Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | FRESENIUS MEDICAL CARE AG & Co. KGaA |
Entity Central Index Key | 0001333141 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 298,329,247 |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Interactive Data Current | Yes |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Registration Statement | false |
Consolidated statements of inco
Consolidated statements of income - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Health care services | € 13,872,219 | € 13,264,289 | € 14,531,636 |
Health care products | 3,604,336 | 3,282,584 | 3,251,936 |
Revenue | 17,476,555 | 16,546,873 | 17,783,572 |
Costs of revenue: | |||
Health care services | 10,483,822 | 9,899,714 | 10,347,512 |
Health care products | 1,596,882 | 1,492,416 | 1,417,806 |
Costs of revenue | 12,080,704 | 11,392,130 | 11,765,318 |
Gross profit | 5,395,851 | 5,154,743 | 6,018,254 |
Operating (income) expenses: | |||
Selling, general and administrative | 3,060,732 | 2,885,220 | 3,637,780 |
(Gain) loss related to divestiture of Care Coordination activities | (28,788) | (809,003) | (25,763) |
Research and development | 168,028 | 114,074 | 110,997 |
Income from equity method investees | (73,679) | (73,346) | (67,199) |
Operating income | 2,269,558 | 3,037,798 | 2,362,439 |
Other (income) expense: | |||
Interest income | (61,617) | (147,409) | (51,375) |
Interest expense | 491,061 | 448,471 | 416,199 |
Income before income taxes | 1,840,114 | 2,736,736 | 1,997,615 |
Income tax expense | 401,614 | 511,079 | 443,081 |
Net income | 1,438,500 | 2,225,657 | 1,554,534 |
Net income attributable to noncontrolling interests | 238,881 | 243,733 | 274,746 |
Net income attributable to shareholders of FMC-AG & Co. KGaA | € 1,199,619 | € 1,981,924 | € 1,279,788 |
Basic earnings per share | € 3.96 | € 6.47 | € 4.17 |
Diluted earnings per share | € 3.96 | € 6.45 | € 4.16 |
Consolidated statements of comp
Consolidated statements of comprehensive income - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidated statements of comprehensive income | ||||
Net income | € 1,438,500 | € 2,225,657 | € 1,554,534 | |
Components that will not be reclassified to profit or loss: | ||||
Actuarial gains (losses) on defined benefit pension plans | (99,613) | (28,070) | 6,840 | |
Income tax (expense) benefit related to components of other comprehensive income not reclassified | 30,245 | 7,713 | (27,393) | |
Total | (69,368) | (20,357) | (20,553) | |
Components that may be reclassified subsequently to profit or loss: | ||||
Gain (loss) related to foreign currency translation | 263,835 | 327,317 | (1,284,173) | |
Gain (loss) related to cash flow hedges | [1] | (11,633) | 23,560 | 27,983 |
Income tax (expense) benefit related to components of other comprehensive income that may be reclassified | 2,674 | (6,734) | (8,407) | |
Total | 254,876 | 344,143 | (1,264,597) | |
Other comprehensive income (loss), net | 185,508 | 323,786 | (1,285,150) | |
Total comprehensive income | 1,624,008 | 2,549,443 | 269,384 | |
Comprehensive income attributable to noncontrolling interests | 259,184 | 285,691 | 150,611 | |
Comprehensive income attributable to shareholders of FMC-AG & Co. KGaA | € 1,364,824 | € 2,263,752 | € 118,773 | |
[1] | Including cost of hedging in the amount of €(1,962) and €(1,335) for the twelve months ended December 31, 2019 and 2018. |
Consolidated statements of co_2
Consolidated statements of comprehensive income (Parenthetical) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated statements of comprehensive income | ||
Cost of hedging | € (1,962) | € (1,335) |
Consolidated balance sheets
Consolidated balance sheets - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | € 1,007,723 | € 2,145,632 |
Trade accounts and other receivables | 3,421,346 | 3,231,500 |
Accounts receivable from related parties | 159,196 | 198,868 |
Inventories | 1,663,278 | 1,466,803 |
Other current assets | 913,603 | 804,083 |
Total current assets | 7,165,146 | 7,846,886 |
Property, plant and equipment | 4,190,281 | 3,836,010 |
Right-of-use assets | 4,325,115 | |
Intangible assets | 1,426,330 | 681,331 |
Goodwill | 14,017,255 | 12,209,606 |
Deferred taxes | 361,196 | 345,686 |
Investment in equity method investees | 696,872 | 649,780 |
Other non-current assets | 752,540 | 672,969 |
Total non-current assets | 25,769,589 | 18,395,382 |
Total assets | 32,934,735 | 26,242,268 |
Liabilities | ||
Accounts payable | 716,526 | 641,271 |
Accounts payable to related parties | 118,663 | 153,781 |
Current provisions and other current liabilities | 2,812,419 | 2,904,288 |
Short-term debt | 1,149,988 | 1,205,294 |
Short-term debt from related parties | 21,865 | 188,900 |
Current portion of long-term debt | 1,447,239 | 1,106,519 |
Current portion of long-term lease liabilities | 622,227 | |
Current portion of long-term lease liabilities from related parties | 16,514 | |
Income tax payable | 101,793 | 68,229 |
Total current liabilities | 7,007,234 | 6,268,282 |
Long-term debt, less current portion | 6,458,318 | 5,045,515 |
Long-term lease liabilities, less current portion | 3,959,865 | |
Long-term lease liabilities from related parties, less current portion | 106,432 | |
Non-current provisions and other non-current liabilities | 668,747 | 750,738 |
Pension liabilities | 689,195 | 551,930 |
Income tax payable | 78,005 | 97,324 |
Deferred taxes | 739,702 | 626,521 |
Total non-current liabilities | 12,700,264 | 7,072,028 |
Total liabilities | 19,707,498 | 13,340,310 |
Shareholders' equity | ||
Ordinary shares, no par value, 1.00 nominal value, 374,165,226 shares authorized, 304,436,876 issued and 298,329,247 outstanding as of December 31, 2019 and 384,822,972 shares authorized, 307,878,652 issued and 306,878,701 outstanding as of December 31, 2018 | 304,437 | 307,879 |
Treasury stock, at cost | (370,502) | (50,993) |
Additional paid-in capital | 3,607,662 | 3,873,345 |
Retained earnings | 9,454,861 | 8,831,930 |
Accumulated other comprehensive income (loss) | (1,038,545) | (1,203,750) |
Total FMC-AG & Co. KGaA shareholders' equity | 11,957,913 | 11,758,411 |
Noncontrolling interests | 1,269,324 | 1,143,547 |
Total equity | 13,227,237 | 12,901,958 |
Total liabilities and equity | € 32,934,735 | € 26,242,268 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - € / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated balance sheets | ||
Par value (in dollars per share) | € 0 | |
Nominal value per share | € 1 | |
Shares authorized | 374,165,226 | 384,822,972 |
Shares issued | 304,436,876 | 307,878,652 |
Shares outstanding | 298,329,247 | 306,878,701 |
Consolidated statements of cash
Consolidated statements of cash flows - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net income | € 1,438,500 | € 2,225,657 | € 1,554,534 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and impairment loss | 1,593,160 | 789,566 | 735,479 |
Change in deferred taxes, net | 64,266 | 89,171 | (203,046) |
(Gain) loss from the sale of fixed assets, right-of-use assets, investments and divestitures | (99,074) | (807,106) | (94,123) |
Compensation expense related to share-based plans | 1,992 | 10,745 | 46,811 |
Cash inflow (outflow) from hedging | (12,744) | ||
Investments in equity method investees, net | (27,657) | (28,369) | (57,009) |
Interest expense, net | 429,444 | 301,062 | 364,824 |
Changes in assets and liabilities, net of amounts from businesses acquired: | |||
Trade accounts and other receivables | (105,828) | (164,685) | (131,676) |
Inventories | (117,504) | (157,092) | (62,692) |
Other current and non-current assets | (46,132) | (12,561) | 227,490 |
Accounts receivable from related parties | 41,717 | (5,805) | 32,614 |
Accounts payable to related parties | (35,861) | 4,480 | (110,375) |
Accounts payable, provisions and other current and non-current liabilities | (128,906) | (84,561) | 222,302 |
Paid interest | (470,223) | (311,971) | (340,632) |
Received interest | 49,453 | 56,809 | 37,601 |
Income tax payable | 380,067 | 514,957 | 644,866 |
Paid income taxes | (387,719) | (358,386) | (675,157) |
Net cash provided by (used in) operating activities | 2,566,951 | 2,061,911 | 2,191,811 |
Investing activities | |||
Purchases of property, plant and equipment | (1,124,791) | (1,057,276) | (944,460) |
Proceeds from sale of property, plant and equipment | 11,535 | 54,529 | 103,225 |
Acquisitions and investments, net of cash acquired, and purchases of intangible assets | (2,232,671) | (925,267) | (565,694) |
Proceeds from divestitures | 59,940 | 1,682,975 | 415,388 |
Net cash provided by (used in) investing activities | (3,285,987) | (245,039) | (991,541) |
Financing activities | |||
Proceeds from short-term debt | 737,409 | 650,634 | 443,996 |
Repayments of short-term debt | (807,807) | (205,790) | (241,309) |
Proceeds from short-term debt from related parties | 281,200 | 217,646 | 122,079 |
Repayments of short-term debt from related parties | (448,311) | (37,746) | (116,079) |
Proceeds from long-term debt | 3,460,805 | 612,388 | 582,311 |
Repayments of long-term debt | (2,217,005) | (1,076,204) | (1,099,329) |
Repayments of lease liabilities | (671,403) | ||
Repayments of lease liabilities from related parties | (16,340) | ||
Increase (decrease) of accounts receivable securitization program | 381,430 | (298,912) | 157,564 |
Proceeds from exercise of stock options | 15,864 | 47,404 | 47,591 |
Purchase of treasury stock | (599,796) | (37,221) | (57,938) |
Dividends paid | (354,636) | (324,838) | (293,973) |
Distributions to noncontrolling interests | (296,168) | (296,293) | (386,340) |
Contributions from noncontrolling interests | 68,125 | 67,196 | 42,797 |
Net cash provided by (used in) financing activities | (466,633) | (681,736) | (798,630) |
Effect of exchange rate changes on cash and cash equivalents | 47,760 | 32,387 | (132,413) |
Cash and cash equivalents: | |||
Net increase (decrease) in cash and cash equivalents | (1,137,909) | 1,167,523 | 269,227 |
Cash and cash equivalents at beginning of period | 2,145,632 | 978,109 | 708,882 |
Cash and cash equivalents at end of period | € 1,007,723 | € 2,145,632 | € 978,109 |
Consolidated statements of shar
Consolidated statements of shareholders' equity - EUR (€) € in Thousands | Total FMC-AG & Co. KGaA shareholders' equityIFRS 9 | Total FMC-AG & Co. KGaA shareholders' equityIFRS 16 | Total FMC-AG & Co. KGaA shareholders' equity | Ordinary Shares | Treasury Stock | Additional paid in capital | Retained earningsIFRS 9 | Retained earningsIFRS 16 | Retained earnings | Foreign currency translation | Cash Flow Hedges | Pensions | Noncontrolling InterestsIFRS 16 | Noncontrolling Interests | IFRS 9 | IFRS 16 | Total |
Balance at beginning of period at Dec. 31, 2016 | € 9,977,657 | € 307,222 | € (50,993) | € 3,960,115 | € 6,085,876 | € (26,019) | € (38,107) | € (260,437) | € 1,073,475 | € 11,051,132 | |||||||
Balance at beginning of period (in shares) at Dec. 31, 2016 | 307,221,791 | (999,951) | |||||||||||||||
Proceeds from exercise of options and related tax effects | 43,833 | € 889 | 42,944 | 43,833 | |||||||||||||
Proceeds from exercise of options and related tax effects (in shares) | 889,209 | ||||||||||||||||
Compensation expense related to stock options | 11,736 | 11,736 | 11,736 | ||||||||||||||
Purchase of treasury stock | (57,938) | € (57,938) | (57,938) | ||||||||||||||
Purchase of treasury stock (in shares) | (660,000) | ||||||||||||||||
Dividends paid | (293,973) | (293,973) | (293,973) | ||||||||||||||
Purchase/sale of noncontrolling interests | (45,550) | (45,550) | 28,421 | (17,129) | |||||||||||||
Contributions from/to noncontrolling interests | (244,423) | (244,423) | |||||||||||||||
Noncontrolling interests subject to put provisions | 65,564 | 65,564 | 65,564 | ||||||||||||||
Net income | 1,279,788 | 1,279,788 | 274,746 | 1,554,534 | |||||||||||||
Other comprehensive income (loss) related to: | |||||||||||||||||
Foreign currency translation | (1,160,038) | (1,177,885) | 195 | 17,652 | (124,135) | (1,284,173) | |||||||||||
Cash flow hedges, net of related tax effects | 19,576 | 19,576 | 19,576 | ||||||||||||||
Pensions, net of related tax effects | (20,553) | (20,553) | (20,553) | ||||||||||||||
Total comprehensive income | 118,773 | 150,611 | 269,384 | ||||||||||||||
Balance at end of period at Dec. 31, 2017 | 9,820,102 | € 308,111 | € (108,931) | 3,969,245 | 7,137,255 | (1,203,904) | (18,336) | (263,338) | 1,008,084 | 10,828,186 | |||||||
Balance at end of period (in shares) at Dec. 31, 2017 | 308,111,000 | (1,659,951) | |||||||||||||||
Adjustment due to initial application at Dec. 31, 2017 | € (5,076) | € (5,076) | € (5,076) | ||||||||||||||
Adjusted balance at Dec. 31, 2017 | 9,815,026 | € 308,111 | € (108,931) | 3,969,245 | 7,132,179 | (1,203,904) | (18,336) | (263,338) | 1,008,084 | 10,823,110 | |||||||
Adjusted balance (in shares) at Dec. 31, 2017 | 308,111,000 | (1,659,951) | |||||||||||||||
Proceeds from exercise of options and related tax effects | 38,777 | € 859 | 37,918 | 38,777 | |||||||||||||
Proceeds from exercise of options and related tax effects (in shares) | 858,652 | ||||||||||||||||
Compensation expense related to stock options | 6,713 | 6,713 | 6,713 | ||||||||||||||
Purchase of treasury stock | (37,221) | € (37,221) | (37,221) | ||||||||||||||
Purchase of treasury stock (in shares) | (431,000) | ||||||||||||||||
Withdrawal of treasury stock | € (1,091) | € 95,159 | (94,068) | ||||||||||||||
Withdrawal of treasury stock (in shares) | (1,091,000) | 1,091,000 | |||||||||||||||
Dividends paid | (324,838) | (324,838) | (324,838) | ||||||||||||||
Purchase/sale of noncontrolling interests | (46,463) | (46,463) | 63,939 | 17,476 | |||||||||||||
Contributions from/to noncontrolling interests | (214,167) | (214,167) | |||||||||||||||
Noncontrolling interests subject to put provisions | 42,665 | 42,665 | 42,665 | ||||||||||||||
Net income | 1,981,924 | 1,981,924 | 243,733 | 2,225,657 | |||||||||||||
Other comprehensive income (loss) related to: | |||||||||||||||||
Foreign currency translation | 285,359 | 292,431 | (18) | (7,054) | 41,958 | 327,317 | |||||||||||
Cash flow hedges, net of related tax effects | 16,826 | 16,826 | 16,826 | ||||||||||||||
Pensions, net of related tax effects | (20,357) | (20,357) | (20,357) | ||||||||||||||
Total comprehensive income | 2,263,752 | 285,691 | 2,549,443 | ||||||||||||||
Balance at end of period at Dec. 31, 2018 | 11,758,411 | € 307,879 | € (50,993) | 3,873,345 | 8,831,930 | (911,473) | (1,528) | (290,749) | 1,143,547 | € 12,901,958 | |||||||
Balance at end of period (in shares) at Dec. 31, 2018 | 307,878,652 | (999,951) | 307,878,652 | ||||||||||||||
Adjustment due to initial application at Dec. 31, 2018 | € (120,809) | € (120,809) | € (15,526) | € (136,335) | |||||||||||||
Adjusted balance at Dec. 31, 2018 | 11,637,602 | € 307,879 | € (50,993) | 3,873,345 | 8,711,121 | (911,473) | (1,528) | (290,749) | 1,128,021 | € 12,765,623 | |||||||
Adjusted balance (in shares) at Dec. 31, 2018 | 307,878,652 | (999,951) | |||||||||||||||
Proceeds from exercise of options and related tax effects | 17,195 | € 329 | 16,866 | 17,195 | |||||||||||||
Proceeds from exercise of options and related tax effects (in shares) | 328,996 | ||||||||||||||||
Compensation expense related to stock options | 1,992 | 1,992 | 1,992 | ||||||||||||||
Purchase of treasury stock | (589,305) | € (589,305) | (589,305) | ||||||||||||||
Purchase of treasury stock (in shares) | (8,878,450) | ||||||||||||||||
Withdrawal of treasury stock | € (3,771) | € 269,796 | (266,025) | ||||||||||||||
Withdrawal of treasury stock (in shares) | (3,770,772) | 3,770,772 | |||||||||||||||
Dividends paid | (354,636) | (354,636) | (354,636) | ||||||||||||||
Purchase/sale of noncontrolling interests | (18,516) | (18,516) | 102,341 | 83,825 | |||||||||||||
Contributions from/to noncontrolling interests | (220,222) | (220,222) | |||||||||||||||
Noncontrolling interests subject to put provisions | (101,243) | (101,243) | (101,243) | ||||||||||||||
Net income | 1,199,619 | 1,199,619 | 238,881 | 1,438,500 | |||||||||||||
Other comprehensive income (loss) related to: | |||||||||||||||||
Foreign currency translation | 243,532 | 246,486 | 27 | (2,981) | 20,303 | 263,835 | |||||||||||
Cash flow hedges, net of related tax effects | (8,959) | (8,959) | (8,959) | ||||||||||||||
Pensions, net of related tax effects | (69,368) | (69,368) | (69,368) | ||||||||||||||
Total comprehensive income | 1,364,824 | 259,184 | 1,624,008 | ||||||||||||||
Balance at end of period at Dec. 31, 2019 | € 11,957,913 | € 304,437 | € (370,502) | € 3,607,662 | € 9,454,861 | € (664,987) | € (10,460) | € (363,098) | € 1,269,324 | € 13,227,237 | |||||||
Balance at end of period (in shares) at Dec. 31, 2019 | 304,436,876 | (6,107,629) | 304,436,876 |
The Company, basis of presentat
The Company, basis of presentation and significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
The Company, basis of presentation and significant accounting policies | |
The Company, basis of presentation and significant accounting policies | 1. The Company, basis of presentation and significant accounting policies The Company Fresenius Medical Care AG & Co. KGaA (“FMC-AG & Co. KGaA” or the “Company”), a German partnership limited by shares (Kommanditgesellschaft auf Aktien) registered in the commercial registry of Hof an der Saale under HRB 4019, with its business address at Else-Kröner-Str. 1, 61352 Bad Homburg v. d. Höhe, is the world’s largest kidney dialysis company, based on publicly reported revenue and number of patients treated. The Company provides dialysis treatment and related dialysis care services to persons who suffer from End-Stage Renal Disease (“ESRD”), as well as other health care services. The Company also develops, manufactures and distributes a wide variety of health care products, which includes dialysis and non-dialysis products. The Company’s dialysis products include hemodialysis machines, peritoneal cyclers, dialyzers, peritoneal solutions, hemodialysis concentrates, solutions and granulates, bloodlines, renal pharmaceuticals and systems for water treatment. The Company’s non-dialysis products include acute cardiopulmonary and apheresis products. The Company supplies dialysis clinics it owns, operates or manages with a broad range of products and also sells dialysis products to other dialysis service providers. The Company describes certain of its other health care services as “Care Coordination.” Care Coordination currently includes, but is not limited to, value and risk-based arrangements, pharmacy services, vascular, cardiovascular and endovascular specialty services as well as ambulatory surgery center services, physician nephrology services, urgent care services and ambulant treatment services. All of these Care Coordination services together with dialysis care and related services represent the Company’s health care services. In these notes, “FMC-AG & Co. KGaA,” the “Company” or the “Group” refers to the Company or the Company and its subsidiaries on a consolidated basis, as the context requires. “Fresenius SE” and “Fresenius SE & Co. KGaA” refer to Fresenius SE & Co. KGaA. “Management AG” and the “General Partner” refer to Fresenius Medical Care Management AG which is FMC-AG & Co. KGaA’s general partner and is wholly owned by Fresenius SE. “Management Board” refers to the members of the management board of Management AG and, except as otherwise specified, “Supervisory Board” refers to the supervisory board of FMC-AG & Co. KGaA. The term “North America Segment” refers to the North America operating segment, the term “EMEA Segment” refers to the Europe, Middle East and Africa operating segment, the term “Asia-Pacific Segment” refers to the Asia-Pacific operating segment, and the term “Latin America Segment” refers to the Latin America operating segment. For further discussion of the Company’s operating segments, see note 26. Basis of presentation The consolidated financial statements and other financial information included in the Company’s Annual Report on Form 20-F are prepared solely in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), using the euro as the Company’s reporting currency. At December 31, 2019, there were no IFRS or International Financial Reporting Interpretations Committee (“IFRIC”) interpretations as endorsed by the European Union relevant for reporting that differed from IFRS as issued by the IASB. The Company is included in the IFRS consolidated financial statements of Fresenius SE & Co. KGaA, Bad Homburg v. d. Höhe, pursuant to Section 315e of the German Commercial Code (“HGB”), published in the Federal Gazette and drawn up for the smallest circle of companies. The consolidated financial statements for the largest circle of companies are drawn up by Fresenius Management SE, Bad Homburg v. d. Höhe, and also published in the Federal Gazette. The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Such financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of the periods presented. All such adjustments are of a normal recurring nature. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in all future periods affected. In order to improve clarity of presentation, various items are aggregated in the consolidated balance sheets and consolidated statements of income. These items are analyzed separately in the notes where this provides useful information to the users of the consolidated financial statements. The consolidated balance sheets contain all information required to be disclosed by IAS 1 (Presentation of Financial Statements) and are in accordance with Accounting Interpretation 1 (“AIC 1”, Balance Sheet Classification according to current/ non-current Distinction in compliance with IAS 1) classified on the basis of the liquidity of assets and liabilities following the consolidated balance sheets. The consolidated statements of income are classified using the cost-of-sales accounting format. Starting on July 1, 2018, the Company’s subsidiaries in Argentina applied IAS 29, Financial Reporting in Hyperinflationary Economies, due to the inflation in Argentina. Pursuant to IAS 29, the Company recorded a loss on its net monetary position of €23,672 for the year ended December 31, 2019 (2018: €12,297). The Company calculated the loss with the use of the Consumer Price Index (Índice de precios al consumidor) as published by the Argentine Statistics and Census Institute for the year ended December 31, 2019, which lists the level at 283.4 index points, a 54% increase since January 1, 2019. As a result of the implementation of IFRS 16, Leases, the Company updated its accounting policies. Refer to “Significant accounting policies – f) Leases” and “– y) Recent pronouncements” below for further details on the updated policies. In the consolidated statements of income “Research and development” expense in the amount of €19,541 and €19,707 for the years ended December 31, 2018 and 2017, respectively, has been reclassified to “Selling, general and administrative” expense to conform to the current year’s presentation. In the consolidated balances sheets, receivables from ESRD Seamless Care Organizations (“ESCOs”) in the amount of €106,206 as of December 31, 2018 have been reclassified from line item “Trade accounts and other receivables” to line item “Accounts receivable from related parties” to conform to the current year’s presentation. Additionally, the corresponding receivables have been reclassified within the consolidated statements of cash flows from line item “Trade accounts and other receivables” to line item “Accounts receivable from related parties” in the amount of €24,181 and €62,411 for the periods ended December 31, 2018 and 2017, respectively, to conform to the current year’s presentation. As of December 31, 2018, “Property, plant and equipment” included leased fixed assets of €36,402 recognized in accordance with IAS 17, Leases. These are transferred to the line item “Right-of-use assets” as of the beginning of fiscal year 2019. As of December 31, 2018, “Current portion of long-term debt” included current lease liabilities from capital leases in accordance with IAS 17 of €9,387. From 2019, these are included in the balance sheet item “Current portion of long-term lease liabilities.” As of December 31, 2018, “Long-term debt, less current portion” included non-current lease liabilities from capital leases in accordance with IAS 17 of €26,757. From 2019, these are included in the balance sheet item “Long-term lease liabilities, less current portion.” In the consolidated statement of cash flows, in the comparative information for the period from January 1, 2018 to December 31, 2018, impairment losses in the amount of €64,719 have been reclassified from line item "Other current and non-current assets" to line item "Depreciation, amortization and impairment loss" to conform to the current year's presentation. In the consolidated statement of cash flows, in the comparative information for the periods from January 1, 2018 to December 31, 2018, and from January 1, 2017 to December 31, 2017, the line item “Repayments of long-term debt” included repayments of lease liabilities from capital leases in accordance with IAS 17 of €10,015 and €11,717, respectively. In the previous periods this line item was labeled as “Repayments of long-term debt and capital lease obligations.” From 2019, these repayments are included in the line item “Repayments of lease liabilities” in accordance with IFRS 16. Certain other items in the prior year's comparative consolidated financial statements have been adjusted to conform to the current year's presentation. At February 19, 2020, the Management Board authorized the consolidated financial statements for issue and passed it through to the Supervisory Board for review and authorization. Significant accounting policies a) Principles of consolidation and composition of the group The financial statements of consolidated entities have been prepared using uniform accounting methods in accordance with IFRS 10, Consolidated Financial Statements (“IFRS 10”). Acquisitions of companies are accounted for under the purchase method. Besides FMC-AG & Co. KGaA, the consolidated financial statements include all material subsidiaries according to IFRS 10 and IFRS 11, Joint Arrangements (“IFRS 11”), over which the Company has control. FMC-AG & Co. KGaA controls an entity if it has power over the entity through existing rights that give the Company the current ability to direct the activities that significantly affect the Company’s return. In addition, the Company is exposed to, or has rights to, variable returns from the involvement with the entity and the Company has the ability to use its power over the entity to affect the amount of the Company’s return. The equity method is applied in accordance with IAS 28, Investments in Associates and Joint Ventures (“IAS 28”). Generally, equity method investees are entities in which FMC-AG & Co. KGaA, directly or indirectly, holds 50% or less of the voting power and can exercise significant influence over their financial and operating policies. The disclosure of business acquisitions is performed according to IFRS 3, Business Combinations (“IFRS 3”) by offsetting investments in subsidiaries against the underlying revaluated equity at the date of acquisition. The identifiable assets and liabilities of subsidiaries as well as the noncontrolling interests are recognized at their fair values. Any remaining debit balance is recognized as goodwill and is tested at least once a year for impairment. Any excess of the net fair value of identifiable assets and liabilities over cost still existing after reassessing the purchase price allocation is recognized immediately in profit or loss. All significant intercompany revenues, expenses, income, receivables and payables are eliminated. Profits and losses on items of property, plant and equipment and inventory acquired from other group entities are also eliminated. Deferred tax assets and liabilities are recognized on temporary differences resulting from consolidation procedures. Noncontrolling interest (“NCI”) is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent and is recognized at its fair value at the date of first consolidation. Profits and losses attributable to the noncontrolling interests are separately disclosed in the consolidated statements of income. The Company writes put options on NCI mainly for dialysis clinics in which nephrologists or nephrology groups own an equity interest. While in certain of the dialysis clinics the Company is generally the majority owner, other non-affiliated parties, such as groups of nephrologists or a single nephrologist, hold an NCI position. Generally, the put options associated with this business model are valid for an unlimited time. Accordingly, they do not constrain a long-term investment into a dialysis clinic by the NCI holder. The put options provide for settlement in cash. For these put options, IAS 32, Financial Instruments: Presentation (“IAS 32”) paragraph 23 requires the Company to recognize a liability for the present value of the exercise price of the option. The potential purchase price liability is recorded in other current provisions and other current liabilities and other non-current provisions and other non-current liabilities at fair value at the balance sheet date. The exercise price of the option is generally based on fair value which is approximated by a multiple of earnings, e.g. a multiple of the proportionate earnings before interest, taxes, depreciation and amortization of the dialysis clinic, and is therefore affected by the periodic changes in the profitability of such a clinic. The Company believes the accounting treatment of the change in fair value of the put liability under IFRS to this date has not been finally clarified. In the absence of an IFRS that specifically applies to the accounting for put options on NCI, the Company, in line with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”) paragraph 10, applied the present access method. According to the present access method, NCI are further recorded in equity. The initial recognition of the purchase price liability, as well as valuation differences, is recorded neutral to profit or loss in equity (see note 1 h). This presentation results in information that is relevant to the economic decision-making needs of users and to provide reliable financial information as the Company sees these NCI with written put options as equity holders and accordingly attributes net income to NCI. The consolidated financial statements for 2019 include FMC-AG & Co. KGaA as well as 2,215 companies. In 2019, 51 companies were accounted for by the equity method. During 2019, 195 companies were first-time consolidations and 16 companies were deconsolidated. The complete list of participations in affiliated and associated companies of FMC-AG & Co. KGaA will be submitted to the electronic Federal Gazette and the electronic companies register. For 2019, the following fully consolidated German subsidiaries of the Company will apply the exemption provided in Section 264 (3) or Section 264b of the HGB and therefore will be exempt from applying certain legal requirements to prepare notes to the statutory standalone financial statements and a management report as well as the requirements of an independent audit and public disclosure. Companies exempt from applying certain legal requirements Name of the company Registered office of the company Ärztliches Versorgungszentrum Ludwigshafen GmbH im Lusanum Ludwigshafen am Rhein, Germany DiZ München Nephrocare GmbH Munich, Germany ET Software Developments GmbH Heidelberg, Germany Fresenius Medical Care Beteiligungsgesellschaft mbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Deutschland GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care EMEA Management GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Frankfurt am Main GmbH Frankfurt am Main, Germany Fresenius Medical Care GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Investment GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Beteiligungsgesellschaft mbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Vermögensverwaltungs GmbH & Co. KG Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Zwei Vermögensverwaltungs GmbH & Co. KG Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Ventures GmbH Bad Homburg v. d. Höhe, Germany Medizinisches Versorgungszentrum Berchtesgaden GmbH Berchtesgaden, Germany MVZ Gelsenkirchen-Buer GmbH Gelsenkirchen, Germany Nephrocare Ahrensburg GmbH Ahrensburg, Germany Nephrocare Augsburg GmbH Augsburg, Germany Nephrocare Berlin-Weißensee GmbH Berlin, Germany Nephrocare Betzdorf GmbH Betzdorf, Germany Nephrocare Bielefeld GmbH Bielefeld, Germany Nephrocare Buchholz GmbH Buchholz, Germany Nephrocare Daun GmbH Daun, Germany Nephrocare Deutschland GmbH Bad Homburg v. d. Höhe, Germany Nephrocare Döbeln GmbH Döbeln, Germany Nephrocare Dortmund, GmbH Dortmund, Germany Nephrocare Friedberg GmbH Friedberg, Germany Nephrocare Grevenbroich GmbH Grevenbroich, Germany Nephrocare Hagen GmbH Hagen, Germany Nephrocare Hamburg-Altona GmbH Hamburg, Germany Nephrocare Hamburg-Barmbek GmbH Hamburg, Germany Nephrocare Hamburg-Süderelbe GmbH Hamburg, Germany Nephrocare Ingolstadt GmbH Ingolstadt, Germany Nephrocare Kaufering GmbH Kaufering, Germany Nephrocare Krefeld GmbH Krefeld, Germany Nephrocare Lahr GmbH Lahr, Germany Nephrocare Leverkusen GmbH Leverkusen, Germany Nephrocare Ludwigshafen GmbH Ludwigshafen am Rhein, Germany Nephrocare Mannheim GmbH Mannheim, Germany Nephrocare Mönchengladbach GmbH Mönchengladbach, Germany Nephrocare Mühlhausen GmbH Mühlhausen, Germany Nephrocare München-Ost GmbH Munich, Germany Nephrocare Münster GmbH Münster, Germany Nephrocare MVZ Aalen GmbH Aalen, Germany Nephrocare Oberhausen GmbH Oberhausen, Germany Nephrocare Papenburg GmbH Papenburg, Germany Nephrocare Pirmasens GmbH Pirmasens, Germany Nephrocare Püttlingen GmbH Püttlingen, Germany Nephrocare Recklinghausen GmbH Recklinghausen, Germany Nephrocare Rostock GmbH Rostock, Germany Nephrocare Salzgitter GmbH Salzgitter, Germany Nephrocare Schrobenhausen GmbH Schrobenhausen, Germany Nephrocare Starnberg GmbH Starnberg, Germany Nephrocare Wetzlar GmbH Wetzlar, Germany Nephrocare Witten GmbH Witten, Germany Nephrologisch-Internistische Versorgung Ingolstadt GmbH Ingolstadt, Germany Nova Med GmbH Vertriebsgesellschaft für medizinischtechnische Geräte und Verbrauchsartikel Bad Homburg v. d. Höhe, Germany VIVONIC GmbH Sailauf, Germany Zentrum für Nieren- und Hochdruckkrankheiten Bensheim GmbH Bensheim, Germany b) Cash and cash equivalents Cash and cash equivalents comprise cash funds and all short-term investments with original maturities of up to three months. Short-term investments are highly liquid and readily convertible into known amounts of cash. The risk of changes in value is insignificant. c) Trade accounts and other receivables Trade accounts and other receivables are posted at the nominal value less individual allowances for doubtful accounts. For information regarding allowance for doubtful accounts see note 2 c). d) Inventories Inventories are stated at the lower of cost (determined by using the average or first-in, first-out method) or net realizable value (see note 8). Costs included in inventories are based on invoiced costs and/or production costs as applicable. Included in production costs are material, direct labor and production overhead, including depreciation charges. e) Property, plant and equipment Property, plant, and equipment are stated at cost less accumulated depreciation (see note 10). Maintenance and repair costs (day-to-day servicing) are expensed as incurred. The Company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing parts and major inspections if it is probable that the future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. Depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets ranging from 4 to 50 years for buildings and improvements with a weighted average life of 14 years and 3 to 19 years for machinery and equipment with a weighted average life of 10 years. Internal use platform software that is integral to the computer equipment it supports is included in property, plant and equipment. In fiscal years until 2018, prior to the implementation of IFRS 16, property, plant and equipment under capital leases was stated at the present value of future minimum lease payments at the inception of the lease, less accumulated depreciation. Equipment held under capital leases and leasehold improvements was amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. f) Leases A lease is defined as a contract that conveys the right to use an underlying asset for a period of time in exchange for consideration. A contract is or contains a lease if: · the underlying asset is identified in the contract, and · the customer has both the right to direct the identified asset’s use and to obtain substantially all the economic benefits from that use. Under IFRS 16, the Company is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments for almost all leases. The Company decided not to apply the guidance within IFRS 16 to leases with a total maximum term of twelve months (short-term leases) and leases for underlying assets of low-value. These leases are exempt from balance sheet recognition and lease payments will be recognized as expenses over the lease term. IFRS 16 is not applied to leases of intangible assets. Lease liabilities Lease liabilities are initially recognized at the present value of the following payments: · fixed lease payments (including in-substance fixed payments), less any lease incentives receivable, · variable lease payments (linked to an index or interest rate), · expected payments under residual value guarantees, · the exercise price of purchase options, where exercise is reasonably certain, · lease payments in optional renewal periods, where exercise of extension options is reasonably certain, and · penalty payments for the termination of a lease, if the lease term reflects the exercise of the respective termination option. Lease payments are discounted using the implicit interest rate underlying the lease if this rate can be readily determined. Otherwise, the incremental borrowing rate is used as the discount rate. Lease liabilities are subsequently measured at amortised cost using the effective interest method. Furthermore, lease liabilities may be remeasured due to lease modifications or reassessments of the lease. A lease modification is any change in lease terms that was not part of the initial terms and conditions of the lease, including increases of the scope of the lease by adding the right to use one or more underlying assets or extending the contractual lease term, decreases of the scope of the lease by removing the right to use one or more underlying assets or shortening the contractual lease term or changes in the consideration. Reassessments are changes in estimates or changes triggered by a clause that was part of the initial lease contract, including changes in future lease payments arising from a change in an index or rate, change in the Company's estimate of the amount expected to be payable under residual value guarantees or change in the Company’s assessment of whether it will exercise purchase, extension or termination options. A lease modification is accounted for as a separate lease if the modification increases the scope of the lease by adding the right to use one or more underlying assets and the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope. Where a lease modification is accounted for as a separate lease, the respective new lease is recognized at the effective date of the modification based on the illustrated recognition and valuation principles with the initial lease remaining unchanged. Where a lease modification is not accounted for as a separate lease, the initial lease is remeasured. For most reassessments and lease modifications that are not accounted for a separate lease, lease liabilities are remeasured by discounting the revised lease payments at a revised discount rate. For specific reassessments, the historical interest rate is used. The revised discount rate is determined at the effective date of the lease modification or the reassessment. When lease liabilities are remeasured in this way, a corresponding remeasurement is made to the carrying amount of the right-of-use asset. Where a lease modification results in a decrease of the scope of the lease, any gain or loss is recognized in profit or loss to reflect the respective partial or full termination of the lease. For lease contracts that include both lease and non-lease components that are not separable from lease components, no allocation is performed. Each lease component and any associated non-lease components are accounted for as a single lease. Right-of-use assets The Company recognises right-of-use asset at the commencement date of the respective lease. Right-of-use asset are stated at cost less accumulated depreciation. Upon initial recognition, cost comprises of: · the initial lease liability amount, · initial direct costs incurred when entering into the lease, · (lease) payments before commencement date of the respective lease, and · an estimate of costs to dismantle and remove the underlying asset, · less any lease incentives received. Right-of-use assets are depreciated over the shorter of the lease term or the useful life of the underlying asset using the straight-line method. Where a lease agreement includes a transfer of ownership at the end of the lease term or the exercise of a purchase option is deemed reasonably certain, right-of-use assets are depreciated over the useful life of the underlying asset using the straight-line method. In addition, right-of-use assets are reduced by impairment losses, if any, and adjusted for certain remeasurements. For reassessments and lease modifications that are not accounted for as separate leases, a remeasurement corresponding to the respective remeasurement of the lease liability is recognized (for lease modifications and reassessments, as well as for partial or full termination of a lease please see guidance on “Lease liabilities” above). If the carrying amount of a right-of-use asset is reduced to zero by such remeasurements, the exceeding amount is recorded in profit or loss. Right-of-use assets are classified into right-of-use assets relating to land, buildings and improvements or machinery and equipment. In addition, prepayments on right-of-use assets are presented separately (see note 21). g) Intangible assets and goodwill Intangible assets such as non-compete agreements, technology, distribution rights, patents, licenses to treat, licenses to manufacture, distribute and sell pharmaceutical drugs, exclusive contracts and exclusive licenses, trade names, management contracts, application software, acute care agreements and customer relationships are recognized and reported apart from goodwill (see note 11). Patient relationships, however, are not reported as separate intangible assets due to the missing contractual basis but are part of goodwill. Goodwill and identifiable intangibles with indefinite useful lives are not amortized but tested for impairment annually or when an event becomes known that could trigger an impairment. The Company identified trade names and certain qualified management contracts as intangible assets with indefinite useful lives because, there is no foreseeable limit to the period over which those assets are expected to generate net cash inflows for the Company. Intangible assets with finite useful lives are amortized over their respective useful lives to their residual values. The Company amortizes non-compete agreements over their useful life which on average is 8 years. Technology is amortized over its useful life of 12 years. Internally developed intangibles are amortized on a straight-line basis over a useful life of 8 years. Licenses to manufacture, distribute and sell pharmaceutical drugs, exclusive contracts and exclusive licenses are amortized over their useful life which on average is 12 years. Customer relationships are amortized over their useful life of 10 years. All other intangible assets are amortized over their weighted average useful lives of 7 years. The weighted average useful life of all amortizable intangible assets is 10 years. Intangible assets with finite useful lives are evaluated for impairment when events have occurred that may give rise to an impairment (see note 1 o). To perform the annual impairment test of goodwill, the Company identified its groups of cash generating units (CGUs) and determined their carrying value by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those CGUs. CGUs reflect the lowest level on which goodwill is monitored for internal management purposes. One CGU was identified in the North America Segment, in the EMEA Segment, in the Asia-Pacific Segment and in the Latin America Segment. For the purpose of goodwill impairment testing, all corporate assets and liabilities are allocated to the CGUs. At least once a year, the Company compares the recoverable amount of each CGU to the CGU’s carrying amount. The recoverable amount (value in use) of a CGU is determined using a discounted cash flow approach based upon the cash flow expected to be generated by the CGU. In case that the value in use of the CGU is less than its carrying amount, the difference is at first recorded as an impairment of the carrying amount of the goodwill. To evaluate the recoverability of intangible assets with indefinite useful lives, the Company compares the fair values of intangible assets with their carrying values. An intangible asset’s fair value is determined using a discounted cash flow approach or other methods, if appropriate. For further information see note 2 a). h) Financial instruments The Company classifies its financial instruments in accordance with IFRS 9 in the following measurement categories: at amortized cost, at fair value through profit and loss (“FVPL”) and at fair value through other comprehensive income (“FVOCI”). Financial assets are classified depending on the business model in which the financial assets are held and the contractual terms of the cash flows. Financial assets are only reclassified when the business model for managing those assets changes. During the reporting period no financial instruments were reclassified. Purchases and sales of financial assets are accounted for on the trading day. The Company does not make use of the fair value option, which allows financial liabilities to be classified at FVPL upon initial recognition. At initial recognition financial asset and financial liabilities are measured at fair value. Excluded are trade accounts receivables. At initial recognition trade accounts receivables (in accordance with IFRS 15) are measured at their transaction price. Subsequent measurement is either at cost, FVPL or FVOCI. In general, financial liabilities are classified and subsequently measured at amortized cost, with the exception of contingent considerations resulting from a business combination, noncontrolling interests subject to put provisions as well as derivative financial liabilities. Investments in equity instruments are recognized and subsequently measured at fair value. The Company’s equity investments are not held for trading. In general, changes in the fair value of equity investments are recognized in the income statement. However, at initial recognition the Company elected, on an instrument-by-instrument basis, to represent subsequent changes in the fair value of individual strategic equity investments in other comprehensive income (loss) (“OCI”). The Company invested in several debt securities, with the objective to achieve both collecting contractual cash flows and selling the financial assets. All debt securities are consequently measured at fair value. Some of these securities give rise on specified dates to cash flows that are solely payments of principle and interest. These securities are subsequently measured at FVOCI. Other securities are measured at FVPL. The Company, as option writer on behalf of existing put options, can be obligated to purchase the noncontrolling interests held by third parties. The obligations are in the form of put provisions and are exercisable at the third-party owners’ discr |
Discretionary decisions and sou
Discretionary decisions and sources of estimation uncertainties | 12 Months Ended |
Dec. 31, 2019 | |
Discretionary decisions and sources of estimation uncertainties | |
Discretionary decisions and sources of estimation uncertainties | 2. Discretionary decisions and sources of estimation uncertainties The Company’s reported results of operations, financial position and net assets are sensitive to discretionary decisions, assumptions and estimates that are the basis for its financial statements. The critical accounting policies, the judgements made in the creation and application of these policies and the sensitivities of reported results to changes in accounting policies, discretionary decisions and estimates are factors to be considered along with the Company’s financial statements. In the opinion of the Management of the Company, the following accounting policies, discretionary decisions and sources of estimation uncertainties are critical for the consolidated financial statements in the present economic environment. a) Recoverability of goodwill and intangible assets The growth of the business through acquisitions has created a significant amount of intangible assets, including goodwill, trade names, management contracts, non-compete agreements, technology and customer relationships as well as licences and distribution agreements. In addition, the Company recognizes internally developed intangible assets related to research and development and software development projects. At December 31, 2019, the carrying amount of goodwill and non-amortizable intangible assets amounted to €14,247,709 (€12,395,641 at December 31, 2018) representing approximately 43% and 47% of the Company’s total assets at December 31, 2019 and 2018, respectively. In accordance with IAS 36, the Company performs an impairment test of goodwill and non-amortizable intangible assets at least once a year for each cash-generating unit or more frequently if the Company becomes aware of events that occur or if circumstances change that would indicate the carrying value may not be recoverable (see also note 1 g). To comply with IFRS to determine possible impairments of these assets, the value in use of the CGUs is first compared to the CGUs’ carrying amount. The value in use of each CGU is determined using estimated future cash flows for the unit discounted by a weighted average cost of capital (“WACC”) specific to that CGU. The Company’s WACC consists of a basic rate adjusted by a weighted average country risk rate and, if appropriate, by a factor to reflect higher risks associated with the cash flows from recent material acquisitions within each CGU, until they are appropriately integrated. Estimating the future cash flows involves significant assumptions, especially regarding future reimbursement rates and sales prices, number of treatments, sales volumes and costs. The key assumptions represent management’s assessment of future trends and have been based on historical data from both external and internal sources. In determining discounted cash flows, the Company utilizes for every CGU its three-year budget, projections for years four to ten and a representative growth rate for all remaining years. Projections for up to ten years are possible due to the non-discretionary nature of the health care services the Company provides, the need for health care products utilized to provide such services and the availability of government reimbursement for a substantial portion of its services. A substantial portion of the Company´s profit is generated in North America. The Company expects a stable operating income margin with a higher margin in dialysis business compensating a lower margin in Care Coordination. The following table shows the key assumptions of value-in-use calculations: Key assumptions in % North America EMEA Asia-Pacific Latin America 2019 2018 2019 2018 2019 2018 2019 2018 Average revenue growth in ten year projection period mid-single-digit mid-single-digit mid-single-digit mid-single-digit high-single-digit high-single-digit mid-single-digit mid-single-digit Residual value growth 1.00 1.00 1.00 1.00 4.00 4.00 2.95 3.45 Pre-tax WACC 7.71 7.42 8.73 9.46 6.79 7.81 10.45 - 20.02 11.93 - 16.75 After-tax WACC 6.00 5.99 6.25 6.86 6.04 6.61 8.06 - 17.63 8.70 - 13.52 An overview of the carrying amounts of goodwill and intangibles with indefinite useful life for each CGU is shown in note 11. To evaluate the recoverability of intangible assets with indefinite useful lives, the Company compares the fair values of intangible assets with their carrying values and intangible asset’s fair value is determined using a discounted cash flow approach or other methods, if appropriate. A prolonged downturn in the health care industry with lower than expected increases in reimbursement rates and/or higher than expected costs for providing health care services and for procuring and selling health care products could adversely affect the Company’s estimated future cash flows. Future adverse changes in a cash-generating unit’s economic environment of a CGU could affect the country specific risk rate and therefore the discount rate. Equally an increase of the general interest rate level could affect the base rate and therefore the discount rate. A decrease in the estimated future cash flows and/or a decline in the cash-generating units economic environment could result in impairment charges to goodwill and other intangible assets with indefinite useful life which could materially and adversely affect the Company’s future financial position and operating results. In 2019, the recoverable amount of Latin America exceeds the carrying amount by €217,815. The following table shows the amounts by which the key assumptions would need to change individually that the recoverable amount equals the carrying amount: Sensitivity analysis Change in percentage points Latin America 2019 2018 Pre-tax WACC 1.87 0.27 Operating income margin of each projection year (2.03) (0.32) Residual value growth (2.13) (0.47) b) Legal contingencies From time to time, during the ordinary course of operations, the Company is party to litigation and arbitration and is subject to investigations relating to various aspects of its business (see note 22). The Company regularly analyzes current information about such claims for probable losses and provides accruals for such matters, including the estimated legal expenses and consulting services in connection with these matters, as appropriate. The Company utilizes its internal legal department as well as external resources for these assessments. In making the decision regarding the need for loss accrual, the Company considers the degree of probability of an unfavorable outcome and its ability to make a reasonable estimate of the amount of loss. The filing of a suit or formal assertion of a claim or assessment, or the disclosure of any such suit or assertion, does not necessarily indicate that accrual of a loss is appropriate. The outcome of these matters may have a material effect on the results of operations, financial position and net assets of the Company. c) Trade accounts and other receivables and allowance for doubtful accounts Trade accounts and other receivables are a substantial asset of the Company and the allowance for doubtful accounts is based upon a significant estimate made by management. Trade accounts and other receivables were €3,421,346 and €3,231,500 at December 31, 2019 and 2018, respectively, net of allowances for doubtful accounts of €141,358 at December 31, 2019 and €118,015 at December 31, 2018. The Company sells health care products directly or through distributors in around 150 countries and provides health care services in around 50 countries. Most payors are government institutions or government-sponsored programs with significant variations between the countries and even between payors within one country in local payment and collection practices. Receivables resulting from health care services are recognized and billed at amounts estimated to be collectable under government reimbursement programs and reimbursement arrangements with third party payors. U.S. Medicare and Medicaid government programs are billed at pre-determined net realizable rates per treatment that are established by statute or regulation. Revenues for non-governmental payors with which the Company has contracts or letters of agreement in place are recognized at the prevailing contract rates. The remaining non-governmental payors are billed at the Company’s standard rates for services and, in the Company’s North America segment, a contractual adjustment is recorded to recognize revenues based on historic reimbursement. The contractual adjustment and the allowance for doubtful accounts are reviewed quarterly for their adequacy. No material changes in estimates were recorded for the contractual allowance in the periods presented. The collectability of receivables is reviewed locally on a regular basis, generally monthly. For further information, see note 1 k). In the Company’s North America Segment operations, the collection process is usually initiated shortly after service is provided or upon the expiration of the time provided by contract. For Medicare and Medicaid, once the services are approved for payment, the collection process begins upon the expiration of a period of time based upon experience with Medicare and Medicaid. In all cases where co-payment is required the collection process usually begins within 30 days after service has been provided. In those cases where claims are approved for amounts less than anticipated or if claims are denied, the collection process usually begins upon notice of approval of the lesser amounts or upon denial of the claim. The collection process can be confined to internal efforts, including the accounting and sales staffs and, where appropriate, local management staff. If appropriate, external collection agencies may be engaged. Public health institutions in a number of countries outside the U.S. require a significant amount of time until payment is made because a substantial number of payors are government entities whose payments are often determined by local laws and regulations and budget constraints. Depending on local facts and circumstances, the period of time to collect can be quite lengthy. In those instances where there are commercial payors, the same type of collection process is initiated as in the North America Segment. Due to the number of subsidiaries and different countries that the Company operates in, the Company’s policy of determining when an individual allowance is required considers the appropriate individual local facts and circumstances that apply to an account. While payment and collection practices vary significantly between countries and even agencies within one country, government payors usually represent low to moderate credit risks. It is the Company’s policy to determine when receivables should be classified as bad debt on a local basis taking into account local payment practices and local collection experience. An individual allowance is calculated locally if specific circumstances indicate that amounts will not be collectible. Receivables where the expected credit losses are not assessed individually are grouped based on geographical regions and the impairment is assessed based on macroeconomic indicators such as credit default swaps. For more information regarding the impairment on trade accounts and other receivables please refer to note 1 i). When all efforts to collect a receivable, including the use of outside sources where required and allowed, have been exhausted, and after appropriate management review, a receivable deemed to be uncollectible is considered a bad debt and written off. Write offs are taken on a claim-by-claim basis. Due to the fact that a large portion of its reimbursement is provided by public health care organizations and private insurers, the Company expects that most of its accounts receivables will be collectible, albeit potentially more slowly outside the North America Segment. A significant change in the Company’s collection experience, deterioration in the aging of receivables and collection difficulties could require that the Company increases its estimate of the allowance for doubtful accounts. Any such additional bad debt charges could materially and adversely affect the Company’s future operating results. If, in addition to the Company’s existing allowances, 1% of the gross amount of the Company’s trade accounts receivable as of December 31, 2019 were uncollectible through either a change in the Company’s estimated contractual adjustment or revised estimate of the collectability, the Company’s operating income for 2019 would have been reduced by approximately 1.6%. The following table shows the portion of major debtors or debtor groups of trade accounts and other receivables as at December 31, 2019 and 2018. No single debtor, other than U.S. Medicare and Medicaid, accounted for more than 5% of total trade accounts and other receivables in any of these years. Composition of trade accounts and other receivables December 31, 2019 2018 U.S. Government health care programs 30 % 31 % U.S. commercial payors 15 % 14 % U.S. hospitals 4 % 4 % Self-pay of U.S. patients 2 % 3 % Other North America segment payors 4 % 3 % Product customers and health care payors outside the North America Segment 45 % 45 % Total 100 % 100 % d) Self-insurance programs Under the Company’s insurance programs for professional, product and general liability, auto liability, worker’s compensation and medical malpractice claims, the Company’s largest subsidiary which is located in the U.S. is partially self-insured for professional liability claims. For all other coverages, the Company assumes responsibility for incurred claims up to predetermined amounts above which third party insurance applies. Reported liabilities for the year represent estimated future payments of the anticipated expense for claims incurred (both reported and incurred but not reported) based on historical experience and existing claim activity. This experience includes both the rate of claims incidence (number) and claim severity (cost) and is combined with individual claim expectations to estimate the reported amounts. e) Level 3 financial instruments Noncontrolling interests subject to put provisions, variable payments outstanding for acquisitions and equity investments are recognized at their fair value. For further information related to the estimation of these fair values, see notes 1 h) and 23. f) Income taxes The Company is subject to ongoing and future tax audits in the U.S., Germany and other jurisdictions. Different interpretations of tax laws may lead to potential additional tax payments or tax refunds for prior years. To consider income tax provisions or income tax receivables of uncertain tax assessments management’s estimations are based on local tax rules of the respective tax jurisdiction and the interpretation of such. Estimates are revised in the period in which there is sufficient evidence to revise the assumption. For further information to estimates related to the recoverability of deferred taxes, see note 1 n). g) Business combinations The Company measures the noncontrolling interest in an acquisition at fair value and classifies costs related to its business combinations within general and administrative expense. In determining whether an intangible asset related to a business combination is identifiable and should be separated from goodwill, significant judgment is required. Additionally, estimation of the acquisition-date fair values of identifiable assets acquired and liabilities assumed also involves significant judgment. The applicable measurements and inputs used in this estimation (including revenue growth rates, gross profit margin adjusted for synergy assumptions associated with manufacturing savings and the discount rate) are based upon information available at the acquisition date using expectations and assumptions that management deems reasonable. Such judgments, estimates and assumptions could materially affect the Company’s business, results of operations and financial condition, primarily due to: · Fair values assigned to assets subject to depreciation and amortization directly impact the depreciation and amortization recorded in the Company’s consolidated statements of income in periods subsequent to a related acquisition. · Any subsequent measurement resulting in a decrease in the estimated fair values of assets acquired may result in impairment. · Subsequent changes resulting in an increase or decrease to the estimated fair values of liabilities assumed may result in additional expense or income, respectively. For further information on business combinations, see note 3. |
Acquisitions, investments, purc
Acquisitions, investments, purchases of intangible assets and divestitures | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions, investments, purchases of intangible assets and divestitures | |
Acquisitions, investments, purchases of intangible assets and divestitures | 3. Acquisitions, investments, purchases of intangible assets and divestitures The Company completed acquisitions, investments and the purchase of intangible assets in the amount of €2,297,173, €956,803 and €682,676 in 2019, 2018 and 2017, respectively. In 2019, €2,232,671 was paid in cash and €64,502 were assumed obligations and non-cash consideration. In 2018, €925,267 was paid in cash and €31,536 were assumed obligations and non-cash consideration. In 2017, €565,694 was paid in cash and €116,982 were assumed obligations and non-cash consideration. Acquisitions The Company made acquisitions of €2,224,599, €280,643 and €638,307 in 2019, 2018 and 2017, respectively in order to expand the scope of its services and to increase its market shares in the respective countries. In 2019, €2,160,097 was paid in cash and €64,502 were assumed obligations and non-cash consideration. In 2018, €249,965 was paid in cash and €30,678 were assumed obligations and non-cash consideration. In 2017, €521,325 was paid in cash and €116,982 were assumed obligations and non-cash consideration. The Company’s acquisition spending was driven primarily by the purchase of dialysis clinics in the normal course of its operations in 2019, 2018 and 2017 as well as the acquisition of NxStage Medical, Inc. (“NxStage”) in 2019 and the acquisition of an operator of day hospitals in Australia in 2017. Impacts on consolidated financial statements from acquisitions The assets and liabilities of all acquisitions were recorded at their estimated fair value at the date of the acquisition and are included in the Company’s financial statements and operating results from the effective date of acquisition. The measurement period adjustments from the previous year’s acquisitions did not have a significant impact on the consolidated financial statements in 2019. The excess of the total acquisition costs over the fair value of the net assets acquired resulted in goodwill of €1,607,559 and €328,702 at December 31, 2019 and 2018, respectively. The purchase price allocation for the acquisition of NxStage was finalized during the year. In 2019, the Company recorded €1,607,559 of goodwill and €685,047 of intangible assets, which represent the share of both controlling and noncontrolling interests. Goodwill arose principally due to the fair value of the established streams of future cash flows for these acquisitions versus building similar franchises. Business combinations during 2019 decreased the Company’s net income (net income attributable to shareholders of FMC-AG & Co. KGaA) by €68,599, excluding the costs of the acquisitions, and revenue increased by €364,892. Total assets increased €2,639,432 due to business combinations. Acquisition of NxStage Medical, Inc. On February 21, 2019, the Company acquired all of the outstanding shares of NxStage for $30.00 per common share. The total acquisition value of this business combination, net of cash acquired, is $1,976,235 (€1,740,563 at date of closing). NxStage is a leading medical technology company that develops, produces and markets an innovative product portfolio of medical devices for use in home dialysis and in the critical care setting. This acquisition is part of the Company’s stated strategy to expand and complement its existing business through acquisitions. Generally, these acquisitions do not change the Company’s business model and can be integrated without disruption to its existing business, requiring little or no realignment of its structures. The NxStage acquisition is consistent in this regard as it supplements the Company’s existing business. The following table summarizes the fair values, as of the date of acquisition based upon information available, as of December 31, 2019, of assets acquired and liabilities assumed at the date of the acquisition: Fair Values of Assets Acquired and Liabilities Assumed in $ THOUS Cash and cash equivalents 47,203 Trade accounts and other receivables 34,062 Inventories 63,735 Other current assets 15,819 Property, plant and equipment 104,533 Right-of-use assets 21,603 Intangible assets and other assets 761,734 Goodwill 1,201,613 Accounts payable, current provisions and other current liabilities (72,429) Deferred taxes (100,485) Lease liabilities (22,065) Other liabilities (27,822) Noncontrolling interests (4,063) Total acquisition cost 2,023,438 Less: Cash acquired (47,203) Net Cash paid 1,976,235 As of the acquisition date amortizable intangible assets (primarily technology in the amount of $660,300) acquired in this acquisition have weighted average useful lives of 13 years. Goodwill in the amount of $1,201,613 was acquired as part of the NxStage acquisition and is allocated to the North America Segment. NxStage’s results have been included in the Company’s consolidated statement of income since February 21, 2019. Specifically, NxStage has contributed revenue and an operating loss in the amount of $294,281 (€262,875) and $31,145 (€27,821) respectively, to the Company’s consolidated operating income. This operating loss amount does not include synergies which may have resulted at consolidated entities outside NxStage since the acquisition closed. Pro forma financial information The following financial information, on a pro forma basis, reflects the consolidated results of operations for the twelve months ended December 31, 2019 as if the NxStage acquisition had been consummated on January 1, 2019 and excludes related transaction costs. The pro-forma financial information is not necessarily indicative of the results of operations as it would have been had the transactions been consummated on January 1, 2019. Pro forma financial Information in € THOUS, except per share data 2019 Pro forma revenue 17,521,432 Pro forma net income attributable to shareholders of FMC-AG & Co. KGaA 1,186,516 Basic earnings per share 3.92 Diluted earnings per share 3.92 Investments and purchases of intangible assets Investments and purchases of intangible assets were €72,574, €676,160 and €44,369 in 2019, 2018 and 2017, respectively. These amounts were primarily driven by investments in debt securities as well as equity investments in 2019, investments in debt securities and an equity investment in Humacyte, Inc. ("Humacyte") in 2018 as well as purchases of intangible assets and an investment in debt securities in 2017. Of this amount €72,574, €675,302 and €44,369 were paid in cash in 2019, 2018 and 2017, respectively. Divestitures Proceeds from divestitures were €79,427, €1,683,292 and €437,031 in 2019, 2018 and 2017, respectively. These amounts mainly related to the divestment of MedSpring Urgent Care Centers in Texas, a California based cardiovascular business, sales of debt securities as well as B.Braun Medical Inc.’s purchase of NxStage’s bloodlines business in connection with our acquisition of NxStage in 2019, the divestiture of the controlling interest in Sound (see notes 4 c) and 25) as well as divestitures of debt securities in 2018, the sale of a provider of non-dialysis laboratory testing services as well as a provider of outsourced clinical services in the North America Segment and divestitures of debt securities in 2017. In 2019, €59,940 was received in cash and €19,487 were non-cash components. In 2018, €1,682,975 was received in cash and €317 were non-cash components. In 2017, €415,388 was received in cash and €21,643 were non-cash components. |
Notes to the consolidated state
Notes to the consolidated statements of income | 12 Months Ended |
Dec. 31, 2019 | |
Notes to the consolidated statements of income | |
Notes to the consolidated statements of income | 4. Notes to the consolidated statements of income a) Revenue The Company has recognized the following revenue in the consolidated statement of income for the year ended December 31, 2019 and 2018: Revenue in € THOUS 2019 2018 Revenue from Revenue from contracts with Other contracts with Other customers revenue Total customers revenue Total Health care services Dialysis services 12,447,092 — 12,447,092 11,420,415 — 11,420,415 Care Coordination 1,176,227 248,900 1,425,127 1,622,862 221,012 1,843,874 13,623,319 248,900 13,872,219 13,043,277 221,012 13,264,289 Health care products Dialysis products 3,402,987 125,519 3,528,506 3,115,753 93,068 3,208,821 Non-dialysis products 75,830 — 75,830 73,763 — 73,763 3,478,817 125,519 3,604,336 3,189,516 93,068 3,282,584 Total 17,102,136 374,419 17,476,555 16,232,793 314,080 16,546,873 The Company has recognized the following amounts as receivables and contract liabilities relating to contracts with customers for the year ended December 31, 2019 and 2018: Trade accounts receivables and contract liabilities in € THOUS 2019 2018 Trade accounts receivables 3,341,111 3,284,712 Contract liabilities 22,802 37,632 Impairment losses in the amount of €41,982 and €16,981 for the years ended December 31, 2019 and 2018, respectively, relate to receivables arising from contracts with customers. The change in the contract liability balance during the period results from the ordinary course of business. Contract liabilities primarily relate to advance payments from customers and to sales of dialysis machines where revenue is recognized upon installation and provision of the necessary technical instructions whereas a receivable is recognized once the machine is billed to the customer. Contract liabilities are shown in the consolidated balance sheet in line item “Current provisions and other current liabilities”. At December 31, 2019, revenue recognized that was included in the contract liability balance at the beginning of the period was €12,608. At December 31, 2019, performance obligations of €1,160,077 (2018: €1,157,314) are unsatisfied (or partially unsatisfied). Expected recognition of the transaction price allocated to unsatisfied performance obligations as revenue for the next five years and in the aggregate for the five years thereafter are as follows: Unsatisfied performance obligations in € THOUS 1 year 278,090 1 - 3 years 455,774 3 - 5 years 359,721 5 - 10 years 66,492 Total 1,160,077 b) Selling, general and administrative expenses Selling, general and administrative expenses are generated in the administrative, logistic and selling functions which are not attributable to production or research and development. Furthermore, general and administrative expenses included realized and unrealized foreign exchange gains and losses. In addition, in 2019 general and administrative expenses included net gains from changes in the fair value of investments of €97,375, mainly related to equity investments, income attributable to a consent agreement on certain pharmaceuticals of €60,471, a net gain related to variable payments outstanding for acquisitions of €41,537 mainly due to revaluation, a net loss from the sale of fixed assets of €28,911, a gain from the settlement of pension plans in the US in the amount of €4,754 (see note 16), an impairment loss on intangible assets of €932 as well as a net loss from the sale of investments of €68. General and administrative expenses also included costs for restructuring activities related to the Company’s cost optimization program in the amount of €91,689, mainly for the impairment of right-of-use assets, the sale of fixed assets as well as severance payments. In 2018, general and administrative expenses included a Foreign Corrupt Practices Act (“FCPA”) related charge of €77,200 (see note 22), an impairment loss on intangible assets of €64,719, income attributable to a consent agreement on certain pharmaceuticals of €53,283, a net gain from the revaluation of variable payments outstanding for acquisitions of €36,327, a net gain from the sale of fixed assets of €6,041, net losses from changes in the fair value of investment of €9,762 and a net gain from the sale of investments of €1,824. In 2017, general and administrative expenses included a FCPA related charge of €200,000 (see note 22), a net gain from the sale of fixed assets of €31,959, a net gain from the sale of investments of €36,402 income attributable to a consent agreement on certain pharmaceuticals of €17,524 and a net gain from the revaluation of variable payments outstanding for acquisitions of €2,685. c) (Gain) loss related to divestitures of Care Coordination activities On June 28, 2018, the Company divested its controlling interest in Sound to an investment consortium led by Summit Partners, L.P. The total transaction proceeds were $1,770,516 (€1,531,109), net of related tax payments. The pre-tax gain related to divestitures for Care Coordination activities was €809,003, which primarily related to this divestiture, the effect of the six month impact from the increase in valuation of Sound’s share based payment program, incentive compensation expense and other costs caused by the divestment of Sound. Sound was included in Care Coordination within the North America Segment. The Company’s history with Sound, prior to divestment, includes the following milestones: · In July 2014, the Company made an investment for a majority interest in Sound, a physician services organization focused on hospitalist, emergency, intensivist and post-acute care services, furthering its strategic investments and expanding the health care services we offer. · In November 2014, Sound acquired Cogent Healthcare, expanding Sound to serve over 180 hospitals in 35 states with more than 1,750 providers. · In 2017, the Company increased its interest in Sound raising the Company majority interest to almost 100% during the first half of 2017. d) Research and development expenses Research and development expenses of €168,028 (2018: €114,074 and 2017: €110,997) included research and non-capitalizable development costs as well as depreciation and amortization expenses related to capitalized development costs of €3,052 (2018: €341 and 2017: €432). e) Cost of materials The cost of materials for the year ended December 31, 2019, 2018 and 2017 consisted of the following: Cost of materials in € THOUS 2019 2018 2017 Cost of raw materials, supplies and purchased components 4,031,371 3,395,895 3,605,316 Cost of purchased services 258,959 233,638 229,806 Cost of materials 4,290,330 3,629,533 3,835,122 f) Personnel expenses Included within costs of revenue, selling, general and administrative expenses and research and development expenses are personnel expenses in the amount of €6,799,358, €6,439,653 and €6,900,023 for the year ended December 31, 2019, 2018 and 2017, respectively. Personnel expenses consisted of the following: Personnel expenses in € THOUS 2019 2018 2017 Wages and salaries 5,448,662 5,025,128 5,396,339 Social security contributions and cost of retirement benefits and social assistance 1,350,696 1,414,525 1,503,684 thereof retirement benefits 174,009 156,581 147,332 Personnel expenses 6,799,358 6,439,653 6,900,023 The Company employed the following personnel on a full-time equivalents basis, on average, for the following years: Employees by function 2019 2018 2017 Production and Services 103,896 97,971 98,547 Administration 11,634 10,510 9,962 Sales and Marketing 3,253 3,360 3,272 Research and Development 1,050 881 804 Total employees 119,833 112,722 112,585 g) Net interest Net interest in the amount of €429,444 (2018: €301,062 and 2017: €364,824) included interest expense of €491,061 (2018: €448,471 and 2017: €416,199) and interest income of €61,617 (2018: €147,409 and 2017: €51,375). Interest expense resulted mainly from the Company’s financial liabilities which are not accounted for at fair value through profit and loss (see note 13 and note 14), lease liabilities and lease liabilities from related parties (see note 21) as well as interest expense related to uncertain tax treatments. In 2019, interest income primarily results from the valuation of the derivatives embedded in the equity-neutral convertible bonds (“Convertible Bonds”), as well as interest on overdue receivables and lease receivables. In 2018, interest income primarily results from the valuation of the derivatives embedded in the Convertible Bonds, interest on overdue receivables and lease receivables as well as interest related to uncertain tax treatments. In 2017, interest income was mainly attributable to the valuation of the Share Options, interest on overdue receivables and lease receivables as well as interest income related to uncertain tax treatment. h) Income taxes Income before income taxes is attributable to the following geographic locations: Income before income taxes in € THOUS 2019 2018 2017 Germany 101,734 161,861 (20,363) United States 1,149,149 2,191,834 1,589,501 Other 589,231 383,041 428,477 Total 1,840,114 2,736,736 1,997,615 Income tax expense (benefit) for the years ended December 31, 2019, 2018 and 2017 consisted of the following: Income tax expense (benefit) in € THOUS 2019 2018 2017 Current Germany (59,928) 45,136 77,934 United States 168,503 261,211 437,201 Other 228,773 115,561 130,992 337,348 421,908 646,127 Deferred Germany 48,313 (34,685) (36,022) United States 57,352 145,700 (156,704) Other (41,399) (21,844) (10,320) 64,266 89,171 (203,046) Total 401,614 511,079 443,081 A reconciliation between the expected and actual income tax expense is shown below. The expected corporate income tax expense is computed by applying the German corporation tax rate (including the solidarity surcharge) and the trade tax rate on income before income taxes. The German combined statutory tax rates were 30.21%, 30.18% and 29.90% for the fiscal years ended December 31, 2019, 2018 and 2017, respectively. Reconciliation of income taxes in € THOUS 2019 2018 2017 Expected corporate income tax expense 555,898 825,810 597,187 Tax free income (65,889) (50,747) (44,302) Income from equity method investees (23,683) (18,185) (18,706) Tax rate differentials (58,386) (106,258) 139,122 Non-deductible expenses 44,283 60,721 106,125 Taxes for prior years (5,454) (91,138) (20,573) Noncontrolling partnership interests (60,724) (61,936) (105,832) Tax on divestitures — (74,560) — Tax rate changes 2,743 (219) (238,130) Change in realizability of deferred tax assets and tax credits 8,519 3,211 7,254 Withholding taxes 13,083 4,564 6,606 Other (8,776) 19,816 14,330 Income tax expense 401,614 511,079 443,081 Effective tax rate % 18.7 % 22.2 % The tax effects of the temporary differences and net operating losses that give rise to deferred tax assets and liabilities at December 31, 2019 and 2018, are presented below: Deferred income tax assets and liabilities in € THOUS 2019 2018 Deferred tax assets Trade accounts receivable 13,392 25,090 Inventories 71,915 70,223 Intangible assets 4,994 6,980 Property, plant and equipment and other non-current assets 72,769 62,124 Lease Liabilities 1,164,620 — Provisions and other liabilities 50,819 93,637 Pension liabilities 135,356 98,278 Net operating loss carryforwards, tax credit carryforwards and interest carryforwards 175,394 93,890 Derivatives 3,027 2,160 Compensation expense related to stock options 3,426 3,732 Other 36,403 15,390 Total deferred tax assets 1,732,115 471,504 Deferred tax liabilities Trade accounts receivable 30,310 29,596 Inventories 19,324 12,598 Intangible assets 632,984 433,228 Property, plant and equipment and other non-current assets 165,082 136,392 Right-of-use assets 1,068,409 — Provisions and other liabilities 92,756 14,678 Derivatives 372 1,978 Other 101,384 123,870 Total deferred tax liabilities 2,110,621 752,340 Net deferred tax liabilities (378,506) (280,836) In the consolidated balance sheets, the accumulated amounts of deferred tax assets and liabilities are shown as follows: Net deferred income tax assets and liabilities in € THOUS 2019 2018 Deferred tax assets 361,196 345,685 Deferred tax liabilities 739,702 626,521 Net deferred tax liabilities (378,506) (280,836) The change in the balance of deferred tax assets and deferred tax liabilities does not equal the deferred tax expense/(benefit). This is due to deferred taxes that are booked directly to equity, the effects of exchange rate changes on tax assets and liabilities denominated in currencies other than euro, the acquisition and disposal of entities as part of ordinary activities and the reclassification of deferred tax assets and liabilities which are presented on the face of the balance sheet as components of other assets and liabilities. The net operating losses included in the table below reflect U.S. federal tax, German corporate income tax, and other tax loss carryforwards in the various countries in which the Company operates, and expire as follows: Net operating loss carryforwards in € THOUS 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 and thereafter Without expiration date Total Included in the balance of net operating loss carryforwards at December 31, 2019 are €204,476 not expected to be absorbed. Deferred tax assets regarding this portion are not recognized. In assessing the realizability of deferred tax assets, management considers to which extent it is probable that the deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences and tax loss carryforwards become deductible. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is probable the Company will realize the benefits of these deferred tax assets at December 31, 2019. The Company provides for income taxes and foreign withholding taxes on the cumulative earnings of foreign subsidiaries and foreign subsidiaries in which the Company has ownership of less than 100% that will not be reinvested. At December 31, 2019, the Company provided for €6,645 (2018: €10,656) of deferred tax liabilities associated with earnings that are likely to be distributed in 2020 and the following years. Provision has not been made for additional taxes on €8,867,422 (2018: €8,240,031) undistributed earnings of foreign subsidiaries as these earnings are considered indefinitely reinvested. The earnings could become subject to additional tax if remitted or deemed remitted as dividends; however, calculation of such additional tax is not practicable. These taxes would predominantly comprise foreign withholding tax on dividends of foreign subsidiaries, and German income tax; however, those dividends and capital gains would generally be 95% tax free for German tax purposes. In the U.S., tax reform was enacted by the Tax Cuts and Jobs Act by signature of the president on December 22, 2017. The Act reduced the U.S. corporate income tax rate from 35% to 21% effective from January 1, 2018. Deferred tax assets and liabilities expected to reverse in 2018 and beyond, were remeasured using the corporate income tax rate that was enacted by the balance sheet date and will apply for future financial years. For the year ended December 31, 2017, the remeasurement of deferred tax assets and liabilities resulted in a deferred tax benefit of €235,692 which was recognized in tax expense affecting profit and loss and included in the balance of €238,130 in the reconciling item “tax rate changes” in the table “reconciliation of income taxes” above. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions | |
Related party transactions | 5. Related party transactions Fresenius SE is the Company’s largest shareholder and owns 31.64% of the Company’s outstanding shares, excluding treasury shares held by the Company, at December 31, 2019. The Company has entered into certain arrangements for services and products with Fresenius SE or its subsidiaries and with certain of the Company’s equity method investees as described in item a) below. The arrangements for leases with Fresenius SE or its subsidiaries are described in item b) below. The Company’s terms related to the receivables or payables for these services, leases and products are generally consistent with the normal terms of the Company’s ordinary course of business transactions with unrelated parties and the Company believes that these arrangements reflect fair market terms. The Company utilizes various methods to verify the commercial reasonableness of its related party arrangements. Financing arrangements as described in item c) below have agreed upon terms which are determined at the time such financing transactions occur and reflect market rates at the time of the transaction. The relationship between the Company and its key management personnel who are considered to be related parties is described in item d) below. Our related party transactions are settled through Fresenius SE’s cash management system where appropriate. a) Service agreements and products The Company is party to service agreements with Fresenius SE and certain of its affiliates (collectively the “Fresenius SE Companies”) to receive services, including, but not limited to: administrative services, management information services, employee benefit administration, insurance, information technology services, tax services and treasury management services. The Company also provides central purchasing services to the Fresenius SE Companies. These related party agreements generally have a duration of 1 to 5 years and are renegotiated on an as needed basis when the agreement comes due. The Company provides administrative services to one of its equity method investees. The Company sold products to the Fresenius SE Companies and made purchases from the Fresenius SE Companies and equity method investees. In addition, Fresenius Medical Care Holdings, Inc. (“FMCH”) purchases heparin supplied by Fresenius Kabi USA, Inc. (“Kabi USA”), through an independent group purchasing organization (“GPO”). Kabi USA is an indirect, wholly-owned subsidiary of Fresenius SE. The Company has no direct supply agreement with Kabi USA and does not submit purchase orders directly to Kabi USA. FMCH acquires heparin from Kabi USA, through the GPO contract, which was negotiated by the GPO at arm’s length on behalf of all members of the GPO. In May 2019, the Company entered into a ten-year agreement with one of the Fresenius SE Companies for the manufacturing of infusion bags. In order to establish the new production line, the Company purchased machinery from one of the Fresenius SE Companies in the amount of €7,183 during the year ended December 31, 2019 and €4,497 during the year ended December 31, 2018. In December 2010, the Company and Galenica Ltd. (now known as Vifor Pharma Ltd.) formed the renal pharmaceutical company Vifor Fresenius Medical Care Renal Pharma Ltd., an equity method investee of which the Company owns 45%. The Company has entered into exclusive supply agreements to purchase certain pharmaceuticals from Vifor Fresenius Medical Care Renal Pharma Ltd. Under the terms of certain unconditional purchase agreements, the Company is obligated to purchase approximately €752,837 of pharmaceuticals, of which €423,545 is committed at December 31, 2019 for 2020. The terms of these agreements run up to five years. Under the CMS' Comprehensive ESRD Care Model, the Company and participating physicians formed entities known as ESCOs as part of a payment and care delivery model that seeks to deliver better health outcomes for Medicare ESRD patients while lowering CMS' costs. The Company has entered into participation/services agreements with these ESCOs, which are accounted for as equity method investees. Below is a summary, including the Company’s receivables from and payables to the indicated parties resulting from the above described transactions with related parties. Service agreements and products with related parties in € THOUS 2019 2018 2017 December 31, 2019 December 31, 2018 Sales of Purchases of Sales of Purchases of Sales of Purchases of goods and goods and goods and goods and goods and goods and Accounts Accounts Accounts Accounts services services services services services services receivable payable receivable payable Service agreements (1) Fresenius SE 153 29,114 445 24,456 381 21,704 35 360 378 4,019 Fresenius SE affiliates 4,420 105,832 3,819 101,590 11,111 81,491 2,003 6,416 681 8,470 Equity method investees 49,052 — 58,362 — 82,628 — 68,300 — 108,655 — Total 53,625 134,946 62,626 126,046 94,120 103,195 70,338 6,776 109,714 12,489 Products Fresenius SE 3 — — — 1 — — — — — Fresenius SE affiliates 44,771 37,279 33,564 39,181 30,529 40,467 16,803 3,405 8,750 3,658 Equity method investees — 469,474 — 399,667 — 399,180 — 36,262 — 57,975 Total 44,774 506,753 33,564 438,848 30,530 439,647 16,803 39,667 8,750 61,633 (1) In addition to the above shown accounts payable, accrued expenses for service agreements with related parties amounted to €8,352 and €9,376 at December 31, 2019 and 2018. b) Lease agreements In addition to the above-mentioned product and service agreements, the Company is a party to real estate lease agreements with the Fresenius SE Companies, which mainly include leases for the Company’s corporate headquarters in Bad Homburg, Germany and production sites in Schweinfurt and St. Wendel, Germany. The majority of the leases expire at the end of 2026. Below is a summary resulting from the above described lease agreements with related parties. For information on the implementation of IFRS 16, see note 1. Lease agreements with related parties in € THOUS 2019 2018 2017 December 31, 2019 Interest Lease Lease Lease Lease Lease Right-of-use Lease Depreciation expense expense (1) income expense income expense asset liability Fresenius SE 4,580 501 4,005 — 8,745 — 8,456 30,336 30,820 Fresenius SE affiliates 12,589 1,396 452 — 15,852 — 13,676 91,879 92,126 Total 17,169 1,897 4,457 — 24,597 — 22,132 122,215 122,946 (1) Short-term leases and expenses relating to variable lease payments are exempted from balance sheet recognition . c) Financing The Company receives short-term financing from and provides short-term financing to Fresenius SE. The Company also utilizes Fresenius SE’s cash management system for the settlement of certain intercompany receivables and payables with its subsidiaries and other related parties. As of December 31, 2019 and December 31, 2018, the Company had accounts receivable from Fresenius SE related to short-term financing in the amount of €71,078 and €80,228, respectively. As of December 31, 2019 and December 31, 2018, the Company had accounts payable to Fresenius SE related to short-term financing in the amount of €38,050 and €32,454, respectively. The interest rates for these cash management arrangements are set on a daily basis and are based on the then-prevailing overnight reference rate, with a floor of zero, for the respective currencies. On August 19, 2009, the Company borrowed €1,500 from the General Partner on an unsecured basis at 1.335%. The loan repayment has been extended periodically and is currently due on August 21, 2020 with an interest rate of 0.930%. On November 28, 2013, the Company borrowed an additional €1,500 with an interest rate of 1.875% from the General Partner. The loan repayment has been extended periodically and is currently due on November 23, 2020 with an interest rate of 0.930%. At December 31, 2018, a subsidiary of Fresenius SE held unsecured bonds issued by the Company in the amount of €6,000. One bond was issued in 2012 with a coupon of 5.25% and interest paid semiannually until maturity in 2019. At December 31, 2019, the subsidiary of Fresenius SE held another unsecured bond issued by the Company in the amount of €1,000. This bond was issued in 2011 with a coupon of 5.25% and interest payable semiannually until maturity in 2021. For further information on these bonds, see note 14. At December 31, 2019 and December 31, 2018, the Company borrowed from Fresenius SE in the amount of €18,865 at an interest rate of 0.930% and €185,900 at an interest rate of 0.825%, respectively. For further information on this loan agreement, see note 13. d) Key management personnel Due to the Company’s legal form of a German partnership limited by shares, the General Partner holds a key management position within the Company. In addition, as key management personnel, members of the Management Board and the Supervisory Board, as well as their close relatives, are considered related parties. The Company’s Articles of Association provide that the General Partner shall be reimbursed for any and all expenses in connection with management of the Company’s business, including remuneration of the members of the General Partner’s supervisory board and the members of the Management Board. The aggregate amount reimbursed to the General Partner was €23,905, €14,612 and €25,995, respectively, for its management services during 2019, 2018 and 2017 and included an annual fee of €120 as compensation for assuming liability as general partner. The annual fee is set at 4% of the amount of the General Partner's share capital (€3,000 as of December 31, 2019). As of December 31, 2019 and December 31, 2018, the Company had accounts receivable from the General Partner in the amount of €977 and €176, respectively. As of December 31, 2019 and December 31, 2018, the Company had accounts payable to the General Partner in the amount of €34,170 and €47,205, respectively. The Chairman of the Company's Supervisory Board, Dr. Dieter Schenk, is also Vice Chairman of the supervisory board of the general partner of Fresenius SE as well as the Vice Chairman of the supervisory board of the Company's General Partner. He is also Chairman of the Advisory Board of a charitable foundation that is the sole shareholder of the general partner of Fresenius SE. He was also a partner in a law firm which provided services to the Company and certain of its subsidiaries until December 31, 2017. While Dr. Dieter Schenk was a partner in the law firm, the Company incurred expenses in the amount of €2,337 for services during 2017. The Chairman of the supervisory board of Fresenius SE and of the general partner of Fresenius SE, Dr. Gerd Krick, is also a member of the supervisory board of the Company's General Partner. Three of the six members of the Company's Supervisory Board, including the Chairman Dr. Dieter Schenk and the Vice Chairman Rolf A. Classon, are also members of the supervisory board of the Company's General Partner. The Chairman of the supervisory board of the Company's General Partner, Stephan Sturm, is also the Chairman of the management board of the general partner of Fresenius SE. Rachel Empey is a member of the supervisory board of the Company's General Partner as well as a member of the management board of the general partner of Fresenius SE. Additionally, the Chairman and Chief Executive Officer of the Management Board of the Company's General Partner, Rice Powell, is a member of the Management Board of the general partner of Fresenius SE. For information regarding compensation of the Management Board and the Supervisory Board of the Company see note 28. |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2019 | |
Cash and cash equivalents | |
Cash and cash equivalents | 6. Cash and cash equivalents As of December 31, 2019 and 2018, cash and cash equivalents are as follows: Cash and cash equivalents in € THOUS 2019 2018 Cash 768,706 831,885 Securities and time deposits 239,017 1,313,747 Cash and cash equivalents 1,007,723 2,145,632 The cash and cash equivalents disclosed in the table above, and respectively in the consolidated statement of cash flows, include at December 31, 2019 an amount of €18,820 (2018: €5,002) from collateral requirements towards an insurance company in North America that are not available for use. |
Trade accounts and other receiv
Trade accounts and other receivables | 12 Months Ended |
Dec. 31, 2019 | |
Trade accounts and other receivables | |
Trade accounts and other receivables | 7. Trade accounts and other receivables As of December 31, 2019 and December 31, 2018, trade accounts and other receivables are as follows: Trade accounts and other receivables in € THOUS December 31, December 31, 2019 2018 thereof credit- thereof credit- Impaired Impaired Trade accounts and other receivables, gross 3,562,704 366,497 3,349,515 325,240 thereof finance lease receivables 57,398 — 28,726 — less allowances (141,358) (102,269) (118,015) (85,775) Trade accounts and other receivables 3,421,346 264,228 3,231,500 239,465 The other receivables in the amount of €100,613 include receivables from finance leases, operating leases and insurance contracts (December 31, 2018: €66,496). All trade accounts and other receivables are due within one year. A small portion of the trade account receivables are subject to factoring agreements. Trade accounts receivables and finance lease receivables with a term of more than one year in the amount of €132,144 (December 31, 2018: €120,668) are included in the balance sheet item "Other non-current assets". The following table shows the development of the allowance for doubtful accounts in the fiscal years 2019, 2018 and 2017: Development of allowance for doubtful accounts in € THOUS 2019 2018 2017 Allowance for doubtful accounts as of January 1 118,015 474,891 482,461 Change in valuation allowances as recorded in the consolidated statements of income 42,315 19,112 549,631 Write-offs and recoveries of amounts previously written-off (18,587) (378,201) (501,229) Foreign currency translation (385) 2,213 (55,972) Allowance for doubtful accounts as of December 31 141,358 118,015 474,891 The following tables show the ageing analysis of trade accounts and other receivables and the allowance for doubtful accounts as of December 31, 2019 and as of December 31, 2018: Aging analysis of trade accounts and other receivables 2019 in € THOUS up to 3 3 to 6 6 to 12 more than not months months months 12 months overdue overdue overdue overdue overdue Total Trade accounts and other receivables 1,997,671 899,987 229,012 184,768 251,266 3,562,704 less allowance for doubtful accounts (9,385) (8,411) (6,267) (13,325) (103,970) (141,358) Trade accounts and other receivables, net 1,988,286 891,576 222,745 171,443 147,296 3,421,346 Aging analysis of trade accounts and other receivables 2018 in € THOUS up to 3 3 to 6 6 to 12 more than not months months months 12 months overdue overdue overdue overdue overdue Total Trade accounts receivable 1,863,149 848,092 217,024 175,079 246,171 3,349,515 less allowance for doubtful accounts (8,043) (4,711) (5,209) (5,946) (94,106) (118,015) Trade accounts receivable, net 1,855,106 843,381 211,815 169,133 152,065 3,231,500 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | |
Inventories | 8. Inventories At December 31, 2019 and December 31, 2018, inventories consisted of the following: Inventories in € THOUS 2019 2018 Finished goods 940,407 774,133 Health care supplies 399,585 391,593 Raw materials and purchased components 233,609 224,054 Work in process 89,677 77,023 Inventories 1,663,278 1,466,803 Under the terms of certain unconditional purchase agreements, the Company is obligated to purchase approximately €443,744 of materials, of which €208,841 is committed at December 31, 2019 for 2020. The terms of these agreements run 1 to 5 years. Further unconditional purchase agreements exist with an equity method investee of the Company. For further information on these agreements, see note 5. Allowances on Inventories amounted to €69,427 and €62,990 for the years ended December 31, 2019 and 2018, respectively. |
Other current assets
Other current assets | 12 Months Ended |
Dec. 31, 2019 | |
Other current assets | |
Other current assets | 9. Other current assets At December 31, 2019 and 2018, other current assets consisted of the following: Other current assets in € THOUS 2019 2018 Income taxes receivable 209,545 159,290 Debt securities 133,322 99,592 Other taxes receivable 127,880 107,708 Payments on account 110,078 104,817 Receivables for supplier rebates 51,296 68,203 Prepaid rent 26,374 57,319 Deposit / Guarantee / Security 22,226 19,915 Prepaid insurance 19,796 23,632 Derivatives 2,513 7,837 Other 210,573 155,770 Other current assets 913,603 804,083 The item “Other” in the table above primarily includes loans to customers, receivables from employees and notes receivables. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, plant and equipment. | |
Property, plant and equipment | 10. Property, plant and equipment At December 31, 2019 and 2018, the acquisition or manufacturing costs and the accumulated depreciation of property, plant and equipment consisted of the following: Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Additions Reclassifications Disposals 2019 Land 58,887 802 2,824 466 3,153 (2,140) 63,992 Buildings and improvements 3,311,704 65,782 10,648 43,560 296,276 (83,533) 3,644,437 Machinery and equipment 4,541,906 59,529 86,743 569,352 127,613 (245,487) 5,139,656 Machinery, equipment and rental equipment under capitalized leases 89,734 2,151 — — (91,885) — — Construction in progress 505,168 7,692 (1,167) 368,577 (366,895) (4,093) 509,282 Property, plant and equipment 8,507,399 135,956 99,048 981,955 (31,738) (335,253) 9,357,367 Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2018 translation group Additions Reclassifications Disposals 2018 Land 56,540 2,299 358 605 490 (1,405) 58,887 Buildings and improvements 2,881,688 108,998 692 67,272 328,718 (75,664) 3,311,704 Machinery and equipment 4,174,027 96,766 (2,576) 465,117 29,325 (220,753) 4,541,906 Machinery, equipment and rental equipment under capitalized leases 80,916 3,880 (98) 6,259 665 (1,888) 89,734 Construction in progress 462,226 6,759 4,519 419,347 (387,131) (552) 505,168 Property, plant and equipment 7,655,397 218,702 2,895 958,600 (27,933) (300,262) 8,507,399 Depreciation in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Additions Reclassifications Disposals 2019 Land 1,295 19 — 20 — (2) 1,332 Buildings and improvements 1,818,053 32,818 (8,312) 255,683 8,805 (54,227) 2,052,820 Machinery and equipment 2,798,709 34,291 (7,023) 461,947 24,591 (199,581) 3,112,934 Machinery, equipment and rental equipment under capitalized leases 53,332 1,334 — — (54,666) — — Construction in progress — — — — — — — Property, plant and equipment 4,671,389 68,462 (15,335) 717,650 (21,270) (253,810) 5,167,086 Depreciation in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2018 translation group Additions Reclassifications Disposals 2018 Land 1,239 38 — — — 18 1,295 Buildings and improvements 1,580,103 65,251 (1,484) 221,866 (786) (46,897) 1,818,053 Machinery and equipment 2,538,436 58,817 (4,278) 400,439 (13,986) (180,719) 2,798,709 Machinery, equipment and rental equipment under capitalized leases 43,848 2,485 (289) 9,118 30 (1,860) 53,332 Construction in progress — — — — — — — Property, plant and equipment 4,163,626 126,591 (6,051) 631,423 (14,742) (229,458) 4,671,389 Book value in € THOUS December 31, December 31, 2019 2018 Land 62,660 57,592 Buildings and improvements 1,591,617 1,493,651 Machinery and equipment 2,026,722 1,743,197 Machinery, equipment and rental equipment under capitalized leases — 36,402 Construction in progress 509,282 505,168 Property, plant and equipment 4,190,281 3,836,010 Depreciation expense for property, plant and equipment amounted to €717,650, €631,423 and €622,706 for the years ended December 31, 2019, 2018, and 2017, respectively. These expenses are allocated within costs of revenue, selling, general and administrative and research and development expenses depending upon the area in which the asset is used. Under the terms of certain unconditional purchase agreements, the Company is obligated to purchase approximately €62,787 of property, plant and equipment, of which €60,190 is committed at December 31, 2019 for 2020. The terms of these agreements run 1 to 5 years. Included in machinery and equipment at December 31, 2019 and 2018 were €775,601 and €731,427, respectively, of peritoneal dialysis cycler machines which the Company leases to customers with end-stage renal disease on a month-to-month basis and hemodialysis machines which the Company leases to physicians under operating leases. At December 31, 2019 and 2018, the hyperinflationary effects on property, plant and equipment consisted of the following: Effect of hyperinflation in Argentina in € THOUS Acquisition or Accumulated December 31, manufacturing costs depreciation 2019 Land 2,307 — 2,307 Buildings and improvements 20,652 7,802 12,850 Machinery and equipment 33,237 21,470 11,767 Machinery, equipment and rental equipment under capitalized leases — — — Construction in progress 1,108 — 1,108 Property, plant and equipment 57,304 29,272 28,032 Acquisition or Accumulated December 31, manufacturing costs depreciation 2018 Land 1,581 — 1,581 Buildings and improvements 13,575 5,454 8,121 Machinery and equipment 21,821 15,321 6,500 Machinery, equipment and rental equipment under capitalized leases — — — Construction in progress 656 — 656 Property, plant and equipment 37,633 20,775 16,858 |
Intangible assets and goodwill
Intangible assets and goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets and goodwill | |
Intangible assets and goodwill | 11. Intangible assets and goodwill At December 31, 2019 and 2018, the acquisition or manufacturing costs and the accumulated amortization of intangible assets and goodwill consisted of the following: Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Additions Reclassifications Disposals 2019 Amortizable intangible assets Non-compete agreements 324,910 6,012 4,744 25 (274) (2,695) 332,722 Technology 153,164 (376) 589,833 — — — 742,621 Licenses and distribution agreements 235,625 4,678 (38,126) 783 5,093 (5,766) 202,287 Customer relationships 23,847 (116) 47,880 — (2,680) — 68,931 Construction in progress 148,002 1,208 36,892 171,446 (86,898) (3,247) 267,403 Internally developed intangibles 217,033 971 — 9,105 71,152 (222) 298,039 Other 381,390 6,852 (1,949) 11,007 17,763 (6,722) 408,341 1,483,971 19,229 639,274 192,366 4,156 (18,652) 2,320,344 Non-amortizable intangible assets Tradename 182,901 3,326 41,002 — — — 227,229 Management contracts 3,134 91 — — — — 3,225 186,035 3,417 41,002 — — — 230,454 Intangible assets 1,670,006 22,646 680,276 192,366 4,156 (18,652) 2,550,798 Goodwill 12,209,606 217,996 1,589,653 — — — 14,017,255 Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2018 translation group Additions Reclassifications Disposals 2018 Amortizable intangible assets Non-compete agreements 310,163 12,427 6,339 720 (2) (4,737) 324,910 Technology 149,191 3,973 — — — — 153,164 Licenses and distribution agreements 173,713 3,049 — 61,166 (3) (2,300) 235,625 Customer relationships 147,096 2,015 (125,264) — — — 23,847 Construction in progress 78,757 2,785 — 107,097 (23,050) (17,587) 148,002 Internally developed intangibles 169,095 2,158 (9,763) 17,501 38,643 (601) 217,033 Other 358,092 9,490 (3,368) 9,881 12,883 (5,588) 381,390 1,386,107 35,897 (132,056) 196,365 28,471 (30,813) 1,483,971 Non-amortizable intangible assets Tradename 174,689 8,212 — — — — 182,901 Management contracts 3,038 96 — — — — 3,134 177,727 8,308 — — — — 186,035 Intangible assets 1,563,834 44,205 (132,056) 196,365 28,471 (30,813) 1,670,006 Goodwill 12,103,921 441,972 (336,287) — — — 12,209,606 Amortization in € THOUS Foreign Changes in January 1, currency consolidation Impairment December 2019 translation group Additions loss Reclassifications Disposals 31, 2019 Amortizable intangible assets Non-compete agreements 282,296 5,235 (166) 11,868 — 26 (3,136) 296,123 Technology 124,605 1,140 — 49,265 — — — 175,010 Licenses and distribution agreements 131,492 2,607 — 14,293 — — (4,680) 143,712 Customer relationships 7,245 12 — 4,099 — — — 11,356 Construction in progress — — — — — — — — Internally developed intangibles 138,343 1,328 — 28,722 932 360 (500) 169,185 Other 304,694 4,795 (3,606) 27,235 — 1,410 (5,446) 329,082 988,675 15,117 (3,772) 135,482 932 1,796 (13,762) 1,124,468 Amortization in € THOUS Foreign Changes in December January 1, currency consolidation Impairment 31, 2018 translation group Additions loss Reclassifications Disposals 2018 Amortizable intangible assets Non-compete agreements 262,381 11,338 (1,468) 14,675 — 17 (4,647) 282,296 Technology 64,563 2,995 (356) 10,740 46,663 — — 124,605 Licenses and distribution agreements 119,819 577 — 12,673 726 (3) (2,300) 131,492 Customer relationships 50,572 727 (53,247) 9,226 — — (33) 7,245 Construction in progress — — — — 16,750 — (16,750) — Internally developed intangibles 108,906 2,927 (2,475) 20,357 — 9,202 (574) 138,343 Other 274,535 8,003 (6,375) 25,753 580 6,064 (3,866) 304,694 880,776 26,567 (63,921) 93,424 64,719 15,280 (28,170) 988,675 Book value in € THOUS December 31, 2019 December 31, 2018 Amortizable intangible assets Non-compete agreements 36,599 42,614 Technology 567,611 28,559 Licenses and distribution agreements 58,575 104,133 Customer relationships 57,575 16,602 Construction in progress 267,403 148,002 Internally developed intangibles 128,854 78,690 Other 79,259 76,696 1,195,876 495,296 Non-amortizable intangible assets Tradename 227,229 182,901 Management contracts 3,225 3,134 230,454 186,035 Intangible assets 1,426,330 681,331 Goodwill 14,017,255 12,209,606 The amortization of intangible assets amounted to €135,482, €93,424 and €112,773 for the years ended December 31, 2019, 2018, and 2017, respectively. These expenses are allocated within costs of revenue, selling, general and administrative and research and development expenses depending upon the area in which the asset is used. At December 31, 2019 and 2018, the hyperinflationary effects on intangible assets and goodwill consisted of the following: Effect of hyperinflation in Argentina in € THOUS Acquisition or Accumulated manufacturing costs depreciation December 31, 2019 Amortizable intangible assets Internally developed intangibles 1,971 1,281 690 Other 1,697 727 970 Intangible assets 3,668 2,008 1,660 Goodwill 28,057 2,926 25,131 Acquisition or Accumulated manufacturing costs depreciation December 31, 2018 Amortizable intangible assets Internally developed intangibles 142 129 13 Other 1,889 1,209 680 Intangible assets 2,031 1,338 693 Goodwill 20,197 2,118 18,079 Goodwill and intangible assets with indefinite useful lives The increase in the carrying amount of goodwill during 2019 is mainly a result of the acquisition of NxStage, the impact of foreign currency translations and the purchase of clinics in the normal course of operations. The carrying amount of goodwill and intangibles with indefinite useful life is allocated to the CGUs at December 31, 2019 and 2018 as follows: Allocation of the carrying amount to CGUs in € THOUS North America EMEA Asia-Pacific Latin America 2019 2018 2019 2018 2019 2018 2019 2018 Goodwill 11,762,791 10,128,309 1,342,730 1,282,632 716,665 662,097 195,069 136,568 Management contracts with indefinite useful life — — — — 3,225 3,134 — — Trade name with indefinite useful life 226,692 182,329 — — — — 537 572 The recoverability of goodwill and other separable intangible assets with indefinite useful lives recorded in the Company’s consolidated balance sheets was verified. As a result, the Company did not record any impairment losses in 2019 and 2018. |
Current provisions and other cu
Current provisions and other current liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Current provisions and other current liabilities | |
Current provisions and other current liabilities | 12. Current provisions and other current liabilities Current provisions The following table shows a reconciliation of the current provisions for 2019: Development of current provisions in € THOUS Foreign Changes in January 1, currency consolidation 2019 translation group Utilized Reversed Additions Reclassifications December 31, 2019 Self-insurance programs 198,307 3,751 — — — 17,808 — 219,866 Personnel expenses 42,430 359 215 (25,436) (293) 32,487 40,764 90,526 Risk of lawsuit 32,304 246 507 (15,049) (50) 3,023 — 20,981 FCPA related charge 223,980 — — (219,588) (4,000) 3,844 — 4,236 Other current provisions 27,495 218 742 (3,976) (839) 12,807 — 36,447 Current provisions 524,516 4,574 1,464 (264,049) (5,182) 69,969 40,764 372,056 Self-insurance programs See note 2 d). Personnel expenses Personnel expenses mainly refer to provisions for share-based plans, the current portion of the provisions for accrued severance payments and provisions for jubilee payments. As at December 31, 2019 and 2018 the provisions for share-based plans amounted to €63,447 and €15,478, respectively. See note 20. Risk of lawsuit See note 22. FCPA related charge On March 29, 2019, the Company entered into a non-prosecution agreement with the United States Department of Justice ("DOJ”) and a separate agreement with the Securities and Exchange Commission ("SEC”) intended to resolve fully and finally the government's claims against the Company arising from the investigations. The Company paid a combined total in penalties and disgorgement of approximately $231,700 to the DOJ and the SEC in connection with these agreements. For further information on these investigations see note 22. Other current provisions The item “Other current provisions” in the table above includes provisions for warranties, physician compensation and return of goods. Other current liabilities As at December 31, 2019 and 2018 other current liabilities consisted of the following: Other current liabilities in € THOUS 2019 2018 Personnel liabilities 647,508 654,457 Noncontrolling interests subject to put provisions 603,132 494,576 Unapplied cash and receivable credits 482,682 364,657 Invoices outstanding 178,209 160,112 Withholding tax and VAT 104,388 100,086 Interest liabilities 73,593 92,961 Variable payments outstanding for acquisitions 34,253 57,217 Legal matters, advisory and audit fees 27,979 38,778 Bonuses, commissions 27,510 26,831 Contract liabilities 22,795 37,628 Rent and lease obligations 176 138,210 Other liabilities 238,138 214,259 Other current liabilities 2,440,363 2,379,772 Personnel liabilities The personnel liabilities mainly refer to liabilities for wages and salaries, bonuses and vacation payments. Contract liabilities Contract liabilities primarily relate to advance payments from customers and to sales of dialysis machines where revenue is recognized upon installation and provision of the necessary technical instructions whereas a receivable is recognized once the machine is billed to the customer. Other liabilities The item “Other liabilities” in the table above includes derivates, deferred income, the current portion of pension liabilities as well as liabilities for severance payments related to the Company’s cost optimization program. |
Short-term debt and short-term
Short-term debt and short-term debt from related parties | 12 Months Ended |
Dec. 31, 2019 | |
Short-term debt and short-term debt from related parties | |
Short-term debt and short-term debt from related parties | 13. Short-term debt and short-term debt from related parties At December 31, 2019 and December 31, 2018, short-term debt and short-term debt from related parties consisted of the following: Short-term debt and short-term debt from related parties in € THOUS 2019 2018 Commercial paper program 999,732 999,873 Borrowings under lines of credit 143,875 204,491 Other 6,381 930 Short-term debt 1,149,988 1,205,294 Short-term debt from related parties (see note 5 c) 21,865 188,900 Short-term debt and short-term debt from related parties 1,171,853 1,394,194 Commercial paper program The Company maintains a commercial paper program under which short-term notes of up to €1,000,000 can be issued. At December 31, 2019 and 2018, the outstanding commercial paper amounted to €1,000,000 and €1,000,000, respectively. Borrowings under lines of credit and further availabilities Borrowings under lines of credit in the amount of €143,875 and €204,491 at December 31, 2019 and 2018, respectively, represented amounts borrowed by the Company and its subsidiaries under lines of credit with commercial banks. The average interest rates on these borrowings at December 31, 2019 and 2018 were 0.86% and 1.21%, respectively. Excluding amounts available under the Amended 2012 Credit Agreement (see note 14 below), at December 31, 2019 and 2018, the Company had €517,926 and €386,619 available under other commercial bank agreements. In some instances, lines of credit are secured by assets of the Company's subsidiary that is party to the agreement or may require the Company's guarantee. In certain circumstances, the subsidiary may be required to meet certain covenants. The Company and certain consolidated entities operate a multi-currency notional pooling cash management system. The Company met the conditions to offset balances within this cash pool for reporting purposes. At December 31, 2019 and 2018, cash and borrowings under lines of credit in the amount of €152,598 and €122,256 were offset under this cash management system. Other At December 31, 2019 and 2018, the Company had €6,381 and €930 of other debt outstanding related to fixed payments outstanding for acquisitions. Short-term debt from related parties On July 31, 2019, the Company and one of its subsidiaries, as borrowers, and Fresenius SE, as lender, amended and restated an unsecured loan agreement to increase the aggregate amount from $400,000 to €600,000. The Company and one of its subsidiaries may request and receive one or more short-term advances until maturity on July 31, 2022. For further information on short-term debt from related parties, see note 5 c). |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2019 | |
Long-term debt | |
Long-term debt | 14. Long-term debt As of December 31, 2019 and 2018, long-term debt consisted of the following: Long-term debt in € THOUS 2019 2018 Amended 2012 Credit Agreement 1,901,372 1,887,357 Bonds 4,966,619 3,700,446 Convertible Bonds 399,939 393,232 Accounts Receivable Facility 379,570 — Capital lease obligations (1) — 36,144 Other 258,057 134,855 Long-term debt (2) 7,905,557 6,152,034 Less current portion (1,447,239) (1,106,519) Long-term debt, less current portion (2) 6,458,318 5,045,515 (1) As of December 31, 2018, this line item included lease liabilities from capital leases in accordance with IAS 17. From 2019, these amounts are transferred to balance sheet items "Current portion of long-term lease liabilities" and "Long-term lease liabilities, less current portion" (see note 1). (2) Labeled as "Long-term debt and capital lease obligations, less current portion" as of December 31, 2018, this line item included lease liabilities from capital leases in accordance with IAS 17. From 2019, these amounts are transferred to balance sheet item "Long-term lease liabilities, less current portion" (see note 1). The Company's long-term debt as of December 31, 2019, all of which ranks equally in rights of payment, are described as follows: Amended 2012 credit agreement The Company originally entered into a syndicated credit facility of $3,850,000 and a 5-year tenor (the "2012 Credit Agreement") on October 30, 2012. On November 26, 2014, the 2012 Credit Agreement was amended to increase the total credit facility to approximately $4,400,000 and extend the term for an additional two years until October 30, 2019 ("Amended 2012 Credit Agreement"). On July 11, 2017, the Company further amended and extended the Amended 2012 Credit Agreement. As of December 31, 2019, the Amended 2012 Credit Agreement consists of: · Revolving credit facilities of $900,000 and €600,000 which will be due and payable on July 31, 2022. · A term loan of $1,230,000, also scheduled to mature on July 31, 2022. Quarterly repayments of $30,000 began on October 31, 2017 with the remaining balance outstanding due on the maturity date. · A term loan of €287,000 scheduled to mature on July 31, 2022. Quarterly repayments of €7,000 began on October 31, 2017 with the remaining balance outstanding due on the maturity date. · A non-amortizing term loan of €400,000 which is scheduled to mature on July 30, 2020. Interest on the credit facilities is floating at a rate equal to EURIBOR / LIBOR (as applicable) plus an applicable margin. The applicable margin is variable and depends on the Company's consolidated net leverage ratio, which is a ratio of its consolidated funded debt less cash and cash equivalents to consolidated EBITDA (as these terms are defined in the Amended 2012 Credit Agreement). At December 31, 2019 and 2018, the dollar-denominated tranches outstanding under the Amended 2012 Credit Agreement had a weighted average interest rate of 3.24% and 3.53%, respectively. At December 31, 2019 and 2018, the euro-denominated tranches had a weighted average interest rate of 0.93% and 0.81%, respectively. The Amended 2012 Credit Agreement contains affirmative and negative covenants with respect to the Company and its subsidiaries. Under certain circumstances these covenants limit indebtedness and restrict the creation of liens. Under the Amended 2012 Credit Agreement the Company is required to comply with a maximum consolidated net leverage ratio. The following table shows the available and outstanding amounts under the Amended 2012 Credit Agreement at December 31, 2019 and 2018: Amended 2012 Credit Agreement - Maximum amount available and balance outstanding in THOUS Maximum amount available Balance outstanding 2019 2019 (1) Revolving credit USD 2017 / 2022 $ 900,000 € 801,139 $ 138,700 € 123,464 Revolving credit EUR 2017 / 2022 € 600,000 € 600,000 € — € — USD term loan 2017 / 2022 $ 1,230,000 € 1,094,891 $ 1,230,000 € 1,094,891 EUR term loan 2017 / 2022 € 287,000 € 287,000 € 287,000 € 287,000 EUR term loan 2017 / 2020 € 400,000 € 400,000 € 400,000 € 400,000 € 3,183,030 € 1,905,355 Maximum amount available Balance outstanding 2018 2018 (1) Revolving credit USD 2017 / 2022 $ 900,000 € 786,026 $ — € — Revolving credit EUR 2017 / 2022 € 600,000 € 600,000 € — € — USD term loan 2017 / 2022 $ 1,350,000 € 1,179,039 $ 1,350,000 € 1,179,039 EUR term loan 2017 / 2022 € 315,000 € 315,000 € 315,000 € 315,000 EUR term loan 2017 / 2020 € 400,000 € 400,000 € 400,000 € 400,000 € 3,280,065 € 1,894,039 (1) Amounts shown are excluding debt issuance costs. At December 31, 2019 and 2018, the Company had letters of credit outstanding in the amount of $1,135 and $1,690 (€1,010 and €1,476), respectively, under the USD revolving credit facility, which are not included above as part of the balance outstanding at those dates but which reduce available borrowings under the applicable revolving credit facility. Bonds At December 31, 2019 and 2018, the Company’s bonds consisted of the following: Bonds in THOUS Face Book value Book value Issuer/Transaction amount Maturity Coupon 2019 in € 2018 in € FMC US Finance II, Inc. 2012 $ 800,000 July 31, 2019 5.625 % — 698,167 FMC Finance VIII S.A. 2012 € 250,000 July 31, 2019 5.25 % — 249,773 FMC US Finance II, Inc. 2014 $ 500,000 October 15, 2020 4.125 % 444,507 435,376 FMC US Finance, Inc. 2011 $ 650,000 February 15, 2021 5.75 % 577,069 564,882 FMC Finance VII S.A. 2011 € 300,000 February 15, 2021 5.25 % 299,498 299,035 FMC US Finance II, Inc. 2012 $ 700,000 January 31, 2022 5.875 % 622,135 609,532 Fresenius Medical Care AG & Co. KGaA, 2019 € 650,000 November 29, 2023 0.25 % 646,936 — FMC US Finance II, Inc. 2014 $ 400,000 October 15, 2024 4.75 % 354,338 347,297 Fresenius Medical Care AG & Co. KGaA, 2018 € 500,000 July 11, 2025 1.50 % 496,138 496,384 Fresenius Medical Care AG & Co. KGaA, 2019 € 600,000 November 30, 2026 0.625 % 593,216 — FMC US Finance III, Inc. 2019 $ 500,000 June 15, 2029 3.75 % 435,673 — Fresenius Medical Care AG & Co. KGaA, 2019 € 500,000 November 29, 2029 1.25 % 497,109 — 4,966,619 3,700,446 All bonds issued before 2018 , as well as the bonds issued by FMC US Finance III in 2019, are guaranteed by the Company and by FMCH and may be redeemed at the option of the respective issuers at any time at 100% of principal plus accrued interest and a premium calculated pursuant to the terms of the indenture. The holders of our bonds have the right to request that the issuers repurchase the bonds at 101% of principal plus accrued interest upon the occurrence of a change of control of the Company followed by a decline in the ratings of the respective bonds. The Company has agreed to a number of covenants to provide protection to the holders which, under certain circumstances and with certain exceptions for the bonds issued since 2018, limit the ability of the Company and its subsidiaries to, among other things, incur debt, incur liens, engage in sale-leaseback transactions and merge or consolidate with other companies or sell assets. The limitation on incurrence of debt in the bonds issued before 2018 was suspended automatically as the rating of the respective bonds reached investment grade status. At December 31, 2019, the Company was in compliance with all of its covenants under the bonds. The bonds issued by FMC Finance VIII S.A. in the amount of €250,000 and the bonds issued by Fresenius Medical Care US Finance II, Inc. in the amount of $800,000, which were due on July 31, 2019, were redeemed at maturity. Convertible bonds On September 19, 2014, the Company issued €400,000 principal amount of equity-neutral convertible bonds with a coupon of 1.125%. The bonds were issued at par and repaid as planned on January 31, 2020. In November 2019, the conversion feature expired and no conversions occurred. The call options on its shares that the Company purchased in 2014 to fully offset the economic exposure from the conversion feature also expired in November 2019. Accounts Receivable Facility The Company refinanced the Accounts Receivable Facility on December 20, 2018 increasing the facility to $900,000 and extending it until December 20, 2021. The following table shows the available and outstanding amounts under the Accounts Receivable Facility at December 31, 2019 and December 31, 2018: Accounts Receivable Facility - Maximum amount available and balance outstanding in THOUS Maximum amount available Balance outstanding 2019 (1) 2019 (2) Accounts Receivable Facility $ 900,000 € 801,139 $ 427,000 € 380,096 Maximum amount available Balance outstanding 2018 (1) 2018 (2) Accounts Receivable Facility $ 900,000 € 786,026 $ — € — (1) Subject to availability of sufficient accounts receivable meeting funding criteria. (2) Amounts shown are excluding debt issuance costs. The Company also had letters of credit outstanding under the Accounts Receivable Facility in the amount of $23,460 at December 31, 2019 and $26,631 at December 31, 2018 (€20,883 and €23,259). These letters of credit are not included above as part of the balance outstanding at December 31, 2019 and 2018; however, they reduce available borrowings under the Accounts Receivable Facility. Under the Accounts Receivable Facility, certain receivables are sold to NMC Funding Corporation ("NMC Funding"), a wholly-owned subsidiary. NMC Funding then assigns percentage ownership interests in the accounts receivable to certain bank investors. Under the terms of the Accounts Receivable Facility, NMC Funding retains the right, at any time, to recall all the then outstanding transferred interests in the accounts receivable. Consequently, the receivables remain on the Company's consolidated balance sheet and the proceeds from the transfer of percentage ownership interests are recorded as long-term debt. NMC Funding pays interest to the bank investors calculated based on the commercial paper rates for the particular tranches selected. At December 31, 2019, the interest rate was 1.98%. At December 31, 2018, this facility was not utilized by the Company. Refinancing fees, which include legal costs and bank fees, are amortized over the term of the facility. Other At December 31, 2019 and 2018, in conjunction with certain acquisitions and investments, the Company had fixed payments outstanding for acquisitions totaling approximately €27,611 and €16,713, respectively, of which €12,456 and €7,621, respectively, were classified as the current portion of long-term debt. |
Non-current provisions and othe
Non-current provisions and other non-current liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Non-current provisions and other non-current liabilities | |
Non-current provisions and other non-current liabilities | 15. Non-current provisions and other non-current liabilities Of the total amount of non-current provisions and other non-current liabilities amounting to €668,747 at December 31, 2019 (2018: €750,738), €219,129 (2018: €457,382) are due in between more than one and three years, €34,762 (2018: €107,080) are due in between three to five years and €414,856 (2018: €186,276) are due after five years. The item “Other non-current liabilities” in the amount of €559,944 at December 31, 2019 (2018: €622,291) includes, among others, noncontrolling interests subject to put provisions of €331,293 (2018: €324,295), variable payments outstanding for acquisitions of €55,424 (2018: €115,061) and derivatives of €50 (2018: €11,820). The following table shows the development of non-current provisions in the fiscal year: Development of non-current provisions in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Utilized Reversed Additions Reclassifications 2019 Personnel expenses 84,439 1,203 430 (3,294) (713) 19,065 (40,764) 60,366 Interest payable related to income taxes 29,231 150 — — (5,447) 2,177 — 26,111 Other non-current provisions 14,777 66 6,066 (283) (249) 1,949 — 22,326 Non-current provisions 128,447 1,419 6,496 (3,577) (6,409) 23,191 (40,764) 108,803 Personnel expenses mainly refer to provisions for share-based plans and provisions for severance payments. As at December 31, 2019, the provisions for share-based plans amounted to €47,411 (2018: €71,784). See note 20. The item “Other non-current provisions” in the table above includes provisions for asset retirement obligations. The increase during the period in the discounted amount arising from the passage over time and the effect of any change in the discount rate is not material. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefit plans | |
Employee benefit plans | 16. Employee benefit plans General FMC-AG & Co. KGaA recognizes pension costs and related pension liabilities for current and future benefits to qualified current and former employees of the Company. The Company’s pension plans are structured in accordance with the differing legal, economic and fiscal circumstances in each country. The Company currently has two types of plans, defined benefit and defined contribution plans. In general, plan benefits in defined benefit plans are based on all or a portion of the employees’ years of services and final salary. Plan benefits in defined contribution plans are determined by the amount of contribution by the employee and the employer, both of which may be limited by legislation, and the returns earned on the investment of those contributions. Upon retirement under defined benefit plans, the Company is required to pay defined benefits to former employees when the defined benefits become due. Defined benefit plans may be funded or unfunded. The Company has five major defined benefit plans, one funded plan in the U.S. and one in France as well as one unfunded plan in Germany and two in France. In the fourth quarter of 2019, FMC North America offered a lump-sum payout for its defined benefit pension plan to former employees. This settlement reduced the benefit obligation and resulted in a gain. Actuarial assumptions generally determine benefit obligations under defined benefit plans. The actuarial calculations require the use of estimates. The main factors used in the actuarial calculations affecting the level of the benefit obligations are: assumptions on life expectancy, the discount rate and future salary and benefit levels. Under the Company’s funded plans, assets are set aside to meet future payment obligations. An estimated return on the plan assets is recognized as income in the respective period. Actuarial gains and losses are generated when there are variations in the actuarial assumptions and by differences between the actual and the estimated projected benefit obligations and the return on plan assets for that year. The Company’s pension liability is impacted by these actuarial gains or losses. Under defined contribution plans, the Company pays defined contributions to an independent third party as directed by the employee during the employee’s service life, which satisfies all obligations of the Company to the employee. The employee retains all rights to the contributions made by the employee and to the vested portion of the Company paid contributions upon leaving the Company. The Company has a defined contribution plan in the U.S. Defined benefit pension plans During the first quarter of 2002 FMCH, the Company’s U.S. subsidiary, curtailed its defined benefit and supplemental executive retirement plans. Under the curtailment amendment for substantially all employees eligible to participate in the plan, benefits have been frozen as of the curtailment date and no additional defined benefits for future services will be earned. The Company has retained all employee benefit obligations as of the curtailment date. Each year FMCH contributes at least the minimum amount required by the Employee Retirement Income Security Act of 1974, as amended. In 2019, FMCH did not have a minimum funding requirement. The Company voluntarily provided €1,131 to the defined benefit plan. Expected funding for 2020 is €1,139. The benefit obligation for all defined benefit plans at December 31, 2019, was €976,467 (2018: €842,601) which consists of the gross benefit obligation of €399,339 (2018: €388,518) for the U.S. plan and of €5,498 (2018: €4,626) for the French plan, which are partially funded by plan assets, and the benefit obligation of €560,255 (2018: €439,677) for the German unfunded plan and the benefit obligation of €11,375 (2018: €9,780) for the two French unfunded plans. Related to defined benefit plans the Company is exposed to certain risks. Besides general actuarial risks, e.g. the longevity risk and the interest rate risk, the Company is exposed to market risk as well as to investment risk. The following table shows the changes in benefit obligations, the changes in plan assets and the deficit or surplus of the pension plans. Benefits paid as shown in the changes in benefit obligations represent payments made from both the funded and unfunded plans while the benefits paid as shown in the changes in plan assets include only benefit payments from the Company’s funded benefit plan. Deficit or surplus in € THOUS 2019 2018 Change in benefit obligation: Benefit obligation at beginning of year 842,601 792,739 Foreign currency translation (gains) losses 7,459 17,957 Changes in consolidation group — 123 Current service cost 30,070 25,467 Interest cost 28,016 24,364 Transfer of plan participants 194 80 Actuarial (gains) losses arising from changes in financial assumptions 140,923 (9,760) Actuarial (gains) losses arising from changes in demographic assumptions (2,306) 3,497 Actuarial (gains) losses arising from experience adjustments (4,873) 11,117 Remeasurements 133,744 4,854 Benefits paid (60,863) (22,983) Settlements (4,754) — Benefit obligation at end of year 976,467 842,601 Change in plan assets: Fair value of plan assets at beginning of year 317,585 291,256 Foreign currency translation gains (losses) 6,130 14,189 Interest income from plan assets 14,108 11,308 Actuarial gains (losses) arising from experience adjustments 34,131 (23,216) Actual return on plan assets 48,239 (11,908) Employer contributions 1,131 43,393 Benefits paid (56,961) (19,345) Fair value of plan assets at end of year 316,124 317,585 Deficit (surplus) at end of year 660,343 525,016 For the years 2019 and 2018, there were no effects from the asset ceiling. At December 31, 2019, the weighted average duration of the defined benefit obligation was 19 years (2018: 18 years). The net pension liability as of December 31, 2019 and 2018 is calculated as follows: Net pension liability in € THOUS 2019 2018 Deficit (surplus) at end of year 660,343 525,016 Benefit plans offered by other subsidiaries 39,147 35,424 Net pension liability 699,490 560,440 Benefit plans offered by the Company in the U.S., Germany and France contain a pension liability of €660,343 and €525,016 at December 31, 2019 and 2018, respectively. The pension liability consists of a current portion of €6,190 (2018: €5,384) which is recorded in the line item “Current provisions and other current liabilities” in the consolidated balance sheets. The non-current portion of €654,153 (2018: €519,632) is recorded in non-current liabilities as “Pension liabilities” in the consolidated balance sheets. As of December 31, 2019, €83,323 related to the U.S. pension plan, €560,255 related to the German plan and €16,765 related to the French plans. At December 31, 2018, €71,031 related to the U.S. pension plan, €439,677 related to the German plan and €14,308 related to the French plans. Approximately 67% of the beneficiaries are located in the U.S. and 7% in France with the majority of the remaining 26% located in Germany. Benefit plans offered by other subsidiaries outside of the U.S., Germany and France contain separate benefit obligations. The total net pension liability for these other plans was €39,147 and €35,424 at December 31, 2019 and 2018 and consists of a current pension liability of €4,105 (2018: €3,126), which is recognized in the line item “Current provisions and other current liabilities.” The non-current pension liability of €35,042 (2018: €32,298) for these plans is recorded in non-current liabilities as “Pension liabilities” in the consolidated balance sheets. The discount rates for all plans are based upon yields of portfolios of highly rated debt instruments with maturities that mirror each plan’s benefit obligation. The Company’s discount rates at December 31, 2019 and 2018 are the weighted average of these plans based upon their benefit obligations. The following weighted-average assumptions were utilized in determining benefit obligations at December 31, 2019 and 2018: Weighted average assumptions in % 2019 2018 Discount rate 2.35 3.27 Rate of compensation increase 3.18 3.21 Rate of pension increase 1.70 1.69 Sensitivity analysis Increases and decreases in principal actuarial assumptions by 0.5 percentage points would affect the pension liability at December 31, 2019 as follows: Sensitivity analysis in € THOUS 0.5% 0.5% increase decrease Discount rate (89,298) 104,053 Rate of compensation increase 16,040 (15,793) Rate of pension increase 46,089 (41,222) The sensitivity analysis was calculated based on the average duration of the pension obligations determined at December 31, 2019. The calculations were performed isolated for each significant actuarial parameter, in order to show the effect on the fair value of the pension liability separately. The sensitivity analysis for compensation increases and for pension increases excludes the U.S. pension plan because it is frozen and therefore is not affected by changes from these two actuarial assumptions. The defined benefit pension plans’ net periodic benefit costs are comprised of the following components for the years ended December 31, 2019, 2018 and 2017: Components of net periodic benefit cost in € THOUS 2019 2018 2017 Service cost 30,070 25,467 28,607 Net interest cost 13,908 13,056 11,087 (Gains) losses from settlements (4,754) — — Net periodic benefit costs 39,224 38,523 39,694 Service cost and net interest cost are allocated as personnel expense within costs of revenues; selling, general and administrative expense; or research and development expense. This is depending upon the area in which the beneficiary is employed. The gain from settlement is included in selling, general and administrative expense. The following weighted-average assumptions were used in determining net periodic benefit cost for the years ended December 31, 2019, 2018 and 2017: Weighted average assumptions in % 2019 2018 2017 Discount rate 3.27 3.08 3.25 Rate of compensation increase 3.21 3.22 3.23 Rate of pension increase 1.69 1.45 1.45 Expected benefit payments are as follows: Defined benefit pension plans: cash outflows in € THOUS 2019 2018 1 year 28,706 24,111 1 - 3 years 56,577 53,662 3 - 5 years 62,441 61,415 5 - 10 years 183,896 184,929 Total 331,620 324,117 Plan Assets The following table presents the fair values of the Company´s pension plan assets at December 31, 2019 and 2018: Fair values of plan assets in € THOUS Quoted prices Quoted prices in active in active markets for Significant Significant markets for Significant identical observable unobservable identical observable Asset category Total assets inputs inputs Total assets inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) 2019 2018 Equity investments Index funds (1) 85,321 8,440 76,881 — 77,718 1,972 75,746 Fixed income investments Government securities (2) 2,875 2,547 328 — 9,241 8,880 361 Corporate bonds (3) 202,642 — 202,642 — 186,500 — 186,500 Other bonds (4) 10,179 — 2,762 7,417 3,518 — 3,518 U.S. treasury money market funds (5) 14,999 14,999 — — 40,510 40,510 — Other types of investments Cash, money market and mutual funds (6) 108 108 — — 98 98 — Total 316,124 26,094 282,613 7,417 317,585 51,460 266,125 (1) This category comprises low-cost equity index funds not actively managed that track the S&P 500, S&P 400, Russell 2000, MSCI Emerging Markets Index and the Morgan Stanley International EAFE Index. (2) This Category comprises fixed income investments by the U.S. government and government sponsored entities. (3) This Category primarily represents investment grade bonds of U.S. issuers from diverse industries. (4) This Category comprises private placement bonds as well as collateralized mortgage obligations. (5) This Category represents funds that invest in U.S. treasury obligations directly or in U.S. treasury backed obligations. (6) This Category represents cash, money market funds as well as mutual funds comprised of high grade corporate bonds. The methods and inputs used to measure the fair value of plan assets at the balance sheet date are as follows: · Common stocks are valued at their market prices. · Index funds are valued based on market quotes. · Government bonds are valued based on both market prices and market quotes. · Corporate bonds and other bonds are valued based on market quotes. · Cash is stated at nominal value which equals the fair value. · U.S. Treasury money market funds as well as other money market and mutual funds are valued at their market price. Plan investment policy and strategy in the U.S. The Company periodically reviews the assumption for long-term expected return on pension plan assets. As part of the assumptions review, a range of reasonable expected investment returns for the pension plan as a whole was determined based on an analysis of expected future returns for each asset class weighted by the allocation of the assets. The range of returns developed relies both on forecasts, which include the actuarial firm's expected long-term rates of return for each significant asset class or economic indicator, and on broad-market historical benchmarks for expected return, correlation, and volatility for each asset class. The Company´s overall investment strategy is to achieve a mix of approximately 99% of investments for long-term growth and income and 1% in cash or cash equivalents. Investment income and cash or cash equivalents are used for near-term benefit payments. Investments are governed by the plan investment policy and include well diversified index funds or funds targeting index performance. The plan investment policy, utilizing a revised target investment allocation in a range around 26% equity and 74% fixed income investments, considers that there will be a time horizon for invested funds of more than 5 years. The total portfolio will be measured against a custom index that reflects the asset class benchmarks and the target asset allocation. The plan investment policy does not allow investments in securities of the Company or other related party securities. The performance benchmarks for the separate asset classes include: S&P 500 Index, S&P 400 Mid-Cap Index, Russell 2000 Index, MSCI EAFE Index, MSCI Emerging Markets Index, Barclays Capital Long-Corporate Bond Index, Bloomberg Barclays U.S. Corporate High Yield Index, and Bloomberg Barclays U.S. High Yield Fallen Angel 3% Capped Index. Defined contribution plans Most FMCH employees are eligible to join a 401(k) savings plan. Employees can deposit up to 75% of their pay up to a maximum of $19.5 if under 50 years old ($25.6 if 50 or over) under this savings plan. The Company will match 50% of the employee deposit up to a maximum Company contribution of 3% of the employee’s pay. The Company’s total expense under this defined contribution plan for the years ended December 31, 2019, 2018, and 2017, was €53,290, €53,872 and €48,746 respectively. Additionally, the Company contributed for the years ended December 31, 2019, 2018, and 2017 €25,950, €24,721 and €24,329 to state pension plans. |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' equity | |
Shareholders' equity | 17. Shareholders' equity Capital stock At December 31, 2019, the Company’s share capital consists of 304,436,876 bearer shares without par value ( Stückaktien ) and a nominal value of €1.00 each. The Company’s share capital has been fully paid in. The General Partner of FMC-AG & Co. KGaA, Fresenius Medical Care Management AG, Hof an der Saale, is not obliged to make a capital contribution and has not made a capital contribution. It does not participate in the profits and losses or in the assets of the Company. The General Partner receives for the assumption of the management of the Company and the liability an annual remuneration independent of profit and loss in the amount of 4% of its share capital (see note 5 d). The General Partner shall be reimbursed for any and all expenses in connection with management of the Company's business, which includes remuneration of the members of its Management Board and its Supervisory Board. Pursuant to Sections 33 and 34 of the German Securities Trading Act (“WpHG”) any party subject to the notification requirement shall notify the Company when certain mandatory reportable thresholds for voting rights, also by taking account the attribution provisions, are reached, exceeded or fallen below. Section 38 WpHG also stipulates a notification requirement when certain thresholds are reached, exceeded or have fallen below through directly or indirectly held instruments and also, according to Section 39 WpHG when certain thresholds are reached, exceeded or have fallen below through the addition of voting rights according to Section 33 WpHG and instruments according to Section 38 WpHG. Notifications received by the Company subject to the notification requirements were published in accordance with the applicable legal provisions, including publication in the Investors section of the Company's website at www.freseniusmedicalcare.com. In a notification dated February 8, 2011, Fresenius SE disclosed to the Company pursuant to Section 21 of the WpHG at the date of notification (predecessor provision to Section 33 of the WpHG) that it held 35.74% of the voting rights in FMC-AG & Co. KGaA. At December 31, 2019, Fresenius SE held 31.00% of the Company’s voting rights. Net of treasury shares held by FMC-AG & Co. KGaA in accordance with Section 16 (2) sentence 2 of the German Stock Corporation Act (AktG), Fresenius SE held 31.64% of the Company’s voting rights. In addition, Fresenius SE is the sole stockholder of the General Partner. On October 30, 2019, FIL Limited, Pembroke, Bermuda, including attributed subsidiaries, disclosed pursuant to Section 33, 34 of the WpHG that 2.98% of the voting rights of FMC-AG & Co. KGaA were held as of October 29, 2019. On May 13, 2019, BlackRock, Inc., Wilmington, DE, U.S., ("BlackRock") including attributed subsidiaries disclosed pursuant to Section 33, 34 of the WpHG that 4.83% of the voting rights of FMC-AG & Co. KGaA and instruments relating to 0.07% of the voting rights of FMC-AG & Co. KGaA were held as of May 8, 2019. On June 7, 2019, BlackRock filed an amended Schedule 13G under the U.S. Securities Exchange Act of 1934, as amended, reporting beneficial ownership of 4.96% of the Company's ordinary shares. The general meeting of a partnership limited by shares may approve Authorized Capital ( genehmigtes Kapital ). The resolution creating Authorized Capital requires the affirmative vote of a majority of three quarters of the capital represented at the vote and may authorize the General Partner and its Management Board to issue new shares up to a stated amount for a period of up to five years. The nominal value of any proposed increase of the Authorized Capital may not exceed half of the issued capital stock at the time of the authorization. In addition, the general meeting of a partnership limited by shares may create Conditional Capital ( bedingtes Kapital ) for the purpose of issuing (i) new shares to holders of convertible bonds or other securities which grant a right to shares, (ii) new shares as the consideration in a merger with another company, or (iii) new shares offered to management or employees. In each case, the authorizing resolution requires the affirmative vote of a majority of three quarters of the capital represented at the vote. The nominal value for any proposed increase of the Conditional Capital may not exceed half or, in the case of Conditional Capital created for the purpose of issuing shares to management and employees, 10% of the Company’s issued capital at the time of the resolution. All resolutions increasing the capital of a partnership limited by shares also require the consent of the General Partner in order for the resolutions to go into effect. The subscribed capital comprised solely ordinary shares due to the conversion of all outstanding preference shares into ordinary shares (approved at FMC-AG & Co. KGaA's Annual General Meeting and Preference Shareholder Meeting held on May 16, 2013) as well as the options associated with the preference shares on a 1:1 basis. Authorized capital By resolution of the Company’s Annual General Meeting (“AGM”) on May 19, 2015, the General Partner was authorized, with the approval of the Supervisory Board, to increase, on one or more occasions, the Company’s share capital until May 18, 2020 up to a total of €35,000 through issue of new bearer ordinary shares for cash contributions, “Authorized Capital 2015/I”. Additionally, the newly issued shares may be taken up by a credit and/or financial institution or a consortium of such credit and/or financial institutions retained by the General Partner with the obligation to offer them to the shareholders of the Company. The General Partner is entitled, subject to the approval of the supervisory board, to exclude the pre-emption rights of the shareholders. However, such an exclusion of pre-emption rights will be permissible only for fractional amounts. No Authorized Capital 2015/I has been issued at December 31, 2019. In addition, by resolution of the AGM of shareholders on May 19, 2015, the General Partner was authorized, with the approval of the Supervisory Board, to increase, on one or more occasions, the share capital of the Company until May 18, 2020 up to a total of €25,000 through the issue of new bearer ordinary shares for cash contributions or contributions in kind, “Authorized Capital 2015/II”. The new shares can also be obtained by a credit and/or financial institution or a consortium of such credit and/or financial institutions retained by the General Partner with the obligation to offer the shares to the Company’s shareholders for subscription. The General Partner is entitled, subject to the approval of the Supervisory Board, to exclude the pre-emption rights of the shareholders. However, such exclusion of pre-emption rights will be permissible only if (i) in case of a capital increase against cash contributions, the nominal value of the issued shares does not exceed 10% of the nominal share value of the Company’s share capital and the issue price for the new shares is at the time of the determination by the General Partner not significantly lower than the stock price of the existing listed shares of the same class and with the same rights or, (ii) in case of a capital increase against contributions in kind, the purpose of such increase is to acquire an enterprise, parts of an enterprise or an interest in an enterprise. No Authorized Capital 2015/II has been issued at December 31, 2019. Authorized Capital 2015/I and Authorized Capital 2015/II became effective upon registration with the commercial register of the local court in Hof an der Saale on June 10, 2015. Conditional capital By resolution of the Company’s AGM on May 12, 2011, the Company’s share capital was conditionally increased with regards to the Stock Option Plan 2011 (“2011 SOP”) by up to €12,000 subject to the issue of up to 12 million no par value bearer ordinary shares with a nominal value of €1.00 each (“Conditional Capital 2011/I”), (see note 20). The Conditional Capital increase is only executed to the extent subscription rights were awarded under the 2011 SOP, the holders of the subscription rights exercise their right and the Company does not use treasury shares to fulfill the subscription rights with each stock option awarded exercisable for one ordinary share (see note 20). The Company has the right to deliver ordinary shares that it owns or purchases in the market in lieu of increasing capital by issuing new shares. At December 31, 2019, 3,488,989 options remained outstanding with a remaining average term of 3.23 years under the 2011 SOP. For the year ending December 31, 2019, 328,996 options had been exercised under the 2011 SOP (see note 20). Conditional capital at December 31, 2019 was €9,728 in total, all relating to the 2011 SOP (see note 20). A total of 328,996 shares were issued out of Conditional Capital 2011/I during 2019 (2018: 858,652 shares), increasing the Company’s capital stock by €329 (2018: €859). Treasury stock On the basis of the authorization granted by the Company’s AGM on May 12, 2011 to conduct a share buy-back program, the Company repurchased 7,548,951 shares in 2013 for an average weighted stock price of €51.00 per share. The Company redeemed 6,549,000 of these repurchased shares on February 16, 2016 in order to decrease its share capital at an average weighted price of €51.00 per share. By resolution of the Company’s AGM on May 12, 2016, the General Partner is authorized to purchase treasury shares up to a maximum amount of 10% of the registered share capital existing at the time of this resolution until May 11, 2021. The shares acquired, together with other treasury shares held by the Company or attributable to the Company pursuant to sections 71a et seqq. AktG, must at no time exceed 10% of the registered share capital. The purchase will be made through the stock exchange, by way of a public tender offer, or a public invitation to shareholders to submit an offer for sale. This authorization is not applicable for the purpose of trading in treasury shares. The General Partner is authorized to use treasury shares purchased on the basis of this authorization or any other earlier authorization for any legally permissible purpose, in particular (i) to redeem shares without requiring any further resolution by the General Meeting, (ii) to sell treasury shares to third parties against contributions in kind, (iii) to award treasury shares, in lieu of the utilization of conditional capital of the Company, to employees of the Company and companies affiliated with the Company, including members of the management of affiliated companies, and use them to service options or obligations to purchase shares of the Company, and (iv) to use treasury shares to service bonds carrying warrant and/or conversion rights or conversion obligations issued by the Company or companies affiliated with the Company pursuant to section 17 AktG. On the basis of the authorization granted by the Company’s Annual General Meeting on May 12, 2016 to conduct a share buy-back program, the Company repurchased treasury shares for the purpose of capital reduction. The total number of shares purchased as of December 31, 2019 will be used solely to either reduce the registered share capital of the Company by cancellation of the acquired shares, or to fulfill employee participation programs of the Company. The following tabular disclosure provides the number of shares acquired in the context of the share buy-back programs as well as the repurchased treasury stock: Treasury Stock Total number of shares purchased and retired as part of publicly Average price per announced plans or Total value of Period share programs shares (1) in € in € THOUS December 31, 2016 51.00 999,951 50,993 Purchase of Treasury Stock December 2017 87.79 660,000 57,938 December 31, 2017 65.63 1,659,951 108,931 Purchase of Treasury Stock May 2018 86.69 173,274 15,020 June 2018 86.14 257,726 22,201 Repurchased Treasury Stock 86.37 431,000 37,221 Retirement of repurchased Treasury Stock December 2018 87.23 1,091,000 95,159 December 31, 2018 51.00 999,951 50,993 Purchase of Treasury Stock March 2019 69.86 1,629,240 113,816 April 2019 72.83 1,993,974 145,214 May 2019 72.97 147,558 10,766 Repurchased Treasury Stock 71.55 3,770,772 269,796 Retirement of repurchased Treasury Stock June 2019 71.55 3,770,772 269,796 Purchase of Treasury Stock June 2019 67.11 504,672 33,870 July 2019 66.77 1,029,655 68,748 August 2019 57.53 835,208 48,050 September 2019 59.67 627,466 37,445 October 2019 57.85 692,910 40,084 November 2019 64.78 852,859 55,245 December 2019 63.85 564,908 36,067 Repurchased Treasury Stock (2) 62.55 5,107,678 319,509 TOTAL 60.66 6,107,629 370,502 (1) The value of shares repurchased in 2017, 2018 and 2019 is inclusive of fees (net of taxes) paid in the amount of approximately €12, €8 and €11 (in € THOUS), respectively, for services rendered. (2) At December 31, 2019, the maximum number of shares that may be purchased pursuant to the buy-back program expiring on June 17, 2020 is 6,892,322 Additional paid-in capital Additional paid-in capital is comprised of the premium paid on the issue of shares and stock options, the tax effects from stock options, the compensation expense from stock options, which is recognized according to IFRS 2 as well as changes in ownership interest in a subsidiary that does not result in a loss of control. Retained earnings Retained earnings is comprised of earnings generated by group entities in prior years to the extent that they have not been distributed as well as changes of the noncontrolling interests subject to put provisions. Dividends Under German law, the amount of dividends available for distribution to shareholders is based upon the unconsolidated retained earnings of the Company as reported in its balance sheet determined in accordance with the German Commercial Code ( Handelsgesetzbuch ). Cash dividends of €354,636 for 2018 in the amount of €1.17 per share were paid on May 21, 2019. Cash dividends of €324,838 for 2017 in the amount of €1.06 per share were paid on May 23, 2018. Cash dividends of €293,973 for 2016 in the amount of €0.96 per share were paid on May 16, 2017. Noncontrolling interests Noncontrolling interests represent the proportion of the net assets of consolidated subsidiaries owned by minority shareholders. The Company has purchase obligations under options held by the holders of noncontrolling interests in certain of its subsidiaries. These obligations result from contractual put options and are exercisable by the owners of the noncontrolling interests. In addition to noncontrolling interests the potential obligations under these put options are recognized at fair value in other current or non-current liabilities by profit or loss neutral reclassification from equity. |
Supplementary information on ca
Supplementary information on capital management | 12 Months Ended |
Dec. 31, 2019 | |
Supplementary information on capital management | |
Supplementary information on capital management | 18. Supplementary information on capital management The principle objectives of the Company's capital management strategy are to optimize the weighted average cost of capital and to achieve a balanced mix of total equity and debt. The dialysis industry, in which the Company has a strong market position in global, growing and largely non-cyclical markets, is characterized by stable cash flows. Due to the Company's payors' mostly high credit quality, it is able to generate high, stable, predictable and sustainable cash flows. These generated cash flows allow a reasonable proportion of debt, through the employment of an extensive mix of debt. As of December 31, 2019 and December 31, 2018, total equity and debt were as follows: Total equity, debt and total assets in € THOUS 2019 2018 Total equity including noncontrolling interests 13,227,237 12,901,958 Debt and lease liabilities 13,782,448 7,546,228 Total assets 32,934,735 26,242,268 Debt and lease liabilities in % of total assets 41.8 % 28.8 % Total equity in % of total assets (equity ratio) 40.2 % 49.2 % The Company is not subject to any capital requirements provided for in its Articles of Association. The Company has obligations to issue shares out of the conditional capital relating to the exercise of stock options on the basis of the existing 2011 SOP stock option plan (see note 20). The Company conducts a share buy-back program. The repurchased shares will be used solely to either reduce the registered share capital of the Company by cancellation of the acquired shares or to fulfill employee participation programs (see note 17). Assuring financial flexibility is a top priority in the Company’s financing strategy. This flexibility is achieved through a wide range of financing instruments and a high degree of diversification of investors. The Company’s maturity profile displays a broad spread of maturities with a high proportion of medium and long-term financings. In the choice of financing instruments market capacity, investor diversification, flexibility, credit conditions and the existing maturity profile are taken into account (see note 14). The Company’s financing structure and business model are reflected in the investment grade ratings. The Company is covered and rated investment grade by the three leading rating agencies, Moody’s, Standard & Poor’s and Fitch. Rating (1) Standard & Poor's Moody's Fitch Corporate credit rating BBB Baa3 BBB- Outlook stable stable stable (1) A rating is not a recommendation to buy, sell or hold securities of the Company, and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Earnings per share | 19. Earnings per share The following table contains reconciliations of the numerators and denominators of the basic and diluted earnings per share computations for 2019, 2018 and 2017: Reconciliation of basic and diluted earnings per share in € THOUS, except share and per share data 2019 2018 2017 Numerators: Net income attributable to shareholders of FMC-AG & Co. KGaA 1,199,619 1,981,924 1,279,788 Denominators: Weighted average number of shares outstanding 302,691,397 306,541,706 306,563,400 Potentially dilutive shares 57,892 684,681 719,912 Basic earnings per share 3.96 6.47 4.17 Diluted earnings per share 3.96 6.45 4.16 |
Share-based plans
Share-based plans | 12 Months Ended |
Dec. 31, 2019 | |
Share-based plans | |
Share-based plans | 20. Share-based plans The Company accounts for its share-based plans in accordance with IFRS 2. As of December 31, 2019, the Company has various share-based compensation plans, which may either be equity- or cash-settled. Fresenius Medical Care AG & Co. KGaA long-term incentive plans during 2016–2019 As of May 11, 2016, the issuance of stock options and Phantom Stock under the FMC-AG & Co. KGaA Long-Term Incentive Program 2011 (“LTIP 2011”) is no longer possible. Furthermore, as of January 1, 2019, the issuance of Performance Shares under the FMC-AG & Co. KGaA Long-Term Incentive Plan 2016 (“LTIP 2016”) is no longer possible. In order to continue to enable the members of the Management Board, the members of the management boards of affiliated companies and managerial staff members to adequately participate in the long-term, sustained success of the Company, successor programs effective January 1, 2019 were introduced. For members of the Management Board, the Supervisory Board of the Management AG has approved and adopted the Fresenius Medical Care Management AG Management Board Long-Term Incentive Plan 2019 (“MB LTIP 2019”). For the members of the management boards of affiliated companies and managerial staff members, the Management Board of the Management AG has approved and adopted the Fresenius Medical Care AG & Co. KGaA Long-Term Incentive Plan 2019 (“LTIP 2019”). Additionally, the Management Board of the Management AG has approved and adopted the Fresenius Medical Care AG & Co. KGaA NxStage Long-Term Incentive Plan (“NxStage LTIP”) for the management board and managerial staff members of NxStage in the course of the integration of NxStage into the Company. The MB LTIP 2019, the LTIP 2019, the NxStage LTIP and the LTIP 2016 are variable compensation programs with long-term incentive effects. Similar to the LTIP 2016, which granted so-called “Performance Shares” annually or semiannually from 2016 to 2018, pursuant to the MB LTIP 2019 and the LTIP 2019, plan participants may be granted Performance Shares once or twice during 2019 for the MB LTIP 2019 and throughout 2019 to 2021 for the LTIP 2019. Pursuant to the NxStage LTIP, plan participants were granted Performance Shares in February 2019. Performance Shares are non-equity, cash-settled virtual compensation instruments which may entitle plan participants to receive a cash payment depending on the achievement of pre-defined performance targets further defined below as well as the Company’s share price development. For members of the Management Board, the Supervisory Board of the Management AG will, in due exercise of its discretion and taking into account the individual responsibility and performance of each Management Board member, determine an initial value for each grant for any awards to Management Board members. For plan participants other than the members of the Management Board, such determination will be made by the Management Board. The initial grant value is determined in the currency in which the respective participant receives his or her base salary at the time of the grant. In order to determine the number of Performance Shares each plan participant receives, the respective grant value will be divided by the value per Performance Share at the time of the grant, which is mainly determined based on the average price of the Company’s shares over a period of thirty calendar days prior to the respective grant date. The number of granted Performance Shares may change over the performance period of three years, depending on the level of achievement of the following: (i) revenue growth at constant currency (“Revenue Growth”), (ii) growth of the net income attributable to the shareholders of FMC-AG & Co. KGaA at constant currency (“Net Income Growth”) and (iii) return on invested capital (“ROIC”). For the LTIP 2019 exclusively, the level of achievement for Performance Shares granted in fiscal year 2019 may be subject to an increase if certain targets in relation to the second phase of the Company’s Global Efficiency Program are achieved (“GEP-II targets”). Revenue, net income and ROIC are determined according to the Company’s consolidated reported and audited figures in Euro for the financial statements prepared in accordance with IFRS, applying the respective plan terms. Revenue Growth, Net Income Growth and the fulfillment of the GEP-II targets, for the purpose of the relevant plan, are determined at constant currency. An annual target achievement level of 100% will be reached for the Revenue Growth performance target if Revenue Growth is 7% in each individual year of the three-year performance period; Revenue Growth of 0% will lead to a target achievement level of 0% and the maximum target achievement level of 200% will be reached in case of Revenue Growth of at least 16%. If Revenue Growth ranges between these values, the degree of target achievement will be linearly interpolated between these values. An annual target achievement level of 100% for the Net Income Growth performance target will be reached if Net Income Growth is 7% in each individual year of the three-year performance period. In case of Net Income Growth of 0%, the target achievement level will also be 0%; the maximum target achievement of 200% will be reached in the case of Net Income Growth of at least 14%. Between these values, the degree of target achievement will be determined by means of linear interpolation. With regard to ROIC, an annual target achievement level of 100% will be reached if the target ROIC as defined for the respective year is reached. For the MB LTIP 2019 and the LTIP 2019, the target ROIC is 7.9% for 2019 (LTIP 2016: 7.3% in 2016 and increased by 0.2 percentage points for each consecutive year until 2020; NxStage LTIP: 7.7% in 2018 and increased by 0.2 percentage points for each consecutive year until 2020). A target achievement level of 0% will be reached if the ROIC falls below the target ROIC for the respective year by 0.2 percentage points or more, whereas the maximum target achievement level of 200% will be reached if the target ROIC for the respective year is exceeded by 0.2 percentage points or more. The degree of target achievement will be determined by means of linear interpolation if the ROIC ranges between these values. In case the annual ROIC target achievement level in the third year of a performance period is equal or higher than the ROIC target achievement level in each of the two previous years of such performance period, the ROIC target achievement level of the third year is deemed to be achieved for all years of the respective performance period. The achievement level for each of the three performance targets will be weighted annually at one-third to determine the yearly target achievement for each year of the three-year performance period. The level of overall target achievement over the three-year performance period will then be determined on the basis of the mean of these three average yearly target achievements. The overall target achievement can be in a range of 0% to 200%. For the LTIP 2019, the overall target achievement for Performance Shares granted in fiscal year 2019 shall be increased by 20 percentage points if the GEP-II targets achievement is 100%. In case of a GEP-II targets achievement between 0% and 100%, the respective increase of the overall target achievement will be calculated by means of linear interpolation. The overall target achievement increased by the GEP-II targets achievement shall not exceed 200%. The number of Performance Shares granted to the plan participants at the beginning of the performance period will each be multiplied by the level of overall target achievement in order to determine the final number of Performance Shares. For the MB LTIP 2019, the final number of Performance Shares is generally deemed earned four years after the day of a respective grant (the four-year vesting period). The number of such vested Performance Shares is then multiplied by the average Company share price over a period of thirty days prior to the lapse of this four-year vesting period. The respective resulting amount will then be paid to the plan participants as cash compensation. For plan participants of the LTIP 2019, the final number of Performance Shares is generally deemed earned three years after the day of a respective grant (the three-year vesting period). The number of such vested Performance Shares is then multiplied by the average Company share price over a period of thirty days prior to the lapse of this three-year vesting period. The respective resulting amount, which is capped in total at an amount equaling 400% of the grant value received by the participant, will then be paid to the plan participants as cash compensation. For plan participants of the NxStage LTIP, the final number of Performance Shares granted in February 2019 is generally deemed earned in December 2022 (the vesting period). The number of such vested Performance Shares is then multiplied by the average Company share price over a period of thirty days prior to the lapse of this vesting period. The respective resulting amount will then be paid to the plan participants as cash compensation. For plan participants of the LTIP 2016, the final number of Performance Shares is generally deemed earned four years after the day of a respective grant (the four-year vesting period). The number of such vested Performance Shares is then multiplied by the average Company share price over a period of thirty days prior to the lapse of this four-year vesting period. The respective resulting amount will then be paid to the plan participants as cash compensation. During 2019, the Company awarded 114,999 Performance Shares under the MB LTIP 2019 at a measurement date weighted average fair value of €60.70 each and a total fair value of €6,980, which will be revalued if the fair value changes. The total fair value will be amortized over the four-year vesting period. During 2019, the Company awarded 817,089 Performance Shares under the LTIP 2019 at a measurement date weighted average fair value of €62.16 each and a total fair value of €50,790, which will be revalued if the fair value changes. The total fair value will be amortized over the three-year vesting period. During 2019, the Company awarded 55,978 Performance Shares under the NxStage LTIP at a measurement date weighted average fair value of €62.17 each and a total fair value of €3,480, which will be revalued if the fair value changes. The total fair value will be amortized over the vesting period. During 2018, the Company awarded 632,804 Performance Shares under the LTIP 2016 including 73,315 Performance Shares to the members of the Management Board at a measurement date weighted average fair value of €51.99 each and a total fair value of €32,900, which will be revalued if the fair value changes. The total fair value will be amortized over the four-year vesting period. During 2017, the Company awarded 614,985 Performance Shares under the LTIP 2016 including 73,746 Performance Shares to the members of the Management Board at a measurement date weighted average fair value of €83.40 each and a total fair value of €51,290, which will be revalued if the fair value changes. The total fair value will be amortized over the four-year vesting period. Fresenius Medical Care AG & Co. KGaA long-term incentive program 2011 On May 12, 2011, the 2011 SOP was established by resolution of the Company’s AGM. The 2011 SOP, together with the Phantom Stock Plan 2011, which was established by resolution of the General Partner’s Management and supervisory boards, forms the Company’s LTIP 2011. Under the LTIP 2011, participants were granted awards, which consisted of a combination of stock options and Phantom Stock. The final grant under the LTIP 2011 was made in December 2015. Awards under the LTIP 2011 were subject to a four-year vesting period. Vesting of the awards granted was subject to achievement of pre-defined performance targets. The 2011 SOP was established with a conditional capital increase up to €12,000 subject to the issue of up to twelve million non-par value bearer ordinary shares with a nominal value of €1.00 per share. Stock options granted under the LTIP 2011 have an eight-year term and can be exercised for the first time after a four-year vesting period. The exercise price of stock options granted under the LTIP 2011 shall be the average stock exchange price on the Frankfurt Stock Exchange of the Company’s shares during the 30 calendar days immediately prior to each grant date. Stock options granted under the LTIP 2011 to U.S. participants are non-qualified stock options under the United States Internal Revenue Code of 1986, as amended. Stock options under the LTIP 2011 are not transferable by a participant or a participant’s heirs, and may not be transferred, pledged, assigned, or disposed of otherwise. Phantom Stock awards under the LTIP 2011 entitle the holders to receive payment in euro from the Company upon exercise of the Phantom Stock. The payment per Phantom Stock in lieu of the issuance of such stock shall be based upon the share price on the Frankfurt Stock Exchange of one of the Company’s shares on the exercise date. Phantom Stock awards have a five-year term and can be exercised for the first time after a four-year vesting period. For participants who are U.S. taxpayers, the Phantom Stock is deemed to be exercised in any event in the month of March following the end of the vesting period. New incentive bonus plan In 2019, the members of the Management Board were eligible for performance-related compensation that depended upon achievement of pre-defined targets. The targets are measured based on the adjusted net income growth attributable to the shareholders of FMC-AG & Co. KGaA at constant currency (”Adjusted Net Income Growth “), adjusted net cash provided by (used in) operating activities after capital expenditures, before acquisitions and investments (“Adjusted Free Cash Flow”) in percent of revenues and adjusted operating margin (“Adjusted Operating Margin“), and are derived from the comparison of targeted and actually achieved current year figures. Targets are divided into Group level targets and those to be achieved in individual regions and areas of responsibility. Performance-related bonuses for 2019 consist proportionately of a cash component and a share-based component which will be paid in cash. Upon meeting the annual targets, the cash component for the year 2019 will be paid in the following year, after the consolidated financial statements for 2019 have been approved. The share-based component is subject to a three-year vesting period, although a shorter period may apply in special cases (e.g. occupational disability, retirement and employment contracts which were not extended by the Company). The amount of cash for the payment relating to the share-based component shall be based on the share price of Fresenius Medical Care AG & Co. KGaA ordinary shares upon exercise. For each of the members of the Management Board, the amount of the achievable pay component as well as of the allocation value of the cash-settled share-based compensation is capped. Share-based compensation related to this plan for fiscal years ended 2019, 2018 and 2017 was €2,623, €3,414 and €3,418, respectively. Information on holdings under share-based plans At December 31, 2019, the members of the Management Board held 102,435 Performance Shares under the MB LTIP 2019. Former members of the Management Board held 12,564 Performance Shares under the MB LTIP 2019. At December 31, 2019, the plan participants held 797,659 Performance Shares under the LTIP 2019. At December 31, 2019, the plan participants held 45,007 Performance Shares under the NxStage LTIP. At December 31, 2019, the members of the Management Board held 211,878 Performance Shares and plan participants other than the members of the Management Board held 1,747,142 Performance Shares under the LTIP 2016. At December 31, 2019, the members of the Management Board held 23,336 Phantom Stock and plan participants other than the members of the Management Board held 311,650 Phantom Stock under the LTIP 2011. At December 31, 2019, the members of the Management Board held 452,989 stock options and plan participants other than the members of the Management Board held 3,036,000 stock options under the 2011 SOP. Additional information on share-based plans The table below provides reconciliations for stock options outstanding at December 31, 2019, as compared to December 31, 2018. Transactions Weighted Average Exercise Options Price Stock options for shares (in THOUS) in € Balance at December 31, 2018 3,896 68.85 Granted — — Exercised (1) 329 51.72 Forfeited 78 75.08 Balance at December 31, 2019 3,489 70.32 (1) The average share price at the date of exercise of the options was €67.62. The following table provides a summary of fully vested options outstanding and exercisable at December 31, 2019: Share Options Outstanding Exercisable Weighted Weighted Weighted Range of average average average exercise remaining exercise exercise prices Number of contractual price Number of price in € options life in € options in € 45.01 - 50.00 767,001 2.38 49.90 767,001 49.90 50.01 - 55.00 825 0.93 52.27 825 52.27 55.01 - 60.00 133,375 1.24 57.68 133,375 57.68 60.01 - 65.00 — — — — — 65.01 - 70.00 — — — — — 70.01 - 75.00 — — — — — 75.01 - 80.00 2,587,788 3.58 77.03 2,587,788 77.03 3,488,989 3.23 70.32 3,488,989 70.32 At December 31, 2019, there were no total unrecognized compensation costs related to non-vested options. During the fiscal years ended December 31, 2019, 2018, and 2017, the Company received cash of €17,014, €43,508 and €42,234, respectively, from the exercise of stock options (see note 17). The intrinsic value of stock options exercised for the twelve-month periods ended December 31, 2019, 2018, and 2017 was €5,231, €29,440 and €31,580, respectively. The compensation expense related to equity-settled stock option programs is determined based upon the fair value on the grant date and the number of stock options granted which will be recognized over the four-year vesting period. In connection with the 2011 SOP, the Company incurred compensation expense of €1,992, €6,713 and €11,736 for the fiscal years ended December 31, 2019, 2018 and 2017, respectively. The compensation expense related to cash-settled share-based payment transactions is determined based upon the fair value at the measurement date and the number of Phantom Stock or Performance Shares granted which will be recognized over the vesting period. In connection with cash-settled share-based payment transactions, the Company recognized compensation expense of: · €656, €0 and €0 related to Performance Shares under the MB LTIP 2019 for the fiscal years ended December 31, 2019, 2018 and 2017, respectively, · €4,771, €0 and €0 related to Performance Shares under the LTIP 2019 for the fiscal years ended December 31, 2019, 2018 and 2017, respectively, · €572, €0 and €0 related to Performance Shares under the NxStage LTIP for the fiscal years ended December 31, 2019, 2018 and 2017, respectively, · €30,304, €4,152 and €38,882 related to Performance Shares under the LTIP 2016 for the fiscal years ended December 31, 2019, 2018 and 2017, respectively, and · €5,724, -€8,799 and €21,576 related to Phantom Stock for the fiscal years ended December 31, 2019, 2018 and 2017, respectively. Care Coordination stock incentive plans In 2014, the Company established two subsidiary stock incentive plans for the acquisitions of Sound and National Cardiovascular Partners. The Company divested its controlling interest in Sound on June 28, 2018, see note 4 c) for information. For the year ended December 31, 2019, the Company did not record stock compensation expense associated with the Sound subsidiary stock incentive plan (2018: €87,157 and 2017: €35,250). The remaining subsidiary stock incentive plan related to National Cardiovascular Partners is immaterial to the Company. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 21. Leases The Company leases land, buildings and improvements, machinery and equipment, as well as IT- and office equipment under various lease agreements. Leasing in the consolidated statements of income The following table shows the effects from lease agreements on the consolidated statements of income for the year ended December 31, 2019: Leasing in the consolidated statements of income in € THOUS 2019 Depreciation on right-of-use assets 700,276 Impairments on right-of-use assets 38,820 Expenses relating to short-term leases 52,108 Expenses relating to leases of low-value assets 25,239 Expenses relating to variable lease payments 10,814 Income from subleasing right-of-use asset 4,367 Interest expense on lease liabilities 171,724 For information regarding leases with related parties, see note 5 b). Leases in the consolidated balance sheets At December 31, 2019, the acquisition costs and the accumulated depreciation of right-of-use assets consisted of the following: Acquisition costs in € THOUS Foreign Changes in January 1, currency consolidation Reclassi- December 31, 2019 translation group Additions fications Disposals 2019 Right-of-use assets: Land 28,717 447 (14) 2,300 512 (1,387) 30,575 Right-of-use assets: Buildings and improvements 3,840,380 65,603 (3,577) 694,031 15,074 (20,816) 4,590,695 Right-of-use assets: Machinery and equipment 407,436 7,639 3,257 23,243 18,002 (24,859) 434,718 Right-of-use assets: Advance Payments — — — 24 — — 24 Right-of-use assets 4,276,533 73,689 (334) 719,598 33,588 (47,062) 5,056,012 Depreciation in € THOUS Foreign Changes in January 1, currency consolidation Impairment Reclassi- December 31, 2019 translation group Additions loss fications Disposals 2019 Right-of-use assets: Land — 14 (4) 3,936 134 128 294 4,502 Right-of-use assets: Buildings and improvements — (1,364) (1,768) 581,081 38,686 3,424 (6,133) 613,926 Right-of-use assets: Machinery and equipment — (291) (105) 115,259 — 21,930 (24,324) 112,469 Right-of-use assets: Advance Payments — — — — — — — — Right-of-use assets — (1,641) (1,877) 700,276 38,820 25,482 (30,163) 730,897 Book value in € THOUS December 31, 2019 Right-of-use assets: Land 26,073 Right-of-use assets: Buildings and improvements 3,976,769 Right-of-use assets: Machinery and equipment 322,249 Right-of-use assets: Advance Payments 24 Right-of-use assets 4,325,115 Depreciation expense for right-of-use assets amounted to €700,276 for the year ended December 31, 2019. These expenses are allocated within costs of revenue, selling, general and administrative and research and development expenses depending upon the area in which the asset is used. Impairment losses for right-of-use assets amounted to €38,820 for the year ended December 31, 2019. These losses are allocated within costs of revenue and selling, general and administrative expense, depending upon the area in which the asset is used. For a maturity analysis of lease liabilities and lease liabilities from related parties see note 23. Leasing in the consolidated statements of cash flows Total cash outflows from leases were € 945,169 for the year ended December 31, 2019. Leases that the Company entered into as a lessee that have not yet begun will result in future cash outflows of € 254,171. Potential future cash outflows resulting from purchase options of € 56,507 were not reflected in the measurement of the lease liabilities, as the exercise of the respective options is not reasonably certain. Potential future cash outflows resulting from extension options of € 6,691,551 were not reflected in the measurement of the lease liabilities, as the exercise of the respective options is not reasonably certain. The major part of these potential future cash outflows relates to extension options in real estate lease agreements, primarily for dialysis clinics in the North America Segment. Individual lease agreements include multiple extension options. The Company uses extension options to obtain a high degree of flexibility in performing its business. These extension options held are exercisable solely by the Company. Potential future cash outflows resulting from termination options of € 3,493 were not reflected in the measurement of the lease liabilities, as the exercise of the respective options is not reasonably certain. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | 22. Commitments and contingencies Legal and regulatory matters The Company is routinely involved in claims, lawsuits, regulatory and tax audits, investigations and other legal matters arising, for the most part, in the ordinary course of its business of providing health care services and products. Legal matters that the Company currently deems to be material or noteworthy are described below. The Company records its litigation reserves for certain legal proceedings and regulatory matters to the extent that the Company determines an unfavorable outcome is probable and the amount of loss can be reasonably estimated. For the other matters described below, the Company believes that the loss probability is remote and/or the loss or range of possible losses cannot be reasonably estimated at this time. The outcome of litigation and other legal matters is always difficult to predict accurately and outcomes that are not consistent with the Company’s view of the merits can occur. The Company believes that it has valid defenses to the legal matters pending against it and is defending itself vigorously. Nevertheless, it is possible that the resolution of one or more of the legal matters currently pending or threatened could have a material adverse effect on its business, results of operations and financial condition. Beginning in 2012, the Company received certain communications alleging conduct in countries outside the United States that might violate the Foreign Corrupt Practices Act or other anti-bribery laws. The Company conducted investigations with the assistance of outside counsel and, in a continuing dialogue, advised the SEC and the DOJ about these investigations. The DOJ and the SEC also conducted their own investigations, in which the Company cooperated. In the course of this dialogue, the Company identified and reported to the DOJ and the SEC, and took remedial actions with respect to, conduct that resulted in the DOJ and the SEC seeking monetary penalties including disgorgement of profits and other remedies. This conduct revolved principally around the Company's products business in countries outside the United States. The Company recorded charges of €200,000 in 2017 and €77,200 in 2018 encompassing estimates for the claims from the DOJ and the SEC for profit disgorgement, penalties, certain legal expenses, and other related costs or asset impairments believed likely to be necessary for full and final resolution, by litigation or settlement, of the claims and issues arising from the investigation. The increase recorded in 2018 took into consideration preliminary understandings with the DOJ and the SEC on the financial terms of a potential settlement. Following this increase, which takes into account incurred and anticipated legal expenses, impairments and other costs, the provision totaled €223,980 as of December 31, 2018. On March 29, 2019, the Company entered into a non-prosecution agreement with the DOJ and a separate agreement with the SEC intended to resolve fully and finally the claims against the Company arising from the investigations. The Company paid a combined total in penalties and disgorgement of approximately $231,700 to the DOJ and the SEC in connection with these agreements. The entire amount paid to the DOJ and the SEC was reserved for in charges that the Company recorded in 2017 and 2018 and announced in 2018. As part of the settlement, the Company agreed to retain an independent compliance monitor for a period of at least two years and to an additional year of self-reporting. As of July 26, 2019, the monitor was appointed and the monitorship period commenced. In 2015, the Company self-reported to the German prosecutor conduct with a potential nexus to Germany and continues to cooperate with government authorities in Germany in their review of the conduct that prompted the Company’s and government investigations. Since 2012, the Company has made and continues to make further significant investments in its compliance and financial controls and in its compliance, legal and financial organizations. The Company’s remedial actions included separation from those employees responsible for the above-mentioned conduct. The Company is dealing with post-FCPA review matters on various levels. The Company continues to be fully committed to compliance with the FCPA and other applicable anti-bribery laws. Personal injury litigation involving the FMCH’s acid concentrate product, labeled as Granuflo® or Naturalyte®, first arose in 2012 and was substantially resolved by settlement agreed in principle in February 2016 and consummated in November 2017. Remaining individual personal injury cases do not present material risk. FMCH’s affected insurers agreed to the settlement of the acid concentrate personal injury litigation and funded $220,000 of the settlement fund under a reciprocal reservation of rights encompassing certain coverage issues raised by insurers and the FMCH’s claims for indemnification of defense costs. FMCH accrued a net expense of $60,000 in connection with the settlement, including legal fees and other anticipated costs. Following entry into the settlement, FMCH’s insurers in the AIG group and FMCH each initiated litigation against the other relating to the AIG group’s coverage obligations under applicable policies. In the coverage litigation, the AIG group seeks to be indemnified by FMCH for some or all of its $220,000 outlay; FMCH seeks to confirm the AIG group’s $220,000 funding obligation, to recover defense costs already incurred by FMCH, and to compel the AIG group to honor defense and indemnification obligations required for resolution of cases not participating in the settlement. As a result of decisions on issues of venue, the coverage litigation is proceeding in the New York state trial court for Manhattan. (National Union Fire Insurance v. Fresenius Medical Care, 2016 Index No. 653108 (Supreme Court of New York for New York County)). Four institutional plaintiffs filed complaints against FMCH or its affiliates under state deceptive practices statutes resting on certain background allegations common to the GranuFlo®/NaturaLyte® personal injury litigation but seeking as a remedy the repayment of sums paid to FMCH that are attributable to the GranuFlo®/NaturaLyte® products. These cases implicate different legal standards, theories of liability and forms of potential recovery from those in the personal injury litigation and their claims were not extinguished by the personal injury litigation settlement described above. All of the institutional cases have been resolved by settlement except for the claims by the State of Louisiana through its Attorney General and Blue Cross Blue Shield Louisiana, which remain active in the combined proceeding. State of Louisiana ex re. Caldwell and Louisiana Health Service & Indemnity Company v. Fresenius Medical Care Airline, et al 2016 Civ. 11035 (U.S.D.C. D. Mass.). The Caldwell and Blue Cross Louisiana cases remain unresolved and are proceeding together in federal court in Boston but are subject to undecided motions for severance and remand. There is no trial date in either case. FMCH has increased its litigation reserves to account for anticipated resolution of these claims. However, at the present time there are no agreements in principle for resolving either case and litigation through final adjudication may be required in them. On September 6, 2018, a special-purpose entity organized under Delaware law for the purpose of pursuing litigation filed a Pure Bill of Discovery in a Florida county court seeking discovery from FMCH related to the personal injury settlement, but no other relief. MSP Recovery Claims Series LLC v. Fresenius Medical Care Holdings, No. 2018‑030366‑CA‑01 (11th Judicial Circuit, Dade County, Florida). The Pure Bill was thereafter removed to federal court and transferred into the multidistrict Fresenius Granuflo/Naturalyte Dialysate Products Liability Litigation in Boston. No.1:13‑MD‑02428‑DPW (D. Mass. 2013). On March 12, 2019, plaintiff amended its Pure Bill by filing a complaint claiming rights to recover monetary damages on behalf of various persons and entities who are alleged to have assigned to plaintiff their rights to recover monetary damages arising from their having provided or paid for medical services for dialysis patients receiving treatments using FMCH’s acid concentrate product. FMCH is responding to the amended complaint. In August 2014, FMCH received a subpoena from the United States Attorney for the District of Maryland inquiring into FMCH’s contractual arrangements with hospitals and physicians involving contracts relating to the management of in-patient acute dialysis services. FMCH is cooperating in the investigation. In July 2015, the Attorney General for Hawaii issued a civil complaint under the Hawaii False Claims Act alleging a conspiracy pursuant to which certain Liberty Dialysis subsidiaries of FMCH overbilled Hawaii Medicaid for Liberty’s Epogen® administrations to Hawaii Medicaid patients during the period from 2006 through 2010, prior to the time of FMCH’s acquisition of Liberty. Hawaii v. Liberty Dialysis - Hawaii, LLC et al., Case No. 15‑1‑1357‑07 (Hawaii 1st Circuit). The State alleges that Liberty acted unlawfully by relying on incorrect and unauthorized billing guidance provided to Liberty by Xerox State Healthcare LLC, which acted as Hawaii’s contracted administrator for its Medicaid program reimbursement operations during the relevant period. The amount of the overpayment claimed by the State is approximately $8,000, but the State seeks civil remedies, interest, fines, and penalties against Liberty and FMCH under the Hawaii False Claims Act substantially in excess of the overpayment. After prevailing on motions by Xerox to preclude it from doing so, FMCH is pursuing third-party claims for contribution and indemnification against Xerox. The State’s False Claims Act complaint was filed after Liberty initiated an administrative action challenging the State’s recoupment of alleged overpayments from sums currently owed to Liberty. The civil litigation and administrative action are proceeding in parallel. Trial in the civil litigation is scheduled for July 13, 2020. On August 31, 2015, FMCH received a subpoena under the False Claims Act from the United States Attorney for the District of Colorado (Denver) inquiring into FMCH’s participation in and management of dialysis facility joint ventures in which physicians are partners. FMCH continues to cooperate in the Denver United States Attorney’s Office ("USAO") investigation, which has come to focus on purchases and sales of minority interests in ongoing outpatient facilities between FMCH and physician groups. On November 25, 2015, FMCH received a subpoena under the False Claims Act from the United States Attorney for the Eastern District of New York (Brooklyn) also inquiring into FMCH’s involvement in certain dialysis facility joint ventures in New York. On September 26, 2018, the Brooklyn USAO declined to intervene on the qui tam complaint filed under seal in 2014 that gave rise to this investigation. CKD Project LLC v. Fresenius Medical Care, 2014 Civ. 6646 (E.D.N.Y. November 12, 2014). The court unsealed the complaint, allowing the relator to serve and proceed on its own. The relator - a special-purpose entity formed by law firms to pursue qui tam proceedings - has served its complaint and litigation is proceeding. Beginning October 6, 2015, the United States Attorney for the Eastern District of New York (Brooklyn) has led an investigation, through subpoenas issued under the False Claims Act, of utilization and invoicing by FMCH’s subsidiary Azura Vascular Care for a period beginning after FMCH’s acquisition of American Access Care LLC ("AAC") in October 2011. FMCH is cooperating in the Brooklyn USAO investigation. The Brooklyn USAO has indicated that its investigation is nationwide in scope and is focused on whether certain access procedures performed at Azura facilities have been medically necessary and whether certain physician assistants employed by Azura exceeded their permissible scope of practice. Allegations against AAC arising in districts in Connecticut, Florida and Rhode Island relating to utilization and invoicing were settled in 2015. On June 30, 2016, FMCH received a subpoena from the United States Attorney for the Northern District of Texas (Dallas) seeking information under the False Claims Act about the use and management of pharmaceuticals including Velphoro®. The investigation encompasses DaVita, Amgen, Sanofi, and other pharmaceutical manufacturers and includes inquiries into whether certain compensation transfers between manufacturers and pharmacy vendors constituted unlawful kickbacks. FMCH understands that this investigation is substantively independent of the $63,700 settlement by DaVita Rx announced on December 14, 2017 in the matter styled United States ex rel. Gallian v. DaVita Rx, 2016 Civ. 0943 (N.D. Tex.). FMCH has cooperated in the investigation. On November 18, 2016, FMCH received a subpoena under the False Claims Act from the United States Attorney for the Eastern District of New York (Brooklyn) seeking documents and information relating to the operations of Shiel Medical Laboratory, Inc. (“Shiel”), which FMCH acquired in October 2013. In the course of cooperating in the investigation and preparing to respond to the subpoena, FMCH identified falsifications and misrepresentations in documents submitted by a Shiel salesperson that relate to the integrity of certain invoices submitted by Shiel for laboratory testing for patients in long term care facilities. On February 21, 2017, FMCH terminated the employee and notified the United States Attorney of the termination and its circumstances. The terminated employee’s conduct is expected to result in demands for FMCH to refund overpayments and to pay related penalties under applicable laws, but the monetary value of such payment demands cannot yet be reasonably estimated. FMCH contends that, under the asset sale provisions of its 2013 Shiel acquisition, it is not responsible for misconduct by the terminated employee or other Shiel employees prior to the date of the acquisition. The Brooklyn USAO continues to investigate a range of issues involving Shiel, including allegations of improper compensation (kickbacks) to physicians, and has disclosed that multiple sealed qui tam complaints underlie the investigation. On December 12, 2017, FMCH sold to Quest Diagnostics certain Shiel operations that are the subject of this Brooklyn subpoena, including the misconduct reported to the United States Attorney. Under the Quest Diagnostics sale agreement, FMCH retains responsibility for responding to the Brooklyn investigation and for liabilities arising from conduct occurring after its 2013 acquisition of Shiel and prior to its sale of Shiel to Quest Diagnostics. FMCH is cooperating in the investigation. On December 14, 2016, CMS, which administers the federal Medicare program, published an Interim Final Rule ("IFR") titled "Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities-Third Party Payment." The IFR would have amended the Conditions for Coverage for dialysis providers, like FMCH and would have effectively enabled insurers to reject premium payments made by or on behalf of patients who received grants for individual market coverage from the American Kidney Fund ("AKF" or "the Fund"). The IFR could thus have resulted in those patients losing individual insurance market coverage. The loss of coverage for these patients would have had a material and adverse impact on the operating results of FMCH. On January 25, 2017, a federal district court in Texas responsible for litigation initiated by a patient advocacy group and dialysis providers including FMCH preliminarily enjoined CMS from implementing the IFR. Dialysis Patient Citizens v. Burwell, 2017 Civ. 0016 (E.D. Texas, Sherman Div.). The preliminary injunction was based on CMS’ failure to follow appropriate notice-and-comment procedures in adopting the IFR. The injunction remains in place and the court retains jurisdiction over the dispute. On June 22, 2017, CMS requested a stay of proceedings in the litigation pending further rulemaking concerning the IFR. CMS stated, in support of its request, that it expects to publish a Notice of Proposed Rulemaking in the Federal Register and otherwise pursue a notice-and-comment process. Plaintiffs in the litigation, including FMCH, consented to the stay, which was granted by the court on June 27, 2017. On January 3, 2017, FMCH received a subpoena from the United States Attorney for the District of Massachusetts under the False Claims Act inquiring into FMCH’s interactions and relationships with the AKF, including FMCH’s charitable contributions to the Fund and the Fund’s financial assistance to patients for insurance premiums. FMCH cooperated in the investigation, which was part of a broader investigation into charitable contributions in the medical industry. On August 1, 2019, the United States District Court for the District of Massachusetts entered an order announcing that the United States had declined to intervene on a qui tam complaint underlying the USAO Boston investigation and unsealing the relator’s complaint so as to permit the relator to serve the complaint and proceed on his own. The relator did not serve the complaint within the time allowed, but the court has not yet dismissed the relator’s complaint. On April 8, 2019, United Healthcare served a demand for arbitration against FMCH. The demand asserts that FMCH unlawfully "steered" patients by waiving co-payments and other means away from coverage under government-funded insurance plans including Medicare into United Healthcare’s commercial plans, including Affordable Care Act exchange plans. FMCH is contesting United Healthcare’s claims and demands. A final hearing date has been scheduled in the arbitration for August 23, 2021. In early May 2017, the United States Attorney for the Middle District of Tennessee (Nashville) issued identical subpoenas to FMCH and two subsidiaries under the False Claims Act concerning FMCH’s retail pharmaceutical business. The investigation is exploring allegations related to improper inducements to dialysis patients to fill oral prescriptions through FMCH’s pharmacy service, improper billing for returned pharmacy products and other allegations similar to those underlying the $63,700 settlement by DaVita Rx in Texas announced on December 14, 2017. United States ex rel. Gallian, 2016 Civ. 0943 (N.D. Tex.). FMCH is cooperating in the investigation. On March 12, 2018, Vifor Fresenius Medical Care Renal Pharma Ltd. and Vifor Fresenius Medical Care Renal Pharma France S.A.S. (collectively, “VFMCRP”) (the joint venture between Vifor Pharma and FMC-AG & Co. KGaA), filed a complaint for patent infringement against Lupin Atlantis Holdings SA and Lupin Pharmaceuticals Inc. (collectively, “Lupin”), and Teva Pharmaceuticals USA, Inc. (“Teva”) in the U.S. District Court for the District of Delaware (Case 1:18-cv-00390-LPS). The patent infringement action is in response to Lupin and Teva’s filings of Abbreviated New Drug Applications ("ANDA") with the U.S. Food and Drug Administration ("FDA") for generic versions of Velphoro®. Velphoro® is protected by patents listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book. The complaint was filed within the 45-day period provided for under the Hatch-Waxman legislation, and triggered a stay of FDA approval of the ANDAs for 30 months (2.5 years) (specifically, up to July 29, 2020 for Lupin’s ANDA; and August 6, 2020 for Teva’s ANDA), or a shorter time if a decision in the infringement suit is reached that the patents-at-issue are invalid or not infringed. In response to another ANDA being filed for a generic Velphoro®, VFMCRP filed a complaint for patent infringement against Annora Pharma Private Ltd., and Hetero Labs Ltd. (collectively, “Annora”), in the U.S. District Court for the District of Delaware on December 17, 2018. A 30-month stay of FDA approval of Annora’s ANDA will run through to May 30, 2021. On December 17, 2018, FMCH was served with a subpoena under the False Claims Act from the United States Attorney for the District of Colorado (Denver) as part of an investigation of allegations against DaVita, Inc. involving transactions between FMCH and DaVita. The subject transactions include sales and purchases of dialysis facilities, dialysis-related products and pharmaceuticals, including dialysis machines and dialyzers, and contracts for certain administrative services. FMCH is cooperating in the investigation. On June 28, 2019, certain FMCH subsidiaries filed a complaint against the United States seeking to recover monies owed to them by the United States Department of Defense under the Tricare program, and to preclude Tricare from recouping monies previously paid. Bio-Medical Applications of Georgia, Inc., et al. v. United States, CA 19‑947, United States Court of Federal Claims. Tricare provides reimbursement for dialysis treatments and other medical care provided to members of the military services, their dependents and retirees. The litigation challenges unpublished administrative actions by Tricare administrators reducing the rate of compensation paid for dialysis treatments provided to Tricare beneficiaries based on a recasting or “crosswalking” of codes used and followed in invoicing without objection for many years. Tricare administrators have acknowledged the unpublished administrative action and declined to change or abandon it. The Tricare administrators have filed a motion to dismiss the complaint, but are not yet required to articulate, and have not yet presented, a substantive defense to the complaint. FMCH intends to oppose the motion to dismiss. FMCH has imposed a constraint on revenue for accounts receivable in legal dispute otherwise recognized from the Tricare program that it believes, in consideration of facts currently known, sufficient to account for the possibility of not prevailing in the litigation. From time to time, the Company is a party to or may be threatened with other litigation or arbitration, claims or assessments arising in the ordinary course of its business. Management regularly analyzes current information including, as applicable, the Company’s defenses and insurance coverage and, as necessary, provides accruals for probable liabilities for the eventual disposition of these matters. The Company, like other health care providers, insurance plans and suppliers, conducts its operations under intense government regulation and scrutiny. It must comply with regulations which relate to or govern the safety and efficacy of medical products and supplies, the marketing and distribution of such products, the operation of manufacturing facilities, laboratories, dialysis clinics and other health care facilities, and environmental and occupational health and safety. With respect to its development, manufacture, marketing and distribution of medical products, if such compliance is not maintained, the Company could be subject to significant adverse regulatory actions by the FDA and comparable regulatory authorities outside the U.S. These regulatory actions could include warning letters or other enforcement notices from the FDA, and/or comparable foreign regulatory authority which may require the Company to expend significant time and resources in order to implement appropriate corrective actions. If the Company does not address matters raised in warning letters or other enforcement notices to the satisfaction of the FDA and/or comparable regulatory authorities outside the U.S., these regulatory authorities could take additional actions, including product recalls, injunctions against the distribution of products or operation of manufacturing plants, civil penalties, seizures of the Company’s products and/or criminal prosecution. FMCH is currently engaged in remediation efforts with respect to one pending FDA warning letter. The Company must also comply with the laws of the United States, including the federal Anti-Kickback Statute, the federal False Claims Act, the federal Stark Law, the federal Civil Monetary Penalties Law and the federal Foreign Corrupt Practices Act as well as other federal and state fraud and abuse laws. Applicable laws or regulations may be amended, or enforcement agencies or courts may make interpretations that differ from the Company’s interpretations or the manner in which it conducts its business. Enforcement has become a high priority for the federal government and some states. In addition, the provisions of the False Claims Act authorizing payment of a portion of any recovery to the party bringing the suit encourage private plaintiffs to commence whistleblower actions. By virtue of this regulatory environment, the Company’s business activities and practices are subject to extensive review by regulatory authorities and private parties, and continuing audits, subpoenas, other inquiries, claims and litigation relating to the Company’s compliance with applicable laws and regulations. The Company may not always be aware that an inquiry or action has begun, particularly in the case of whistleblower actions, which are initially filed under court seal. The Company operates many facilities and handles the personal data ("PD") of its patients and beneficiaries throughout the United States and other parts of the world and engages with other business associates to help it carry out its health care activities. In such a decentralized system, it is often difficult to maintain the desired level of oversight and control over the thousands of individuals employed by many affiliated companies and its business associates. On occasion, the Company or its business associates may experience a breach under the Health Insurance Portability and Accountability Act Privacy Rule and Security Rules, the EU’s General Data Protection Regulation and or other similar laws ("Data Protection Laws") when there has been impermissible use, access, or disclosure of unsecured PD or when the Company or its business associates neglect to implement the required administrative, technical and physical safeguards of its electronic systems and devices, or a data breach that results in impermissible use, access or disclosure of personal identifying information of its employees, patients and beneficiaries. On those occasions, the Company must comply with applicable breach notification requirements. The Company relies upon its management structure, regulatory and legal resources, and the effective operation of its compliance program to direct, manage and monitor the activities of its employees. On occasion, the Company may identify instances where employees or other agents deliberately, recklessly or inadvertently contravene the Company’s policies or violate applicable law. The actions of such persons may subject the Company and its subsidiaries to liability under the Anti-Kickback Statute, the Stark Law, the False Claims Act, Data Protection Laws, the Health Information Technology for Economic and Clinical Health Act and the Foreign Corrupt Practices Act, among other laws and comparable state laws or laws of other countries. Physicians, hospitals and other participants in the health care industry are also subject to a large number of lawsuits alleging professional negligence, malpractice, product liability, worker’s compensation or related claims, many of which involve large claims and significant defense costs. The Company has been and is currently subject to these suits due to the nature of its business and expects that those types of lawsuits may continue. Although the Company maintains insurance at a level which it believes to be prudent, it cannot assure that the coverage limits will be adequate or that insurance will cover all asserted claims. A successful claim against the Company or any of its subsidiaries in excess of insurance coverage could have a material adverse effect upon it and the results of its operations. Any claims, regardless of their merit or eventual outcome, could have a material adverse effect on the Company’s reputation and business. The Company has also had claims asserted against it and has had lawsuits filed against it relating to alleged patent infringements or businesses that it has acquired or divested. These claims and suits relate both to operation of the businesses and to the acquisition and divestiture transactions. The Company has, when appropriate, asserted its own claims, and claims for indemnification. A successful claim against the Company or any of its subsidiaries could have a material adverse effect upon its business, financial condition, and the results of its operations. Any claims, regardless of their merit or eventual outcome, could have a material adverse effect on the Company's reputation and business. In Germany, the tax audits for the years 2006 through 2009 have been substantially completed. The German tax authorities have indicated a re-qualification of dividends received in connection with intercompany mandatorily redeemable preferred shares into fully taxable interest payments for these and subsequent years until 2013. The Company has defended its position and will avail itself of appropriate remedies. The Company is also subject to ongoing and future tax audits in the U.S., Germany and other jurisdictions in the ordinary course of business. Tax authorities routinely pursue adjustments to the Company’s tax returns and disallowances of claimed tax deductions. When appropriate, the Company defends these adjustments and disallowances and asserts its own claims. A successful tax related claim against the Company or any of its subsidiaries could have a material adverse effect upon its business, financial condition and results of operations. Other than those individual contingent liabilities mentioned above, as well as in note 8, the current estimated amount of the Company’s other known individual contingent liabilities is immaterial. |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments | |
Financial instruments | 23. Financial instruments The following tables show the carrying amounts and fair values of the Company’s financial instruments at December 31, 2019 and December 31, 2018: Carrying amount and fair value of financial instruments in € THOUS December 31, 2019 Carrying amount Fair value Amortized cost FVPL FVOCI Not classified Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) 768,706 239,017 — — 1,007,723 — 239,017 — Trade accounts and other receivables 3,343,873 — — 77,473 3,421,346 — — — Accounts receivable from related parties 159,196 — — — 159,196 — — — Derivatives - cash flow hedging instruments — — — 107 107 — 107 — Derivatives - not designated as hedging instruments — 2,406 — — 2,406 — 2,406 — Equity investments — 186,273 50,975 — 237,248 13,110 41,084 183,054 Debt securities — 107,988 261,833 — 369,821 365,170 4,651 — Other financial assets 141,355 — — 111,649 253,004 — — — Other current and non-current assets 141,355 296,667 312,808 111,756 862,586 — — — Financial assets 4,413,130 535,684 312,808 189,229 5,450,851 — — — Accounts payable 716,526 — — — 716,526 — — — Accounts payable to related parties 118,663 — — — 118,663 — — — Short-term debt and short-term debt from related parties 1,171,853 — — — 1,171,853 — — — Long-term debt 7,905,557 — — — 7,905,557 5,555,475 2,537,932 — Long-term lease liabilities and long-term lease liabilities from related parties — — — 4,705,038 4,705,038 — — — Derivatives - cash flow hedging instruments — — — 2,534 2,534 — 2,534 — Derivatives - not designated as hedging instruments — 10,762 — — 10,762 — 10,762 — Variable payments outstanding for acquisitions — 89,677 — — 89,677 — — 89,677 Noncontrolling interest subject to put provisions — — — 934,425 934,425 — — 934,425 Other financial liabilities 1,414,464 — — — 1,414,464 — — — Other current and non-current liabilities 1,414,464 100,439 — 936,959 2,451,862 — — — Financial liabilities 11,327,063 100,439 — 5,641,997 17,069,499 — — — (1) Highly liquid short-term investments are categorized in level 2 of the fair value hierarchy. Other cash and cash equivalents is not categorized. Carrying amount and fair value of financial instruments in € THOUS December 31, 2018 Carrying amount Fair value Amortized cost FVPL FVOCI Not classified Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) 831,885 1,313,747 — — 2,145,632 — 1,313,747 — Trade accounts and other receivables 3,182,052 — — 49,448 3,231,500 — — — Accounts receivable from related parties 198,868 — — — 198,868 — — — Derivatives - cash flow hedging instruments — — — 1,492 1,492 — 1,492 — Derivatives - not designated as hedging instruments — 18,222 — — 18,222 — 18,222 — Equity investments — 106,350 34,377 — 140,727 13,869 126,858 — Debt securities — 83,213 250,822 — 334,035 329,821 4,214 — Other financial assets 144,838 — — 107,125 251,963 — — — Other current and non-current assets 144,838 207,785 285,199 108,617 746,439 — — — Financial assets 4,357,643 1,521,532 285,199 158,065 6,322,439 — — — Accounts payable 641,271 — — — 641,271 — — — Accounts payable to related parties 153,781 — — — 153,781 — — — Short-term debt and short-term debt from related parties 1,394,194 — — — 1,394,194 — — — Long-term debt and capital lease obligations 6,115,890 — — 36,144 6,152,034 4,227,684 2,022,057 — Derivatives - cash flow hedging instruments — — — 1,125 1,125 — 1,125 — Derivatives - not designated as hedging instruments — 18,911 — — 18,911 — 18,911 — Variable payments outstanding for acquisitions — 172,278 — — 172,278 — — 172,278 Noncontrolling interest subject to put provisions — — — 818,871 818,871 — — 818,871 Other financial liabilities 1,467,767 — — — 1,467,767 — — — Other current and non-current liabilities 1,467,767 191,189 — 819,996 2,478,952 — — — Financial liabilities 9,772,903 191,189 — 856,140 10,820,232 — — — (1) Highly liquid short-term investments are categorized in level 2 of the fair value hierarchy. Other cash and cash equivalents is not categorized. Derivative and non-derivative financial instruments are categorised in the following three-tier fair value hierarchy that reflects the significance of the inputs in making the measurements. Level 1 is defined as observable inputs, such as quoted prices in active markets. Level 2 is defined as inputs other than quoted prices in active markets that are directly or indirectly observable. Level 3 is defined as unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. Fair value information is not provided for financial instruments, if the carrying amount is a reasonable estimate of fair value due to the relatively short period of maturity of these instruments. Transfers between levels of the fair value hierarchy have not occurred as of December 31, 2018. The Company accounts for transfers at the end of the reporting period. At September 30, 2019 the Company transferred its Humacyte investment with a carrying amount of €186,427 from Level 2 to Level 3, because the Company remeasured the fair value using a discounted cash flow model after events or changes in circumstances were identified that had a significant effect on the fair value of the investment. Non-derivative financial instruments The significant methods and assumptions used for the classification and measurement of non-derivative financial instruments are as follows: The Company assessed its business models and the cash flow characteristics of its financial assets. The vast majority of the non-derivative financial assets are held in order to collect the contractual cash flows. The contractual terms of the financial assets allow the conclusion that the cash flows represent payment of principle and interest only. Trade accounts and other receivables, Accounts receivable from related parties and Other financial assets are consequently measured at amortized cost. Cash and cash equivalents are comprised of cash funds and other short-term investments. Cash funds are measured at amortized cost. Short-term investments are highly liquid and readily convertible to known amounts of cash. Short-term investments are measured at FVPL. The risk of changes in fair value is insignificant. Equity investments are not held for trading. At initial recognition the Company elected, on an instrument-by-instrument basis, to represent subsequent changes in the fair value of individual strategic investments in OCI. If equity instruments are quoted in an active market, the fair value is based on price quotations at the period-end-date. From time to time the Company engages external valuation firms to determine the fair value of Level 3 equity investments. The external valuation uses a discounted cash flow model, which includes significant unobservable inputs such as investment specific forecasted financial statements, weighted average cost of capital, that reflects current market assessments as well as a terminal growth rate. The majority of the debt securities are held within a business model whose objective is achieving both contractual cash flows and sell the securities. The standard coupon bonds give rise on specified dates to cash flows that are solely payments of principal and interest on the outstanding principal amount. Subsequently these financial assets have been classified as FVOCI. The smaller part of debt securities do not give rise to cash flows that are solely payments of principle and interest. Consequently, these securities are measured at FVPL. In general most of the debt securities are quoted in an active market. Long-term debt is recognized at its carrying amount. The fair values of major long-term debt are calculated on the basis of market information. Liabilities for which market quotes are available are measured using these quotes. The fair values of the other long-term debt are calculated at the present value of the respective future cash flows. To determine these present values, the prevailing interest rates and credit spreads for the Company as of the balance sheet date are used. Variable payments outstanding for acquisitions are recognized at their fair value. The estimation of the individual fair values is based on the key inputs of the arrangement that determine the future contingent payment as well as the Company’s expectation of these factors. The Company assesses the likelihood and timing of achieving the relevant objectives. The underlying assumptions are reviewed regularly. Noncontrolling interests subject to put provisions are recognized at their fair value. The methodology the Company uses to estimate the fair values assumes the greater of net book value or a multiple of earnings, based on historical earnings, development stage of the underlying business and other factors. From time to time the Company engages external valuation firms for the valuation of the put provisions. The external valuation estimates the fair values using a combination of discounted cash flows and a multiple of earnings and/or revenue. When applicable, the obligations are discounted at a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability. The estimated fair values of the noncontrolling interests subject to these put provisions can also fluctuate, and the discounted cash flows as well as the implicit multiple of earnings and/or revenue at which these noncontrolling interest obligations may ultimately be settled could vary significantly from the Company’s current estimates depending upon market conditions. At December 31, 2019, 2018 and 2017 the Company's potential obligations under these put provisions, which are recorded in other current liabilities and other non-current liabilities, were €934,425, €818,871 and €830,773, respectively. At December 31, 2019, 2018 and 2017, put provisions with an aggregate purchase obligation of €385,924, €408,525 and €324,814, respectively, were exercisable. In the last three fiscal years ending December 31, 2019, 30 such put provisions have been exercised for a total consideration of €143,109. Following is a roll forward of Level 3 financial instruments at December 31, 2019, 2018 and 2017: Reconciliation from beginning to ending balance of level 3 financial instruments in € THOUS 2019 2018 2017 Variable Variable Variable payments Noncontrolling payments Noncontrolling payments Noncontrolling Equity outstanding for interests subject outstanding for interests subject outstanding for interests subject investments acquisitions to put provisions acquisitions to put provisions acquisitions to put provisions Beginning balance at January 1, — 172,278 818,871 205,792 830,773 223,504 1,007,733 Transfer from Level 2 186,427 — — — — — — Increase 2,233 4,828 109,109 19,051 53,731 21,128 85,322 Decrease — (43,941) (20,269) (15,734) (50,706) (32,764) (121,057) (Gain) loss recognized in profit or loss 128 (41,537) 154,436 (36,327) 142,279 (2,685) 160,916 (Gain) loss recognized in equity — — 13,701 — (50,612) — (20,012) Dividends — — (153,614) — (139,742) — (164,404) Foreign currency translation and other changes (5,734) (1,951) 12,191 (504) 33,148 (3,391) (117,725) Ending balance at December 31, 183,054 89,677 934,425 172,278 818,871 205,792 830,773 Derivative financial instruments Derivative financial risks The Company is exposed to effects related to foreign exchange fluctuations in connection with its international business activities that are denominated in various currencies. In order to finance its business operations, the Company issues bonds and enters mainly into long-term credit agreements with banks. Due to these financing activities, the Company is exposed to changes in the interest rate as well as to price risks of balance sheet items with a fixed interest rate. In order to manage the risk of currency exchange rate and interest rate fluctuations, the Company enters into various hedging transactions by means of derivative instruments with highly rated financial institutions as authorized by the Company’s General Partner. On a quarterly basis, the Company performs an assessment of its counterparty credit risk. The Company currently considers this risk to be low. The Company’s policy, which has been consistently followed, is that financial derivatives be used only for the purpose of hedging foreign currency and interest rate exposure. In certain instances, the Company enters into derivative contracts that do not qualify for hedge accounting but are utilized for economic purposes (“economic hedges”). The Company does not use financial instruments for trading purposes. The Company established guidelines for risk assessment procedures and controls for the use of financial instruments. They include a clear segregation of duties with regard to execution on one side and administration, accounting and controlling on the other. To reduce the credit risk arising from derivatives the Company entered into Master Netting Agreements with banks. Through such agreements, positive and negative fair values of the derivative contracts could be offset against one another if a partner becomes insolvent. This offsetting is valid for transactions where the aggregate amount of obligations owed to and receivable from are not equal. If insolvency occurs, the party which owes the larger amount is obliged to pay the other party the difference between the amounts owed in the form of one net payment. These master netting agreements do not provide a basis for offsetting the fair values of derivative financial instruments in the statement of financial position as the offsetting criteria under IFRS are not satisfied. At December 31, 2019 and December 31, 2018, the Company had €2,108 and €7,547 of derivative financial assets subject to netting arrangements and €12,355 and €8,111 of derivative financial liabilities subject to netting arrangements. Offsetting these derivative financial instruments would have resulted in net assets of €137 and €4,048 as well as net liabilities of €10,384 and €4,612 at December 31, 2019 and December 31, 2018, respectively. The Company calculates benchmarks for individual exposures in order to quantify interest and foreign exchange risks. The benchmarks are derived from achievable and reasonable market rates. Depending on the individual benchmarks, hedging strategies are agreed on and implemented. In connection with the issuance of the Convertible Bonds in September 2014, the Company purchased Share Options. Any change in the Company’s share price above the conversion price would be offset by a corresponding value change in the Share Options. The Share Options expired in November 2019. Market risk Foreign exchange risk management The Company conducts business on a global basis in various currencies, though a majority of its operations are in Germany and the United States. For financial reporting purposes, the Company reports in euro pursuant to Section 315e and Section 244 HGB. Therefore, changes in the rate of exchange between the euro and the local currencies in which the financial statements of the Company’s international operations are maintained, affect its results of operations and financial position as reported in its consolidated financial statements. Additionally, individual subsidiaries are exposed to transactional risks mainly resulting from intercompany purchases between production sites and other subsidiaries with different functional currencies. This exposes the subsidiaries to fluctuations in the rate of exchange between the invoicing currencies and the currency in which their local operations are conducted. For the purpose of hedging existing and foreseeable foreign exchange transaction exposures the Company enters into foreign exchange forward contracts. Changes in the fair value of the effective portion of foreign exchange forward contracts designated and qualifying as cash flow hedges of forecasted product purchases and sales are reported in AOCI. Additionally, in connection with intercompany loans in foreign currency, the Company uses foreign exchange swaps to assure that no foreign exchange risks arise from those loans, which, if they qualify for cash flow hedge accounting, are also reported in AOCI. The Company only designates the change in fair value of the spot element of foreign exchange forward contracts as the hedging instrument in cash flow hedging relationships and uses a hedge ratio for designated risks of 1:1. The forward elements are separately accounted for as cost of hedging in a separate component within AOCI. The amounts recorded in AOCI are subsequently reclassified into earnings as a component of revenue for those contracts that hedge sales or as an adjustment of cost of revenue for those contracts that hedge intercompany product purchases. Foreign exchange forward contracts that hedge loans are subsequently reclassified from AOCI to interest income/expense. The amounts recorded in AOCI are reclassified in the same period in which the hedged transaction affects earnings. Amounts recorded in AOCI for cash flow hedges related to product purchases from third parties are removed from AOCI and included directly in the carrying amount of the asset at initial recognition. Product purchases and sales designated in a cash flow hedging relationship are expected to affect profit and loss in the same period in which the cash flows occur. The critical terms of the forward exchange contracts generally align with the hedged item. The economic relationship between forward exchange contracts and the hedged forecast transaction is based on the timing, currency and amount of the hedged cash flows. Ineffectiveness could arise in case the timing of the hedged transaction or the credit default risk changes. Earnings of the Company were not materially affected by hedge ineffectiveness in the reporting period since the critical terms of the interest and foreign exchange derivatives matched mainly the critical terms of the underlying exposures. The notional amounts of foreign exchange contracts in place that are designated and qualify as cash flow hedges totalled €115,263 and €129,153 at December 31, 2019 and December 31, 2018, respectively. At December 31, 2019, the Company had foreign exchange derivatives with maturities of up to 14 months. The Company also enters into derivative contracts for forecasted product purchases and sales and for intercompany loans in foreign currencies which do not qualify for hedge accounting but are utilized for economic hedges as defined above. In these two cases, the change in value of the economic hedge is recorded in the income statement and usually offsets the change in value recorded in the income statement for the underlying asset or liability. The notional amounts of economic hedges that do not qualify for hedge accounting totalled €626,585 and €913,683 at December 31, 2019 and December 31, 2018, respectively. The Company uses a Cash-Flow-at-Risk (CFaR) model in order to estimate and quantify transaction risks from foreign currencies. The basis for the analysis of the currency risks are the foreign currency cash flows that are reasonably expected to arise within the following twelve months, less any hedges. Under the CFaR approach, the potential currency fluctuations of these net exposures are shown as probability distributions based on historical volatilities and correlations of the preceding 250 business days. The calculation is made assuming a confidence level of 95% and a holding period of up to one year. The aggregation of currency risks has risk-mitigating effects due to correlations between the transactions concerned, i.e. the overall portfolio's risk exposure is generally less than the sum total of the underlying individual risks. Based on a net exposure of €1,381,399, the Company’s CFaR amounts to €41,342 at December 31, 2019, this means with a probability of 95% a potential loss in relation to the forecasted foreign exchange cash flows of the next twelve months will be not higher than €41,342. The following table shows the average hedging rate and the nominal amount of the foreign exchange forward contracts for the currencies with highest hedging volume at December 31, 2019: Significant currency pairs in € THOUS Nominal Average amount hedging rate EUR/AUD 168,395 1.6314 EUR/USD 122,305 1.1373 EUR/GBP 49,308 0.8798 Interest rate risk management The Company’s interest rate risks mainly arise from money market and capital market transactions of the group for financing its business activities. The Company enters into derivatives, particularly interest rate swaps and to a certain extent, interest rate options, to protect against the risk of rising interest rates. These interest rate derivatives are designated as cash flow hedges and have been entered into in order to effectively convert payments based on variable interest rates into payments at a fixed interest rate. The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, maturities and the notional amounts. The effective portion of gains and losses of derivatives designated as cash flow hedges is deferred in AOCI; the amount of gains and losses reclassified from AOCI are recorded in interest income and interest expenses. For purposes of analysing the impact of changes in the relevant reference interest rates on the Company’s results of operations, the Company calculates the portion of financial debt which bears variable interest rate and which has not been hedged by means of interest rate swaps or options against rising interest rates. For this particular part of its liabilities, the Company assumes an increase in the reference rates of 0.5% compared to the actual rates as of the balance sheet date. The corresponding additional annual interest expense is then compared to the Company’s net income. This analysis shows that an increase of 0.5% in the relevant reference rates would have an effect of approximately 1% on the consolidated net income and less than 1% on the shareholder’s equity of the Company. At December 31, 2019 no interest rate swaps were in place. At December 31, 2018, the notional amount of the euro-denominated interest rate swaps in place was €204,000. In addition, the Company also enters into interest rate hedges (“pre-hedges”) in anticipation of future long-term debt issuance. These pre-hedges are used to hedge interest rate exposures with regard to interest rates which are relevant for the future long-term debt issuance and which could rise until the respective debt is actually issued. These pre-hedges were settled at the issuance date of the corresponding long-term debt with the settlement amount recorded in AOCI amortized to interest expense over the life of the debt. At December 31, 2019 and December 31, 2018, the Company had €9,249 and €1,131, respectively, related to settlements of pre-hedges deferred in AOCI, net of tax. Derivative financial instruments valuation The following table shows the carrying amounts of the Company’s derivatives at December 31, 2019 and December 31, 2018: Derivative financial instruments valuation in € THOUS 2019 2018 Assets Liabilities Assets Liabilities Current Foreign exchange contracts 107 (2,484) 1,434 (711) Interest rate contracts — — — (414) Non-current Foreign exchange contracts — (50) 58 — Derivatives in cash flow hedging relationships 107 (2,534) 1,492 (1,125) Current Foreign exchange contracts 2,406 (10,762) 6,402 (7,091) Non-current Derivatives embedded in the Convertible Bonds — — — (11,820) Share Options to secure the Convertible Bonds — — 11,820 — Derivatives not designated as hedging instruments 2,406 (10,762) 18,222 (18,911) The significant methods and assumptions used in estimating the fair values of derivative financial instruments are as follows: The fair value of interest rate swaps is calculated by discounting the future cash flows on the basis of the market interest rates applicable for the remaining term of the contract as of the balance sheet date. To determine the fair value of foreign exchange forward contracts, the contracted forward rate is compared to the current forward rate for the remaining term of the contract as of the balance sheet date. The result is then discounted on the basis of the market interest rates prevailing at the balance sheet date for the applicable currency. The fair value of the embedded derivative of the Convertible Bonds is calculated using the difference between the market value of the Convertible Bonds and the market value of an adequate straight bond discounted with the market interest rates as of the reporting date. The Company’s own credit risk is incorporated in the fair value estimation of derivatives that are liabilities. Counterparty credit risk adjustments are factored into the valuation of derivatives that are assets. The Company monitors and analyses the credit risk from derivative financial instruments on a regular basis. For the valuation of derivative financial instruments, the credit risk is considered in the fair value of every individual instrument. The default probability is based upon the credit default swap spreads of each counterparty appropriate for the duration. The calculation of the credit risk considered in the valuation is performed by multiplying the default probability appropriate for the duration with the expected discounted cash flows of the derivative financial instrument. The effect of financial instruments on the consolidated statements of income The effects of financial instruments recorded in the consolidated statements of income consist of interest income of €59,448 (2018: €141,491), interest expense of €486,039 (2018: €437,957) as well as allowances for doubtful accounts of €42,315 (2018: €19,112). In the fiscal year 2019 net losses from foreign currency transactions amount to €4,901 (2018: net losses €21,391). The following table shows the effect of derivatives in cash flow hedging relationship on the consolidated financial statement: The effect of derivatives in cash flow hedging relationships on the consolidated financial statements in € THOUS Fair value gain Fair value gain (loss) recognized in (loss) recognized in Amount Amount AOCI on hedging AOCI on hedging Location of reclassified reclassified instrument (hedge instrument (cost of reclassified from hedge from cost of reserve) hedging) amounts from AOCI reserve hedging For the year ended December 31, 2019 Interest rate contracts (12,807) — Interest income/expense 2,753 — Foreign exchange contracts (3,189) (1,473) thereof: Revenue 1,331 1,480 Costs of revenue 2,509 (1,913) Inventories (269) (55) Total (15,996) (1,473) 6,324 (488) For the year ended December 31, 2018 Interest rate contracts (105) — Interest income/expense 22,249 — Foreign exchange contracts 5,029 (2,244) thereof: Revenue (423) 132 Costs of revenue (1,839) 799 Inventories (17) (21) Total 4,924 (2,244) 19,970 910 The following table shows the effect of derivatives not designated as hedging instruments on the consolidated financial statements: The effect of derivatives not designated as hedging instruments on the consolidated financial statements in € THOUS Amount of (gain) loss recognized in Location of (gain) loss recognized in income on derivatives income on derivatives for the year ended, December 31, 2019 2018 Foreign exchange contracts Selling, general and administrative expenses 7,686 (12,841) Foreign exchange contracts Interest income/expense 16,491 14,809 Derivatives embedded in the Convertible Bonds Interest income/expense (11,820) (90,614) Share Options to secure the Convertible Bonds Interest income/expense 11,820 90,614 Derivatives not designated as hedging instruments 24,177 1,968 The following table shows when the cash flow from derivative financial instruments is expected to occur: Cash Flow from derivative financial instruments in € THOUS Expected in period of Less than 1 year 1 - 3 years 3 - 5 years Over 5 years 2019 Designated as hedging instrument (2,377) (50) — — Not designated as hedging instrument (8,356) — — — 2018 Designated as hedging instrument 87 58 — — Not designated as hedging instrument (689) — — — Credit risk The Company is exposed to potential losses in the event of non-performance by counterparties. With respect to derivative financial instruments it is not expected that any counterparty fails to meet its obligations as the counterparties are highly rated financial institutions. The maximum credit exposure of derivatives is represented by the fair value of those contracts with a positive fair value at the balance sheet date. The maximum credit exposure of all derivatives amounted to €2,513 at December 31, 2019 (2018: €19,714). The maximum credit risk resulting from the use of non-derivative financial instruments is defined as the total amount of all financial assets. In order to control this credit risk, the Management of the Company carries out an ageing analysis of trade accounts and other receivables. For details on the ageing analysis and on the allowance for doubtful accounts, please see note 7. Liquidity risk The liquidity risk is defined as the risk that a company is potentially unable to meet its financial obligations. The Management of the Company manages the liquidity of the group by means of effective working capital and cash management as well as an anticipatory evaluation of refinancing alternatives. The Management of the Company believes that existing credit facilities, net cash provided by operating activities and additional short-term debt are sufficient to meet the Company’s foreseeable demand for liquidity (see note 13). The following table shows all non-discounted payments agreed by contract concerning financial liabilities and derivative financial instruments recorded in the consolidated balance sheets: Payments agreed by contracts in € THOUS Payments due by period of Less than 1 year 1 - 3 years 3 - 5 years Over 5 years 2019 Accounts payable 716,526 — — — Accounts payable to related parties 118,663 — — — Other current financial liabilities 1,414,464 — — — Short-term debt (1) 1,171,853 — — — Amended 2012 Credit Agreement (2) 577,115 1,424,798 — — Bonds and Convertible Bonds 1,004,042 1,686,586 1,109,894 2,166,434 Accounts Receivable Facility (2) 7,518 387,468 — — Other long-term debt 68,078 66,531 74,131 49,467 Long-term lease liabilities (1) 789,145 1,479,119 1,112,401 2,190,926 Variable payments outstanding for acquisitions 34,253 26,710 26,325 9,503 Noncontrolling interests subject to put provisions 603,132 114,950 136,163 121,021 Letters of credit 21,893 — — — Derivative financial instruments - in cash flow hedging relationships 2,484 50 — — Derivative financial instruments - not designated as hedging instrument 10,762 — — — 2018 Accounts payable 641,271 1 — — Accounts payable to related parties 153,781 — — — Other current financial liabilities 1,467,766 — — — Short-term debt (1) 1,394,194 — — — Amended 2012 Credit Agreement (2) 178,170 740,024 1,126,183 — Bonds and Convertible Bonds 1,132,032 1,917,239 677,500 880,939 Accounts Receivable Facility (2) — — — — Other long-term debt and capital lease obligations (2) 26,519 68,976 19,796 63,734 Variable payments outstanding for acquisitions 57,217 69,918 33,221 30,576 Noncontrolling interests subject to put provisions 494,576 183,396 66,324 107,857 Letters of credit 12,413 12,322 — — Derivative financial instruments - in cash flow hedging relationships 1,347 — — — Derivative financial instruments - not designated as hedging instrument 7,091 11,820 — — (1) Includes amounts from related parties. (2) Future interest payments for financial liabilities with variable interest rates were calculated using the latest interest rates fixed prior to December 31, 2019 and 2018. |
Other comprehensive income (los
Other comprehensive income (loss) | 12 Months Ended |
Dec. 31, 2019 | |
Other comprehensive income (loss) | |
Other comprehensive income (loss) | 24. Other comprehensive income (loss) The changes in the components of other comprehensive income (loss) for the years ended December 31, 2019, 2018, and 2017 are as follows: Other comprehensive income (loss) in € THOUS 2019 2018 2017 Pretax Tax effect Net Pretax Tax effect Net Pretax Tax effect Net Components that will not be reclassified to profit or loss: Actuarial gain (loss) on defined benefit pension plans (99,613) 30,245 (69,368) (28,070) 7,713 (20,357) 6,840 (27,393) (20,553) Components that may be reclassified subsequently to profit or loss: Foreign currency translation adjustment 263,835 — 263,835 327,317 — 327,317 (1,284,173) — (1,284,173) Other comprehensive income (loss) relating to cash flow hedges: Changes in fair value of cash flow hedges during the period (17,469) 4,352 (13,117) 2,680 (698) 1,982 1,613 (430) 1,183 Reclassification adjustments 5,836 (1,678) 4,158 20,880 (6,036) 14,844 26,370 (7,977) 18,393 Total other comprehensive income (loss) relating to cash flow hedges (11,633) 2,674 (8,959) 23,560 (6,734) 16,826 27,983 (8,407) 19,576 Other comprehensive income (loss) 152,589 32,919 185,508 322,807 979 323,786 (1,249,350) (35,800) (1,285,150) |
Supplementary cash flow informa
Supplementary cash flow information | 12 Months Ended |
Dec. 31, 2019 | |
Supplementary cash flow information | |
Supplementary cash flow information | 25. Supplementary cash flow information The following additional information is provided with respect to net cash provided by (used in) investing activities for the years ended December 31, 2019, 2018 and 2017: Details for net cash provided by (used in) investing activities in € THOUS 2019 2018 2017 Details for acquisitions Assets acquired (2,639,432) (360,375) (758,720) Liabilities assumed 260,120 21,122 128,552 Noncontrolling interests subject to put provisions 72,151 11,901 68,069 Noncontrolling interests 65,217 45,319 14,293 Non-cash consideration 26,637 28,530 8,851 Cash paid (2,215,307) (253,503) (538,955) Less cash acquired 55,210 3,538 17,630 Net cash paid for acquisitions (2,160,097) (249,965) (521,325) Cash paid for investments (34,602) (590,199) (17,999) Cash paid for intangible assets (37,972) (85,103) (26,370) Total cash paid for acquisitions and investments, net of cash acquired, and purchases of intangible assets (2,232,671) (925,267) (565,694) Details for divestitures Cash received from sale of subsidiaries or other businesses, less cash disposed (1) 43,317 1,532,724 157,025 Cash received from divestitures of debt securities 16,623 150,172 256,136 Cash received from repayment of loans — 79 2,227 Proceeds from divestitures 59,940 1,682,975 415,388 (1) In 2018, cash received from sale of subsidiaries or other businesses, less cash disposed included a cash payment of €142,593 relating to tax payments in connection with the divestiture of Sound. In connection with divestitures which occurred during 2018, the Company divested, in aggregate, assets, excluding cash, of €1,100,315, liabilities of €296,857, noncontrolling interests subject to put provisions of €469 and noncontrolling interests of €16,540. The following table shows a reconciliation of debt to net cash provided by (used in) financing activities for 2019: Reconciliation of debt to net cash provided by (used in) financing activities in € THOUS Non-cash changes Acquisitions Foreign Amortization January 1, Cash (net of currency of debt December 31, 2019 (1) Flow divestitures) translation issuance costs Other (2) 2019 Short-term debt 1,205,294 (70,398) 14,611 618 — (137) 1,149,988 Short-term debt from related parties 188,900 (167,111) — — — 76 21,865 Long-term debt (excluding Accounts Receivable Facility) (3) 6,115,890 1,285,603 22,815 85,424 15,147 1,108 7,525,987 Accounts Receivable Facility — 381,430 — (2,435) 575 — 379,570 Lease liabilities 4,451,081 (671,403) 2,141 81,817 — 718,456 4,582,092 Lease liabilities from related parties 137,494 (16,340) — 35 — 1,757 122,946 (1) Line item "Long-term Debt (excluding Accounts Receivable Facility)" as of December 31, 2018, was labeled as “Long-term debt and capital lease obligations (excluding Accounts Receivable Facility)” and included liabilities from capital leases in accordance with IAS 17 of €36,144; As of January 1, 2019, these liabilities have been transferred to the line item “Lease liabilities”. Furthermore, upon the initial application of IFRS 16 as of January 1, 2019, Lease liabilities of €4,414,937 and Lease liabilities from related parties of €137,494 were recognized. (2) Includes newly concluded leases, lease modifications and reassessments of leases with third parties and related parties. (3) Cash Flow excluding repayments of variable payments outstanding for acquisitions in the amount of €41,803. The following table shows a reconciliation of debt to net cash provided by (used in) financing activities for 2018: Reconciliation of debt to net cash provided by (used in) financing activities in € THOUS Non-cash changes Acquisitions Foreign Amortization January 1, Cash (net of currency of debt New December 31, 2018 Flow divestitures) translation issuance costs leases Other 2018 Short-term debt 760,279 444,844 3,046 (2,860) — — (15) 1,205,294 Short-term debt from related parties 9,000 179,900 — — — — — 188,900 Long-term debt (excluding Accounts Receivable Facility) (1) 6,384,734 (453,717) 8,652 188,165 15,975 6,517 1,708 6,152,034 Accounts Receivable Facility 293,673 (298,912) — 4,883 356 — — — (1) Cash Flow excluding repayments of variable payments outstanding for acquisitions in the amount of €10,099. |
Segment and corporate informati
Segment and corporate information | 12 Months Ended |
Dec. 31, 2019 | |
Segment and corporate information | |
Segment and corporate information | 26. Segment and corporate information The Company’s operating segments are the North America Segment, the EMEA Segment, the Asia-Pacific Segment and the Latin America Segment. The operating segments are determined based upon how the Company manages its businesses with geographical responsibilities. All segments are primarily engaged in providing health care services and the distribution of products and equipment for the treatment of ESRD and other extracorporeal therapies. Management evaluates each segment using measures that reflect all of the segment’s controllable revenues and expenses. With respect to the performance of business operations, management believes that the most appropriate measures are revenue, operating income and operating income margin. The Company does not include income taxes as it believes this is outside the segments’ control. Financing is a corporate function, which the Company’s segments do not control. Therefore, the Company does not include interest expense relating to financing as a segment measurement. Similarly, the Company does not allocate certain costs, which relate primarily to certain headquarters’ overhead charges, including accounting and finance, because the Company believes that these costs are also not within the control of the individual segments. Production of products, production asset management, quality management and procurement related to production are centrally managed. The Company’s global research and development is also centrally managed. These corporate activities ("Corporate") do not fulfill the definition of a segment according to IFRS 8, Operating Segments. Products are transferred to the segments at cost; therefore, no internal profit is generated. The associated internal revenue for the product transfers and their elimination are recorded as corporate activities. Capital expenditures for production are based on the expected demand of the segments and consolidated profitability considerations. In addition, certain revenues, investments and intangible assets, as well as any related expenses, are not allocated to a segment but are accounted for as Corporate. Information pertaining to the Company’s segment and Corporate activities for the twelve-month periods ended December 31, 2019, 2018 and 2017 is set forth below: Segment and corporate information in € THOUS North Asia- Latin America EMEA Pacific America Total Segment Segment Segment Segment Segment Corporate Total 2019 Revenue from contracts with customers 11,931,396 2,652,943 1,792,020 705,636 17,081,995 20,141 17,102,136 Other revenue external customers 263,777 40,530 66,750 3,362 374,419 — 374,419 Revenue external customers 12,195,173 2,693,473 1,858,770 708,998 17,456,414 20,141 17,476,555 Inter- segment revenue 3,067 686 504 251 4,508 (4,508) — Revenue 12,198,240 2,694,159 1,859,274 709,249 17,460,922 15,633 17,476,555 Operating income 1,794,101 448,062 328,996 42,508 2,613,667 (344,109) 2,269,558 Interest (429,444) Income before income taxes 1,840,114 Depreciation and amortization (992,526) (188,580) (98,599) (33,352) (1,313,057) (240,351) (1,553,408) Impairment loss (36,411) (3,341) — — (39,752) — (39,752) Income (loss) from equity method investees 75,941 (4,414) 2,551 1,152 75,230 (1,551) 73,679 Total assets 21,700,202 4,058,523 2,852,271 917,184 29,528,180 3,406,555 32,934,735 thereof investment in equity method investees 400,514 171,704 99,815 24,839 696,872 — 696,872 Additions of property, plant and equipment, intangible assets and right-of-use assets 1,097,517 212,282 190,591 36,595 1,536,985 356,934 1,893,919 2018 Revenue from contracts with customers 11,347,963 2,559,485 1,627,715 682,894 16,218,057 14,736 16,232,793 Other revenue external customers 221,769 27,073 61,638 3,600 314,080 — 314,080 Revenue external customers 11,569,732 2,586,558 1,689,353 686,494 16,532,137 14,736 16,546,873 Inter- segment revenue 1,609 304 633 240 2,786 (2,786) — Revenue 11,571,341 2,586,862 1,689,986 686,734 16,534,923 11,950 16,546,873 Operating income 2,665,187 398,683 303,956 28,848 3,396,674 (358,876) 3,037,798 Interest (301,062) Income before income taxes 2,736,736 Depreciation and amortization (377,836) (116,384) (45,475) (22,344) (562,039) (162,808) (724,847) Impairment loss — (64,719) — — (64,719) — (64,719) Income (loss) from equity method investees 75,279 (4,322) 2,125 264 73,346 — 73,346 Total assets 16,936,646 3,612,800 2,322,284 719,334 23,591,064 2,651,204 26,242,268 thereof investment in equity method investees 348,096 178,886 98,741 24,057 649,780 — 649,780 Additions of property, plant and equipment and intangible assets 598,988 158,974 53,962 26,894 838,818 316,147 1,154,965 2017 Revenue from contracts with customers 12,878,665 2,547,055 1,623,312 719,792 17,768,824 14,748 17,783,572 Inter- segment revenue 1,898 16 356 374 2,644 (2,644) — Revenue 12,880,563 2,547,071 1,623,668 720,166 17,771,468 12,104 17,783,572 Operating income 2,086,391 443,725 313,042 58,349 2,901,507 (539,068) 2,362,439 Interest (364,824) Income before income taxes 1,997,615 Depreciation and amortization (398,235) (119,044) (45,401) (17,929) (580,609) (154,870) (735,479) Income (loss) from equity method investees 71,739 (7,159) 1,919 700 67,199 — 67,199 Total assets 15,556,146 3,585,486 2,074,150 670,126 21,885,908 2,139,307 24,025,215 thereof investment in equity method investees 342,462 181,870 98,281 24,396 647,009 - 647,009 Additions of property, plant and equipment and intangible assets 526,652 130,755 52,861 41,637 751,905 241,052 992,957 For the geographic presentation, revenues are attributed to specific countries based on the end user's location for products and the country in which the service is provided. Information with respect to the Company's geographic operations is set forth in the table below: Geographic presentation in € THOUS North Rest of Germany America the world Total 2019 Revenue external customers 474,750 12,195,173 4,806,632 17,476,555 Long-lived assets 1,311,786 19,112,827 4,335,569 24,760,182 2018 Revenue external customers 426,327 11,569,732 4,550,814 16,546,873 Long-lived assets 948,355 13,260,913 3,290,930 17,500,198 2017 Revenue external customers 433,105 12,878,665 4,471,802 17,783,572 Long-lived assets 905,571 13,037,452 3,122,590 17,065,613 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent events | |
Subsequent events | 27. Subsequent events No significant activities have taken place subsequent to the balance sheet date December 31, 2019 that have a material impact on the key figures and earnings presented. Currently, there are no other significant changes in the Company’s structure, management, legal form or personnel. |
Compensation of the Management
Compensation of the Management Board and the supervisory board | 12 Months Ended |
Dec. 31, 2019 | |
Compensation of the Management Board and the supervisory board | |
Compensation of the Management Board and the supervisory board | 28. Compensation of the Management Board and the Supervisory Board Compensation of the Management Board of the General Partner The total compensation of the members of the Management Board of Fresenius Medical Care Management AG for the fiscal year 2019 amounted to €24,773 (2018: €24,166) and consisted of non-performance-based compensation (including fringe benefits) in the total amount of €7,122 (2018: €6,532), short-term performance-based compensation in the total amount of €7,869 (2018: €8,437) and components with long-term incentive effects (multi-year variable compensation) in the total amount of €9,782 (2018: €9,197). Components with long-term incentive effects, which were granted in or for the fiscal year 2019, include exclusively share-based compensation with cash settlement. Under the MB LTIP 2019, in the fiscal year 2019, a total of 114,999 Performance Shares (2018: 73,315 under the LTIP 2016) were granted to the members of the Management Board of Fresenius Medical Care Management AG. The fair value of the Performance Shares granted in July of the fiscal year 2019 was on the grant date €62.10 (2018: €80.55 under the LTIP 2016) each for grants denominated in euro and $69.71 (2018: $94.11 under the LTIP 2016) for grants denominated in US-Dollar. Ms. Helen Giza (member of the Management Board since November 1, 2019) was granted Performance Shares in December of the fiscal year 2019 whose fair value on the grant date was €60.58 (2018: €69.05 for Dr. Katarzyna Mazur-Hofsäß under the LTIP 2016). Based on the target achievement in the fiscal year 2019, in addition to the Performance Shares granted under the MB LTIP 2019, the Management Board members of Fresenius Medical Care Management AG were entitled to further share-based compensation with cash settlement (so-called Share Based Award) in the amount of €2,623 (2018: €3,414). At the end of fiscal year 2019, the members of the Management Board of Fresenius Medical Care Management AG being in office on December 31 of the fiscal year held a total of 314,313 Performance Shares (2018: 204,693) and 23,336 Phantom Stock (2018: 54,711). In addition, they held a total of 452,989 stock options at the end of the fiscal year 2019 (2018: 602,389 stock options). As of December 31, 2019, aggregate pension obligations of €24,252 (December 31, 2018: €24,535) existed relating to existing pension commitments. In the fiscal year 2019, the appropriation to the pension reserves amounted to €6,751 (2018: €5,071). In the fiscal year, no loans or advance payments for future compensation components were made to the members of the Management Board of Fresenius Medical Care Management AG. To the extent permitted by law, Fresenius Medical Care Management AG undertook to indemnify the members of the Management Board from claims against them arising out of their work for the Company and its affiliates, to the extent such claims exceed their liability under German law. To secure such obligations, a Directors & Officers liability insurance exists with a deductible that corresponds to the specifications according to the German Stock Corporation Act. Mr. Michael Brosnan was a member of the Management Board until the end of October 31, 2019. In his termination agreement, it was agreed with respect to the compensation components he is contractually entitled to for the period from November 1, 2019 to December 31, 2020 that he will receive a base salary of $850 p.a. (pro rata for the period from November 1, 2019 to December 31, 2019). For the period from January 1, 2020 to December 31, 2020 Mr. Michael Brosnan has an entitlement to fringe benefits in the form of contributions to financial planning, insurance benefits, contributions to pension, accident, life and health insurances and housing, rent and relocation supplements as well as tax burden compensation due to varying tax rates in Germany and the U.S. (net compensation) and a car allowance in the total amount of approximately $257. For the period from November 1, 2019 to December 31, 2019 these fringe benefits amounted to $17. Additionally, Mr. Michael Brosnan will participate in the U.S.-based 401(k) savings plan until December 31, 2020. For the period from January 1, 2020 to December 31, 2020, Mr. Michael Brosnan will also receive an amount equivalent to 30% of his base salary. The compensation components granted to Mr. Michael Brosnan under the LTIP 2016, the MB LTIP 2019 and in the form of Share Based Awards are payable or exercisable in accordance with the respective plan conditions. With the exception of the Share Based Award for 2019, Mr. Michael Brosnan will no longer be granted any further components with long-term incentive effects as from (and including) the year 2020. As of January 1, 2021, Mr. Michael Brosnan will receive an annual compensation for the agreed post-employment non-competition covenant in the amount of $553 p.a. for a period of two years. It was agreed with Mr. Michael Brosnan that he is entitled to receive a company pension on the basis of the individual contractual pension commitment of Fresenius Medical Care Management AG in the annual amount of $405 from January 1, 2021. The compensation for the agreed post-employment non-competition covenant is credited against the company pension. Mr. Dominik Wehner was a member of the Management Board until the end of December 31, 2017. In his termination agreement, it was agreed with respect to the compensation components he is entitled to by contract for the period from January 1, 2018 to March 31, 2022 that he will annually receive a base salary of €425 and an amount of 30% of his base salary. In addition, Mr. Dominik Wehner is entitled to fringe benefits such as the private use of his company car, contributions to financial planning, insurance benefits and contributions to pension and health insurance in a total amount of approximately €30 p.a. The compensation components granted to Mr. Dominik Wehner under the LTIP 2011, the LTIP 2016 and in form of Share Based Awards are payable or can be exercised, as the case may be, upon the relevant regular vesting date in accordance with the respective plan conditions. Except for the Share Based Award for 2017, Mr. Dominik Wehner is no longer eligible to be granted any components with long-term incentive effects since the year 2018 (including). As of the completion of the age of 65, Mr. Dominik Wehner will receive a Company-funded retirement pension in accordance with the individual contractual pension commitment by Fresenius Medical Care Management AG. Mr. Ronald Kuerbitz, who was a member of the Management Board until February 17, 2017, received an annual non-compete compensation from February 17, 2017 for a period of two years; this compensation amounted in the fiscal year 2019 to €90 (2018: €515). It was also agreed with him that, after the end of his employment contract, he would act as an advisor to National Medical Care, Inc. from August 14, 2017 until the end of August 13, 2019. The consideration to be granted for such services (including reimbursement of expenses) amounts to €167 (2018: €212) for the fiscal year 2019. As of the completion of the age of 65, Mr. Ronald Kuerbitz will receive a Company-funded retirement pension of €130 per year. Mr. Roberto Fusté, who was a member of the Management Board until March 31, 2016, received pension payments in the amount of approximately €274 (2018: €261) in the fiscal year 2019. On the occasion of the termination of his employment contract with effect as of December 31, 2016 as a member of the Management Board, it was agreed with Mr. Roberto Fusté that he would be subject to a post-employment non-compete obligation lasting until the end of December 31, 2018 and that he would act as an advisor to the Chairman of the Management Board. For this, he did neither receive a non-compete compensation (2018: €377) nor an advisory fee (2018: €377) in the fiscal year 2019. Prof. Emanuele Gatti, who was a member of the Management Board until March 31, 2014, received pension payments in the amount of €355 in the fiscal year 2019 (2018: €338). A consulting agreement was entered into with Dr. Rainer Runte, who was a member of the Management Board until March 31, 2014, effective March 1, 2017, the term of which in the meantime was extended until December 31, 2018. Under this consulting agreement, Dr. Rainer Runte provided consulting services on certain fields. The consideration (including the reimbursement of expenses) to be granted by Fresenius Medical Care Management AG for such services amounts to €0 for the fiscal year 2019 (2018: €226). Instead of a pension provision, a consulting agreement was entered into with Dr. Ben Lipps, the Chairman of the Management Board until December 31, 2012, for the period January 1, 2013 to December 31, 2021. Under this consulting agreement, Dr. Ben Lipps will provide consulting services on certain fields and within a specified time frame and will be subject to a non-compete covenant. The consideration to be granted by Fresenius Medical Care Management AG for such services (including reimbursement of expenses) amounts for the fiscal year to €568 (2018: €522). In 2019, an amendment to the agreement was made which provides for a one-off payment of €1,129 for the remaining term of the agreement. This payment was also made in the fiscal year. All payments for services to be performed by him under the consulting agreement have thus been made. Former members of the Management Board did not receive any compensation in the fiscal year other than mentioned herein. As of December 31 of the fiscal year 2019, pension obligations towards this group of persons exist in an amount of €37,373 (December 31, 2018: €25,163). A post-employment non-competition covenant was agreed upon with all members of the Management Board. If such covenant becomes applicable, the members of the Management Board for a period of up to two years receive compensation amounting to half of their respective annual base salary and an amount equivalent to 30% of their respective base salary for each year of respective application of the non-competition covenant. The employment contracts of the members of the Management Board contain no express provisions that are triggered by a change of control. The new or extended employment contracts concluded with individual members of the Management Board effective from or after January 1, 2018 provide for a severance payment cap. Under this cap, payments in connection with the early termination of a Management Board activity in the event of dismissal for cause ( Abberufung aus wichtigem Grund ) may not exceed the value of two years' compensation and may not compensate more than the remaining term of the contract. For the calculation of the relevant annual compensation, only the non-performance-based compensation components are applied. If there is good cause for the termination of the employment contract, no severance payments are made. In addition, already earned and paid compensation components, in particular in case of relevant violations of internal guidelines or undutiful conduct, can be reclaimed (claw back) on the basis of the MB LTIP 2019 and the LTIP 2016 plan conditions and in accordance with the employment contracts concluded with individual members of the Management Board as from January 1, 2018. Compensation of the Supervisory Board In the fiscal year the total compensation fees to all members of the Supervisory Board of FMC-AG & Co. KGaA amounted to €626 (2018: €773). This includes a fixed compensation of €439 (2018: €361) and compensation components for the work in the Committees of €187 (2018: €148). For the fiscal year, no entitlement to a payment of variable performance-related compensation (2018: €264) was achieved. In accordance with section 13e para. 3 of the Articles of Association of FMC-AG & Co. KGaA, the members of the Joint Committee are entitled to receive an attendance fee in the amount of $3.5. The compensation of the supervisory board of the Fresenius Medical Care Management AG and the compensation of its Committees was, in compliance with article 7 para. 3 of the Articles of Association of FMC-AG & Co. KGaA, charged to FMC-AG & Co. KGaA. In the fiscal year the total compensation for the members of the supervisory board of the Fresenius Medical Care Management AG amounted to €937 (2018: €1,110). This includes fixed compensation components for the work in the supervisory board in the amount of €432 (2018: €402) and compensation components for the work in the Committees of €505 (2018: €428). For the fiscal year, no entitlement to a payment of variable performance-related compensation (2018: €280) was achieved. For the benefit of the members of the Supervisory Board of FMC-AG & Co. KGaA a Directors & Officers liability insurance exists with a deductible that corresponds to the specifications according to the German Stock Corporation Act. |
Principal accountant fees and s
Principal accountant fees and services | 12 Months Ended |
Dec. 31, 2019 | |
Principal accountant fees and services | |
Principal accountant fees and services | 29. Principal accountant fees and services In 2019, 2018 and 2017, fees for the auditor KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, and its affiliates were expensed as follows: Fees in € THOUS Consolidated thereof Consolidated thereof Consolidated thereof group Germany group Germany group Germany 2019 2018 2017 Audit fees 10,113 1,665 7,845 1,322 8,629 1,232 Audit-related fees 615 525 320 316 59 18 Tax fees 318 — 1,069 115 830 169 Other fees 41 — 251 234 716 110 Audit fees are the aggregate fees billed by KPMG for the audit of the Company’s consolidated financial statements and the statutory financial statements of FMC-AG & Co. KGaA and certain of its subsidiaries, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements. Fees related to the audit of internal control over financial reporting are included in audit fees. Audit-related fees are fees charged by KPMG for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under audit fees. This category comprises fees billed for comfort letters, consultation on accounting issues, agreed-upon procedure engagements and other attestation services subject to regulatory requirements. Tax fees are fees for professional services rendered by KPMG for tax compliance, tax advice on implications for actual or contemplated transactions, tax consulting associated with international transfer prices, and expatriate employee tax services, as well as support services related to tax audits. Other fees include amounts related to services in regard to the harmonization of the IT-landscape as well as amounts related to supply chain consulting fees. Fees billed by KPMG for non-audit services in Germany include fees for the services described above within the audit-related fees, tax fees and other fees. |
The company, basis of present_2
The company, basis of presentation and significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
The Company, basis of presentation and significant accounting policies | |
Principles of consolidation and composition of the group | a) Principles of consolidation and composition of the group The financial statements of consolidated entities have been prepared using uniform accounting methods in accordance with IFRS 10, Consolidated Financial Statements (“IFRS 10”). Acquisitions of companies are accounted for under the purchase method. Besides FMC-AG & Co. KGaA, the consolidated financial statements include all material subsidiaries according to IFRS 10 and IFRS 11, Joint Arrangements (“IFRS 11”), over which the Company has control. FMC-AG & Co. KGaA controls an entity if it has power over the entity through existing rights that give the Company the current ability to direct the activities that significantly affect the Company’s return. In addition, the Company is exposed to, or has rights to, variable returns from the involvement with the entity and the Company has the ability to use its power over the entity to affect the amount of the Company’s return. The equity method is applied in accordance with IAS 28, Investments in Associates and Joint Ventures (“IAS 28”). Generally, equity method investees are entities in which FMC-AG & Co. KGaA, directly or indirectly, holds 50% or less of the voting power and can exercise significant influence over their financial and operating policies. The disclosure of business acquisitions is performed according to IFRS 3, Business Combinations (“IFRS 3”) by offsetting investments in subsidiaries against the underlying revaluated equity at the date of acquisition. The identifiable assets and liabilities of subsidiaries as well as the noncontrolling interests are recognized at their fair values. Any remaining debit balance is recognized as goodwill and is tested at least once a year for impairment. Any excess of the net fair value of identifiable assets and liabilities over cost still existing after reassessing the purchase price allocation is recognized immediately in profit or loss. All significant intercompany revenues, expenses, income, receivables and payables are eliminated. Profits and losses on items of property, plant and equipment and inventory acquired from other group entities are also eliminated. Deferred tax assets and liabilities are recognized on temporary differences resulting from consolidation procedures. Noncontrolling interest (“NCI”) is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent and is recognized at its fair value at the date of first consolidation. Profits and losses attributable to the noncontrolling interests are separately disclosed in the consolidated statements of income. The Company writes put options on NCI mainly for dialysis clinics in which nephrologists or nephrology groups own an equity interest. While in certain of the dialysis clinics the Company is generally the majority owner, other non-affiliated parties, such as groups of nephrologists or a single nephrologist, hold an NCI position. Generally, the put options associated with this business model are valid for an unlimited time. Accordingly, they do not constrain a long-term investment into a dialysis clinic by the NCI holder. The put options provide for settlement in cash. For these put options, IAS 32, Financial Instruments: Presentation (“IAS 32”) paragraph 23 requires the Company to recognize a liability for the present value of the exercise price of the option. The potential purchase price liability is recorded in other current provisions and other current liabilities and other non-current provisions and other non-current liabilities at fair value at the balance sheet date. The exercise price of the option is generally based on fair value which is approximated by a multiple of earnings, e.g. a multiple of the proportionate earnings before interest, taxes, depreciation and amortization of the dialysis clinic, and is therefore affected by the periodic changes in the profitability of such a clinic. The Company believes the accounting treatment of the change in fair value of the put liability under IFRS to this date has not been finally clarified. In the absence of an IFRS that specifically applies to the accounting for put options on NCI, the Company, in line with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”) paragraph 10, applied the present access method. According to the present access method, NCI are further recorded in equity. The initial recognition of the purchase price liability, as well as valuation differences, is recorded neutral to profit or loss in equity (see note 1 h). This presentation results in information that is relevant to the economic decision-making needs of users and to provide reliable financial information as the Company sees these NCI with written put options as equity holders and accordingly attributes net income to NCI. The consolidated financial statements for 2019 include FMC-AG & Co. KGaA as well as 2,215 companies. In 2019, 51 companies were accounted for by the equity method. During 2019, 195 companies were first-time consolidations and 16 companies were deconsolidated. The complete list of participations in affiliated and associated companies of FMC-AG & Co. KGaA will be submitted to the electronic Federal Gazette and the electronic companies register. For 2019, the following fully consolidated German subsidiaries of the Company will apply the exemption provided in Section 264 (3) or Section 264b of the HGB and therefore will be exempt from applying certain legal requirements to prepare notes to the statutory standalone financial statements and a management report as well as the requirements of an independent audit and public disclosure. Companies exempt from applying certain legal requirements Name of the company Registered office of the company Ärztliches Versorgungszentrum Ludwigshafen GmbH im Lusanum Ludwigshafen am Rhein, Germany DiZ München Nephrocare GmbH Munich, Germany ET Software Developments GmbH Heidelberg, Germany Fresenius Medical Care Beteiligungsgesellschaft mbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Deutschland GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care EMEA Management GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Frankfurt am Main GmbH Frankfurt am Main, Germany Fresenius Medical Care GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Investment GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Beteiligungsgesellschaft mbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Vermögensverwaltungs GmbH & Co. KG Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Zwei Vermögensverwaltungs GmbH & Co. KG Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Ventures GmbH Bad Homburg v. d. Höhe, Germany Medizinisches Versorgungszentrum Berchtesgaden GmbH Berchtesgaden, Germany MVZ Gelsenkirchen-Buer GmbH Gelsenkirchen, Germany Nephrocare Ahrensburg GmbH Ahrensburg, Germany Nephrocare Augsburg GmbH Augsburg, Germany Nephrocare Berlin-Weißensee GmbH Berlin, Germany Nephrocare Betzdorf GmbH Betzdorf, Germany Nephrocare Bielefeld GmbH Bielefeld, Germany Nephrocare Buchholz GmbH Buchholz, Germany Nephrocare Daun GmbH Daun, Germany Nephrocare Deutschland GmbH Bad Homburg v. d. Höhe, Germany Nephrocare Döbeln GmbH Döbeln, Germany Nephrocare Dortmund, GmbH Dortmund, Germany Nephrocare Friedberg GmbH Friedberg, Germany Nephrocare Grevenbroich GmbH Grevenbroich, Germany Nephrocare Hagen GmbH Hagen, Germany Nephrocare Hamburg-Altona GmbH Hamburg, Germany Nephrocare Hamburg-Barmbek GmbH Hamburg, Germany Nephrocare Hamburg-Süderelbe GmbH Hamburg, Germany Nephrocare Ingolstadt GmbH Ingolstadt, Germany Nephrocare Kaufering GmbH Kaufering, Germany Nephrocare Krefeld GmbH Krefeld, Germany Nephrocare Lahr GmbH Lahr, Germany Nephrocare Leverkusen GmbH Leverkusen, Germany Nephrocare Ludwigshafen GmbH Ludwigshafen am Rhein, Germany Nephrocare Mannheim GmbH Mannheim, Germany Nephrocare Mönchengladbach GmbH Mönchengladbach, Germany Nephrocare Mühlhausen GmbH Mühlhausen, Germany Nephrocare München-Ost GmbH Munich, Germany Nephrocare Münster GmbH Münster, Germany Nephrocare MVZ Aalen GmbH Aalen, Germany Nephrocare Oberhausen GmbH Oberhausen, Germany Nephrocare Papenburg GmbH Papenburg, Germany Nephrocare Pirmasens GmbH Pirmasens, Germany Nephrocare Püttlingen GmbH Püttlingen, Germany Nephrocare Recklinghausen GmbH Recklinghausen, Germany Nephrocare Rostock GmbH Rostock, Germany Nephrocare Salzgitter GmbH Salzgitter, Germany Nephrocare Schrobenhausen GmbH Schrobenhausen, Germany Nephrocare Starnberg GmbH Starnberg, Germany Nephrocare Wetzlar GmbH Wetzlar, Germany Nephrocare Witten GmbH Witten, Germany Nephrologisch-Internistische Versorgung Ingolstadt GmbH Ingolstadt, Germany Nova Med GmbH Vertriebsgesellschaft für medizinischtechnische Geräte und Verbrauchsartikel Bad Homburg v. d. Höhe, Germany VIVONIC GmbH Sailauf, Germany Zentrum für Nieren- und Hochdruckkrankheiten Bensheim GmbH Bensheim, Germany |
Cash and cash equivalents | b) Cash and cash equivalents Cash and cash equivalents comprise cash funds and all short-term investments with original maturities of up to three months. Short-term investments are highly liquid and readily convertible into known amounts of cash. The risk of changes in value is insignificant. |
Trade accounts and other receivables | c) Trade accounts and other receivables Trade accounts and other receivables are posted at the nominal value less individual allowances for doubtful accounts. For information regarding allowance for doubtful accounts see note 2 c). |
Inventories | d) Inventories Inventories are stated at the lower of cost (determined by using the average or first-in, first-out method) or net realizable value (see note 8). Costs included in inventories are based on invoiced costs and/or production costs as applicable. Included in production costs are material, direct labor and production overhead, including depreciation charges. |
Property, plant and equipment | e) Property, plant and equipment Property, plant, and equipment are stated at cost less accumulated depreciation (see note 10). Maintenance and repair costs (day-to-day servicing) are expensed as incurred. The Company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing parts and major inspections if it is probable that the future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. Depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets ranging from 4 to 50 years for buildings and improvements with a weighted average life of 14 years and 3 to 19 years for machinery and equipment with a weighted average life of 10 years. Internal use platform software that is integral to the computer equipment it supports is included in property, plant and equipment. In fiscal years until 2018, prior to the implementation of IFRS 16, property, plant and equipment under capital leases was stated at the present value of future minimum lease payments at the inception of the lease, less accumulated depreciation. Equipment held under capital leases and leasehold improvements was amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. |
Leases | f) Leases A lease is defined as a contract that conveys the right to use an underlying asset for a period of time in exchange for consideration. A contract is or contains a lease if: · the underlying asset is identified in the contract, and · the customer has both the right to direct the identified asset’s use and to obtain substantially all the economic benefits from that use. Under IFRS 16, the Company is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments for almost all leases. The Company decided not to apply the guidance within IFRS 16 to leases with a total maximum term of twelve months (short-term leases) and leases for underlying assets of low-value. These leases are exempt from balance sheet recognition and lease payments will be recognized as expenses over the lease term. IFRS 16 is not applied to leases of intangible assets. Lease liabilities Lease liabilities are initially recognized at the present value of the following payments: · fixed lease payments (including in-substance fixed payments), less any lease incentives receivable, · variable lease payments (linked to an index or interest rate), · expected payments under residual value guarantees, · the exercise price of purchase options, where exercise is reasonably certain, · lease payments in optional renewal periods, where exercise of extension options is reasonably certain, and · penalty payments for the termination of a lease, if the lease term reflects the exercise of the respective termination option. Lease payments are discounted using the implicit interest rate underlying the lease if this rate can be readily determined. Otherwise, the incremental borrowing rate is used as the discount rate. Lease liabilities are subsequently measured at amortised cost using the effective interest method. Furthermore, lease liabilities may be remeasured due to lease modifications or reassessments of the lease. A lease modification is any change in lease terms that was not part of the initial terms and conditions of the lease, including increases of the scope of the lease by adding the right to use one or more underlying assets or extending the contractual lease term, decreases of the scope of the lease by removing the right to use one or more underlying assets or shortening the contractual lease term or changes in the consideration. Reassessments are changes in estimates or changes triggered by a clause that was part of the initial lease contract, including changes in future lease payments arising from a change in an index or rate, change in the Company's estimate of the amount expected to be payable under residual value guarantees or change in the Company’s assessment of whether it will exercise purchase, extension or termination options. A lease modification is accounted for as a separate lease if the modification increases the scope of the lease by adding the right to use one or more underlying assets and the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope. Where a lease modification is accounted for as a separate lease, the respective new lease is recognized at the effective date of the modification based on the illustrated recognition and valuation principles with the initial lease remaining unchanged. Where a lease modification is not accounted for as a separate lease, the initial lease is remeasured. For most reassessments and lease modifications that are not accounted for a separate lease, lease liabilities are remeasured by discounting the revised lease payments at a revised discount rate. For specific reassessments, the historical interest rate is used. The revised discount rate is determined at the effective date of the lease modification or the reassessment. When lease liabilities are remeasured in this way, a corresponding remeasurement is made to the carrying amount of the right-of-use asset. Where a lease modification results in a decrease of the scope of the lease, any gain or loss is recognized in profit or loss to reflect the respective partial or full termination of the lease. For lease contracts that include both lease and non-lease components that are not separable from lease components, no allocation is performed. Each lease component and any associated non-lease components are accounted for as a single lease. Right-of-use assets The Company recognises right-of-use asset at the commencement date of the respective lease. Right-of-use asset are stated at cost less accumulated depreciation. Upon initial recognition, cost comprises of: · the initial lease liability amount, · initial direct costs incurred when entering into the lease, · (lease) payments before commencement date of the respective lease, and · an estimate of costs to dismantle and remove the underlying asset, · less any lease incentives received. Right-of-use assets are depreciated over the shorter of the lease term or the useful life of the underlying asset using the straight-line method. Where a lease agreement includes a transfer of ownership at the end of the lease term or the exercise of a purchase option is deemed reasonably certain, right-of-use assets are depreciated over the useful life of the underlying asset using the straight-line method. In addition, right-of-use assets are reduced by impairment losses, if any, and adjusted for certain remeasurements. For reassessments and lease modifications that are not accounted for as separate leases, a remeasurement corresponding to the respective remeasurement of the lease liability is recognized (for lease modifications and reassessments, as well as for partial or full termination of a lease please see guidance on “Lease liabilities” above). If the carrying amount of a right-of-use asset is reduced to zero by such remeasurements, the exceeding amount is recorded in profit or loss. Right-of-use assets are classified into right-of-use assets relating to land, buildings and improvements or machinery and equipment. In addition, prepayments on right-of-use assets are presented separately (see note 21). |
Intangible assets and goodwill | g) Intangible assets and goodwill Intangible assets such as non-compete agreements, technology, distribution rights, patents, licenses to treat, licenses to manufacture, distribute and sell pharmaceutical drugs, exclusive contracts and exclusive licenses, trade names, management contracts, application software, acute care agreements and customer relationships are recognized and reported apart from goodwill (see note 11). Patient relationships, however, are not reported as separate intangible assets due to the missing contractual basis but are part of goodwill. Goodwill and identifiable intangibles with indefinite useful lives are not amortized but tested for impairment annually or when an event becomes known that could trigger an impairment. The Company identified trade names and certain qualified management contracts as intangible assets with indefinite useful lives because, there is no foreseeable limit to the period over which those assets are expected to generate net cash inflows for the Company. Intangible assets with finite useful lives are amortized over their respective useful lives to their residual values. The Company amortizes non-compete agreements over their useful life which on average is 8 years. Technology is amortized over its useful life of 12 years. Internally developed intangibles are amortized on a straight-line basis over a useful life of 8 years. Licenses to manufacture, distribute and sell pharmaceutical drugs, exclusive contracts and exclusive licenses are amortized over their useful life which on average is 12 years. Customer relationships are amortized over their useful life of 10 years. All other intangible assets are amortized over their weighted average useful lives of 7 years. The weighted average useful life of all amortizable intangible assets is 10 years. Intangible assets with finite useful lives are evaluated for impairment when events have occurred that may give rise to an impairment (see note 1 o). To perform the annual impairment test of goodwill, the Company identified its groups of cash generating units (CGUs) and determined their carrying value by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those CGUs. CGUs reflect the lowest level on which goodwill is monitored for internal management purposes. One CGU was identified in the North America Segment, in the EMEA Segment, in the Asia-Pacific Segment and in the Latin America Segment. For the purpose of goodwill impairment testing, all corporate assets and liabilities are allocated to the CGUs. At least once a year, the Company compares the recoverable amount of each CGU to the CGU’s carrying amount. The recoverable amount (value in use) of a CGU is determined using a discounted cash flow approach based upon the cash flow expected to be generated by the CGU. In case that the value in use of the CGU is less than its carrying amount, the difference is at first recorded as an impairment of the carrying amount of the goodwill. To evaluate the recoverability of intangible assets with indefinite useful lives, the Company compares the fair values of intangible assets with their carrying values. An intangible asset’s fair value is determined using a discounted cash flow approach or other methods, if appropriate. For further information see note 2 a). |
Financial instruments | h) Financial instruments The Company classifies its financial instruments in accordance with IFRS 9 in the following measurement categories: at amortized cost, at fair value through profit and loss (“FVPL”) and at fair value through other comprehensive income (“FVOCI”). Financial assets are classified depending on the business model in which the financial assets are held and the contractual terms of the cash flows. Financial assets are only reclassified when the business model for managing those assets changes. During the reporting period no financial instruments were reclassified. Purchases and sales of financial assets are accounted for on the trading day. The Company does not make use of the fair value option, which allows financial liabilities to be classified at FVPL upon initial recognition. At initial recognition financial asset and financial liabilities are measured at fair value. Excluded are trade accounts receivables. At initial recognition trade accounts receivables (in accordance with IFRS 15) are measured at their transaction price. Subsequent measurement is either at cost, FVPL or FVOCI. In general, financial liabilities are classified and subsequently measured at amortized cost, with the exception of contingent considerations resulting from a business combination, noncontrolling interests subject to put provisions as well as derivative financial liabilities. Investments in equity instruments are recognized and subsequently measured at fair value. The Company’s equity investments are not held for trading. In general, changes in the fair value of equity investments are recognized in the income statement. However, at initial recognition the Company elected, on an instrument-by-instrument basis, to represent subsequent changes in the fair value of individual strategic equity investments in other comprehensive income (loss) (“OCI”). The Company invested in several debt securities, with the objective to achieve both collecting contractual cash flows and selling the financial assets. All debt securities are consequently measured at fair value. Some of these securities give rise on specified dates to cash flows that are solely payments of principle and interest. These securities are subsequently measured at FVOCI. Other securities are measured at FVPL. The Company, as option writer on behalf of existing put options, can be obligated to purchase the noncontrolling interests held by third parties. The obligations are in the form of put provisions and are exercisable at the third-party owners’ discretion within specified periods as outlined in each specific put provision. If these put provisions were exercised, the Company would be required to purchase all or part of third-party owners’ noncontrolling interests at the appraised fair value at the time of exercise. The initial recognition and subsequent measurement are recognized in equity. For further information related to the estimation of these fair values, see note 23. Derivative financial instruments which primarily include foreign currency forward contracts and interest rate swaps are recognized as assets or liabilities at fair value in the balance sheet (see note 23). From time to time, the Company may enter into other types of derivative instruments which are dealt with on a transaction by transaction basis. Changes in the fair value of derivative financial instruments classified as cash flow hedges are recognized in accumulated OCI (“AOCI”) in shareholders’ equity. The Company only designated the change in fair value of the spot element of foreign exchange forward contracts as the hedging instrument in cash flow hedging relationships. The forward elements are separately accounted for as cost of hedging in a separate component within AOCI. The ineffective portion of cash flow hedge is recognized in the income statement. The change in fair value of derivatives that do not qualify for hedge accounting is recorded in the income statement and usually offsets the changes in value recorded in the income statement for the underlying asset or liability. Derivatives embedded in host contracts are accounted for as separate derivatives if their economic characteristics and risks are not closely related to those of the host contracts. These embedded derivatives are measured at fair value with changes in fair value recognized in the income statement. Before January 1, 2018, the following categories according to IAS 39, Financial Instruments: Recognition and Measurement (“IAS 39”) were relevant for the Company: loans and receivables, financial liabilities measured at amortized cost, available for sale financial assets as well as financial assets/liabilities measured at fair value through profit or loss. All other categories were immaterial or not existing. The Company regularly reviewed if objective substantial evidence occurred that would indicate an impairment of a financial asset or a portfolio of financial assets. After testing the recoverability of these assets, a possible impairment loss was recorded in the consolidated statement of income. Gains and losses of available for sale financial assets were recognized in AOCI in shareholders’ equity until the financial asset was disposed of or if it was considered to be impaired. In these cases, the accumulated net loss recorded in AOCI was transferred to the income statement. Changes in the fair value of derivative financial instruments classified as fair value hedges and in the corresponding underlying assets and liabilities were recognized periodically in earnings, while the effective portion of changes in fair value of derivative financial instruments classified as cash flow hedges were recognized in AOCI in shareholders’ equity. All amounts recorded in AOCI were subsequently reclassified and recorded in the consolidated statement of income. |
Impairment of financial assets | i) Impairment of financial assets The impairment of financial assets is based on the expected credit loss approach, as introduced by IFRS 9. Prior to the introduction of IFRS 9, the incurred loss model of IAS 39 required the recognition of an allowance once a loss event occurred. An additional allowance was recorded based on individual country risk for receivables overdue by more than one year. IFRS 9 replaces the incurred loss model under IAS 39 with an expected credit loss approach. The expected credit loss approach requires that all impacted financial assets will carry a loss allowance based on their expected credit losses. Expected credit losses are a probability-weighted estimate of credit losses over the contractual life of the financial assets. This model comprises a three-stage approach. Upon recognition, the Company shall recognize losses that are expected within the next 12 months. If credit risk deteriorates significantly, from that time, impairment losses shall amount to lifetime expected losses. When assessing for significant increases in credit risk, the Company shall compare the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial recognition. The Company should consider reasonable and supportable information including historic loss rates, present developments such as liquidity issues and information about future economic conditions, to ensure foreseeable changes in the customer-specific or macroeconomic environment are considered. Separately, there is the rebuttable presumption that the credit risk has increased significantly since the initial recognition when contractual payments are overdue by more than 30 days. In case of objective evidence of impairment there is an assignment to stage 3. The assignment of a financial asset to stage 3 should rely on qualitative knowledge on the customers’ unfavorable financial position (for example bankruptcy, lawsuits with private or public payers), or quantitative criteria, based on an individual maturity analysis. Independently, there is an assignment to stage 3 if the contractual payments are overdue by more than 360 days. When a counterpart defaults, all financial assets against this counterpart are considered impaired. The definition of default is mainly based on payment practices specific to individual regions and businesses. The Company recognizes a loss allowance for expected credit losses on financial assets measured at amortized cost, contract assets and lease receivables as well as in investments in debt securities measured at fair value through other comprehensive income. The financial assets mainly comprise trade accounts and other receivables as well as cash and cash equivalents. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective instrument. Financial assets whose expected credit loss is not assessed individually are grouped on the basis of geographical regions and the impairment is generally assessed on the basis of macroeconomic indicators such as credit default swaps. For trade accounts receivable, the Company uses the simplified method which requires recognizing lifetime expected credit losses at inception. However, expected credit losses on cash and cash equivalents are measured according to the general method which is based on 12-month expected credit losses. Due to the short maturity term of the financial instruments this corresponds with the lifetime expected loss. Based on the external credit ratings of the counterparties the Company considers that its cash and cash equivalents have a low credit risk. |
Foreign currency translation | j) Foreign currency translation For purposes of these consolidated financial statements, the euro is the reporting currency. The requirement to report in euro arises from Section 315e and Section 244 HGB. Substantially all assets and liabilities of foreign subsidiaries, that use a functional currency other than the euro, are translated at year-end exchange rates, while revenues and expenses are translated at average exchange rates. Adjustments for foreign currency translation fluctuations are excluded from net earnings and are reported in AOCI. In addition, the translation adjustments of certain intercompany borrowings, which are of a long-term nature, are reported in AOCI. The exchange rates of the U.S. dollar affecting foreign currency translation developed as follows: Exchange rates December 31, 2019 December 31, 2018 2019 2018 2017 spot exchange rate in € spot exchange rate in € average exchange rate in € average exchange rate in € average exchange rate in € 1 U.S. dollar 0.89015 0.87336 0.89328 0.84678 0.88519 |
Revenue recognition | k) Revenue recognition The Company has adopted IFRS 15 as of January 1, 2018, which resulted in changes in accounting policies. In accordance with the transition provisions in IFRS 15, the new rules have been adopted only to those contracts that are not considered completed contracts as of January 1, 2018 following the cumulative effect method with no restatement of the comparative periods presented. For both health care services revenue and health care products revenue, patients, third party payors and customers are billed at our standard rates net of contractual allowances, discounts or rebates to reflect the estimated amounts to be receivable from these payors. Health care services Health care services revenue, other than the hospitalist and insurance revenues discussed below, are recognized on the date the patient receives treatment and includes amounts related to certain services, products and supplies utilized in providing such treatment. The patient is obligated to pay for health care services at amounts estimated to be receivable based upon the Company’s standard rates or at rates determined under reimbursement arrangements. In the U.S., these arrangements are generally with third party payors, such as Medicare, Medicaid or commercial insurers. Outside the U.S., the reimbursement is usually made through national or local government programs with reimbursement rates established by statute or regulation. Prior to the divestiture of the Company’s controlling interest in Sound Inpatient Physicians, Inc. ("Sound") on June 28, 2018, hospitalist revenues in the U.S. were reported at the estimated net realizable amount from third-party payors, client hospitals, and others at the time services were provided. Third-party payors included federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, and commercial insurance companies. Inpatient acute care services rendered to Medicare and Medicaid program beneficiaries were paid according to a fee-for-service schedule. These rates varied according to a patient classification system that was based on clinical, diagnostic and other factors. Inpatient acute services generated through payment arrangements with managed care health plans and commercial insurance companies were recorded on an accrual basis in the period in which services were provided at established rates. For services performed for patients where the collection of the billed amount or a portion of the billed amount cannot be determined at the time services are performed the Company concludes that the consideration is variable (“implicit price concession”) and records the difference between the billed amount and the amount estimated to be collectible as a reduction to health care services revenue, whereas prior to the adoption of IFRS 15 it was recorded as part of selling, general and administrative expenses as an allowance for doubtful accounts. Implicit price concessions include such items as amounts due from patients without adequate insurance coverage, patient co-payment and deductible amounts due from patients with health care coverage. The Company determines implicit price concessions based primarily upon past collection history. Upon receipt of new information relevant for the determination of the implicit price concession, the Company constrains, or adjusts the constraints for the variable consideration of the transaction price. In the U.S., the Company generates revenue from insurance contracts in accordance with IFRS 4, Insurance Contracts (“IFRS 4”). Insurance premium revenue is recognized as earned each month and risk adjustments are offset against revenue. Prior to January 1, 2019, in the U.S the Company provided Medicare Advantage ESRD Chronic Conditions Special Needs Plan products. These were Medicare Advantage health plans offered by the Company that contracted with the Centers for Medicare and Medicaid Services (“CMS”) to provide patients with Medicare benefits and receive capitated payments from CMS. Furthermore, the Company has also entered into sub-capitation and other shared savings arrangements with certain payors. Revenue from insurance contracts is disclosed as part of “Other revenue” separately from “Revenue from contracts with customers” in the notes to the consolidated financial statements. Health care products In the health care product business, major revenues are generated from the sale of dialysis machines and water treatment systems, home hemodialysis products, disposable products and maintenance agreements for the Company´s health care products. Revenues from the sale of dialysis machines and water treatment system are typically recognized upon installation and provision of the necessary technical instructions as only thereafter the customer obtains control of the medical device whereas prior to the adoption of IFRS 15 revenues were recorded upon transfer of title to the customer, either at the time of shipment, upon receipt or upon any other terms that clearly define passage of title. A small portion of the Company´s revenue is recognized from sales of dialysis machines, home hemodialysis products and other products used for in-center hemodialysis treatment to distributors. When the distributor is the principal in the contract, the revenue allocated to the machine or the products will be recognized upon transfer of title to the distributor. In case the Company is committed to perform the installation, revenue allocated to the installation would be recorded separately upon installation of the machine at the end-customers’ premises. In case the distributor is only an agent in the contract, revenue for sale of the machine would be recorded upon installation. Under consignment arrangements revenue is recognized upon withdrawal of the products by the customer. Maintenance is provided over time, and as such revenue is typically recognized on a straight-line basis. All other dialysis and non-dialysis product revenues are recognized upon transfer of title to the customer. Product revenues are normally based upon pre-determined rates that are established by contractual arrangement. A portion of dialysis product revenues is generated from arrangements which give the customer, typically a health care provider, the right to use dialysis machines. In the same contract the customer agrees to purchase the related treatment disposables at a price marked up from the standard price list. If the right to use the machine is conveyed through an operating lease and the customer agrees to purchase a minimum number of related treatment disposables, FMC-AG & Co. KGaA does not recognize revenue upon delivery of the dialysis machine but recognizes revenue on the sale of disposables upon transfer of control with revenue for the use of dialysis machines recognized straight-line over the term of the lease contract. When there is no such agreement that the customer purchases a minimum number of related treatment disposables, revenue is recognized only on the sale of disposables unless the timing of the first purchase order of related treatment disposables justifies a combination of contracts according to IFRS 15. If the lease of the machines is a finance lease, ownership of the dialysis machine is transferred to the user upon installation of the dialysis machine at the customer site. In this type of contract, revenue is recognized in accordance with the accounting principles for finance leases. For certain home-dialysis products the Company offers month-to month rental arrangements, where revenue is recognized on a monthly basis. In addition, for some licensing agreements and equipment sales to dialysis clinic customers in the area of home-dialysis, the Company recognizes upfront fees received as lease revenue on a straight-line basis over the term of the contract. IFRS 15 specifically excludes leases from the scope of the revenue standard. Therefore, the transaction price is allocated in accordance with IFRS 15, and revenue is recognized separately for the lease and the non-lease components of the contract in accordance with IFRS 16. Revenue from lease contracts is disclosed as part of “Other revenue” separately from “Revenue from contracts with customers” in the notes to the consolidated financial statements. |
Capitalized interest | l) Capitalized interest The Company includes capitalized interest as part of the cost of the asset if it is directly attributable to the acquisition, construction or manufacture of qualifying assets. For the fiscal years 2019, 2018 and 2017, interest of €7,240, €5,724 and €4,758, based on an average interest rate of 3.84%, 4.03% and 4.19%, respectively, was recognized as a component of the cost of assets. |
Research and development expenses | m) Research and development expenses Research is the original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge. Development is the technical and commercial implementation of research results and takes place before the start of commercial production or use. Research costs are expensed as incurred. Development costs that fully meet the criteria for the recognition of an intangible asset set out in IAS 38, Intangible Assets (“IAS 38”) are capitalized as intangible asset. |
Income taxes | n) Income taxes Current taxes are calculated based on the profit (loss) of the fiscal year and in accordance with local tax rules of the respective tax jurisdictions. Expected and executed additional tax payments and tax refunds for prior years are also taken into account. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the single entity’s financial statement carrying amounts of existing assets and liabilities and their respective tax basis, tax credits and tax loss carryforwards which are probable to be utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantially enacted by the end of the reporting period. A change in tax rate for the calculation of deferred tax assets and liabilities is recognized in the period the new laws are enacted or substantively enacted. The effects of the adjustment are generally recognized in the income statement. The effects of the adjustment are recognized in equity, if the temporary differences are related to items directly recognized in equity. Deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. In addition, deferred tax assets and liabilities are not recognized if they arise from the initial recognition of an asset or a liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss. The carrying amount of a deferred tax asset is reviewed at each balance sheet date. A deferred tax asset is recognized to the extent that the utilization of parts or all of it is probable because sufficient taxable profit will be available (see note 4 h). The determination of future taxable income is based on assumptions on future market conditions and future profits of FMC-AG & Co. KGaA and considers all currently available information as well as the level of historical taxable income. In addition, the determination of the recoverable amount of deferred tax assets considers implemented tax strategies. The Company recognizes assets and liabilities for uncertain tax treatments to the extent it is probable the tax will be recovered or that the tax will be payable, respectively. In North America and Germany, interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore are accounted for under IAS 37. All other jurisdictions account for interest and penalties related to income taxes in accordance with local tax rules of the respective tax jurisdiction either under IAS 37 or as income tax expense under IAS 12. |
Impairment | o) Impairment The Company reviews the carrying amount of its property, plant and equipment, its intangible assets with definite useful lives, its right-of-use assets as well as other non-current assets for impairment whenever events or changes in circumstances indicate that the carrying amount is higher than the asset’s net realizable value or its value in use in accordance with IAS 36, Impairment of Assets (“IAS 36”). The net realizable value of an asset is defined as its fair value less costs to sell. The value in use is the present value of future cash flows expected to be derived from the relevant asset. If it is not possible to estimate the future cash flows from the individual assets, impairment is tested on the basis of the future cash flows of the corresponding CGUs. Impairment losses, except impairment losses recognized on goodwill, are reversed up to the amount of the amortised acquisition cost, as soon as the reasons for impairment no longer exist. Long-lived assets to be disposed of by sale are reported at the lower of carrying value or fair value less cost to sell and depreciation is ceased. Long-lived assets to be disposed of other than by sale are considered to be held and used until disposal. |
Debt issuance costs | p) Debt issuance costs Debt issuance costs related to a recognized debt liability are presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. These costs are amortized over the term of the related obligation (see note 14). |
Self-insurance programs | q) Self-insurance programs See note 2 d). |
Concentration of risk | r) Concentration of risk The Company is engaged in the manufacture and sale of products for all forms of kidney dialysis, principally to health care providers throughout the world, and in providing kidney dialysis treatment. The Company also provides additional health care services under Care Coordination. The Company performs ongoing evaluations of its customers' financial condition and, generally, requires no collateral. Revenues which were earned and subject to regulations under Medicare and Medicaid, governmental health care programs administered by the United States government, were approximately 33%, 33%, and 34% of the Company's worldwide revenues in 2019, 2018 and 2017, respectively. See note 2 c) for concentration risks of debtors or group of debtors as well as note 8 for discussion of suppliers with long-term purchase commitments. |
Legal contingencies | s) Legal contingencies See note 2 b). |
Other provisions | t) Other provisions In accordance with IAS 12 and IAS 37, accruals for taxes and other obligations are recognized when there is a present obligation to a third party arising from past events, it is probable that the obligation will be settled in the future and the required amount can be reliably estimated. Provisions by their nature are more uncertain than most other items in the statement of financial position. Tax accruals include obligations for the current year and for prior periods. Non-current provisions with a remaining period of more than one year are discounted to the present value of the expenditures expected to settle the obligation. |
Earnings per share | u) Earnings per share Basic earnings per share is calculated in accordance with IAS 33, Earnings per Share (“IAS 33”). Basic earnings per share is calculated by dividing net income attributable to shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share include the effect of all potentially dilutive instruments on shares that would have been outstanding during the years presented had the dilutive instruments been issued. For the calculation of basic earnings per share, treasury stock is not considered outstanding and is therefore deducted from the number of shares outstanding. Equity-settled awards granted under the Company’s stock incentive plans (see note 20), are potentially dilutive equity instruments. |
Treasury stock | v) Treasury stock The Company may, from time to time, acquire its own shares (“Treasury Stock”) as approved by its shareholders. The acquisition, sale or retirement of its Treasury Stock is recorded separately in equity. The value of such Treasury Stock is shown as a reduction of the Company’s equity. |
Employee benefit plans | w) Employee benefit plans Pension obligations for post-employment benefits are measured in accordance with IAS 19 (revised 2011), Employee Benefits (“IAS 19”), using the projected unit credit method, taking into account future salary and trends for pension increase. The Company uses December 31 as the measurement date when measuring the deficit or surplus of all plans. For the Company’s funded benefit plans the defined benefit obligation is offset against the fair value of plan assets (deficit or surplus). A pension liability is recognized in the consolidated balance sheet if the defined benefit obligation exceeds the fair value of plan assets. A pension asset is recognized (and reported under “Other non-current assets” in the consolidated balance sheet) if the fair value of plan assets exceeds the defined benefit obligation and if the Company has a right of reimbursement against the fund or a right to reduce future payments to the fund. Net interest costs are calculated by multiplying the benefit obligation (fair value of plan assets) at beginning of the year with the discount rate utilized in determining the benefit obligation. Remeasurements include actuarial gains and losses resulting from the evaluation of the defined benefit obligation as well as from the difference between actual investment returns and the return implied by the net interest cost. In the event of a surplus for a defined benefit pension plan remeasurements can also contain the effect from asset ceiling, as far as this effect is not included in net interest costs. Remeasurements are recognized in AOCI completely. It is not allowed to reclassify the remeasurements in subsequent periods. Components of net periodic benefit cost are recognized in profit and loss of the period. |
Share-based plans | x) Share-based plans The grant date fair value of stock options and convertible equity instruments that are settled by delivering equity instruments granted to the Management Board and executive employees of the Group entities by FMC-AG & Co. KGaA is measured in accordance with IFRS 2, Share-based Payment (“IFRS 2”) using the binominal option pricing model and recognized as expense over the vesting period of the stock option plans. For certain exceptions a shorter vesting period may apply after which the stock options will not forfeit in any way. In such cases the vesting period is shortened accordingly. The balance sheet date fair value of cash-settled phantom stock granted to the Management Board and executive employees of the Company is calculated in accordance with IFRS 2 using the binominal option pricing model. The corresponding liability based on the balance sheet date fair value is accrued over the vesting period of the phantom stock plans. For certain exceptions a shorter vesting period may apply after which the phantom stock will not forfeit in any way. In such cases the vesting period is shortened accordingly. The balance sheet date fair value of cash-settled performance shares granted to the Management Board and executive employees of the Company is calculated using the Monte Carlo pricing model in accordance with IFRS 2. The corresponding liability based on the balance sheet date fair value is accrued over the vesting periods of the performance share plans. For certain exceptions a shorter vesting period may apply after which the performance shares will not forfeit in any way. In such cases the vesting period is shortened accordingly. |
Recent pronouncements | y) Recent pronouncements Recently implemented accounting pronouncements The Company has prepared its consolidated financial statements at December 31, 2019 in conformity with IFRS that have to be applied for fiscal years beginning on January 1, 2019. In 2019, the Company applied the following new standard relevant for its business for the first time: IFRS 16 In January 2016, the IASB issued IFRS 16, which supersedes the current standard on lease-accounting, IAS 17, as well as the interpretations IFRIC 4, Determining whether an arrangement contains a lease, Standard Interpretations Committee (“SIC”)‑15, Operating leases - incentives and SIC‑27, Evaluating the substance of transactions in the legal form of a lease. IFRS 16 significantly changes lessee accounting. For almost all leases, a lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Leases with a total maximum term of twelve months (short-term leases) and leases for underlying assets of low-value may be exempt from balance sheet recognition by applying an accounting policy choice. Depreciation of the right-of-use asset and interest on the lease liability must be recognized in the income statement for every on-balance lease contract. Therefore, straight-line rental expenses will no longer be shown for the vast majority of the leases. The lessor accounting requirements in IAS 17 are substantially carried forward. The Company applies the modified retrospective method in accordance with IFRS 16 as the transition method. Accordingly, the cumulative effect from first-time application is recognized in the opening balance of retained earnings as of January 1, 2019 without adjustments to the comparative information of the previous period. In the application of the modified retrospective method, the carrying amount of the lease liability at the date of the initial application is determined by discounting the remaining lease payments of lease agreements that were classified as operating leases under IAS 17 using the term-, country-, and currency-specific incremental borrowing rate at date of initial application. Furthermore, right-of-use assets are to be recognized. In the application of the modified retrospective method, the carrying amount of the right-of-use asset equals the carrying amount of the lease liability adjusted for any prepaid or accrued lease payments. For a part of the existing contracts, the Company recognizes the right-of-use asset with its carrying amount assuming the new standard had been applied since the commencement date of the lease discounted using its term-, country-, and currency-specific incremental borrowing rate at the date of initial application. Regarding the options and exemptions available upon the initial application of IFRS 16, the Company adopted the following approach: · IFRS 16 is only applied to contracts that were previously identified as leases under IAS 17 and IFRIC 4. · Recognition, valuation and disclosure principles of IFRS 16 are not applied to lease contracts with a lease term ending in less than 12 months from the date of the initial application. The respective lease contracts are accounted for as if they were short term leases and recognized as an expense accordingly. · Material initial direct costs are included in the measurement of a right-of-use asset with the carrying amount assuming the new standard was applied since the commencement date of the lease. · Upon initial recognition no impairment review is performed. The right-of-use assets are adjusted for onerous contract provisions, recognized on the consolidated balance sheet immediately before the date of initial application. Right-of-use assets from lease contracts are classified in accordance with the Company’s classification of property, plant and equipment: · Right-of-use assets: Land · Right-of-use assets: Buildings and improvements · Right-of-use assets: Machinery and equipment In addition to the right-of-use asset categories above, prepayments on right-of-use assets are presented separately. Right-of-use assets from lease contracts and lease obligations are presented separately from property, plant and equipment and other financial debt in the consolidated balance sheet. For lease contracts that include both lease and non-lease components that are not separable from lease components, no allocation is performed. Each lease component and any associated non-lease components are accounted for as a single lease. Upon the initial application of IFRS 16 as of January 1, 2019, the Company recognized right-of-use assets of €4,276,532 and lease liabilities from third and related parties of €4,552,431. The cumulative effect from the first-time application is recognized in the opening balance of retained earnings (€120,809) as well as in noncontrolling interests (€15,526) as of January 1, 2019. The following table shows a reconciliation of the future minimum rental payments as of December 31, 2018 to the lease liabilities as of January 1, 2019: Reconciliation of lease liabilities upon the initial application of IFRS 16 in € THOUS Future minimum rental payments as of December 31, 2018 (IAS 17) 5,527,638 less short-term leases (21,936) less leases of low-value assets (34,145) other (25,169) Gross lease liabilities as of January 1, 2019 5,446,388 Discounting (893,957) Lease liabilities as a result of the initial application of IFRS 16 as of January 1, 2019 4,552,431 Lease liabilities from capital leases as of December 31, 2018 (IAS 17) 36,144 Lease liabilities as of January 1, 2019 4,588,575 The lease liabilities were discounted using the term-, country-, and currency-specific incremental borrowing rate as of January 1, 2019. The weighted average discount rate was 3.69%. For the impacts of IFRS 16 please see note 21. Recent accounting pronouncements not yet adopted The IASB issued the following new standard which is relevant for the Company: IFRS 17, Insurance Contracts In May 2017, the IASB issued IFRS 17, Insurance Contracts. IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure related to the issuance of insurance contracts. IFRS 17 replaces IFRS 4, Insurance Contracts, which was brought in as an interim standard in 2004. IFRS 4 permitted the use of national accounting standards for the accounting of insurance contracts under IFRS. As a result of the varied application for insurance contracts there was a lack of comparability among peer groups. IFRS 17 eliminates this diversity in practice by requiring all insurance contracts to be accounted for using current values. The frequent updates to the insurance values are expected to provide more useful information to users of financial statements. IFRS 17 is effective for fiscal years beginning on or after January 1, 2021. Earlier adoption is permitted for entities that have also adopted IFRS 9, Financial Instruments and IFRS 15, Revenue from Contracts with Customers. The Company is evaluating the impact of IFRS 17 on the consolidated financial statements. In the Company’s view, all other pronouncements issued by the IASB do not have a material impact on the consolidated financial statements, as expected |
The Company, basis of present_3
The Company, basis of presentation and significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
The Company, basis of presentation and significant accounting policies | |
Schedule of subsidiaries exempt from applying certain legal requirements | Companies exempt from applying certain legal requirements Name of the company Registered office of the company Ärztliches Versorgungszentrum Ludwigshafen GmbH im Lusanum Ludwigshafen am Rhein, Germany DiZ München Nephrocare GmbH Munich, Germany ET Software Developments GmbH Heidelberg, Germany Fresenius Medical Care Beteiligungsgesellschaft mbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Deutschland GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care EMEA Management GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Frankfurt am Main GmbH Frankfurt am Main, Germany Fresenius Medical Care GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Investment GmbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Beteiligungsgesellschaft mbH Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Vermögensverwaltungs GmbH & Co. KG Bad Homburg v. d. Höhe, Germany Fresenius Medical Care US Zwei Vermögensverwaltungs GmbH & Co. KG Bad Homburg v. d. Höhe, Germany Fresenius Medical Care Ventures GmbH Bad Homburg v. d. Höhe, Germany Medizinisches Versorgungszentrum Berchtesgaden GmbH Berchtesgaden, Germany MVZ Gelsenkirchen-Buer GmbH Gelsenkirchen, Germany Nephrocare Ahrensburg GmbH Ahrensburg, Germany Nephrocare Augsburg GmbH Augsburg, Germany Nephrocare Berlin-Weißensee GmbH Berlin, Germany Nephrocare Betzdorf GmbH Betzdorf, Germany Nephrocare Bielefeld GmbH Bielefeld, Germany Nephrocare Buchholz GmbH Buchholz, Germany Nephrocare Daun GmbH Daun, Germany Nephrocare Deutschland GmbH Bad Homburg v. d. Höhe, Germany Nephrocare Döbeln GmbH Döbeln, Germany Nephrocare Dortmund, GmbH Dortmund, Germany Nephrocare Friedberg GmbH Friedberg, Germany Nephrocare Grevenbroich GmbH Grevenbroich, Germany Nephrocare Hagen GmbH Hagen, Germany Nephrocare Hamburg-Altona GmbH Hamburg, Germany Nephrocare Hamburg-Barmbek GmbH Hamburg, Germany Nephrocare Hamburg-Süderelbe GmbH Hamburg, Germany Nephrocare Ingolstadt GmbH Ingolstadt, Germany Nephrocare Kaufering GmbH Kaufering, Germany Nephrocare Krefeld GmbH Krefeld, Germany Nephrocare Lahr GmbH Lahr, Germany Nephrocare Leverkusen GmbH Leverkusen, Germany Nephrocare Ludwigshafen GmbH Ludwigshafen am Rhein, Germany Nephrocare Mannheim GmbH Mannheim, Germany Nephrocare Mönchengladbach GmbH Mönchengladbach, Germany Nephrocare Mühlhausen GmbH Mühlhausen, Germany Nephrocare München-Ost GmbH Munich, Germany Nephrocare Münster GmbH Münster, Germany Nephrocare MVZ Aalen GmbH Aalen, Germany Nephrocare Oberhausen GmbH Oberhausen, Germany Nephrocare Papenburg GmbH Papenburg, Germany Nephrocare Pirmasens GmbH Pirmasens, Germany Nephrocare Püttlingen GmbH Püttlingen, Germany Nephrocare Recklinghausen GmbH Recklinghausen, Germany Nephrocare Rostock GmbH Rostock, Germany Nephrocare Salzgitter GmbH Salzgitter, Germany Nephrocare Schrobenhausen GmbH Schrobenhausen, Germany Nephrocare Starnberg GmbH Starnberg, Germany Nephrocare Wetzlar GmbH Wetzlar, Germany Nephrocare Witten GmbH Witten, Germany Nephrologisch-Internistische Versorgung Ingolstadt GmbH Ingolstadt, Germany Nova Med GmbH Vertriebsgesellschaft für medizinischtechnische Geräte und Verbrauchsartikel Bad Homburg v. d. Höhe, Germany VIVONIC GmbH Sailauf, Germany Zentrum für Nieren- und Hochdruckkrankheiten Bensheim GmbH Bensheim, Germany |
Schedule of foreign currency translation | Exchange rates December 31, 2019 December 31, 2018 2019 2018 2017 spot exchange rate in € spot exchange rate in € average exchange rate in € average exchange rate in € average exchange rate in € 1 U.S. dollar 0.89015 0.87336 0.89328 0.84678 0.88519 |
Reconciliation of lease liabilities upon initial application of IFRS 16 | Reconciliation of lease liabilities upon the initial application of IFRS 16 in € THOUS Future minimum rental payments as of December 31, 2018 (IAS 17) 5,527,638 less short-term leases (21,936) less leases of low-value assets (34,145) other (25,169) Gross lease liabilities as of January 1, 2019 5,446,388 Discounting (893,957) Lease liabilities as a result of the initial application of IFRS 16 as of January 1, 2019 4,552,431 Lease liabilities from capital leases as of December 31, 2018 (IAS 17) 36,144 Lease liabilities as of January 1, 2019 4,588,575 |
Discretionary decisions and s_2
Discretionary decisions and sources of estimation uncertainties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discretionary decisions and sources of estimation uncertainties | |
Schedule of key assumptions of value-in-use calculations for cash generating unit | Key assumptions in % North America EMEA Asia-Pacific Latin America 2019 2018 2019 2018 2019 2018 2019 2018 Average revenue growth in ten year projection period mid-single-digit mid-single-digit mid-single-digit mid-single-digit high-single-digit high-single-digit mid-single-digit mid-single-digit Residual value growth 1.00 1.00 1.00 1.00 4.00 4.00 2.95 3.45 Pre-tax WACC 7.71 7.42 8.73 9.46 6.79 7.81 10.45 - 20.02 11.93 - 16.75 After-tax WACC 6.00 5.99 6.25 6.86 6.04 6.61 8.06 - 17.63 8.70 - 13.52 |
Schedule that shows the amounts by which the key assumptions would need to change individually that the recoverable amount equals the carrying amount | Sensitivity analysis Change in percentage points Latin America 2019 2018 Pre-tax WACC 1.87 0.27 Operating income margin of each projection year (2.03) (0.32) Residual value growth (2.13) (0.47) |
Schedule of the composition of trade accounts receivable | Composition of trade accounts and other receivables December 31, 2019 2018 U.S. Government health care programs 30 % 31 % U.S. commercial payors 15 % 14 % U.S. hospitals 4 % 4 % Self-pay of U.S. patients 2 % 3 % Other North America segment payors 4 % 3 % Product customers and health care payors outside the North America Segment 45 % 45 % Total 100 % 100 % |
Acquisitions, investments, pu_2
Acquisitions, investments, purchases of intangible assets and divestitures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions, investments, purchases of intangible assets and divestitures | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | Fair Values of Assets Acquired and Liabilities Assumed in $ THOUS Cash and cash equivalents 47,203 Trade accounts and other receivables 34,062 Inventories 63,735 Other current assets 15,819 Property, plant and equipment 104,533 Right-of-use assets 21,603 Intangible assets and other assets 761,734 Goodwill 1,201,613 Accounts payable, current provisions and other current liabilities (72,429) Deferred taxes (100,485) Lease liabilities (22,065) Other liabilities (27,822) Noncontrolling interests (4,063) Total acquisition cost 2,023,438 Less: Cash acquired (47,203) Net Cash paid 1,976,235 |
Summary of pro forma financial information | 2019 Pro forma revenue 17,521,432 Pro forma net income attributable to shareholders of FMC-AG & Co. KGaA 1,186,516 Basic earnings per share 3.92 Diluted earnings per share 3.92 |
Notes to the consolidated sta_2
Notes to the consolidated statements of income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes to the consolidated statements of income | |
Schedule of revenue | Revenue in € THOUS 2019 2018 Revenue from Revenue from contracts with Other contracts with Other customers revenue Total customers revenue Total Health care services Dialysis services 12,447,092 — 12,447,092 11,420,415 — 11,420,415 Care Coordination 1,176,227 248,900 1,425,127 1,622,862 221,012 1,843,874 13,623,319 248,900 13,872,219 13,043,277 221,012 13,264,289 Health care products Dialysis products 3,402,987 125,519 3,528,506 3,115,753 93,068 3,208,821 Non-dialysis products 75,830 — 75,830 73,763 — 73,763 3,478,817 125,519 3,604,336 3,189,516 93,068 3,282,584 Total 17,102,136 374,419 17,476,555 16,232,793 314,080 16,546,873 |
Schedule of trade accounts receivables and contract liabilities | Trade accounts receivables and contract liabilities in € THOUS 2019 2018 Trade accounts receivables 3,341,111 3,284,712 Contract liabilities 22,802 37,632 |
Schedule of unsatisfied performance obligations | Unsatisfied performance obligations in € THOUS 1 year 278,090 1 - 3 years 455,774 3 - 5 years 359,721 5 - 10 years 66,492 Total 1,160,077 |
Schedule of cost of materials | Cost of materials in € THOUS 2019 2018 2017 Cost of raw materials, supplies and purchased components 4,031,371 3,395,895 3,605,316 Cost of purchased services 258,959 233,638 229,806 Cost of materials 4,290,330 3,629,533 3,835,122 |
Schedule of personnel expenses | Personnel expenses in € THOUS 2019 2018 2017 Wages and salaries 5,448,662 5,025,128 5,396,339 Social security contributions and cost of retirement benefits and social assistance 1,350,696 1,414,525 1,503,684 thereof retirement benefits 174,009 156,581 147,332 Personnel expenses 6,799,358 6,439,653 6,900,023 |
Schedule of employee by function | Employees by function 2019 2018 2017 Production and Services 103,896 97,971 98,547 Administration 11,634 10,510 9,962 Sales and Marketing 3,253 3,360 3,272 Research and Development 1,050 881 804 Total employees 119,833 112,722 112,585 |
Schedule of income before income taxes according to region | Income before income taxes in € THOUS 2019 2018 2017 Germany 101,734 161,861 (20,363) United States 1,149,149 2,191,834 1,589,501 Other 589,231 383,041 428,477 Total 1,840,114 2,736,736 1,997,615 |
Schedule of income tax expense (benefit) according to region | Income tax expense (benefit) in € THOUS 2019 2018 2017 Current Germany (59,928) 45,136 77,934 United States 168,503 261,211 437,201 Other 228,773 115,561 130,992 337,348 421,908 646,127 Deferred Germany 48,313 (34,685) (36,022) United States 57,352 145,700 (156,704) Other (41,399) (21,844) (10,320) 64,266 89,171 (203,046) Total 401,614 511,079 443,081 |
Schedule of reconciliation of expected and actual income tax expense | Reconciliation of income taxes in € THOUS 2019 2018 2017 Expected corporate income tax expense 555,898 825,810 597,187 Tax free income (65,889) (50,747) (44,302) Income from equity method investees (23,683) (18,185) (18,706) Tax rate differentials (58,386) (106,258) 139,122 Non-deductible expenses 44,283 60,721 106,125 Taxes for prior years (5,454) (91,138) (20,573) Noncontrolling partnership interests (60,724) (61,936) (105,832) Tax on divestitures — (74,560) — Tax rate changes 2,743 (219) (238,130) Change in realizability of deferred tax assets and tax credits 8,519 3,211 7,254 Withholding taxes 13,083 4,564 6,606 Other (8,776) 19,816 14,330 Income tax expense 401,614 511,079 443,081 Effective tax rate % 18.7 % 22.2 % |
Schedule of deferred income taxes and net operating loss carryforwards | Deferred income tax assets and liabilities in € THOUS 2019 2018 Deferred tax assets Trade accounts receivable 13,392 25,090 Inventories 71,915 70,223 Intangible assets 4,994 6,980 Property, plant and equipment and other non-current assets 72,769 62,124 Lease Liabilities 1,164,620 — Provisions and other liabilities 50,819 93,637 Pension liabilities 135,356 98,278 Net operating loss carryforwards, tax credit carryforwards and interest carryforwards 175,394 93,890 Derivatives 3,027 2,160 Compensation expense related to stock options 3,426 3,732 Other 36,403 15,390 Total deferred tax assets 1,732,115 471,504 Deferred tax liabilities Trade accounts receivable 30,310 29,596 Inventories 19,324 12,598 Intangible assets 632,984 433,228 Property, plant and equipment and other non-current assets 165,082 136,392 Right-of-use assets 1,068,409 — Provisions and other liabilities 92,756 14,678 Derivatives 372 1,978 Other 101,384 123,870 Total deferred tax liabilities 2,110,621 752,340 Net deferred tax liabilities (378,506) (280,836) Net deferred income tax assets and liabilities in € THOUS 2019 2018 Deferred tax assets 361,196 345,685 Deferred tax liabilities 739,702 626,521 Net deferred tax liabilities (378,506) (280,836) Net operating loss carryforwards in € THOUS 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 and thereafter Without expiration date Total |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions | |
Schedule of service agreements and products with related parties | Service agreements and products with related parties in € THOUS 2019 2018 2017 December 31, 2019 December 31, 2018 Sales of Purchases of Sales of Purchases of Sales of Purchases of goods and goods and goods and goods and goods and goods and Accounts Accounts Accounts Accounts services services services services services services receivable payable receivable payable Service agreements (1) Fresenius SE 153 29,114 445 24,456 381 21,704 35 360 378 4,019 Fresenius SE affiliates 4,420 105,832 3,819 101,590 11,111 81,491 2,003 6,416 681 8,470 Equity method investees 49,052 — 58,362 — 82,628 — 68,300 — 108,655 — Total 53,625 134,946 62,626 126,046 94,120 103,195 70,338 6,776 109,714 12,489 Products Fresenius SE 3 — — — 1 — — — — — Fresenius SE affiliates 44,771 37,279 33,564 39,181 30,529 40,467 16,803 3,405 8,750 3,658 Equity method investees — 469,474 — 399,667 — 399,180 — 36,262 — 57,975 Total 44,774 506,753 33,564 438,848 30,530 439,647 16,803 39,667 8,750 61,633 (1) In addition to the above shown accounts payable, accrued expenses for service agreements with related parties amounted to €8,352 and €9,376 at December 31, 2019 and 2018. |
Schedule of lease agreements with related parties | Lease agreements with related parties in € THOUS 2019 2018 2017 December 31, 2019 Interest Lease Lease Lease Lease Lease Right-of-use Lease Depreciation expense expense (1) income expense income expense asset liability Fresenius SE 4,580 501 4,005 — 8,745 — 8,456 30,336 30,820 Fresenius SE affiliates 12,589 1,396 452 — 15,852 — 13,676 91,879 92,126 Total 17,169 1,897 4,457 — 24,597 — 22,132 122,215 122,946 (1) Short-term leases and expenses relating to variable lease payments are exempted from balance sheet recognition . |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and cash equivalents | |
Summary of cash and cash equivalents | Cash and cash equivalents in € THOUS 2019 2018 Cash 768,706 831,885 Securities and time deposits 239,017 1,313,747 Cash and cash equivalents 1,007,723 2,145,632 |
Trade accounts and other rece_2
Trade accounts and other receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Trade accounts and other receivables | |
Summary of trade accounts and other receivables | Trade accounts and other receivables in € THOUS December 31, December 31, 2019 2018 thereof credit- thereof credit- Impaired Impaired Trade accounts and other receivables, gross 3,562,704 366,497 3,349,515 325,240 thereof finance lease receivables 57,398 — 28,726 — less allowances (141,358) (102,269) (118,015) (85,775) Trade accounts and other receivables 3,421,346 264,228 3,231,500 239,465 |
Summary of the development of allowance for doubtful accounts | Development of allowance for doubtful accounts in € THOUS 2019 2018 2017 Allowance for doubtful accounts as of January 1 118,015 474,891 482,461 Change in valuation allowances as recorded in the consolidated statements of income 42,315 19,112 549,631 Write-offs and recoveries of amounts previously written-off (18,587) (378,201) (501,229) Foreign currency translation (385) 2,213 (55,972) Allowance for doubtful accounts as of December 31 141,358 118,015 474,891 |
Summary of the ageing analysis of trade accounts receivable and the allowance for doubtful accounts | Aging analysis of trade accounts and other receivables 2019 in € THOUS up to 3 3 to 6 6 to 12 more than not months months months 12 months overdue overdue overdue overdue overdue Total Trade accounts and other receivables 1,997,671 899,987 229,012 184,768 251,266 3,562,704 less allowance for doubtful accounts (9,385) (8,411) (6,267) (13,325) (103,970) (141,358) Trade accounts and other receivables, net 1,988,286 891,576 222,745 171,443 147,296 3,421,346 Aging analysis of trade accounts and other receivables 2018 in € THOUS up to 3 3 to 6 6 to 12 more than not months months months 12 months overdue overdue overdue overdue overdue Total Trade accounts receivable 1,863,149 848,092 217,024 175,079 246,171 3,349,515 less allowance for doubtful accounts (8,043) (4,711) (5,209) (5,946) (94,106) (118,015) Trade accounts receivable, net 1,855,106 843,381 211,815 169,133 152,065 3,231,500 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | |
Schedule of inventories | Inventories in € THOUS 2019 2018 Finished goods 940,407 774,133 Health care supplies 399,585 391,593 Raw materials and purchased components 233,609 224,054 Work in process 89,677 77,023 Inventories 1,663,278 1,466,803 |
Other current assets (Tables)
Other current assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other current assets | |
Schedule of other current assets | Other current assets in € THOUS 2019 2018 Income taxes receivable 209,545 159,290 Debt securities 133,322 99,592 Other taxes receivable 127,880 107,708 Payments on account 110,078 104,817 Receivables for supplier rebates 51,296 68,203 Prepaid rent 26,374 57,319 Deposit / Guarantee / Security 22,226 19,915 Prepaid insurance 19,796 23,632 Derivatives 2,513 7,837 Other 210,573 155,770 Other current assets 913,603 804,083 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, plant and equipment | |
Schedule of property, plant and equipment | Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Additions Reclassifications Disposals 2019 Land 58,887 802 2,824 466 3,153 (2,140) 63,992 Buildings and improvements 3,311,704 65,782 10,648 43,560 296,276 (83,533) 3,644,437 Machinery and equipment 4,541,906 59,529 86,743 569,352 127,613 (245,487) 5,139,656 Machinery, equipment and rental equipment under capitalized leases 89,734 2,151 — — (91,885) — — Construction in progress 505,168 7,692 (1,167) 368,577 (366,895) (4,093) 509,282 Property, plant and equipment 8,507,399 135,956 99,048 981,955 (31,738) (335,253) 9,357,367 Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2018 translation group Additions Reclassifications Disposals 2018 Land 56,540 2,299 358 605 490 (1,405) 58,887 Buildings and improvements 2,881,688 108,998 692 67,272 328,718 (75,664) 3,311,704 Machinery and equipment 4,174,027 96,766 (2,576) 465,117 29,325 (220,753) 4,541,906 Machinery, equipment and rental equipment under capitalized leases 80,916 3,880 (98) 6,259 665 (1,888) 89,734 Construction in progress 462,226 6,759 4,519 419,347 (387,131) (552) 505,168 Property, plant and equipment 7,655,397 218,702 2,895 958,600 (27,933) (300,262) 8,507,399 Depreciation in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Additions Reclassifications Disposals 2019 Land 1,295 19 — 20 — (2) 1,332 Buildings and improvements 1,818,053 32,818 (8,312) 255,683 8,805 (54,227) 2,052,820 Machinery and equipment 2,798,709 34,291 (7,023) 461,947 24,591 (199,581) 3,112,934 Machinery, equipment and rental equipment under capitalized leases 53,332 1,334 — — (54,666) — — Construction in progress — — — — — — — Property, plant and equipment 4,671,389 68,462 (15,335) 717,650 (21,270) (253,810) 5,167,086 Depreciation in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2018 translation group Additions Reclassifications Disposals 2018 Land 1,239 38 — — — 18 1,295 Buildings and improvements 1,580,103 65,251 (1,484) 221,866 (786) (46,897) 1,818,053 Machinery and equipment 2,538,436 58,817 (4,278) 400,439 (13,986) (180,719) 2,798,709 Machinery, equipment and rental equipment under capitalized leases 43,848 2,485 (289) 9,118 30 (1,860) 53,332 Construction in progress — — — — — — — Property, plant and equipment 4,163,626 126,591 (6,051) 631,423 (14,742) (229,458) 4,671,389 Book value in € THOUS December 31, December 31, 2019 2018 Land 62,660 57,592 Buildings and improvements 1,591,617 1,493,651 Machinery and equipment 2,026,722 1,743,197 Machinery, equipment and rental equipment under capitalized leases — 36,402 Construction in progress 509,282 505,168 Property, plant and equipment 4,190,281 3,836,010 |
ARGENTINA | |
Property, plant and equipment | |
Schedule of property, plant and equipment | Effect of hyperinflation in Argentina in € THOUS Acquisition or Accumulated December 31, manufacturing costs depreciation 2019 Land 2,307 — 2,307 Buildings and improvements 20,652 7,802 12,850 Machinery and equipment 33,237 21,470 11,767 Machinery, equipment and rental equipment under capitalized leases — — — Construction in progress 1,108 — 1,108 Property, plant and equipment 57,304 29,272 28,032 Acquisition or Accumulated December 31, manufacturing costs depreciation 2018 Land 1,581 — 1,581 Buildings and improvements 13,575 5,454 8,121 Machinery and equipment 21,821 15,321 6,500 Machinery, equipment and rental equipment under capitalized leases — — — Construction in progress 656 — 656 Property, plant and equipment 37,633 20,775 16,858 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets and goodwill | |
Schedule of intangible assets and goodwill | Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Additions Reclassifications Disposals 2019 Amortizable intangible assets Non-compete agreements 324,910 6,012 4,744 25 (274) (2,695) 332,722 Technology 153,164 (376) 589,833 — — — 742,621 Licenses and distribution agreements 235,625 4,678 (38,126) 783 5,093 (5,766) 202,287 Customer relationships 23,847 (116) 47,880 — (2,680) — 68,931 Construction in progress 148,002 1,208 36,892 171,446 (86,898) (3,247) 267,403 Internally developed intangibles 217,033 971 — 9,105 71,152 (222) 298,039 Other 381,390 6,852 (1,949) 11,007 17,763 (6,722) 408,341 1,483,971 19,229 639,274 192,366 4,156 (18,652) 2,320,344 Non-amortizable intangible assets Tradename 182,901 3,326 41,002 — — — 227,229 Management contracts 3,134 91 — — — — 3,225 186,035 3,417 41,002 — — — 230,454 Intangible assets 1,670,006 22,646 680,276 192,366 4,156 (18,652) 2,550,798 Goodwill 12,209,606 217,996 1,589,653 — — — 14,017,255 Acquisition or manufacturing costs in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2018 translation group Additions Reclassifications Disposals 2018 Amortizable intangible assets Non-compete agreements 310,163 12,427 6,339 720 (2) (4,737) 324,910 Technology 149,191 3,973 — — — — 153,164 Licenses and distribution agreements 173,713 3,049 — 61,166 (3) (2,300) 235,625 Customer relationships 147,096 2,015 (125,264) — — — 23,847 Construction in progress 78,757 2,785 — 107,097 (23,050) (17,587) 148,002 Internally developed intangibles 169,095 2,158 (9,763) 17,501 38,643 (601) 217,033 Other 358,092 9,490 (3,368) 9,881 12,883 (5,588) 381,390 1,386,107 35,897 (132,056) 196,365 28,471 (30,813) 1,483,971 Non-amortizable intangible assets Tradename 174,689 8,212 — — — — 182,901 Management contracts 3,038 96 — — — — 3,134 177,727 8,308 — — — — 186,035 Intangible assets 1,563,834 44,205 (132,056) 196,365 28,471 (30,813) 1,670,006 Goodwill 12,103,921 441,972 (336,287) — — — 12,209,606 Amortization in € THOUS Foreign Changes in January 1, currency consolidation Impairment December 2019 translation group Additions loss Reclassifications Disposals 31, 2019 Amortizable intangible assets Non-compete agreements 282,296 5,235 (166) 11,868 — 26 (3,136) 296,123 Technology 124,605 1,140 — 49,265 — — — 175,010 Licenses and distribution agreements 131,492 2,607 — 14,293 — — (4,680) 143,712 Customer relationships 7,245 12 — 4,099 — — — 11,356 Construction in progress — — — — — — — — Internally developed intangibles 138,343 1,328 — 28,722 932 360 (500) 169,185 Other 304,694 4,795 (3,606) 27,235 — 1,410 (5,446) 329,082 988,675 15,117 (3,772) 135,482 932 1,796 (13,762) 1,124,468 Amortization in € THOUS Foreign Changes in December January 1, currency consolidation Impairment 31, 2018 translation group Additions loss Reclassifications Disposals 2018 Amortizable intangible assets Non-compete agreements 262,381 11,338 (1,468) 14,675 — 17 (4,647) 282,296 Technology 64,563 2,995 (356) 10,740 46,663 — — 124,605 Licenses and distribution agreements 119,819 577 — 12,673 726 (3) (2,300) 131,492 Customer relationships 50,572 727 (53,247) 9,226 — — (33) 7,245 Construction in progress — — — — 16,750 — (16,750) — Internally developed intangibles 108,906 2,927 (2,475) 20,357 — 9,202 (574) 138,343 Other 274,535 8,003 (6,375) 25,753 580 6,064 (3,866) 304,694 880,776 26,567 (63,921) 93,424 64,719 15,280 (28,170) 988,675 Book value in € THOUS December 31, 2019 December 31, 2018 Amortizable intangible assets Non-compete agreements 36,599 42,614 Technology 567,611 28,559 Licenses and distribution agreements 58,575 104,133 Customer relationships 57,575 16,602 Construction in progress 267,403 148,002 Internally developed intangibles 128,854 78,690 Other 79,259 76,696 1,195,876 495,296 Non-amortizable intangible assets Tradename 227,229 182,901 Management contracts 3,225 3,134 230,454 186,035 Intangible assets 1,426,330 681,331 Goodwill 14,017,255 12,209,606 |
Schedule of the carrying amount of goodwill and indefinite-lived intangibles by geographical area | Allocation of the carrying amount to CGUs in € THOUS North America EMEA Asia-Pacific Latin America 2019 2018 2019 2018 2019 2018 2019 2018 Goodwill 11,762,791 10,128,309 1,342,730 1,282,632 716,665 662,097 195,069 136,568 Management contracts with indefinite useful life — — — — 3,225 3,134 — — Trade name with indefinite useful life 226,692 182,329 — — — — 537 572 |
ARGENTINA | |
Intangible assets and goodwill | |
Schedule of intangible assets and goodwill | Effect of hyperinflation in Argentina in € THOUS Acquisition or Accumulated manufacturing costs depreciation December 31, 2019 Amortizable intangible assets Internally developed intangibles 1,971 1,281 690 Other 1,697 727 970 Intangible assets 3,668 2,008 1,660 Goodwill 28,057 2,926 25,131 Acquisition or Accumulated manufacturing costs depreciation December 31, 2018 Amortizable intangible assets Internally developed intangibles 142 129 13 Other 1,889 1,209 680 Intangible assets 2,031 1,338 693 Goodwill 20,197 2,118 18,079 |
Current provisions and other _2
Current provisions and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Current provisions and other current liabilities | |
Summary of reconciliation of the current provisions | Development of current provisions in € THOUS Foreign Changes in January 1, currency consolidation 2019 translation group Utilized Reversed Additions Reclassifications December 31, 2019 Self-insurance programs 198,307 3,751 — — — 17,808 — 219,866 Personnel expenses 42,430 359 215 (25,436) (293) 32,487 40,764 90,526 Risk of lawsuit 32,304 246 507 (15,049) (50) 3,023 — 20,981 FCPA related charge 223,980 — — (219,588) (4,000) 3,844 — 4,236 Other current provisions 27,495 218 742 (3,976) (839) 12,807 — 36,447 Current provisions 524,516 4,574 1,464 (264,049) (5,182) 69,969 40,764 372,056 |
Schedule of other current liabilities | Other current liabilities in € THOUS 2019 2018 Personnel liabilities 647,508 654,457 Noncontrolling interests subject to put provisions 603,132 494,576 Unapplied cash and receivable credits 482,682 364,657 Invoices outstanding 178,209 160,112 Withholding tax and VAT 104,388 100,086 Interest liabilities 73,593 92,961 Variable payments outstanding for acquisitions 34,253 57,217 Legal matters, advisory and audit fees 27,979 38,778 Bonuses, commissions 27,510 26,831 Contract liabilities 22,795 37,628 Rent and lease obligations 176 138,210 Other liabilities 238,138 214,259 Other current liabilities 2,440,363 2,379,772 |
Short-term debt and short-ter_2
Short-term debt and short-term debt from related parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Short-term debt and short-term debt from related parties | |
Schedule of short-term debt and short-term debt from related parties | Short-term debt and short-term debt from related parties in € THOUS 2019 2018 Commercial paper program 999,732 999,873 Borrowings under lines of credit 143,875 204,491 Other 6,381 930 Short-term debt 1,149,988 1,205,294 Short-term debt from related parties (see note 5 c) 21,865 188,900 Short-term debt and short-term debt from related parties 1,171,853 1,394,194 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term debt | |
Schedule of long-term debt | Long-term debt in € THOUS 2019 2018 Amended 2012 Credit Agreement 1,901,372 1,887,357 Bonds 4,966,619 3,700,446 Convertible Bonds 399,939 393,232 Accounts Receivable Facility 379,570 — Capital lease obligations (1) — 36,144 Other 258,057 134,855 Long-term debt (2) 7,905,557 6,152,034 Less current portion (1,447,239) (1,106,519) Long-term debt, less current portion (2) 6,458,318 5,045,515 (1) As of December 31, 2018, this line item included lease liabilities from capital leases in accordance with IAS 17. From 2019, these amounts are transferred to balance sheet items "Current portion of long-term lease liabilities" and "Long-term lease liabilities, less current portion" (see note 1). (2) Labeled as "Long-term debt and capital lease obligations, less current portion" as of December 31, 2018, this line item included lease liabilities from capital leases in accordance with IAS 17. From 2019, these amounts are transferred to balance sheet item "Long-term lease liabilities, less current portion" (see note 1). |
Schedule of available and outstanding amounts under the Amended 2012 Credit Agreement | Amended 2012 Credit Agreement - Maximum amount available and balance outstanding in THOUS Maximum amount available Balance outstanding 2019 2019 (1) Revolving credit USD 2017 / 2022 $ 900,000 € 801,139 $ 138,700 € 123,464 Revolving credit EUR 2017 / 2022 € 600,000 € 600,000 € — € — USD term loan 2017 / 2022 $ 1,230,000 € 1,094,891 $ 1,230,000 € 1,094,891 EUR term loan 2017 / 2022 € 287,000 € 287,000 € 287,000 € 287,000 EUR term loan 2017 / 2020 € 400,000 € 400,000 € 400,000 € 400,000 € 3,183,030 € 1,905,355 Maximum amount available Balance outstanding 2018 2018 (1) Revolving credit USD 2017 / 2022 $ 900,000 € 786,026 $ — € — Revolving credit EUR 2017 / 2022 € 600,000 € 600,000 € — € — USD term loan 2017 / 2022 $ 1,350,000 € 1,179,039 $ 1,350,000 € 1,179,039 EUR term loan 2017 / 2022 € 315,000 € 315,000 € 315,000 € 315,000 EUR term loan 2017 / 2020 € 400,000 € 400,000 € 400,000 € 400,000 € 3,280,065 € 1,894,039 (1) Amounts shown are excluding debt issuance costs. |
Schedule of bonds | Bonds in THOUS Face Book value Book value Issuer/Transaction amount Maturity Coupon 2019 in € 2018 in € FMC US Finance II, Inc. 2012 $ 800,000 July 31, 2019 5.625 % — 698,167 FMC Finance VIII S.A. 2012 € 250,000 July 31, 2019 5.25 % — 249,773 FMC US Finance II, Inc. 2014 $ 500,000 October 15, 2020 4.125 % 444,507 435,376 FMC US Finance, Inc. 2011 $ 650,000 February 15, 2021 5.75 % 577,069 564,882 FMC Finance VII S.A. 2011 € 300,000 February 15, 2021 5.25 % 299,498 299,035 FMC US Finance II, Inc. 2012 $ 700,000 January 31, 2022 5.875 % 622,135 609,532 Fresenius Medical Care AG & Co. KGaA, 2019 € 650,000 November 29, 2023 0.25 % 646,936 — FMC US Finance II, Inc. 2014 $ 400,000 October 15, 2024 4.75 % 354,338 347,297 Fresenius Medical Care AG & Co. KGaA, 2018 € 500,000 July 11, 2025 1.50 % 496,138 496,384 Fresenius Medical Care AG & Co. KGaA, 2019 € 600,000 November 30, 2026 0.625 % 593,216 — FMC US Finance III, Inc. 2019 $ 500,000 June 15, 2029 3.75 % 435,673 — Fresenius Medical Care AG & Co. KGaA, 2019 € 500,000 November 29, 2029 1.25 % 497,109 — 4,966,619 3,700,446 |
Schedule of accounts receivable facility | Accounts Receivable Facility - Maximum amount available and balance outstanding in THOUS Maximum amount available Balance outstanding 2019 (1) 2019 (2) Accounts Receivable Facility $ 900,000 € 801,139 $ 427,000 € 380,096 Maximum amount available Balance outstanding 2018 (1) 2018 (2) Accounts Receivable Facility $ 900,000 € 786,026 $ — € — (1) Subject to availability of sufficient accounts receivable meeting funding criteria. (2) Amounts shown are excluding debt issuance costs. |
Non-current provisions and ot_2
Non-current provisions and other non-current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Non-current provisions and other non-current liabilities | |
Schedule of development of non-current provisions | Development of non-current provisions in € THOUS Foreign Changes in January 1, currency consolidation December 31, 2019 translation group Utilized Reversed Additions Reclassifications 2019 Personnel expenses 84,439 1,203 430 (3,294) (713) 19,065 (40,764) 60,366 Interest payable related to income taxes 29,231 150 — — (5,447) 2,177 — 26,111 Other non-current provisions 14,777 66 6,066 (283) (249) 1,949 — 22,326 Non-current provisions 128,447 1,419 6,496 (3,577) (6,409) 23,191 (40,764) 108,803 |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefit plans | |
Schedule of changes in benefit obligations, plan assets, and the funded status of pension plans | Deficit or surplus in € THOUS 2019 2018 Change in benefit obligation: Benefit obligation at beginning of year 842,601 792,739 Foreign currency translation (gains) losses 7,459 17,957 Changes in consolidation group — 123 Current service cost 30,070 25,467 Interest cost 28,016 24,364 Transfer of plan participants 194 80 Actuarial (gains) losses arising from changes in financial assumptions 140,923 (9,760) Actuarial (gains) losses arising from changes in demographic assumptions (2,306) 3,497 Actuarial (gains) losses arising from experience adjustments (4,873) 11,117 Remeasurements 133,744 4,854 Benefits paid (60,863) (22,983) Settlements (4,754) — Benefit obligation at end of year 976,467 842,601 Change in plan assets: Fair value of plan assets at beginning of year 317,585 291,256 Foreign currency translation gains (losses) 6,130 14,189 Interest income from plan assets 14,108 11,308 Actuarial gains (losses) arising from experience adjustments 34,131 (23,216) Actual return on plan assets 48,239 (11,908) Employer contributions 1,131 43,393 Benefits paid (56,961) (19,345) Fair value of plan assets at end of year 316,124 317,585 Deficit (surplus) at end of year 660,343 525,016 |
Schedule of net pension liability | Net pension liability in € THOUS 2019 2018 Deficit (surplus) at end of year 660,343 525,016 Benefit plans offered by other subsidiaries 39,147 35,424 Net pension liability 699,490 560,440 |
Schedule of weighted-average assumptions utilized in determining benefit obligations | Weighted average assumptions in % 2019 2018 Discount rate 2.35 3.27 Rate of compensation increase 3.18 3.21 Rate of pension increase 1.70 1.69 |
Schedule of sensitivity analysis | Sensitivity analysis in € THOUS 0.5% 0.5% increase decrease Discount rate (89,298) 104,053 Rate of compensation increase 16,040 (15,793) Rate of pension increase 46,089 (41,222) |
Schedule of components of net periodic benefit cost | Components of net periodic benefit cost in € THOUS 2019 2018 2017 Service cost 30,070 25,467 28,607 Net interest cost 13,908 13,056 11,087 (Gains) losses from settlements (4,754) — — Net periodic benefit costs 39,224 38,523 39,694 |
Schedule of weighted-average assumptions utilized in determining net periodic benefit cost | Weighted average assumptions in % 2019 2018 2017 Discount rate 3.27 3.08 3.25 Rate of compensation increase 3.21 3.22 3.23 Rate of pension increase 1.69 1.45 1.45 |
Schedule of expected benefit payments | Defined benefit pension plans: cash outflows in € THOUS 2019 2018 1 year 28,706 24,111 1 - 3 years 56,577 53,662 3 - 5 years 62,441 61,415 5 - 10 years 183,896 184,929 Total 331,620 324,117 |
Schedule of pension plan assets | Fair values of plan assets in € THOUS Quoted prices Quoted prices in active in active markets for Significant Significant markets for Significant identical observable unobservable identical observable Asset category Total assets inputs inputs Total assets inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) 2019 2018 Equity investments Index funds (1) 85,321 8,440 76,881 — 77,718 1,972 75,746 Fixed income investments Government securities (2) 2,875 2,547 328 — 9,241 8,880 361 Corporate bonds (3) 202,642 — 202,642 — 186,500 — 186,500 Other bonds (4) 10,179 — 2,762 7,417 3,518 — 3,518 U.S. treasury money market funds (5) 14,999 14,999 — — 40,510 40,510 — Other types of investments Cash, money market and mutual funds (6) 108 108 — — 98 98 — Total 316,124 26,094 282,613 7,417 317,585 51,460 266,125 (1) This category comprises low-cost equity index funds not actively managed that track the S&P 500, S&P 400, Russell 2000, MSCI Emerging Markets Index and the Morgan Stanley International EAFE Index. (2) This Category comprises fixed income investments by the U.S. government and government sponsored entities. (3) This Category primarily represents investment grade bonds of U.S. issuers from diverse industries. (4) This Category comprises private placement bonds as well as collateralized mortgage obligations. (5) This Category represents funds that invest in U.S. treasury obligations directly or in U.S. treasury backed obligations. (6) This Category represents cash, money market funds as well as mutual funds comprised of high grade corporate bonds. |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Shareholders' equity | |
Tabular disclosure of number of shares acquired in the context of the buy-back programs as well as the repurchased treasury stock | Treasury Stock Total number of shares purchased and retired as part of publicly Average price per announced plans or Total value of Period share programs shares (1) in € in € THOUS December 31, 2016 51.00 999,951 50,993 Purchase of Treasury Stock December 2017 87.79 660,000 57,938 December 31, 2017 65.63 1,659,951 108,931 Purchase of Treasury Stock May 2018 86.69 173,274 15,020 June 2018 86.14 257,726 22,201 Repurchased Treasury Stock 86.37 431,000 37,221 Retirement of repurchased Treasury Stock December 2018 87.23 1,091,000 95,159 December 31, 2018 51.00 999,951 50,993 Purchase of Treasury Stock March 2019 69.86 1,629,240 113,816 April 2019 72.83 1,993,974 145,214 May 2019 72.97 147,558 10,766 Repurchased Treasury Stock 71.55 3,770,772 269,796 Retirement of repurchased Treasury Stock June 2019 71.55 3,770,772 269,796 Purchase of Treasury Stock June 2019 67.11 504,672 33,870 July 2019 66.77 1,029,655 68,748 August 2019 57.53 835,208 48,050 September 2019 59.67 627,466 37,445 October 2019 57.85 692,910 40,084 November 2019 64.78 852,859 55,245 December 2019 63.85 564,908 36,067 Repurchased Treasury Stock (2) 62.55 5,107,678 319,509 TOTAL 60.66 6,107,629 370,502 (1) The value of shares repurchased in 2017, 2018 and 2019 is inclusive of fees (net of taxes) paid in the amount of approximately €12, €8 and €11 (in € THOUS), respectively, for services rendered. (2) At December 31, 2019, the maximum number of shares that may be purchased pursuant to the buy-back program expiring on June 17, 2020 is 6,892,322 |
Supplementary information on _2
Supplementary information on capital management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplementary information on capital management | |
Schedule of equity and debt | Total equity, debt and total assets in € THOUS 2019 2018 Total equity including noncontrolling interests 13,227,237 12,901,958 Debt and lease liabilities 13,782,448 7,546,228 Total assets 32,934,735 26,242,268 Debt and lease liabilities in % of total assets 41.8 % 28.8 % Total equity in % of total assets (equity ratio) 40.2 % 49.2 % |
Schedule of Company's rating | Rating (1) Standard & Poor's Moody's Fitch Corporate credit rating BBB Baa3 BBB- Outlook stable stable stable (1) A rating is not a recommendation to buy, sell or hold securities of the Company, and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings per share | |
Schedule of reconciliation of basic and fully diluted earnings per share | Reconciliation of basic and diluted earnings per share in € THOUS, except share and per share data 2019 2018 2017 Numerators: Net income attributable to shareholders of FMC-AG & Co. KGaA 1,199,619 1,981,924 1,279,788 Denominators: Weighted average number of shares outstanding 302,691,397 306,541,706 306,563,400 Potentially dilutive shares 57,892 684,681 719,912 Basic earnings per share 3.96 6.47 4.17 Diluted earnings per share 3.96 6.45 4.16 |
Share-based plans (Tables)
Share-based plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based plans | |
Schedule of reconciliations for stock options outstanding | Transactions Weighted Average Exercise Options Price Stock options for shares (in THOUS) in € Balance at December 31, 2018 3,896 68.85 Granted — — Exercised (1) 329 51.72 Forfeited 78 75.08 Balance at December 31, 2019 3,489 70.32 (1) The average share price at the date of exercise of the options was €67.62. |
Summary of fully vested options outstanding and exercisable by price range | Share Options Outstanding Exercisable Weighted Weighted Weighted Range of average average average exercise remaining exercise exercise prices Number of contractual price Number of price in € options life in € options in € 45.01 - 50.00 767,001 2.38 49.90 767,001 49.90 50.01 - 55.00 825 0.93 52.27 825 52.27 55.01 - 60.00 133,375 1.24 57.68 133,375 57.68 60.01 - 65.00 — — — — — 65.01 - 70.00 — — — — — 70.01 - 75.00 — — — — — 75.01 - 80.00 2,587,788 3.58 77.03 2,587,788 77.03 3,488,989 3.23 70.32 3,488,989 70.32 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of effects from lease agreements on the consolidated statements of income | Leasing in the consolidated statements of income in € THOUS 2019 Depreciation on right-of-use assets 700,276 Impairments on right-of-use assets 38,820 Expenses relating to short-term leases 52,108 Expenses relating to leases of low-value assets 25,239 Expenses relating to variable lease payments 10,814 Income from subleasing right-of-use asset 4,367 Interest expense on lease liabilities 171,724 |
Schedule of acquisition costs and the accumulated depreciation of right-of-use assets | Acquisition costs in € THOUS Foreign Changes in January 1, currency consolidation Reclassi- December 31, 2019 translation group Additions fications Disposals 2019 Right-of-use assets: Land 28,717 447 (14) 2,300 512 (1,387) 30,575 Right-of-use assets: Buildings and improvements 3,840,380 65,603 (3,577) 694,031 15,074 (20,816) 4,590,695 Right-of-use assets: Machinery and equipment 407,436 7,639 3,257 23,243 18,002 (24,859) 434,718 Right-of-use assets: Advance Payments — — — 24 — — 24 Right-of-use assets 4,276,533 73,689 (334) 719,598 33,588 (47,062) 5,056,012 Depreciation in € THOUS Foreign Changes in January 1, currency consolidation Impairment Reclassi- December 31, 2019 translation group Additions loss fications Disposals 2019 Right-of-use assets: Land — 14 (4) 3,936 134 128 294 4,502 Right-of-use assets: Buildings and improvements — (1,364) (1,768) 581,081 38,686 3,424 (6,133) 613,926 Right-of-use assets: Machinery and equipment — (291) (105) 115,259 — 21,930 (24,324) 112,469 Right-of-use assets: Advance Payments — — — — — — — — Right-of-use assets — (1,641) (1,877) 700,276 38,820 25,482 (30,163) 730,897 Book value in € THOUS December 31, 2019 Right-of-use assets: Land 26,073 Right-of-use assets: Buildings and improvements 3,976,769 Right-of-use assets: Machinery and equipment 322,249 Right-of-use assets: Advance Payments 24 Right-of-use assets 4,325,115 |
Financial instruments (Tables)
Financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments | |
Schedule of carrying amount and fair value of financial instruments | Carrying amount and fair value of financial instruments in € THOUS December 31, 2019 Carrying amount Fair value Amortized cost FVPL FVOCI Not classified Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) 768,706 239,017 — — 1,007,723 — 239,017 — Trade accounts and other receivables 3,343,873 — — 77,473 3,421,346 — — — Accounts receivable from related parties 159,196 — — — 159,196 — — — Derivatives - cash flow hedging instruments — — — 107 107 — 107 — Derivatives - not designated as hedging instruments — 2,406 — — 2,406 — 2,406 — Equity investments — 186,273 50,975 — 237,248 13,110 41,084 183,054 Debt securities — 107,988 261,833 — 369,821 365,170 4,651 — Other financial assets 141,355 — — 111,649 253,004 — — — Other current and non-current assets 141,355 296,667 312,808 111,756 862,586 — — — Financial assets 4,413,130 535,684 312,808 189,229 5,450,851 — — — Accounts payable 716,526 — — — 716,526 — — — Accounts payable to related parties 118,663 — — — 118,663 — — — Short-term debt and short-term debt from related parties 1,171,853 — — — 1,171,853 — — — Long-term debt 7,905,557 — — — 7,905,557 5,555,475 2,537,932 — Long-term lease liabilities and long-term lease liabilities from related parties — — — 4,705,038 4,705,038 — — — Derivatives - cash flow hedging instruments — — — 2,534 2,534 — 2,534 — Derivatives - not designated as hedging instruments — 10,762 — — 10,762 — 10,762 — Variable payments outstanding for acquisitions — 89,677 — — 89,677 — — 89,677 Noncontrolling interest subject to put provisions — — — 934,425 934,425 — — 934,425 Other financial liabilities 1,414,464 — — — 1,414,464 — — — Other current and non-current liabilities 1,414,464 100,439 — 936,959 2,451,862 — — — Financial liabilities 11,327,063 100,439 — 5,641,997 17,069,499 — — — (1) Highly liquid short-term investments are categorized in level 2 of the fair value hierarchy. Other cash and cash equivalents is not categorized. Carrying amount and fair value of financial instruments in € THOUS December 31, 2018 Carrying amount Fair value Amortized cost FVPL FVOCI Not classified Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) 831,885 1,313,747 — — 2,145,632 — 1,313,747 — Trade accounts and other receivables 3,182,052 — — 49,448 3,231,500 — — — Accounts receivable from related parties 198,868 — — — 198,868 — — — Derivatives - cash flow hedging instruments — — — 1,492 1,492 — 1,492 — Derivatives - not designated as hedging instruments — 18,222 — — 18,222 — 18,222 — Equity investments — 106,350 34,377 — 140,727 13,869 126,858 — Debt securities — 83,213 250,822 — 334,035 329,821 4,214 — Other financial assets 144,838 — — 107,125 251,963 — — — Other current and non-current assets 144,838 207,785 285,199 108,617 746,439 — — — Financial assets 4,357,643 1,521,532 285,199 158,065 6,322,439 — — — Accounts payable 641,271 — — — 641,271 — — — Accounts payable to related parties 153,781 — — — 153,781 — — — Short-term debt and short-term debt from related parties 1,394,194 — — — 1,394,194 — — — Long-term debt and capital lease obligations 6,115,890 — — 36,144 6,152,034 4,227,684 2,022,057 — Derivatives - cash flow hedging instruments — — — 1,125 1,125 — 1,125 — Derivatives - not designated as hedging instruments — 18,911 — — 18,911 — 18,911 — Variable payments outstanding for acquisitions — 172,278 — — 172,278 — — 172,278 Noncontrolling interest subject to put provisions — — — 818,871 818,871 — — 818,871 Other financial liabilities 1,467,767 — — — 1,467,767 — — — Other current and non-current liabilities 1,467,767 191,189 — 819,996 2,478,952 — — — Financial liabilities 9,772,903 191,189 — 856,140 10,820,232 — — — (1) Highly liquid short-term investments are categorized in level 2 of the fair value hierarchy. Other cash and cash equivalents is not categorized. |
Schedule of reconciliation of level 3 financial instruments | Reconciliation from beginning to ending balance of level 3 financial instruments in € THOUS 2019 2018 2017 Variable Variable Variable payments Noncontrolling payments Noncontrolling payments Noncontrolling Equity outstanding for interests subject outstanding for interests subject outstanding for interests subject investments acquisitions to put provisions acquisitions to put provisions acquisitions to put provisions Beginning balance at January 1, — 172,278 818,871 205,792 830,773 223,504 1,007,733 Transfer from Level 2 186,427 — — — — — — Increase 2,233 4,828 109,109 19,051 53,731 21,128 85,322 Decrease — (43,941) (20,269) (15,734) (50,706) (32,764) (121,057) (Gain) loss recognized in profit or loss 128 (41,537) 154,436 (36,327) 142,279 (2,685) 160,916 (Gain) loss recognized in equity — — 13,701 — (50,612) — (20,012) Dividends — — (153,614) — (139,742) — (164,404) Foreign currency translation and other changes (5,734) (1,951) 12,191 (504) 33,148 (3,391) (117,725) Ending balance at December 31, 183,054 89,677 934,425 172,278 818,871 205,792 830,773 |
Schedule of average hedging rate and the nominal amount of the foreign exchange forward contracts | Significant currency pairs in € THOUS Nominal Average amount hedging rate EUR/AUD 168,395 1.6314 EUR/USD 122,305 1.1373 EUR/GBP 49,308 0.8798 |
Schedule of derivative financial instruments valuation | Derivative financial instruments valuation in € THOUS 2019 2018 Assets Liabilities Assets Liabilities Current Foreign exchange contracts 107 (2,484) 1,434 (711) Interest rate contracts — — — (414) Non-current Foreign exchange contracts — (50) 58 — Derivatives in cash flow hedging relationships 107 (2,534) 1,492 (1,125) Current Foreign exchange contracts 2,406 (10,762) 6,402 (7,091) Non-current Derivatives embedded in the Convertible Bonds — — — (11,820) Share Options to secure the Convertible Bonds — — 11,820 — Derivatives not designated as hedging instruments 2,406 (10,762) 18,222 (18,911) |
Schedule of effect of derivatives in cash flow hedging on the consolidated financial statements | The effect of derivatives in cash flow hedging relationships on the consolidated financial statements in € THOUS Fair value gain Fair value gain (loss) recognized in (loss) recognized in Amount Amount AOCI on hedging AOCI on hedging Location of reclassified reclassified instrument (hedge instrument (cost of reclassified from hedge from cost of reserve) hedging) amounts from AOCI reserve hedging For the year ended December 31, 2019 Interest rate contracts (12,807) — Interest income/expense 2,753 — Foreign exchange contracts (3,189) (1,473) thereof: Revenue 1,331 1,480 Costs of revenue 2,509 (1,913) Inventories (269) (55) Total (15,996) (1,473) 6,324 (488) For the year ended December 31, 2018 Interest rate contracts (105) — Interest income/expense 22,249 — Foreign exchange contracts 5,029 (2,244) thereof: Revenue (423) 132 Costs of revenue (1,839) 799 Inventories (17) (21) Total 4,924 (2,244) 19,970 910 |
Schedule of effect of derivatives not in hedging on the consolidated financial statements | The effect of derivatives not designated as hedging instruments on the consolidated financial statements in € THOUS Amount of (gain) loss recognized in Location of (gain) loss recognized in income on derivatives income on derivatives for the year ended, December 31, 2019 2018 Foreign exchange contracts Selling, general and administrative expenses 7,686 (12,841) Foreign exchange contracts Interest income/expense 16,491 14,809 Derivatives embedded in the Convertible Bonds Interest income/expense (11,820) (90,614) Share Options to secure the Convertible Bonds Interest income/expense 11,820 90,614 Derivatives not designated as hedging instruments 24,177 1,968 |
Schedule of expected timing for cash flows related to derivative financial instruments | Cash Flow from derivative financial instruments in € THOUS Expected in period of Less than 1 year 1 - 3 years 3 - 5 years Over 5 years 2019 Designated as hedging instrument (2,377) (50) — — Not designated as hedging instrument (8,356) — — — 2018 Designated as hedging instrument 87 58 — — Not designated as hedging instrument (689) — — — |
Schedule of non-discounted payments agreed by contract | Payments agreed by contracts in € THOUS Payments due by period of Less than 1 year 1 - 3 years 3 - 5 years Over 5 years 2019 Accounts payable 716,526 — — — Accounts payable to related parties 118,663 — — — Other current financial liabilities 1,414,464 — — — Short-term debt (1) 1,171,853 — — — Amended 2012 Credit Agreement (2) 577,115 1,424,798 — — Bonds and Convertible Bonds 1,004,042 1,686,586 1,109,894 2,166,434 Accounts Receivable Facility (2) 7,518 387,468 — — Other long-term debt 68,078 66,531 74,131 49,467 Long-term lease liabilities (1) 789,145 1,479,119 1,112,401 2,190,926 Variable payments outstanding for acquisitions 34,253 26,710 26,325 9,503 Noncontrolling interests subject to put provisions 603,132 114,950 136,163 121,021 Letters of credit 21,893 — — — Derivative financial instruments - in cash flow hedging relationships 2,484 50 — — Derivative financial instruments - not designated as hedging instrument 10,762 — — — 2018 Accounts payable 641,271 1 — — Accounts payable to related parties 153,781 — — — Other current financial liabilities 1,467,766 — — — Short-term debt (1) 1,394,194 — — — Amended 2012 Credit Agreement (2) 178,170 740,024 1,126,183 — Bonds and Convertible Bonds 1,132,032 1,917,239 677,500 880,939 Accounts Receivable Facility (2) — — — — Other long-term debt and capital lease obligations (2) 26,519 68,976 19,796 63,734 Variable payments outstanding for acquisitions 57,217 69,918 33,221 30,576 Noncontrolling interests subject to put provisions 494,576 183,396 66,324 107,857 Letters of credit 12,413 12,322 — — Derivative financial instruments - in cash flow hedging relationships 1,347 — — — Derivative financial instruments - not designated as hedging instrument 7,091 11,820 — — (1) Includes amounts from related parties. (2) Future interest payments for financial liabilities with variable interest rates were calculated using the latest interest rates fixed prior to December 31, 2019 and 2018. |
Other comprehensive income (l_2
Other comprehensive income (loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other comprehensive income (loss) | |
Schedule of components of other comprehensive income (loss) | Other comprehensive income (loss) in € THOUS 2019 2018 2017 Pretax Tax effect Net Pretax Tax effect Net Pretax Tax effect Net Components that will not be reclassified to profit or loss: Actuarial gain (loss) on defined benefit pension plans (99,613) 30,245 (69,368) (28,070) 7,713 (20,357) 6,840 (27,393) (20,553) Components that may be reclassified subsequently to profit or loss: Foreign currency translation adjustment 263,835 — 263,835 327,317 — 327,317 (1,284,173) — (1,284,173) Other comprehensive income (loss) relating to cash flow hedges: Changes in fair value of cash flow hedges during the period (17,469) 4,352 (13,117) 2,680 (698) 1,982 1,613 (430) 1,183 Reclassification adjustments 5,836 (1,678) 4,158 20,880 (6,036) 14,844 26,370 (7,977) 18,393 Total other comprehensive income (loss) relating to cash flow hedges (11,633) 2,674 (8,959) 23,560 (6,734) 16,826 27,983 (8,407) 19,576 Other comprehensive income (loss) 152,589 32,919 185,508 322,807 979 323,786 (1,249,350) (35,800) (1,285,150) |
Supplementary cash flow infor_2
Supplementary cash flow information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplementary cash flow information | |
Schedule of additional information provided with respect to net cash provided by (used in) investing activities | Details for net cash provided by (used in) investing activities in € THOUS 2019 2018 2017 Details for acquisitions Assets acquired (2,639,432) (360,375) (758,720) Liabilities assumed 260,120 21,122 128,552 Noncontrolling interests subject to put provisions 72,151 11,901 68,069 Noncontrolling interests 65,217 45,319 14,293 Non-cash consideration 26,637 28,530 8,851 Cash paid (2,215,307) (253,503) (538,955) Less cash acquired 55,210 3,538 17,630 Net cash paid for acquisitions (2,160,097) (249,965) (521,325) Cash paid for investments (34,602) (590,199) (17,999) Cash paid for intangible assets (37,972) (85,103) (26,370) Total cash paid for acquisitions and investments, net of cash acquired, and purchases of intangible assets (2,232,671) (925,267) (565,694) Details for divestitures Cash received from sale of subsidiaries or other businesses, less cash disposed (1) 43,317 1,532,724 157,025 Cash received from divestitures of debt securities 16,623 150,172 256,136 Cash received from repayment of loans — 79 2,227 Proceeds from divestitures 59,940 1,682,975 415,388 (1) In 2018, cash received from sale of subsidiaries or other businesses, less cash disposed included a cash payment of €142,593 relating to tax payments in connection with the divestiture of Sound. |
Schedule of reconciliation of debt to net cash provided by (used in) financing activities | Reconciliation of debt to net cash provided by (used in) financing activities in € THOUS Non-cash changes Acquisitions Foreign Amortization January 1, Cash (net of currency of debt December 31, 2019 (1) Flow divestitures) translation issuance costs Other (2) 2019 Short-term debt 1,205,294 (70,398) 14,611 618 — (137) 1,149,988 Short-term debt from related parties 188,900 (167,111) — — — 76 21,865 Long-term debt (excluding Accounts Receivable Facility) (3) 6,115,890 1,285,603 22,815 85,424 15,147 1,108 7,525,987 Accounts Receivable Facility — 381,430 — (2,435) 575 — 379,570 Lease liabilities 4,451,081 (671,403) 2,141 81,817 — 718,456 4,582,092 Lease liabilities from related parties 137,494 (16,340) — 35 — 1,757 122,946 (1) Line item "Long-term Debt (excluding Accounts Receivable Facility)" as of December 31, 2018, was labeled as “Long-term debt and capital lease obligations (excluding Accounts Receivable Facility)” and included liabilities from capital leases in accordance with IAS 17 of €36,144; As of January 1, 2019, these liabilities have been transferred to the line item “Lease liabilities”. Furthermore, upon the initial application of IFRS 16 as of January 1, 2019, Lease liabilities of €4,414,937 and Lease liabilities from related parties of €137,494 were recognized. (2) Includes newly concluded leases, lease modifications and reassessments of leases with third parties and related parties. (3) Cash Flow excluding repayments of variable payments outstanding for acquisitions in the amount of €41,803. The following table shows a reconciliation of debt to net cash provided by (used in) financing activities for 2018: Reconciliation of debt to net cash provided by (used in) financing activities in € THOUS Non-cash changes Acquisitions Foreign Amortization January 1, Cash (net of currency of debt New December 31, 2018 Flow divestitures) translation issuance costs leases Other 2018 Short-term debt 760,279 444,844 3,046 (2,860) — — (15) 1,205,294 Short-term debt from related parties 9,000 179,900 — — — — — 188,900 Long-term debt (excluding Accounts Receivable Facility) (1) 6,384,734 (453,717) 8,652 188,165 15,975 6,517 1,708 6,152,034 Accounts Receivable Facility 293,673 (298,912) — 4,883 356 — — — (1) Cash Flow excluding repayments of variable payments outstanding for acquisitions in the amount of €10,099. |
Segment and corporate informa_2
Segment and corporate information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment and corporate information | |
Schedule of segment and corporate activities | Segment and corporate information in € THOUS North Asia- Latin America EMEA Pacific America Total Segment Segment Segment Segment Segment Corporate Total 2019 Revenue from contracts with customers 11,931,396 2,652,943 1,792,020 705,636 17,081,995 20,141 17,102,136 Other revenue external customers 263,777 40,530 66,750 3,362 374,419 — 374,419 Revenue external customers 12,195,173 2,693,473 1,858,770 708,998 17,456,414 20,141 17,476,555 Inter- segment revenue 3,067 686 504 251 4,508 (4,508) — Revenue 12,198,240 2,694,159 1,859,274 709,249 17,460,922 15,633 17,476,555 Operating income 1,794,101 448,062 328,996 42,508 2,613,667 (344,109) 2,269,558 Interest (429,444) Income before income taxes 1,840,114 Depreciation and amortization (992,526) (188,580) (98,599) (33,352) (1,313,057) (240,351) (1,553,408) Impairment loss (36,411) (3,341) — — (39,752) — (39,752) Income (loss) from equity method investees 75,941 (4,414) 2,551 1,152 75,230 (1,551) 73,679 Total assets 21,700,202 4,058,523 2,852,271 917,184 29,528,180 3,406,555 32,934,735 thereof investment in equity method investees 400,514 171,704 99,815 24,839 696,872 — 696,872 Additions of property, plant and equipment, intangible assets and right-of-use assets 1,097,517 212,282 190,591 36,595 1,536,985 356,934 1,893,919 2018 Revenue from contracts with customers 11,347,963 2,559,485 1,627,715 682,894 16,218,057 14,736 16,232,793 Other revenue external customers 221,769 27,073 61,638 3,600 314,080 — 314,080 Revenue external customers 11,569,732 2,586,558 1,689,353 686,494 16,532,137 14,736 16,546,873 Inter- segment revenue 1,609 304 633 240 2,786 (2,786) — Revenue 11,571,341 2,586,862 1,689,986 686,734 16,534,923 11,950 16,546,873 Operating income 2,665,187 398,683 303,956 28,848 3,396,674 (358,876) 3,037,798 Interest (301,062) Income before income taxes 2,736,736 Depreciation and amortization (377,836) (116,384) (45,475) (22,344) (562,039) (162,808) (724,847) Impairment loss — (64,719) — — (64,719) — (64,719) Income (loss) from equity method investees 75,279 (4,322) 2,125 264 73,346 — 73,346 Total assets 16,936,646 3,612,800 2,322,284 719,334 23,591,064 2,651,204 26,242,268 thereof investment in equity method investees 348,096 178,886 98,741 24,057 649,780 — 649,780 Additions of property, plant and equipment and intangible assets 598,988 158,974 53,962 26,894 838,818 316,147 1,154,965 2017 Revenue from contracts with customers 12,878,665 2,547,055 1,623,312 719,792 17,768,824 14,748 17,783,572 Inter- segment revenue 1,898 16 356 374 2,644 (2,644) — Revenue 12,880,563 2,547,071 1,623,668 720,166 17,771,468 12,104 17,783,572 Operating income 2,086,391 443,725 313,042 58,349 2,901,507 (539,068) 2,362,439 Interest (364,824) Income before income taxes 1,997,615 Depreciation and amortization (398,235) (119,044) (45,401) (17,929) (580,609) (154,870) (735,479) Income (loss) from equity method investees 71,739 (7,159) 1,919 700 67,199 — 67,199 Total assets 15,556,146 3,585,486 2,074,150 670,126 21,885,908 2,139,307 24,025,215 thereof investment in equity method investees 342,462 181,870 98,281 24,396 647,009 - 647,009 Additions of property, plant and equipment and intangible assets 526,652 130,755 52,861 41,637 751,905 241,052 992,957 |
Schedule of geographic operations | Geographic presentation in € THOUS North Rest of Germany America the world Total 2019 Revenue external customers 474,750 12,195,173 4,806,632 17,476,555 Long-lived assets 1,311,786 19,112,827 4,335,569 24,760,182 2018 Revenue external customers 426,327 11,569,732 4,550,814 16,546,873 Long-lived assets 948,355 13,260,913 3,290,930 17,500,198 2017 Revenue external customers 433,105 12,878,665 4,471,802 17,783,572 Long-lived assets 905,571 13,037,452 3,122,590 17,065,613 |
Principal accountant fees and_2
Principal accountant fees and services (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Principal accountant fees and services | |
Schedule of fees for the auditor | Fees in € THOUS Consolidated thereof Consolidated thereof Consolidated thereof group Germany group Germany group Germany 2019 2018 2017 Audit fees 10,113 1,665 7,845 1,322 8,629 1,232 Audit-related fees 615 525 320 316 59 18 Tax fees 318 — 1,069 115 830 169 Other fees 41 — 251 234 716 110 |
The Company, basis of present_4
The Company, basis of presentation and significant accounting policies - Basis of presentation, Principles of consolidation and composition (Details) € in Thousands | Dec. 31, 2018EUR (€) | Dec. 31, 2019EUR (€)item | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) |
The Company and basis of presentation | ||||
Leased fixed assets, included in Property, plant and equipment | € 36,402 | € 36,402 | ||
Current lease liabilities from capital leases | 9,387 | 9,387 | ||
Non-current lease liabilities from capital leases | 26,757 | 26,757 | ||
Repayments of capital lease liabilities | 10,015 | € 11,717 | ||
Number of companies consolidated | item | 2,215 | |||
Number of companies accounted for by the equity method | item | 51 | |||
Number of first-time consolidations companies | item | 195 | |||
Number of companies deconsolidated | item | 16 | |||
Research and development expense reclassified to selling, general and administrative | ||||
The Company and basis of presentation | ||||
Amount of reclassifications or changes in presentation | 19,541 | 19,707 | ||
Trade accounts and other receivables reclassified to accounts receivable from related parties, balance sheet | ||||
The Company and basis of presentation | ||||
Amount of reclassifications or changes in presentation | € 106,206 | |||
Trade accounts and other receivables reclassified to accounts receivable from related parties, cash flow | ||||
The Company and basis of presentation | ||||
Amount of reclassifications or changes in presentation | 24,181 | € 62,411 | ||
Impairment loss reclassified to depreciation, amortization and impairment loss | ||||
The Company and basis of presentation | ||||
Amount of reclassifications or changes in presentation | 64,719 | |||
ARGENTINA | ||||
The Company and basis of presentation | ||||
Gains (losses) on net monetary position | € (23,672) | € (12,297) | ||
Level of price index | 283.4 | |||
Percentage of price index increase | 54.00% |
The Company, basis of present_5
The Company, basis of presentation and significant accounting policies - Property, plant and equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings and improvements | Minimum | |
Useful Lives of Property, Plant, and Equipment | |
Useful life | 4 years |
Buildings and improvements | Maximum | |
Useful Lives of Property, Plant, and Equipment | |
Useful life | 50 years |
Buildings and improvements | Weighted average | |
Useful Lives of Property, Plant, and Equipment | |
Useful life | 14 years |
Machinery and equipment | Minimum | |
Useful Lives of Property, Plant, and Equipment | |
Useful life | 3 years |
Machinery and equipment | Maximum | |
Useful Lives of Property, Plant, and Equipment | |
Useful life | 19 years |
Machinery and equipment | Weighted average | |
Useful Lives of Property, Plant, and Equipment | |
Useful life | 10 years |
The Company, basis of present_6
The Company, basis of presentation and significant accounting policies - Intangible assets and goodwill (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Amortizable intangible assets | |
Detailed information on intangible assets | |
Useful lives | 10 years |
Non-compete agreements | |
Detailed information on intangible assets | |
Useful lives | 8 years |
Technology | |
Detailed information on intangible assets | |
Useful lives | 12 years |
Internally developed intangibles | |
Detailed information on intangible assets | |
Useful lives | 8 years |
Licenses and distribution agreements | |
Detailed information on intangible assets | |
Useful lives | 12 years |
Customer relationships | |
Detailed information on intangible assets | |
Useful lives | 10 years |
Other | |
Detailed information on intangible assets | |
Useful lives | 7 years |
The Company, basis of present_7
The Company, basis of presentation and significant accounting policies - Foreign currency translation (Details) - $ / € | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign Currency Translation | |||
Spot exchange rate | 0.89015 | 0.87336 | |
Average exchange rate | 0.89328 | 0.84678 | 0.88519 |
The Company, basis of present_8
The Company, basis of presentation and significant accounting policies - Capitalized interest (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capitalized Interest | |||
Interest cost capitalized | € 7,240 | € 5,724 | € 4,758 |
Capitalisation rate of borrowing costs eligible for capitalisation | 3.84% | 4.03% | 4.19% |
The Company, basis of present_9
The Company, basis of presentation and significant accounting policies - Concentration of risk (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
U.S. Medicare and Medicaid | |||
Concentration of Risk | |||
Percentage of revenues which were earned and subject to regulations | 33.00% | 33.00% | 34.00% |
The Company, basis of presen_10
The Company, basis of presentation and significant accounting policies - Recent pronouncements (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
IFRS 16 application | ||
Right-of-use assets | € 4,325,115 | |
Retained earnings | 9,454,861 | € 8,831,930 |
Non-controlling interests | € 1,269,324 | 1,143,547 |
Lease liabilities | ||
Future minimum rental payments | 5,527,638 | |
Liabilities from capital leases in accordance with IAS 17 | € 36,144 | |
Lease liability weighted average discount rate | 3.69% | |
Increase (decrease) due to application of IFRS 16 | ||
IFRS 16 application | ||
Right-of-use assets | € 4,276,532 | |
Lease liabilities from third and related parties | 4,552,431 | |
Retained earnings | (120,809) | |
Non-controlling interests | (15,526) | |
Lease liabilities | ||
Less short-term leases | (21,936) | |
Less leases of low-value assets | (34,145) | |
Other | (25,169) | |
Gross lease liabilities | 5,446,388 | |
Discounting | (893,957) | |
Lease liabilities | 4,552,431 | |
After application of IFRS 16 | ||
IFRS 16 application | ||
Lease liabilities from third and related parties | 4,588,575 | |
Lease liabilities | ||
Lease liabilities | € 4,588,575 |
Discretionary decisions and s_3
Discretionary decisions and sources of estimation uncertainties - Recoverability of goodwill and intangible assets (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Recoverability of Goodwill and Intangible Assets | ||
Number of years of budget | 3 years | |
Maximum number of projection years | 10 years | |
North America Segment | ||
Recoverability of Goodwill and Intangible Assets | ||
Residual value growth | 1.00% | 1.00% |
Pre-tax WACC | 7.71% | 7.42% |
After-tax WACC | 6.00% | 5.99% |
EMEA Segment | ||
Recoverability of Goodwill and Intangible Assets | ||
Residual value growth | 1.00% | 1.00% |
Pre-tax WACC | 8.73% | 9.46% |
After-tax WACC | 6.25% | 6.86% |
Asia-Pacific Segment | ||
Recoverability of Goodwill and Intangible Assets | ||
Residual value growth | 4.00% | 4.00% |
Pre-tax WACC | 6.79% | 7.81% |
After-tax WACC | 6.04% | 6.61% |
Latin America Segment | ||
Recoverability of Goodwill and Intangible Assets | ||
Residual value growth | 2.95% | 3.45% |
Recoverable amount of CGU exceeding the carrying amount | € 217,815 | |
Latin America Segment | Pre-tax WACC | ||
Recoverability of Goodwill and Intangible Assets | ||
Amount by which value assigned to key assumption must change in order for unit's recoverable amount to be equal to carrying amount | 1.87 | 0.27 |
Latin America Segment | Operating income margin | ||
Recoverability of Goodwill and Intangible Assets | ||
Amount by which value assigned to key assumption must change in order for unit's recoverable amount to be equal to carrying amount | (2.03) | (0.32) |
Latin America Segment | Residual value growth | ||
Recoverability of Goodwill and Intangible Assets | ||
Amount by which value assigned to key assumption must change in order for unit's recoverable amount to be equal to carrying amount | (2.13) | (0.47) |
Latin America Segment | Minimum | ||
Recoverability of Goodwill and Intangible Assets | ||
Pre-tax WACC | 10.45% | 11.93% |
After-tax WACC | 8.06% | 8.70% |
Latin America Segment | Maximum | ||
Recoverability of Goodwill and Intangible Assets | ||
Pre-tax WACC | 20.02% | 16.75% |
After-tax WACC | 17.63% | 13.52% |
Non-amortizable intangible assets and goodwill | ||
Recoverability of Goodwill and Intangible Assets | ||
Carrying amount of intangible assets | € 14,247,709 | € 12,395,641 |
Carrying amount of goodwill and non-amortizable intangible assets, percentage of the Company's total assets | 43.00% | 47.00% |
Discretionary decisions and s_4
Discretionary decisions and sources of estimation uncertainties - Trade accounts receivable and allowance for doubtful accounts (Details) € in Thousands | 12 Months Ended | |
Dec. 31, 2019EUR (€)country | Dec. 31, 2018EUR (€) | |
Trade accounts and other receivables and allowance for doubtful accounts | ||
Trade accounts and other receivables | € | € 3,421,346 | € 3,231,500 |
Number of countries Company sells health care products | country | 150 | |
Number of countries Company sells health care services | country | 50 | |
Additional percentage of uncollectible receivables for sensitivity analysis | 1.00% | |
Percentage of operating income reduced, if 1% of trade accounts receivable were uncollectible | 1.60% | |
Allowances | ||
Trade accounts and other receivables and allowance for doubtful accounts | ||
Trade accounts and other receivables | € | € (141,358) | € (118,015) |
Discretionary decisions and s_5
Discretionary decisions and sources of estimation uncertainties - Percentage of Accounts Receivable (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Major customers | ||
Number of single debtor other than U.S. Medicare and Medicaid accounted for more than 5% of total trade accounts receivable | 0 | 0 |
Percentage of trade accounts receivable | 100.00% | 100.00% |
U.S. Government health care programs | ||
Major customers | ||
Percentage of trade accounts receivable | 30.00% | 31.00% |
U.S. commercial payors | ||
Major customers | ||
Percentage of trade accounts receivable | 15.00% | 14.00% |
U.S. hospitals | ||
Major customers | ||
Percentage of trade accounts receivable | 4.00% | 4.00% |
Self-pay of U.S. patients | ||
Major customers | ||
Percentage of trade accounts receivable | 2.00% | 3.00% |
Other North America Segment payors | ||
Major customers | ||
Percentage of trade accounts receivable | 4.00% | 3.00% |
Product customers and health care payors outside the North America Segment | ||
Major customers | ||
Percentage of trade accounts receivable | 45.00% | 45.00% |
Acquisitions, investments, pu_3
Acquisitions, investments, purchases of intangible assets and divestitures - Acquisitions (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquisitions, investments, purchases of intangible assets and divestitures | |||
Acquisitions, investments and purchase of intangible assets, total purchase consideration | € 2,297,173 | € 956,803 | € 682,676 |
Cash consideration, net of cash acquired | 2,232,671 | 925,267 | 565,694 |
Assumed obligations and non-cash consideration | 64,502 | 31,536 | 116,982 |
Acquisitions | |||
Total acquisitions | 2,224,599 | 280,643 | 638,307 |
Cash flows used in obtaining control of subsidiaries or other businesses, classified as investing activities | 2,160,097 | 249,965 | 521,325 |
Assumed obligations and non-cash consideration | 64,502 | 30,678 | € 116,982 |
Goodwill | 1,607,559 | € 328,702 | |
Intangible assets acquired | 685,047 | ||
Net income of acquiree since acquisition date | (68,599) | ||
Revenue of acquiree since acquisition date | 364,892 | ||
Increase in assets as a result of business combinations | € 2,639,432 |
Acquisitions, investments, pu_4
Acquisitions, investments, purchases of intangible assets and divestitures - Estimated Fair Values of Assets Acquired and Liabilities Assumed and Pro forma financial information (Details) € / shares in Units, $ / shares in Units, € in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019EUR (€)€ / shares | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | |
Estimated Fair Values of Assets Acquired and Liabilities Assumed Details | |||||
Cash and cash equivalents | € | € 55,210 | € 3,538 | € 17,630 | ||
Intangible assets and other assets | € | 685,047 | ||||
Goodwill | € | 1,607,559 | 328,702 | |||
Noncontrolling interests | € | € (65,217) | € (45,319) | € (14,293) | ||
Revenue of acquiree since acquisition date | € | € 364,892 | ||||
Operating profit (loss) of acquiree since acquisition date | € | (68,599) | ||||
NxStage Medical Inc | |||||
Estimated Fair Values of Assets Acquired and Liabilities Assumed Details | |||||
NxStage purchase per common share | $ / shares | $ 30 | ||||
Cash and cash equivalents | $ 47,203 | ||||
Trade accounts and other receivables | 34,062 | ||||
Inventories | 63,735 | ||||
Other current assets | 15,819 | ||||
Property, plant and equipment | 104,533 | ||||
Right-of-use assets | 21,603 | ||||
Intangible assets and other assets | 761,734 | ||||
Goodwill | 1,201,613 | ||||
Accounts payable, current provisions and other current liabilities | (72,429) | ||||
Deferred taxes | (100,485) | ||||
Lease liabilities | (22,065) | ||||
Other liabilities | (27,822) | ||||
Noncontrolling interests | (4,063) | ||||
Total acquisition cost | 2,023,438 | ||||
Cash acquired | (47,203) | ||||
Net cash paid | $ 1,976,235 | € 1,740,563 | |||
Useful lives | 13 years | 13 years | |||
Revenue of acquiree since acquisition date | $ 294,281 | € 262,875 | |||
Operating profit (loss) of acquiree since acquisition date | (31,145) | (27,821) | |||
Proforma financial information details | |||||
Pro forma revenue | € | 17,521,432 | ||||
Pro forma net income attributable to shareholders of FMC-AG & Co. KGaA | € | € 1,186,516 | ||||
Basic earnings per share | € / shares | € 3.92 | ||||
Diluted earnings per share | € / shares | € 3.92 | ||||
NxStage Medical Inc | Technology | |||||
Estimated Fair Values of Assets Acquired and Liabilities Assumed Details | |||||
Intangible assets and other assets | $ 660,300 |
Acquisitions, investments, pu_5
Acquisitions, investments, purchases of intangible assets and divestitures - Investments Proceeds from divestitures (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments and Purchases of Intangible Assets | |||
Investments and purchases of intangible assets, total purchase consideration | € 72,574 | € 676,160 | € 44,369 |
Cash consideration | 72,574 | 675,302 | 44,369 |
Divestitures | |||
Proceeds from divestitures | 79,427 | 1,683,292 | 437,031 |
Cash portion of proceeds from divestitures | 59,940 | 1,682,975 | 415,388 |
Non-cash portion of proceeds from divestitures | € 19,487 | € 317 | € 21,643 |
Notes to the consolidated sta_3
Notes to the consolidated statements of income - Revenue (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||
Dialysis services | € 12,447,092 | € 11,420,415 | |
Care Coordination | 1,425,127 | 1,843,874 | |
Health care services | 13,872,219 | 13,264,289 | € 14,531,636 |
Dialysis products | 3,528,506 | 3,208,821 | |
Non-dialysis products | 75,830 | 73,763 | |
Health care products | 3,604,336 | 3,282,584 | 3,251,936 |
Total | 17,476,555 | 16,546,873 | € 17,783,572 |
Revenue from contracts with customers | |||
Revenue | |||
Dialysis services | 12,447,092 | 11,420,415 | |
Care Coordination | 1,176,227 | 1,622,862 | |
Health care services | 13,623,319 | 13,043,277 | |
Dialysis products | 3,402,987 | 3,115,753 | |
Non-dialysis products | 75,830 | 73,763 | |
Health care products | 3,478,817 | 3,189,516 | |
Total | 17,102,136 | 16,232,793 | |
Other revenue | |||
Revenue | |||
Care Coordination | 248,900 | 221,012 | |
Health care services | 248,900 | 221,012 | |
Dialysis products | 125,519 | 93,068 | |
Health care products | 125,519 | 93,068 | |
Total | € 374,419 | € 314,080 |
Notes to the consolidated sta_4
Notes to the consolidated statements of income - Trade accounts receivables and contract liabilities (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Notes to the consolidated statements of income | ||
Trade accounts receivables | € 3,341,111 | € 3,284,712 |
Contract liabilities | 22,802 | 37,632 |
Impairment losses relate to receivables | 41,982 | € 16,981 |
Revenue that was included in contract liability balance at beginning of period | € 12,608 |
Notes to the consolidated sta_5
Notes to the consolidated statements of income - Unsatisfied performance obligations (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Unsatisfied performance obligations | ||
Transaction price allocated to unsatisfied performance obligations | € 1,160,077 | € 1,157,314 |
Less than 1 year | ||
Unsatisfied performance obligations | ||
Transaction price allocated to unsatisfied performance obligations | 278,090 | |
1 - 3 years | ||
Unsatisfied performance obligations | ||
Transaction price allocated to unsatisfied performance obligations | 455,774 | |
3 - 5 years | ||
Unsatisfied performance obligations | ||
Transaction price allocated to unsatisfied performance obligations | 359,721 | |
5 - 10 years | ||
Unsatisfied performance obligations | ||
Transaction price allocated to unsatisfied performance obligations | € 66,492 |
Notes to the consolidated sta_6
Notes to the consolidated statements of income - Selling, general and administrative expenses (Details) - General and administrative expense - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selling, general and administrative expenses | |||
Gains (losses) on change in fair value of investments | € 97,375 | € (9,762) | |
FCPA related charge | (77,200) | € (200,000) | |
Income attributable to a consent agreement on certain pharmaceuticals | 60,471 | 53,283 | 17,524 |
Net gain related to variable payments outstanding for acquisitions | 41,537 | 36,327 | 2,685 |
Net gain (loss) from sale of fixed assets | (28,911) | 6,041 | 31,959 |
Gain (loss) from settlement of pension plan | 4,754 | ||
Impairment loss on intangible assets | (932) | (64,719) | |
Net gains (losses) from the sale of investments | (68) | € 1,824 | € 36,402 |
Restructuring costs | € (91,689) |
Notes to the consolidated sta_7
Notes to the consolidated statements of income - (Gain) loss related to divestitures of Care Coordination activities (Details) € in Thousands, $ in Thousands | Jun. 28, 2018USD ($) | Jun. 28, 2018EUR (€) | Nov. 30, 2014item | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) |
Divestments | ||||||
Proceeds from divestitures | € | € 59,940 | € 1,682,975 | € 415,388 | |||
Sound | ||||||
Divestments | ||||||
Proceeds from divestitures | $ 1,770,516 | € 1,531,109 | ||||
Net gains (losses) from the sale of investments | € | € 809,003 | |||||
Number of hospitals served | 180 | |||||
Number of states served | 35 | |||||
Number of providers | 1,750 | |||||
Proportion of ownership interest in subsidiary | 100.00% |
Notes to the consolidated sta_8
Notes to the consolidated statements of income - Research and development expenses (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Detailed information on intangible assets | |||
Research and development expense | € 168,028 | € 114,074 | € 110,997 |
Depreciation and amortisation expense | 1,553,408 | 724,847 | 735,479 |
Capitalized development costs | |||
Detailed information on intangible assets | |||
Depreciation and amortisation expense | € 3,052 | € 341 | € 432 |
Notes to the consolidated sta_9
Notes to the consolidated statements of income - Cost of materials (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Notes to the consolidated statements of income | |||
Cost of raw materials, supplies and purchased components | € 4,031,371 | € 3,395,895 | € 3,605,316 |
Cost of purchased services | 258,959 | 233,638 | 229,806 |
Cost of materials | € 4,290,330 | € 3,629,533 | € 3,835,122 |
Notes to the consolidated st_10
Notes to the consolidated statements of income - Personnel expenses (Details) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019EUR (€)employee | Dec. 31, 2018EUR (€)employee | Dec. 31, 2017EUR (€)employee | |
Personnel expenses | |||
Wages and salaries | € | € 5,448,662 | € 5,025,128 | € 5,396,339 |
Social security contributions and cost of retirement benefits and social assistance | € | 1,350,696 | 1,414,525 | 1,503,684 |
thereof retirement benefits | € | 174,009 | 156,581 | 147,332 |
Personnel expenses | € | € 6,799,358 | € 6,439,653 | € 6,900,023 |
Employees by function | |||
Production and Services | 103,896 | 97,971 | 98,547 |
Administration | 11,634 | 10,510 | 9,962 |
Sales and Marketing | 3,253 | 3,360 | 3,272 |
Research and Development | 1,050 | 881 | 804 |
Total employees | 119,833 | 112,722 | 112,585 |
Notes to the consolidated st_11
Notes to the consolidated statements of income - Net interest (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Notes to the consolidated statements of income | |||
Net interest | € 429,444 | € 301,062 | € 364,824 |
Interest expense | 491,061 | 448,471 | 416,199 |
Interest income | € 61,617 | € 147,409 | € 51,375 |
Notes to the consolidated st_12
Notes to the consolidated statements of income - Income taxes geographical (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of geographic region | |||
Income before income taxes | € 1,840,114 | € 2,736,736 | € 1,997,615 |
Income tax expense (benefit) | |||
Current tax expense | 337,348 | 421,908 | 646,127 |
Deferred tax income | 64,266 | 89,171 | (203,046) |
Total tax expense (income) | 401,614 | 511,079 | 443,081 |
Germany | |||
Disclosure of geographic region | |||
Income before income taxes | 101,734 | 161,861 | (20,363) |
Income tax expense (benefit) | |||
Current tax expense | (59,928) | 45,136 | 77,934 |
Deferred tax income | 48,313 | (34,685) | (36,022) |
United States | |||
Disclosure of geographic region | |||
Income before income taxes | 1,149,149 | 2,191,834 | 1,589,501 |
Income tax expense (benefit) | |||
Current tax expense | 168,503 | 261,211 | 437,201 |
Deferred tax income | 57,352 | 145,700 | (156,704) |
Other | |||
Disclosure of geographic region | |||
Income before income taxes | 589,231 | 383,041 | 428,477 |
Income tax expense (benefit) | |||
Current tax expense | 228,773 | 115,561 | 130,992 |
Deferred tax income | € (41,399) | € (21,844) | € (10,320) |
Notes to the consolidated st_13
Notes to the consolidated statements of income - Income taxes reconciliation (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax reconciliation | |||
Statutory tax rate (as a percent) | 30.21% | 30.18% | 29.90% |
Expected corporate income tax expense | € 555,898 | € 825,810 | € 597,187 |
Tax free income | (65,889) | (50,747) | (44,302) |
Income from equity method investees | (23,683) | (18,185) | (18,706) |
Tax rate differentials | (58,386) | (106,258) | 139,122 |
Non-deductible expenses | 44,283 | 60,721 | 106,125 |
Taxes for prior years | (5,454) | (91,138) | (20,573) |
Noncontrolling partnership interests | (60,724) | (61,936) | (105,832) |
Tax on divestitures | (74,560) | ||
Tax rate changes | 2,743 | (219) | (238,130) |
Change in realizability of deferred tax assets and tax credits | 8,519 | 3,211 | 7,254 |
Withholding taxes | 13,083 | 4,564 | 6,606 |
Other | (8,776) | 19,816 | 14,330 |
Total tax expense (income) | € 401,614 | € 511,079 | € 443,081 |
Effective tax rate (as a percent) | 21.80% | 18.70% | 22.20% |
Notes to the consolidated st_14
Notes to the consolidated statements of income - Deferred income tax assets and liabilities (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | € 1,732,115 | € 471,504 |
Total deferred tax liabilities | 2,110,621 | 752,340 |
Net deferred tax liabilities | (378,506) | (280,836) |
Trade accounts receivable | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 13,392 | 25,090 |
Total deferred tax liabilities | 30,310 | 29,596 |
Inventories | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 71,915 | 70,223 |
Total deferred tax liabilities | 19,324 | 12,598 |
Intangible assets | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 4,994 | 6,980 |
Total deferred tax liabilities | 632,984 | 433,228 |
Property, plant and equipment | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 72,769 | 62,124 |
Total deferred tax liabilities | 165,082 | 136,392 |
Lease liabilities | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 1,164,620 | |
Right-of-use assets | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax liabilities | 1,068,409 | |
Provisions and other liabilities | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 50,819 | 93,637 |
Total deferred tax liabilities | 92,756 | 14,678 |
Pension liabilities | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 135,356 | 98,278 |
Net operating loss carryforwards, tax credit carryforwards and interest carryforwards | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 175,394 | 93,890 |
Derivatives | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 3,027 | 2,160 |
Total deferred tax liabilities | 372 | 1,978 |
Compensation expense related to stock options | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 3,426 | 3,732 |
Other temporary differences | ||
Disclosure of temporary difference, unused tax losses and unused tax credits | ||
Total deferred tax assets | 36,403 | 15,390 |
Total deferred tax liabilities | € 101,384 | € 123,870 |
Notes to the consolidated st_15
Notes to the consolidated statements of income - Net deferred income tax assets and liabilities (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Notes to the consolidated statements of income | ||
Deferred taxes assets | € 361,196 | € 345,686 |
Deferred tax liabilities | 739,702 | 626,521 |
Net deferred tax liabilities | € (378,506) | € (280,836) |
Notes to the consolidated st_16
Notes to the consolidated statements of income - Net operating loss carryforwards (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure | ||
Net operating loss carryforwards | € 640,619 | |
Unused tax losses for which no deferred tax asset recognized | 204,476 | |
Deferred tax liabilities of foreign subsidiaries | 6,645 | € 10,656 |
Undistributed earnings of foreign subsidiaries for which no deferred tax recognized | € 8,867,422 | € 8,240,031 |
Percentage of dividends and capital gain tax free | 95.00% | |
Less than 1 year | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | € 11,264 | |
2021 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 15,032 | |
2022 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 7,476 | |
2023 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 9,959 | |
2024 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 42,970 | |
2025 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 16,181 | |
2026 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 61,553 | |
2027 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 48,654 | |
2028 | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 29,091 | |
2029 and thereafter | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | 160,236 | |
Without expiration date | ||
Income Tax Disclosure | ||
Net operating loss carryforwards | € 238,203 |
Notes to the consolidated st_17
Notes to the consolidated statements of income - U.S. Tax Reform (Details) - EUR (€) € in Thousands | Jan. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure | ||||
Statutory tax rate (as a percent) | 30.21% | 30.18% | 29.90% | |
Tax rate changes | € (2,743) | € 219 | € 238,130 | |
United States | ||||
Income Tax Disclosure | ||||
Statutory tax rate (as a percent) | 21.00% | 35.00% | ||
Deferred tax benefit from Tax Cuts and Jobs Act | € 235,692 |
Related party transactions - Se
Related party transactions - Service agreements and products - General (Details) - EUR (€) € in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2010 | |
Vifor Fresenius Medical Care Renal Pharma Ltd. | ||||
Related party transactions | ||||
Ownership in joint venture (as a percent) | 45.00% | |||
Commitments made | € 752,837 | |||
Vifor Fresenius Medical Care Renal Pharma Ltd. | Less than 1 year | ||||
Related party transactions | ||||
Commitments made | € 423,545 | |||
Vifor Fresenius Medical Care Renal Pharma Ltd. | Maximum | ||||
Related party transactions | ||||
Agreement term | 5 years | |||
Fresenius SE | ||||
Related party transactions | ||||
Proportion of ownership interest in reporting entity (as a percent) | 31.64% | |||
Fresenius SE Companies | Minimum | ||||
Related party transactions | ||||
Term of related party agreement | 1 year | |||
Fresenius SE Companies | Maximum | ||||
Related party transactions | ||||
Term of related party agreement | 5 years | |||
One Company of Fresenius SE Companies | Manufacturing of infusion bags | ||||
Related party transactions | ||||
Term of related party agreement | 10 years | |||
Purchase of machinery | € 7,183 | € 4,497 |
Related party transactions - _2
Related party transactions - Service agreements and products with related parties (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Service Agreements | |||
Transactions | |||
Sales of goods and services | € 53,625 | € 62,626 | € 94,120 |
Purchases of goods and services | 134,946 | 126,046 | 103,195 |
Balances | |||
Accounts receivable | 70,338 | 109,714 | |
Accounts payable | 6,776 | 12,489 | |
Accrued expenses | 8,352 | 9,376 | |
Products | |||
Transactions | |||
Sales of goods and services | 44,774 | 33,564 | 30,530 |
Purchases of goods and services | 506,753 | 438,848 | 439,647 |
Balances | |||
Accounts receivable | 16,803 | 8,750 | |
Accounts payable | 39,667 | 61,633 | |
Fresenius SE | Service Agreements | |||
Transactions | |||
Sales of goods and services | 153 | 445 | 381 |
Purchases of goods and services | 29,114 | 24,456 | 21,704 |
Balances | |||
Accounts receivable | 35 | 378 | |
Accounts payable | 360 | 4,019 | |
Fresenius SE | Products | |||
Transactions | |||
Sales of goods and services | 3 | 1 | |
Fresenius SE affiliates | Service Agreements | |||
Transactions | |||
Sales of goods and services | 4,420 | 3,819 | 11,111 |
Purchases of goods and services | 105,832 | 101,590 | 81,491 |
Balances | |||
Accounts receivable | 2,003 | 681 | |
Accounts payable | 6,416 | 8,470 | |
Fresenius SE affiliates | Products | |||
Transactions | |||
Sales of goods and services | 44,771 | 33,564 | 30,529 |
Purchases of goods and services | 37,279 | 39,181 | 40,467 |
Balances | |||
Accounts receivable | 16,803 | 8,750 | |
Accounts payable | 3,405 | 3,658 | |
Equity method investees | Service Agreements | |||
Transactions | |||
Sales of goods and services | 49,052 | 58,362 | 82,628 |
Balances | |||
Accounts receivable | 68,300 | 108,655 | |
Equity method investees | Products | |||
Transactions | |||
Purchases of goods and services | 469,474 | 399,667 | € 399,180 |
Balances | |||
Accounts payable | € 36,262 | € 57,975 |
Related Party Transactions - Le
Related Party Transactions - Lease Agreements - Summary (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease Transactions | |||
Depreciation | € 700,276 | ||
Interest expense | 171,724 | ||
Leases balances | |||
Right-of-use asset | 4,325,115 | ||
Lease Agreements | |||
Lease Transactions | |||
Depreciation | 17,169 | ||
Interest expense | 1,897 | ||
Lease expense | 4,457 | € 24,597 | € 22,132 |
Leases balances | |||
Right-of-use asset | 122,215 | ||
Lease liability | 122,946 | ||
Fresenius SE | Lease Agreements | |||
Lease Transactions | |||
Depreciation | 4,580 | ||
Interest expense | 501 | ||
Lease expense | 4,005 | 8,745 | 8,456 |
Leases balances | |||
Right-of-use asset | 30,336 | ||
Lease liability | 30,820 | ||
Fresenius SE affiliates | Lease Agreements | |||
Lease Transactions | |||
Depreciation | 12,589 | ||
Interest expense | 1,396 | ||
Lease expense | 452 | € 15,852 | € 13,676 |
Leases balances | |||
Right-of-use asset | 91,879 | ||
Lease liability | € 92,126 |
Related party transactions - Fi
Related party transactions - Financing (Details) - EUR (€) € in Thousands | Nov. 28, 2013 | Aug. 19, 2009 | Dec. 31, 2019 | Dec. 31, 2018 |
Transactions | ||||
Outstanding borrowings | € 13,782,448 | € 7,546,228 | ||
Fresenius SE | Short-term financing | ||||
Balances | ||||
Accounts receivable | 71,078 | 80,228 | ||
Accounts payable | € 38,050 | € 32,454 | ||
Fresenius SE | Loans | ||||
Transactions | ||||
Interest rate on borrowings (as a percent) | 0.93% | 0.825% | ||
Outstanding borrowings | € 18,865 | € 185,900 | ||
General Partner | Unsecured debt - originated in 2009 | ||||
Transactions | ||||
Proceeds from short-term debt from related parties | € 1,500 | |||
Interest rate on borrowings (as a percent) | 1.335% | 0.93% | ||
General Partner | Unsecured debt - originated in 2013 | ||||
Transactions | ||||
Proceeds from short-term debt from related parties | € 1,500 | |||
Interest rate on borrowings (as a percent) | 1.875% | 0.93% | ||
Subsidiary of Fresenius SE | Bonds | ||||
Transactions | ||||
Interest rate on borrowings (as a percent) | 5.25% | 5.25% | ||
Outstanding borrowings | € 1,000 | € 6,000 |
Related party transactions - Ke
Related party transactions - Key management personnel (Details) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019EUR (€)item | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | |
Transactions | |||
Issued capital | € 304,437 | € 307,879 | |
Number of supervisory board participants of reporting entity who are also supervisory board participants of General Partner | item | 3 | ||
Total number of supervisory board participants of reporting entity | item | 6 | ||
General Partner | |||
Transactions | |||
Amount paid for services received from related party | € 23,905 | 14,612 | € 25,995 |
Annual fee portion of reimbursements paid to related party | € 120 | ||
Annual fee, as percent of General Partner's share capital | 4.00% | ||
Issued capital | € 3,000 | ||
Balances | |||
Accounts receivable | 977 | 176 | |
Accounts payable | € 34,170 | € 47,205 | |
Chairman of Supervisory Board | |||
Transactions | |||
Amount paid for services received from related party | € 2,337 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | ||||
Cash | € 768,706 | € 831,885 | ||
Securities and time deposits | 239,017 | 1,313,747 | ||
Cash and cash equivalents | 1,007,723 | 2,145,632 | € 978,109 | € 708,882 |
Restricted cash | € 18,820 | € 5,002 |
Trade accounts and other rece_3
Trade accounts and other receivables (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Trade accounts and other receivables | ||
Trade accounts and other receivables | € 3,421,346 | € 3,231,500 |
Other receivables | € 100,613 | 66,496 |
Collection period for trade accounts receivable | 1 year | |
Trade accounts receivable included in other non-current assets | € 132,144 | 120,668 |
Financial instruments credit-impaired | ||
Trade accounts and other receivables | ||
Trade accounts and other receivables | 264,228 | 239,465 |
Gross carrying amount | ||
Trade accounts and other receivables | ||
Trade accounts and other receivables | 3,562,704 | 3,349,515 |
thereof finance lease receivables | 57,398 | 28,726 |
Gross carrying amount | Financial instruments credit-impaired | ||
Trade accounts and other receivables | ||
Trade accounts and other receivables | 366,497 | 325,240 |
Allowances | ||
Trade accounts and other receivables | ||
Trade accounts and other receivables | (141,358) | (118,015) |
Allowances | Financial instruments credit-impaired | ||
Trade accounts and other receivables | ||
Trade accounts and other receivables | € (102,269) | € (85,775) |
Trade accounts and other rece_4
Trade accounts and other receivables - Development of allowance for doubtful accounts (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Development of allowance | |||
Financial assets at beginning of period | € (6,322,439) | ||
Financial assets at end of period | (5,450,851) | € (6,322,439) | |
Trade accounts and other receivables | Allowances | |||
Development of allowance | |||
Financial assets at beginning of period | 118,015 | 474,891 | € 482,461 |
Change in valuation allowances as recorded in the consolidated statements of income | 42,315 | 19,112 | 549,631 |
Write-offs and recoveries of amounts previously written-off | (18,587) | (378,201) | (501,229) |
Foreign currency translation | (385) | 2,213 | (55,972) |
Financial assets at end of period | € 141,358 | € 118,015 | € 474,891 |
Trade accounts and other rece_5
Trade accounts and other receivables - Aging Analysis of Trade Accounts Receivable and the Allowance For Doubtful Accounts (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | € 3,421,346 | € 3,231,500 |
not overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 1,988,286 | 1,855,106 |
up to 3 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 891,576 | 843,381 |
3 to 6 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 222,745 | 211,815 |
6 to 12 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 171,443 | 169,133 |
More than one year | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 147,296 | 152,065 |
Gross carrying amount | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 3,562,704 | 3,349,515 |
Gross carrying amount | not overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 1,997,671 | 1,863,149 |
Gross carrying amount | up to 3 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 899,987 | 848,092 |
Gross carrying amount | 3 to 6 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 229,012 | 217,024 |
Gross carrying amount | 6 to 12 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 184,768 | 175,079 |
Gross carrying amount | More than one year | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | 251,266 | 246,171 |
Allowances | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | (141,358) | (118,015) |
Allowances | not overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | (9,385) | (8,043) |
Allowances | up to 3 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | (8,411) | (4,711) |
Allowances | 3 to 6 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | (6,267) | (5,209) |
Allowances | 6 to 12 months overdue | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | (13,325) | (5,946) |
Allowances | More than one year | ||
Aging Analysis of Trade Accounts Receivable | ||
Trade accounts and other receivables | € (103,970) | € (94,106) |
Inventories (Details)
Inventories (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventories | ||
Finished goods | € 940,407 | € 774,133 |
Health care supplies | 399,585 | 391,593 |
Raw materials and purchased components | 233,609 | 224,054 |
Work in process | 89,677 | 77,023 |
Inventories | 1,663,278 | 1,466,803 |
Unconditional purchase agreement of materials | 443,744 | |
Allowances | ||
Inventories | ||
Inventories | € (69,427) | € (62,990) |
Minimum | ||
Inventories | ||
Term of unconditional purchase agreements of materials | 1 year | |
Maximum | ||
Inventories | ||
Term of unconditional purchase agreements of materials | 5 years | |
Less than 1 year | ||
Inventories | ||
Unconditional purchase agreement of materials | € 208,841 |
Other current assets (Details)
Other current assets (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other current assets | ||
Income taxes receivable | € 209,545 | € 159,290 |
Debt securities | 133,322 | 99,592 |
Other taxes receivable | 127,880 | 107,708 |
Payments on account | 110,078 | 104,817 |
Receivables for supplier rebates | 51,296 | 68,203 |
Prepaid rent | 26,374 | 57,319 |
Deposit / Guarantee / Security | 22,226 | 19,915 |
Prepaid insurance | 19,796 | 23,632 |
Derivatives | 2,513 | 7,837 |
Other | 210,573 | 155,770 |
Other current assets | € 913,603 | € 804,083 |
Property, plant and equipment_2
Property, plant and equipment (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in property, plant, and equipment: | |||
Balance, beginning of period | € 3,836,010 | ||
Additions - depreciation | (717,650) | € (631,423) | € (622,706) |
Balance, ending of period | 4,190,281 | 3,836,010 | |
Contractual commitments for acquisition of property, plant and equipment | € 62,787 | ||
Minimum | |||
Changes in property, plant, and equipment: | |||
Term of unconditional purchase agreements of property, plant and equipment | 1 year | ||
Maximum | |||
Changes in property, plant, and equipment: | |||
Term of unconditional purchase agreements of property, plant and equipment | 5 years | ||
Less than 1 year | |||
Changes in property, plant, and equipment: | |||
Contractual commitments for acquisition of property, plant and equipment | € 60,190 | ||
Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 8,507,399 | 7,655,397 | |
Foreign currency translation | 135,956 | 218,702 | |
Changes in consolidation group | 99,048 | 2,895 | |
Additions | 981,955 | 958,600 | |
Reclassifications | (31,738) | (27,933) | |
Disposals | (335,253) | (300,262) | |
Balance, ending of period | 9,357,367 | 8,507,399 | 7,655,397 |
Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (4,671,389) | (4,163,626) | |
Foreign currency translation | (68,462) | (126,591) | |
Changes in consolidation group | 15,335 | 6,051 | |
Additions - depreciation | (717,650) | (631,423) | |
Reclassifications | 21,270 | 14,742 | |
Disposals | 253,810 | 229,458 | |
Balance, ending of period | (5,167,086) | (4,671,389) | (4,163,626) |
Land | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 57,592 | ||
Balance, ending of period | 62,660 | 57,592 | |
Land | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 58,887 | 56,540 | |
Foreign currency translation | 802 | 2,299 | |
Changes in consolidation group | 2,824 | 358 | |
Additions | 466 | 605 | |
Reclassifications | 3,153 | 490 | |
Disposals | (2,140) | (1,405) | |
Balance, ending of period | 63,992 | 58,887 | 56,540 |
Land | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (1,295) | (1,239) | |
Foreign currency translation | (19) | (38) | |
Additions - depreciation | (20) | ||
Disposals | 2 | (18) | |
Balance, ending of period | (1,332) | (1,295) | (1,239) |
Buildings and improvements | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 1,493,651 | ||
Balance, ending of period | 1,591,617 | 1,493,651 | |
Buildings and improvements | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 3,311,704 | 2,881,688 | |
Foreign currency translation | 65,782 | 108,998 | |
Changes in consolidation group | 10,648 | 692 | |
Additions | 43,560 | 67,272 | |
Reclassifications | 296,276 | 328,718 | |
Disposals | (83,533) | (75,664) | |
Balance, ending of period | 3,644,437 | 3,311,704 | 2,881,688 |
Buildings and improvements | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (1,818,053) | (1,580,103) | |
Foreign currency translation | (32,818) | (65,251) | |
Changes in consolidation group | 8,312 | 1,484 | |
Additions - depreciation | (255,683) | (221,866) | |
Reclassifications | (8,805) | 786 | |
Disposals | 54,227 | 46,897 | |
Balance, ending of period | (2,052,820) | (1,818,053) | (1,580,103) |
Machinery and equipment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 1,743,197 | ||
Balance, ending of period | 2,026,722 | 1,743,197 | |
Machinery and equipment | Subject to operating leases | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 731,427 | ||
Balance, ending of period | 775,601 | 731,427 | |
Machinery and equipment | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 4,541,906 | 4,174,027 | |
Foreign currency translation | 59,529 | 96,766 | |
Changes in consolidation group | 86,743 | (2,576) | |
Additions | 569,352 | 465,117 | |
Reclassifications | 127,613 | 29,325 | |
Disposals | (245,487) | (220,753) | |
Balance, ending of period | 5,139,656 | 4,541,906 | 4,174,027 |
Machinery and equipment | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (2,798,709) | (2,538,436) | |
Foreign currency translation | (34,291) | (58,817) | |
Changes in consolidation group | 7,023 | 4,278 | |
Additions - depreciation | (461,947) | (400,439) | |
Reclassifications | (24,591) | 13,986 | |
Disposals | 199,581 | 180,719 | |
Balance, ending of period | (3,112,934) | (2,798,709) | (2,538,436) |
Machinery, equipment and rental equipment under capitalized leases | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 36,402 | ||
Balance, ending of period | 36,402 | ||
Machinery, equipment and rental equipment under capitalized leases | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 89,734 | 80,916 | |
Foreign currency translation | 2,151 | 3,880 | |
Changes in consolidation group | (98) | ||
Additions | 6,259 | ||
Reclassifications | (91,885) | 665 | |
Disposals | (1,888) | ||
Balance, ending of period | 89,734 | 80,916 | |
Machinery, equipment and rental equipment under capitalized leases | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (53,332) | (43,848) | |
Foreign currency translation | (1,334) | (2,485) | |
Changes in consolidation group | 289 | ||
Additions - depreciation | (9,118) | ||
Reclassifications | 54,666 | (30) | |
Disposals | 1,860 | ||
Balance, ending of period | (53,332) | (43,848) | |
Construction in progress | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 505,168 | ||
Balance, ending of period | 509,282 | 505,168 | |
Construction in progress | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 505,168 | 462,226 | |
Foreign currency translation | 7,692 | 6,759 | |
Changes in consolidation group | (1,167) | 4,519 | |
Additions | 368,577 | 419,347 | |
Reclassifications | (366,895) | (387,131) | |
Disposals | (4,093) | (552) | |
Balance, ending of period | 509,282 | 505,168 | € 462,226 |
ARGENTINA | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 16,858 | ||
Balance, ending of period | 28,032 | 16,858 | |
ARGENTINA | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 37,633 | ||
Balance, ending of period | 57,304 | 37,633 | |
ARGENTINA | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (20,775) | ||
Balance, ending of period | (29,272) | (20,775) | |
ARGENTINA | Land | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 1,581 | ||
Balance, ending of period | 2,307 | 1,581 | |
ARGENTINA | Land | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 1,581 | ||
Balance, ending of period | 2,307 | 1,581 | |
ARGENTINA | Buildings and improvements | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 8,121 | ||
Balance, ending of period | 12,850 | 8,121 | |
ARGENTINA | Buildings and improvements | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 13,575 | ||
Balance, ending of period | 20,652 | 13,575 | |
ARGENTINA | Buildings and improvements | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (5,454) | ||
Balance, ending of period | (7,802) | (5,454) | |
ARGENTINA | Machinery and equipment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 6,500 | ||
Balance, ending of period | 11,767 | 6,500 | |
ARGENTINA | Machinery and equipment | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 21,821 | ||
Balance, ending of period | 33,237 | 21,821 | |
ARGENTINA | Machinery and equipment | Accumulated depreciation / amortization / impairment | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | (15,321) | ||
Balance, ending of period | (21,470) | (15,321) | |
ARGENTINA | Construction in progress | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 656 | ||
Balance, ending of period | 1,108 | 656 | |
ARGENTINA | Construction in progress | Gross carrying amount | |||
Changes in property, plant, and equipment: | |||
Balance, beginning of period | 656 | ||
Balance, ending of period | € 1,108 | € 656 |
Intangible assets and goodwil_2
Intangible assets and goodwill - Acquisition or manufacturing costs of intangible assets and goodwill (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | € 681,331 | ||
Additions - amortization | (135,482) | € (93,424) | € (112,773) |
Balance at the end of the period | 1,426,330 | 681,331 | |
Reconciliation of goodwill | |||
Balance at the beginning of the period | 12,209,606 | ||
Balance at the end of the period | 14,017,255 | 12,209,606 | |
Intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 681,331 | ||
Balance at the end of the period | 1,426,330 | 681,331 | |
Amortizable intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 495,296 | ||
Balance at the end of the period | 1,195,876 | 495,296 | |
Non-compete agreements | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 42,614 | ||
Balance at the end of the period | 36,599 | 42,614 | |
Technology | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 28,559 | ||
Balance at the end of the period | 567,611 | 28,559 | |
Licenses and distribution agreements | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 104,133 | ||
Balance at the end of the period | 58,575 | 104,133 | |
Customer relationships | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 16,602 | ||
Balance at the end of the period | 57,575 | 16,602 | |
Construction in progress. | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 148,002 | ||
Balance at the end of the period | 267,403 | 148,002 | |
Internally developed intangibles | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 78,690 | ||
Balance at the end of the period | 128,854 | 78,690 | |
Other | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 76,696 | ||
Balance at the end of the period | 79,259 | 76,696 | |
Non-amortizable intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 186,035 | ||
Balance at the end of the period | 230,454 | 186,035 | |
Tradename | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 182,901 | ||
Balance at the end of the period | 227,229 | 182,901 | |
Management contracts | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 3,134 | ||
Balance at the end of the period | 3,225 | 3,134 | |
Goodwill | |||
Reconciliation of goodwill | |||
Balance at the beginning of the period | 12,209,606 | ||
Balance at the end of the period | 14,017,255 | 12,209,606 | |
Gross carrying amount | Intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 1,670,006 | 1,563,834 | |
Foreign currency translation | 22,646 | 44,205 | |
Changes in consolidation group | 680,276 | (132,056) | |
Additions | 192,366 | 196,365 | |
Reclassifications | 4,156 | 28,471 | |
Disposals | (18,652) | (30,813) | |
Balance at the end of the period | 2,550,798 | 1,670,006 | 1,563,834 |
Gross carrying amount | Amortizable intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 1,483,971 | 1,386,107 | |
Foreign currency translation | 19,229 | 35,897 | |
Changes in consolidation group | 639,274 | (132,056) | |
Additions | 192,366 | 196,365 | |
Reclassifications | 4,156 | 28,471 | |
Disposals | (18,652) | (30,813) | |
Balance at the end of the period | 2,320,344 | 1,483,971 | 1,386,107 |
Gross carrying amount | Non-compete agreements | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 324,910 | 310,163 | |
Foreign currency translation | 6,012 | 12,427 | |
Changes in consolidation group | 4,744 | 6,339 | |
Additions | 25 | 720 | |
Reclassifications | (274) | (2) | |
Disposals | (2,695) | (4,737) | |
Balance at the end of the period | 332,722 | 324,910 | 310,163 |
Gross carrying amount | Technology | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 153,164 | 149,191 | |
Foreign currency translation | (376) | 3,973 | |
Changes in consolidation group | 589,833 | ||
Balance at the end of the period | 742,621 | 153,164 | 149,191 |
Gross carrying amount | Licenses and distribution agreements | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 235,625 | 173,713 | |
Foreign currency translation | 4,678 | 3,049 | |
Changes in consolidation group | (38,126) | ||
Additions | 783 | 61,166 | |
Reclassifications | 5,093 | (3) | |
Disposals | (5,766) | (2,300) | |
Balance at the end of the period | 202,287 | 235,625 | 173,713 |
Gross carrying amount | Customer relationships | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 23,847 | 147,096 | |
Foreign currency translation | (116) | 2,015 | |
Changes in consolidation group | 47,880 | (125,264) | |
Reclassifications | (2,680) | ||
Balance at the end of the period | 68,931 | 23,847 | 147,096 |
Gross carrying amount | Construction in progress. | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 148,002 | 78,757 | |
Foreign currency translation | 1,208 | 2,785 | |
Changes in consolidation group | 36,892 | ||
Additions | 171,446 | 107,097 | |
Reclassifications | (86,898) | (23,050) | |
Disposals | (3,247) | (17,587) | |
Balance at the end of the period | 267,403 | 148,002 | 78,757 |
Gross carrying amount | Internally developed intangibles | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 217,033 | 169,095 | |
Foreign currency translation | 971 | 2,158 | |
Changes in consolidation group | (9,763) | ||
Additions | 9,105 | 17,501 | |
Reclassifications | 71,152 | 38,643 | |
Disposals | (222) | (601) | |
Balance at the end of the period | 298,039 | 217,033 | 169,095 |
Gross carrying amount | Other | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 381,390 | 358,092 | |
Foreign currency translation | 6,852 | 9,490 | |
Changes in consolidation group | (1,949) | (3,368) | |
Additions | 11,007 | 9,881 | |
Reclassifications | 17,763 | 12,883 | |
Disposals | (6,722) | (5,588) | |
Balance at the end of the period | 408,341 | 381,390 | 358,092 |
Gross carrying amount | Non-amortizable intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 186,035 | 177,727 | |
Foreign currency translation | 3,417 | 8,308 | |
Changes in consolidation group | 41,002 | ||
Balance at the end of the period | 230,454 | 186,035 | 177,727 |
Gross carrying amount | Tradename | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 182,901 | 174,689 | |
Foreign currency translation | 3,326 | 8,212 | |
Changes in consolidation group | 41,002 | ||
Balance at the end of the period | 227,229 | 182,901 | 174,689 |
Gross carrying amount | Management contracts | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 3,134 | 3,038 | |
Foreign currency translation | 91 | 96 | |
Balance at the end of the period | 3,225 | 3,134 | 3,038 |
Gross carrying amount | Goodwill | |||
Reconciliation of goodwill | |||
Balance at the beginning of the period | 12,209,606 | 12,103,921 | |
Foreign currency translation | 217,996 | 441,972 | |
Changes in consolidation group | 1,589,653 | (336,287) | |
Balance at the end of the period | 14,017,255 | 12,209,606 | 12,103,921 |
Accumulated depreciation / amortization / impairment | Amortizable intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (988,675) | (880,776) | |
Foreign currency translation | (15,117) | (26,567) | |
Changes in consolidation group | 3,772 | 63,921 | |
Additions - amortization | (135,482) | (93,424) | |
Impairment loss | (932) | (64,719) | |
Reclassifications | (1,796) | (15,280) | |
Disposals | 13,762 | 28,170 | |
Balance at the end of the period | (1,124,468) | (988,675) | (880,776) |
Accumulated depreciation / amortization / impairment | Non-compete agreements | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (282,296) | (262,381) | |
Foreign currency translation | (5,235) | (11,338) | |
Changes in consolidation group | 166 | 1,468 | |
Additions - amortization | (11,868) | (14,675) | |
Reclassifications | (26) | (17) | |
Disposals | 3,136 | 4,647 | |
Balance at the end of the period | (296,123) | (282,296) | (262,381) |
Accumulated depreciation / amortization / impairment | Technology | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (124,605) | (64,563) | |
Foreign currency translation | (1,140) | (2,995) | |
Changes in consolidation group | 356 | ||
Additions - amortization | (49,265) | (10,740) | |
Impairment loss | (46,663) | ||
Balance at the end of the period | (175,010) | (124,605) | (64,563) |
Accumulated depreciation / amortization / impairment | Licenses and distribution agreements | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (131,492) | (119,819) | |
Foreign currency translation | (2,607) | (577) | |
Additions - amortization | (14,293) | (12,673) | |
Impairment loss | (726) | ||
Reclassifications | 3 | ||
Disposals | 4,680 | 2,300 | |
Balance at the end of the period | (143,712) | (131,492) | (119,819) |
Accumulated depreciation / amortization / impairment | Customer relationships | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (7,245) | (50,572) | |
Foreign currency translation | (12) | (727) | |
Changes in consolidation group | 53,247 | ||
Additions - amortization | (4,099) | (9,226) | |
Disposals | 33 | ||
Balance at the end of the period | (11,356) | (7,245) | (50,572) |
Accumulated depreciation / amortization / impairment | Construction in progress. | |||
Reconciliation of intangible assets other than goodwill | |||
Impairment loss | (16,750) | ||
Disposals | 16,750 | ||
Accumulated depreciation / amortization / impairment | Internally developed intangibles | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (138,343) | (108,906) | |
Foreign currency translation | (1,328) | (2,927) | |
Changes in consolidation group | 2,475 | ||
Additions - amortization | (28,722) | (20,357) | |
Impairment loss | (932) | ||
Reclassifications | (360) | (9,202) | |
Disposals | 500 | 574 | |
Balance at the end of the period | (169,185) | (138,343) | (108,906) |
Accumulated depreciation / amortization / impairment | Other | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (304,694) | (274,535) | |
Foreign currency translation | (4,795) | (8,003) | |
Changes in consolidation group | 3,606 | 6,375 | |
Additions - amortization | (27,235) | (25,753) | |
Impairment loss | (580) | ||
Reclassifications | (1,410) | (6,064) | |
Disposals | 5,446 | 3,866 | |
Balance at the end of the period | (329,082) | (304,694) | € (274,535) |
ARGENTINA | Intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 693 | ||
Balance at the end of the period | 1,660 | 693 | |
ARGENTINA | Internally developed intangibles | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 13 | ||
Balance at the end of the period | 690 | 13 | |
ARGENTINA | Other | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 680 | ||
Balance at the end of the period | 970 | 680 | |
ARGENTINA | Goodwill | |||
Reconciliation of goodwill | |||
Balance at the beginning of the period | 18,079 | ||
Balance at the end of the period | 25,131 | 18,079 | |
ARGENTINA | Gross carrying amount | Intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 2,031 | ||
Balance at the end of the period | 3,668 | 2,031 | |
ARGENTINA | Gross carrying amount | Internally developed intangibles | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 142 | ||
Balance at the end of the period | 1,971 | 142 | |
ARGENTINA | Gross carrying amount | Other | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | 1,889 | ||
Balance at the end of the period | 1,697 | 1,889 | |
ARGENTINA | Gross carrying amount | Goodwill | |||
Reconciliation of goodwill | |||
Balance at the beginning of the period | 20,197 | ||
Balance at the end of the period | 28,057 | 20,197 | |
ARGENTINA | Accumulated depreciation / amortization / impairment | Intangible assets | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (1,338) | ||
Balance at the end of the period | (2,008) | (1,338) | |
ARGENTINA | Accumulated depreciation / amortization / impairment | Internally developed intangibles | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (129) | ||
Balance at the end of the period | (1,281) | (129) | |
ARGENTINA | Accumulated depreciation / amortization / impairment | Other | |||
Reconciliation of intangible assets other than goodwill | |||
Balance at the beginning of the period | (1,209) | ||
Balance at the end of the period | (727) | (1,209) | |
ARGENTINA | Accumulated depreciation / amortization / impairment | Goodwill | |||
Reconciliation of goodwill | |||
Balance at the beginning of the period | (2,118) | ||
Balance at the end of the period | € (2,926) | € (2,118) |
Intangible assets and goodwil_3
Intangible assets and goodwill - Goodwill and intangible assets with indefinite useful Life (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure of geographic region | ||
Goodwill | € 14,017,255 | € 12,209,606 |
Intangible assets other than goodwill | 1,426,330 | 681,331 |
Goodwill | ||
Disclosure of geographic region | ||
Goodwill | 14,017,255 | 12,209,606 |
Intangible assets | ||
Disclosure of geographic region | ||
Intangible assets other than goodwill | 1,426,330 | 681,331 |
Management contracts | ||
Disclosure of geographic region | ||
Intangible assets other than goodwill | 3,225 | 3,134 |
Tradename | ||
Disclosure of geographic region | ||
Intangible assets other than goodwill | 227,229 | 182,901 |
North America | Goodwill | ||
Disclosure of geographic region | ||
Goodwill | 11,762,791 | 10,128,309 |
North America | Tradename | ||
Disclosure of geographic region | ||
Intangible assets other than goodwill | 226,692 | 182,329 |
EMEA | Goodwill | ||
Disclosure of geographic region | ||
Goodwill | 1,342,730 | 1,282,632 |
Asia Pacific | Goodwill | ||
Disclosure of geographic region | ||
Goodwill | 716,665 | 662,097 |
Asia Pacific | Management contracts | ||
Disclosure of geographic region | ||
Intangible assets other than goodwill | 3,225 | 3,134 |
Latin America | Goodwill | ||
Disclosure of geographic region | ||
Goodwill | 195,069 | 136,568 |
Latin America | Tradename | ||
Disclosure of geographic region | ||
Intangible assets other than goodwill | € 537 | € 572 |
Current provisions and other _3
Current provisions and other current liabilities (Details) € in Thousands, $ in Thousands | Mar. 29, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) |
Development of provisions | |||
FCPA related payment | $ | $ 231,700 | ||
Provisions for share-based plans | € 63,447 | € 15,478 | |
Miscellaneous current liabilities | |||
Personnel liabilities | 647,508 | 654,457 | |
Noncontrolling interests subject to put provisions | 603,132 | 494,576 | |
Unapplied cash and receivable credits | 482,682 | 364,657 | |
Invoices outstanding | 178,209 | 160,112 | |
Withholding tax and VAT | 104,388 | 100,086 | |
Interest liabilities | 73,593 | 92,961 | |
Variable payments outstanding for acquisitions | 34,253 | 57,217 | |
Legal matters, advisory and audit fees | 27,979 | 38,778 | |
Bonuses, commissions | 27,510 | 26,831 | |
Contract liabilities | 22,795 | 37,628 | |
Rent and lease obligations | 176 | 138,210 | |
Other liabilities | 238,138 | 214,259 | |
Other current liabilities | 2,440,363 | 2,379,772 | |
Current provisions | |||
Development of provisions | |||
Provisions at beginning of period | 524,516 | ||
Foreign currency translation | 4,574 | ||
Changes in consolidation group | 1,464 | ||
Utilized | (264,049) | ||
Reversed | (5,182) | ||
Additions | 69,969 | ||
Reclassifications | 40,764 | ||
Provisions at end of period | 372,056 | 524,516 | |
Current provisions | Self-insurance programs | |||
Development of provisions | |||
Provisions at beginning of period | 198,307 | ||
Foreign currency translation | 3,751 | ||
Additions | 17,808 | ||
Provisions at end of period | 219,866 | 198,307 | |
Current provisions | Personnel expenses | |||
Development of provisions | |||
Provisions at beginning of period | 42,430 | ||
Foreign currency translation | 359 | ||
Changes in consolidation group | 215 | ||
Utilized | (25,436) | ||
Reversed | (293) | ||
Additions | 32,487 | ||
Reclassifications | 40,764 | ||
Provisions at end of period | 90,526 | 42,430 | |
Current provisions | Risk of lawsuit | |||
Development of provisions | |||
Provisions at beginning of period | 32,304 | ||
Foreign currency translation | 246 | ||
Changes in consolidation group | 507 | ||
Utilized | (15,049) | ||
Reversed | (50) | ||
Additions | 3,023 | ||
Provisions at end of period | 20,981 | 32,304 | |
Current provisions | FCPA related charge | |||
Development of provisions | |||
Provisions at beginning of period | 223,980 | ||
Utilized | (219,588) | ||
Reversed | (4,000) | ||
Additions | 3,844 | ||
Provisions at end of period | 4,236 | 223,980 | |
Current provisions | Other provisions | |||
Development of provisions | |||
Provisions at beginning of period | 27,495 | ||
Foreign currency translation | 218 | ||
Changes in consolidation group | 742 | ||
Utilized | (3,976) | ||
Reversed | (839) | ||
Additions | 12,807 | ||
Provisions at end of period | € 36,447 | € 27,495 |
Short-term debt and short-ter_3
Short-term debt and short-term debt from related parties (Details) € in Thousands, $ in Thousands | Dec. 31, 2019EUR (€) | Jul. 31, 2019EUR (€) | Jul. 30, 2019USD ($) | Dec. 31, 2018EUR (€) |
Debt | ||||
Short-term debt | € 1,149,988 | € 1,205,294 | ||
Short-term debt from related parties | 21,865 | 188,900 | ||
Short-term debt and short-term debt from related parties | 1,171,853 | 1,394,194 | ||
Offset amount | 152,598 | 122,256 | ||
Commercial paper program | ||||
Debt | ||||
Short-term debt | 999,732 | 999,873 | ||
Commercial paper borrowing limit | 1,000,000 | 1,000,000 | ||
Borrowings under lines of credit | ||||
Debt | ||||
Short-term debt | € 143,875 | € 204,491 | ||
Average interest rate (as a percent) | 0.86% | 1.21% | ||
Other | ||||
Debt | ||||
Short-term debt | € 6,381 | € 930 | ||
Amended 2012 Credit Agreement Excluded Amount | ||||
Debt | ||||
Remaining borrowing capacity | € 517,926 | € 386,619 | ||
Related party loan agreement | ||||
Debt | ||||
Short term borrowing capacity from related party | € 600,000 | $ 400,000 |
Long-term debt (Details)
Long-term debt (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt | ||
Long-term debt | € 7,905,557 | € 6,152,034 |
Less current portion | (1,447,239) | (1,106,519) |
Long-term debt, less current portion | 6,458,318 | 5,045,515 |
Amended 2012 Credit Agreement | ||
Long-term debt | ||
Long-term debt | 1,901,372 | 1,887,357 |
Bonds | ||
Long-term debt | ||
Long-term debt | 4,966,619 | 3,700,446 |
Convertible Bonds | ||
Long-term debt | ||
Long-term debt | 399,939 | 393,232 |
Accounts Receivable Facility | ||
Long-term debt | ||
Long-term debt | 379,570 | |
Capital lease obligations | ||
Long-term debt | ||
Long-term debt | 36,144 | |
Other long-term debt | ||
Long-term debt | ||
Long-term debt | € 258,057 | € 134,855 |
Long-term debt - Amended 2012 c
Long-term debt - Amended 2012 credit agreement (Details) € in Thousands, $ in Thousands | 1 Months Ended | |||||
Nov. 26, 2014USD ($) | Oct. 30, 2012USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | |
2012 Credit Agreement | ||||||
Long-term debt | ||||||
Maximum amount available | $ | $ 3,850,000 | |||||
Borrowings term (in years) | 5 years | |||||
Amended 2012 Credit Agreement | ||||||
Long-term debt | ||||||
Maximum amount available | $ 4,400,000 | € 3,183,030 | € 3,280,065 | |||
Extended borrowings term (in years) | 2 years | |||||
Balance outstanding | € 1,905,355 | € 1,894,039 | ||||
Amended 2012 Credit Agreement | Weighted average | USD | ||||||
Long-term debt | ||||||
Borrowings, interest rate | 3.24% | 3.24% | 3.53% | 3.53% | ||
Amended 2012 Credit Agreement | Weighted average | EUR | ||||||
Long-term debt | ||||||
Borrowings, interest rate | 0.93% | 0.93% | 0.81% | 0.81% | ||
Revolving credit facility USD | ||||||
Long-term debt | ||||||
Maximum amount available | $ 900,000 | € 801,139 | $ 900,000 | € 786,026 | ||
Balance outstanding | 138,700 | 123,464 | ||||
Letters of credit outstanding | 1,135 | 1,010 | 1,690 | 1,476 | ||
Revolving credit facility EUR | ||||||
Long-term debt | ||||||
Maximum amount available | 600,000 | 600,000 | ||||
USD term loan 5-year | ||||||
Long-term debt | ||||||
Maximum amount available | 1,230,000 | 1,094,891 | 1,350,000 | 1,179,039 | ||
Quarterly repayment | $ | 30,000 | |||||
Balance outstanding | $ 1,230,000 | 1,094,891 | $ 1,350,000 | 1,179,039 | ||
EUR term loan 5-year | ||||||
Long-term debt | ||||||
Maximum amount available | 287,000 | 315,000 | ||||
Quarterly repayment | 7,000 | |||||
Balance outstanding | 287,000 | 315,000 | ||||
EUR term loan 3-year | ||||||
Long-term debt | ||||||
Maximum amount available | 400,000 | 400,000 | ||||
Balance outstanding | € 400,000 | € 400,000 |
Long-term debt - Bonds (Details
Long-term debt - Bonds (Details) € in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | |
Debt | |||
Long-term debt | € 7,905,557 | € 6,152,034 | |
FMC US Finance II, Inc. 2012 | |||
Debt | |||
Face amount | $ | $ 800,000 | ||
Interest rate on borrowings (as a percent) | 5.625% | 5.625% | |
Long-term debt | 698,167 | ||
FMC Finance VIII S.A. 2012 | |||
Debt | |||
Face amount | € 250,000 | ||
Interest rate on borrowings (as a percent) | 5.25% | 5.25% | |
Long-term debt | 249,773 | ||
FMC US Finance II, Inc. 2014 | |||
Debt | |||
Face amount | $ | $ 500,000 | ||
Interest rate on borrowings (as a percent) | 4.125% | 4.125% | |
Long-term debt | € 444,507 | 435,376 | |
FMC US Finance, Inc. 2011 | |||
Debt | |||
Face amount | $ | $ 650,000 | ||
Interest rate on borrowings (as a percent) | 5.75% | 5.75% | |
Long-term debt | € 577,069 | 564,882 | |
FMC Finance VII S.A. 2011 | |||
Debt | |||
Face amount | € 300,000 | ||
Interest rate on borrowings (as a percent) | 5.25% | 5.25% | |
Long-term debt | € 299,498 | 299,035 | |
FMC US Finance II, Inc. 2012 | |||
Debt | |||
Face amount | $ | $ 700,000 | ||
Interest rate on borrowings (as a percent) | 5.875% | 5.875% | |
Long-term debt | € 622,135 | 609,532 | |
Fresenius Medical Care AG & Co. KGaA, 2019 | |||
Debt | |||
Face amount | € 650,000 | ||
Interest rate on borrowings (as a percent) | 0.25% | 0.25% | |
Long-term debt | € 646,936 | ||
FMC US Finance II, Inc. 2014 | |||
Debt | |||
Face amount | $ | $ 400,000 | ||
Interest rate on borrowings (as a percent) | 4.75% | 4.75% | |
Long-term debt | € 354,338 | 347,297 | |
Fresenius Medical Care AG & Co. KGaA, 2018 | |||
Debt | |||
Face amount | € 500,000 | ||
Interest rate on borrowings (as a percent) | 1.50% | 1.50% | |
Long-term debt | € 496,138 | 496,384 | |
Fresenius Medical Care AG & Co. KGaA, 2019 | |||
Debt | |||
Face amount | € 600,000 | ||
Interest rate on borrowings (as a percent) | 0.625% | 0.625% | |
Long-term debt | € 593,216 | ||
FMC US Finance III, Inc. 2019 | |||
Debt | |||
Face amount | $ | $ 500,000 | ||
Interest rate on borrowings (as a percent) | 3.75% | 3.75% | |
Long-term debt | € 435,673 | ||
Fresenius Medical Care AG & Co. KGaA, 2019 | |||
Debt | |||
Face amount | € 500,000 | ||
Interest rate on borrowings (as a percent) | 1.25% | 1.25% | |
Long-term debt | € 497,109 | ||
Bonds | |||
Debt | |||
Long-term debt | € 4,966,619 | € 3,700,446 | |
Percentage at which holders have right to ask repurchase | 101.00% | ||
Bonds issued before 2018 and bond issued by FMC US Finance III in 2019 | |||
Debt | |||
Redemption percentage at option of issuer | 100.00% |
Long-term debt - Convertible bo
Long-term debt - Convertible bonds (Details) - Equity-neutral convertible bonds € in Thousands | Sep. 19, 2014EUR (€) |
Debt | |
Face amount | € 400,000 |
Average interest rate (as a percent) | 1.125% |
Long-term debt - Accounts Recei
Long-term debt - Accounts Receivable Facility and Other (Details) € in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) |
Accounts Receivable Facility | ||||
Long-term debt | ||||
Maximum amount available | $ 900,000 | € 801,139 | $ 900,000 | € 786,026 |
Balance outstanding | 427,000 | 380,096 | ||
Letters of credit outstanding | $ 23,460 | € 20,883 | $ 26,631 | 23,259 |
Interest rate on borrowings (as a percent) | 1.98% | 1.98% | ||
Other long-term debt | ||||
Long-term debt | ||||
Fixed payment obligations for acquisitions | € 27,611 | 16,713 | ||
Fixed payment obligations for acquisitions classified as current portion of long-term debt | € 12,456 | € 7,621 |
Non-current provisions and ot_3
Non-current provisions and other non-current liabilities (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Non-current provisions and other non-current liabilities | ||
Noncurrent provisions and other noncurrent liabilities | € 668,747 | € 750,738 |
Other non-current liabilities | 559,944 | 622,291 |
Non-current provisions | ||
Development of provisions | ||
Provisions at beginning of period | 128,447 | |
Foreign currency translation | 1,419 | |
Changes in consolidation group | 6,496 | |
Utilized | (3,577) | |
Reversed | (6,409) | |
Additions | 23,191 | |
Reclassifications | (40,764) | |
Provisions at end of period | 108,803 | |
Liabilities from share-based payment transactions | 47,411 | 71,784 |
Non-current provisions | Personnel expenses | ||
Development of provisions | ||
Provisions at beginning of period | 84,439 | |
Foreign currency translation | 1,203 | |
Changes in consolidation group | 430 | |
Utilized | (3,294) | |
Reversed | (713) | |
Additions | 19,065 | |
Reclassifications | (40,764) | |
Provisions at end of period | 60,366 | |
Non-current provisions | Income Tax Liability | ||
Development of provisions | ||
Provisions at beginning of period | 29,231 | |
Foreign currency translation | 150 | |
Reversed | (5,447) | |
Additions | 2,177 | |
Provisions at end of period | 26,111 | |
Non-current provisions | Other provisions | ||
Development of provisions | ||
Provisions at beginning of period | 14,777 | |
Foreign currency translation | 66 | |
Changes in consolidation group | 6,066 | |
Utilized | (283) | |
Reversed | (249) | |
Additions | 1,949 | |
Provisions at end of period | 22,326 | |
Noncontrolling interests subject to put provisions | ||
Non-current provisions and other non-current liabilities | ||
Other non-current liabilities | 331,293 | 324,295 |
Variable payments outstanding for acquisitions | ||
Non-current provisions and other non-current liabilities | ||
Other non-current liabilities | 55,424 | 115,061 |
Derivatives | ||
Non-current provisions and other non-current liabilities | ||
Other non-current liabilities | 50 | 11,820 |
1 - 3 years | ||
Non-current provisions and other non-current liabilities | ||
Noncurrent provisions and other noncurrent liabilities | 219,129 | 457,382 |
3 - 5 years | ||
Non-current provisions and other non-current liabilities | ||
Noncurrent provisions and other noncurrent liabilities | 34,762 | 107,080 |
Over 5 Years | ||
Non-current provisions and other non-current liabilities | ||
Noncurrent provisions and other noncurrent liabilities | € 414,856 | € 186,276 |
Employee benefit plans - Define
Employee benefit plans - Defined benefit pension plans (Details) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019EUR (€)plan | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | |
Defined benefit pension plans | |||
Number of defined benefit plans | plan | 5 | ||
Defined benefit liability (asset) | € 699,490 | € 560,440 | |
FMCH | |||
Defined benefit pension plans | |||
Company contribution to plan | 1,131 | ||
Expected funding for next fiscal year | 1,139 | ||
United States, France and Germany | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | 660,343 | 525,016 | |
United States, France and Germany | Benefit obligation | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | 976,467 | 842,601 | € 792,739 |
United States | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 83,323 | 71,031 | |
United States | Funded plan | |||
Defined benefit pension plans | |||
Number of defined benefit plans | plan | 1 | ||
United States | Funded plan | Benefit obligation | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 399,339 | 388,518 | |
France | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 16,765 | 14,308 | |
France | Funded plan | |||
Defined benefit pension plans | |||
Number of defined benefit plans | plan | 1 | ||
France | Funded plan | Benefit obligation | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 5,498 | 4,626 | |
France | Unfunded plan | |||
Defined benefit pension plans | |||
Number of defined benefit plans | plan | 2 | ||
France | Unfunded plan | Benefit obligation | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 11,375 | 9,780 | |
Germany | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 560,255 | 439,677 | |
Germany | Unfunded plan | |||
Defined benefit pension plans | |||
Number of defined benefit plans | plan | 1 | ||
Germany | Unfunded plan | Benefit obligation | |||
Defined benefit pension plans | |||
Defined benefit liability (asset) | € 560,255 | € 439,677 |
Employee benefit plans - Defici
Employee benefit plans - Deficit or surplus (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net defined benefit liability and asset | ||
Balance at beginning of year | € 560,440 | |
Balance at end of year | € 699,490 | € 560,440 |
Weighted average duration of defined benefit obligation | 19 years | 18 years |
Non-current portion of pension liability | € 689,195 | € 551,930 |
United States, France and Germany | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | 525,016 | |
Balance at end of year | 660,343 | 525,016 |
Current portion of pension liability | 6,190 | 5,384 |
Non-current portion of pension liability | 654,153 | 519,632 |
United States | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | 71,031 | |
Balance at end of year | € 83,323 | 71,031 |
Beneficiary percentage | 67.00% | |
France | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | € 14,308 | |
Balance at end of year | € 16,765 | 14,308 |
Beneficiary percentage | 7.00% | |
Germany | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | € 439,677 | |
Balance at end of year | € 560,255 | 439,677 |
Beneficiary percentage | 26.00% | |
Countries other than US, France, and Germany | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | € 35,424 | |
Balance at end of year | 39,147 | 35,424 |
Current portion of pension liability | 4,105 | 3,126 |
Non-current portion of pension liability | 35,042 | 32,298 |
Benefit obligation | United States, France and Germany | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | 842,601 | 792,739 |
Foreign currency translation gains/losses | 7,459 | 17,957 |
Changes in consolidation group | 123 | |
Current service cost | 30,070 | 25,467 |
Interest expense (income) | 28,016 | 24,364 |
Transfer of plan participants | 194 | 80 |
Actuarial (gains) losses arising from changes in financial assumptions | 140,923 | (9,760) |
Actuarial (gains) losses arising from changes in demographic assumptions | (2,306) | 3,497 |
Actuarial (gains) losses arising from experience adjustments | (4,873) | 11,117 |
Remeasurements | 133,744 | 4,854 |
Benefits paid | (60,863) | (22,983) |
Settlements | (4,754) | |
Balance at end of year | 976,467 | 842,601 |
Plan assets | United States, France and Germany | ||
Net defined benefit liability and asset | ||
Balance at beginning of year | (317,585) | (291,256) |
Foreign currency translation gains/losses | (6,130) | (14,189) |
Interest expense (income) | (14,108) | (11,308) |
Actuarial (gains) losses arising from experience adjustments | (34,131) | 23,216 |
Actual return on plan assets | (48,239) | 11,908 |
Employer contributions | (1,131) | (43,393) |
Benefits paid | 56,961 | 19,345 |
Balance at end of year | € (316,124) | € (317,585) |
Employee benefit plans - Weight
Employee benefit plans - Weighted average assumptions for benefit obligations (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Employee benefit plans | ||
Discount rate (as a percent) | 2.35% | 3.27% |
Rate of compensation increase (as a percent) | 3.18% | 3.21% |
Rate of pension increase (as a percent) | 1.70% | 1.69% |
Employee benefit plans - Sensit
Employee benefit plans - Sensitivity analysis (Details) € in Thousands | Dec. 31, 2019EUR (€) |
Sensitivity analysis | |
Increase in actuarial assumption (as a percent) | 0.50% |
Decrease in actuarial assumption (as a percent) | 0.50% |
Discount rate | |
Sensitivity analysis | |
Increase (decrease) in pension liability due to increase in assumption | € (89,298) |
Increase (decrease) in pension liability due to decrease in assumption | 104,053 |
Rate of compensation increase | |
Sensitivity analysis | |
Increase (decrease) in pension liability due to increase in assumption | 16,040 |
Increase (decrease) in pension liability due to decrease in assumption | (15,793) |
Rate of pension increase | |
Sensitivity analysis | |
Increase (decrease) in pension liability due to increase in assumption | 46,089 |
Increase (decrease) in pension liability due to decrease in assumption | € (41,222) |
Employee benefit plans - Compon
Employee benefit plans - Components of net periodic benefit cost (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee benefit plans | |||
Current service cost | € 30,070 | € 25,467 | € 28,607 |
Net interest cost | 13,908 | 13,056 | 11,087 |
(Gains) losses from settlements | (4,754) | ||
Net periodic benefit costs | € 39,224 | € 38,523 | € 39,694 |
Employee benefit plans - Weig_2
Employee benefit plans - Weighted average assumptions for periodic benefit cost (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee benefit plans | |||
Discount rate (as a percent) | 3.27% | 3.08% | 3.25% |
Rate of compensation increase (as a percent) | 3.21% | 3.22% | 3.23% |
Rate of pension increase (as a percent) | 1.69% | 1.45% | 1.45% |
Employee benefit plans - Defi_2
Employee benefit plans - Defined benefit pension plans - cash outflows (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Defined benefit pension plans | ||
Estimated future benefit payments | € 331,620 | € 324,117 |
Less than 1 year | ||
Defined benefit pension plans | ||
Estimated future benefit payments | 28,706 | 24,111 |
1 - 3 years | ||
Defined benefit pension plans | ||
Estimated future benefit payments | 56,577 | 53,662 |
3 - 5 years | ||
Defined benefit pension plans | ||
Estimated future benefit payments | 62,441 | 61,415 |
5 - 10 years | ||
Defined benefit pension plans | ||
Estimated future benefit payments | € 183,896 | € 184,929 |
Employee benefit plans - Plan A
Employee benefit plans - Plan Assets (Details) - Plan assets - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair values | ||
Plan assets | € 316,124 | € 317,585 |
Equity investments | ||
Fair values | ||
Index funds | 85,321 | 77,718 |
Fixed income investments | ||
Fair values | ||
Government securities | 2,875 | 9,241 |
Corporate bonds | 202,642 | 186,500 |
Other bonds | 10,179 | 3,518 |
U.S. treasury money market funds | 14,999 | 40,510 |
Other types of investments | ||
Fair values | ||
Cash, money market and mutual funds | 108 | 98 |
Level 1 | ||
Fair values | ||
Plan assets | 26,094 | 51,460 |
Level 1 | Equity investments | ||
Fair values | ||
Index funds | 8,440 | 1,972 |
Level 1 | Fixed income investments | ||
Fair values | ||
Government securities | 2,547 | 8,880 |
U.S. treasury money market funds | 14,999 | 40,510 |
Level 1 | Other types of investments | ||
Fair values | ||
Cash, money market and mutual funds | 108 | 98 |
Level 2 | ||
Fair values | ||
Plan assets | 282,613 | 266,125 |
Level 2 | Equity investments | ||
Fair values | ||
Index funds | 76,881 | 75,746 |
Level 2 | Fixed income investments | ||
Fair values | ||
Government securities | 328 | 361 |
Corporate bonds | 202,642 | 186,500 |
Other bonds | 2,762 | € 3,518 |
Level 3 | ||
Fair values | ||
Plan assets | 7,417 | |
Level 3 | Fixed income investments | ||
Fair values | ||
Other bonds | € 7,417 |
Employee benefit plans - Plan i
Employee benefit plans - Plan investment policy (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefit plans | |
Preferred investment mix, long-term growth and income (as a percent) | 99.00% |
Preferred investment mix, cash and cash equivalents (as a percent) | 1.00% |
Target investment allocation for equity (as a percent) | 26.00% |
Target investment allocation for fixed income investments (as a percent) | 74.00% |
Minimum time horizon for invested funds | 5 years |
Employee benefit plans - Defi_3
Employee benefit plans - Defined contribution plans (Details) € in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)Y | Dec. 31, 2019EUR (€)Y | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | |
Plan 401(k) | ||||
Defined contribution plans | ||||
Minimum age in which individual qualified for greater contribution amount | Y | 50 | 50 | ||
Maximum annual contributions as a percentage of gross pay (as a percent) | 75.00% | 75.00% | ||
Maximum annual contributions | $ | $ 19,500 | |||
Maximum annual contributions if over age 50 | $ | $ 25,600 | |||
Percentage of employee's deposit that Company will match | 50.00% | 50.00% | ||
Maximum percentage of employee's pay that Company will match | 3.00% | 3.00% | ||
Defined contribution expense | € | € 53,290 | € 53,872 | € 48,746 | |
State plan | ||||
Defined contribution plans | ||||
Defined contribution expense | € | € 25,950 | € 24,721 | € 24,329 |
Shareholders' equity - Capital
Shareholders' equity - Capital stock (Details) | 12 Months Ended | |||||||
Dec. 31, 2019€ / sharesshares | Oct. 30, 2019 | Jun. 07, 2019 | May 13, 2019 | May 08, 2019 | Dec. 31, 2018shares | May 16, 2013 | Feb. 08, 2011 | |
Shareholders' equity | ||||||||
Number of shares issued | shares | 304,436,876 | 307,878,652 | ||||||
Nominal value per share | € / shares | € 1 | |||||||
Vote to create Authorized Capital (as a percent) | 75.00% | |||||||
Maximum increase in Authorized Capital, as a percent to issued capital | 50.00% | |||||||
Period that General Partner and its management board may issue new shares | 5 years | |||||||
Vote to create Conditional Capital (as a percent) | 75.00% | |||||||
Maximum increase in Conditional Capital, as a percent to issued capital | 50.00% | |||||||
Maximum increase in Conditional Capital for purpose of issuing shares to management and employees, as a percent to issued capital | 10.00% | |||||||
Conversion ratio of preference shares to ordinary shares | 1 | |||||||
General Partner | ||||||||
Shareholders' equity | ||||||||
Annual fee, as percent of General Partner's share capital | 4.00% | |||||||
Fresenius SE | ||||||||
Shareholders' equity | ||||||||
Voting interest held (as a percent) | 31.00% | 35.74% | ||||||
Voting interest held, net of treasury shares (as a percent) | 31.64% | |||||||
FIL Limited | ||||||||
Shareholders' equity | ||||||||
Voting interest held (as a percent) | 2.98% | |||||||
BlackRock, Inc., Wilmington, DE, US | ||||||||
Shareholders' equity | ||||||||
Voting interest held (as a percent) | 4.96% | 4.83% | 0.07% |
Shareholders' equity - Authoriz
Shareholders' equity - Authorized capital (Details) € in Thousands | May 19, 2015EUR (€)item |
Authorized Capital 2015/I | |
Shareholders' equity | |
Minimum number of occasions to increase share capital | item | 1 |
Maximum increase in authorised capital | € | € 35,000 |
Authorized Capital 2015/II | |
Shareholders' equity | |
Minimum number of occasions to increase share capital | item | 1 |
Maximum increase in authorised capital | € | € 25,000 |
Maximum increase in capital (as a percent) | 10.00% |
Shareholders' equity - Conditio
Shareholders' equity - Conditional capital (Details) € / shares in Units, € in Thousands, shares in Millions | May 12, 2011EUR (€)€ / sharesshares | Dec. 31, 2019EUR (€)Options€ / shares | Dec. 31, 2018EUR (€)Options | Dec. 31, 2017EUR (€) |
Shareholders' equity | ||||
Nominal value per share | € / shares | € 1 | |||
Outstanding number of options | 3,488,989 | 3,896,000 | ||
Outstanding options weighted average remaining contractual life | 3 years 2 months 23 days | |||
Exercised | 329,000 | |||
Increase in capital stock from exercise of stock options | € | € 17,195 | € 38,777 | € 43,833 | |
2011 SOP | ||||
Shareholders' equity | ||||
Conditional increase in capital | € | € 12,000 | |||
Conditional increase in capital (in shares) | shares | 12 | |||
Nominal value per share | € / shares | € 1 | |||
Outstanding number of options | 3,488,989 | |||
Outstanding options weighted average remaining contractual life | 3 years 2 months 23 days | |||
Exercised | 328,996 | |||
Conditional Capital | € | € 9,728 | |||
Conditional Capital Plan | ||||
Shareholders' equity | ||||
Exercised | 328,996 | 858,652 | ||
Increase in capital stock from exercise of stock options | € | € 329 | € 859 |
Shareholders' equity - Treasury
Shareholders' equity - Treasury stock (Details) - EUR (€) € / shares in Units, € in Thousands | Feb. 16, 2016 | Dec. 31, 2019 | Nov. 30, 2019 | Oct. 31, 2019 | Sep. 30, 2019 | Aug. 31, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | Apr. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | May 31, 2018 | Dec. 31, 2017 | May 31, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2013 | Dec. 31, 2016 |
Treasury stock | |||||||||||||||||||||||
Value of treasury shares held | € 370,502 | € 50,993 | € 370,502 | € 370,502 | € 50,993 | ||||||||||||||||||
Value of shares repurchased | € 589,305 | € 37,221 | € 57,938 | ||||||||||||||||||||
Maximum purchase of treasury shares, as a percent to registered capital | 10.00% | ||||||||||||||||||||||
Treasury Stock | |||||||||||||||||||||||
Treasury stock | |||||||||||||||||||||||
Average price per share, at date | € 60.66 | € 51 | € 65.63 | € 60.66 | € 60.66 | € 51 | € 65.63 | € 51 | |||||||||||||||
Average price paid per repurchased share, during period | € 63.85 | € 64.78 | € 57.85 | € 59.67 | € 57.53 | € 66.77 | € 67.11 | € 72.97 | € 72.83 | € 69.86 | € 86.14 | € 86.69 | € 87.79 | € 71.55 | € 86.37 | € 62.55 | € 51 | ||||||
Average price per retired share, during period | € 51 | € 71.55 | € 87.23 | ||||||||||||||||||||
Number of treasury shares held | 6,107,629 | 999,951 | 1,659,951 | 6,107,629 | 6,107,629 | 999,951 | 1,659,951 | 999,951 | |||||||||||||||
Number of shares repurchased | 564,908 | 852,859 | 692,910 | 627,466 | 835,208 | 1,029,655 | 504,672 | 147,558 | 1,993,974 | 1,629,240 | 257,726 | 173,274 | 660,000 | 3,770,772 | 431,000 | 5,107,678 | 8,878,450 | 431,000 | 660,000 | 7,548,951 | |||
Number of shares retired | 6,549,000 | 3,770,772 | 1,091,000 | 3,770,772 | 1,091,000 | ||||||||||||||||||
Value of treasury shares held | € 370,502 | € 50,993 | € 108,931 | € 370,502 | € 370,502 | € 50,993 | € 108,931 | € 50,993 | |||||||||||||||
Value of shares repurchased | € 36,067 | € 55,245 | € 40,084 | € 37,445 | € 48,050 | € 68,748 | € 33,870 | € 10,766 | € 145,214 | € 113,816 | € 22,201 | € 15,020 | € 57,938 | € 269,796 | € 37,221 | € 319,509 | 589,305 | 37,221 | 57,938 | ||||
Value of shares retired | € 269,796 | € 95,159 | 269,796 | 95,159 | |||||||||||||||||||
Repurchase of shares fees, net of taxes | € 11 | € 8 | € 12 | ||||||||||||||||||||
Maximum number of repurchase share (in shares) | 6,892,322 | 6,892,322 | 6,892,322 |
Shareholders' equity - Dividend
Shareholders' equity - Dividends (Details) - EUR (€) € / shares in Units, € in Thousands | May 21, 2019 | May 23, 2018 | May 16, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Dividends | ||||||
Total dividends paid | € 354,636 | € 324,838 | € 293,973 | € 354,636 | € 324,838 | € 293,973 |
Dividends paid per share | € 1.17 | € 1.06 | € 0.96 |
Supplementary information on _3
Supplementary information on capital management (Details) - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplementary information on capital management | ||||
Total equity including noncontrolling interests | € 13,227,237 | € 12,901,958 | € 10,828,186 | € 11,051,132 |
Debt and lease liabilities | 13,782,448 | 7,546,228 | ||
Total assets | € 32,934,735 | € 26,242,268 | € 24,025,215 | |
Debt and lease liabilities in % of total assets | 41.80% | 28.80% | ||
Total equity in % of total assets | 40.20% | 49.20% |
Earnings per share (Details)
Earnings per share (Details) - EUR (€) € / shares in Units, € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerators: | |||
Net income attributable to shareholders of FMC-AG & Co. KGaA | € 1,199,619 | € 1,981,924 | € 1,279,788 |
Denominators: | |||
Weighted average number of shares outstanding | 302,691,397 | 306,541,706 | 306,563,400 |
Potentially dilutive shares | 57,892 | 684,681 | 719,912 |
Basic earnings per share | € 3.96 | € 6.47 | € 4.17 |
Diluted earnings per share | € 3.96 | € 6.45 | € 4.16 |
Share-based plans (Details)
Share-based plans (Details) | 12 Months Ended | |||
Dec. 31, 2019EUR (€)EquityInstrumentsitem | Dec. 31, 2018EUR (€)EquityInstruments | Dec. 31, 2017EUR (€)EquityInstruments | Dec. 31, 2016 | |
Share-based plans | ||||
Performance period (in years) | 3 years | |||
Number of performance targets | item | 3 | |||
Weight of each performance target | 33.33% | |||
Annual target achievement level of 100% | ||||
Share-based plans | ||||
Annual target achievement level (as a percent) | 100.00% | |||
Revenue Growth target rate (as a percent) | 7.00% | |||
Net Income Growth target rate (as a percent) | 7.00% | |||
Annual target achievement level of 0% | ||||
Share-based plans | ||||
Annual target achievement level (as a percent) | 0.00% | |||
Revenue Growth target rate (as a percent) | 0.00% | |||
Net Income Growth target rate (as a percent) | 0.00% | |||
Decrease from target ROIC to drop to level | 0.002 | |||
Annual target achievement level of 200% | ||||
Share-based plans | ||||
Annual target achievement level (as a percent) | 200.00% | |||
Revenue Growth target rate (as a percent) | 16.00% | |||
Net Income Growth target rate (as a percent) | 14.00% | |||
Increase over target ROIC to reach level | 0.002 | |||
LTIP 2016 | ||||
Share-based plans | ||||
Vesting period | 4 years | |||
Period considered for calculation of average share price | 30 days | |||
Awarded (in shares) | EquityInstruments | 632,804 | 614,985 | ||
Weighted average fair value | € 51.99 | € 83.40 | ||
Total fair value | € 32,900,000 | € 51,290,000 | ||
LTIP 2016 | Annual target achievement level of 100% | ||||
Share-based plans | ||||
ROIC target rate (as a percent) | 7.30% | |||
Annual increase in target ROIC | 0.002 | |||
LTIP 2019 | ||||
Share-based plans | ||||
Increase (decrease) in annual target achievement level, if GEP -II target rate is 100% | 0.20 | |||
Vesting period | 3 years | |||
Period considered for calculation of average share price | 30 days | |||
Grant value cap (as a percent) | 400.00% | |||
Awarded (in shares) | EquityInstruments | 817,089 | |||
Weighted average fair value | € 62.16 | |||
Total fair value | € 50,790,000 | |||
LTIP 2019 | Annual target achievement level of 100% | ||||
Share-based plans | ||||
ROIC target rate (as a percent) | 7.90% | |||
NxStage LTIP | ||||
Share-based plans | ||||
Period considered for calculation of average share price | 30 days | |||
Awarded (in shares) | EquityInstruments | 55,978 | |||
Weighted average fair value | € 62.17 | |||
Total fair value | € 3,480,000 | |||
NxStage LTIP | Annual target achievement level of 100% | ||||
Share-based plans | ||||
ROIC target rate (as a percent) | 7.70% | |||
Annual increase in target ROIC | 0.002 | |||
Management Board | LTIP 2016 | ||||
Share-based plans | ||||
Awarded (in shares) | EquityInstruments | 73,315 | 73,746 | ||
Management Board | LTIP 2019 | ||||
Share-based plans | ||||
Vesting period | 4 years | |||
Period considered for calculation of average share price | 30 days | |||
Awarded (in shares) | EquityInstruments | 114,999 | |||
Weighted average fair value | € 60.70 | |||
Total fair value | € 6,980,000 | |||
Management Board | LTIP 2019 | Annual target achievement level of 100% | ||||
Share-based plans | ||||
ROIC target rate (as a percent) | 7.90% |
Share-based plans - Long-term i
Share-based plans - Long-term incentive program 2011 (Details) - EUR (€) € / shares in Units, € in Thousands, shares in Millions | May 12, 2011 | Dec. 31, 2019 |
Share-based payment transaction | ||
Nominal value per share | € 1 | |
LTIP 2011 | ||
Share-based payment transaction | ||
Vesting period | 4 years | |
Conditional increase in capital | € 12,000 | |
Conditional increase in capital (in shares) | 12 | |
Nominal value per share | € 1 | |
2011 SOP | ||
Share-based payment transaction | ||
Conditional increase in capital | € 12,000 | |
Conditional increase in capital (in shares) | 12 | |
Nominal value per share | € 1 | |
Award terms | 8 years | |
Exercise price period basis | 30 days | |
2011 Phantom stock awards | ||
Share-based payment transaction | ||
Award terms | 5 years |
Share-based plans - New incenti
Share-based plans - New incentive bonus plan (Details) - New incentive bonus plan, share-based component - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |||
Vesting period | 3 years | ||
Share-based compensation | € 2,623 | € 3,414 | € 3,418 |
Share-based plans - Holdings un
Share-based plans - Holdings under share-based plans (Details) | Dec. 31, 2019Optionsshares | Dec. 31, 2018Options |
Share-based payment transaction | ||
Outstanding number of options | Options | 3,488,989 | 3,896,000 |
LTIP 2019 | ||
Share-based payment transaction | ||
Number of performance shares held | 797,659 | |
NxStage LTIP | ||
Share-based payment transaction | ||
Number of performance shares held | 45,007 | |
2011 SOP | ||
Share-based payment transaction | ||
Outstanding number of options | Options | 3,488,989 | |
Management Board | LTIP 2019 | ||
Share-based payment transaction | ||
Number of performance shares held | 102,435 | |
Management Board | LTIP 2016 | ||
Share-based payment transaction | ||
Number of performance shares held | 211,878 | |
Management Board | LTIP 2011 | ||
Share-based payment transaction | ||
Number of phantom shares held | 23,336 | |
Management Board | 2011 SOP | ||
Share-based payment transaction | ||
Outstanding number of options | Options | 452,989 | |
Former members | LTIP 2019 | ||
Share-based payment transaction | ||
Number of performance shares held | 12,564 | |
Employees | LTIP 2016 | ||
Share-based payment transaction | ||
Number of performance shares held | 1,747,142 | |
Employees | LTIP 2011 | ||
Share-based payment transaction | ||
Number of phantom shares held | 311,650 | |
Employees | 2011 SOP | ||
Share-based payment transaction | ||
Outstanding number of options | Options | 3,036,000 |
Share-based plans - Stock optio
Share-based plans - Stock options activity (Details) | 12 Months Ended |
Dec. 31, 2019Options€ / shares | |
Options | |
Options outstanding balance at the beginning of the year | Options | 3,896,000 |
Exercised | Options | 329,000 |
Forfeited | Options | 78,000 |
Options outstanding balance at the end of the year | Options | 3,488,989 |
Options Weighted Average Exercise Price | |
Weighted average exercise price at the beginning of the year | € 68.85 |
Exercised | 51.72 |
Forfeited | 75.08 |
Weighted average exercise price at the end of the year | 70.32 |
Average market price of options exercised during year | € 67.62 |
Share-based plans - Stock Opt_2
Share-based plans - Stock Options Exercise Price Range (Details) | 12 Months Ended | |
Dec. 31, 2019Options€ / shares | Dec. 31, 2018Options€ / shares | |
Ranges of exercise prices | ||
Outstanding number of options | Options | 3,488,989 | 3,896,000 |
Outstanding options weighted average remaining contractual life | 3 years 2 months 23 days | |
Outstanding options weighted average exercise price in Euro | € 70.32 | € 68.85 |
Exercisable number of options | Options | 3,488,989 | |
Exercisable options weighted average exercise price in Euro | € 70.32 | |
45.01-50.00 | ||
Ranges of exercise prices | ||
Outstanding number of options | Options | 767,001 | |
Outstanding options weighted average remaining contractual life | 2 years 4 months 17 days | |
Outstanding options weighted average exercise price in Euro | € 49.90 | |
Exercisable number of options | Options | 767,001 | |
Exercisable options weighted average exercise price in Euro | € 49.90 | |
45.01-50.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 45.01 | |
45.01-50.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | € 50 | |
50.01-55.00 | ||
Ranges of exercise prices | ||
Outstanding number of options | Options | 825 | |
Outstanding options weighted average remaining contractual life | 11 months 5 days | |
Outstanding options weighted average exercise price in Euro | € 52.27 | |
Exercisable number of options | Options | 825 | |
Exercisable options weighted average exercise price in Euro | € 52.27 | |
50.01-55.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 50.01 | |
50.01-55.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | € 55 | |
55.01-60.00 | ||
Ranges of exercise prices | ||
Outstanding number of options | Options | 133,375 | |
Outstanding options weighted average remaining contractual life | 1 year 2 months 27 days | |
Outstanding options weighted average exercise price in Euro | € 57.68 | |
Exercisable number of options | Options | 133,375 | |
Exercisable options weighted average exercise price in Euro | € 57.68 | |
55.01-60.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 55.01 | |
55.01-60.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 60 | |
60.01-65.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 60.01 | |
60.01-65.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 65 | |
65.01-70.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 65.01 | |
65.01-70.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 70 | |
70.01-75.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 70.01 | |
70.01-75.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | € 75 | |
75.01-80.00 | ||
Ranges of exercise prices | ||
Outstanding number of options | Options | 2,587,788 | |
Outstanding options weighted average remaining contractual life | 3 years 6 months 29 days | |
Outstanding options weighted average exercise price in Euro | € 77.03 | |
Exercisable number of options | Options | 2,587,788 | |
Exercisable options weighted average exercise price in Euro | € 77.03 | |
75.01-80.00 | Minimum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | 75.01 | |
75.01-80.00 | Maximum | ||
Ranges of exercise prices | ||
Range of exercise prices in Euro | € 80 |
Share-based Plans - Stock Opt_3
Share-based Plans - Stock Options Other Disclosure (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based payment transaction | |||
Proceeds from exercise of stock options | € 15,864 | € 47,404 | € 47,591 |
Stock Options | |||
Share-based payment transaction | |||
Proceeds from exercise of stock options | 17,014 | 43,508 | 42,234 |
Intrinsic value of stock options exercised | € 5,231 | 29,440 | 31,580 |
Vesting period | 4 years | ||
LTIP 2019 | |||
Share-based payment transaction | |||
Vesting period | 3 years | ||
Expense from cash-settled share-based payment transactions | € 4,771 | 0 | 0 |
LTIP 2019 | Management Board | |||
Share-based payment transaction | |||
Vesting period | 4 years | ||
Expense from cash-settled share-based payment transactions | € 656 | 0 | 0 |
NxStage LTIP | |||
Share-based payment transaction | |||
Expense from cash-settled share-based payment transactions | € 572 | 0 | 0 |
LTIP 2016 | |||
Share-based payment transaction | |||
Vesting period | 4 years | ||
Expense from cash-settled share-based payment transactions | € 30,304 | 4,152 | 38,882 |
2011 Phantom stock awards | |||
Share-based payment transaction | |||
Expense from cash-settled share-based payment transactions | 5,724 | (8,799) | 21,576 |
2011 SOP | |||
Share-based payment transaction | |||
Expense from equity-settled share-based payment transactions | € 1,992 | € 6,713 | € 11,736 |
Share-based plans - Care Coordi
Share-based plans - Care Coordination stock incentive plans (Details) € in Thousands | 12 Months Ended | |||
Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | Dec. 31, 2014item | |
Subsidiary stock incentive plans | ||||
Share-based payment transaction | ||||
Number of acquisitions | item | 2 | |||
Sound subsidiary stock incentive plan | ||||
Share-based payment transaction | ||||
Compensation costs | € | € 0 | € 87,157 | € 35,250 |
Leases - Leasing in the consoli
Leases - Leasing in the consolidated statements of income (Details) € in Thousands | 12 Months Ended |
Dec. 31, 2019EUR (€) | |
Leases | |
Depreciation on right-of-use assets | € 700,276 |
Impairments on right-of-use assets | 38,820 |
Expenses relating to short-term leases | 52,108 |
Expenses relating to leases of low-value assets | 25,239 |
Expenses relating to variable lease payments | 10,814 |
Income from subleasing right-of-use asset | 4,367 |
Interest expense on lease liabilities | € 171,724 |
Leases - Leases in the consolid
Leases - Leases in the consolidated balance sheets (Details) € in Thousands | 12 Months Ended |
Dec. 31, 2019EUR (€) | |
Leases in the consolidated balance sheets | |
Additions - depreciation | € (700,276) |
Impairment loss | (38,820) |
Balance at the end of the period | 4,325,115 |
Land | |
Leases in the consolidated balance sheets | |
Balance at the end of the period | 26,073 |
Buildings and improvements | |
Leases in the consolidated balance sheets | |
Balance at the end of the period | 3,976,769 |
Machinery and equipment | |
Leases in the consolidated balance sheets | |
Balance at the end of the period | 322,249 |
Advance Payments | |
Leases in the consolidated balance sheets | |
Balance at the end of the period | 24 |
Gross carrying amount | |
Leases in the consolidated balance sheets | |
Balance at the beginning of the period | 4,276,533 |
Foreign currency translation | 73,689 |
Changes in consolidation group | (334) |
Additions | 719,598 |
Reclassifications | 33,588 |
Disposals | (47,062) |
Balance at the end of the period | 5,056,012 |
Gross carrying amount | Land | |
Leases in the consolidated balance sheets | |
Balance at the beginning of the period | 28,717 |
Foreign currency translation | 447 |
Changes in consolidation group | (14) |
Additions | 2,300 |
Reclassifications | 512 |
Disposals | (1,387) |
Balance at the end of the period | 30,575 |
Gross carrying amount | Buildings and improvements | |
Leases in the consolidated balance sheets | |
Balance at the beginning of the period | 3,840,380 |
Foreign currency translation | 65,603 |
Changes in consolidation group | (3,577) |
Additions | 694,031 |
Reclassifications | 15,074 |
Disposals | (20,816) |
Balance at the end of the period | 4,590,695 |
Gross carrying amount | Machinery and equipment | |
Leases in the consolidated balance sheets | |
Balance at the beginning of the period | 407,436 |
Foreign currency translation | 7,639 |
Changes in consolidation group | 3,257 |
Additions | 23,243 |
Reclassifications | 18,002 |
Disposals | (24,859) |
Balance at the end of the period | 434,718 |
Gross carrying amount | Advance Payments | |
Leases in the consolidated balance sheets | |
Additions | 24 |
Balance at the end of the period | 24 |
Accumulated depreciation / amortization / impairment | |
Leases in the consolidated balance sheets | |
Foreign currency translation | 1,641 |
Changes in consolidation group | 1,877 |
Additions - depreciation | (700,276) |
Impairment loss | (38,820) |
Reclassifications | (25,482) |
Disposals | 30,163 |
Balance at the end of the period | (730,897) |
Accumulated depreciation / amortization / impairment | Land | |
Leases in the consolidated balance sheets | |
Foreign currency translation | (14) |
Changes in consolidation group | 4 |
Additions - depreciation | (3,936) |
Impairment loss | (134) |
Reclassifications | (128) |
Disposals | (294) |
Balance at the end of the period | (4,502) |
Accumulated depreciation / amortization / impairment | Buildings and improvements | |
Leases in the consolidated balance sheets | |
Foreign currency translation | 1,364 |
Changes in consolidation group | 1,768 |
Additions - depreciation | (581,081) |
Impairment loss | (38,686) |
Reclassifications | (3,424) |
Disposals | 6,133 |
Balance at the end of the period | (613,926) |
Accumulated depreciation / amortization / impairment | Machinery and equipment | |
Leases in the consolidated balance sheets | |
Foreign currency translation | 291 |
Changes in consolidation group | 105 |
Additions - depreciation | (115,259) |
Reclassifications | (21,930) |
Disposals | 24,324 |
Balance at the end of the period | € (112,469) |
Leases - Leasing in the conso_2
Leases - Leasing in the consolidated statements of cash flows (Details) € in Thousands | 12 Months Ended |
Dec. 31, 2019EUR (€) | |
Leases | |
Cash outflow for leases | € 945,169 |
Future cash outflows from leases that have not yet begun | 254,171 |
Potential future cash outflows resulting from purchase options, not reflected in the measurement of the lease liabilities | 56,507 |
Potential future cash outflows resulting from extension options, not reflected in the measurement of the lease liabilities | 6,691,551 |
Potential future cash outflows resulting from termination options, not reflected in the measurement of the lease liabilities | € 3,493 |
Commitments and contingencies (
Commitments and contingencies (Details) € in Thousands, $ in Thousands | Mar. 29, 2019USD ($) | Dec. 14, 2017USD ($) | May 31, 2017item | Dec. 31, 2019USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | Jul. 31, 2015USD ($) |
Commitments and contingencies | |||||||
FCPA related payment | $ 231,700 | ||||||
Number of U.S. FDA Pending Warning Letters | 1 | ||||||
Foreign Corrupt Practices Act | |||||||
Commitments and contingencies | |||||||
FCPA related charge | € | € 77,200 | € 200,000 | |||||
FCPA related payment | $ 231,700 | ||||||
Legal proceedings provision | € | € 223,980 | ||||||
Foreign Corrupt Practices Act | Minimum | |||||||
Commitments and contingencies | |||||||
Independent compliance monitor period (in years) | 2 years | ||||||
Acid Concentrate Products - Personal Injury | |||||||
Commitments and contingencies | |||||||
Settlement fund | $ 220,000 | ||||||
Net litigation settlement expense recorded | $ 60,000 | ||||||
Acid Concentrate Products - Deceptive Practices | |||||||
Commitments and contingencies | |||||||
Number of plaintiffs | 4 | ||||||
Hawaii Medicaid False Claims | |||||||
Commitments and contingencies | |||||||
Amount claimed against company | $ 8,000 | ||||||
Management of pharmaceuticals, including Velphoro | |||||||
Commitments and contingencies | |||||||
Litigation settlement by Davita Rx | $ 63,700 | ||||||
United States Attorney for the Middle District of Tennessee | |||||||
Commitments and contingencies | |||||||
Litigation settlement by Davita Rx | $ 63,700 | ||||||
Number of subsidiaries to which subpoenas were issued | item | 2 |
Financial instruments - Carryin
Financial instruments - Carrying amount and fair value (Details) - EUR (€) € in Thousands | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Financial instruments | |||
Carrying amount of financial assets | € 5,450,851 | € 6,322,439 | |
Carrying amount of financial liabilities | 17,069,499 | 10,820,232 | |
Transfers of fair value into from level 2 to level 3 | € 186,427 | ||
Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 11,327,063 | 9,772,903 | |
FVPL - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 100,439 | 191,189 | |
Not classified | |||
Financial instruments | |||
Carrying amount of financial liabilities | 5,641,997 | 856,140 | |
Accounts payable | |||
Financial instruments | |||
Carrying amount of financial liabilities | 716,526 | 641,271 | |
Accounts payable | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 716,526 | 641,271 | |
Accounts payable to related parties | |||
Financial instruments | |||
Carrying amount of financial liabilities | 118,663 | 153,781 | |
Accounts payable to related parties | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 118,663 | 153,781 | |
Short-term debt and short-term debt from related parties | |||
Financial instruments | |||
Carrying amount of financial liabilities | 1,171,853 | 1,394,194 | |
Short-term debt and short-term debt from related parties | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 1,171,853 | 1,394,194 | |
Long-term debts | |||
Financial instruments | |||
Carrying amount of financial liabilities | 7,905,557 | ||
Long-term debts | Level 1 | |||
Financial instruments | |||
Fair value of financial liabilities | 5,555,475 | ||
Long-term debts | Level 2 | |||
Financial instruments | |||
Fair value of financial liabilities | 2,537,932 | ||
Long-term debts | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 7,905,557 | ||
Long-term lease liabilities and long-term lease liabilities from related parties | |||
Financial instruments | |||
Carrying amount of financial liabilities | 4,705,038 | ||
Long-term lease liabilities and long-term lease liabilities from related parties | Not classified | |||
Financial instruments | |||
Carrying amount of financial liabilities | 4,705,038 | ||
Long-term debt and capital lease obligations | |||
Financial instruments | |||
Carrying amount of financial liabilities | 6,152,034 | ||
Long-term debt and capital lease obligations | Level 1 | |||
Financial instruments | |||
Fair value of financial liabilities | 4,227,684 | ||
Long-term debt and capital lease obligations | Level 2 | |||
Financial instruments | |||
Fair value of financial liabilities | 2,022,057 | ||
Long-term debt and capital lease obligations | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 6,115,890 | ||
Long-term debt and capital lease obligations | Not classified | |||
Financial instruments | |||
Carrying amount of financial liabilities | 36,144 | ||
Other current and non-current liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 2,451,862 | 2,478,952 | |
Other current and non-current liabilities | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 1,414,464 | 1,467,767 | |
Other current and non-current liabilities | FVPL - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 100,439 | 191,189 | |
Other current and non-current liabilities | Not classified | |||
Financial instruments | |||
Carrying amount of financial liabilities | 936,959 | 819,996 | |
Derivatives - cash flow hedging instruments | |||
Financial instruments | |||
Carrying amount of financial liabilities | 2,534 | 1,125 | |
Derivatives - cash flow hedging instruments | Level 2 | |||
Financial instruments | |||
Fair value of financial liabilities | 2,534 | 1,125 | |
Derivatives - cash flow hedging instruments | Not classified | |||
Financial instruments | |||
Carrying amount of financial liabilities | 2,534 | 1,125 | |
Derivatives not designated as hedging instruments | |||
Financial instruments | |||
Carrying amount of financial liabilities | 10,762 | 18,911 | |
Derivatives not designated as hedging instruments | Level 2 | |||
Financial instruments | |||
Fair value of financial liabilities | 10,762 | 18,911 | |
Derivatives not designated as hedging instruments | FVPL - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 10,762 | 18,911 | |
Variable payments outstanding for acquisition | |||
Financial instruments | |||
Carrying amount of financial liabilities | 89,677 | 172,278 | |
Variable payments outstanding for acquisition | Level 3 | |||
Financial instruments | |||
Fair value of financial liabilities | 89,677 | 172,278 | |
Variable payments outstanding for acquisition | FVPL - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 89,677 | 172,278 | |
Noncontrolling interests subject to put provisions | |||
Financial instruments | |||
Carrying amount of financial liabilities | 934,425 | 818,871 | |
Noncontrolling interests subject to put provisions | Level 3 | |||
Financial instruments | |||
Fair value of financial liabilities | 934,425 | 818,871 | |
Noncontrolling interests subject to put provisions | Not classified | |||
Financial instruments | |||
Carrying amount of financial liabilities | 934,425 | 818,871 | |
Other financial liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 1,414,464 | 1,467,767 | |
Other financial liabilities | Amortized cost - Liabilities | |||
Financial instruments | |||
Carrying amount of financial liabilities | 1,414,464 | 1,467,767 | |
Amortized cost - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 4,413,130 | 4,357,643 | |
FVPL - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 535,684 | 1,521,532 | |
FVOCI - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 312,808 | 285,199 | |
Not classified | |||
Financial instruments | |||
Carrying amount of financial assets | 189,229 | 158,065 | |
Cash and cash equivalents | |||
Financial instruments | |||
Carrying amount of financial assets | 1,007,723 | 2,145,632 | |
Cash and cash equivalents | Level 2 | |||
Financial instruments | |||
Fair value of financial assets | 239,017 | 1,313,747 | |
Cash and cash equivalents | Amortized cost - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 768,706 | 831,885 | |
Cash and cash equivalents | FVPL - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 239,017 | 1,313,747 | |
Trade accounts and other receivables | |||
Financial instruments | |||
Carrying amount of financial assets | 3,421,346 | 3,231,500 | |
Trade accounts and other receivables | Amortized cost - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 3,343,873 | 3,182,052 | |
Trade accounts and other receivables | Not classified | |||
Financial instruments | |||
Carrying amount of financial assets | 77,473 | 49,448 | |
Accounts receivable from related parties | |||
Financial instruments | |||
Carrying amount of financial assets | 159,196 | 198,868 | |
Accounts receivable from related parties | Amortized cost - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 159,196 | 198,868 | |
Other current and non-current assets | |||
Financial instruments | |||
Carrying amount of financial assets | 862,586 | 746,439 | |
Other current and non-current assets | Amortized cost - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 141,355 | 144,838 | |
Other current and non-current assets | FVPL - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 296,667 | 207,785 | |
Other current and non-current assets | FVOCI - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 312,808 | 285,199 | |
Other current and non-current assets | Not classified | |||
Financial instruments | |||
Carrying amount of financial assets | 111,756 | 108,617 | |
Derivatives - cash flow hedging instruments | |||
Financial instruments | |||
Carrying amount of financial assets | 107 | 1,492 | |
Derivatives - cash flow hedging instruments | Level 2 | |||
Financial instruments | |||
Fair value of financial assets | 107 | 1,492 | |
Derivatives - cash flow hedging instruments | Not classified | |||
Financial instruments | |||
Carrying amount of financial assets | 107 | 1,492 | |
Derivatives not designated as hedging instruments | |||
Financial instruments | |||
Carrying amount of financial assets | 2,406 | 18,222 | |
Derivatives not designated as hedging instruments | Level 2 | |||
Financial instruments | |||
Fair value of financial assets | 2,406 | 18,222 | |
Derivatives not designated as hedging instruments | FVPL - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 2,406 | 18,222 | |
Equity investments | |||
Financial instruments | |||
Carrying amount of financial assets | 237,248 | 140,727 | |
Equity investments | Level 1 | |||
Financial instruments | |||
Fair value of financial assets | 13,110 | 13,869 | |
Equity investments | Level 2 | |||
Financial instruments | |||
Fair value of financial assets | 41,084 | 126,858 | |
Equity investments | Level 3 | |||
Financial instruments | |||
Fair value of financial assets | 183,054 | ||
Equity investments | FVPL - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 186,273 | 106,350 | |
Equity investments | FVOCI - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 50,975 | 34,377 | |
Debt securities | |||
Financial instruments | |||
Carrying amount of financial assets | 369,821 | 334,035 | |
Debt securities | Level 1 | |||
Financial instruments | |||
Fair value of financial assets | 365,170 | 329,821 | |
Debt securities | Level 2 | |||
Financial instruments | |||
Fair value of financial assets | 4,651 | 4,214 | |
Debt securities | FVPL - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 107,988 | 83,213 | |
Debt securities | FVOCI - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 261,833 | 250,822 | |
Other financial assets | |||
Financial instruments | |||
Carrying amount of financial assets | 253,004 | 251,963 | |
Other financial assets | Amortized cost - Assets | |||
Financial instruments | |||
Carrying amount of financial assets | 141,355 | 144,838 | |
Other financial assets | Not classified | |||
Financial instruments | |||
Carrying amount of financial assets | € 111,649 | € 107,125 |
Financial instruments - Noncont
Financial instruments - Noncontrolling interests subject to put provisions (Details) € in Thousands | Sep. 30, 2019EUR (€) | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | Dec. 31, 2017EUR (€) | Dec. 31, 2019EUR (€)item |
Reconciliation of changes in fair value measurement | |||||
Number of put options exercised | item | 30 | ||||
Assets at beginning of period | € 26,242,268 | € 24,025,215 | |||
Transfer from Level 2 | € 186,427 | ||||
Assets at end of period | 32,934,735 | 26,242,268 | € 24,025,215 | € 32,934,735 | |
Liabilities at beginning of period | 13,340,310 | ||||
Liabilities at end of period | 19,707,498 | 13,340,310 | 19,707,498 | ||
Equity investments | Fair Value | Level 3 | |||||
Reconciliation of changes in fair value measurement | |||||
Transfer from Level 2 | 186,427 | ||||
Increase | 2,233 | ||||
Gains (losses) recognised in profit or loss | 128 | ||||
Foreign currency translation and other changes | (5,734) | ||||
Assets at end of period | 183,054 | 183,054 | |||
Variable payments outstanding for acquisition | Fair Value | Level 3 | |||||
Reconciliation of changes in fair value measurement | |||||
Liabilities at beginning of period | 172,278 | 205,792 | 223,504 | 223,504 | |
Increase | 4,828 | 19,051 | 21,128 | ||
Decrease | (43,941) | (15,734) | (32,764) | ||
(Gain) loss recognized in profit or loss | (41,537) | (36,327) | (2,685) | ||
Foreign currency translation and other changes | (1,951) | (504) | (3,391) | ||
Liabilities at end of period | 89,677 | 172,278 | 205,792 | 89,677 | |
Noncontrolling interests subject to put provisions | |||||
Reconciliation of changes in fair value measurement | |||||
Put provision exercisable | 385,924 | 408,525 | 324,814 | 385,924 | |
Consideration for put provisions exercised | 143,109 | ||||
Liabilities at beginning of period | 818,871 | 830,773 | |||
Liabilities at end of period | 934,425 | 818,871 | 830,773 | 934,425 | |
Noncontrolling interests subject to put provisions | Fair Value | Level 3 | |||||
Reconciliation of changes in fair value measurement | |||||
Liabilities at beginning of period | 818,871 | 830,773 | 1,007,733 | 1,007,733 | |
Increase | 109,109 | 53,731 | 85,322 | ||
Decrease | (20,269) | (50,706) | (121,057) | ||
(Gain) loss recognized in profit or loss | 154,436 | 142,279 | 160,916 | ||
(Gain) loss recognized in equity | 13,701 | (50,612) | (20,012) | ||
Dividends | (153,614) | (139,742) | (164,404) | ||
Foreign currency translation and other changes | 12,191 | 33,148 | (117,725) | ||
Liabilities at end of period | € 934,425 | € 818,871 | € 830,773 | € 934,425 |
Financial Instruments - Derivat
Financial Instruments - Derivatives financial risks (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial instruments | ||
Net financial assets subject to offsetting, enforceable master netting arrangements or similar agreements in statement of financial position | € 2,108 | € 7,547 |
Net financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements in statement of financial position | 12,355 | 8,111 |
Net financial assets subject to offsetting, enforceable master netting arrangements or similar agreements | 137 | 4,048 |
Net financial liabilities subject to offsetting, enforceable master netting arrangements or similar agreements | € 10,384 | € 4,612 |
Financial Instruments - Foreign
Financial Instruments - Foreign exchange risk management (Details) - Foreign exchange risk - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives - cash flow hedging instruments | ||
Financial instruments | ||
Notional amount | € 115,263 | € 129,153 |
Derivatives not designated as hedging instruments | ||
Financial instruments | ||
Notional amount | € 626,585 | € 913,683 |
Financial instruments - Forei_2
Financial instruments - Foreign exchange risk (Details) - Foreign exchange risk € in Thousands | 12 Months Ended |
Dec. 31, 2019EUR (€)€ / $€ / £€ / $D | |
Financial risk management and financial instruments | |
Number of preceding business days for calculation of probability distributions | D | 250 |
Confidence level (as a percent) | 95.00% |
Holding period | 1 year |
Net exposure | € 1,381,399 |
CFaR | 41,342 |
AUD | |
Financial risk management and financial instruments | |
Notional amount | € 168,395 |
Average hedging rate | € / $ | 1.6314 |
USD | |
Financial risk management and financial instruments | |
Notional amount | € 122,305 |
Average hedging rate | € / $ | 1.1373 |
GBP | |
Financial risk management and financial instruments | |
Notional amount | € 49,308 |
Average hedging rate | € / £ | 0.8798 |
Financial instruments - Interes
Financial instruments - Interest rate risk (Details) - Interest rate risk - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financial debt bearing variable interest rate, not hedged | ||
Financial risk management and financial instruments | ||
Percentage increase in variable interest rate for sensitivity analysis | 0.50% | |
Percentage effect on consolidated net income | 1.00% | |
Percentage effect on equity | 1.00% | |
Interest rate swap | ||
Financial risk management and financial instruments | ||
Notional amount | € 0 | € 204,000 |
Interest rate pre-hedges | ||
Financial risk management and financial instruments | ||
Reserve of cash flow hedges | € 9,249 | € 1,131 |
Financial instruments - Deriv_2
Financial instruments - Derivative financial instruments valuation (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial instruments | ||
Current Assets | € 2,513 | € 7,837 |
Derivatives - cash flow hedging instruments | ||
Financial instruments | ||
Total Assets | 107 | 1,492 |
Total Liabilities | (2,534) | (1,125) |
Derivatives - cash flow hedging instruments | Foreign exchange contracts | ||
Financial instruments | ||
Current Assets | 107 | 1,434 |
Non-current Assets | 58 | |
Current Liabilities | (2,484) | (711) |
Non-current Liabilities | (50) | |
Derivatives - cash flow hedging instruments | Interest rate swap | ||
Financial instruments | ||
Current Liabilities | (414) | |
Derivatives not designated as hedging instruments | ||
Financial instruments | ||
Total Assets | 2,406 | 18,222 |
Total Liabilities | (10,762) | (18,911) |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Financial instruments | ||
Current Assets | 2,406 | 6,402 |
Current Liabilities | € (10,762) | (7,091) |
Derivatives not designated as hedging instruments | Derivatives embedded in the Convertible Bonds | ||
Financial instruments | ||
Non-current Liabilities | (11,820) | |
Derivatives not designated as hedging instruments | Share Options to secure the Convertible Bonds | ||
Financial instruments | ||
Non-current Assets | € 11,820 |
Financial instruments - Effect
Financial instruments - Effect of derivatives on consolidated financial statements (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Financial instruments | ||
Interest income recorded as an effect of financial instruments | € 59,448 | € 141,491 |
Interest expense recorded as an effect of financial instruments | 486,039 | 437,957 |
Allowances for doubtful accounts recorded as an effect of financial instruments | 42,315 | 19,112 |
Net losses from foreign currency transactions | 4,901 | 21,391 |
Derivatives - cash flow hedging instruments | ||
Financial instruments | ||
Fair value gain (loss) recognized in AOCI on hedging instrument (hedge reserve) | (15,996) | 4,924 |
Fair value gain (loss) recognized in AOCI on hedging instrument (cost of hedging) | (1,473) | (2,244) |
Amount reclassified from hedge reserve included in Interest income/expense | 2,753 | 22,249 |
Amount reclassified from hedge reserve included in revenue | 1,331 | (423) |
Amount reclassified from cost of hedging included in revenue | 1,480 | 132 |
Amount reclassified from hedge reserve included in cost of revenue | 2,509 | (1,839) |
Amount reclassified from cost of hedging included in cost of revenue | (1,913) | 799 |
Amount reclassified from hedge reserve included in Inventory | (269) | (17) |
Amount reclassified from cost of hedging included in Inventory | (55) | (21) |
Amount reclassified from hedge reserve | 6,324 | 19,970 |
Amount reclassified from cost of hedging | (488) | 910 |
Derivatives - cash flow hedging instruments | Interest rate swap | ||
Financial instruments | ||
Fair value gain (loss) recognized in AOCI on hedging instrument (hedge reserve) | (12,807) | (105) |
Derivatives - cash flow hedging instruments | Foreign exchange contracts | ||
Financial instruments | ||
Fair value gain (loss) recognized in AOCI on hedging instrument (hedge reserve) | (3,189) | 5,029 |
Fair value gain (loss) recognized in AOCI on hedging instrument (cost of hedging) | (1,473) | (2,244) |
Derivatives not designated as hedging instruments | ||
Financial instruments | ||
Amount of (Gain) Loss recognized in income on Derivatives - Total | 24,177 | 1,968 |
Derivatives not designated as hedging instruments | Foreign exchange contracts | ||
Financial instruments | ||
Amount of (Gain) Loss recognized in income on Derivatives - Selling, general and administrative expense | 7,686 | (12,841) |
Amount of (Gain) Loss recognized in income on Derivatives - Interest income/expense | 16,491 | 14,809 |
Derivatives not designated as hedging instruments | Derivatives embedded in the Convertible Bonds | ||
Financial instruments | ||
Amount of (Gain) Loss recognized in income on Derivatives - Interest income/expense | (11,820) | (90,614) |
Derivatives not designated as hedging instruments | Share Options to secure the Convertible Bonds | ||
Financial instruments | ||
Amount of (Gain) Loss recognized in income on Derivatives - Interest income/expense | € 11,820 | € 90,614 |
Financial instruments - Deriv_3
Financial instruments - Derivatives, cash flow and credit risk (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivatives | ||
Financial instruments | ||
Maximum credit exposure | € 2,513 | € 19,714 |
Derivatives - cash flow hedging instruments | Less than 1 year | ||
Financial instruments | ||
Cash flow from derivative financial instruments | (2,377) | 87 |
Derivatives - cash flow hedging instruments | 1 - 3 years | ||
Financial instruments | ||
Cash flow from derivative financial instruments | (50) | 58 |
Derivatives not designated as hedging instruments | Less than 1 year | ||
Financial instruments | ||
Cash flow from derivative financial instruments | € (8,356) | € (689) |
Financial instruments - Payment
Financial instruments - Payments agreed by contracts (Details) - EUR (€) € in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts payable | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | € 716,526 | € 641,271 |
Accounts payable | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1 | |
Accounts payable to related parties | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 118,663 | 153,781 |
Other current financial liabilities | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,414,464 | 1,467,766 |
Short-term debt and short-term debt from related parties | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,171,853 | 1,394,194 |
Amended 2012 Credit Agreement | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 577,115 | 178,170 |
Amended 2012 Credit Agreement | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,424,798 | 740,024 |
Amended 2012 Credit Agreement | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,126,183 | |
Bonds and Convertible Bonds | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,004,042 | 1,132,032 |
Bonds and Convertible Bonds | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,686,586 | 1,917,239 |
Bonds and Convertible Bonds | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,109,894 | 677,500 |
Bonds and Convertible Bonds | Over 5 Years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 2,166,434 | 880,939 |
Accounts Receivable Facility | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 7,518 | |
Accounts Receivable Facility | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 387,468 | |
Other long-term debt | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 68,078 | |
Other long-term debt | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 66,531 | |
Other long-term debt | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 74,131 | |
Other long-term debt | Over 5 Years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 49,467 | |
Long-term lease liabilities and long-term lease liabilities from related parties | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 789,145 | |
Long-term lease liabilities and long-term lease liabilities from related parties | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,479,119 | |
Long-term lease liabilities and long-term lease liabilities from related parties | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 1,112,401 | |
Long-term lease liabilities and long-term lease liabilities from related parties | Over 5 Years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 2,190,926 | |
Other long-term debt and capital lease obligations | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 26,519 | |
Other long-term debt and capital lease obligations | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 68,976 | |
Other long-term debt and capital lease obligations | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 19,796 | |
Other long-term debt and capital lease obligations | Over 5 Years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 63,734 | |
Variable payments outstanding for acquisition | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 34,253 | 57,217 |
Variable payments outstanding for acquisition | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 26,710 | 69,918 |
Variable payments outstanding for acquisition | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 26,325 | 33,221 |
Variable payments outstanding for acquisition | Over 5 Years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 9,503 | 30,576 |
Noncontrolling interests subject to put provisions | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 603,132 | 494,576 |
Noncontrolling interests subject to put provisions | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 114,950 | 183,396 |
Noncontrolling interests subject to put provisions | 3 - 5 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 136,163 | 66,324 |
Noncontrolling interests subject to put provisions | Over 5 Years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 121,021 | 107,857 |
Letters of credit | Less than 1 year | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 21,893 | 12,413 |
Letters of credit | 1 - 3 years | ||
Payments | ||
Non-discounted payments, non-derivative financial instruments | 12,322 | |
Derivatives - cash flow hedging instruments | Less than 1 year | ||
Payments | ||
Non-discounted payments, derivative financial instruments | 2,484 | 1,347 |
Derivatives - cash flow hedging instruments | 1 - 3 years | ||
Payments | ||
Non-discounted payments, derivative financial instruments | 50 | |
Derivatives not designated as hedging instruments | Less than 1 year | ||
Payments | ||
Non-discounted payments, derivative financial instruments | € 10,762 | 7,091 |
Derivatives not designated as hedging instruments | 1 - 3 years | ||
Payments | ||
Non-discounted payments, derivative financial instruments | € 11,820 |
Other comprehensive income (l_3
Other comprehensive income (loss) (Details) - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Other comprehensive income (loss) | ||||
Actuarial gain (loss) on defined benefit pension plans, Pretax | € (99,613) | € (28,070) | € 6,840 | |
Actuarial gain (loss) on defined benefit pension plans, Tax effect | 30,245 | 7,713 | (27,393) | |
Actuarial gain (loss) on defined benefit pension plans, Net | (69,368) | (20,357) | (20,553) | |
Foreign currency translation adjustment, Pretax | 263,835 | 327,317 | (1,284,173) | |
Foreign currency translation adjustment, Net | 263,835 | 327,317 | (1,284,173) | |
Changes in fair value of cash flow hedges during the period, Pretax | (17,469) | 2,680 | 1,613 | |
Changes in fair value of cash flow hedges during the period, Tax effect | 4,352 | (698) | (430) | |
Changes in fair value of cash flow hedges during the period, Net | (13,117) | 1,982 | 1,183 | |
Reclassification adjustments, pretax | 5,836 | 20,880 | 26,370 | |
Reclassification adjustments, Tax effect | (1,678) | (6,036) | (7,977) | |
Reclassification adjustments, Net | 4,158 | 14,844 | 18,393 | |
Total other comprehensive income (loss) relating to cash flow hedges, Pretax | [1] | (11,633) | 23,560 | 27,983 |
Total other comprehensive income (loss) relating to cash flow hedges, Tax effect | 2,674 | (6,734) | (8,407) | |
Total other comprehensive income (loss) relating to cash flow hedges, Net | (8,959) | 16,826 | 19,576 | |
Other comprehensive income (loss), Pretax | 152,589 | 322,807 | (1,249,350) | |
Other comprehensive income (loss), Tax effect | 32,919 | 979 | (35,800) | |
Other comprehensive income (loss), net | € 185,508 | € 323,786 | € (1,285,150) | |
[1] | Including cost of hedging in the amount of €(1,962) and €(1,335) for the twelve months ended December 31, 2019 and 2018. |
Supplementary cash flow infor_3
Supplementary cash flow information (Details) - EUR (€) € in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Details for acquisitions | ||||
Assets acquired | € (2,639,432) | € (360,375) | € (758,720) | |
Liabilities assumed | 260,120 | 21,122 | 128,552 | |
Noncontrolling interest subject to put provisions | 72,151 | 11,901 | 68,069 | |
Noncontrolling interests | 65,217 | 45,319 | 14,293 | |
Non-cash consideration | 26,637 | 28,530 | 8,851 | |
Cash paid | (2,215,307) | (253,503) | (538,955) | |
Less cash acquired | 55,210 | 3,538 | 17,630 | |
Net cash paid for acquisitions | (2,160,097) | (249,965) | (521,325) | |
Cash paid for investments | (34,602) | (590,199) | (17,999) | |
Cash paid for intangible assets | (37,972) | (85,103) | (26,370) | |
Total cash paid for acquisitions and investments, net of cash acquired and purchases of intangible assets | (2,232,671) | (925,267) | (565,694) | |
Details for divestitures | ||||
Cash received from sale of subsidiaries or other businesses, less cash disposed | [1] | 43,317 | 1,532,724 | 157,025 |
Cash received from divestitures of debt securities | 16,623 | 150,172 | 256,136 | |
Cash received from repayment of loans | 79 | 2,227 | ||
Proceeds from divestitures | € 59,940 | 1,682,975 | € 415,388 | |
Tax payment of disposal | 142,593 | |||
Divested of aggregate assets, excluding cash | 1,100,315 | |||
Divested liabilities | 296,857 | |||
Noncontrolling interests subject to put provisions divested | 469 | |||
Divested noncontrolling interests | € 16,540 | |||
[1] | In 2018, cash received from sale of subsidiaries or other businesses, less cash disposed included a cash payment of €142,593 relating to tax payments in connection with the divestiture of Sound. |
Supplementary cash flow infor_4
Supplementary cash flow information - Reconciliation of debt to net cash provided by (used in) financing activities (Details) - EUR (€) € in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Liabilities from capital leases in accordance with IAS 17 | € 36,144 | |
Repayments of variable payments outstanding for acquisitions | € 41,803 | 10,099 |
Short-term debt | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 1,205,294 | 760,279 |
Cash Flow | (70,398) | 444,844 |
Acquisitions (net of divestitures) | 14,611 | 3,046 |
Foreign currency translation | 618 | (2,860) |
Other | (137) | (15) |
Balance at the end of period | 1,149,988 | 1,205,294 |
Short-term debt from related parties | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 188,900 | 9,000 |
Cash Flow | (167,111) | 179,900 |
Other | 76 | |
Balance at the end of period | 21,865 | 188,900 |
Long-term debt (excluding Accounts Receivable Facility) | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 6,115,890 | |
Cash Flow | 1,285,603 | |
Acquisitions (net of divestitures) | 22,815 | |
Foreign currency translation | 85,424 | |
Amortization of debt issuance costs | 15,147 | |
Other | 1,108 | |
Balance at the end of period | 7,525,987 | 6,115,890 |
Long-term debt and capital lease obligations (excluding Accounts Receivable Facility) | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 6,152,034 | 6,384,734 |
Cash Flow | (453,717) | |
Acquisitions (net of divestitures) | 8,652 | |
Foreign currency translation | 188,165 | |
Amortization of debt issuance costs | 15,975 | |
New leases | 6,517 | |
Other | 1,708 | |
Balance at the end of period | 6,152,034 | |
Accounts Receivable Facility | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 293,673 | |
Cash Flow | 381,430 | (298,912) |
Foreign currency translation | (2,435) | 4,883 |
Amortization of debt issuance costs | 575 | 356 |
Balance at the end of period | 379,570 | |
Lease liabilities | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 4,451,081 | |
Cash Flow | (671,403) | |
Acquisitions (net of divestitures) | 2,141 | |
Foreign currency translation | 81,817 | |
Other | 718,456 | |
Balance at the end of period | 4,582,092 | 4,451,081 |
Lease liabilities from related parties | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Balance at the beginning of period | 137,494 | |
Cash Flow | (16,340) | |
Foreign currency translation | 35 | |
Other | 1,757 | |
Balance at the end of period | € 122,946 | 137,494 |
Increase (decrease) due to application of IFRS 16 | ||
Reconciliation of debt to net cash provided by (used in) financing activities | ||
Lease liability | 4,414,937 | |
Lease liabilities from related parties | € 137,494 |
Segment and corporate informa_3
Segment and corporate information (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment and corporate information | |||
Revenue | € 17,476,555 | € 16,546,873 | € 17,783,572 |
Operating income | 2,269,558 | 3,037,798 | 2,362,439 |
Interest | (429,444) | (301,062) | (364,824) |
Income before income taxes | 1,840,114 | 2,736,736 | 1,997,615 |
Depreciation and Amortization | (1,553,408) | (724,847) | (735,479) |
Impairment loss | (39,752) | (64,719) | |
Income (loss) from equity method investees | 73,679 | 73,346 | 67,199 |
Total assets | 32,934,735 | 26,242,268 | 24,025,215 |
thereof investments in equity method investees | 696,872 | 649,780 | 647,009 |
Additions to non-current assets | 1,893,919 | 1,154,965 | 992,957 |
Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 17,102,136 | 16,232,793 | |
Other revenue | |||
Segment and corporate information | |||
Revenue | 374,419 | 314,080 | |
Segment Total | |||
Segment and corporate information | |||
Revenue | 17,456,414 | 16,532,137 | 17,768,824 |
Operating income | 2,613,667 | 3,396,674 | 2,901,507 |
Depreciation and Amortization | (1,313,057) | (562,039) | (580,609) |
Impairment loss | (39,752) | (64,719) | |
Income (loss) from equity method investees | 75,230 | 73,346 | 67,199 |
Total assets | 29,528,180 | 23,591,064 | 21,885,908 |
thereof investments in equity method investees | 696,872 | 649,780 | 647,009 |
Additions to non-current assets | 1,536,985 | 838,818 | 751,905 |
Segment Total | Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 17,081,995 | 16,218,057 | |
Segment Total | Other revenue | |||
Segment and corporate information | |||
Revenue | 374,419 | 314,080 | |
North America Segment | |||
Segment and corporate information | |||
Revenue | 12,195,173 | 11,569,732 | 12,878,665 |
Operating income | 1,794,101 | 2,665,187 | 2,086,391 |
Depreciation and Amortization | (992,526) | (377,836) | (398,235) |
Impairment loss | (36,411) | ||
Income (loss) from equity method investees | 75,941 | 75,279 | 71,739 |
Total assets | 21,700,202 | 16,936,646 | 15,556,146 |
thereof investments in equity method investees | 400,514 | 348,096 | 342,462 |
Additions to non-current assets | 1,097,517 | 598,988 | 526,652 |
North America Segment | Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 11,931,396 | 11,347,963 | |
North America Segment | Other revenue | |||
Segment and corporate information | |||
Revenue | 263,777 | 221,769 | |
EMEA Segment | |||
Segment and corporate information | |||
Revenue | 2,693,473 | 2,586,558 | 2,547,055 |
Operating income | 448,062 | 398,683 | 443,725 |
Depreciation and Amortization | (188,580) | (116,384) | (119,044) |
Impairment loss | (3,341) | (64,719) | |
Income (loss) from equity method investees | (4,414) | (4,322) | (7,159) |
Total assets | 4,058,523 | 3,612,800 | 3,585,486 |
thereof investments in equity method investees | 171,704 | 178,886 | 181,870 |
Additions to non-current assets | 212,282 | 158,974 | 130,755 |
EMEA Segment | Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 2,652,943 | 2,559,485 | |
EMEA Segment | Other revenue | |||
Segment and corporate information | |||
Revenue | 40,530 | 27,073 | |
Asia-Pacific Segment | |||
Segment and corporate information | |||
Revenue | 1,858,770 | 1,689,353 | 1,623,312 |
Operating income | 328,996 | 303,956 | 313,042 |
Depreciation and Amortization | (98,599) | (45,475) | (45,401) |
Income (loss) from equity method investees | 2,551 | 2,125 | 1,919 |
Total assets | 2,852,271 | 2,322,284 | 2,074,150 |
thereof investments in equity method investees | 99,815 | 98,741 | 98,281 |
Additions to non-current assets | 190,591 | 53,962 | 52,861 |
Asia-Pacific Segment | Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 1,792,020 | 1,627,715 | |
Asia-Pacific Segment | Other revenue | |||
Segment and corporate information | |||
Revenue | 66,750 | 61,638 | |
Latin America Segment | |||
Segment and corporate information | |||
Revenue | 708,998 | 686,494 | 719,792 |
Operating income | 42,508 | 28,848 | 58,349 |
Depreciation and Amortization | (33,352) | (22,344) | (17,929) |
Income (loss) from equity method investees | 1,152 | 264 | 700 |
Total assets | 917,184 | 719,334 | 670,126 |
thereof investments in equity method investees | 24,839 | 24,057 | 24,396 |
Additions to non-current assets | 36,595 | 26,894 | 41,637 |
Latin America Segment | Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 705,636 | 682,894 | |
Latin America Segment | Other revenue | |||
Segment and corporate information | |||
Revenue | 3,362 | 3,600 | |
Corporate | |||
Segment and corporate information | |||
Revenue | 20,141 | 14,736 | 14,748 |
Operating income | (344,109) | (358,876) | (539,068) |
Depreciation and Amortization | (240,351) | (162,808) | (154,870) |
Income (loss) from equity method investees | (1,551) | ||
Total assets | 3,406,555 | 2,651,204 | 2,139,307 |
Additions to non-current assets | 356,934 | 316,147 | 241,052 |
Corporate | Revenue from contracts with customers | |||
Segment and corporate information | |||
Revenue | 20,141 | 14,736 | |
Operating Segments | Segment Total | |||
Segment and corporate information | |||
Revenue | 17,460,922 | 16,534,923 | 17,771,468 |
Operating Segments | North America Segment | |||
Segment and corporate information | |||
Revenue | 12,198,240 | 11,571,341 | 12,880,563 |
Operating Segments | EMEA Segment | |||
Segment and corporate information | |||
Revenue | 2,694,159 | 2,586,862 | 2,547,071 |
Operating Segments | Asia-Pacific Segment | |||
Segment and corporate information | |||
Revenue | 1,859,274 | 1,689,986 | 1,623,668 |
Operating Segments | Latin America Segment | |||
Segment and corporate information | |||
Revenue | 709,249 | 686,734 | 720,166 |
Operating Segments | Corporate | |||
Segment and corporate information | |||
Revenue | 15,633 | 11,950 | 12,104 |
Inter-segment | Segment Total | |||
Segment and corporate information | |||
Revenue | (4,508) | (2,786) | (2,644) |
Inter-segment | North America Segment | |||
Segment and corporate information | |||
Revenue | (3,067) | (1,609) | (1,898) |
Inter-segment | EMEA Segment | |||
Segment and corporate information | |||
Revenue | (686) | (304) | (16) |
Inter-segment | Asia-Pacific Segment | |||
Segment and corporate information | |||
Revenue | (504) | (633) | (356) |
Inter-segment | Latin America Segment | |||
Segment and corporate information | |||
Revenue | (251) | (240) | (374) |
Inter-segment | Corporate | |||
Segment and corporate information | |||
Revenue | € 4,508 | € 2,786 | € 2,644 |
Segment and corporate informa_4
Segment and corporate information - Geographic Information (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of geographic region | |||
Revenue external customers | € 17,476,555 | € 16,546,873 | € 17,783,572 |
Long-lived assets | 24,760,182 | 17,500,198 | 17,065,613 |
Germany | |||
Disclosure of geographic region | |||
Revenue external customers | 474,750 | 426,327 | 433,105 |
Long-lived assets | 1,311,786 | 948,355 | 905,571 |
North America | |||
Disclosure of geographic region | |||
Revenue external customers | 12,195,173 | 11,569,732 | 12,878,665 |
Long-lived assets | 19,112,827 | 13,260,913 | 13,037,452 |
Rest of the World | |||
Disclosure of geographic region | |||
Revenue external customers | 4,806,632 | 4,550,814 | 4,471,802 |
Long-lived assets | € 4,335,569 | € 3,290,930 | € 3,122,590 |
Compensation of the Managemen_2
Compensation of the Management Board and the supervisory board - Compensation of the Management Board (Details) | Jan. 01, 2021USD ($) | Feb. 17, 2017 | Dec. 31, 2019USD ($)Optionsshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)OptionsEquityInstrumentsshares | Dec. 31, 2019EUR (€)EquityInstruments | Dec. 31, 2018EUR (€)EquityInstruments | Dec. 31, 2017EUR (€)EquityInstruments | Dec. 31, 2019EUR (€)Optionsshares | Dec. 31, 2018USD ($)Optionsshares | Dec. 31, 2018EUR (€)Optionsshares |
Key management personnel | |||||||||||
Number of stock options held | Options | 3,488,989 | 3,488,989 | 3,488,989 | 3,896,000 | 3,896,000 | ||||||
LTIP 2016 | |||||||||||
Key management personnel | |||||||||||
Number of units or rights granted | EquityInstruments | 632,804 | 614,985 | |||||||||
Share-based compensation | € 30,304,000 | € 4,152,000 | € 38,882,000 | ||||||||
LTIP 2019 | |||||||||||
Key management personnel | |||||||||||
Number of units or rights granted | EquityInstruments | 817,089 | 817,089 | |||||||||
Share-based compensation | € 4,771,000 | 0 | 0 | ||||||||
Number of performance shares held | shares | 797,659 | 797,659 | 797,659 | ||||||||
2011 Phantom stock awards | |||||||||||
Key management personnel | |||||||||||
Share-based compensation | 5,724,000 | (8,799,000) | € 21,576,000 | ||||||||
Mr. Michael Brosnan | |||||||||||
Key management personnel | |||||||||||
Basic compensation | $ | $ 850,000 | ||||||||||
Bonus (in percentage) | 30.00% | ||||||||||
Amount paid for fringe benefits | $ | $ 17,000 | $ 257,000 | |||||||||
Period for which compensation receivable related to non-competition covenant (in years) | 2 years | ||||||||||
Amount paid for non-compete compensation | $ | $ 553,000 | ||||||||||
Future retirement pension | $ | $ 405,000 | ||||||||||
Mr. Dominik Wehner | |||||||||||
Key management personnel | |||||||||||
Basic compensation | € 425,000 | ||||||||||
Bonus (in percentage) | 30.00% | 30.00% | |||||||||
Amount paid for fringe benefits | € 30,000 | ||||||||||
Mr. Ronald Kuerbitz | |||||||||||
Key management personnel | |||||||||||
Period for which compensation receivable related to non-competition covenant (in years) | 2 years | ||||||||||
Amount paid for non-compete compensation | 90,000 | 515,000 | |||||||||
Advisory fee | 167,000 | 212,000 | |||||||||
Future retirement pension | 130,000 | ||||||||||
Roberto Fuste | |||||||||||
Key management personnel | |||||||||||
Amount paid for non-compete compensation | 0 | 377,000 | |||||||||
Advisory fee | 0 | 377,000 | |||||||||
Amount paid for pensions | 274,000 | 261,000 | |||||||||
Prof. Emanuele Gatti | |||||||||||
Key management personnel | |||||||||||
Amount paid for pensions | 355,000 | 338,000 | |||||||||
Dr Rainer Runte | |||||||||||
Key management personnel | |||||||||||
Advisory fee | 0 | 226,000 | |||||||||
Dr. Ben Lipps | |||||||||||
Key management personnel | |||||||||||
Advisory fee | 568,000 | € 522,000 | |||||||||
One-off payment for remaining term of agreement | € 1,129,000 | ||||||||||
Management Board | |||||||||||
Key management personnel | |||||||||||
Period for which compensation receivable related to non-competition covenant (in years) | 2 years | 2 years | |||||||||
Non-compete compensation (in percentage of base salary) | 30.00% | 30.00% | |||||||||
Management Board | LTIP 2016 | |||||||||||
Key management personnel | |||||||||||
Number of units or rights granted | EquityInstruments | 73,315 | 73,746 | |||||||||
Number of performance shares held | shares | 211,878 | 211,878 | 211,878 | ||||||||
Management Board | LTIP 2019 | |||||||||||
Key management personnel | |||||||||||
Number of units or rights granted | EquityInstruments | 114,999 | 114,999 | |||||||||
Share-based compensation | € 656,000 | € 0 | € 0 | ||||||||
Number of performance shares held | shares | 102,435 | 102,435 | 102,435 | ||||||||
General Partner | Management Board | |||||||||||
Key management personnel | |||||||||||
Total | 24,773,000 | 24,166,000 | |||||||||
Non-performance-related compensation | 7,122,000 | 6,532,000 | |||||||||
Short-term performance related compensation | 7,869,000 | 8,437,000 | |||||||||
Long term incentive effects | 9,782,000 | 9,197,000 | |||||||||
Share-based compensation | 2,623,000 | 3,414,000 | |||||||||
Number of stock options held | Options | 452,989 | 452,989 | 452,989 | 602,389 | 602,389 | ||||||
Pension obligation | € 24,252,000 | € 24,535,000 | |||||||||
Amount appropriated to the pension reserves | 6,751,000 | € 5,071,000 | |||||||||
Loans and advances for future compensation | € 0 | ||||||||||
General Partner | Management Board | LTIP 2016 | |||||||||||
Key management personnel | |||||||||||
Number of units or rights granted | EquityInstruments | 73,315 | ||||||||||
Fair value of the performance shares granted | $ 94.11 | € 80.55 | |||||||||
General Partner | Management Board | LTIP 2019 | |||||||||||
Key management personnel | |||||||||||
Number of units or rights granted | EquityInstruments | 114,999 | 114,999 | |||||||||
Fair value of the performance shares granted | $ 69.71 | $ 69.71 | € 62.10 | ||||||||
General Partner | Management Board | Performance shares | |||||||||||
Key management personnel | |||||||||||
Number of performance shares held | shares | 314,313 | 314,313 | 314,313 | 204,693 | 204,693 | ||||||
General Partner | Management Board | 2011 Phantom stock awards | |||||||||||
Key management personnel | |||||||||||
Number of phantom shares held | shares | 23,336 | 23,336 | 23,336 | 54,711 | 54,711 | ||||||
General Partner | Management Board | Ms. Helen Giza | LTIP 2019 | |||||||||||
Key management personnel | |||||||||||
Fair value of the performance shares granted | € 60.58 | ||||||||||
General Partner | Management Board | Dr. Katarzyna Mazur-Hofs | LTIP 2016 | |||||||||||
Key management personnel | |||||||||||
Fair value of the performance shares granted | € 69.05 | ||||||||||
General Partner | Management Board | Former members | |||||||||||
Key management personnel | |||||||||||
Pension obligation | € 37,373,000 | € 25,163,000 |
Compensation of the Managemen_3
Compensation of the Management Board and the supervisory board - Compensation of the Supervisory Board (Details) - Members of Supervisory Board € in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) | |
Key management personnel | |||
Total | € 626 | € 773 | |
Fixed compensation | 439 | 361 | |
Compensation to committees | 187 | 148 | |
Variable performance-related compensation | 0 | 264 | |
Attendance fees | $ | $ 3,500 | ||
General Partner | |||
Key management personnel | |||
Total | 937 | 1,110 | |
Fixed compensation | 432 | 402 | |
Compensation to committees | 505 | 428 | |
Variable performance-related compensation | € 0 | € 280 |
Principal accountant fees and_3
Principal accountant fees and services (Details) - EUR (€) € in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of geographic region | |||
Audit fees | € 10,113 | € 7,845 | € 8,629 |
Audit-related fees | 615 | 320 | 59 |
Tax fees | 318 | 1,069 | 830 |
Other fees | 41 | 251 | 716 |
Germany | |||
Disclosure of geographic region | |||
Audit fees | 1,665 | 1,322 | 1,232 |
Audit-related fees | € 525 | 316 | 18 |
Tax fees | 115 | 169 | |
Other fees | € 234 | € 110 |