Fresenius Medical Care AG & Co. KGaA (FMS) 6-K 3 Nov 09 Current report (foreign) Financial data

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Sep. 30, 2009
Document Information
Document type	6-K
Document period end date	2009-09-30
Amendment flag	false
Entity Information
Entity registrant name	FRESENIUS MEDICAL CARE AG & Co. KGaA
Entity central index key	0001333141
Entity current reporting status	Yes
Entity voluntary filers	No
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Entity well known seasoned issuer	Yes
Entity common stock shares outstanding	294,690,763
Entity public float	$14,657,918,552

Consolidated Statements of Inco

Consolidated Statements of Income (unaudited) (USD $)
In Thousands	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net revenue:
Dialysis Care Revenue	$2,146,349	$1,984,938	$6,123,774	$5,753,484
Dialysis Products Revenue	742,320	728,327	2,088,274	2,136,801
Net revenue	2,888,669	2,713,265	8,212,048	7,890,285
Costs of revenue:
Dialysis Care Cost of Revenue	1,526,262	1,423,913	4,397,112	4,146,509
Dialysis Products Cost of Revenue	383,906	379,973	1,042,418	1,055,212
Cost of revenues	1,910,168	1,803,886	5,439,530	5,201,721
Gross profit	978,501	909,379	2,772,518	2,688,564
Operating expenses:
Selling, general and administrative	504,520	466,983	1,443,206	1,388,680
Research and development	22,656	20,206	64,508	59,978
Operating income	451,325	422,190	1,264,804	1,239,906
Other (income) expense:
Interest income	(4,624)	(6,467)	(16,797)	(19,266)
Interest expense	79,769	93,516	241,466	271,275
Income before income taxes	376,180	335,141	1,040,135	987,897
Income tax expense	131,687	119,492	345,436	356,513
Net Income	244,493	215,649	694,699	631,384
Less: Net Income attributable to Noncontrolling interest	19,193	9,314	50,180	28,088
Net Income attributable to the Company	$225,300	$206,335	$644,519	$603,296
Basic income per ordinary share	0.76	0.69	2.16	2.03
Fully diluted income per ordinary share	0.76	0.69	2.16	2.03

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (unaudited) (USD $)
In Thousands	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Consolidated Statements of Comprehensive Income
Net Income	$244,493	$215,649	$694,699	$631,384
Gain (loss) related to cash flow hedges	4,215	(14,084)	20,061	(21,414)
Actuarial gains on defined benefit pension plans	1,219	454	3,655	1,242
Foreign currency translation	74,884	(150,783)	103,145	(56,083)
Income tax (expense) benefit related to components of other comprehensive income	(2,904)	5,306	(11,622)	6,157
Other comprehensive income, net of tax	77,414	(159,107)	115,239	(70,098)
Total Comprehensive income	321,907	56,542	809,938	561,286
Comprehensive income attributable to noncontrolling interest	19,712	10,557	51,606	34,930
Comprehensive income attributable to the Company	$302,195	$45,985	$758,332	$526,356

Consolidated Balance Sheets (un

Consolidated Balance Sheets (unaudited) (USD $)
In Thousands	Sep. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$223,570	$221,584
Trade accounts receivable, less allowance for doubtful accounts of $264,437 in 2009 and $262,836 in 2008	2,332,615	2,176,316
Accounts receivable from related parties	298,171	175,525
Inventories	841,323	707,050
Prepaid expenses and other current assets	696,192	607,399
Deferred tax asset, current	334,169	324,123
Total current assets	4,726,040	4,211,997
Property, plant and equipment, net	2,380,167	2,236,078
Intangible assets	855,622	846,496
Goodwill	7,425,492	7,309,910
Deferred tax asset, non-current	72,749	92,805
Other assets	236,586	222,390
Assets	15,696,656	14,919,676
Current liabilities:
Accounts payable	371,314	366,017
Accounts payable to related parties	294,818	239,243
Accrued expenses and other current liabilities	1,361,420	1,288,433
Short-term borrowings	312,026	683,155
Short-term borrowings from related parties	42,533	1,330
Current portion of long-term debt and capital lease obligations	160,326	455,114
Income tax payable, current	66,695	82,468
Deferred tax liability, current	32,417	28,652
Total current liabilities	2,641,549	3,144,412
Long-term debt and capital lease obligations, less current portion	4,561,466	3,957,379
Other liabilities	300,210	319,602
Pension liabilities	152,798	136,755
Income tax payable, non-current	182,325	171,747
Deferred tax liability, non-current	481,029	426,299
Company-obligated mandatorily redeemable preferred securities of subsidiary Fresenius Medical Care Capital Trusts holding solely Company-guaranteed debentures of subsidiaries	663,005	640,696
Total liabilities	8,982,382	8,796,890
Company shareholders' equity:
Preferred stock, no par value, 1.00 Euro nominal value, 12,356,880 shares authorized, 3,854,182 issued and outstanding	4,313	4,240
Common stock, no par value, 1.00 Euro nominal value, 373,436,220 shares authorized, 294,365,648 issued and outstanding	364,112	363,076
Additional paid-in capital	3,337,771	3,293,918
Retained earnings	2,864,911	2,452,332
Accumulated other comprehensive (loss)	(37,471)	(151,284)
Total Company shareholders' equity	6,533,636	5,962,282
Noncontrolling interest	180,638	160,504
Total equity	6,714,274	6,122,786
Total liabilities and equity	$15,696,656	$14,919,676

1_Consolidated Balance Sheets (

Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $)
In Thousands, except Share data	Sep. 30, 2009	Dec. 31, 2008
Consolidated Balance Sheets (Parentheticals)
Trade accounts receivable allowance for doubtful accounts	$264,437	$262,836
Preferred stock no par value (in Euros)	1
Preferred stock authorized	12,356,880
Preferred stock issued	3,863,739
Preferred stock outstanding	3,863,739
Common stock no par value (in Euros)	1
Common stock authorized	373,436,220
Common stock issued	294,690,763
Common stock outstanding	294,690,763

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Operating Activities:
Net Income	$694,699	$631,384
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	334,133	306,761
Change in deferred taxes, net	59,469	56,131
(Gain) Loss on sale of investments	(1,811)	(15,355)
(Gain) Loss on sale of fixed assets	(3,236)	1,555
Stock Option Compensation Expense	22,822	22,585
Changes in assets and liabilities, net of amounts from businesses acquired:
Trade accounts receivable, net	(76,782)	(213,455)
Inventories, net	(104,302)	(102,780)
Prepaid expenses, other current and non-current assets	(92,701)	(55,421)
Accounts receivable, related parties	(160,775)	(8,627)
Accounts payable, related parties	147,668	9,622
Accounts payable, accrued expenses and other current and non-current liabilities	72,200	39,756
Income tax payable	(10,899)	43,684
Net cash provided by operating activities	880,485	715,840
Investing Activities:
Purchases of property, plant and equipment	(398,347)	(502,141)
Proceeds from sale of property, plant and equipment	9,980	9,619
Acquisitions and investments, net of cash acquired, and net purchases of intangible assets	(109,045)	(175,954)
Proceeds from divestitures	51,738	45,743
Net cash used in investing activities	(445,674)	(622,733)
Financing Activities:
Proceeds from short-term borrowings and other financial liabilities	69,291	92,827
Repayments of short-term borrowings and other financial liabilities	(120,619)	(94,568)
Proceeds from short-term borrowings from related parties	18,448	174,431
Repayments of short-term borrowings from related parties	(86,248)	(175,405)
Proceeds from long-term debt and capital lease obligations	756,543	408,195
Repayments of long-term debt and capital lease obligations	(493,291)	(95,440)
Redemption of trust preferred securities	0	(678,379)
Increase of accounts receivable securitization program	(335,000)	452,000
Proceeds from exercise of stock options	25,772	37,616
Payment of Dividends	231,940	252,395
Distributions to noncontrolling interest	(47,591)	(26,786)
Contributions from noncontrolling interest	7,964	0
Net cash used in financing activities	(436,671)	(157,904)
Effect of exchange rate changes on cash and cash equivalents	3,846	76
Cash and Cash Equivalents:
Net (decrease) in cash and cash equivalents	1,986	(64,721)
Cash and cash equivalents at beginning of period	221,584	244,690
Cash and cash equivalents at end of period	$223,570	$179,969

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (unaudited) (USD $)
In Thousands, except Share data	Total Company shareholders' equity [Member]	Preferred Stock [Member]	Preferred Stock, No par value [Member]	Common Stock [Member]	Common Stock, No par value [Member]	Additional paid in capital [Member]	Retained earnings [Member]	Accumulated other comprehensive income (loss) [Member]	Noncontrolling interest [Member]	Total
Shares issued at Dec. 31, 2007		3,778,087		292,786,583
Shareholders equity at Dec. 31, 2007	$5,575,217		$4,191		$361,384	$3,221,644	$1,887,120	$100,878	$105,814	$5,681,031
Comprehensive income (loss)
Shares issued at Dec. 31, 2007		3,778,087		292,786,583
Shareholders equity at Dec. 31, 2007	5,575,217		4,191		361,384	3,221,644	1,887,120	100,878	105,814	5,681,031
Proceeds from exercise of options and related tax effects	42,136		49		1,692	40,395				42,136
Shares from exercise of options and related tax effects		32,453		1,145,453
Compensation expense related to stock options	31,879					31,879				31,879
Dividends paid	(252,395)						(252,395)		(38,592)	(290,987)
Purchase (sale) of noncontrolling interest									31,000	31,000
Cash contributions from noncontrolling interest									17,174	17,174
Comprehensive income (loss)
Net Income	817,607						817,607		42,381	859,988
Other comprehensive income (loss)	(252,162)							(252,162)	2,727	(249,435)
Total Comprehensive income	565,445								45,108	610,553
Shareholders equity at Dec. 31, 2008	5,962,282		4,240		363,076	3,293,918	2,452,332	(151,284)	160,504	6,122,786
Shares issued at Dec. 31, 2008		3,810,540		293,932,036
Comprehensive income (loss)
Proceeds from exercise of options and related tax effects	24,780		73		1,036	23,671				24,780
Shares from exercise of options and related tax effects		53,199		758,727
Compensation expense related to stock options	22,822					22,822				22,822
Dividends paid	(231,940)						(231,940)		(42,255)	(274,195)
Purchase (sale) of noncontrolling interest	(2,640)					(2,640)			5,148	2,508
Cash contributions from noncontrolling interest									5,635	5,635
Comprehensive income (loss)
Net Income	644,519						644,519		50,180	694,699
Other comprehensive income (loss)	113,813							113,813	1,426	115,239
Total Comprehensive income	758,332								51,606	809,938
Shareholders equity at Sep. 30, 2009	$6,533,636		$4,313		$364,112	$3,337,771	$2,864,911	($37,471)	$180,638	$6,714,274
Shares issued at Sep. 30, 2009		3,863,739		294,690,763

The Company and Basis of Presen

The Company and Basis of Presentation
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
The Company and Basis of Presentation	1. The Company and Basis of PresentationThe CompanyFresenius Medical Care AG Co. KGaA (FMC-AG Co. KGaAor the Company) a German partnership limited by shares (Kommanditgesellschaft auf Aktien), is the worlds largest kidney dialysis company, operating in both the field of dialysis services and the field of dialysis products for the treatment of end-stage renal disease (ESRD). The Companys dialysis business is vertically integrated, providing dialysis treatment at dialysis clinics it owns or operates and supplying these clinics with a broad range of products. In addition, the Company sells dialysis products to other dialysis service providers. In the United States, the Company also performs clinical laboratory testing and provides inpatient dialysis services and other services under contract to hospitals. In this Report, FMC-AG Co. KGaA, or the Company, we, us or our refers to the Company or the Company and its subsidiaries on a consolidated basis, as the context requires.Basis of PresentationOn July 1, 2009, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Codification (ASC) 105, Generally Accepted Accounting Principles (originally issued as FASB Statement No. 168-FASB accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles). ASC 105 establishes the FASB ASC as the exclusive authoritative reference for nongovernmental U.S. GAAP for use in financial statements issued for interim and annual periods ending after September 15, 2009, except for SEC rules and interpretive releases, which are also authoritative GAAP for SEC registrants. This divides nongovernmental U.S. GAAP into the authoritative ASC and guidance that is nonauthoritative. The contents of the ASC carry the same level of authority, eliminating the four-level GAAP hierarchy previously set forth in FASB Statement No. 162, which has been superseded by the ASC. The ASC supersedes or makes nonauthoritative all other existing non-grandfathered, non-SEC accounting literature and reporting standards not included in the ASC.The consolidated financial statements at September 30, 2009 and for the three- and nine-month periods ended September 30, 2009 and 2008 contained in this report are unaudited and should be read in conjunction with the consolidated financial statements contained in the Company's 2008 Annual Report on Form20-F. 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.The results of operations for the three- and nine-month periods ended September 30, 2009 are not necessarily indicative of the results of operations for the year ending December31, 2009.The preparation of consolidated financial statements in conformity with U.S. GAAP 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

Related Party Transactions

Related Party Transactions
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Related Party Transactions	2. Related Party Transactions Service and Lease Agreements The Company is party to service agreements with Fresenius SE, the sole stockholder of its General Partner and its largest shareholder with approximately 36.2% ownership of the Companys voting shares, and certain affiliates of Fresenius SE that are not also subsidiaries of the Company, to receive services, including, but not limited to: administrative services, management information services, employee benefit administration, insurance, IT services, tax services and treasury management services. For the nine-month periods ended September 30, 2009 and 2008, amounts charged by Fresenius SE to the Company under the terms of these agreements are $51,042 and $44,743 respectively. The Company also provides certain services to Fresenius SE and certain affiliates of Fresenius SE, including research and development, central purchasing, patent administration and warehousing. The Company charged $11,617 and $8,806 for services rendered to Fresenius SE during the first nine months of 2009 and 2008, respectively. Under operating lease agreements for real estate entered into with Fresenius SE, the Company paid Fresenius SE $14,976 and $17,522 during the first nine months of 2009 and 2008, respectively. The majority of the leases expire in 2016 and contain renewal options.The Companys Articles of Association provide that the General Partner shall be reimbursed for any and all expenses in connection with management of the Companys business, including remuneration of the members of the General Partners supervisory board and the General Partners management board. The aggregate amount reimbursed to Management AG for the nine-month periods ended September 30, 2009 and 2008 was $5,862 and $7,616, respectively, for its management services during those nine-month periods. Products For the nine-month periods ended September 30, 2009, and 2008, the Company sold products to Fresenius SE for $9,231 and $28,714 respectively. During the nine-month periods ended September 30, 2009, and 2008, the Company made purchases from Fresenius SE in the amount of $32,404 and $35,093, respectively.In addition to the purchases noted above, the Company currently purchases heparin supplied by APP Inc., through a group purchasing organization (GPO). In September 2008, Fresenius Kabi AG, a wholly-owned subsidiary of Fresenius SE, acquired 100% of APP Inc. The Company has no direct supply agreement with APP Inc. and does not submit purchase orders directly to APP Inc. During the nine month-periods ended September 30, 2009 and 2008, Fresenius Medical Care Holdings, Inc. (FMCH) acquired approximately $23,199 and $12,088, respectively, of heparin from APP Inc. through the GPO contract, which was negotiated by the GPO at arms length on behalf of all members of the GPO. Financing Provided by and to Fresenius SE The Company receives short-term financing from and provides short-term financing to Fresenius SE. During the second quarter 2009, the Company reclassified an account payable in the amount of 77,745 ($109,885 at June 30, 2009) to Fresenius SE to short-term borrowings from related parties. The amount represents taxes payable b

Inventories

Inventories
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Inventories Note	3. InventoriesAs of September 30, 2009 and December31, 2008, inventories consisted of the following: September 30, 2009 December 31, 2008 Raw materials and purchased components $ 160,280 $ 145,756 Work in process 64,813 60,960 Finished goods 510,933 385,607 Health care supplies 105,297 114,727 Inventories $ 841,323 $ 707,050 During the first quarter, 2009, inventory adjustments led to an increase in value of inventory at January 1, 2009, of $23,327 and a corresponding reduction in costs of revenues sold during the three month period ending March 31, 2009.

Short-Term Borrowings and Short

Short-Term Borrowings and Short-Term Borrowings from Related Parties
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Short-Term Borrowings and Short-Term Borrowings from Related Parties	4. Short-Term Borrowings and Short-Term Borrowings from Related PartiesAs of September 30, 2009 and December 31, 2008, short-term borrowings and short-term borrowings from related parties consisted of the following: September 30, 2009 December 31, 2008 Borrowings under lines of credit $ 82,125 $ 121,476 Accounts receivable facility 204,000 539,000 Other financial liabilities 25,901 22,679 Short-term borrowings 312,026 683,155 Short-term borrowings from related parties (see Note 2.c.) 42,533 1,330 Short-term borrowings including related parties $ 354,559 $ 684,485

Long-term Debt and Capital Leas

Long-term Debt and Capital Lease Obligations
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Long-term Debt and Capital Lease Obligations	5. Long-term Debt and Capital Lease ObligationsAs of September 30, 2009 and December 31, 2008, long-term debt and capital lease obligations consisted of the following: September 30, December 31, 2009 2008 2006 Senior Credit Agreement $ 3,645,244 $ 3,366,079 Senior Notes 493,122 492,456 Euro Notes 292,860 278,340 EIB Agreements 215,593 174,059 Capital lease obligations 11,906 13,394 Other 63,067 88,165 4,721,792 4,412,493 Less current maturities (160,326) (455,114) $ 4,561,466 $ 3,957,379 The following table shows the available and outstanding amounts under the 2006 Senior Credit Agreement at September 30, 2009 and December 31, 2008: Maximum Amount Available Balance Outstanding September 30, December 31, September 30, December 31, 2009 2008 2009 2008 Revolving Credit $ 1,000,000 $ 1,000,000 $ 684,452 $ 304,887 Term Loan A 1,402,848 1,491,139 1,402,848 1,491,139 Term Loan B 1,557,944 1,570,053 1,557,944 1,570,053 $ 3,960,792 $ 4,061,192 $ 3,645,244 $ 3,366,079 In addition, at September 30, 2009 and December 31, 2008, the Company had letters of credit outstanding in the amount of $111,994 which are not included above as part of the balance outstanding at those dates but which reduce available borrowings under the revolving credit facility.On April 27, 2009, the Company issued euro denominated notes (Euro Notes) totaling 200,000 ($292,860) at September 30, 2009, which are senior, unsecured and guaranteed by FMCH and D-GmbH, consisting of 4 tranches having terms of 3.5 and 5.5 years with floating and fixed interest rate tranches. The initial average interest rate is 6.95%. Proceeds of 69,500 of the newly issued Euro Notes were used in April 2009 to voluntarily retire a portion of the Euro Notes that were due in July 2009 with the remaining proceeds used to repay the balance of the notes on their scheduled maturity date of July 27, 2009.

Stock Options

Stock Options
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Stock Options	6. Stock Options On July 27, 2009, the Company awarded 2,508,276 options under the Fresenius Medical Care AG and Co. KGaA Stock Option Plan 2006 (the 2006 Plan), including 348,600 options granted to members of the Management Board of Fresenius Medical Care Management AG, the Companys general partner, at an exercise price of $45.62 (31.97), a fair value of $10.90 each and a total fair value of $27,344 which will be amortized over the three year vesting period.

Earnings Per Share

Earnings Per Share
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Earnings Per Share	7. Earnings Per ShareThe following table contains reconciliations of the numerators and denominators of the basic and diluted earnings per share computations for the three- and nine-month periods ended September 30, 2009 and 2008: For the three months For the nine months ended September 30, ended September 30, 2009 2008 2009 2008 Numerators: Net income attributable to FMC-AG Co. KGaA $ 225,300 $ 206,335 $ 644,519 $ 603,296 less: Dividend preference on Preference shares 28 29 78 87 Income available to all classes of shares $ 225,272 $ 206,306 $ 644,441 $ 603,209 Denominators: Weighted average number of: Ordinary shares outstanding 294,443,038 293,417,973 294,181,563 293,030,504 Preference shares outstanding 3,857,335 3,802,913 3,832,367 3,790,298 Total weighted average shares outstanding 298,300,373 297,220,886 298,013,930 296,820,802 Potentially dilutive Ordinary shares - 578,884 - 390,591 Potentially dilutive Preference shares 70,925 101,648 69,494 100,021 Total weighted average ordinary shares outstanding assuming dilution 294,443,038 293,996,857 294,181,563 293,421,095 Total weighted average Preference shares outstanding assuming dilution 3,928,260 3,904,561 3,901,861 3,890,319 Basic income per Ordinary share $ 0.76 $ 0.69 $ 2.16 $ 2.03 Plus preference per Preference shares 0.00 0.01 0.02 0.02 Basic income per Preference share $ 0.76 $ 0.70 $ 2.18 $ 2.05 Fully diluted income per Ordinary share $ 0.76 $ 0.69 $ 2.16 $ 2.03 Plus preference per Preference shares 0.00 0.01 0.02 0.02 Fully diluted income per Preference share $ 0.76 $ 0.70 $ 2.18 $ 2.05

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Employee Benefit Plans	8. Employee Benefit PlansThe Company currently has two principal pension plans, one for German employees, the other covering employees in the United States, the latter of which was curtailed in 2002. Plan benefits are generally based on years of service and final salary. Consistent with predominant practice in Germany, the Company's pension obligations in Germany are unfunded. Each year FMCH, a wholly-owned subsidiary of the Company and its principal North American subsidiary, contributes to the plan covering United States employees at least the minimum required by the Employee Retirement Income Security Act of 1974, as amended.The following table provides the calculations of net periodic benefit cost for the three-and nine-month periods ended September 30, 2009 and 2008. For the three months ended September 30, For the nine months ended September 30, 2009 2008 2009 2008 Components of net periodic benefit cost: Service cost $ 2,044 $ 2,139 $ 5,912 $ 6,431 Interest cost 5,445 5,220 16,089 15,461 Expected return on plan assets (3,965) (4,222) (11,895) (12,697) Amortization of unrealized losses 1,217 459 3,653 1,260 Net periodic benefit costs $ 4,741 $ 3,596 $ 13,759 $ 10,455

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Commitments and Contingencies	9. Commitments and ContingenciesLegal ProceedingsThe Company is routinely involved in numerous 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 healthcare services and products. The outcome of litigation and other legal matters is always difficult to accurately predict and outcomes that are not consistent with the Companys 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.Commercial LitigationThe Company was originally formed as a result of a series of transactions it completed pursuant to the Agreement and Plan of Reorganization dated as of February 4, 1996, by and between W.R. Grace Co. and Fresenius SE (the quot;Mergerquot;). At the time of the Merger, a W.R. Grace Co. subsidiary known as W.R. Grace Co.-Conn. had, and continues to have, significant liabilities arising out of product-liability related litigation (including asbestos-related actions), pre-Merger tax claims and other claims unrelated to National Medical Care, Inc. (NMC), which was W.R. Grace Co.s dialysis business prior to the Merger. In connection with the Merger, W.R. Grace Co.-Conn. agreed to indemnify the Company, FMCH, and NMC against all liabilities of W.R. Grace Co., whether relating to events occurring before or after the Merger, other than liabilities arising from or relating to NMCs operations. W.R. Grace Co. and certain of its subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code (the Grace Chapter 11 Proceedings) on April 2, 2001. Prior to and after the commencement of the Grace Chapter 11 Proceedings, class action complaints were filed against W.R. Grace Co. and FMCH by plaintiffs claiming to be creditors of W.R. Grace Co.-Conn., and by the asbestos creditors committees on behalf of the W.R. Grace Co. bankruptcy estate in the Grace Chapter 11 Proceedings, alleging among other things that the Merger was a fraudulent conveyance, violated the uniform fraudulent transfer act and constituted a conspiracy. All such cases have been stayed and transferred to or are pending before the U.S. District Court as part of the Grace Chapter 11 Proceedings.In 2003, the Company reached agreement with the asbestos creditors committees on behalf of the W.R. Grace Co. bankruptcy estate and W.R. Grace Co. in the matters pending in the Grace Chapter 11 Proceedings for the settlement of all fraudulent conveyance and tax claims against it and other claims related to the Company that arise out of the bankruptcy of W.R. Grace Co. Under the terms of the settlement agreement as amended (the Settlement Agreement), fraudulent conveyance and other claims raised on behalf of asbestos claimants will be dismissed with prejudice and the Company will receive protection against existing and potential future W.R. Grace Co. related

Financial Instruments

Financial Instruments
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Financial Instruments	10. Financial InstrumentsAs a global supplier of dialysis services and products in more than 115 countries throughout the world, the Company is faced with a concentration of credit risks due to the nature of the reimbursement systems which are often provided by the governments of the countries in which the Company operates. Changes in reimbursement rates or the scope of coverage could have a material adverse effect on the Companys business, financial condition and results of operations and thus on its capacity to generate cash flow. In the past the Company experienced and also expects in the future generally stable reimbursements for its dialysis services. This includes the balancing of unfavorable reimbursement changes in certain countries with favorable changes in other countries. Due to the fact that a large portion of the Companys reimbursement is provided by public health care organizations and private insurers, the Company expects that most of its accounts receivables will be collectable, albeit somewhat more slowly in the International segment in the immediate future, particularly in countries most severely affected by the current global financial crisis.Non-derivative Financial InstrumentsThe following table presents the carrying amounts and fair values of the Companys non-derivative financial instruments at September 30, 2009, and December 31, 2008. September 30, December 31, 2009 2008 Carrying Fair Carrying Fair Amount Value Amount Value Non-derivatives Assets Cash and cash equivalents $ 223,570 $ 223,570 $ 221,584 $ 221,584 Receivables 2,630,786 2,630,786 2,351,841 2,351,841 Liabilities Accounts payable 666,132 666,132 605,260 605,260 Short-term borrowings 312,026 312,026 683,155 683,155 Short-term borrowings from related parties 42,533 42,533 1,330 1,330 Long term debt, excluding Euro and Senior Notes 3,935,810 3,935,810 3,641,697 3,641,697 Trust Preferred Securities 663,005 693,487 640,696 626,241 Euro Notes 292,860 301,943 278,340 276,154 Senior Notes 493,122 485,000 492,456 465,625 The carrying amounts in the table are included in the consolidated balance sheet under the indicated captions.The significant methods and assumptions used in estimating the fair values of non-derivative financial instruments are as follows:Cash and cash equivalents are stated at nominal value which equals the fair value.Short-term financial instruments such as accounts receivable and accounts payable and short-term borrowings are valued at their carrying amounts, which are reasonable estimates of the fair value due to the relatively short period to maturity of these instruments. The fair value of Senior Notes and trust preferred securities are based on market prices and quotes as of the balance sheet date. The fair values of other fixed-rate financial liabilities, for which market quotes are not available, are calculated as 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. The fair values

Business Segment Information

Business Segment Information
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Business Segment Information	11. Business Segment InformationThe Company has identified three business segments, North America, International, and Asia Pacific, which were determined based upon how the Company manages its businesses. All segments are primarily engaged in providing dialysis care services and manufacturing and distribution products and equipment for the treatment of ESRD. In the U.S., the Company is also engaged in performing clinical laboratory testing and providing inpatient dialysis services and other services under contract to hospitals. The Company has aggregated the International and Asia Pacific operating segments as International. The segments are aggregated due to their similar economic characteristics. These characteristics include the same services provided and products sold, the same type patient population, similar methods of distribution of products and services and similar economic environments.Management evaluates each segment using a measure that reflects all of the segments controllable revenues and expenses. Management believes that the most appropriate measure in this regard is operating income which measures the Companys source of earnings. Financing is a corporate function, which the Companys segments do not control. Therefore, the Company does not include interest expense relating to financing as a segment measure. Similarly, the Company does not allocate corporate costs, which relate primarily to certain headquarters overhead charges, including accounting and finance, professional services, etc., because the Company believes that these costs are also not within the control of the individual segments. The Company also regards income taxes to be outside the segments control. North America International Segment Total Corporate Total Three months ended September 30, 2009 Net revenue external customers $ 1,949,384 $ 939,115 $ 2,888,499 $ 170 $ 2,888,669 Inter - segment revenue 572 20,668 21,240 (21,240) - Total net revenue 1,949,956 959,783 2,909,739 (21,070) 2,888,669 Depreciation and amortization (67,995) (48,005) (116,000) (2,291) (118,291) Operating income 324,723 156,589 481,312 (29,987) 451,325 Capital expenditures, acquisitions and investments 81,076 90,806 171,882 162 172,044 Three months ended September 30, 2008 Net revenue external customers $ 1,770,820 $ 942,278 $ 2,713,098 $ 167 $ 2,713,265 Inter - segment revenue 1,146 20,849 21,995 (21,995) - Total net revenue 1,771,966 963,127 2,735,093 (21,828) 2,713,265 Depreciation and amortization (61,156) (44,388) (105,544) (2,352) (107,896) Operating income 295,809 152,083 447,892 (25,702) 422,190 Capital expenditures, acquisitions and investments 109,220 79,050 188,270 13,868 202,138 Nine months ended September 30, 2009 Net revenue external customers $ 5,599,543 $ 2,612,029 $ 8,211,572 $ 476 $ 8,212,048 Inter - segment revenue 1,805 59,661 61,466 (61,466) - Total net revenue 5,601,348 2,671,690 8,273,038 (60,990) 8,212,048 Depreciation and amortization (196,450) (131,178) (327,628)

Supplementary Cash Flow Informa

Supplementary Cash Flow Information
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Supplementary Cash Flow Information	12. Supplementary Cash Flow InformationThe following additional information is provided with respect to the consolidated statements of cash flows: For the nine months ended September 30, 2009 2008 Supplementary cash flow information: Cash paid for interest $ 264,741 $ 283,489 Cash paid for income taxes(1) $ 308,508 $ 240,755 Cash inflow for income taxes from stock option exercises $ 3,596 $ 6,391 Supplemental disclosures of cash flow information: Details for acquisitions: Assets acquired $ (135,990) $ (118,131) Liabilities assumed 13,516 9,523 Noncontrolling interest 16,889 (3,701) Notes assumed in connection with acquisition 3,056 2,134 Cash paid (102,529) (110,175) Less cash acquired 5,398 873 Net cash paid for acquisitions $ (97,131) $ (109,302) (1) Net of tax refund

Supplemental Condensed Combinin

Supplemental Condensed Combining Information
	3 Months Ended Sep. 30, 2009
Note to Consolidated Financial Statements (unaudited)
Supplemental Condensed Combining Information	13. Supplemental Condensed Combining InformationIn February 1998 FMC Trust Finance S..r.l. Luxembourg, and in June 2001 FMC Trust Finance S..r.l. Luxembourg III, each of which is a wholly-owned subsidiary of FMC-AG Co. KGaA, issued senior subordinated debt securities, fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis, by FMC-AG Co. KGaA, D-GmbH and FMCH (D-GmbH and FMCH being the Guarantor Subsidiaries). The senior subordinated debt securities were issued to statutory trusts organized under the laws of the State of Delaware, which issued trust preferred securities that were guaranteed by the Company through a series of undertakings by the Company and the Guarantor Subsidiaries, and the Company acquired all of the common securities of these trusts. In December 2004, the Company assumed the obligations of its wholly owned subsidiaries as the issuer of senior subordinated notes denominated in Deutschmark and Euro held by Fresenius Medical Care Capital Trust III and Fresenius Medical Care Capital Trust V, respectively. The issuers repaid $450 and DM300 aggregate principal amount of senior subordinated debt securities on February 1, 2008 in connection with the mandatory redemption on the same date of the related trust preferred securities issued by Fresenius Medical Care Capital Trust II and Fresenius Medical Care Capital Trust III.In addition, FMC Finance III S.A., a wholly-owned subsidiary of the Company, is the obligor on senior debt securities issued in June 2007 which are fully and unconditionally guaranteed, jointly and severally on a senior basis, by the Company and by the Guarantor Subsidiaries. The following combining financial information for the Company is as of September 30, 2009 and December 31, 2008 and for the nine month periods ended September 30, 2009 and 2008, segregated between FMC Finance III S.A., the Company, D-GmbH, FMCH, and each of the Company's other businesses (the quot;Non-Guarantor Subsidiariesquot;). For purposes of the condensed combining information, the Company and the Guarantor Subsidiaries carry their investments under the equity method. Other (income) expense includes income and losses related to investments in consolidated subsidiaries recorded under the equity method for purposes of the condensed combining information. In addition, other (income) expense includes income and losses from profit and loss transfer agreements as well as dividends received. For the nine months ended September 30, 2009 Issuer Guarantors Non-Guarantor Combining Combined FMC Finance III FMC - AG Co. KGaA D-GmbH FMCH Subsidiaries Adjustment Total Net revenue $ - $ - $ 2,011,518 $ - $ 7,909,841 $ (1,709,311) $ 8,212,048 Cost of revenue - - 1,640,405 - 5,515,461 (1,716,336) 5,439,530 Gross profit - - 371,113 - 2,394,380 7,025 2,772,518 Operating expenses (income): Selling, general and administrative 15 61,230 127,689 (24,492) 1,289,086 (10,322) 1,443,206 Research and development - - 45,266 - 19,242 - 64,508 Operating (loss) income (15) (61,230) 198,158 24,492 1,086,052 17,347 1,264,804