claims, self insurance obligations, performance, surety and similar bonds and completion guarantees provided in this ordinary course of business; | |
(2) | Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Subsidiary,provided,that the maximum aggregate liability in respect of all such Indebtedness (other than in respect of tax and environmental indemnities) shall at no time exceed, in the case of a disposition, the gross proceeds actually received by the Company and its Subsidiaries in connection with such disposition and, in the case of an acquisition, the fair market value of any business assets or Capital Stock acquired; | |
(3) | Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of the Incurrence. |
“Interest Rate Agreement”means any interest rate swap agreement, interest rate cap agreement or other similar financial agreement or arrangement. | |
“Investment”in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of such Person) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person;provided, however,that advances, loans or other extensions of credit arising under the Cash Management Arrangements shall not be deemed Investments. |
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“Investment Grade”means a rating of BBB- or higher by S&P and Baa3 or higher by Moody’s or the equivalent of such ratings by S&P or Moody’s and the equivalent in respect of Rating Categories of any Rating Agencies substituted for S&P or Moody’s. | |
“Investment Grade Status”exists as of any time if at such time both (i) the rating assigned to the Notes by Moody’s is at least Baa3 (or the equivalent) or higher and (ii) the rating assigned to the Notes by S&P is at least BBB-(or the equivalent) or higher and the equivalent in respect of Rating Categories of any Rating Agencies substituted for S&P or Moody’s. | |
“Issue Date”means the date on which any Notes are issued. | |
“KGaA”means a German partnership limited by shares (Kommanditgesellschaft auf Aktien). | |
“Lien”means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). | |
“Moody’s” means Moody’s Investors Service, Inc. and its successors. | |
“Note Guarantee” means the Guarantee by a Guarantor of the Issuer’s obligations under the Notes. | |
“Officers’ Certificate”means a certificate signed by two Responsible Officers of the Issuer or of any Guarantor. | |
“Opinion of Counsel”means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer, a Guarantor or the Trustee. | |
“Permitted Holders”means Fresenius AG. | |
“Permitted Liens”means, with respect to any Person: |
(1) | pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits or cash or Designated Government Obligations to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import or customs duties or for the payment of rent, in each case Incurred in the ordinary course of business; | |
(2) | Liens imposed by law, including carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith if a reserve or other appropriate provisions, if any, as are required by Accounting Principles have been made in respect thereof; | |
(3) | Liens for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or which are being contested in good faith provided appropriate reserves, if any, as are required by Accounting Principles have been made in respect thereof; | |
(4) | Liens in favor of issuers of surety or performance bonds or letters of credit or bankers’ acceptances issued pursuant to the request of and for the account of such Person in the ordinary course of its business; | |
(5) | encumbrances, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or liens incidental to the conduct of the business of such Person or to the ownership of its properties which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; | |
(6) | Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such Hedging Obligation or Interest Rate Agreement; |
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(7) | leases, subleases and licenses of real property which do not materially interfere with the ordinary conduct of the business of the Company or any of its Subsidiaries and leases, subleases and licenses of other assets in the ordinary course of business; | |
(8) | judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired; | |
(9) | Liens for the purpose of securing the payment (or the refinancing of the payment) of all or a part of the purchase price of, or Capitalized Lease Obligations with respect to, assets or property acquired or constructed in the ordinary course of business;providedthat: |
(a) | the aggregate principal amount secured by such Liens does not exceed the cost of the assets or property so acquired or constructed; and | |
(b) | such Liens are created within 180 days of construction or acquisition of such assets or property (or, upon a refinancing, replace Liens created within such period) and do not encumber any other assets or property of the Company or any Subsidiary other than such assets or property and assets affixed or appurtenant thereto; |
(10) | Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution;providedthat such deposit account is not intended by the Company or any Subsidiary to provide collateral to the depository institution; | |
(11) | Liens arising from United States Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases entered into by the Company and its Subsidiaries in the ordinary course of business; | |
(12) | Liens existing on the Issue Date; | |
(13) | Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary;provided, however,that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming a Subsidiary;provided further, however,that any such Lien may not extend to any other property owned by the Company or any Subsidiary; | |
(14) | Liens on property at the time the Company or a Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Subsidiary;provided, however,that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition;provided further, however,that such Liens may not extend to any other property owned by the Company or any Subsidiary; | |
(15) | Liens securing Indebtedness or other obligations of the Company to a Subsidiary or of a Subsidiary owing to the Company or a Subsidiary; | |
(16) | Liens securing the Notes and all other Indebtedness which by its terms must be secured if the Notes are secured; | |
(17) | Liens securing Indebtedness Incurred to refinance Indebtedness that was previously secured;provided,that such Lien is limited to all or part of the same property or assets that secured the Indebtedness refinanced; | |
(18) | Liens arising by operation of law or by agreement to the same effect in the ordinary course of business; | |
(19) | Liens securing the Credit Facility; | |
(20) | Liens securing the A/ R Facility; and |
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(21) | other Liens securing Indebtedness having an aggregate principal amount, measured as of the date of creation of any such Lien and the date of Incurrence of any such Indebtedness, not to exceed 5% of the Company’s Consolidated Net Tangible Assets. |
“Person”means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency, instrumentality or political subdivision thereof, or any other entity. | |
“Preferred Stock”, as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. | |
“Qualified Capital Stock”means any Capital Stock which is not Disqualified Capital Stock. | |
“Rating Agencies” means: |
(1) | S&P and | |
(2) | Moody’s, or | |
(3) | if S&P or Moody’s or both shall not make a rating of the Notes publicly available, despite the Company using its commercially reasonable efforts to obtain such a rating, a nationally recognized securities rating agency or agencies, as the case may be, selected by the Company, which shall be substituted for S&P or Moody’s or both, as the case may be. |
“Rating Category” means: |
(1) | with respect to S&P, any of the following categories: BB, B, CCC, CC, C and D (or equivalent successor categories), | |
(2) | with respect to Moody’s, any of the following categories: Ba, B, Caa, Ca, C and D (or equivalent successor categories), and | |
(3) | the equivalent of any such category of S&P or Moody’s used by another rating agency. In determining whether the rating of the Notes has decreased by one or more gradations, gradations within rating categories (+ and — for S&P, 1, 2 and 3 for Moody’s; or the equivalent gradations for another rating agency) shall be taken into account (e.g., with respect to S&P, a decline in a rating from BB+ to BB, as well as from BB- to B+, which constitute a decrease of one gradation). |
“Rating Date”means the date which is 90 days prior to the earlier of (1) a Change of Control and (2) public notice of the occurrence of a Change of Control or of the intention by the Company or any Person to effect a Change of Control. | |
“Ratings Decline” means the occurrence on or within 90 days after the date of the first public notice of either the occurrence of a Change of Control or of a transaction which will effect a Change of Control, whichever is earlier (which period shall be extended so long as any Rating Agency has publicly announced that it is considering a possible downgrade of the Notes) of (1) in the event the Notes are rated by either Moody’s or S&P on the Rating Date as Investment Grade, a decrease in the rating of the Notes by both Rating Agencies to a rating that is below Investment Grade, or (2) in the event the Notes are rated below Investment Grade by both Rating Agencies on the Rating Date, a decrease in the rating of the Notes by either Rating Agency by one or more gradations (including gradations within Rating Categories as well as between Rating Categories). | |
“Receivables Financings”means: |
(1) | the A/ R Facility, and | |
(2) | any financing transaction or series of financing transactions that have been or may be entered into by the Company or a Subsidiary pursuant to which the Company or a Subsidiary may sell, |
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convey or otherwise transfer to a Subsidiary or Affiliate, or any other Person, or may grant a security interest in, any receivables or interests therein secured by the merchandise or services financed thereby (whether such receivables are then existing or arising in the future) of the Company or such Subsidiary, as the case may be, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. |
“Refinance”means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings. | |
“Refinancing Indebtedness”means Indebtedness that Refinances any Indebtedness of the Company or any Subsidiary existing on the Issue Date or Incurred in compliance with the Indenture including Indebtedness that Refinances Refinancing Indebtedness;provided, however,that: |
(1) | such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced, | |
(2) | such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced, and | |
(3) | such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding or committed (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced;provided further, however, that Refinancing Indebtedness shall not include (x) Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Subsidiary that Refinances Indebtedness of another Subsidiary. |
“Responsible Officer”means the chief executive officer, president, chief financial officer, senior vice president-finance, treasurer, assistant treasurer, managing director or director of a company (or in the case of the Company, a Responsible Officer of its General Partner, other managing entity or other Person authorized to act on its behalf, and if such Person is also a partnership, limited liability company or similarly organized entity, a Responsible Officer of the entity that may be authorized to act on behalf of such Person). | |
“S&P” means Standard & Poor’s Corporation and its successors. | |
“Sale and Leaseback Transaction”means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Issuer or any Guarantor or a Subsidiary of any property, whether owned by the Issuer, a Guarantor or any Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Issuer, a Guarantor or such Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such property. | |
“SEC”means the U.S. Securities and Exchange Commission. | |
“Secured Indebtedness”means any Indebtedness of the Company secured by a Lien. | |
“Significant Subsidiary,”with respect to any Person, means any Subsidiary of such Person that satisfies the criteria for a “significant subsidiary” set forth in Rule 1.02 of Regulation S-X under the Exchange Act. | |
“Stated Maturity”means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred). |
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“Subordinated Obligation”means any Indebtedness of the Issuer or a Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the Notes or such Guarantor’s Note Guarantee pursuant to a written agreement to that effect. | |
“Subsidiary”means, with respect to any Person, any corporation, limited liability company, association, partnership or other business entity of which more than 50% of the total voting power of shares of Voting Stock is at the time owned or controlled, directly or indirectly, by: |
(1) | such Person; | |
(2) | such Person and one or more Subsidiaries of such Person, or | |
(3) | one or more Subsidiaries of such Person. |
Unless otherwise provided, all references to a Subsidiary shall be a Subsidiary of the Company. | |
“Surviving Person”means, with respect to any Person involved in any merger, consolidation or other business combination or the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of such Person’s assets, the Person formed by or surviving such transaction or the Person to which such disposition is made. | |
“Treasury Rate”means, with respect to a Redemption Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15(519) that has become publicly available at least two Business Days prior to such Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such Redemption Date to July 15, 2017;provided, however, that if the period from the Redemption Date to such date is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to such date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. | |
“U.S. GAAP”means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in: |
(1) | the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, | |
(2) | statements and pronouncements of the Financial Accounting Standards Board, | |
(3) | such other statements by such other entity as approved by a significant segment of the accounting profession, and | |
(4) | the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. |
“Voting Stock”of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof. | |
“Wholly Owned Subsidiary”means a Subsidiary all the Capital Stock of which (other than (i) directors’ qualifying shares and shares held by other Persons to the extent such shares are required by applicable law to be held by a Person other than its parent or a Subsidiary of its parent and (ii) certain classes of Preferred Stock of FMCH) is owned by the Company or by one or more Wholly Owned Subsidiaries, or by the Company and one or more Wholly Owned Subsidiaries. |
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• | upon deposit of each Global Note with DTC’s custodian, DTC will credit portions of the principal amount of the Global Note to the accounts of the DTC participants, and | |
• | ownership of beneficial interests in each Global Note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the Global Note). |
(1) | upon deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the initial purchasers with portions of the principal amount of the Global Notes; and | |
(2) | ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes). |
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(1) | any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or | |
(2) | any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. |
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(1) | DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, the Company fails to appoint a successor depositary, and in each case, a successor depositary is not appointed within 90 days; | |
(2) | the Company, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or | |
(3) | there has occurred and is continuing a Default or Event of Default with respect to the notes. |
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Interest Payments |
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Sale or Redemption of the Notes |
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Tax Consequences of the Exchange Offer |
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Disposition of a Note |
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Information Reporting and Backup Withholding |
Payments of Interest |
(1) theNon-U.S. Holder does not actually or constructively own 10 percent or more of the total combined voting power of all classes of our stock entitled to vote; | |
(2) theNon-U.S. Holder is not a controlled foreign corporation with respect to which we are a related person (within the meaning of section 864(d)(4) of the Code); and | |
(3) either (A) the beneficial owner of the notes certifies to us or our paying agent on IRS Form W-8BEN (or successor form), under penalties of perjury, that it is not a U.S. person and provides its name and address, or (B) the notes are held through certain foreign intermediaries that have entered into a “qualified intermediary” or similar agreement with the IRS and the beneficial owner of the notes satisfies certification requirements of applicable Treasury Regulations. |
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Disposition of Notes |
(i) the application of the Luxembourg law of 21 June 2005 implementing the European Union Savings Directive and providing for the possible application of a withholding tax (15% from 1 July 2005 to 30 June 2008, 20% from 1 July 2008 to 30 June 2011 and 35% from 1 July 2011) on interest paid to certain non-Luxembourg resident investors (individuals and certain types of entities called “residual entities”) in the |
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event the Issuer appoints a paying agent in Luxembourg within the meaning of the above-mentioned directive (see“— EU Savings Directive,”below); and | |
(ii) the application of the Luxembourg law of 23 December 2005 which has introduced a 10% final withholding tax on savings income (i.e. with certain exemptions, savings income within the meaning of the Luxembourg law of 21 June 2005 implementing the European Union Savings Directive) in respect of Luxembourg resident individuals. |
(i) such holder is, or is deemed to be, resident in Luxembourg; or | |
(ii) such income or gain is attributable to an enterprise or part thereof which is carried on through a permanent establishment or a permanent representative in Luxembourg; |
(i) such holder is, or is deemed to be, resident in Luxembourg for the purpose of the relevant provisions; or | |
(ii) such Note is attributable to an enterprise or part thereof which is carried on through a permanent establishment or a permanent representative in Luxembourg; |
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EU Savings Directive |
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Page | ||||||
Fresenius Medical Care AG & Co. KGaA | ||||||
Unaudited Condensed Consolidated Financial Statements | ||||||
Condensed Consolidated Statements of Income for the three months and the nine months ended September 30, 2007 and September 30, 2006 | F-2 | |||||
Condensed Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006 | F-3 | |||||
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2007 and September 30, 2006 | F-4 | |||||
Condensed Consolidated Statement of Shareholders’ Equity for the nine months ended September 30, 2007 and the year ended December 31, 2006 | F-5 | |||||
Notes to Condensed Consolidated Financial Statements | F-6 | |||||
Audited Consolidated Financial Statements | ||||||
Report of Independent Registered Public Accounting Firm | F-24 | |||||
Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004 | F-25 | |||||
Consolidated Balance Sheets as of December 31, 2006 and 2005 | F-26 | |||||
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004 | F-27 | |||||
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2006, 2005 and 2004 | F-28 | |||||
Notes to Consolidated Financial Statements | F-29 |
F-1
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For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||
Net revenue: | |||||||||||||||||
Dialysis Care | $ | 1,800,771 | $ | 1,703,866 | $ | 5,356,669 | $ | 4,628,064 | |||||||||
Dialysis Products | 625,371 | 530,459 | 1,794,357 | 1,518,623 | |||||||||||||
2,426,142 | 2,234,325 | 7,151,026 | 6,146,687 | ||||||||||||||
Costs of revenue: | |||||||||||||||||
Dialysis Care | 1,276,499 | 1,205,567 | 3,808,755 | 3,312,111 | |||||||||||||
Dialysis Products | 311,702 | 277,994 | 882,592 | 776,477 | |||||||||||||
1,588,201 | 1,483,561 | 4,691,347 | 4,088,588 | ||||||||||||||
Gross profit | 837,941 | 750,764 | 2,459,679 | 2,058,099 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 425,590 | 391,403 | 1,263,681 | 1,096,561 | |||||||||||||
Gain on sale of dialysis clinics | — | (1,258 | ) | — | (40,233 | ) | |||||||||||
Research and development | 15,639 | 11,814 | 43,546 | 37,347 | |||||||||||||
Operating income | 396,712 | 348,805 | 1,152,452 | 964,424 | |||||||||||||
Other (income) expense: | |||||||||||||||||
Interest income | (8,705 | ) | (4,497 | ) | (19,048 | ) | (14,844 | ) | |||||||||
Interest expense | 103,538 | 104,071 | 300,367 | 269,914 | |||||||||||||
Income before income taxes and minority interest | 301,879 | 249,231 | 871,133 | 709,354 | |||||||||||||
Income tax expense | 114,750 | 105,357 | 331,097 | 314,401 | |||||||||||||
Minority interest | 6,371 | 4,685 | 20,320 | 10,231 | |||||||||||||
Net income | $ | 180,758 | $ | 139,189 | $ | 519,716 | $ | 384,722 | |||||||||
Basic income per ordinary share | $ | 0.61 | $ | 0.47 | $ | 1.76 | $ | 1.31 | |||||||||
Fully diluted income per ordinary share | $ | 0.61 | $ | 0.47 | $ | 1.75 | $ | 1.30 | |||||||||
F-2
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September 30, | December 31, | ||||||||
2007 | 2006 | ||||||||
(Unaudited) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 237,903 | $ | 159,010 | |||||
Trade accounts receivable, less allowance for doubtful accounts of $230,154 in 2007 and $207,293 in 2006 | 1,959,831 | 1,848,695 | |||||||
Accounts receivable from related parties | 93,452 | 143,349 | |||||||
Inventories | 624,152 | 523,929 | |||||||
Prepaid expenses and other current assets | 552,546 | 443,854 | |||||||
Deferred taxes | 291,573 | 293,079 | |||||||
Total current assets | 3,759,457 | 3,411,916 | |||||||
Property, plant and equipment, net | 1,934,430 | 1,722,392 | |||||||
Intangible assets | 659,699 | 661,365 | |||||||
Goodwill | 7,051,638 | 6,892,161 | |||||||
Deferred taxes | 76,499 | 62,722 | |||||||
Other assets | 279,899 | 294,125 | |||||||
Total assets | $ | 13,761,622 | $ | 13,044,681 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 361,304 | $ | 316,188 | |||||
Accounts payable to related parties | 195,766 | 236,619 | |||||||
Accrued expenses and other current liabilities | 1,406,798 | 1,194,939 | |||||||
Short-term borrowings | 76,243 | 331,231 | |||||||
Short-term borrowings from related parties | 45,939 | 4,575 | |||||||
Current portion of long-term debt and capital lease obligations | 46,038 | 160,135 | |||||||
Company-obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiaries — current portion | 665,067 | — | |||||||
Income tax payable | 102,699 | 116,059 | |||||||
Deferred taxes | 23,590 | 15,959 | |||||||
Total current liabilities | 2,923,444 | 2,375,705 | |||||||
Long-term debt and capital lease obligations, less current portion | 4,032,433 | 3,829,341 | |||||||
Other liabilities | 151,982 | 149,684 | |||||||
Pension liabilities | 127,877 | 112,316 | |||||||
Income tax payable | 100,755 | — | |||||||
Deferred taxes | 341,632 | 378,487 | |||||||
Company-obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiaries | 647,595 | 1,253,828 | |||||||
Minority interest | 107,869 | 75,158 | |||||||
Total liabilities | 8,433,587 | 8,174,519 | |||||||
Shareholders’ equity: | |||||||||
Preference shares, no par value,€1.00 nominal value, 12,356,880 shares authorized, 3,765,721 issued and outstanding | 4,173 | 4,098 | |||||||
Ordinary shares, no par value,€1.00 nominal value, 373,436,220 shares authorized, 292,405,855 issued and outstanding | 360,832 | 359,527 | |||||||
Additional paid-in capital | 3,201,239 | 3,153,556 | |||||||
Retained earnings | 1,689,706 | 1,358,397 | |||||||
Accumulated other comprehensive income (loss) | 72,085 | (5,416 | ) | ||||||
Total shareholders’ equity | 5,328,035 | 4,870,162 | |||||||
Total liabilities and shareholders’ equity | $ | 13,761,622 | $ | 13,044,681 | |||||
F-3
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For the Nine Months Ended | |||||||||||
September 30, | |||||||||||
2007 | 2006 | ||||||||||
Operating Activities: | |||||||||||
Net income | $ | 519,716 | $ | 384,722 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Settlement of shareholder proceedings | — | (880 | ) | ||||||||
Depreciation and amortization | 259,861 | 221,258 | |||||||||
Change in minority interest | 33,051 | 15,506 | |||||||||
Change in deferred taxes, net | 13,911 | 19,324 | |||||||||
Loss on sale of fixed assets and investments | 1,934 | 3,344 | |||||||||
Compensation expense related to stock options | 16,305 | 11,617 | |||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | |||||||||||
Trade accounts receivable, net | (38,418 | ) | 10,148 | ||||||||
Inventories | (74,581 | ) | (59,114 | ) | |||||||
Prepaid expenses, other current and non-current assets | (85,563 | ) | (96,345 | ) | |||||||
Accounts receivable from /payable to related parties | (7,698 | ) | (4,269 | ) | |||||||
Accounts payable, accrued expenses and other current and non-current liabilities | 199,207 | 85,993 | |||||||||
Income tax payable | 52,478 | (51,708 | ) | ||||||||
Tax payments related to divestitures and acquisitions | — | (74,605 | ) | ||||||||
Net cash provided by operating activities | 890,203 | 464,991 | |||||||||
Investing Activities: | |||||||||||
Purchases of property, plant and equipment | (385,896 | ) | (288,205 | ) | |||||||
Proceeds from sale of property, plant and equipment | 21,850 | 15,903 | |||||||||
Acquisitions and investments, net of cash acquired | (139,592 | ) | (4,189,537 | ) | |||||||
Proceeds from divestitures | 29,495 | 506,693 | |||||||||
Net cash used in investing activities | (474,143 | ) | (3,955,146 | ) | |||||||
Financing Activities: | |||||||||||
Proceeds from short-term borrowings | 44,277 | 32,218 | |||||||||
Repayments of short-term borrowings | (53,419 | ) | (27,438 | ) | |||||||
Proceeds from short-term borrowings from related parties | 43,554 | 269,920 | |||||||||
Repayments of short-term borrowings from related parties | (4,566 | ) | (259,921 | ) | |||||||
Proceeds from long-term debt and capital lease obligations (net of debt issuance costs of $15,976 in 2007 and $85,828 in 2006) | 511,689 | 3,965,001 | |||||||||
Repayments of long-term debt and capital lease obligations | (448,361 | ) | (854,968 | ) | |||||||
(Decrease) Increase of accounts receivable securitization program | (266,000 | ) | 193,250 | ||||||||
Proceeds from exercise of stock options | 32,607 | 47,947 | |||||||||
Proceeds from conversion of preference shares into ordinary shares | — | 306,759 | |||||||||
Dividends paid | (188,407 | ) | (153,720 | ) | |||||||
Distributions to minority interest | (14,980 | ) | (7,347 | ) | |||||||
Net cash (used in) provided by financing activities | (343,606 | ) | 3,511,701 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 6,439 | 20,971 | |||||||||
Cash and Cash Equivalents: | |||||||||||
Net increase in cash and cash equivalents | 78,893 | 42,517 | |||||||||
Cash and cash equivalents at beginning of period | 159,010 | 85,077 | |||||||||
Cash and cash equivalents at end of period | $ | 237,903 | $ | 127,594 | |||||||
F-4
Table of Contents
Accumulated Other | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||
Preference Shares | Ordinary Shares | |||||||||||||||||||||||||||||||||||||||||
Additional | Foreign | |||||||||||||||||||||||||||||||||||||||||
Number of | No par | Number of | No par | Paid in | Retained | Currency | Cash Flow | |||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Capital | Earnings | Translation | Hedges | Pensions | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2005 | 83,286,537 | $ | 90,740 | 210,000,000 | $ | 270,501 | $ | 2,779,873 | $ | 975,371 | $ | (106,185 | ) | $ | 18,964 | $ | (55,558 | ) | $ | 3,973,706 | ||||||||||||||||||||||
Proceeds from exercise of options and related tax effects | 313,164 | 395 | 1,561,407 | 1,989 | 51,202 | 53,586 | ||||||||||||||||||||||||||||||||||||
Proceeds from conversion of preference shares into ordinary shares | (79,888,266 | ) | (87,037 | ) | 79,888,266 | 87,037 | 306,759 | 306,759 | ||||||||||||||||||||||||||||||||||
Compensation expense related to stock options | 16,610 | 16,610 | ||||||||||||||||||||||||||||||||||||||||
Dividends paid | (153,720 | ) | (153,720 | ) | ||||||||||||||||||||||||||||||||||||||
Settlement of shareholder proceedings | (888 | ) | (888 | ) | ||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||
Net income | 536,746 | 536,746 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) related to: | ||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of related tax effects | 18,223 | 18,223 | ||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 114,494 | 114,494 | ||||||||||||||||||||||||||||||||||||||||
Adjustments relating to pension obligations, net of related tax effects | 15,952 | 15,952 | ||||||||||||||||||||||||||||||||||||||||
Comprehensive income | 685,415 | |||||||||||||||||||||||||||||||||||||||||
Effect of adoption of SFAS 158 | (11,306 | ) | (11,306 | ) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 3,711,435 | $ | 4,098 | 291,449,673 | $ | 359,527 | $ | 3,153,556 | $ | 1,358,397 | $ | 8,309 | $ | 37,187 | $ | (50,912 | ) | $ | 4,870,162 | |||||||||||||||||||||||
Proceeds from exercise of options and related tax effects | 54,286 | 75 | 956,182 | 1,305 | 31,378 | 32,758 | ||||||||||||||||||||||||||||||||||||
Compensation expense related to stock options | 16,305 | 16,305 | ||||||||||||||||||||||||||||||||||||||||
Dividends paid | (188,407 | ) | (188,407 | ) | ||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||
Net income | 519,716 | 519,716 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) related to: | ||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of related tax effects | (17,844 | ) | (17,844 | ) | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 92,991 | 92,991 | ||||||||||||||||||||||||||||||||||||||||
Adjustments relating to pension obligations, net of related tax effects | 2,354 | 2,354 | ||||||||||||||||||||||||||||||||||||||||
Comprehensive income | 597,217 | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2007 | 3,765,721 | $ | 4,173 | 292,405,855 | $ | 360,832 | $ | 3,201,239 | $ | 1,689,706 | $ | 101,300 | $ | 19,343 | $ | (48,558 | ) | $ | 5,328,035 | |||||||||||||||||||||||
F-5
Table of Contents
1. | The Company and Basis of Presentation |
2. | Pro Forma Financial Information |
F-6
Table of Contents
Nine Months Ended | |||||
Unaudited | September 30, 2006 | ||||
Pro forma net revenue | $ | 6,457,222 | |||
Pro forma net income | 384,199 | ||||
Pro forma net income per ordinary share: | |||||
Basic | 1.31 | ||||
Fully diluted | 1.30 |
3. | Inventories |
September 30, | December 31, | ||||||||
2007 | 2006 | ||||||||
Raw materials and purchased components | $ | 129,331 | $ | 108,584 | |||||
Work in process | 49,514 | 41,272 | |||||||
Finished goods | 356,750 | 269,496 | |||||||
Health care supplies | 88,557 | 104,577 | |||||||
Inventories | $ | 624,152 | $ | 523,929 | |||||
4. | Short-Term Borrowings and Short-Term Borrowings from Related Parties |
September 30, | December 31, | |||||||
2007 | 2006 | |||||||
Borrowings under lines of credit | $ | 76,243 | $ | 65,231 | ||||
Accounts receivable facility | — | 266,000 | ||||||
Short-term borrowings | 76,243 | 331,231 | ||||||
Short-term borrowings from related parties | 45,939 | 4,575 | ||||||
Short-term borrowings including related parties | $ | 122,182 | $ | 335,806 | ||||
F-7
Table of Contents
5. | Long-term Debt and Capital Lease Obligations |
September 30, | December 31, | |||||||
2007 | 2006 | |||||||
2006 Senior Credit Agreement | $ | 3,160,373 | $ | 3,564,702 | ||||
Senior Notes | 491,347 | — | ||||||
Euro Notes | 283,580 | 263,400 | ||||||
EIB Agreements | 84,618 | 84,618 | ||||||
Capital lease obligations | 8,008 | 8,286 | ||||||
Other | 50,545 | 68,470 | ||||||
4,078,471 | 3,989,476 | |||||||
Less current maturities | (46,038 | ) | (160,135 | ) | ||||
$ | 4,032,433 | $ | 3,829,341 | |||||
Maximum Amount Available | Balance Outstanding | |||||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revolving Credit | $ | 1,000,000 | $ | 1,000,000 | $ | 32,248 | $ | 67,827 | ||||||||
Term Loan A | 1,550,000 | 1,760,000 | 1,550,000 | 1,760,000 | ||||||||||||
Term Loan B | 1,578,125 | 1,736,875 | 1,578,125 | 1,736,875 | ||||||||||||
$ | 4,128,125 | $ | 4,496,875 | $ | 3,160,373 | $ | 3,564,702 | |||||||||
F-8
Table of Contents
6. | Stock Options |
7. | Earnings Per Share |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Numerators: | ||||||||||||||||
Net income | $ | 180,758 | $ | 139,189 | $ | 519,716 | $ | 384,722 | ||||||||
less: | ||||||||||||||||
Dividend preference on preference shares | 26 | 24 | 75 | 66 | ||||||||||||
Income available to all classes of shares | $ | 180,732 | $ | 139,165 | $ | 519,641 | $ | 384,656 | ||||||||
Denominators: | ||||||||||||||||
Weighted average number of: | ||||||||||||||||
Ordinary shares outstanding | 292,062,414 | 290,888,289 | 291,721,451 | 290,367,524 | ||||||||||||
Preference shares outstanding | 3,747,548 | 3,650,988 | 3,728,265 | 3,548,433 | ||||||||||||
Total weighted average shares outstanding | 295,809,962 | 294,539,277 | 295,449,716 | 293,915,957 | ||||||||||||
Potentially dilutive ordinary shares | 1,085,285 | 1,369,624 | 1,070,722 | 1,187,985 | ||||||||||||
Potentially dilutive preference shares | 137,770 | 199,027 | 141,617 | 235,066 | ||||||||||||
Total weighted average ordinary shares outstanding assuming dilution | 293,147,699 | 292,257,913 | 292,792,173 | 291,555,509 | ||||||||||||
Total weighted average preference shares outstanding assuming dilution | 3,885,318 | 3,850,015 | 3,869,882 | 3,783,499 | ||||||||||||
Basic income per ordinary share | $ | 0.61 | $ | 0.47 | $ | 1.76 | $ | 1.31 | ||||||||
Plus preference per preference shares | 0.01 | 0.01 | 0.02 | 0.02 | ||||||||||||
Basic income per preference share | $ | 0.62 | $ | 0.48 | $ | 1.78 | $ | 1.33 | ||||||||
Fully diluted income per ordinary share | $ | 0.61 | $ | 0.47 | $ | 1.75 | $ | 1.30 | ||||||||
Plus preference per preference shares | 0.01 | 0.01 | 0.02 | 0.02 | ||||||||||||
Fully diluted income per preference share | $ | 0.62 | $ | 0.48 | $ | 1.77 | $ | 1.32 | ||||||||
8. | Employee Benefit Plans |
F-9
Table of Contents
For the Three | For the Nine | |||||||||||||||
Months Ended | Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||
Service cost | 2.212 | 2.073 | 6.523 | 6.106 | ||||||||||||
Interest cost | 4.624 | 4.232 | 13.790 | 12.624 | ||||||||||||
Expected return on plan assets | (4.090 | ) | (3.840 | ) | (12.270 | ) | (11.520 | ) | ||||||||
Amortization unrealized losses | 1.284 | 2.125 | 3.830 | 6.448 | ||||||||||||
Amortization of prior service cost | — | 54 | — | 157 | ||||||||||||
Net periodic benefit cost | 4.030 | 4.644 | 11.873 | 13.815 | ||||||||||||
9. | Income Taxes |
F-10
Table of Contents
10. | Commitments and Contingencies |
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
11. | Business Segment Information |
F-15
Table of Contents
North | ||||||||||||||||
America | International | Corporate | Total | |||||||||||||
Nine months ended September 30, 2007 | ||||||||||||||||
Net revenue external customers | $ | 4,957,479 | $ | 2,193,547 | $ | — | $ | 7,151,026 | ||||||||
Inter-segment revenue | 516 | 56,264 | (56,780 | ) | — | |||||||||||
Total net revenue | 4,957,995 | 2,249,811 | (56,780 | ) | 7,151,026 | |||||||||||
Depreciation and amortization | (158,922 | ) | (99,443 | ) | (1,496 | ) | (259,861 | ) | ||||||||
Operating Income | 826,191 | 385,526 | (59,265 | ) | 1,152,452 | |||||||||||
Segment assets | 10,479,227 | 3,215,641 | 66,754 | 13,761,622 | ||||||||||||
Capital expenditures and acquisitions(1) | 302,325 | 222,967 | 196 | 525,488 | ||||||||||||
Nine months ended September 30, 2006 | ||||||||||||||||
Net revenue external customers | $ | 4,367,238 | $ | 1,779,449 | $ | — | $ | 6,146,687 | ||||||||
Inter-segment revenue | 860 | 43,972 | (44,832 | ) | — | |||||||||||
Total net revenue | 4,368,098 | 1,823,421 | (44,832 | ) | 6,146,687 | |||||||||||
Depreciation and amortization | (137,035 | ) | (83,138 | ) | (1,085 | ) | (221,258 | ) | ||||||||
Operating Income | 704,274 | 317,583 | (57,433 | ) | 964,424 | |||||||||||
Segment assets | 10,021,911 | 2,529,720 | 115,217 | 12,666,848 | ||||||||||||
Capital expenditures and acquisitions(2) | 4,376,936 | 100,681 | 124 | 4,477,741 | ||||||||||||
Three months ended September 30, 2007 | ||||||||||||||||
Net revenue external customers | $ | 1,660,461 | $ | 765,681 | $ | — | $ | 2,426,142 | ||||||||
Inter-segment revenue | — | 16,891 | (16,891 | ) | — | |||||||||||
Total net revenue | 1,660,461 | 782,572 | (16,891 | ) | 2,426,142 | |||||||||||
Depreciation and amortization | (54,225 | ) | (34,656 | ) | (488 | ) | (89,369 | ) | ||||||||
Operating income | 282,927 | 134,929 | (21,144 | ) | 396,712 | |||||||||||
Capital expenditures and acquisitions | 82,416 | 77,259 | 50 | 159,725 | ||||||||||||
Three months ended September 30, 2006 | ||||||||||||||||
Net revenue external customers | $ | 1,613,083 | $ | 621,242 | $ | — | $ | 2,234,325 | ||||||||
Inter-segment revenue | 261 | 16,828 | (17,089 | ) | — | |||||||||||
Total net revenue | 1,613,344 | 638,070 | (17,089 | ) | 2,234,325 | |||||||||||
Depreciation and amortization | (50,507 | ) | (28,567 | ) | (342 | ) | (79,416 | ) | ||||||||
Operating income | 257,179 | 113,115 | (21,489 | ) | 348,805 | |||||||||||
Capital expenditures and acquisitions | 92,739 | 31,624 | 75 | 124,438 |
(1) | International acquisitions exclude $8,473 of non-cash acquisitions for 2007. |
(2) | International acquisitions exclude $4,611 of non-cash acquisitions for 2006. North America acquisitions include $4,145,190 for the acquisition of RCG at September 30, 2006. |
F-16
Table of Contents
For the Three Months | For the Nine Months | ||||||||||||||||
Ended September 30, | Ended September 30, | ||||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||||
Reconciliation of Measures to Consolidated Totals | |||||||||||||||||
Total operating income of reporting segments | $ | 417,856 | $ | 370,294 | $ | 1,211,717 | $ | 1,021,857 | |||||||||
Corporate expenses | (21,144 | ) | (21,489 | ) | (59,265 | ) | (57,433 | ) | |||||||||
Interest expense | (103,538 | ) | (104,071 | ) | (300,367 | ) | (269,914 | ) | |||||||||
Interest income | 8,705 | 4,497 | 19,048 | 14,844 | |||||||||||||
Total income before income taxes and minority interest | $ | 301,879 | $ | 249,231 | $ | 871,133 | $ | 709,354 | |||||||||
12. | Supplementary Cash Flow Information |
Nine Months Ended | |||||||||
September 30, | |||||||||
2007 | 2006 | ||||||||
Supplementary cash flow information: | |||||||||
Cash paid for interest | $ | 320,354 | $ | 275,451 | |||||
Cash paid for income taxes | $ | 251,844 | $ | 365,499 | |||||
Cash inflow for income taxes from stock option exercises | $ | 6,430 | $ | 5,942 | |||||
Supplemental disclosures of cash flow information: | |||||||||
Details for acquisitions: | |||||||||
Assets acquired | $ | (220,538 | ) | $ | (4,670,239 | ) | |||
Liabilities assumed | 46,942 | 355,862 | |||||||
Minorities | 12,220 | 56,294 | |||||||
Notes assumed in connection with acquisition | 8,473 | 4,611 | |||||||
Cash paid | (152,903 | ) | (4,253,472 | ) | |||||
Less cash acquired | 13,311 | 63,935 | |||||||
Net cash paid for acquisitions | $ | (139,592 | ) | $ | (4,189,537 | ) | |||
13. | Supplemental Condensed Combining Information |
F-17
Table of Contents
For the Nine Months Period Ended September 30, 2007 | |||||||||||||||||||||||||
Guarantor Subsidiaries | |||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | ||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | ||||||||||||||||||||
Net revenue | $ | — | $ | 1,738,763 | $ | — | $ | 6,808,471 | $ | (1,396,208 | ) | $ | 7,151,026 | ||||||||||||
Cost of revenue | — | 1,353,170 | — | 4,711,304 | (1,373,127 | ) | 4,691,347 | ||||||||||||||||||
Gross profit | — | 385,593 | — | 2,097,167 | (23,081 | ) | 2,459,679 | ||||||||||||||||||
Operating (income) expenses: | |||||||||||||||||||||||||
Selling, general and administrative | 49,022 | 134,746 | 2,806 | 1,094,881 | (17,774 | ) | 1,263,681 | ||||||||||||||||||
Research and development | — | 31,451 | — | 12,095 | — | 43,546 | |||||||||||||||||||
Operating (loss) income | (49,022 | ) | 219,396 | (2,806 | ) | 990,191 | (5,307 | ) | 1,152,452 | ||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||||
Interest, net | 12,492 | 12,183 | 145,891 | 113,154 | (2,401 | ) | 281,319 | ||||||||||||||||||
Other, net | (608,650 | ) | 130,876 | (430,000 | ) | — | 907,774 | — | |||||||||||||||||
Income (loss) before income taxes and minority interest | 547,136 | 76,337 | 281,303 | 877,037 | (910,680 | ) | 871,133 | ||||||||||||||||||
Income tax expense (benefit) | 27,420 | 83,896 | (59,479 | ) | 304,735 | (25,475 | ) | 331,097 | |||||||||||||||||
Income (loss) before minority interest | 519,716 | (7,559 | ) | 340,782 | 572,302 | (885,205 | ) | 540,036 | |||||||||||||||||
Minority interest | — | — | — | — | 20,320 | 20,320 | |||||||||||||||||||
Net income (loss) | $ | 519,716 | $ | (7,559 | ) | $ | 340,782 | $ | 572,302 | $ | (905,525 | ) | $ | 519,716 | |||||||||||
F-18
Table of Contents
For the Nine Months Ended September 30, 2006 | |||||||||||||||||||||||||
Guarantor Subsidiaries | |||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | ||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | ||||||||||||||||||||
Net revenue | $ | — | $ | 1,252,862 | $ | — | $ | 5,973,411 | $ | (1,079,586 | ) | $ | 6,146,687 | ||||||||||||
Cost of revenue | — | 929,798 | — | 4,228,935 | (1,070,145 | ) | 4,088,588 | ||||||||||||||||||
Gross profit | — | 323,064 | — | 1,744,476 | (9,441 | ) | 2,058,099 | ||||||||||||||||||
Operating (income) expenses: | |||||||||||||||||||||||||
Selling, general and administrative | 66,033 | 111,789 | 10,023 | 930,546 | (21,830 | ) | 1,096,561 | ||||||||||||||||||
Gain on sale of legacy clinics | — | — | — | (40,233 | ) | — | (40,233 | ) | |||||||||||||||||
Research and development | — | 27,185 | — | 10,162 | — | 37,347 | |||||||||||||||||||
Operating (loss) income | (66,033 | ) | 184,090 | (10,023 | ) | 844,001 | 12,389 | 964,424 | |||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||||
Interest, net | 19,996 | 11,177 | 134,803 | 88,107 | 987 | 255,070 | |||||||||||||||||||
Other, net | (492,446 | ) | 107,952 | (322,744 | ) | — | 707,238 | — | |||||||||||||||||
Income before income taxes and minority interest | 406,417 | 64,961 | 177,918 | 755,894 | (695,836 | ) | 709,354 | ||||||||||||||||||
Income tax expense (benefit) | 21,695 | 66,419 | (57,930 | ) | 280,319 | 3,898 | 314,401 | ||||||||||||||||||
Income (loss) before minority interest | 384,722 | (1,458 | ) | 235,848 | 475,575 | (699,734 | ) | 394,953 | |||||||||||||||||
Minority interest | — | — | — | — | 10,231 | 10,231 | |||||||||||||||||||
Net income (loss) | $ | 384,722 | $ | (1,458 | ) | $ | 235,848 | $ | 475,575 | $ | (709,965 | ) | $ | 384,722 | |||||||||||
F-19
Table of Contents
At September 30, 2007 | ||||||||||||||||||||||||||
Guarantor Subsidiaries | ||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 65 | $ | — | $ | 237,838 | $ | — | $ | 237,903 | ||||||||||||||
Trade accounts receivable, less allowance for doubtful accounts | — | 147,524 | — | 1,812,307 | — | 1,959,831 | ||||||||||||||||||||
Accounts receivable from related parties | 1,172,498 | 494,917 | 357,524 | 1,102,026 | (3,033,513 | ) | 93,452 | |||||||||||||||||||
Inventories | — | 159,226 | — | 547,237 | (82,311 | ) | 624,152 | |||||||||||||||||||
Prepaid expenses and other current assets | 20,968 | 23,628 | 100 | 512,195 | (4,345 | ) | 552,546 | |||||||||||||||||||
Deferred taxes | 2,101 | — | — | 254,494 | 34,978 | 291,573 | ||||||||||||||||||||
Total current assets | 1,195,567 | 825,360 | 357,624 | 4,466,097 | (3,085,191 | ) | 3,759,457 | |||||||||||||||||||
Property, plant and equipment, net | 188 | 120,960 | — | 1,875,030 | (61,748 | ) | 1,934,430 | |||||||||||||||||||
Intangible assets | 119 | 13,166 | — | 646,414 | — | 659,699 | ||||||||||||||||||||
Goodwill | — | 3,453 | — | 7,048,185 | — | 7,051,638 | ||||||||||||||||||||
Deferred taxes | — | 10,413 | — | 68,800 | (2,714 | ) | 76,499 | |||||||||||||||||||
Other assets | 5,980,262 | 1,231,878 | 7,855,765 | (3,351,103 | ) | (11,436,903 | ) | 279,899 | ||||||||||||||||||
Total assets | $ | 7,176,136 | $ | 2,205,230 | $ | 8,213,389 | $ | 10,753,423 | $ | (14,586,556 | ) | $ | 13,761,622 | |||||||||||||
Current liabilities: | ||||||||||||||||||||||||||
Accounts payable | $ | 582 | $ | 28,002 | $ | — | $ | 332,720 | $ | — | $ | 361,304 | ||||||||||||||
Accounts payable to related parties | 322,294 | 307,399 | 965,743 | 1,654,889 | (3,054,559 | ) | 195,766 | |||||||||||||||||||
Accrued expenses and other current liabilities | 23,676 | 130,130 | 6,381 | 1,236,321 | 10,290 | 1,406,798 | ||||||||||||||||||||
Short-term borrowings | — | — | — | 76,243 | — | 76,243 | ||||||||||||||||||||
Short-term borrowings from related parties | 1,071,128 | — | — | (931,039 | ) | (94,150 | ) | 45,939 | ||||||||||||||||||
Current portion of long-term debt and capital lease obligations | 801 | 284 | 33,467 | 11,486 | — | 46,038 | ||||||||||||||||||||
Company-guaranteed debentures of subsidiaries — current portion | — | — | — | 665,067 | — | 665,067 | ||||||||||||||||||||
Income tax payable | 47,636 | — | — | 45,306 | 9,757 | 102,699 | ||||||||||||||||||||
Deferred taxes | — | 6,222 | — | 18,502 | (1,134 | ) | 23,590 | |||||||||||||||||||
Total current liabilities | 1,466,117 | 472,037 | 1,005,591 | 3,109,495 | (3,129,796 | ) | 2,923,444 | |||||||||||||||||||
Long term debt and capital lease obligations, less current portion | 329,820 | 425 | 2,558,782 | 5,725,986 | (4,582,580 | ) | 4,032,433 | |||||||||||||||||||
Long term borrowings from related parties | 4,471 | 220,117 | — | 931,039 | (1,155,627 | ) | — | |||||||||||||||||||
Other liabilities | (550 | ) | 9,932 | — | 128,979 | 13,621 | 151,982 | |||||||||||||||||||
Pension liabilities | 3,440 | 123,818 | — | 619 | — | 127,877 | ||||||||||||||||||||
Income tax payable | 43,092 | — | — | 22,680 | 34,983 | 100,755 | ||||||||||||||||||||
Deferred taxes | 1,711 | — | — | 337,124 | 2,797 | 341,632 | ||||||||||||||||||||
Company obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiary | — | — | — | 647,595 | — | 647,595 | ||||||||||||||||||||
Minority interest | — | — | 7,412 | 100,457 | — | 107,869 | ||||||||||||||||||||
Total liabilities | 1,848,101 | 826,329 | 3,571,785 | 11,003,974 | (8,816,602 | ) | 8,433,587 | |||||||||||||||||||
Shareholders’ equity: | 5,328,035 | 1,378,901 | 4,641,604 | (250,551 | ) | (5,769,954 | ) | 5,328,035 | ||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 7,176,136 | $ | 2,205,230 | $ | 8,213,389 | $ | 10,753,423 | $ | (14,586,556 | ) | $ | 13,761,622 | |||||||||||||
F-20
Table of Contents
At September 30, 2006 | ||||||||||||||||||||||||||
Guarantor Subsidiaries | ||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | — | $ | 126,086 | $ | 1,507 | $ | 127,594 | ||||||||||||||
Trade accounts receivable, less allowance for doubtful accounts | — | 105,543 | — | 1,686,533 | — | 1,792,076 | ||||||||||||||||||||
Accounts receivable from related parties | 1,345,552 | 427,053 | 275,200 | 1,473,109 | (3,469,515 | ) | 51,399 | |||||||||||||||||||
Inventories | — | 133,331 | — | 468,085 | (65,918 | ) | 535,498 | |||||||||||||||||||
Prepaid expenses and other current assets | 15,368 | 20,854 | 100 | 383,551 | (3,041 | ) | 416,832 | |||||||||||||||||||
Deferred taxes | 4,091 | — | — | 163,216 | 27,284 | 194,591 | ||||||||||||||||||||
Total current assets | 1,365,012 | 686,781 | 275,300 | 4,300,580 | (3,509,683 | ) | 3,117,990 | |||||||||||||||||||
Property, plant and equipment, net | 192 | 91,789 | — | 1,576,102 | (44,662 | ) | 1,623,421 | |||||||||||||||||||
Intangible assets | 954 | 11,944 | — | 595,342 | — | 608,240 | ||||||||||||||||||||
Goodwill | — | 3,083 | — | 6,961,142 | — | 6,964,225 | ||||||||||||||||||||
Deferred taxes | — | 6,787 | — | 29,153 | 9,434 | 45,374 | ||||||||||||||||||||
Other assets | 4,965,329 | 870,860 | 5,908,759 | (945,498 | ) | (10,491,852 | ) | 307,598 | ||||||||||||||||||
Total assets | $ | 6,331,487 | $ | 1,671,244 | $ | 6,184,059 | $ | 12,516,821 | $ | (14,036,763 | ) | $ | 12,666,848 | |||||||||||||
Current liabilities: | ||||||||||||||||||||||||||
Accounts payable | $ | 116 | $ | 16,185 | $ | — | $ | 232,747 | $ | — | $ | 249,048 | ||||||||||||||
Accounts payable to related parties | 1,185,685 | 229,210 | 918,451 | 2,135,302 | (4,332,742 | ) | 135,906 | |||||||||||||||||||
Accrued expenses and other current liabilities | 25,604 | 100,639 | 9,296 | 1,031,033 | 6,786 | 1,173,358 | ||||||||||||||||||||
Short-term borrowings | 1 | — | — | 354,652 | — | 354,653 | ||||||||||||||||||||
Short-term borrowings from related parties | 18,357 | 8,801 | — | 11,514 | (8,801 | ) | 29,871 | |||||||||||||||||||
Current portion of long-term debt and capital lease obligations | 1,039 | 253 | 137,500 | 18,419 | — | 157,211 | ||||||||||||||||||||
Income tax payable | 5,855 | — | — | 56,701 | 11,156 | 73,712 | ||||||||||||||||||||
Deferred taxes | — | 4,874 | — | 14,083 | 31,443 | 50,400 | ||||||||||||||||||||
Total current liabilities | 1,236,657 | 359,962 | 1,065,247 | 3,854,451 | (4,292,158 | ) | 2,224,159 | |||||||||||||||||||
Long term debt and capital lease obligations, less current portion | 409,858 | 380 | 2,370,879 | 4,883,888 | (3,770,462 | ) | 3,894,543 | |||||||||||||||||||
Long term borrowings from related parties | 3,992 | 196,536 | — | — | (200,528 | ) | — | |||||||||||||||||||
Other liabilities | 22,981 | 11,813 | — | 110,026 | 6,867 | 151,687 | ||||||||||||||||||||
Pension liabilities | 3,289 | 89,432 | — | 24,262 | — | 116,983 | ||||||||||||||||||||
Deferred taxes | 20,999 | — | — | 261,274 | 53,608 | 335,881 | ||||||||||||||||||||
Company obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiary | — | — | — | 1,235,718 | — | 1,235,718 | ||||||||||||||||||||
Minority interest | — | — | 7,412 | 66,754 | — | 74,166 | ||||||||||||||||||||
Total liabilities | 1,697,776 | 658,123 | 3,443,538 | 10,436,373 | (8,202,673 | ) | 8,033,137 | |||||||||||||||||||
Shareholders’ equity: | 4,633,711 | 1,013,121 | 2,740,521 | 2,080,448 | (5,834,090 | ) | 4,633,711 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,331,487 | $ | 1,671,244 | $ | 6,184,059 | $ | 12,516,821 | $ | (14,036,763 | ) | $ | 12,666,848 | |||||||||||||
F-21
Table of Contents
For the Nine Months Ended September 30, 2007 | |||||||||||||||||||||||||||
Guarantor | |||||||||||||||||||||||||||
Subsidiaries | |||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | ||||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | ||||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||||||||
Net income (loss) | 519,716 | $ | (7,559 | ) | $ | 340,782 | $ | 572,303 | $ | (905,525 | ) | $ | 519,716 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||||||||||||||
Equity affiliate income | (368,691 | ) | — | (430,000 | ) | — | 798,691 | — | |||||||||||||||||||
Depreciation and amortization | 1,496 | 22,827 | — | 247,950 | (12,412 | ) | 259,861 | ||||||||||||||||||||
Change in minority interest | — | — | — | 3,470 | 29,581 | 33,051 | |||||||||||||||||||||
Change in deferred taxes, net | (13,487 | ) | 1,452 | — | 26,136 | (190 | ) | 13,911 | |||||||||||||||||||
(Gain) Loss on sale of fixed assets and investments | (297 | ) | (528 | ) | — | 2,462 | 297 | 1,934 | |||||||||||||||||||
Compensation expense related to stock options | 16,305 | — | — | — | — | 16,305 | |||||||||||||||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | |||||||||||||||||||||||||||
Trade accounts receivable, net | — | (14,330 | ) | — | (24,088 | ) | — | (38,418 | ) | ||||||||||||||||||
Inventories | — | (17,279 | ) | — | (71,138 | ) | 13,836 | (74,581 | ) | ||||||||||||||||||
Prepaid expenses and other current and non-current assets | 11,649 | 7,504 | 11,961 | (102,147 | ) | (14,530 | ) | (85,563 | ) | ||||||||||||||||||
Accounts receivable from/payable to related parties | (84,839 | ) | (84,899 | ) | 28,439 | 89,852 | 43,749 | (7,698 | ) | ||||||||||||||||||
Accounts payable, accrued expenses and other current and non-current liabilities | 4,360 | 41,718 | 6,525 | 147,181 | (577 | ) | 199,207 | ||||||||||||||||||||
Income tax payable | 23,826 | — | (59,479 | ) | 58,131 | 30,000 | 52,478 | ||||||||||||||||||||
Net cash provided by (used in) operating activities | 110,038 | (51,094 | ) | (101,772 | ) | 950,111 | (17,080 | ) | 890,203 | ||||||||||||||||||
Investing Activities: | |||||||||||||||||||||||||||
Purchases of property, plant and equipment | (196 | ) | (36,865 | ) | — | (365,198 | ) | 16,363 | (385,896 | ) | |||||||||||||||||
Proceeds from sale of property, plant and equipment | 3 | 920 | — | 20,927 | — | 21,850 | |||||||||||||||||||||
Disbursement of loans to related parties | 21,598 | (9,232 | ) | 78,025 | — | (90,391 | ) | — | |||||||||||||||||||
Acquisitions and investments, net of cash acquired | (9,128 | ) | (58 | ) | — | (139,135 | ) | 8,729 | (139,592 | ) | |||||||||||||||||
Proceeds from divestitures | — | — | — | 29,495 | — | 29,495 | |||||||||||||||||||||
Net cash provided by (used in) investing activities | 12,277 | (45,235 | ) | 78,025 | (453,911 | ) | (65,299 | ) | (474,143 | ) | |||||||||||||||||
Financing Activities: | |||||||||||||||||||||||||||
Short-term borrowings, net | 38,582 | 96,356 | — | (105,092 | ) | — | 29,846 | ||||||||||||||||||||
Long-term debt and capital lease obligations, net | (380 | ) | — | 24,137 | (50,820 | ) | 90,391 | 63,328 | |||||||||||||||||||
Increase of accounts receivable securitization program | — | — | — | (266,000 | ) | — | (266,000 | ) | |||||||||||||||||||
Proceeds from exercise of stock options | 26,178 | — | — | 6,429 | — | 32,607 | |||||||||||||||||||||
Dividends paid | (188,407 | ) | — | — | (3,299 | ) | 3,299 | (188,407 | ) | ||||||||||||||||||
Capital increase (decrease) | — | — | — | 8,728 | (8,728 | ) | — | ||||||||||||||||||||
Distributions to minority interest | — | — | (390 | ) | (14,590 | ) | — | (14,980 | ) | ||||||||||||||||||
Net cash (used in) provided by financing activities | (124,027 | ) | 96,356 | 23,747 | (424,644 | ) | 84,962 | (343,606 | ) | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,693 | 4 | — | 7,325 | (2,583 | ) | 6,439 | ||||||||||||||||||||
Cash and Cash Equivalents: | |||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (19 | ) | 31 | — | 78,881 | — | 78,893 | ||||||||||||||||||||
Cash and cash equivalents at beginning of period | 19 | 34 | — | 158,957 | — | 159,010 | |||||||||||||||||||||
Cash and cash equivalents at end of period | — | $ | 65 | $ | — | $ | 237,838 | $ | — | 237,903 | |||||||||||||||||
F-22
Table of Contents
For the Nine Months Ended September 30, 2006 | ||||||||||||||||||||||||||
Guarantor Subsidiaries | ||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||
Operating Activities: | ||||||||||||||||||||||||||
Net income (loss) | $ | 384,722 | $ | (1,458 | ) | $ | 235,848 | $ | 475,575 | $ | (709,965 | ) | $ | 384,722 | ||||||||||||
Adjustments to reconcile net income to cash and cash equivalents provided by (used in) operating activities: | ||||||||||||||||||||||||||
Equity affiliate income | (312,268 | ) | — | (322,744 | ) | — | 635,012 | — | ||||||||||||||||||
Settlement of shareholder proceedings | — | — | — | (880 | ) | (880 | ) | |||||||||||||||||||
Depreciation and amortization | 1,085 | 21,551 | — | 209,758 | (11,136 | ) | 221,258 | |||||||||||||||||||
Change in minority interest | — | — | — | 15,506 | 15,506 | |||||||||||||||||||||
Change in deferred taxes, net | (14,424 | ) | (1,008 | ) | — | (2,589 | ) | 37,345 | 19,324 | |||||||||||||||||
Loss on sale of fixed assets and investments | 40 | — | 3,220 | 84 | 3,344 | |||||||||||||||||||||
Compensation expense related to stock options | 11,617 | — | — | — | 11,617 | |||||||||||||||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | ||||||||||||||||||||||||||
Trade accounts receivable, net | — | 3,240 | — | 6,908 | — | 10,148 | ||||||||||||||||||||
Inventories | — | (9,964 | ) | — | (58,786 | ) | 9,636 | (59,114 | ) | |||||||||||||||||
Prepaid expenses and other current and non-current assets | 28,987 | (7,234 | ) | 21,707 | (107,405 | ) | (32,400 | ) | (96,345 | ) | ||||||||||||||||
Accounts receivable from/payable to related parties | (16,739 | ) | (14,161 | ) | 33,762 | (29,502 | ) | 22,371 | (4,269 | ) | ||||||||||||||||
Accounts payable, accrued expenses and other current and non-current liabilities | (5,095 | ) | 23,251 | 8,521 | 50,455 | 8,861 | 85,993 | |||||||||||||||||||
Income tax payable | (10,180 | ) | (57,930 | ) | 6,364 | 10,038 | (51,708 | ) | ||||||||||||||||||
Tax payments related to divestitures and acquisitions | — | — | — | (74,605 | ) | — | (74,605 | ) | ||||||||||||||||||
Net cash provided by (used in) operating activities | 67,745 | 14,217 | (80,836 | ) | 479,393 | (15,528 | ) | 464,991 | ||||||||||||||||||
Investing Activities: | ||||||||||||||||||||||||||
Purchases of property, plant and equipment | (155 | ) | (19,463 | ) | — | (277,442 | ) | 8,855 | (288,205 | ) | ||||||||||||||||
Proceeds from sale of property, plant and equipment | 102 | 337 | — | 15,464 | — | 15,903 | ||||||||||||||||||||
Disbursement of loans to related parties | (365,635 | ) | 109 | (2,937,275 | ) | — | 3,302,801 | — | ||||||||||||||||||
Acquisitions and investments, net of cash acquired | (17,771 | ) | (743 | ) | — | (4,196,510 | ) | 25,487 | (4,189,537 | ) | ||||||||||||||||
Proceeds from divestitures | — | — | — | 506,693 | — | 506,693 | ||||||||||||||||||||
Net cash (used in) provided by investing activities | (383,459 | ) | (19,760 | ) | (2,937,275 | ) | (3,951,795 | ) | 3,337,143 | (3,955,146 | ) | |||||||||||||||
Financing Activities: | ||||||||||||||||||||||||||
Short-term borrowings, net | (1,777 | ) | 6,387 | — | 10,169 | — | 14,779 | |||||||||||||||||||
Long-term debt and capital lease obligations, net | 108,127 | (871 | ) | 1,768,501 | 4,537,077 | (3,302,801 | ) | 3,110,033 | ||||||||||||||||||
Increase of accounts receivable securitization program | — | — | — | 193,250 | — | 193,250 | ||||||||||||||||||||
Proceeds from exercise of stock options | 42,005 | — | — | 5,942 | — | 47,947 | ||||||||||||||||||||
Proceeds from conversion of preference shares into ordinary shares | 306,759 | — | — | — | — | 306,759 | ||||||||||||||||||||
Dividends paid | (153,720 | ) | — | (1,377 | ) | 1,377 | (153,720 | ) | ||||||||||||||||||
Capital Increase | — | — | 1,250,000 | (1,231,671 | ) | (18,329 | ) | — | ||||||||||||||||||
Change in minority interest | — | — | (390 | ) | (6,957 | ) | — | (7,347 | ) | |||||||||||||||||
Net cash provided by (used in) financing activities | 301,394 | 5,516 | 3,018,111 | 3,506,433 | (3,319,753 | ) | 3,511,701 | |||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 14,320 | 1 | — | 7,005 | (355 | ) | 20,971 | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | — | (26 | ) | — | 41,036 | 1,507 | 42,517 | |||||||||||||||||||
Cash and cash equivalents at beginning of period | 1 | 26 | — | 85,050 | — | 85,077 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 1 | $ | — | $ | — | $ | 126,086 | $ | 1,507 | $ | 127,594 | ||||||||||||||
F-23
Table of Contents
F-24
Table of Contents
2006 | 2005 | 2004 | |||||||||||
Net revenue: | |||||||||||||
Dialysis Care | $ | 6,377,390 | $ | 4,866,833 | $ | 4,501,197 | |||||||
Dialysis Products | 2,121,648 | 1,904,986 | 1,726,805 | ||||||||||
8,499,038 | 6,771,819 | 6,228,002 | |||||||||||
Costs of revenue: | |||||||||||||
Dialysis Care | 4,538,234 | 3,583,781 | 3,356,271 | ||||||||||
Dialysis Products | 1,083,248 | 979,900 | 909,932 | ||||||||||
5,621,482 | 4,563,681 | 4,266,203 | |||||||||||
Gross profit | 2,877,556 | 2,208,138 | 1,961,799 | ||||||||||
Operating expenses: | |||||||||||||
Selling, general and administrative | 1,548,369 | 1,218,265 | 1,058,090 | ||||||||||
Gain on Sale of dialysis clinics | (40,233 | ) | — | — | |||||||||
Research and development | 51,293 | 50,955 | 51,364 | ||||||||||
Operating income | 1,318,127 | 938,918 | 852,345 | ||||||||||
Other (income) expense: | |||||||||||||
Interest income | (20,432 | ) | (18,187 | ) | (13,418 | ) | |||||||
Interest expense | 371,678 | 191,379 | 197,164 | ||||||||||
Income before income taxes and minority interest | 966,881 | 765,726 | 668,599 | ||||||||||
Income tax expense | 413,489 | 308,748 | 265,415 | ||||||||||
Minority interest | 16,646 | 2,026 | 1,186 | ||||||||||
Net income | $ | 536,746 | $ | 454,952 | $ | 401,998 | |||||||
Basic income per ordinary share | $ | 1.82 | $ | 1.56 | $ | 1.39 | |||||||
Fully diluted income per ordinary share | $ | 1.81 | $ | 1.55 | $ | 1.38 | |||||||
F-25
Table of Contents
2006 | 2005 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 159,010 | $ | 85,077 | |||||
Trade accounts receivable, less allowance for doubtful accounts of $207,293 in 2006 and $176,568 in 2005 | 1,848,695 | 1,469,933 | |||||||
Accounts receivable from related parties | 143,349 | 33,884 | |||||||
Inventories | 523,929 | 430,893 | |||||||
Prepaid expenses and other current assets | 443,854 | 261,590 | |||||||
Deferred taxes | 293,079 | 179,561 | |||||||
Total current assets | 3,411,916 | 2,460,938 | |||||||
Property, plant and equipment, net | 1,722,392 | 1,215,758 | |||||||
Intangible assets | 661,365 | 585,689 | |||||||
Goodwill | 6,892,161 | 3,456,877 | |||||||
Deferred taxes | 62,722 | 35,649 | |||||||
Other assets | 294,125 | 228,189 | |||||||
Total assets | $ | 13,044,681 | $ | 7,983,100 | |||||
Liabilities and shareholders’ equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 316,188 | $ | 201,317 | |||||
Accounts payable to related parties | 236,619 | 107,938 | |||||||
Accrued expenses and other current liabilities | 1,194,939 | 838,768 | |||||||
Short-term borrowings | 331,231 | 151,113 | |||||||
Short-term borrowings from related parties | 4,575 | 18,757 | |||||||
Current portion of long-term debt and capital lease obligations | 160,135 | 126,269 | |||||||
Income tax payable | 116,059 | 120,138 | |||||||
Deferred taxes | 15,959 | 13,940 | |||||||
Total current liabilities | 2,375,705 | 1,578,240 | |||||||
Long-term debt and capital lease obligations, less current portion | 3,829,341 | 707,100 | |||||||
Other liabilities | 149,684 | 112,418 | |||||||
Pension liabilities | 112,316 | 108,702 | |||||||
Deferred taxes | 378,487 | 300,665 | |||||||
Company-obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiaries | 1,253,828 | 1,187,864 | |||||||
Minority interest | 75,158 | 14,405 | |||||||
Total liabilities | 8,174,519 | 4,009,394 | |||||||
Shareholders’ equity: | |||||||||
Preference shares, no par value,€1.00 nominal value, 12,356,880 shares authorized, 3,711,435 issued and outstanding | 4,098 | 90,740 | |||||||
Ordinary shares, no par value,€1.00 nominal value, 373,436,220 shares authorized, 291,449,673 issued and outstanding | 359,527 | 270,501 | |||||||
Additional paid-in capital | 3,153,556 | 2,779,873 | |||||||
Retained earnings | 1,358,397 | 975,371 | |||||||
Accumulated other comprehensive loss | (5,416 | ) | (142,779 | ) | |||||
Total shareholders’ equity | 4,870,162 | 3,973,706 | |||||||
Total liabilities and shareholders’ equity | $ | 13,044,681 | $ | 7,983,100 | |||||
F-26
Table of Contents
2006 | 2005 | 2004 | |||||||||||||
Operating Activities: | |||||||||||||||
Net income | $ | 536,746 | $ | 454,952 | $ | 401,998 | |||||||||
Adjustments to reconcile net income to cash and cash equivalents provided by (used in) operating activities: | |||||||||||||||
Settlement of shareholder proceedings | (888 | ) | 7,335 | — | |||||||||||
Depreciation and amortization | 308,698 | 251,452 | 232,585 | ||||||||||||
Change in minority interest | 24,333 | — | — | ||||||||||||
Change in deferred taxes, net | 10,904 | (3,675 | ) | 34,281 | |||||||||||
Loss on sale of fixed assets and investments | 5,742 | 3,965 | 735 | ||||||||||||
Compensation expense related to stock options | 16,610 | 1,363 | 1,751 | ||||||||||||
Cash inflow from Hedging | 10,908 | — | 14,514 | ||||||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | |||||||||||||||
Trade accounts receivable, net | (31,276 | ) | (63,574 | ) | (7,886 | ) | |||||||||
Inventories | (42,553 | ) | (9,811 | ) | 27,245 | ||||||||||
Prepaid expenses, other current and non-current assets | (21,629 | ) | (41,036 | ) | 70,033 | ||||||||||
Accounts receivable from / payable to related parties | (4,875 | ) | 9,596 | (22,686 | ) | ||||||||||
Accounts payable, accrued expenses and other current and non-current liabilities | 182,877 | 148,735 | 36,157 | ||||||||||||
Income tax payable | (24,250 | ) | (88,998 | ) | 39,116 | ||||||||||
Tax payments related to divestitures and acquisitions | (63,517 | ) | — | — | |||||||||||
Net cash provided by operating activities | 907,830 | 670,304 | 827,843 | ||||||||||||
Investing Activities: | |||||||||||||||
Purchases of property, plant and equipment | (467,193 | ) | (314,769 | ) | (278,732 | ) | |||||||||
Proceeds from sale of property, plant and equipment | 17,658 | 17,427 | 18,358 | ||||||||||||
Acquisitions and investments, net of cash acquired | (4,307,282 | ) | (125,153 | ) | (104,493 | ) | |||||||||
Proceeds from divestitures | 515,705 | — | — | ||||||||||||
Net cash used in investing activities | (4,241,112 | ) | (422,495 | ) | (364,867 | ) | |||||||||
Financing Activities: | |||||||||||||||
Proceeds from short-term borrowings | 56,562 | 44,655 | 70,484 | ||||||||||||
Repayments of short-term borrowings | (55,789 | ) | (75,493 | ) | (86,850 | ) | |||||||||
Proceeds from short-term borrowings from related parties | 269,920 | 56,381 | 55,539 | ||||||||||||
Repayments of short-term borrowings from related parties | (285,430 | ) | (42,632 | ) | (80,000 | ) | |||||||||
Proceeds from long-term debt and capital lease obligations (net of debt issuance costs of $85,828 in 2006) | 4,007,450 | 426,531 | 369,369 | ||||||||||||
Repayments of long-term debt and capital lease obligations | (973,885 | ) | (331,407 | ) | (840,131 | ) | |||||||||
Increase (decrease) of accounts receivable securitization program | 172,000 | (241,765 | ) | 177,767 | |||||||||||
Proceeds from exercise of stock options | 53,952 | 79,944 | 3,622 | ||||||||||||
Proceeds from conversion of preference shares into ordinary shares | 306,759 | — | — | ||||||||||||
Dividends paid | (153,720 | ) | (137,487 | ) | (122,106 | ) | |||||||||
Change in minority interest | (15,130 | ) | 1,506 | 389 | |||||||||||
Net cash provided by (used in) financing activities | 3,382,689 | (219,767 | ) | (451,917 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | 24,526 | (1,931 | ) | (520 | ) | ||||||||||
Cash and Cash Equivalents: | |||||||||||||||
Net increase in cash and cash equivalents | 73,933 | 26,111 | 10,539 | ||||||||||||
Cash and cash equivalents at beginning of period | 85,077 | 58,966 | 48,427 | ||||||||||||
Cash and cash equivalents at end of period | $ | 159,010 | $ | 85,077 | $ | 58,966 | |||||||||
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Table of Contents
Accumulated Other | |||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||||||
Preference Shares | Ordinary Shares | ||||||||||||||||||||||||||||||||||||||||
Additional | Retained | Foreign | |||||||||||||||||||||||||||||||||||||||
Number of | No Par | Number of | No Par | Paid in | Earnings | Currency | Cash Flow | ||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Capital | (Deficit) | Translation | Hedges | Pensions | Total | ||||||||||||||||||||||||||||||||
Balance at December 31, 2003 | 78,641,937 | $ | 84,973 | 210,000,000 | $ | 270,501 | $ | 2,684,998 | $ | 378,014 | $ | (146,246 | ) | $ | 4,847 | $ | (33,407 | ) | $ | 3,243,680 | |||||||||||||||||||||
Proceeds from exercise of options and related tax effects | 246,321 | 310 | 3,312 | 3,622 | |||||||||||||||||||||||||||||||||||||
Compensation expense related to stock options | 1,751 | 1,751 | |||||||||||||||||||||||||||||||||||||||
Dividends paid | (122,106 | ) | (122,106 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||||||||
Net income | 401,998 | 401,998 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) related to: | |||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of related tax effects | (29,011 | ) | (29,011 | ) | |||||||||||||||||||||||||||||||||||||
Foreign currency translation | 144,784 | 144,784 | |||||||||||||||||||||||||||||||||||||||
Minimum pension liability, net of related tax effects | (9,902 | ) | (9,902 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive income | 507,869 | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2004 | 78,888,258 | $ | 85,283 | 210,000,000 | $ | 270,501 | $ | 2,690,061 | $ | 657,906 | $ | (1,462 | ) | $ | (24,164 | ) | $ | (43,309 | ) | $ | 3,634,816 | ||||||||||||||||||||
Proceeds from exercise of options and related tax effects | 4,398,279 | 5,457 | 81,114 | 86,571 | |||||||||||||||||||||||||||||||||||||
Compensation expense related to stock options | 1,363 | 1,363 | |||||||||||||||||||||||||||||||||||||||
Dividends paid | (137,487 | ) | (137,487 | ) | |||||||||||||||||||||||||||||||||||||
Settlement of shareholder proceedings | 7,335 | 7,335 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||||||||
Net income | 454,952 | 454,952 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) related to: | |||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of related tax effects | 43,128 | 43,128 | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation | (104,723 | ) | (104,723 | ) | |||||||||||||||||||||||||||||||||||||
Minimum pension liability, net of related tax effects | (12,249 | ) | (12,249 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive income | 381,108 | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2005 | 83,286,537 | $ | 90,740 | 210,000,000 | $ | 270,501 | $ | 2,779,873 | $ | 975,371 | $ | (106,185 | ) | $ | 18,964 | $ | (55,558 | ) | $ | 3,973,706 | |||||||||||||||||||||
Proceeds from exercise of options and related tax effects | 313,164 | 395 | 1,561,407 | 1,989 | 51,202 | 53,586 | |||||||||||||||||||||||||||||||||||
Proceeds from conversion of preference shares into ordinary shares | (79,888,266 | ) | (87,037 | ) | 79,888,266 | 87,037 | 306,759 | 306,759 | |||||||||||||||||||||||||||||||||
Compensation expense related to stock options | 16,610 | 16,610 | |||||||||||||||||||||||||||||||||||||||
Dividends paid | (153,720 | ) | (153,720 | ) | |||||||||||||||||||||||||||||||||||||
Settlement of shareholder proceedings | (888 | ) | (888 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||||||||||||||||||||||||
Net income | 536,746 | 536,746 | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) related to: | |||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of related tax effects | 18,223 | 18,223 | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 114,494 | 114,494 | |||||||||||||||||||||||||||||||||||||||
Adjustments relating to pension obligations | 4,646 | 4,646 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | 674,109 | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 3,711,435 | $ | 4,098 | 291,449,673 | $ | 359,527 | $ | 3,153,556 | $ | 1,358,397 | $ | 8,309 | $ | 37,187 | $ | (50,912 | ) | $ | 4,870,162 | ||||||||||||||||||||||
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Table of Contents
1. | The Company and Summary of Significant Accounting Policies |
a) | Principles of Consolidation |
b) | Classifications |
F-29
Table of Contents
c) | Cash and Cash Equivalents |
d) | Allowance for Doubtful Accounts |
e) | Inventories |
f) | Property, Plant and Equipment |
g) | Other Intangible Assets and Goodwill |
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h) | Derivative Financial Instruments |
i) | Foreign Currency Translation |
j) | Revenue Recognition Policy |
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Table of Contents
k) | Research and Development expenses |
l) | Income Taxes |
m) | Impairment |
n) | Debt Issuance Costs |
o) | Self-Insurance Programs |
p) | Use of Estimates |
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Table of Contents
q) | Concentration of Risk |
r) | Legal Contingencies |
s) | Earnings per Ordinary share and Preference share |
t) | Employee Benefit Plans |
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u) | Stock Option Plans |
v) | Recent Pronouncements |
F-34
Table of Contents
2. | Transformation of Legal Form and Conversion of Preference Shares |
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3. | Acquisitions and Divestitures |
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Assets held for sale | $ | 330,092 | ||
Other current assets | 413,937 | |||
Property, plant and equipment | 301,498 | |||
Intangible assets and other assets | 149,485 | |||
Goodwill | 3,381,901 | |||
Accounts payable, accrued expenses and other current liabilities | (276,184 | ) | ||
Income tax payable and deferred taxes | (63,939 | ) | ||
Long-term debt and capital lease obligations | (3,882 | ) | ||
Other liabilities | (75,289 | ) | ||
Total allocation of acquisition cost | $ | 4,157,619 | ||
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Unaudited | 2006 | 2005 | |||||||
Pro forma net revenue | $ | 8,809,573 | $ | 7,983,941 | |||||
Pro forma net income | 536,223 | 449,481 | |||||||
Pro forma net income per ordinary share: | |||||||||
Basic | 1.82 | 1.54 | |||||||
Fully Diluted | 1.81 | 1.53 |
4. | Related Party Transactions |
a) | Service Agreements |
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b) | Products |
c) | Financing Provided by Fresenius AG |
d) | Other |
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5. | Inventories |
2006 | 2005 | ||||||||
Raw materials and purchased components | $ | 108,584 | $ | 93,889 | |||||
Work in process | 41,272 | 33,073 | |||||||
Finished goods | 269,496 | 223,356 | |||||||
Health care supplies | 104,577 | 80,575 | |||||||
Inventories | $ | 523,929 | $ | 430,893 | |||||
2006 | 2005 | |||||||
Land and improvements | $ | 32,492 | $ | 26,564 | ||||
Buildings and improvements | 1,123,691 | 812,841 | ||||||
Machinery and equipment | 1,844,299 | 1,381,427 | ||||||
Machinery, equipment and rental equipment under capitalized leases | 17,044 | 13,468 | ||||||
Construction in progress | 255,994 | 117,331 | ||||||
3,273,520 | 2,351,631 | |||||||
Accumulated depreciation | (1,551,128 | ) | (1,135,873 | ) | ||||
Property, plant and equipment, net | $ | 1,722,392 | $ | 1,215,758 | ||||
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7. | Other Intangible Assets and Goodwill |
December 31, 2006 | December 31, 2005 | |||||||||||||||
Gross | Gross | |||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
Amortizable Intangible Assets | ||||||||||||||||
Non-compete Agreements | $ | 203,123 | $ | (118,553 | ) | $ | — | $ | — | |||||||
Technology | 64,800 | (406 | ) | — | — | |||||||||||
Patient relationships | — | — | 164,188 | (114,192 | ) | |||||||||||
Other | 305,509 | (233,099 | ) | 205,406 | (108,517 | ) | ||||||||||
$ | 573,432 | $ | (352,058 | ) | $ | 369,594 | $ | (222,709 | ) | |||||||
Carrying | Carrying | |||||||||||||||
Amount | Amount | |||||||||||||||
Non-amortizable Intangible Assets | ||||||||||||||||
Tradename | $ | 222,122 | $ | 220,935 | ||||||||||||
Management contracts | 217,869 | 217,869 | ||||||||||||||
$ | 439,991 | $ | 438,804 | |||||||||||||
Total Intangible Assets | $ | 661,365 | $ | 585,689 | ||||||||||||
2004 | $ | 32,853 | ||
2005 | $ | 40,349 | ||
2006 | $ | 43,210 | ||
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2007 | $ | 40,577 | ||
2008 | $ | 38,438 | ||
2009 | $ | 35,927 | ||
2010 | $ | 34,138 | ||
2011 | $ | 33,765 | ||
North | |||||||||||||
America | International | Total | |||||||||||
Balance as of January 1, 2005 | 3,035,697 | $ | 409,455 | $ | 3,445,152 | ||||||||
Goodwill acquired | 49,410 | 22,715 | 72,125 | ||||||||||
Reclassifications | (8,882 | ) | (390 | ) | (9,272 | ) | |||||||
Foreign Currency Translation Adjustment | 108 | (51,236 | ) | (51,128 | ) | ||||||||
Balance as of December 31, 2005 | $ | 3,076,333 | $ | 380,544 | $ | 3,456,877 | |||||||
Goodwill acquired RCG (excl. divestitures) | 3,381,901 | — | 3,381,901 | ||||||||||
Goodwill acquired other | 68,106 | 36,843 | 104,949 | ||||||||||
Goodwill disposed of | (119,942 | ) | — | (119,942 | ) | ||||||||
Reclassification from Patient Relationships | 35,240 | — | 35,240 | ||||||||||
Other Reclassifications | (3,603 | ) | (424 | ) | (4,027 | ) | |||||||
Foreign Currency Translation Adjustment | (40 | ) | 37,203 | 37,163 | |||||||||
Balance as of December 31, 2006 | $ | 6,437,995 | $ | 454,166 | $ | 6,892,161 | |||||||
8. | Accrued Expenses and Other Current Liabilities |
2006 | 2005 | |||||||
Accrued salaries and wages | $ | 283,859 | $ | 214,873 | ||||
Unapplied cash and receivable credits | 148,985 | 73,897 | ||||||
Accrued insurance | 124,422 | 75,545 | ||||||
Special charge for legal matters | 115,000 | 117,541 | ||||||
Other | 522,672 | 356,912 | ||||||
Total accrued expenses and other current liabilities | $ | 1,194,938 | $ | 838,768 | ||||
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9. | Short-Term Borrowings and Short-Term Borrowings from Related Parties |
2006 | 2005 | |||||||
Borrowings under lines of credit | $ | 65,231 | $ | 57,113 | ||||
Accounts receivable facility | 266,000 | 94,000 | ||||||
Short-term borrowings | 331,231 | 151,113 | ||||||
Short-term borrowings from related parties | 4,575 | 18,757 | ||||||
Short-term borrowings including related parties | $ | 335,806 | $ | 169,870 | ||||
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Table of Contents
10. | Long-term Debt and Capital Lease Obligations |
2006 | 2005 | |||||||
Senior Credit Agreement | $ | 3,564,702 | $ | 470,700 | ||||
Euro Notes | 263,400 | 235,940 | ||||||
EIB Agreements | 84,618 | 48,806 | ||||||
Capital lease obligations | 8,286 | 4,596 | ||||||
Other | 68,470 | 73,327 | ||||||
3,989,476 | 833,369 | |||||||
Less current maturities | (160,135 | ) | (126,269 | ) | ||||
$ | 3,829,341 | $ | 707,100 | |||||
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Maximum Amount Available | Balance Outstanding | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Revolving Credit | $ | 1,000,000 | $ | 750,000 | $ | 67,827 | $ | 45,700 | ||||||||
Term Loan A/ A-1 | 1,760,000 | 425,000 | 1,760,000 | 425,000 | ||||||||||||
Term Loan B | 1,736,875 | — | 1,736,875 | — | ||||||||||||
$ | 4,496,875 | $ | 1,175,000 | $ | 3,564,702 | $ | 470,700 | |||||||||
• | a 5-year $1,000,000 revolving credit facility (of which up to $250,000 is available for letters of credit, up to $300,000 is available for borrowings in certain non-U.S. currencies, up to $150,000 is available as swing line loans in U.S. dollars, up to $250,000 is available as a competitive loan facility and up to $50,000 is available as swing line loans in certain non-U.S. currencies, the total of which cannot exceed $1,000,000) which will be due and payable on March 31, 2011. | |
• | a 5-year term loan facility (“Loan A”) of $1,850,000, also scheduled to mature on March 31, 2011. The 2006 Senior Credit Agreement requires 19 quarterly payments on Loan A of $30,000 each that permanently reduce the term loan facility which began June 30, 2006 and continue through December 31, 2010. The remaining amount outstanding is due on March 31, 2011. | |
• | a 7-year term loan facility (“Loan B”) of $1,750,000 scheduled to mature on March 31, 2013. The terms of the 2006 Senior Credit Agreement require 28 quarterly payments on Loan B that permanently reduce the term loan facility. The repayment began June 30, 2006. The first 24 quarterly payments will be equal to one quarter of one percent (0.25%) of the original principal balance outstanding, payments 25 through 28 will be equal to twenty-three and one half percent (23.5%) of the original principal balance outstanding with the final payment due on March 31, 2013, subject to an early repayment requirement on March 1, 2011 if the Trust Preferred Securities due June 15, 2011 are not repaid or refinanced or their maturity is not extended prior to that date. |
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Table of Contents
2007 | $ | 160,135 | ||
2008 | 151,808 | |||
2009 | 412,150 | |||
2010 | 145,198 | |||
2011 | 1,370,789 | |||
Thereafter | 1,749,396 | |||
$ | 3,989,476 | |||
11. | Employee Benefit Plans |
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2006 | 2005 | 2004 | ||||||||||
Change in benefit obligation: | ||||||||||||
Benefit obligation at beginning of year | $ | 320,975 | $ | 288,862 | $ | 241,240 | ||||||
Foreign currency translation | 10,843 | (11,233 | ) | 4,939 | ||||||||
Service cost | 8,113 | 5,103 | 4,269 | |||||||||
Interest cost | 16,945 | 15,927 | 14,816 | |||||||||
Transfer of plan participants | (728 | ) | (36 | ) | (261 | ) | ||||||
Actuarial (gain) loss | (16,194 | ) | 27,170 | 28,165 | ||||||||
Benefits paid | (5,579 | ) | (4,818 | ) | (4,306 | ) | ||||||
Benefit obligation at end of year | $ | 334,375 | $ | 320,975 | $ | 288,862 | ||||||
Change of plan assets: | ||||||||||||
Fair value of plan assets at beginning of year | $ | 196,013 | $ | 166,952 | $ | 135,247 | ||||||
Actual return on plan assets | 18,128 | 7,481 | 9,642 | |||||||||
Employer contributions | 10,982 | 25,627 | 25,633 | |||||||||
Benefits paid | (4,756 | ) | (4,047 | ) | (3,570 | ) | ||||||
Fair value of plan assets at end of year | $ | 220,367 | $ | 196,013 | $ | 166,952 | ||||||
Funded status at year end | $ | 114,008 | $ | 124,962 | $ | 121,910 | ||||||
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2006 | 2005 | 2004 | ||||||||||
Funded status at end of year | $ | 114,008 | $ | 124,962 | $ | 121,910 | ||||||
Unrecognized net loss | (84,104 | ) | (108,440 | ) | (85,945 | ) | ||||||
Unrecognized prior service cost | — | (795 | ) | — | ||||||||
Additional Minimum Liability | 65,664 | 92,975 | 72,160 | |||||||||
Effect of adoption of FAS 158 | 18,440 | — | — | |||||||||
Total Pension Liability at December 31, | $ | 114,008 | $ | 108,702 | $ | 108,125 | ||||||
2006 | 2005 | 2004 | |||||||||||
Fair value of plan assets | $ | 220,367 | $ | 196,013 | $ | 166,952 | |||||||
Accumulated benefit obligation | 315,935 | 304,715 | 213,995 | ||||||||||
Minimum Liability | 95,568 | 108,702 | 47,043 | ||||||||||
Accrued/(prepaid) benefit costs | 29,904 | 15,727 | (25,117 | ) | |||||||||
Additional Minimum Liability | $ | 65,664 | $ | 92,975 | $ | 72,160 | |||||||
Thereof intangible assets | $ | 795 | $ | — | |||||||||
Thereof accumulated other comprehensive income | $ | 92,180 | $ | 72,160 | |||||||||
Foreign | ||||||||||||||||||||
Currency | ||||||||||||||||||||
January 1, | Additions/ | Adjustment | Translation | December 31, | ||||||||||||||||
2006 | Releases | FAS 158 | Adjustment | 2006 | ||||||||||||||||
Additional Minimum Liability | $ | 92,180 | $ | (28,189 | ) | $ | (65,664 | ) | $ | 1,673 | $ | — | ||||||||
Actuarial losses | — | — | 84,104 | — | 84,104 | |||||||||||||||
Adjustments related to pension liabilities(1) | $ | 92,180 | $ | (28,189 | ) | $ | 18,440 | $ | 1,673 | $ | 84,104 | |||||||||
(1) | See Note 21 for the tax effects on other comprehensive income recognized during 2006. |
Before Adoption of | After Adoption of | |||||||||||
Statement 158 | Adjustments | Statement 158 | ||||||||||
Deferred tax assets | $ | 26,058 | $ | 7,134 | $ | 33,192 | ||||||
Accrued expenses and other current liabilities | — | 1,692 | 1,692 | |||||||||
Pension liabilities | 95,568 | 16,748 | 112,316 | |||||||||
Accumulated other comprehensive loss | (39,606 | ) | (11,306 | ) | (50,912 | ) |
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2006 | 2005 | 2004 | ||||||||||
Discount rate | 5.52% | 5.22% | 5.62% | |||||||||
Rate of compensation increase | 4.18% | 4.22% | 4.25% |
2006 | 2005 | 2004 | ||||||||||
Components of net periodic benefit cost: | ||||||||||||
Service cost | $ | 8,113 | $ | 5,103 | $ | 4,269 | ||||||
Interest cost | 16,945 | 15,927 | 14,816 | |||||||||
Expected return on plan assets | (15,361 | ) | (13,163 | ) | (10,219 | ) | ||||||
Amortization unrealized losses | 8,420 | 6,753 | 4,712 | |||||||||
Amortization of prior service cost | 846 | 210 | — | |||||||||
Settlement loss | 238 | — | — | |||||||||
Net periodic benefit costs | $ | 19,201 | $ | 14,830 | $ | 13,578 | ||||||
2006 | 2005 | 2004 | ||||||||||
Discount rate | 5.16% | 5.61% | 6.00% | |||||||||
Expected return of plan assets | 7.50% | 7.50% | 7.50% | |||||||||
Rate of compensation increase | 4.18% | 4.22% | 4.25% |
2007 | $ | 6,568 | ||
2008 | 7,619 | |||
2009 | 8,476 | |||
2010 | 9,701 | |||
2011 | 10,488 | |||
2012-2016 | 73,048 |
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Allocation in | Allocation in | Target allocation | |||||||||||
2006 in % | 2005 in % | in % | |||||||||||
Categories of plan assets | |||||||||||||
Equity securities | 38 | % | 44 | % | 36 | % | |||||||
Debt securities | 62 | % | 56 | % | 64 | % | |||||||
Total | 100 | % | 100 | % | 100 | % | |||||||
12. | Mandatorily Redeemable Trust Preferred Securities |
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Mandatory | ||||||||||||||||||||||||
Year | Stated | Interest | Redemption | |||||||||||||||||||||
Issued | Amount | Rate | Date | 2006 | 2005 | |||||||||||||||||||
Fresenius Medical Care Capital Trust II | 1998 | $ | 450,000 | 77/8 | % | February 1, 2008 | 434,942 | 431,762 | ||||||||||||||||
Fresenius Medical Care Capital Trust III | 1998 | DM 300,000 | 73/8 | % | February 1, 2008 | 202,011 | 180,951 | |||||||||||||||||
Fresenius Medical Care Capital Trust IV | 2001 | $ | 225,000 | 77/8 | % | June 15, 2011 | 223,300 | 222,917 | ||||||||||||||||
Fresenius Medical Care Capital Trust V | 2001 | €300,000 | 73/8 | % | June 15, 2011 | 393,575 | 352,234 | |||||||||||||||||
$ | 1,253,828 | $ | 1,187,864 | |||||||||||||||||||||
13. | Shareholders’ Equity |
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14. | Earnings Per Share |
2006 | 2005 | 2004 | |||||||||||
Numerators: | |||||||||||||
Net income | $ | 536,746 | $ | 454,952 | $ | 401,998 | |||||||
less: | |||||||||||||
Dividend Preference on Preference shares | 90 | 2,000 | 1,959 | ||||||||||
Income available to all class of shares | $ | 536,656 | $ | 452,952 | $ | 400,039 | |||||||
Denominators: | |||||||||||||
Weighted average number of: | |||||||||||||
Ordinary shares outstanding | 290,621,904 | 210,000,000 | 210,000,000 | ||||||||||
Preference shares outstanding | 3,575,376 | 80,369,448 | 78,729,177 | ||||||||||
Total weighted average shares outstanding | 294,197,280 | 290,369,448 | 288,729,177 | ||||||||||
Potentially dilutive Ordinary shares | 1,673,649 | ||||||||||||
Potentially dilutive Preference shares | 140,976 | 2,337,990 | 1,265,724 | ||||||||||
Total weighted average ordinary shares outstanding assuming dilution | 292,295,553 | 210,000,000 | 210,000,000 | ||||||||||
Total weighted average Preference shares outstanding assuming dilution | 3,716,352 | 82,707,438 | 79,994,901 | ||||||||||
Basic income per Ordinary share | $ | 1.82 | $ | 1.56 | $ | 1.39 | |||||||
Plus preference per Preference share | 0.03 | 0.02 | 0.02 | ||||||||||
Basic income per Preference Share | $ | 1.85 | $ | 1.58 | $ | 1.41 | |||||||
Fully diluted income per Ordinary share | $ | 1.81 | $ | 1.55 | $ | 1.38 | |||||||
Plus preference per Preference share | 0.03 | 0.02 | 0.02 | ||||||||||
Fully diluted income per Preference share | $ | 1.84 | $ | 1.57 | $ | 1.40 | |||||||
15. | Stock Options |
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2005 | 2004 | |||||||||
Net income: | ||||||||||
As reported | $ | 454,952 | $ | 401,998 | ||||||
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects | 1,090 | 1,751 | ||||||||
Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects | (8,302 | ) | (7,559 | ) | ||||||
Pro forma | $ | 447,740 | $ | 396,190 | ||||||
Basic earnings per: | ||||||||||
Ordinary share | ||||||||||
As reported | $ | 1.56 | $ | 1.39 | ||||||
Pro forma | $ | 1.54 | $ | 1.37 | ||||||
Preference share | ||||||||||
As reported | $ | 1.58 | $ | 1.41 | ||||||
Pro forma | $ | 1.56 | $ | 1.39 | ||||||
Fully diluted earnings per: | ||||||||||
Ordinary share | ||||||||||
As reported | $ | 1.55 | $ | 1.38 | ||||||
Pro forma | $ | 1.52 | $ | 1.36 | ||||||
Preference share | ||||||||||
As reported | $ | 1.57 | $ | 1.40 | ||||||
Pro forma | $ | 1.55 | $ | 1.38 |
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Weighted | Weighted | ||||||||||||
Average | Average | ||||||||||||
Reconciliation of options for preference shares | Exercise | Exercise | |||||||||||
converted to options for ordinary shares | Options | Price | Price | ||||||||||
(in thousands) | € | $ | |||||||||||
Balance at December 31, 2005 | 12,308 | 15.96 | 21.02 | ||||||||||
Forfeited prior to conversion | 15 | 13.67 | 18.00 | ||||||||||
Eligible for conversion | 12,293 | 15.98 | 21.04 | ||||||||||
Options not converted | 703 | 16.39 | 21.59 | ||||||||||
Options converted | 11,590 | ||||||||||||
Reduction due to impact of conversion ratios | 3,042 | ||||||||||||
Balance of options outstanding after conversion into ordinary shares as of February 10, 2006 | 8,548 | 21.41 | 28.20 | ||||||||||
Granted | 2,317 | 30.54 | 40.23 | ||||||||||
Exercised | 1,561 | 20.46 | 26.95 | ||||||||||
Forfeited | 82 | 22.98 | 30.26 | ||||||||||
Balance at December 31, 2006 options for ordinary shares | 9,222 | 20.39 | 26.86 | ||||||||||
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Reconciliation of options for preference shares | |||||||||||||
Balance of options not converted as of February 10, 2006 | 703 | 16.39 | 21.59 | ||||||||||
Exercised | 313 | 16.61 | 21.87 | ||||||||||
Forfeited | 22 | 16.87 | 22.22 | ||||||||||
Balance at December 31, 2006 options for preference shares | 368 | 16.19 | 21.32 | ||||||||||
Fully Vested Outstanding and Exercisable Options | ||||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Remaining | Weighted | Weighted | ||||||||||||||||||||||
Contractual | Average | Average | Aggregate | Aggregate | ||||||||||||||||||||
Number of | Life in | Exercise | Exercise | Intrinsic | Intrinsic | |||||||||||||||||||
Options | Years | Price | Price | Value | Value | |||||||||||||||||||
(in thousands) | € | US-$ | € | US-$ | ||||||||||||||||||||
Options for preference shares | 213 | 3.63 | 14.46 | 19.04 | 3,734 | 4,918 | ||||||||||||||||||
Options for ordinary shares | 2,878 | 4.86 | 19.70 | 25.95 | 40,167 | 52,900 |
Weighted-average assumptions: | 2006 | |||||
Expected dividend yield | 1.64% | |||||
Risk-free interest rate | 3.78% | |||||
Expected volatility | 30.03% | |||||
Expected life of options | 7 years | |||||
Exercise price | 30.54€ | (US-$40.23) |
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Weighted-average assumptions: | 2005 | 2004 | ||||||
Expected dividend yield | 2.88% | 2.87% | ||||||
Risk-free interest rate | 2.76% | 3.50% | ||||||
Expected volatility | 40.00% | 40.00% | ||||||
Expected life of options | 5.3 years | 5.3 years |
16. | Income Taxes |
2006 | 2005 | 2004 | ||||||||||
Germany | $ | 167,258 | $ | 109,407 | $ | 86,702 | ||||||
United States | 645,360 | 512,697 | 447,197 | |||||||||
Other | 154,263 | 143,622 | 134,700 | |||||||||
$ | 966,881 | $ | 765,726 | $ | 668,599 | |||||||
2006 | 2005 | 2004 | |||||||||||
Current: | |||||||||||||
Germany | $ | 107,609 | $ | 40,386 | $ | 55,034 | |||||||
United States | 150,550 | 206,551 | 129,445 | ||||||||||
Other | 57,462 | 48,133 | 40,316 | ||||||||||
315,621 | 295,070 | 224,796 | |||||||||||
Deferred: | |||||||||||||
Germany | (15,219 | ) | (12,990 | ) | 5,147 | ||||||||
United States | 118,800 | 27,391 | 34,958 | ||||||||||
Other | (5,713 | ) | (723 | ) | 513 | ||||||||
97,868 | 13,678 | 40,619 | |||||||||||
$ | 413,489 | $ | 308,748 | $ | 265,415 | ||||||||
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2006 | 2005 | 2004 | ||||||||||
Expected corporate income tax expense | $ | 371,959 | $ | 294,345 | $ | 255,271 | ||||||
Tax free income | (33,912 | ) | (18,442 | ) | (15,570 | ) | ||||||
Foreign tax rate differential | (3,013 | ) | (8,431 | ) | 15,734 | |||||||
Non-deductible expenses | 17,055 | 27,757 | 9,426 | |||||||||
Taxes for prior years | 41,332 | 20,509 | 10,267 | |||||||||
Tax on divestitures | 29,128 | 0 | 0 | |||||||||
Other | (9,060 | ) | (6,990 | ) | (9,713 | ) | ||||||
Actual income tax expense | $ | 413,489 | $ | 308,748 | $ | 265,415 | ||||||
Effective tax rate | 42.8 | % | 40.3 | % | 39.7 | % | ||||||
2006 | 2005 | |||||||
Deferred tax assets: | ||||||||
Accounts receivable, primarily due to allowance for doubtful accounts | $ | 42,753 | $ | 26,018 | ||||
Inventory, primarily due to additional costs capitalized for tax purposes, and inventory reserve accounts | 32,512 | 29,628 | ||||||
Plant, equipment, intangible assets and other non current assets, principally due to differences in depreciation and amortization | 45,949 | 37,905 | ||||||
Accrued expenses and other liabilities for financial accounting purposes, not currently tax deductible | 253,730 | 159,339 | ||||||
Net operating loss carryforwards | 37,965 | 44,249 | ||||||
Derivatives | 8,313 | 3,735 | ||||||
Other | 10,978 | 5,266 | ||||||
Total deferred tax assets | $ | 432,200 | $ | 306,140 | ||||
Less: valuation allowance | (41,231 | ) | (46,146 | ) | ||||
Net deferred tax assets | $ | 390,969 | $ | 259,994 | ||||
Deferred tax liabilities: | ||||||||
Accounts receivable, primarily due to allowance for doubtful accounts | $ | 10,398 | $ | 9,266 | ||||
Inventory, primarily due to inventory reserve accounts for tax purposes | 6,994 | 6,040 | ||||||
Accrued expenses and other liabilities deductible for tax prior to financial accounting recognition | 30,714 | 15,945 | ||||||
Plant, equipment and intangible assets, principally due to differences in depreciation and amortization | 302,187 | 256,663 | ||||||
Derivatives | 33,831 | 21,582 | ||||||
Other | 45,491 | 49,893 | ||||||
Total deferred tax liabilities | 429,615 | 359,389 | ||||||
Net deferred tax liabilities | $ | 38,646 | $ | 99,395 | ||||
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2007 | $ | 12,551 | ||
2008 | 5,524 | |||
2009 | 5,755 | |||
2010 | 9,724 | |||
2011 | 11,113 | |||
2012 | 6,537 | |||
2013 | 2,123 | |||
2014 and thereafter | 1,305 | |||
Without expiration date | 61,822 | |||
Total | $ | 116,454 | ||
17. | Operating Leases |
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2007 | $ | 308,084 | ||
2008 | 272,995 | |||
2009 | 237,973 | |||
2010 | 202,458 | |||
2011 | 168,712 | |||
Thereafter | 507,516 | |||
$ | 1,697,738 | |||
18. | Legal Proceedings |
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F-64
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F-65
Table of Contents
19. | Financial Instruments |
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F-67
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2006 | 2005 | ||||||||||||||||
Carrying | Carrying | ||||||||||||||||
Amount | Fair Value | Amount | Fair Value | ||||||||||||||
Non-derivatives | |||||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 159,010 | $ | 159,010 | $ | 85,077 | $ | 85,077 | |||||||||
Receivables | 1,848,695 | 1,848,695 | 1,469,933 | 1,469,933 | |||||||||||||
Liabilities | |||||||||||||||||
Accounts payable | 552,807 | 552,807 | 309,255 | 309,255 | |||||||||||||
Long term debt, excluding Euro-Notes | 3,726,076 | 3,726,076 | 597,429 | 597,429 | |||||||||||||
Trust Preferred Securities | 1,253,828 | 1,331,802 | 1,187,864 | 1,285,319 | |||||||||||||
Euro-Notes | 263,400 | 266,480 | 235,940 | 236,326 | |||||||||||||
Derivatives | |||||||||||||||||
Foreign exchange contracts | 2,613 | 2,613 | (2,939 | ) | (2,939 | ) | |||||||||||
Dollar interest rate hedges | 45,217 | 45,217 | 21,830 | 21,830 | |||||||||||||
Yen interest rate hedges | (75 | ) | (75 | ) | (201 | ) | (201 | ) |
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20. | Other Comprehensive Income (Loss) |
Year Ended December 31, 2006 | Year Ended December 31, 2005 | Year Ended December 31, 2004 | |||||||||||||||||||||||||||||||||||
Tax | Tax | Tax | |||||||||||||||||||||||||||||||||||
Pretax | Effect | Net | Pretax | Effect | Net | Pretax | Effect | Net | |||||||||||||||||||||||||||||
Other comprehensive (loss) income relating to cash flow hedges: | |||||||||||||||||||||||||||||||||||||
Changes in fair value of cash flow hedges during the period | $ | 25,513 | $ | (9,300 | ) | $ | 16,213 | $ | 72,440 | $ | (28,653 | ) | $ | 43,787 | $ | (36,192 | ) | $ | 13,638 | $ | (22,554 | ) | |||||||||||||||
Reclassification adjustments | 3,280 | (1,270 | ) | 2,010 | (1,243 | ) | 584 | (659 | ) | (9,906 | ) | 3,449 | (6,457 | ) | |||||||||||||||||||||||
Total other comprehensive (loss) income relating to cash flow hedges | 28,793 | (10,570 | ) | 18,223 | 71,197 | (28,069 | ) | 43,128 | (46,098 | ) | 17,087 | (29,011 | ) | ||||||||||||||||||||||||
Foreign-currency translation adjustment | 114,494 | — | 114,494 | (104,723 | ) | — | (104,723 | ) | 144,784 | — | 144,784 | ||||||||||||||||||||||||||
Adjustments related to pension obligations | 8,074 | (3,428 | ) | 4,646 | (19,996 | ) | 7,747 | (12,249 | ) | (16,507 | ) | 6,605 | (9,902 | ) | |||||||||||||||||||||||
Other comprehensive income (loss) | $ | 151,361 | $ | (13,998 | ) | $ | 137,363 | $ | (53,522 | ) | $ | (20,322 | ) | $ | (73,844 | ) | $ | 82,179 | $ | 23,692 | $ | 105,871 | |||||||||||||||
21. | Business Segment Information |
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North | Segment | ||||||||||||||||||||
America | International | Total | Corporate | Total | |||||||||||||||||
2006 | |||||||||||||||||||||
Net revenue external customers | $ | 6,025,314 | $ | 2,473,724 | $ | 8,499,038 | $ | — | $ | 8,499,038 | |||||||||||
Inter-segment revenue | 1,281 | 60,043 | 61,324 | (61,324 | ) | — | |||||||||||||||
Total net revenue | 6,026,595 | 2,533,767 | 8,560,362 | (61,324 | ) | 8,499,038 | |||||||||||||||
Depreciation and amortization | (186,826 | ) | (119,938 | ) | (306,764 | ) | (1,934 | ) | (308,698 | ) | |||||||||||
Operating Income | 964,609 | 440,552 | 1,405,161 | (87,034 | ) | 1,318,127 | |||||||||||||||
Segment assets(1) | 10,196,844 | 2,744,833 | 12,941,677 | 103,004 | 13,044,681 | ||||||||||||||||
Capital expenditures and acquisitions(2) | 4,599,276 | 175,062 | 4,774,338 | 137 | 4,774,475 | ||||||||||||||||
2005 | |||||||||||||||||||||
Net revenue external customers | $ | 4,577,379 | $ | 2,194,440 | $ | 6,771,819 | $ | — | $ | 6,771,819 | |||||||||||
Inter-segment revenue | 1,327 | 54,449 | 55,776 | (55,776 | ) | — | |||||||||||||||
Total net revenue | 4,578,706 | 2,248,889 | 6,827,595 | (55,776 | ) | 6,771,819 | |||||||||||||||
Depreciation and amortization | (139,747 | ) | (109,812 | ) | (249,559 | ) | (1,893 | ) | (251,452 | ) | |||||||||||
Operating Income | 643,917 | 362,134 | 1,006,051 | (67,133 | ) | 938,918 | |||||||||||||||
Segment assets | 5,634,985 | 2,216,630 | 7,851,615 | 131,485 | 7,983,100 | ||||||||||||||||
Capital expenditures and acquisitions(3) | 252,822 | 187,030 | 439,852 | 70 | 439,922 | ||||||||||||||||
2004 | |||||||||||||||||||||
Net revenue external customers | $ | 4,248,216 | $ | 1,979,786 | $ | 6,228,002 | $ | — | $ | 6,228,002 | |||||||||||
Inter-segment revenue | 1,602 | 39,004 | 40,606 | (40,606 | ) | — | |||||||||||||||
Total net revenue | 4,249,818 | 2,018,790 | 6,268,608 | (40,606 | ) | 6,228,002 | |||||||||||||||
Depreciation and amortization | (128,532 | ) | (102,137 | ) | (230,669 | ) | (1,917 | ) | (232,586 | ) | |||||||||||
Operating Income | 587,400 | 300,291 | 887,691 | (35,346 | ) | 852,345 | |||||||||||||||
Segment assets | 5,539,631 | 2,366,277 | 7,905,908 | 55,633 | 7,961,541 | ||||||||||||||||
Capital expenditures and acquisitions(4) | 230,150 | 152,820 | 382,970 | 255 | 383,225 |
(1) | Segment assets of North America include the goodwill of RCG of $3,381,901 as of December 31, 2006. |
(2) | North America and International acquisitions exclude $2,500 and $6,208 of non-cash acquisitions for 2006. North America acquisitions include $4,148,200 at December 31, 2006 of the total $4,157,619 purchase price of RCG. |
(2) | North America and International acquisitions exclude $260 and $9,031, respectively, of non-cash acquisitions for 2005. |
(4) | International acquisitions exclude $15,479 of non-cash acquisitions for 2004. |
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United | Rest of the | |||||||||||||||
Germany | States | World | Total | |||||||||||||
2006 | ||||||||||||||||
Net revenue external customers | $ | 288,047 | $ | 6,025,314 | $ | 2,185,677 | $ | 8,499,038 | ||||||||
Long-lived assets | 144,877 | 8,274,104 | 1,080,301 | 9,499,282 | ||||||||||||
2005 | ||||||||||||||||
Net revenue external customers | $ | 288,923 | $ | 4,577,379 | $ | 1,905,517 | $ | 6,771,819 | ||||||||
Long-lived assets | 157,362 | 4,372,453 | 906,220 | 5,436,035 | ||||||||||||
2004 | ||||||||||||||||
Net revenue external customers | $ | 288,526 | $ | 4,248,216 | $ | 1,691,260 | $ | 6,228,002 | ||||||||
Long-lived assets | 169,981 | 4,277,319 | 956,860 | 5,404,160 |
22. | Supplementary Cash Flow Information |
2006 | 2005 | 2004 | |||||||||||
Supplementary cash flow information: | |||||||||||||
Cash paid for interest | $ | 378,233 | $ | 180,853 | $ | 201,380 | |||||||
Cash paid for income taxes | $ | 423,514 | $ | 380,764 | $ | 198,983 | |||||||
Cash inflow for income taxes from stock option exercises | $ | 7,428 | $ | — | $ | — | |||||||
Supplemental disclosures of cash flow information: | |||||||||||||
Details for acquisitions: | |||||||||||||
Assets acquired | $ | 4,784,713 | $ | 149,189 | $ | 148,324 | |||||||
Liabilities assumed | 348,898 | 18,161 | 12,957 | ||||||||||
Minorities | 56,300 | (5,017 | ) | — | |||||||||
Notes assumed in connection with acquisition | 8,708 | 9,291 | 15,479 | ||||||||||
Cash paid | 4,370,807 | 126,754 | 119,888 | ||||||||||
Less cash acquired | 63,525 | 1,601 | 15,395 | ||||||||||
Net cash paid for acquisitions | $ | 4,307,282 | $ | 125,153 | $ | 104,493 | |||||||
23. | Supplemental Condensed Combining Information |
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For the Year Ended December 31, 2006 | |||||||||||||||||||||||||
Guarantor Subsidiaries | |||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | ||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | ||||||||||||||||||||
Net revenue | $ | — | $ | 1,750,605 | $ | — | $ | 8,242,843 | $ | (1,494,410 | ) | $ | 8,499,038 | ||||||||||||
Cost of revenue | — | 1,297,157 | — | 5,804,814 | (1,480,489 | ) | 5,621,482 | ||||||||||||||||||
Gross profit | — | 453,448 | — | 2,438,029 | (13,921 | ) | 2,877,556 | ||||||||||||||||||
Operating (income) expenses: | |||||||||||||||||||||||||
Selling, general and administrative | 98,761 | 145,700 | 16,829 | 1,345,974 | (58,895 | ) | 1,548,369 | ||||||||||||||||||
Gain on sale of legacy clinics | — | — | — | (40,233 | ) | — | (40,233 | ) | |||||||||||||||||
Research and development | — | 36,801 | — | 14,492 | — | 51,293 | |||||||||||||||||||
Operating (loss) income | (98,761 | ) | 270,947 | (16,829 | ) | 1,077,563 | 44,974 | 1,318,127 | |||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||||
Interest, net | 23,228 | 13,108 | 186,988 | 126,338 | 1,584 | 351,246 | |||||||||||||||||||
Other, net | (728,116 | ) | 160,094 | (448,408 | ) | — | 1,016,430 | — | |||||||||||||||||
Income (loss) before income taxes and minority interest | 606,127 | 97,745 | 244,591 | 991,458 | (973,040 | ) | 966,881 | ||||||||||||||||||
Income tax expense (benefit) | 69,381 | 101,042 | (81,527 | ) | 379,268 | (54,675 | ) | 413,489 | |||||||||||||||||
Income (loss) before minority interest | 536,746 | (3,297 | ) | 326,118 | 612,190 | (918,365 | ) | 553,392 | |||||||||||||||||
Minority interest | — | — | — | — | 16,646 | 16,646 | |||||||||||||||||||
Net income (loss) | $ | 536,746 | $ | (3,297 | ) | $ | 326,118 | $ | 612,190 | $ | (935,011 | ) | $ | 536,746 | |||||||||||
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For the Year Ended December 31, 2005 | |||||||||||||||||||||||||
Guarantor | |||||||||||||||||||||||||
Subsidiaries | |||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | ||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | ||||||||||||||||||||
Net revenue | $ | — | $ | 1,059,401 | $ | — | $ | 7,010,734 | $ | (1,298,316 | ) | $ | 6,771,819 | ||||||||||||
Cost of revenue | — | 664,871 | — | 5,058,548 | (1,284,265 | ) | 4,439,154 | ||||||||||||||||||
Gross profit | — | 394,530 | — | 1,952,186 | (14,051 | ) | 2,332,665 | ||||||||||||||||||
Operating (income) expenses: | |||||||||||||||||||||||||
Selling, general and administrative | (14,805 | ) | 135,899 | — | 1,075,777 | 145,921 | 1,342,792 | ||||||||||||||||||
Research and development | 3,271 | 32,702 | — | 14,982 | — | 50,955 | |||||||||||||||||||
Operating income (loss) | 11,534 | 225,929 | — | 861,427 | (159,972 | ) | 938,918 | ||||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||||
Interest, net | 35,391 | 11,750 | 51,981 | 112,199 | (38,129 | ) | 173,192 | ||||||||||||||||||
Other, net | (525,497 | ) | 131,392 | (294,649 | ) | — | 688,754 | — | |||||||||||||||||
Income (loss) before income taxes and minority interest | 501,640 | 82,787 | 242,668 | 749,228 | (810,597 | ) | 765,726 | ||||||||||||||||||
Income tax expense (benefit) | 46,688 | 79,606 | (20,792 | ) | 286,629 | (83,383 | ) | 308,748 | |||||||||||||||||
Income (loss) before minority interest | 454,952 | 3,181 | 263,460 | 462,599 | (727,214 | ) | 456,978 | ||||||||||||||||||
Minority interest | — | — | — | — | 2,026 | 2,026 | |||||||||||||||||||
Net income (loss) | $ | 454,952 | $ | 3,181 | $ | 263,460 | $ | 462,599 | $ | (729,240 | ) | $ | 454,952 | ||||||||||||
For the Year Ended December 31, 2004 | |||||||||||||||||||||||||
Guarantor Subsidiaries | |||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | ||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | ||||||||||||||||||||
Net revenue | $ | — | $ | 967,981 | $ | — | $ | 7,086,578 | $ | (1,826,557 | ) | $ | 6,228,002 | ||||||||||||
Cost of revenue | — | 618,147 | — | 5,344,614 | (1,820,644 | ) | 4,142,117 | ||||||||||||||||||
Gross profit | — | 349,834 | — | 1,741,964 | (5,913 | ) | 2,085,885 | ||||||||||||||||||
Operating (income) expenses: | |||||||||||||||||||||||||
Selling, general and administrative | 98,025 | 144,952 | — | 1,068,900 | (129,701 | ) | 1,182,176 | ||||||||||||||||||
Research and development | 2,455 | 33,610 | — | 15,299 | 51,364 | ||||||||||||||||||||
Operating (loss) income | (100,479 | ) | 171,272 | — | 657,764 | 123,788 | 852,345 | ||||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||||
Interest, net | 36,777 | 13,367 | 62,189 | 104,768 | (33,355 | ) | 183,746 | ||||||||||||||||||
Other, net | (592,166 | ) | 101,430 | (286,567 | ) | — | 777,303 | — | |||||||||||||||||
Income (loss) before income taxes and minority interest | 454,909 | 56,475 | 224,378 | 552,997 | (620,160 | ) | 668,599 | ||||||||||||||||||
Income tax expense (benefit) | 52,912 | 58,815 | (24,876 | ) | 237,413 | (58,849 | ) | 265,415 | |||||||||||||||||
Income (loss) before minority interest | 401,998 | (2,340 | ) | 249,254 | 315,584 | (561,311 | ) | 403,184 | |||||||||||||||||
Minority interest | — | — | — | — | 1,186 | 1,186 | |||||||||||||||||||
Net income (loss) | $ | 401,998 | $ | (2,340 | ) | $ | 249,254 | $ | 315,584 | $ | (562,497 | ) | $ | 401,998 | |||||||||||
F-74
Table of Contents
At December 31, 2006 | ||||||||||||||||||||||||||
Guarantor | ||||||||||||||||||||||||||
Subsidiaries | ||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 22 | $ | 34 | $ | — | $ | 158,954 | $ | — | $ | 159,010 | ||||||||||||||
Trade accounts receivable, less allowance for doubtful accounts | — | 122,987 | — | 1,725,708 | — | 1,848,69 | ||||||||||||||||||||
Accounts receivable from related parties | 1,483,462 | 835,512 | 290,288 | 1,830,293 | (4,296,206 | ) | 143,349 | |||||||||||||||||||
Inventories | — | 130,967 | — | 457,426 | (64,464 | ) | 523,929 | |||||||||||||||||||
Prepaid expenses and other current assets | 18,455 | 20,633 | 50 | 408,850 | (4,134 | ) | 443,854 | |||||||||||||||||||
Deferred taxes | 1,586 | — | — | 262,476 | 29,017 | 293,079 | ||||||||||||||||||||
Total current assets | 1,503,525 | 1,110,133 | 290,338 | 4,843,707 | (4,335,787 | ) | 3,411,916 | |||||||||||||||||||
Property, plant and equipment, net | 174 | 97,244 | — | 1,678,511 | (53,537 | ) | 1,722,392 | |||||||||||||||||||
Intangible assets | 70 | 13,969 | — | 647,326 | — | 661,365 | ||||||||||||||||||||
Goodwill | — | 3,207 | — | 6,888,954 | — | 6,892,161 | ||||||||||||||||||||
Deferred taxes | — | 11,825 | — | 40,429 | 10,468 | 62,722 | ||||||||||||||||||||
Other assets | 5,105,547 | 869,630 | 5,998,241 | (1,532,867 | ) | (10,146,426 | ) | 294,125 | ||||||||||||||||||
Total assets | $ | 6,609,316 | $ | 2,106,008 | $ | 6,288,579 | $ | 12,566,060 | $ | (14,525,282 | ) | $ | 13,044,681 | |||||||||||||
Current liabilities: | ||||||||||||||||||||||||||
Accounts payable | $ | 306 | $ | 20,399 | $ | — | $ | 295,483 | $ | — | $ | 316,188 | ||||||||||||||
Accounts payable to related parties | 351,450 | 642,878 | 926,178 | 3,496,135 | (5,180,022 | ) | 236,619 | |||||||||||||||||||
Accrued expenses and other current liabilities | 17,617 | 91,634 | 8,450 | 1,064,412 | 12,826 | 1,194,939 | ||||||||||||||||||||
Short-term borrowings | — | — | — | 331,231 | — | 331,231 | ||||||||||||||||||||
Short-term borrowings from related parties | 954,896 | 9,155 | — | (950,321 | ) | (9,155 | ) | 4,575 | ||||||||||||||||||
Current portion of long-term debt and capital lease obligations | 744 | 263 | 137,500 | 21,628 | — | 160,135 | ||||||||||||||||||||
Income tax payable | 40,551 | — | — | 63,929 | 11,579 | 116,059 | ||||||||||||||||||||
Deferred taxes | — | 6,174 | — | 15,982 | (6,197 | ) | 15,959 | |||||||||||||||||||
Total current liabilities | 1,365,564 | 770,503 | 1,072,128 | 4,338,479 | (5,170,969 | ) | 2,375,705 | |||||||||||||||||||
Long term debt and capital lease obligations, less current portion | 329,918 | 395 | 2,367,731 | 4,853,043 | (3,721,746 | ) | 3,829,341 | |||||||||||||||||||
Long term borrowings from related parties | 4,153 | 204,453 | — | — | (208,606 | ) | — | |||||||||||||||||||
Other liabilities | 18,872 | 9,462 | — | 112,350 | 9,000 | 149,684 | ||||||||||||||||||||
Pension liabilities | 2,580 | 107,357 | — | 2,379 | — | 112,316 | ||||||||||||||||||||
Deferred taxes | 18,067 | — | 309,140 | 51,280 | 378,487 | |||||||||||||||||||||
Company obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiary | — | — | — | 1,253,828 | — | 1,253,828 | ||||||||||||||||||||
Minority interest | — | — | 7,412 | 67,746 | — | 75,158 | ||||||||||||||||||||
Total liabilities | 1,739,154 | 1,092,170 | 3,447,271 | 10,936,965 | (9,041,041 | ) | 8,174,519 | |||||||||||||||||||
Shareholders’ equity: | 4,870,162 | 1,013,838 | 2,841,308 | 1,629,095 | (5,484,241 | ) | 4,870,162 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 6,609,316 | $ | 2,106,008 | $ | 6,288,579 | $ | 12,566,060 | $ | (14,525,282 | ) | $ | 13,044,681 | |||||||||||||
F-75
Table of Contents
At December 31, 2005 | ||||||||||||||||||||||||||
Guarantor | ||||||||||||||||||||||||||
Subsidiaries | ||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | 26 | $ | — | $ | 82,558 | $ | 2,492 | $ | 85,077 | ||||||||||||||
Trade accounts receivable, less allowance for doubtful accounts | — | 108,426 | — | 1,361,507 | — | 1,469,933 | ||||||||||||||||||||
Accounts receivable from related parties | 852,926 | 338,097 | 216,337 | 1,248,942 | (2,622,418 | ) | 33,884 | |||||||||||||||||||
Inventories | — | 113,359 | — | 371,638 | (54,104 | ) | 430,893 | |||||||||||||||||||
Prepaid expenses and other current assets | 17,399 | 12,329 | 13 | 231,734 | 115 | 261,590 | ||||||||||||||||||||
Deferred taxes | — | — | — | 163,975 | 15,586 | 179,561 | ||||||||||||||||||||
Total current assets | 870,326 | 572,237 | 216,350 | 3,460,354 | (2,658,329 | ) | 2,460,938 | |||||||||||||||||||
Property, plant and equipment, net | 157 | 86,386 | — | 1,174,252 | (45,037 | ) | 1,215,758 | |||||||||||||||||||
Intangible assets | 970 | 12,220 | — | 572,499 | — | 585,689 | ||||||||||||||||||||
Goodwill | — | 3,227 | — | 3,453,650 | — | 3,456,877 | ||||||||||||||||||||
Deferred taxes | — | 4,562 | — | 27,994 | 3,093 | 35,649 | ||||||||||||||||||||
Other assets | 4,552,128 | 811,728 | 3,812,542 | (829,742 | ) | (8,118,467 | ) | 228,189 | ||||||||||||||||||
Total assets | $ | 5,423,581 | $ | 1,490,360 | $ | 4,028,892 | $ | 7,859,007 | $ | (10,818,740 | ) | $ | 7,983,100 | |||||||||||||
Current liabilities: | ||||||||||||||||||||||||||
Accounts payable | $ | 19 | $ | 13,401 | $ | — | $ | 187,897 | $ | — | $ | 201,317 | ||||||||||||||
Accounts payable to related parties | 1,059,718 | 160,884 | 882,439 | 1,397,213 | (3,392,316 | ) | 107,938 | |||||||||||||||||||
Accrued expenses and other current liabilities | 22,205 | 92,545 | 775 | 731,208 | (7,965 | ) | 838,768 | |||||||||||||||||||
Short-term borrowings | 33 | — | — | 151,080 | — | 151,113 | ||||||||||||||||||||
Short-term borrowings from related parties | 18,757 | 1,752 | — | — | (1,752 | ) | 18,757 | |||||||||||||||||||
Current portion of long-term debt and capital lease obligations | 968 | 826 | 100,000 | 24,475 | — | 126,269 | ||||||||||||||||||||
Income tax payable | 15,106 | — | — | 81,593 | 23,439 | 120,138 | ||||||||||||||||||||
Deferred taxes | 2,489 | 3,735 | — | 34,266 | (26,550 | ) | 13,940 | |||||||||||||||||||
Total current liabilities | 1,119,295 | 273,143 | 983,214 | 2,607,732 | (3,405,144 | ) | 1,578,240 | |||||||||||||||||||
Long term debt and capital lease obligations, less current portion | 294,131 | 590 | 561,229 | 651,297 | (800,147 | ) | 707,100 | |||||||||||||||||||
Long term borrowings from related parties | 3,720 | 180,951 | — | — | (184,671 | ) | — | |||||||||||||||||||
Other liabilities | 419 | 5,013 | — | 89,112 | 17,874 | 112,418 | ||||||||||||||||||||
Pension liabilities | 2,578 | 75,880 | — | 42,680 | (12,436 | ) | 108,702 | |||||||||||||||||||
Deferred taxes | 29,732 | — | 235,538 | 35,395 | 300,665 | |||||||||||||||||||||
Company obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiary | — | — | — | 1,187,864 | — | 1,187,864 | ||||||||||||||||||||
Minority interest | — | — | 7,412 | — | 6,993 | 14,405 | ||||||||||||||||||||
Total liabilities | 1,449,875 | 535,577 | 1,551,855 | 4,814,223 | (4,342,136 | ) | 4,009,394 | |||||||||||||||||||
Shareholders’ equity: | 3,973,706 | 954,783 | 2,477,037 | 3,044,784 | (6,476,604 | ) | 3,973,706 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 5,423,581 | $ | 1,490,360 | $ | 4,028,892 | $ | 7,859,007 | $ | (10,818,740 | ) | $ | 7,983,100 | |||||||||||||
F-76
Table of Contents
For the Year Ended December 31, 2006 | ||||||||||||||||||||||||||||
Guarantor | ||||||||||||||||||||||||||||
Subsidiaries | ||||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||||
Operating Activities: | ||||||||||||||||||||||||||||
Net income (loss) | $ | 536,746 | $ | (3,297 | ) | $ | 326,118 | $ | 612,190 | $ | (935,011 | ) | $ | 536,745 | ||||||||||||||
Adjustments to reconcile net income to cash and cash equivalents provided by (used in) operating activities: | ||||||||||||||||||||||||||||
Equity affiliate income | (451,099 | ) | — | (448,408 | ) | — | 899,507 | — | ||||||||||||||||||||
Settlement of shareholder proceedings | — | — | — | — | (888 | ) | (888 | ) | ||||||||||||||||||||
Depreciation and amortization | 1,934 | 30,715 | — | 290,425 | (14,376 | ) | 308,698 | |||||||||||||||||||||
Change in minority interest | — | — | — | — | 24,333 | 24,333 | ||||||||||||||||||||||
Change in deferred taxes, net | (14,072 | ) | (14 | ) | — | 32,927 | (7,937 | ) | 10,904 | |||||||||||||||||||
Loss (Gain) on investments | 24,660 | — | — | — | (24,660 | ) | — | |||||||||||||||||||||
Write-up of loans from related parties | (1,695 | ) | — | — | — | 1,695 | — | |||||||||||||||||||||
Loss on sale of fixed assets | — | — | — | 5,742 | — | 5,742 | ||||||||||||||||||||||
Compensation expense related to stock options | 16,610 | — | — | — | — | 16,610 | ||||||||||||||||||||||
Cash inflow from hedging | 10,908 | — | — | — | — | 10,908 | ||||||||||||||||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | ||||||||||||||||||||||||||||
Trade accounts receivable, net | — | (9,094 | ) | — | (22,182 | ) | — | (31,276 | ) | |||||||||||||||||||
Inventories | — | (4,210 | ) | — | (44,067 | ) | 5,724 | (42,553 | ) | |||||||||||||||||||
Prepaid expenses and other current and non-current assets | 10,123 | (4,566 | ) | 28,936 | (15,204 | ) | (40,918 | ) | (21,629 | ) | ||||||||||||||||||
Accounts receivable from / payable to related parties | 3,993 | 106,552 | 40,739 | (192,257 | ) | 36,098 | (4,875 | ) | ||||||||||||||||||||
Accounts payable, accrued expenses and other current and non-current liabilities | (8,113 | ) | 8,726 | 7,675 | 158,132 | 16,457 | 182,877 | |||||||||||||||||||||
Income tax payable | 22,585 | — | (81,527 | ) | 24,568 | 10,124 | (24,250 | ) | ||||||||||||||||||||
Tax payments related to divestitures and acquisitions | — | — | — | (63,517 | ) | — | (63,517 | ) | ||||||||||||||||||||
Net cash provided by (used in) operating activities | 152,580 | 124,812 | (126,467 | ) | 786,757 | (29,852 | ) | 907,830 | ||||||||||||||||||||
Investing Activities: | ||||||||||||||||||||||||||||
Purchases of property, plant and equipment | (137 | ) | (31,267 | ) | — | (454,524 | ) | 18,735 | (467,193 | ) | ||||||||||||||||||
Proceeds from sale of property, plant and equipment | 846 | 395 | — | 16,417 | — | 17,658 | ||||||||||||||||||||||
Disbursement of loans to related parties | (361,156 | ) | 134 | (2,879,204 | ) | — | 3,240,226 | — | ||||||||||||||||||||
Acquisitions and investments, net of cash acquired | (22,671 | ) | (793 | ) | — | (4,314,968 | ) | 31,150 | (4,307,282 | ) | ||||||||||||||||||
Proceeds from disposal of businesses | — | — | — | 515,705 | — | 515,705 | ||||||||||||||||||||||
Net cash (used in) provided by investing activities | (383,118 | ) | (31,531 | ) | (2,879,204 | ) | (4,237,370 | ) | 3,290,111 | (4,241,112 | ) | |||||||||||||||||
Financing activities: | ||||||||||||||||||||||||||||
Short-term borrowings, net | (17,239 | ) | (92,397 | ) | — | 94,899 | — | (14,737 | ) | |||||||||||||||||||
Long-term debt and capital lease obligations, net | 27,769 | (879 | ) | 1,756,191 | 4,490,710 | (3,240,226 | ) | 3,033,565 | ||||||||||||||||||||
Increase of accounts receivable securitization program | — | — | — | 172,000 | — | 172,000 | ||||||||||||||||||||||
Proceeds from exercise of stock options | 46,528 | — | — | 7,424 | — | 53,952 | ||||||||||||||||||||||
Proceeds from conversion of preference shares into ordinary shares | 306,759 | — | — | — | — | 306,759 | ||||||||||||||||||||||
Dividends paid | (153,720 | ) | — | — | (4,184 | ) | 4,184 | (153,720 | ) | |||||||||||||||||||
Capital increase (decrease) | — | — | 1,250,000 | (1,226,202 | ) | (23,798 | ) | — | ||||||||||||||||||||
Change in minority interest | — | — | (520 | ) | (14,610 | ) | — | (15,130 | ) | |||||||||||||||||||
Net cash provided by (used in) financing activities | 210,097 | (93,276 | ) | 3,005,671 | 3,520,037 | (3,259,840 | ) | 3,382,689 | ||||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 20,459 | 3 | — | 4,483 | (419 | ) | 24,526 | |||||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 18 | 8 | — | 73,907 | — | 73,933 | ||||||||||||||||||||||
Cash and cash equivalents at beginning of period | 1 | 26 | — | 85,050 | — | 85,077 | ||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 19 | $ | 34 | $ | — | $ | 158,957 | $ | — | $ | 159,010 | ||||||||||||||||
F-77
Table of Contents
For the Year Ended December 31, 2005 | ||||||||||||||||||||||||||||
Guarantor | ||||||||||||||||||||||||||||
Subsidiaries | ||||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||||
Operating Activities: | ||||||||||||||||||||||||||||
Net income (loss) | $ | 454,952 | $ | 3,181 | $ | 263,460 | $ | 462,599 | $ | (729,240 | ) | $ | 454,952 | |||||||||||||||
Adjustments to reconcile net income to cash and cash equivalents provided by (used in) operating activities: | ||||||||||||||||||||||||||||
Equity affiliate income | (228,488 | ) | — | (294,649 | ) | — | 523,137 | — | ||||||||||||||||||||
Settlement of shareholder proceedings | — | 7,335 | 7,335 | |||||||||||||||||||||||||
Depreciation and amortization | 1,893 | 31,967 | — | 232,749 | (15,157 | ) | 251,452 | |||||||||||||||||||||
Change in deferred taxes, net | 7,836 | (528 | ) | — | (5,138 | ) | (5,845 | ) | (3,675 | ) | ||||||||||||||||||
(Gain) loss on investments | (48,373 | ) | — | — | — | 48,373 | — | |||||||||||||||||||||
Write-up of loans from related parties | (17,276 | ) | — | — | — | 17,276 | — | |||||||||||||||||||||
Loss on sale of fixed assets | — | 284 | — | 3,681 | — | 3,965 | ||||||||||||||||||||||
Compensation expense related to stock options | 1,363 | — | — | — | — | 1,363 | ||||||||||||||||||||||
Cash inflow from hedging | — | (1,339 | ) | — | 1,339 | — | — | |||||||||||||||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | ||||||||||||||||||||||||||||
Trade accounts receivable, net | — | (14,645 | ) | — | (48,929 | ) | (63,574 | ) | ||||||||||||||||||||
Inventories | — | (4,507 | ) | — | (7,069 | ) | 1,765 | (9,811 | ) | |||||||||||||||||||
Prepaid expenses and other current and non-current assets | 4,738 | 4,490 | 3,320 | (119,397 | ) | 65,813 | (41,036 | ) | ||||||||||||||||||||
Accounts receivable from / payable to related parties | (72,755 | ) | (26,544 | ) | 37,235 | 16,225 | 55,435 | 9,596 | ||||||||||||||||||||
Accounts payable, accrued expenses and other current and non-current liabilities | 8,749 | 33,639 | 234 | 104,596 | 1,517 | 148,735 | ||||||||||||||||||||||
Income tax payable | (100,380 | ) | — | (20,792 | ) | 31,883 | 291 | (88,998 | ) | |||||||||||||||||||
Net cash provided by (used in) operating activities | 12,259 | 25,998 | (11,192 | ) | 672,539 | (29,300 | ) | 670,304 | ||||||||||||||||||||
Investing Activities: | ||||||||||||||||||||||||||||
Purchases of property, plant and equipment | (90 | ) | (27,649 | ) | — | (311,157 | ) | 24,127 | (314,769 | ) | ||||||||||||||||||
Proceeds from sale of property, plant and equipment | — | 1,417 | — | 16,010 | — | 17,427 | ||||||||||||||||||||||
Disbursement of loans to related parties | (64,349 | ) | 125 | 25,512 | — | 38,712 | — | |||||||||||||||||||||
Acquisitions and investments, net of cash acquired | (49,087 | ) | — | — | (99,938 | ) | 23,872 | (125,153 | ) | |||||||||||||||||||
Net cash (used in) provided by investing activities | (113,526 | ) | (26,107 | ) | 25,512 | (395,085 | ) | 86,711 | (422,495 | ) | ||||||||||||||||||
Financing Activities: | ||||||||||||||||||||||||||||
Short-term borrowings, net | 17,298 | 1,151 | — | (35,538 | ) | — | (17,089 | ) | ||||||||||||||||||||
Long-term debt and capital lease obligations, net | 137,766 | — | (13,800 | ) | 9,870 | (38,712 | ) | 95,124 | ||||||||||||||||||||
Increase of accounts receivable securitization program | — | (1,045 | ) | — | (240,720 | ) | — | (241,765 | ) | |||||||||||||||||||
Proceeds from exercise of stock options | 80,366 | — | — | (422 | ) | — | 79,944 | |||||||||||||||||||||
Dividends paid | (137,487 | ) | — | — | (5,320 | ) | 5,320 | (137,487 | ) | |||||||||||||||||||
Capital increase (decrease) of Non-Guarantor-Subsidiaries | — | — | — | 23,872 | (23,872 | ) | — | |||||||||||||||||||||
Change in minority interest | — | — | (520 | ) | — | 2,026 | 1,506 | |||||||||||||||||||||
Net cash provided by (used in) financing activities | 97,943 | 106 | (14,320 | ) | (248,258 | ) | (55,238 | ) | (219,767 | ) | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,173 | (3 | ) | — | (3,420 | ) | 319 | (1,931 | ) | |||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (2,151 | ) | (6 | ) | — | 25,776 | 2,492 | 26,111 | ||||||||||||||||||||
Cash and cash equivalents at beginning of period | 2,152 | 32 | — | 56,782 | — | 58,966 | ||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 1 | $ | 26 | $ | — | $ | 82,558 | $ | 2,492 | $ | 85,077 | ||||||||||||||||
F-78
Table of Contents
For the Year Ended December 31, 2004 | ||||||||||||||||||||||||||||
Guarantor | ||||||||||||||||||||||||||||
Subsidiaries | ||||||||||||||||||||||||||||
FMC-AG & | Non-Guarantor | Combining | Combined | |||||||||||||||||||||||||
Co. KGaA | D-GmbH | FMCH | Subsidiaries | Adjustment | Total | |||||||||||||||||||||||
Operating Activities: | ||||||||||||||||||||||||||||
Net income (loss) | $ | 401,998 | $ | (2,340 | ) | $ | 249,254 | $ | 315,583 | $ | (562,497 | ) | $ | 401,998 | ||||||||||||||
Adjustments to reconcile net income to cash and cash equivalents provided by (used in) operating activities: | ||||||||||||||||||||||||||||
Equity affiliate income | (400,655 | ) | — | (286,567 | ) | — | 687,222 | — | ||||||||||||||||||||
Depreciation and amortization | 1,917 | 28,034 | — | 214,661 | (12,027 | ) | 232,585 | |||||||||||||||||||||
Change in deferred taxes, net | 636 | (4,241 | ) | — | 34,379 | 3,507 | 34,281 | |||||||||||||||||||||
Loss (gain) on investments | 72,100 | — | — | 9,287 | (81,387 | ) | — | |||||||||||||||||||||
(Gain) loss on sale of fixed assets | — | (301 | ) | — | 1,036 | — | 735 | |||||||||||||||||||||
Compensation expense related to stock options | 1,751 | — | — | — | — | 1,751 | ||||||||||||||||||||||
Cash inflow from hedging | 2,928 | 116 | — | 11,470 | — | 14,514 | ||||||||||||||||||||||
Changes in assets and liabilities, net of amounts from businesses acquired: | ||||||||||||||||||||||||||||
Trade accounts receivable, net | — | (2,142 | ) | — | (5,744 | ) | — | (7,886 | ) | |||||||||||||||||||
Inventories | — | 9,870 | — | 16,214 | 1,161 | 27,245 | ||||||||||||||||||||||
Prepaid expenses and other current and non-current assets | (3,039 | ) | 5,870 | 658 | 119,533 | (52,989 | ) | 70,033 | ||||||||||||||||||||
Accounts receivable from / payable to related parties | (4,471 | ) | 4,882 | 37,235 | (39,766 | ) | (20,566 | ) | (22,686 | ) | ||||||||||||||||||
Accounts payable, accrued expenses and other current and non-current liabilities | 1,680 | (3,935 | ) | (1,788 | ) | 38,838 | 1,362 | 36,157 | ||||||||||||||||||||
Income tax payable | 24,353 | — | (24,876 | ) | 39,639 | — | 39,116 | |||||||||||||||||||||
Net cash provided by (used in) operating activities | 99,198 | 35,813 | (26,084 | ) | 755,130 | (36,214 | ) | 827,843 | ||||||||||||||||||||
Investing Activities: | ||||||||||||||||||||||||||||
Purchases of property, plant and equipment | (251 | ) | (36,332 | ) | — | (259,097 | ) | 16,948 | (278,732 | ) | ||||||||||||||||||
Proceeds from sale of property, plant and equipment | — | 1,617 | — | 16,741 | — | 18,358 | ||||||||||||||||||||||
Disbursement of loans to related parties | 29,666 | 108 | 454,404 | — | (484,178 | ) | — | |||||||||||||||||||||
Acquisitions and investments, net of cash acquired | (4,146 | ) | — | — | (103,863 | ) | 3,516 | (104,493 | ) | |||||||||||||||||||
Net cash provided by (used in) investing activities | 25,269 | (34,607 | ) | 454,404 | (346,219 | ) | (463,714 | ) | (364,867 | ) | ||||||||||||||||||
Financing activities: | ||||||||||||||||||||||||||||
Short-term borrowings, net | (25 | ) | — | — | (40,802 | ) | — | (40,827 | ) | |||||||||||||||||||
Long-term debt and capital lease obligations, net | (2,073 | ) | (1,471 | ) | (427,800 | ) | (523,596 | ) | 484,178 | (470,762 | ) | |||||||||||||||||
Increase of accounts receivable securitization program | — | — | — | 177,767 | — | 177,767 | ||||||||||||||||||||||
Proceeds from exercise of stock options | 3,622 | — | — | — | — | 3,622 | ||||||||||||||||||||||
Dividends paid | (122,106 | ) | — | — | (16,870 | ) | 16,870 | (122,106 | ) | |||||||||||||||||||
Capital Increase (decrease) of Non-Guarantor-Subsidiaries | — | — | — | 3,480 | (3,480 | ) | — | |||||||||||||||||||||
Change in minority interest | — | — | (520 | ) | (276 | ) | 1,185 | 389 | ||||||||||||||||||||
Net cash (used in) provided by financing activities | (120,582 | ) | (1,471 | ) | (428,320 | ) | (400,297 | ) | 498,753 | (451,917 | ) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (1,736 | ) | — | — | 41 | 1,175 | (520 | ) | ||||||||||||||||||||
Cash and Cash Equivalents: | ||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 2,149 | (265 | ) | — | 8,655 | — | 10,539 | |||||||||||||||||||||
Cash and cash equivalents at beginning of period | 3 | 300 | — | 48,124 | — | 48,427 | ||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 2,152 | $ | 35 | $ | — | $ | 56,779 | $ | — | $ | 58,966 | ||||||||||||||||
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Item 20. | Indemnification of Directors and Officers |
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Item 21. | Exhibits and Financial Statement Schedules |
(a) | Exhibits |
Exhibit | ||||
Number | Description | |||
2 | .1 | Agreement and Plan of Reorganization dated as of February 4, 1996 between W.R. Grace & Co. and Fresenius AG. (Incorporated by reference to Appendix A to the Joint Proxy Statement-Prospectus of Fresenius Medical Care AG (“FMC-AG”), W.R. Grace & Co. and Fresenius USA, Inc., dated August 2, 1996). | ||
2 | .2 | Distribution Agreement by and among W.R. Grace & Co., W.R., Grace & Co. — Conn. and Fresenius AG dated as of February 4, 1996. (Incorporated by reference to Appendix A to the Joint Proxy Statement-Prospectus of FMC-AG, W.R. Grace & Co. and Fresenius USA, Inc., dated August 2, 1996). | ||
2 | .3 | Contribution Agreement by and among Fresenius AG, Sterilpharma GmbH and W.R. Grace & Co. — Conn. dated February 4, 1996. (Incorporated by reference to Appendix E to the Joint Proxy Statement-Prospectus of FMC-AG, W.R. Grace & Co. and Fresenius USA, Inc., dated August 2, 1996). | ||
2 | .4 | Merger Agreement dated as of May 3, 2005 among FMC-AG, FMCH, Florence Acquisition, Inc. and Renal Care Group, Inc. (incorporated by reference to Exhibit 10.1 to FMC-AG’s Report on Form 6-K for the three months ended March 31, 2005 filed May 5, 2005). | ||
2 | .5 | Agreement Containing Consent Orders, United States of America before Federal Trade Commission, In the Matter of Fresenius AG, File No. 051-0154. (Incorporated by reference to Exhibit 10.1 to the Form 6-K of Fresenius Medical Care AG & Co. KGaA (“FMC-KGaA”) for the three-month period ended March 31, 2006 filed May 17, 2006). | ||
2 | .6 | Complaint, United States of America before Federal Trade Commission, In the Matter of Fresenius AG. (Incorporated by reference to Exhibit 10.2 to FMC KGaA’s Form 6-K for the three-month period ended March 31, 2006 filed May 17, 2006). | ||
2 | .7 | Decision and Order, United States of America before Federal Trade Commission, In the Matter of Fresenius AG. (Incorporated by reference to Exhibit 10.3 to FMC KGaA’s Form 6-K for the three-month period ended March 31, 2006 filed May 17, 2006). | ||
2 | .7 | Order to Maintain Assets, United States of America before Federal Trade Commission, In the Matter of Fresenius AG. (Incorporated by reference to Exhibit 10.4 to FMC KGaA’s Form 6-K for the three-month period ended March 31, 2006 filed May 17, 2006. | ||
3 | .1 | Articles of Association (Satzung) of FMC KGaA. (Incorporated by reference to Exhibit 10.1 to FMC-KGaA’s Report on Form 6-K/ A for the six months ended June 30, 2006 filed August 11, 2006). | ||
4 | .1 | Indenture for the 67/8% Senior Notes due 2017, dated as of July 2, 2007 by and among FMC Finance III S.A., the Guarantors party thereto and U.S. Bank National Association, as Trustee. (Incorporated by reference to Exhibit 4.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .2 | Form of 67/8% Senior Note due 2017 (included in Exhibit 4.1). (Incorporated by reference to Exhibit 4.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .3 | Form of Note Guarantee for 67/8% Senior Note due 2017 (included in Exhibit 4.1). (Incorporated by reference to Exhibit 4.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .4 | Amended and Restated Deposit Agreement between The Bank of New York and Fresenius Medical Care AG & Co. KGaA dated as of February 26, 2007 relating to Ordinary Share ADSs (Incorporated by reference to Exhibit 3.a. to the Registration Statement on Form F-6, Registration No. 333-140664, filed February 13, 2007). | ||
4 | .5 | Amended and Restated Deposit Agreement between The Bank of New York and Fresenius Medical Care AG & Co. KGaA dated as of February 26, 2007 relating to Preference Share ADSs (Incorporated by reference to Exhibit 3.a. to the Registration Statement on Form F-6, Registration No. 333-140730, filed February 15, 2007). |
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Exhibit | ||||
Number | Description | |||
4 | .6 | Pooling Agreement dated February 13, 2006 by and between Fresenius AG, Fresenius Medical Care Management AG and the individuals acting from time to time as Independent Directors. (Incorporated by reference to Exhibit 2.3 to FMC KGaA’s Annual Report on Form 20-F for the year ended December 31, 2005, filed March 2, 2006). | ||
4 | .7 | Senior Subordinated Indenture (U.S. Dollar denominated) dated as of February 19, 1998, among Fresenius Medical Care AG, FMC Trust Finance S.à.r.l. Luxembourg, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein. (Incorporated by reference to Exhibit 2.6 to Annual Report on Form 20-F of Fresenius Medical Care AG (“FMC-AG”) for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .8 | Senior Subordinated Indenture (DM denominated) dated as of February 19, 1998, among Fresenius Medical Care AG, FMC Trust Finance S.à.r.l. Luxembourg, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein. (Incorporated by reference to Exhibit 2.7 to the FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .9 | Declaration of Trust Establishing Fresenius Medical Care Capital Trust II, dated February 12, 1998. (Incorporated by reference to Exhibit 2.1 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .10 | Declaration of Trust Establishing Fresenius Medical Care Capital Trust III, dated February 12, 1998. (Incorporated by reference to Exhibit 2.2 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .11 | First Amendment to Declaration of Trust Establishing Fresenius Medical Care Capital Trust III, dated February 12, 1998. (Incorporated by reference to Exhibit 2.3 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .12 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust II, dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.4 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .13 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust III, dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.5 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .14 | Guarantee Agreement dated as of February 19, 1998 between Fresenius Medical Care AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust II. (Incorporated by reference to Exhibit 2.8 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .15 | Guarantee Agreement dated as of February 19, 1998 between Fresenius Medical Care AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust III. (Incorporated by reference to Exhibit 2.9 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .16 | Agreement as to Expenses and Liabilities between Fresenius Medical Care AG and Fresenius Medical Care Capital Trust II dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.10 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .17 | Agreement as to Expenses and Liabilities between Fresenius Medical Care AG and Fresenius Medical Care Capital Trust III dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.11 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .18 | Declaration of Trust of Fresenius Medical Care Capital Trust IV, dated February 12, 1998 (Incorporated by reference to Exhibit no. 4.41 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .19 | First Amendment to Declaration of Trust of Fresenius Medical Care Capital Trust IV, dated June 5, 2001 (Incorporated by reference to Exhibit No. 4.42 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .20 | Declaration of Trust of Fresenius Medical Care Capital Trust V, dated June 1, 2001 (Incorporated by reference to Exhibit No. 4.43 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). |
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Exhibit | ||||
Number | Description | |||
4 | .21 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust IV, dated as of June 6, 2001 (Incorporated by reference to Exhibit No. 4.44 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .22 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust V, dated as of June 15, 2000 (Incorporated by reference to Exhibit No. 4.45 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .23 | Senior Subordinated Indenture (U.S. Dollar denominated) dated as of June 6, 2001, among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg-III, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (Incorporated by reference to Exhibit No. 4.46 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .24 | Senior Subordinated Indenture (Euro denominated) dated as of June 15, 2001, among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg-III, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (Incorporated by reference to Exhibit No. 4.47 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .25 | Guarantee Agreement dated as of June 6, 2001 between FMC — AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust IV (Incorporated by reference to Exhibit No. 4.48 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .26 | Guarantee Agreement dated as of June 15, 2001 between FMC — AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust V (Incorporated by reference to Exhibit No. 4.49 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .27 | Agreement as to Expenses and Liabilities between FMC — AG and Fresenius Medical Care Capital Trust IV dated as of June 6, 2001 (Incorporated by reference to Exhibit No. 4.50 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .28 | Agreement as to Expenses and Liabilities between FMC — AG and Fresenius Medical Care Capital Trust V dated as of June 15, 2001 (Incorporated by reference to Exhibit No. 4.51 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .29 | First Supplemental Indenture dated as of December 23, 2004 among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg, US Bank, National Association, successor to State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (incorporated by reference to Exhibit No. 2.27 to the Annual Report of FMC — AG for the year ended December 31, 2004 filed March 1, 2005). | ||
4 | .30 | First Supplemental Indenture dated as of December 23, 2004 among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg-III, US Bank, National Association, successor to State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (incorporated by reference to Exhibit No. 2.28 to the Annual Report of FMC — AG for the year ended December 31, 2004 filed March 1, 2005). | ||
4 | .31 | Receivables Purchase Agreement dated August 28, 1997 between National Medical Care, Inc. and NMC Funding Corporation. (Incorporated by reference to Exhibit 10.3 to FMCH’s Quarterly Report on Form 10-Q, for the three months ended September 30, 1997, filed November 4, 1997). | ||
4 | .32 | Amendment dated as of September 28, 1998 to the Receivables Purchase Agreement dated as of August 28, 1997, by and between NMC Funding Corporation, as Purchaser and National Medical Care, Inc., as Seller. (Incorporated by reference to Exhibit 10.1 to FMCH’s Quarterly Report on Form 10-Q, for the three months ended September 30, 1998, filed November 12, 1998). | ||
4 | .33 | Amendment dated as of October 20, 2005 to the Receivables Purchase Agreement dated as of August 28, 1997, by and between NMC Funding Corporation, as Purchaser and National Medical Care, Inc., as Seller (incorporated by reference to Exhibit 10.2 to FMC-AG’s Report on Form 6-K, for the nine months ended September 30, 2005, filed November 3, 2005). |
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Exhibit | ||||
Number | Description | |||
4 | .34 | Third Amended and Restated Transfer and Administrative agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Asset One Securitization, LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.29 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 2003). | ||
4 | .35 | Amendment No. 1 dated as of March 31, 2004 to Third Amended and Restated Transfer and Administration Agreement dated as of October 23, 2003, among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Asset One Securitization, LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.30 to FMC-AG’s Report on Form 6-K dated May 12, 2004). | ||
4 | .36 | Amendment No. 2 dated as of October 21, 2004 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Asset One Securitization, LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.30 to FMC-AG’s Report on Form 6-K dated November 12, 2004). | ||
4 | .37 | Amendment No. 3 dated as of January 1, 2005 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.2 to FMC-AG’s Report on Form 6-K for the three months ended March 31, 2005, filed May 5, 2005). | ||
4 | .38 | Amendment No. 4 dated as of October 20, 2005 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.1 to FMC-AG’s Report on Form 6-K for the nine months ended September 30, 2005 filed November 3, 2005). | ||
4 | .39 | Amendment No. 5 dated as of October 19, 2006 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.36 to FMC-KGaA’s Annual Report on Form 20-F for the year ended December 31, 2006 filed February 26, 2007). | ||
4 | .40 | Amendment No. 6 dated as of January 19, 2007 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Balanced Funding Corporation, Amsterdam Funding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.1 to FMC-KGaA’s Report on Form 6-K furnished to the SEC on October 31, 2007). | ||
4 | .41 | Amendment No. 7 dated as of April 27, 2007 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Balanced Funding Corporation, Amsterdam Funding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.2 to FMC-KGaA’s Report on Form 6-K furnished to the SEC on October 31, 2007). |
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Exhibit | ||||
Number | Description | |||
4 | .42 | Amendment No. 8 dated as of October 18, 2007 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 3, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Balanced Funding Corporation, Amsterdam Funding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.3 to FMC-KGaA’s Report on Form 6-K furnished to the SEC on October 31, 2007). | ||
4 | .43 | Bank Credit Agreement dated as of March 31, 2006 among FMC KGaA, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of FMC-KGaA as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (incorporated by reference to Exhibit No. 4.1 to the Form 6-K of FMC-KGaA for the three months ended March 31, 2006 filed May 17, 2006).(1) | ||
4 | .44 | Term Loan Credit Agreement dated as of March 31, 2006 among and FMC KGaA, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of FMC-KGaA as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (incorporated by reference to Exhibit 4.2 to the Form 6-K of FMC-KGaA for the three month period ended March 31, 2006 filed May 17, 2006).(1) | ||
4 | .45 | Amendment No. 1 dated as of June 26, 2007 to Bank Credit Agreement dated as of March 31, 2006 among the Company, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of the Company as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (incorporated by reference to Exhibit 4.1 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .46 | Amendment No. 1 dated as of June 26, 2007 to Term Loan Credit Agreement dated as of March 31, 2006 among and the Company, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of the Company as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (Incorporated by reference to Exhibit 4.2 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). AG’s Registration Statement on Form F-1, filed on November 4, 1996). | ||
5 | .1 | Opinion of Baker & McKenzie LLP as to the validity of the notes to be issued in the exchange offer and the guarantees (filed herewith) | ||
5 | .2 | Opinion of Nörr Stiefenhofer Lutz (filed herewith). | ||
5 | .3 | Opinion of Wildgen & Partners (filed herewith). | ||
10 | .1 | Amendment for Lease Agreement for Office Buildings dated December 19, 2006 by and between Fresenius AG and Fresenius Medical Care Deutschland GmbH. (Incorporated by reference to Exhibit 10.3 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .2 | Amendment for Lease Agreement for Manufacturing Facilities dated December 19, 2006 by and between Fresenius Immobilien-Verwaltungs-GmbH & Co. Objekt Schweinfurt KG and Fresenius Medical Care Deutschland GmbH. (Incorporated by reference to Exhibit 10.4 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .3 | Amendment for Lease Agreement for Manufacturing Facilities dated December 19, 2006 by and between Fresenius Immobilien-Verwaltungs-GmbH & Co. Objekt St. Wendel KG and Fresenius Medical Care Deutschland GmbH. (Incorporated by reference to Exhibit 10.4 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). |
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Exhibit | ||||
Number | Description | |||
10 | .4 | Amendment for Lease Agreement for Manufacturing Facilities dated December 19, 2006 by and between Fresenius AG and Fresenius Medical Care Deutschland GmbH (Ober-Erlenbach). (Incorporated by reference to Exhibit 10.5 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .5 | Trademark License Agreement dated September 27, 1996 by and between Fresenius AG and FMC-AG. (Incorporated by reference to Exhibit 10.8 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .6 | Technology License Agreement (Biofine) dated September 27, 1996 by and between Fresenius AG and FMC-AG. (Incorporated by reference to Exhibit 10.9 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .7 | Cross-License Agreement dated September 27, 1996 by and between Fresenius AG and FMC-AG. (Incorporated by reference to Exhibit 10.10 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .8 | Amendment for Lease Agreement for Office Buildings dated December 19, 2006 by and between Fresenius AG and Fresenius Medical Care Deutschland GmbH (Daimler Str.). (Incorporated by reference to Exhibit 2.8 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1996, filed April 7, 1997). | ||
10 | .9 | FMC — AG 1996 Stock Incentive Plan, (incorporated by reference to FMC-AG’s Registration Statement on Form S-8, dated October 1, 1996). | ||
10 | .10 | FMC — AG 1998 Stock Incentive Plan adopted effective as of April 6, 1998. (Incorporated by reference to Exhibit 4.8 to FMC-AG’s Report on Form 6-K for the three months ended March 31, 1998, filed May 14, 1998). | ||
10 | .11 | FMC — AG Stock Option Plan of June 10, 1998 (for non-North American employees). (Incorporated by reference to Exhibit 1.2 to FMC-AG’s Annual Report on Form 20-F, for the year ended December 31, 1998, filed March 24, 1999). | ||
10 | .12 | Fresenius Medical Care Aktiengesellschaft 2001 International Stock Incentive Plan (Incorporated by reference to Exhibit No. 10.17 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
10 | .13 | Stock Option Plan 2006 of Fresenius Medical Care AG & Co. KGaA (Incorporated by reference to Exhibit 10.2 to FMC KGaA’s Form 6-K/ A for the six-month period ended June 30, 2006 filed August 11, 2006). | ||
10 | .14 | Sourcing and Supply Agreement dated October 13, 2006, by and among Amgen, Inc., Amgen USA, Inc., and Fresenius Medical Care Holdings, Inc. (incorporated by reference to Exhibit 4.18 to FMC-KGaA’s Annual Report on Form 20-F for the year ended December 31, 2006 filed February 26, 2007).(1) | ||
10 | .15 | Amendment No. 1 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.2 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .16 | Amendment No. 2 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .17 | Amendment No. 3 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.4 the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .18 | Amendment No. 4 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.5 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .19 | Corporate Integrity Agreement dated January 18, 2000 between FMCH and Office of the Inspector General of the Department of Health and Human Services. (Incorporated by reference to Exhibit 10.1 to FMCH’s Current Report on Form 8-K dated January 21, 2000). |
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Exhibit | ||||
Number | Description | |||
10 | .20 | Settlement Agreement dated as of February 6, 2003 by and among FMC-AG, Fresenius Medical Care Holdings, National Medical Care, Inc., the Official Committee of Asbestos Personal Injury Claimants, and the Official Committee of Asbestos Property Damage Claimants of W.R. Grace & Co. (incorporated by reference to Exhibit No. 10.18 to the Annual Report on Form 10-K of Fresenius Medical Care Holdings, Inc. for the year ended December 31, 2002 filed March 17, 2002). | ||
10 | .30 | Amended and Restated Subordinated Loan Note dated as of March 31, 2006, among National Medical Care, Inc. and certain of its subsidiaries as borrowers and Fresenius AG as lender (incorporated herein by reference to Exhibit 4.3 to FMC-KGaA’s Form 6-K for the three month period ended March 31, 2006 filed May 17, 2006).(1) | ||
12 | .1 | Statement regarding computation of ratio of earnings to fixed charges (filed herewith). | ||
21 | .1 | List of Significant Subsidiaries (included in the prospectus under the heading “Business — Our Organizational Structure.” | ||
23 | .1 | Report on Financial Statement Schedule and Consent of Independent Registered Public Accounting Firm (filed herewith). | ||
23 | .2 | Consent of Baker & McKenzie LLP (included in Exhibit 5.1) | ||
23 | .3 | Consent of Nörr Stiefenhofer Lutz (included in Exhibit 5.2) | ||
23 | .4 | Consent of Wildgen & Partners (included in Exhibit 5.3) | ||
24 | .1 | Power of Attorney (included in the signature pages hereto). | ||
25 | .1 | Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of U.S. Bank National Association relating to Indenture for the 67/8% Senior Notes due 2017 (filed herewith). | ||
99 | .1 | Form of Letter of Transmittal (filed herewith). | ||
99 | .2 | Form of Notice of Guaranteed Delivery (filed herewith). | ||
99 | .3 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (filed herewith). | ||
99 | .4 | Form of Letter to Clients (filed herewith). | ||
99 | .5 | Registration Rights Agreement for the 67/8% Senior Notes due 2017, dated as of July 2, 2007, by and among FMC Finance III S.A., the Guarantors party thereto and the initial purchasers (Incorporated by reference to Exhibit 10.1 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). |
(1) | Confidential treatment has been granted as to certain portions of this document in accordance with the applicable rules of the Securities and Exchange Commission. |
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(b) | Financial Statement Schedules |
(Addition) | (Reduction) | ||||||||||||||||
Balance at | Charge to | Deductions/ | Balance at | ||||||||||||||
Beginning | Costs and | Write-offs/ | End of | ||||||||||||||
of Period | Expenses | Recoveries | Period | ||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||
Year ended December 31, 2006 | $ | 176,568 | $ | 177,285 | $ | 146,560 | $ | 207,293 | |||||||||
Year ended December 31, 2005 | $ | 179,917 | $ | 140,799 | $ | 144,148 | $ | 176,568 | |||||||||
Year ended December 31, 2004 | $ | 166,385 | $ | 131,257 | $ | 117,725 | $ | 179,917 |
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Item 22. | Undertakings |
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FMC Finance III S.A. |
By: | /s/Dr. Andrea Stopper |
Name: Dr. Andrea Stopper | |
Title: Director |
Name | Title | Date | ||||
/s/Dr. Andrea Stopper | Director | December 3, 2007 | ||||
/s/Gabriele Dux | Director | December 3, 2007 | ||||
/s/Khaled Bahi | Director | December 3, 2007 | ||||
/s/Ben J. Lipps | Authorized Representative in the United States | December 3, 2007 |
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Fresenius Medical Care AG & Co. KGaA | |
a partnership limited by shares, represented by | |
Fresenius Medical Care Management AG, | |
its general partner |
By: | /s/ Emanuele Gatti |
Name: Dr. Emanuele Gatti | |
Title: Member of the Management Board |
By: | /s/ Rainer Runte |
Name: Dr. Rainer Runte | |
Title: Member of the Management Board |
Name | Title | Date | ||||
/s/ Ben J. Lipps | Chairman of the Management Board (Chief Executive Officer) of Fresenius Medical Care Management AG (“Management AG”), general partner of Fresenius Medical Care AG & Co. KGaA | December 3, 2007 | ||||
/s/ Lawrence A. Rosen | Member of the Management Board (Chief Financial Officer) and principal accounting officer of Management AG and authorized representative of Fresenius Medical Care AG & Co. KGaA in the United States | December 3, 2007 |
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Name | Title | Date | ||||
/s/ Roberto Fusté | Member of the Management Board of Management AG | December 3, 2007 | ||||
/s/ Emanuele Gatti | Member of the Management Board of Management AG | December 3, 2007 | ||||
/s/ Rainer Runte | Member of the Management Board of Management AG | December 3, 2007 | ||||
/s/ Rice Powell | Member of the Management Board of Management AG | December 3, 2007 | ||||
/s/ Mats Wahlstrom | Member of the Management Board of Management AG | December 3, 2007 |
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Fresenius Medical Care Holdings, Inc. |
By: | /s/ Ben J. Lipps |
Name: Dr. Ben J. Lipps | |
Title: Director |
Name | Title | Date | ||||
/s/ Mats Wahlstrom | Director, Co-Chief Executive Officer & Co. President | December 3, 2007 | ||||
/s/ Rice Powell | Director, Co-Chief Executive Officer & Co-President | December 3, 2007 | ||||
/s/ Michael Brosnan | Director, Senior Vice President & Treasurer (Chief Financial Officer and Chief Accounting Officer) | December 3, 2007 | ||||
/s/ Ben J. Lipps | Director | December 3, 2007 | ||||
/s/ Lawrence A. Rosen | Director | December 3, 2007 | ||||
/s/ Rainer Runte | Director | December 3, 2007 | ||||
/s/ Ronald J. Kuerbitz | Director | December 3, 2007 |
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Fresenius Medical Care Deutschland GmbH |
By: | /s/ Emanuele Gatti |
Name: Dr. Emanuele Gatti | |
Title: Managing Director |
By: | /s/ Rolf Groos |
Name: Rolf Groos | |
Title: Managing Director |
Name | Title | Date | ||||
/s/ Rolf Groos | Managing Director | December 3, 2007 | ||||
/s/ Roberto Fusté | Managing Director | December 3, 2007 | ||||
/s/ Norbert Weber | Managing Director | December 3, 2007 | ||||
/s/ Emanuele Gatti | Managing Director | December 3, 2007 | ||||
/s/ Ben J. Lipps | Authorized Representative in the United States | December 3, 2007 |
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Exhibit | ||||
Number | Description | |||
2 | .1 | Agreement and Plan of Reorganization dated as of February 4, 1996 between W.R. Grace & Co. and Fresenius AG. (Incorporated by reference to Appendix A to the Joint Proxy Statement-Prospectus of Fresenius Medical Care AG (“FMC-AG”), W.R. Grace & Co. and Fresenius USA, Inc., dated August 2, 1996). | ||
2 | .2 | Distribution Agreement by and among W.R. Grace & Co., W.R., Grace & Co. — Conn. and Fresenius AG dated as of February 4, 1996. (Incorporated by reference to Appendix A to the Joint Proxy Statement-Prospectus of FMC-AG, W.R. Grace & Co. and Fresenius USA, Inc., dated August 2, 1996). | ||
2 | .3 | Contribution Agreement by and among Fresenius AG, Sterilpharma GmbH and W.R. Grace & Co. — Conn. dated February 4, 1996. (Incorporated by reference to Appendix E to the Joint Proxy Statement-Prospectus of FMC-AG, W.R. Grace & Co. and Fresenius USA, Inc., dated August 2, 1996). | ||
2 | .4 | Merger Agreement dated as of May 3, 2005 among FMC-AG, FMCH, Florence Acquisition, Inc. and Renal Care Group, Inc. (incorporated by reference to Exhibit 10.1 to FMC-AG’s Report on Form 6-K for the three months ended March 31, 2005 filed May 5, 2005). | ||
2 | .5 | Agreement Containing Consent Orders, United States of America before Federal Trade Commission, In the Matter of Fresenius AG, File No. 051-0154. (Incorporated by reference to Exhibit 10.1 to the Form 6-K of Fresenius Medical Care AG & Co. KGaA (“FMC-KGaA”) for the three-month period ended March 31, 2006 filed May 17, 2006). | ||
2 | .6 | Complaint, United States of America before Federal Trade Commission, In the Matter of Fresenius AG. (Incorporated by reference to Exhibit 10.2 to FMC KGaA’s Form 6-K for the three-month period ended March 31, 2006 filed May 17, 2006). | ||
2 | .7 | Decision and Order, United States of America before Federal Trade Commission, In the Matter of Fresenius AG. (Incorporated by reference to Exhibit 10.3 to FMC KGaA’s Form 6-K for the three-month period ended March 31, 2006 filed May 17, 2006). | ||
2 | .7 | Order to Maintain Assets, United States of America before Federal Trade Commission, In the Matter of Fresenius AG. (Incorporated by reference to Exhibit 10.4 to FMC KGaA’s Form 6-K for the three-month period ended March 31, 2006 filed May 17, 2006. | ||
3 | .1 | Articles of Association (Satzung) of FMC KGaA. (Incorporated by reference to Exhibit 10.1 to FMC-KGaA’s Report on Form 6-K/ A for the six months ended June 30, 2006 filed August 11, 2006). | ||
4 | .1 | Indenture for the 67/8% Senior Notes due 2017, dated as of July 2, 2007 by and among FMC Finance III S.A., the Guarantors party thereto and U.S. Bank National Association, as Trustee. (Incorporated by reference to Exhibit 4.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .2 | Form of 67/8% Senior Note due 2017 (included in Exhibit 4.1). (Incorporated by reference to Exhibit 4.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .3 | Form of Note Guarantee for 67/8% Senior Note due 2017 (included in Exhibit 4.1). (Incorporated by reference to Exhibit 4.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .4 | Amended and Restated Deposit Agreement between The Bank of New York and Fresenius Medical Care AG & Co. KGaA dated as of February 26, 2007 relating to Ordinary Share ADSs (Incorporated by reference to Exhibit 3.a. to the Registration Statement on Form F-6, Registration No. 333-140664, filed February 13, 2007). | ||
4 | .5 | Amended and Restated Deposit Agreement between The Bank of New York and Fresenius Medical Care AG & Co. KGaA dated as of February 26, 2007 relating to Preference Share ADSs (Incorporated by reference to Exhibit 3.a. to the Registration Statement on Form F-6, Registration No. 333-140730, filed February 15, 2007). | ||
4 | .6 | Pooling Agreement dated February 13, 2006 by and between Fresenius AG, Fresenius Medical Care Management AG and the individuals acting from time to time as Independent Directors. (Incorporated by reference to Exhibit 2.3 to FMC KGaA’s Annual Report on Form 20-F for the year ended December 31, 2005, filed March 2, 2006). |
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Exhibit | ||||
Number | Description | |||
4 | .7 | Senior Subordinated Indenture (U.S. Dollar denominated) dated as of February 19, 1998, among Fresenius Medical Care AG, FMC Trust Finance S.à.r.l. Luxembourg, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein. (Incorporated by reference to Exhibit 2.6 to Annual Report on Form 20-F of Fresenius Medical Care AG (“FMC-AG”) for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .8 | Senior Subordinated Indenture (DM denominated) dated as of February 19, 1998, among Fresenius Medical Care AG, FMC Trust Finance S.à.r.l. Luxembourg, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein. (Incorporated by reference to Exhibit 2.7 to the FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .9 | Declaration of Trust Establishing Fresenius Medical Care Capital Trust II, dated February 12, 1998. (Incorporated by reference to Exhibit 2.1 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .10 | Declaration of Trust Establishing Fresenius Medical Care Capital Trust III, dated February 12, 1998. (Incorporated by reference to Exhibit 2.2 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .11 | First Amendment to Declaration of Trust Establishing Fresenius Medical Care Capital Trust III, dated February 12, 1998. (Incorporated by reference to Exhibit 2.3 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .12 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust II, dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.4 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .13 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust III, dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.5 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .14 | Guarantee Agreement dated as of February 19, 1998 between Fresenius Medical Care AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust II. (Incorporated by reference to Exhibit 2.8 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .15 | Guarantee Agreement dated as of February 19, 1998 between Fresenius Medical Care AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust III. (Incorporated by reference to Exhibit 2.9 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .16 | Agreement as to Expenses and Liabilities between Fresenius Medical Care AG and Fresenius Medical Care Capital Trust II dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.10 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .17 | Agreement as to Expenses and Liabilities between Fresenius Medical Care AG and Fresenius Medical Care Capital Trust III dated as of February 19, 1998. (Incorporated by reference to Exhibit 2.11 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1997, filed March 27, 1998). | ||
4 | .18 | Declaration of Trust of Fresenius Medical Care Capital Trust IV, dated February 12, 1998 (Incorporated by reference to Exhibit no. 4.41 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .19 | First Amendment to Declaration of Trust of Fresenius Medical Care Capital Trust IV, dated June 5, 2001 (Incorporated by reference to Exhibit No. 4.42 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .20 | Declaration of Trust of Fresenius Medical Care Capital Trust V, dated June 1, 2001 (Incorporated by reference to Exhibit No. 4.43 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .21 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust IV, dated as of June 6, 2001 (Incorporated by reference to Exhibit No. 4.44 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). |
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Exhibit | ||||
Number | Description | |||
4 | .22 | Amended and Restated Declaration of Trust of Fresenius Medical Care Capital Trust V, dated as of June 15, 2000 (Incorporated by reference to Exhibit No. 4.45 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .23 | Senior Subordinated Indenture (U.S. Dollar denominated) dated as of June 6, 2001, among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg-III, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (Incorporated by reference to Exhibit No. 4.46 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .24 | Senior Subordinated Indenture (Euro denominated) dated as of June 15, 2001, among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg-III, State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (Incorporated by reference to Exhibit No. 4.47 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .25 | Guarantee Agreement dated as of June 6, 2001 between FMC — AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust IV (Incorporated by reference to Exhibit No. 4.48 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .26 | Guarantee Agreement dated as of June 15, 2001 between FMC — AG and State Street Bank and Trust Company as Trustee, with respect to Fresenius Medical Care Capital Trust V (Incorporated by reference to Exhibit No. 4.49 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .27 | Agreement as to Expenses and Liabilities between FMC — AG and Fresenius Medical Care Capital Trust IV dated as of June 6, 2001 (Incorporated by reference to Exhibit No. 4.50 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .28 | Agreement as to Expenses and Liabilities between FMC — AG and Fresenius Medical Care Capital Trust V dated as of June 15, 2001 (Incorporated by reference to Exhibit No. 4.51 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
4 | .29 | First Supplemental Indenture dated as of December 23, 2004 among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg, US Bank, National Association, successor to State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (incorporated by reference to Exhibit No. 2.27 to the Annual Report of FMC — AG for the year ended December 31, 2004 filed March 1, 2005). | ||
4 | .30 | First Supplemental Indenture dated as of December 23, 2004 among FMC-AG, FMC Trust Finance S.à.r.l. Luxembourg-III, US Bank, National Association, successor to State Street Bank and Trust Company, as Trustee, and the Subsidiary Guarantors named therein (incorporated by reference to Exhibit No. 2.28 to the Annual Report of FMC — AG for the year ended December 31, 2004 filed March 1, 2005). | ||
4 | .31 | Receivables Purchase Agreement dated August 28, 1997 between National Medical Care, Inc. and NMC Funding Corporation. (Incorporated by reference to Exhibit 10.3 to FMCH’s Quarterly Report on Form 10-Q, for the three months ended September 30, 1997, filed November 4, 1997). | ||
4 | .32 | Amendment dated as of September 28, 1998 to the Receivables Purchase Agreement dated as of August 28, 1997, by and between NMC Funding Corporation, as Purchaser and National Medical Care, Inc., as Seller. (Incorporated by reference to Exhibit 10.1 to FMCH’s Quarterly Report on Form 10-Q, for the three months ended September 30, 1998, filed November 12, 1998). | ||
4 | .33 | Amendment dated as of October 20, 2005 to the Receivables Purchase Agreement dated as of August 28, 1997, by and between NMC Funding Corporation, as Purchaser and National Medical Care, Inc., as Seller (incorporated by reference to Exhibit 10.2 to FMC-AG’s Report on Form 6-K, for the nine months ended September 30, 2005, filed November 3, 2005). | ||
4 | .34 | Third Amended and Restated Transfer and Administrative agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Asset One Securitization, LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.29 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 2003). |
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Exhibit | ||||
Number | Description | |||
4 | .35 | Amendment No. 1 dated as of March 31, 2004 to Third Amended and Restated Transfer and Administration Agreement dated as of October 23, 2003, among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Asset One Securitization, LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.30 to FMC-AG’s Report on Form 6-K dated May 12, 2004). | ||
4 | .36 | Amendment No. 2 dated as of October 21, 2004 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Asset One Securitization, LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.30 to FMC-AG’s Report on Form 6-K dated November 12, 2004). | ||
4 | .37 | Amendment No. 3 dated as of January 1, 2005 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.2 to FMC-AG’s Report on Form 6-K for the three months ended March 31, 2005, filed May 5, 2005). | ||
4 | .38 | Amendment No. 4 dated as of October 20, 2005 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.1 to FMC-AG’s Report on Form 6-K for the nine months ended September 30, 2005 filed November 3, 2005). | ||
4 | .39 | Amendment No. 5 dated as of October 19, 2006 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Multifunding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 2.36 to FMC-KGaA’s Annual Report on Form 20-F for the year ended December 31, 2006 filed February 26, 2007). | ||
4 | .40 | Amendment No. 6 dated as of January 19, 2007 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Balanced Funding Corporation, Amsterdam Funding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.1 to FMC-KGaA’s Report on Form 6-K furnished to the SEC on October 31, 2007). | ||
4 | .41 | Amendment No. 7 dated as of April 27, 2007 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 23, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Balanced Funding Corporation, Amsterdam Funding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.2 to FMC-KGaA’s Report on Form 6-K furnished to the SEC on October 31, 2007). | ||
4 | .42 | Amendment No. 8 dated as of October 18, 2007 to the Third Amended and Restated Transfer and Administrative Agreement dated as of October 3, 2003 among NMC Funding Corporation, National Medical Care, Inc., Paradigm Funding LLC, Liberty Street Funding Corp., Giro Balanced Funding Corporation, Amsterdam Funding Corporation, and the Bank Investors listed therein, and WestLB AG, New York Branch, as administrative agent and agent (incorporated by reference to Exhibit 10.3 to FMC-KGaA’s Report on Form 6-K furnished to the SEC on October 31, 2007). |
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Exhibit | ||||
Number | Description | |||
4 | .43 | Bank Credit Agreement dated as of March 31, 2006 among FMC KGaA, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of FMC-KGaA as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (incorporated by reference to Exhibit No. 4.1 to the Form 6-K of FMC-KGaA for the three months ended March 31, 2006 filed May 17, 2006).(1) | ||
4 | .44 | Term Loan Credit Agreement dated as of March 31, 2006 among and FMC KGaA, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of FMC-KGaA as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (incorporated by reference to Exhibit 4.2 to the Form 6-K of FMC-KGaA for the three month period ended March 31, 2006 filed May 17, 2006).(1) | ||
4 | .45 | Amendment No. 1 dated as of June 26, 2007 to Bank Credit Agreement dated as of March 31, 2006 among the Company, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of the Company as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (incorporated by reference to Exhibit 4.1 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). | ||
4 | .46 | Amendment No. 1 dated as of June 26, 2007 to Term Loan Credit Agreement dated as of March 31, 2006 among and the Company, Fresenius Medical Care Holdings, Inc., and certain subsidiaries of the Company as Borrowers and Guarantors, Bank of America N.A., as Administrative Agent, Deutsche Bank AG New York Branch, as Sole Syndication Agent, The Bank of Nova Scotia, Credit Suisse, Cayman Islands Branch, and JPMorgan Chase Bank, National Association, as Co-Documentation Agents and the Lenders named therein (Incorporated by reference to Exhibit 4.2 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). AG’s Registration Statement on Form F-1, filed on November 4, 1996). | ||
5 | .1 | Opinion of Baker & McKenzie LLP (filed herewith). | ||
5 | .2 | Opinion of Nörr Stiefenhofer Lutz (filed herewith). | ||
5 | .3 | Opinion of Wildgen & Partners (filed herewith). | ||
10 | .1 | Amendment for Lease Agreement for Office Buildings dated December 19, 2006 by and between Fresenius AG and Fresenius Medical Care Deutschland GmbH. (Incorporated by reference to Exhibit 10.3 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .2 | Amendment for Lease Agreement for Manufacturing Facilities dated December 19, 2006 by and between Fresenius Immobilien-Verwaltungs-GmbH & Co. Objekt Schweinfurt KG and Fresenius Medical Care Deutschland GmbH. (Incorporated by reference to Exhibit 10.4 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .3 | Amendment for Lease Agreement for Manufacturing Facilities dated December 19, 2006 by and between Fresenius Immobilien-Verwaltungs-GmbH & Co. Objekt St. Wendel KG and Fresenius Medical Care Deutschland GmbH. (Incorporated by reference to Exhibit 10.4 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .4 | Amendment for Lease Agreement for Manufacturing Facilities dated December 19, 2006 by and between Fresenius AG and Fresenius Medical Care Deutschland GmbH (Ober-Erlenbach). (Incorporated by reference to Exhibit 10.5 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .5 | Trademark License Agreement dated September 27, 1996 by and between Fresenius AG and FMC-AG. (Incorporated by reference to Exhibit 10.8 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). |
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Exhibit | ||||
Number | Description | |||
10 | .6 | Technology License Agreement (Biofine) dated September 27, 1996 by and between Fresenius AG and FMC-AG. (Incorporated by reference to Exhibit 10.9 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .7 | Cross-License Agreement dated September 27, 1996 by and between Fresenius AG and FMC-AG. (Incorporated by reference to Exhibit 10.10 to FMC-AG’s Registration Statement on Form F-1, Registration No. 333-05922, filed November 16, 1996). | ||
10 | .8 | Amendment for Lease Agreement for Office Buildings dated December 19, 2006 by and between Fresenius AG and Fresenius Medical Care Deutschland GmbH (Daimler Str.). (Incorporated by reference to Exhibit 2.8 to FMC-AG’s Annual Report on Form 20-F for the year ended December 31, 1996, filed April 7, 1997). | ||
10 | .9 | FMC — AG 1996 Stock Incentive Plan, (incorporated by reference to FMC-AG’s Registration Statement on Form S-8, dated October 1, 1996). | ||
10 | .10 | FMC — AG 1998 Stock Incentive Plan adopted effective as of April 6, 1998. (Incorporated by reference to Exhibit 4.8 to FMC-AG’s Report on Form 6-K for the three months ended March 31, 1998, filed May 14, 1998). | ||
10 | .11 | FMC — AG Stock Option Plan of June 10, 1998 (for non-North American employees). (Incorporated by reference to Exhibit 1.2 to FMC-AG’s Annual Report on Form 20-F, for the year ended December 31, 1998, filed March 24, 1999). | ||
10 | .12 | Fresenius Medical Care Aktiengesellschaft 2001 International Stock Incentive Plan (Incorporated by reference to Exhibit No. 10.17 to the Registration Statement on Form F-4 of FMC — AG et al filed August 2, 2001, Registration No. 333-66558). | ||
10 | .13 | Stock Option Plan 2006 of Fresenius Medical Care AG & Co. KGaA (Incorporated by reference to Exhibit 10.2 to FMC KGaA’s Form 6-K/ A for the six-month period ended June 30, 2006 filed August 11, 2006). | ||
10 | .14 | Sourcing and Supply Agreement dated October 13, 2006, by and among Amgen, Inc., Amgen USA, Inc., and Fresenius Medical Care Holdings, Inc. (incorporated by reference to Exhibit 4.18 to FMC-KGaA’s Annual Report on Form 20-F for the year ended December 31, 2006 filed February 26, 2007).(1) | ||
10 | .15 | Amendment No. 1 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.2 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .16 | Amendment No. 2 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.3 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .17 | Amendment No. 3 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.4 the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .18 | Amendment No. 4 to Sourcing and Supply agreement dated effective October 1, 2006, among Fresenius Medical Care Holdings, Inc. Amgen Inc. and Amgen USA Inc. (Incorporated by reference to Exhibit 10.5 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007).(1) | ||
10 | .19 | Corporate Integrity Agreement dated January 18, 2000 between FMCH and Office of the Inspector General of the Department of Health and Human Services. (Incorporated by reference to Exhibit 10.1 to FMCH’s Current Report on Form 8-K dated January 21, 2000). | ||
10 | .20 | Settlement Agreement dated as of February 6, 2003 by and among FMC-AG, Fresenius Medical Care Holdings, National Medical Care, Inc., the Official Committee of Asbestos Personal Injury Claimants, and the Official Committee of Asbestos Property Damage Claimants of W.R. Grace & Co. (incorporated by reference to Exhibit No. 10.18 to the Annual Report on Form 10-K of Fresenius Medical Care Holdings, Inc. for the year ended December 31, 2002 filed March 17, 2002). | ||
10 | .30 | Amended and Restated Subordinated Loan Note dated as of March 31, 2006, among National Medical Care, Inc. and certain of its subsidiaries as borrowers and Fresenius AG as lender (incorporated herein by reference to Exhibit 4.3 to FMC-KGaA’s Form 6-K for the three month period ended March 31, 2006 filed May 17, 2006).(1) |
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Exhibit | ||||
Number | Description | |||
12 | .1 | Statement regarding computation of ratio of earnings to fixed charges (filed herewith). | ||
21 | .1 | List of Significant Subsidiaries (included in the prospectus under the heading “Business — Our Organizational Structure.” | ||
23 | .1 | Report on Financial Statement Schedule and Consent of Independent Registered Public Accounting Firm (filed herewith). | ||
23 | .2 | Consent of Baker & McKenzie LLP (included in Exhibit 5.1) | ||
23 | .3 | Consent of Nörr Stiefenhofer Lutz (included in Exhibit 5.2) | ||
23 | .4 | Consent of Wildgen & Partners (included in Exhibit 5.3) | ||
24 | .1 | Power of Attorney (included in the signature pages hereto). | ||
25 | .1 | Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of U.S. Bank National Association relating to Indenture for the 67/8% Senior Notes due 2017 (filed herewith). | ||
99 | .1 | Form of Letter of Transmittal (filed herewith). | ||
99 | .2 | Form of Notice of Guaranteed Delivery (filed herewith). | ||
99 | .3 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (filed herewith). | ||
99 | .4 | Form of Letter to Clients (filed herewith). | ||
99 | .5 | Registration Rights Agreement for the 67/8% Senior Notes due 2017, dated as of July 2, 2007, by and among FMC Finance III S.A., the Guarantors party thereto and the initial purchasers (Incorporated by reference to Exhibit 10.1 to the Report on Form 6-K furnished to the SEC by FMC-KGaA on August 2, 2007). |
(1) | Confidential treatment has been granted as to certain portions of this document in accordance with the applicable rules of the Securities and Exchange Commission. |
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