SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2002

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.

FOR THE TRANSITION PERIOD FROM ____________________TO__________________

COMMISSION FILE NUMBER: 1-3720

FRESENIUS MEDICAL CARE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEW YORK 13-3461988
-------- ----------
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer ID No.)

95 HAYDEN AVENUE, LEXINGTON, MA 02420
----------------------------- -----
(Address of Principal Executive Office) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 781-402-9000
----------------------------------------------------------------

- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)

Indicated by check whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of the date hereof,
90,000,000 shares of common stock, par value $1.00 per share, are outstanding,
all of which are held by Fresenius Medical Care AG.

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS PAGE

Unaudited Consolidated Statements of Earnings ............... 4
Unaudited Consolidated Statements of Comprehensive Income.... 5
Unaudited Consolidated Balance Sheets....................... 6
Unaudited Consolidated Statements of Cash Flows............. 7
Notes to Unaudited Consolidated Financial Statements......... 9

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................... 20

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK............................................... 24

PART II: OTHER INFORMATION

ITEM 1: Legal Proceedings........................................... 25
ITEM 6: Exhibits and Reports on Form 8-K............................ 28

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

UNAUDITED, CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

THREE MONTHS ENDED
MARCH 31,
-----------------------------------
2002 2001
------------- -------------

NET REVENUES
Health care services............................ $ 784,022 $ 754,199
Medical supplies................................ 109,882 114,077
------------- --------------
893,904 868,276
------------- --------------
EXPENSES
Cost of health care services.................... 563,655 518,284
Cost of medical supplies........................ 73,123 83,982
General and administrative expenses............. 76,171 86,525
Provision for doubtful accounts................. 21,340 18,273
Depreciation and amortization................... 35,435 61,693
Research and development........................ 1,998 1,084
Interest expense, net, and related financing
costs including $33,679 and $31,179, of
interest with affiliates...................... 55,023 55,479
------------- --------------
826,745 825,320
------------- --------------

INCOME BEFORE INCOME TAXES ......................... 67,159 42,956
PROVISION FOR INCOME TAXES........................... 26,701 20,510
------------- --------------
NET INCOME........................................... $ 40,458 $ 22,446
============= ==============
Basic and fully dilutive earnings per share
Net Income ....................................... $ 0.45 $ 0.25

See accompanying Notes to Unaudited, Consolidated Financial Statements

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

UNAUDITED, CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(DOLLARS IN THOUSANDS)

THREE MONTHS ENDED
MARCH 31,
--------------------------
2002 2001
--------- ---------
NET INCOME .................................. $ 40,458 $ 22,446
Other comprehensive income...................
Foreign currency translation adjustments.. (432) (408)
Derivative instruments (net of deferred
tax expense (benefit) of $3,813 and
($18,692))............................... 5,910 (28,039)
--------- ---------

Total other comprehensive income (loss)... 5,478 (28,447)
--------- ---------
COMPREHENSIVE INCOME (LOSS) ................. $ 45,936 $ (6,001)
========= =========

See accompanying Notes to Unaudited, Consolidated Financial Statements

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

MARCH 31, DECEMBER 31,
2002 2001
------------ ---------------
(UNAUDITED)

ASSETS

Current Assets:
Cash and cash equivalents..................... $ 34,386 $ 26,786
Accounts receivable, less allowances of
$110,287 and $103,859....................... 395,517 423,912
Inventories................................... 211,286 202,221
Deferred income taxes......................... 188,044 196,831
Other current assets.......................... 125,295 119,592
------------ ------------
Total Current Assets..................... 954,528 969,342
------------ ------------

Properties and equipment, net..................... 523,102 520,620
------------ ------------
Other Assets:
Excess of cost over the fair value of net
assets acquired and other intangible assets,
net of accumulated amortization of $730,992
and $718,939................................. 3,408,906 3,418,544

Other assets and deferred charges............. 100,053 94,460
------------ ------------
Total Other Assets....................... 3,508,959 3,513,004
------------ ------------
Total Assets....................................... $ 4,986,589 $ 5,002,966
============ ============
LIABILITIES AND EQUITY

Current Liabilities:
Current portion of long-term debt and
capitalized lease obligations................ $ 152,212 $ 152,046

Current portion of borrowing from affiliates.. 292,425 291,360
Accounts payable.............................. 145,573 125,530
Accrued liabilities........................... 217,831 229,153
Accrued special charge for legal matters...... 219,741 224,037
Net accounts payable to affiliates............ 25,149 39,934
Accrued income taxes.......................... 72,755 83,654
------------ ------------
Total Current Liabilities................ 1,125,686 1,145,714

Long-term debt..................................... 272,200 300,600
Non-current borrowings from affiliates............. 1,005,687 1,005,669
Capitalized lease obligations...................... 2,497 1,675
Deferred income taxes.............................. 117,800 113,046
Other liabilities.................................. 136,405 146,170
------------ ------------
Total Liabilities........................ 2,660,275 2,712,874
------------ ------------

Mandatorily Redeemable Preferred Securities........ 682,746 692,330
------------ ------------
Equity:
Preferred stock, $100 par value................. 7,412 7,412
Preferred stock, $.10 par value ................ 8,906 8,906
Common stock, $1 par value; 300,000,000 shares
authorized; outstanding 90,000,000............ 90,000 90,000
Paid in capital................................. 1,945,014 1,945,014
Retained deficit................................ (362,421) (402,749)
Accumulated comprehensive (loss)................ (45,343) (50,821)
------------ ------------
Total Equity............................... 1,643,568 1,597,762
------------ ------------
Total Liabilities and Equity $ 4,986,589 $ 5,002,966
============ ============

See accompanying Notes to Unaudited, Consolidated Financial Statements.

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
UNAUDITED, CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

THREE MONTHS ENDED
MARCH 31,
----------------------------------
2002 2001
-------------- -------------

Cash Flows from Operating Activities:
Net income ........................................... $ 40,458 $ 22,446
Adjustments to reconcile net income to net cash from
Operating activities:
Depreciation and amortization.................... 35,435 61,693
Provision for doubtful accounts.................. 21,340 18,273
Deferred income taxes............................ 9,728 (17,553)
Loss on disposal of properties and equipment..... 461 210

Changes in operating assets and liabilities, net of
effects of purchase acquisitions and foreign exchange:
Increase in accounts receivable.................. (21,945) (57,612)
Increase in inventories.......................... (9,044) (4,647)
Increase in other current assets................. (8,981) (4,373)
Decrease in IDPN accounts receivable............. -- 5,189
(Increase) decrease in other assets and
deferred charges............................. (2,616) 4,509
Increase (decrease) in accounts payable.......... 20,043 (5,232)
(Decrease) increase in accrued income taxes...... (10,899) 28,880
Decrease in accrued liabilities.................. (14,770) (3,835)
Decrease in accrued special charge for legal
matters........................................ (4,296) --

(Decrease) increase in other long-term
liabilities.................................... (7,354) 2,535
Net changes due to/from affiliates............... (14,785) 5,847
Other, net....................................... 3,849 2,763
----------- -----------
Net cash provided by operating activities............. 36,624 59,093
----------- -----------

Cash Flows from Investing Activities:
Capital expenditures............................. (27,364) (35,482)
Payments for acquisitions, net of cash acquired.. (2,333) (246,756)
----------- -----------
Net cash used in investing activities................. (29,697) (282,238)
----------- -----------

Cash Flows from Financing Activities:
Payments on settlement of investigation.......... -- (34,734)
Net increase in borrowings from affiliates....... 1,084 216,282
Cash dividends paid.............................. (130) (130)
(Payments) proceeds from receivable financing
facility ...................................... 29,000 (5,600)
Net (decrease) increase on debt and capitalized
leases......................................... (28,837) 45,340
Equity contribution.............................. -- 10,000
----------- -----------
Net cash provided by financing activities.............. 1,117 231,158
----------- -----------
Effects of changes in foreign exchange rates............... (444) (416)
----------- -----------
Change in cash and cash equivalents........................ 7,600 7,597
Cash and cash equivalents at beginning of period........... 26,786 33,327
----------- -----------
Cash and cash equivalents at end of period................. $ 34,386 $ 40,924
=========== ===========

See accompanying Notes to Unaudited, Consolidated Financial Statements

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

THREE MONTHS ENDED
MARCH 31,
--------------------------
2002 2001
----------- -----------

Supplemental disclosures of cash flow information:

Cash paid during the period for:
Interest, net.................................... $ 75,666 $ 41,710
Income taxes paid, net........................... 27,982 1,269

Details for Acquisitions:
Assets acquired....................................... 3,572 295,068
Liabilities assumed................................... 1,239 48,312
----------- ----------
Net cash paid for acquisitions........................ $ 2,333 $ 246,756
=========== ==========

See accompanying Notes to Unaudited, Consolidated Financial Statements

FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED, CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

NOTE 1. THE COMPANY

Fresenius Medical Care Holdings, Inc., a New York corporation ("the
Company") is a subsidiary of Fresenius Medical Care AG, a German corporation
("FMC" or "Fresenius Medical Care"). The Company conducts its operations through
five principal subsidiaries, National Medical Care, Inc., ("NMC"); Fresenius USA
Marketing, Inc., Fresenius USA Manufacturing, Inc., and SRC Holding Company,
Inc., ("SRC"), all Delaware corporations and Fresenius USA, Inc., a
Massachusetts corporation.

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries and those financial statements where the
Company controls professional corporations in accordance with Emerging Issues
Task Force Issue 97-2.

The Company is primarily engaged in (i) providing kidney dialysis
services, and clinical laboratory testing, and (ii) manufacturing and
distributing products and equipment for dialysis treatment.

BASIS OF PRESENTATION

BASIS OF CONSOLIDATION

The consolidated financial statements in this report at March 31, 2002
and 2001 and for the three month interim periods then ended are unaudited and
should be read in conjunction with the audited, consolidated financial
statements in the Company's 2001 report on Form 10-K. Such interim financial
statements reflect all adjustments that, in the opinion of management, are
necessary for a fair presentation of the results of the interim periods
presented. Certain amounts in the prior periods' consolidated financial
statements have been reclassified to conform to the current periods' basis of
presentation.

The results of operations for the three month period ended March 31,
2002 are not necessarily indicative of the results of operations for the fiscal
year ending December 31, 2002.

All intercompany transactions and balances have been eliminated in
consolidation.

EARNINGS PER SHARE

Basic earnings per share are computed by dividing net income available to
common shareholders by the weighted-average number of common shares outstanding
during the year. Diluted earnings per share includes the effect of all dilutive
potential common shares that were outstanding during the year. The number of
shares used to compute basic and diluted earnings per share was 90,000 in all
periods as there were no potential common shares and no adjustments to income to
be considered for purposes of the diluted earnings per shares calculation.

THREE MONTHS ENDED
MARCH 31,
----------------------
2002 2001
-------- --------

The weighted average number of shares of
Common Stock were as follows................ 90,000 90,000
======== ========

Net income used in the computation of earnings per share is as follows:

THREE MONTHS ENDED
MARCH 31,
--------------------
2002 2001
------- --------

CONSOLIDATED

Net income ......................................... $ 40,458 $ 22,446

Dividends paid on preferred stocks.................. (130) (130)
------- --------

Income used in per share computation of earnings ... $ 40,328 $ 22,316
======== ========

Basic and fully dilutive earnings per share......... $ 0.45 $ 0.25
======== ========

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Effective January 1, 2001, the Company adopted the provisions of SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities and the
related amendments of SFAS No. 138. The cumulative effect of adopting SFAS 133
as of January 1, 2001 was not material to the Company's consolidated financial
statements.

The Company is exposed to market risk due to changes in interest rates and
foreign currencies. The Company uses derivative financial instruments, including
interest rate swaps and foreign exchange contracts, as part of its risk
management strategy. These instruments are used as a means of hedging exposure
to interest rate and foreign currency fluctuations in connection with debt
obligations, forecasted raw material purchases and Euro denominated mandatorily
redeemable preferred stock.

The interest rate swaps are designated as cash flow hedges effectively
converting certain variable interest rate payments into fixed interest rate
payments. After tax gains of $6.3 million ($10.3 million pretax) for the three
months ended March 31, 2002 were deferred in other comprehensive income.
Interest payable and interest receivable under the swap terms are accrued and
recorded as an adjustment to interest expense at each reporting date.

The Company enters into forward rate agreements that are designated and
effective as hedges of forecasted raw material purchases. After tax losses of
$0.3 million ($0.5 million pretax) for the three months ended March 31, 2002
were deferred in other comprehensive income and will be reclassified into cost
of sales in the period during which the hedged transactions affect earnings. All
deferred amounts will be reclassified into earnings within the next twelve
months.

The Company enters into forward rate agreements that are designated and
effective as hedges of changes in the fair value of the Euro denominated
mandatorily redeemable preferred stock. Changes in fair value are recorded in
earnings and offset against gains and losses resulting from the underlying
exposures. After tax loss of $0.1 million ($0.1 million pretax) for the three
months ended March 31, 2002 were deferred in other comprehensive income.
Ineffective amounts had no material impact on earnings for the three months
ended March 31, 2002.

Periodically, the Company enters into derivative instruments with related
parties to form a natural hedge for currency exposures on intercompany
obligations. These instruments are reflected in the balance sheet at fair value
with changes in fair value recognized in earnings.

EVEREST ACQUISITION

On January 8, 2001, FMC acquired Everest Healthcare Services Corporation
(now known as Everest Healthcare Holdings, Inc., "Everest") through a merger of
Everest into a subsidiary of FMC at a purchase price of $341 million.
Approximately $99 million was funded by the issuance of 2.25 million FMC
preference shares to Everest. The remaining purchase price was paid with cash of
$242 million, including assumed debt. Everest owned, operated or managed
approximately 70 clinic facilities providing therapy to approximately 6,800
patients in the United States. Everest also operated extracorporeal blood
services and acute dialysis businesses that provide acute dialysis, apheresis
and hemoperfusion services to approximately 100 hospitals. On August 22, 2001
FMC transferred its interests in Everest to the Company at its book value. There
was no gain or loss recorded on this sale as it is a transfer

between entities under common control. The consolidated operations and cash
flows of the Company for the twelve months ended December 31, 2001 include the
consolidated operations and cash flows of Everest retroactive to January 1,
2001. Accordingly, the Company's previously reported revenues and results of
operations for the three months ended March 31, 2001 have been restated to
include Everest revenues and earnings of $63 million and $0.7 million,
respectively.

NEW PRONOUNCEMENTS

In July 2001, the FASB issued SFAS No.141, Business Combinations ("SFAS
141"), and SFAS No.142, Goodwill and Other Intangible Assets ("SFAS 142"). SFAS
141 requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001 as well as all purchase method
business combinations completed after June 30, 2001. SFAS 141 also specifies
criteria intangible assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill, noting that any
purchase price allocable to an assembled workforce may not be accounted for
separately. SFAS 142 requires that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in accordance with the provisions of SFAS 142. SFAS
142 also requires that intangible assets with definite useful lives be amortized
over their respective estimated useful lives to their estimated residual values,
and reviewed for impairment in accordance with SFAS No.144, Accounting for the
Impairment or Diposal of Long-Lived Assets.

The Company adopted the provisions of SFAS 141 immediately, and adopted
SFAS 142 effective January 1, 2002. Accordingly, any goodwill or intangible
asset determined to have an indefinite useful life acquired in a purchase
business combination completed after June 30, 2001 has not been amortized, but
will be evaluated for impairment in accordance with SFAS 142 accounting
literature. Goodwill and intangible assets acquired in business combinations
completed before July 1, 2001 were amortized through December 31, 2001.

SFAS 141 requires that the Company evaluate existing intangible assets and
goodwill that were acquired in prior purchase business combinations, and that it
make any necessary reclassifications in order to conform with the new criteria
in SFAS 141 for recognition apart from goodwill. The Company will be required to
reassess the useful lives and residual values of all intangible assets acquired
in purchase business combinations, and make any necessary amortization period
adjustments by the end of the first interim period after adoption. In addition,
to the extent an intangible asset is identified as having an indefinite useful
life, the Company will be required to test the intangible asset for impairment
in accordance with the provisions of SFAS 142 within the first interim period.
Any impairment loss should be measured as of the date of adoption and recognized
as the cumulative effect of a change in accounting principle in the first
interim period.

In connection with the transitional goodwill impairment evaluation, SFAS
142 requires that the Company perform an assessment of whether there is an
indication that goodwill (and equity-method goodwill) is impaired as of the date
of adoption. To accomplish this the Company must identify its reporting units
and determine the carrying value of each reporting unit by assigning the assets
and liabilities, including the existing goodwill and intangible assets, to those
reporting units as of the date of adoption. The Company then has up to six
months from the date of adoption to determine the fair value of each reporting
unit and compare it to the reporting unit's carrying amount. To the extent a
reporting unit's carrying amount exceeds its fair value, an indication exists
that the reporting unit's goodwill may be impaired and the Company must perform
the second step of the transitional impairment test. In the second step, the
Company must compare the implied fair value of the reporting unit's goodwill,
determined by allocating the reporting unit's fair value to all of its assets
(recognized and unrecognized) and liabilities in a manner similar to a purchase
price allocation in accordance with SFAS 141, to its carrying amount, both of
which would be measured as of the date of adoption. This second step is required
to be completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss should be recognized as the
cumulative effect of a change in accounting principle in its statement of
operations.

The Company is currently estimating the impact of SFAS 142 on the Company's
financial statements, including whether any transitional impairment losses will
be required to be recognized as the cumulative effect of a change in accounting
principle. Management does not believe that transitional impairment losses will
be incurred.

However, based on our current assessments and subject to continuing
analysis, had SFAS 142 been effective as of January 1, 2001 the Company
estimates that there would have been a favorable impact to pre-tax earnings of
approximately $107 million. The favorable impact in 2002 should approximate $97
million.

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations ("SFAS 143"). SFAS 143 addresses the reporting
requirements for the retirement of tangible long-lived assets and asset
retirement costs. SFAS 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period incurred and the
associated asset retirement costs be capitalized as part of the carrying amount
of the long-lived asset. SFAS 143 is effective for financial statements issued
for

fiscal years beginning after June 15, 2002. The Company is currently reviewing
the impact of adopting this statement.

In October 2001, the FASB issued SFAS No.144, Accounting for the
Impairment of Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 requires that
those long-lived assets be measured at the lower of carrying amount or fair
value less selling costs. SFAS 144 also broadens the reporting of discontinued
operations and will no longer be measured at net realizable value or include
amounts for operating losses that have not yet occurred. SFAS No. 144 is
effective for financial statements issued for fiscal years beginning after
December 31, 2001. The Company is currently reviewing the impact of adopting
this statement.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections
("SFAS 145"). SFAS 145 rescinds Statement No. 4 and requires the criteria under
Opinion 30 to determine if losses from extinguishment of debt should be
classified as extraordinary items. SFAS 145 rescinds Statement No. 44 which is
no longer necessary. SFAS 145 amends Statement No. 13 to require that certain
lease modifications that have economic effects similar to sale-leaseback
arrangements be accounted for in a similar manner as sale-leaseback
transactions.

NOTE 2. INVENTORIES

MARCH 31, DECEMBER 31,
2002 2001
---------- ----------

Inventories:
Raw materials............................................... $ 43,703 $ 40,834
Manufactured goods in process............................... 9,897 11,053
Manufactured and purchased inventory available for sale..... 92,379 84,789
---------- ----------
145,979 136,676
Health care supplies....................................... 65,307 65,545
---------- ----------
Total.................................................. $ 211,286 $ 202,221
========== ==========
</Table>

NOTE 3. DEBT

MARCH 31, DECEMBER 31,
2002 2001
---------- -----------

Long-term debt to outside parties consists of:

NMC Credit Facility .......................................... $ 422,200 $ 450,600
Other ........................................................ 1,475 27
---------- ----------
423,675 450,627
Less amounts classified as current ........................... 151,475 150,027
---------- ----------
$ 272,200 $ 300,600
========== ==========

Borrowings (receivables) from affiliates consists of:

MARCH 31, DECEMBER 31,
2002 2001
---------- ------------

Fresenius Medical Care AG borrowings primarily at interest
rates approximating 2.57% and 2.85%, respectively......... $ 208,031 $ 191,967
Fresenius AG borrowing at interest rates approximating 2.73%.. -- 15,000
Fresenius Medical Care Trust Finance S.a.r.l. borrowings at
interest rates of 8.25%, 8.43% and 9.25%................... 1,005,239 1,005,239
Franconia Acquisition, LLC at interest rates approximating
2.15% and 2.40%, respectively............................. 83,721 83,721
Other......................................................... 1,121 1,102
---------- ----------
1,298,112 1,297,029
Less amounts classified as current............................ 292,425 291,360
---------- ----------
Total......................................................... $1,005,687 $1,005,669
========== ==========

NOTE 4. MANDATORILY REDEEMABLE PREFERRED SECURITIES

During 2001 and 2000, a wholly-owned subsidiary of the Company issued to
NMC shares of various series of Preferred Stock ("Redeemable Preferred
Securities") which were then transferred to FMC for proceeds totaling $392,037
in 2001 and $305,500 in 2000. No Redeemable Preferred Securities were issued for
the three months ended March 31, 2002. The table below provides information for
Redeemable Preferred Securities for the periods indicated.

MARCH 31, DECEMBER 31,
MANDATORILY REDEEMABLE PREFERRED SECURITIES 2002 2001
----------- -----------

Series A Preferred Stock, 1,000 shares........ $ 113,500 $ 113,500
Series B Preferred Stock, 300 shares.......... 34,000 34,000
Series C Preferred Stock, 1,700 shares........ 192,000 192,000
Series D Preferred Stock, 870 shares.......... 97,500 97,500
Series E Preferred Stock, 1,300 shares........ 147,500 147,500
Series F Preferred Stock, 980 shares.......... 113,037 113,037
----------- ----------
697,537 697,537
Mark to Market Adjustment..................... (14,791) (5,207)
----------- ----------
Total......................................... $ 682,746 $ 692,330
=========== ==========

These securities are similar in substance except for the order
preference both as to dividends and liquidation, dissolution or winding-up of
the subsidiary. The order of preference is alphabetically Series A through
Series F. In addition, the holders of the Redeemable Preferred Securities are
entitled to receive dividends in an amount of dollars per share that varies from
approximately 5% to 8% depending on the Series. The dividends will be declared
and paid in cash at least annually. All the Redeemable Preferred Securities have
a par value of $.01 per share.

Upon liquidation or dissolution or winding up of the issuer of the
Redeemable Preferred Securities, the holders of the Redeemable Preferred
Securities are entitled to an amount equal to the liquidation preference for
each share of stock plus an amount equal to all accrued and unpaid dividends
thereon through the date of distribution. The liquidation preference is the sum
of the issuance price plus, for each year or portion thereof, an amount equal to
one-half of one percent of the issue price, not to exceed 5%.

The Redeemable Preferred Securities will be sold back to the Company two
years from their respective date of issuance for a total amount equal to Euros
501,773 (Series A, B, C, and F) and US dollars $245,000 (Series D and E) plus
any accrued and unpaid dividends. For the three months ended March 31, 2002 and
2001, dividends of $9,929 and $5,200, respectively, were recorded and classified
as part of interest expense in the consolidated statement of operations. During
the three months ended March 31, 2002, a cash dividend payment was made totaling
$29,850. Accordingly, the Euro Redeemable Preferred Securities are deemed to be
a Euro liability and the risk of foreign currency fluctuations are hedged
through forward currency contracts.

The holders of the Redeemable Preferred Securities have the same
participation rights as the holders of all other classes of capital stock of the
issuing subsidiary.

NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF SFAS 142

Net income and net income adjusted to exclude amortization expense
(including any related tax effect) recognized in those periods relating to
goodwill and specific intangible assets that are no longer being amortized.

THREE MONTHS ENDED
MARCH 31,
----------------------------
($000 EXCEPT FOR EARNINGS PER SHARE) 2002 2001
-------- --------
Net Income $ 40,458 $ 22,446
Net Income Adjusted $ 40,458 $ 46,726

Reconciliation of net income to adjusted net income and earnings per share
to adjusted earnings per share.

THREE MONTHS ENDED
MARCH 31,
---------------------------
($000 EXCEPT FOR EARNINGS PER SHARE) 2002 2001
-------- ---------

Reported Net Income $ 40,458 $ 22,446
Addback: Amortization -- 24,280
-------- ---------
Adjusted Net Income $ 40,458 $ 46,726
======== =========

BASIC AND FULLY DILUTIVE EARNINGS PER SHARE
Reported Net Income $ 0.45 $ 0.25
Addback: Amortization -- 0.27
-------- ---------
Adjusted Net Income $ 0.45 $ 0.52
======== =========

The total pre-tax amortization expense associated with goodwill and
specific intangible assets recognized during the three months ended March 31,
2001 totaled $29,559. The effective tax rate for restatement of amortization was
17.9%. The effective tax rate is less than the corporate statutory rate
primarily due to permanent differences related to non-deductible goodwill.

The gross currying value and accumulated amortization of intangible assets
is as follows:

<Table>
<Caption>
MARCH 31, 2002 DECEMBER 31, 2001
------------------------ -------------------------
GROSS GROSS
CARRYING ACCUMULATED CARRYING ACCUMULATED
VALUE AMORTIZATION VALUE AMORTIZATION
-------- ------------ -------- ------------

Patient Relationships $236,608 $(165,693) $233,490 $(155,769)

Other Intangibles $107,318 $(52,394) $109,545 $(50,406)

</Table>

Amortization expense for amortizable intangible assets at March 31, 2002 is
estimated to be $30,000 for the remainder of 2002, $19,500 for 2003, $15,500 for
2004, $11,700 for 2005, and $9,200 for 2006.

NOTE 6: SPECIAL CHARGE FOR LEGAL MATTERS

In the fourth quarter of 2001, the Company recorded a $258 million ($177
million after tax) special charge to address 1996 merger related legal matters,
estimated liabilities including legal expenses arising in connection with the
W.R. Grace Chapter 11 proceedings and the cost of resolving pending litigation
and other disputes with certain commercial insurers. In January 2002, the
Company reached an agreement in principle to resolve pending litigation with
Aetna Life Insurance Company (Aetna). The special charge is primarily comprised
of three major components relating to (i) the W.R. Grace bankruptcy, (ii)
litigation with commercial insurers and (iii) other legal matters.

The Company has assessed the extent of potential liabilities as a result
of the W.R. Grace Chapter 11 proceedings. The Company accrued $172 million
principally representing a provision for income taxes payable for the years
prior to the 1996 merger for which the Company has been indemnified by W.R.
Grace, but may ultimately be obligated to pay as a result of W.R. Grace's
Chapter 11 filing. In addition, that amount included the costs of defending the
Company in litigation arising out of W.R. Grace's Chapter 11 filing.

The Company entered into an agreement in principle with Aetna to establish
a process for resolving its pending litigation. The Company included in the
special charge the amount of $55 million to provide for settlement obligations,
legal expenses and the resolution of disputed accounts receivable for Aetna and
the other commercial litigants. If the Company is unable to settle the pending
matters with any of the remaining commercial insurers, whether on the basis of
the Aetna agreement in principle or otherwise, the Company believes that this
charge reasonably estimates the costs and expenses associated with such
litigation.

The remaining amount of $31 million pre-tax was accrued for (i) assets and
receivables that are impaired in connection with other legal matters and (ii)
anticipated expenses associated with the continued defense and resolution of the
legal matters. See also Note 8- "Commitment and Contingencies- Legal
Proceedings."

At March 31, 2002, there is a remaining balance of approximately $220
million for the accrued special charge for legal matters. During the three
months ended March 31, 2002, approximately $4 million in payments have been
applied against the accrued special charge for legal matters.

NOTE 7. PENSION PLANS

During the first quarter of 2002, the Company recorded a gain of
approximately $13.1 million resulting from the curtailment of the Company's
defined benefit and supplemental executive retirement plans. The Company has
retained all employee pension obligations as of the closing date for the
fully-vested and frozen benefits for all employees.

NOTE 8. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

COMMERCIAL LITIGATION

The Company was formed as a result of a series of transactions pursuant to
the Agreement and Plan of Reorganization (the "Merger") dated as of February 4,
1996 by and between W.R. Grace & Co. and Fresenius AG. 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 potential liabilities arising out of
product-liability related litigation, pre-merger tax claims and other claims
unrelated to NMC, which was Grace's dialysis business prior to the Merger. In
connection with the Merger, W.R. Grace & Co.-Conn. agreed to indemnify the
Company 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 NMC's operations. Proceedings have been brought against W.R.
Grace & Co. and the Company by plaintiffs claiming to be creditors of W.R. Grace
& Co.-Conn., principally alleging that the Merger was a fraudulent conveyance,
violated the uniform fraudulent transfer act, and constituted a conspiracy. See
discussion of "Mesquita v. W.R. Grace and Company" below.

Pre-merger tax claims or tax claims that would arise if events were to
violate the tax-free nature of the Merger, could ultimately be the obligation of
the Company. In particular, W. R. Grace & Co. ("Grace") has disclosed in its
filings with the Securities and Exchange Commission that: its tax returns for
the 1993 to 1996 tax years are under audit by the Internal Revenue Service (the
"Service"); that during those years Grace deducted approximately $122.1 million
in interest attributable to corporate owned life insurance ("COLI") policy
loans; that Grace has paid $21.2 million of tax and interest related to COLI
deductions taken in tax years prior to 1993; and that a U.S. District Court
ruling has denied interest deductions of a taxpayer in a similar situation.
Subject to certain representations made by Grace, the Company and Fresenius AG,
Grace and certain of its affiliates agreed to indemnify the Company against this
or other pre-Merger or Merger related tax liabilities.

Subsequent to the Merger, Grace was involved in a multi-step
transaction involving Sealed Air Corporation (formerly known as Grace Holding,
Inc.). The Company is engaged in litigation with Sealed Air Corporation ("Sealed
Air") to confirm the Company's entitlement to indemnification from Sealed Air
for all losses and expenses incurred by the Company relating to pre-Merger tax
liabilities and Merger-related claims.

Subsequent to the Sealed Air transaction, Grace and certain of its
subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy
Code. As a result of the Company's continuing observation and analysis of the
Service's on-going audit of Grace's pre-Merger tax returns, the Sealed Air
litigation and the Grace bankruptcy proceedings, and based on its current
assessment of the potential impact of these matters on the Company, the Company
recorded a pre-tax accrual of $171.5 million at December 31, 2001 to reflect the
Company's estimated exposure for liabilities and legal expenses related to the
Grace bankruptcy. The Company intends to continue to pursue vigorously its
rights to indemnification from Grace and its insurers and former and current
affiliates, including Sealed Air, for all costs incurred by the Company relating
to pre-Merger tax and Merger-related claims.

Since 1997, the Company, NMC, and certain NMC subsidiaries have been
engaged in litigation with Aetna Life Insurance Company and certain of its
affiliates ("Aetna") concerning allegations of inappropriate billing practices
for nutritional therapy and diagnostic and clinical laboratory tests and
misrepresentations. In January 2002, the Company entered into an agreement in
principle with Aetna to establish a process for resolving these claims and the
Company's counterclaims relating to overdue payments for services rendered by
the Company to Aetna's beneficiaries.

claim denials and delays in claim payments. Other private payors have contacted
the Company and may assert that NMC received excess payments and, similarly, may
join the lawsuits or file their own lawsuit seeking reimbursement and other
damages. Although the ultimate outcome on the Company of these proceedings
cannot be predicted at this time, an adverse result could have a material
adverse effect on the Company's business, financial condition and results of
operations.

In light of the Aetna agreement in principle the Company established a
pre-tax accrual of $55 million at December 31, 2001 to provide for the
anticipated settlement of the Aetna lawsuit and estimated legal expenses related
to the continued defense of other commercial insurer claims and resolution of
these claims, including overdue payments for services rendered by the Company to
these insurers' beneficiaries. No assurance can be given that the anticipated
Aetna settlement will be consummated or that the costs associated with such a
settlement or a litigated resolution of Aetna's claims and the other commercial
insurers' claims will not exceed the $55 million pre-tax accrual.

On September 28, 2000, Mesquita, et al. v. W. R. Grace & Company, et al.
(Sup. Court of Calif., S.F. County, #315465) was filed as a class action by
plaintiffs claiming to be creditors of W. R. Grace & Co.-Conn ("Grace
Chemicals") against Grace Chemicals, the Company and other defendants,
principally alleging that the Merger which resulted in the original formation of
the Company was a fraudulent transfer, violated the uniform fraudulent transfer
act, and constituted a conspiracy. An amended complaint (Abner et al. v. W. R.
Grace & Company, et al.) and additional class actions were filed subsequently
with substantially similar allegations; all cases have been stayed and
transferred to the U.S. District Court, have been dismissed without prejudice or
are pending before the U.S. Bankruptcy Court in Delaware in connection with
Grace's Chapter 11 proceeding. The Company has requested indemnification from
Grace Chemicals and Sealed Air Corporation pursuant to the Merger agreements. If
the Merger is determined to have been a fraudulent transfer, if material damages
are proved by the plaintiffs, and if the Company is not able to collect, in
whole or in part on the indemnity, from W.R. Grace & Co., Sealed Air
Corporation, or their affiliates or former affiliates or their insurers, and if
the Company is not able to collect against any party that may have received
distributions from W.R. Grace & Co., a judgment could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company is confident that no fraudulent transfer or conspiracy occurred and
intends to defend the cases vigorously.

OBRA 93

The Omnibus Budget Reconciliation Act of 1993 affected the payment of
benefits under Medicare and employer health plans for dual-eligible ESRD
patients. In July 1994, the Centers for Medicare and Medicaid Services (CMS)
(formerly known as the Health Care Financing Administration, or HCFA) issued an
instruction to Medicare claims processors to the effect that Medicare benefits
for the patients affected by that act would be subject to a new 18-month
"coordination of benefits" period. This instruction had a positive impact on
NMC's dialysis revenues because, during the 18-month coordination of benefits
period, patients' employer health plans were responsible for payment, which was
generally at rates higher than those provided under Medicare.

In April 1995, CMS issued a new instruction, reversing its original
instruction in a manner that would substantially diminish the positive effect of
the original instruction on NMC's dialysis business. CMS further proposed that
its new instruction be effective retroactive to August 1993, the effective date
of the Omnibus Budget Reconciliation Act of 1993.

NMC ceased to recognize the incremental revenue realized under the
original instruction as of July 1, 1995, but it continued to bill employer
health plans as primary payors for patients affected by the Omnibus Budget
Reconciliation Act of 1993 through December 31, 1995. As of January 1, 1996, NMC
commenced billing Medicare as primary payor for dual eligible ESRD patients
affected by the act, and then began to re-bill in compliance with the revised
policy for services rendered between April 24 and December 31, 1995.

favor of NMC, holding CMS' retroactive application of the April 1995 rule
legally invalid. Based on its finding, the Court also permanently enjoined CMS
from enforcing and applying the April 1995 rule retroactively against NMC. The
Court took no action on CMS' motion for summary judgment pending completion of
the outstanding discovery. On October 5, 1998, NMC filed its own motion for
summary judgment requesting that the Court declare CMS' prospective application
of the April 1995 rule invalid and permanently enjoin CMS from prospectively
enforcing and applying the April 1995 rule. The Court has not yet ruled on the
parties' motions. CMS elected not to appeal the Court's June 1995 and January
1998 orders. CMS may, however, appeal all rulings at the conclusion of the
litigation. If CMS should successfully appeal so that the revised interpretation
would be applied retroactively, NMC may be required to refund the payment
received from employer health plans for services provided after August 10, 1993
under the CMS' original implementation, and to re-bill Medicare for the same
services, which would result in a loss to NMC of approximately $120 million
attributable to all periods prior to December 31, 1995. Also, in this event, the
Company's business, financial condition and results of operations would be
materially adversely affected.

In July, 2000, NMC filed a complaint in the U.S. District Court for the
Eastern District of Virginia (National Medical Care, Inc. and Bio-Medical
Applications of Virginia, Inc. v. Aetna Life Insurance Co., Inc., Aetna U.S.
Healthcare, Inc. and John Does 1-10) seeking recovery against Aetna U.S.
Healthcare and health plans administered by Aetna U.S. Healthcare for claims
related to primary payor liability for dual eligible ESRD patients under the
Omnibus Budget Reconciliation Act of 1993. On January 16, 2001, the Court stayed
the action pending resolution of the District of Columbia Court action. The
Company's agreement in principle with Aetna establishes a process for resolving
these claims.

OTHER LITIGATION AND POTENTIAL EXPOSURES

From time to time, the Company is a party to or may be threatened with
other litigation 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, conducts its operations
under intense government regulation and scrutiny. The Company must comply with
regulations which relate to or govern the safety and efficacy of medical
products and supplies, the operation of manufacturing facilities, laboratories
and dialysis clinics, and environmental and occupational health and safety. The
Company must also comply with the U.S. anti-kickback statute, the False Claims
Act, the Stark Law, and 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 or the manner in which the
Company conduct its business. In the U.S., 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 "whistle
blower" actions. By virtue of this regulatory environment, as well as our
corporate integrity agreement with the government, the Company expects that its
business activities and practices will continue to be subject to extensive
review by regulatory authorities and private parties, and continuing inquiries,
claims and litigation relating to its 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 "whistle blower" actions, which are initially
filed under court seal.

The Company operates a large number facilities throughout the U.S. 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. 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 these employees. On
occasion, the Company may identify instances where employees, deliberately or
inadvertently, have submitted inadequate or false billings. The actions of such
persons may subject the Company and its subsidiaries to liability under the
False Claims Act, among other laws, and the Company cannot predict whether law
enforcement authorities may use such information to initiate further
investigations of the business practices disclosed or any of its other business
activities.

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 subject to these suits due to the nature of its business and
the Company expects that those types of lawsuits may continue. Although the
Company maintains insurance at a level which it believes to be prudent, the
Company 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 the Company and the results of its operations. Any claims,
regardless of their merit or eventual outcome, also may 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 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 asserted its
own claims, and claims for indemnification. Although the ultimate outcome on the
Company cannot be predicted at this time, an adverse result could have a
material adverse effect upon the Company's business, financial condition, and
results of operations. At December 31, 2001, the Company recorded a pre-tax
accrual to reflect anticipated expenses associated with the continued defense
and resolution of these claims. No assurances can be given that the actual costs
incurred by the Company in connection with the continued defense and resolution
of these claims will not exceed the amount of this accrual.

NOTE 9. INDUSTRY SEGMENTS INFORMATION

The Company's reportable segments are Dialysis Services and Dialysis
Products. For purposes of segment reporting, the Dialysis Services Division and
Spectra Renal Management are combined and reported as Dialysis Services. These
divisions are aggregated because of their similar economic classifications.
These include the fact that they are both health care service providers whose
services are provided to a common patient population, and both receive a
significant portion of their net revenue from Medicare and other government and
non-government third party payors. The Dialysis Products segment reflects the
activity of the Dialysis Products Division only.

The table below provides information for the three months ended March 31, 2002
and 2001 pertaining to the Company's two industry segments.

LESS
DIALYSIS DIALYSIS INTERSEGMENT
SERVICES PRODUCTS SALES TOTAL
--------- -------- ------------ ---------

NET REVENUES FOR THREE MONTHS ENDED
3/31/02 $788,533 $183,207 $77,836 $893,904
3/31/01 $758,508 $178,679 $68,911 $868,276

OPERATING EARNINGS FOR THREE MONTHS ENDED
3/31/02 93,192 35,330 -- 128,522
3/31/01 102,773 29,618 -- 132,391

ASSETS AT
3/31/2002 2,654,004 659,171 -- 3,313,175
12/31/2001 2,650,561 645,956 -- 3,296,517

DEPRECIATION AND AMORTIZATION FOR THE THREE MONTHS ENDED
3/31/2002 25,627 4,357 -- 29,984
12/31/2001 36,178 5,969 -- 42,147

Total assets of $4,986,589 is comprised of total assets for reportable
segments, $3,313,175; intangible assets not allocated to segments, $1,884,703;
accounts receivable financing agreement ($471,000); and other corporate assets,
$259,711.

The table below provides the reconciliations of reportable segment operating
earnings to the Company's consolidated totals.

THREE MONTHS ENDED
SEGMENT RECONCILIATION MARCH 31,
---------------------------
2002 2001
--------- ----------
INCOME BEFORE INCOME TAXES:
Total operating earnings for
reportable segments $ 128,522 $ 132,391
Corporate G&A 1,109 (13,326)
Corporate depreciation and amortization (5,451) (19,546)
Research and development expense (1,998) (1,084)
Net interest expense (55,023) (55,479)
--------- ---------

Income Before Income Taxes $ 67,159 $ 42,956
========= =========

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of
operations of the Company. The discussion should be read in conjunction with the
consolidated financial statements included elsewhere in this document.

This section contains certain forward-looking statements that are
subject to various risks and uncertainties. Such statements include, without
limitation, discussions concerning the outlook of the Company, government
reimbursement, future plans and management's expectations regarding future
performance. Actual results could differ materially from those contained in
these forward-looking statements due to certain factors including, without
limitation, changes in business, economic and competitive conditions, regulatory
reforms, foreign exchange rate fluctuations, uncertainties in litigation or
investigative proceedings, the realization of anticipated tax deductions, and
the availability of financing. These and other risks and uncertainties, which
are more fully described elsewhere in this Item 2 and in the Company's reports
filed from time to time with the Securities and Exchange Commission, could cause
the Company's results to differ materially from the results that have been or
may be projected by or on behalf of the Company.

RESULTS OF OPERATIONS

The following table summarizes certain operating results of the Company
by principal business unit for the periods indicated. Intercompany eliminations
primarily reflect sales of medical supplies by Dialysis Products to Dialysis
Services.

THREE MONTHS ENDED
MARCH 31,
-----------------------
(DOLLARS IN MILLIONS)
2002 2001
------ -------
NET REVENUES
Dialysis Services......................... $ 789 $ 759
Dialysis Products......................... 183 179
Intercompany Eliminations................. (78) (69)
------ -------
Total Net Revenues............................ $ 894 $ 869
====== =======
Operating Earnings:
Dialysis Services......................... $ 93 $ 103
Dialysis Products......................... 35 29
------ -------
Total Operating Earnings...................... 128 132
------ -------
Other Expenses:
General Corporate......................... $ 4 $ 33
Research & Development.................... 2 1
Interest Expense, Net..................... 55 55
------ -------
Total Other Expenses.......................... 61 89
------ -------

Earnings Before Income Taxes.................. 67 43
Provision for Income Taxes.................... 27 21
------ -------
Net Income.................................. $ 40 $ 22
====== =======

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

Net revenues for the first three months of 2002 increased by 3% ($25
million) over the comparable period in 2001. Net income for the first three
months of 2002 increased by 82% ($18 million) over the comparable period in 2001
as a result of decreased general corporate expenses ($29 million) partially
offset by decreased operating earnings ($4 million) and increased income taxes
($6 million). Had the adoption of SFAS 142 been effective January 1, 2001 net
income for the first three months of 2002 would have decreased 13% ($6 million)
over the comparable period in 2001.

DIALYSIS SERVICES

Dialysis Services net revenues for the first three months of 2002
increased by 4% to $784 million (net of $5 million of intercompany sales)
primarily attributable to base business revenue growth. The increase in dialysis
service revenue growth resulted primarily from a 3% increase in treatment
volume, reflecting both base business growth and the impact of 2002 and 2001
acquisitions. Revenue was also favorably impacted by a 1.4% increase in revenue
per treatment due to the 1.2% increase in Medicare reimbursement rate and
increased ancillary services in 2002 as compared to 2001.

Dialysis Services operating earnings for the first three months of 2002
decreased 10% ($10 million) over the comparable period of 2001, primarily due to
lower ancillary margins ($9 million), higher personnel costs resulting from
severance and workforce reductions ($7 million), Amgen price increases ($5
million), expenses associated with the Company's conversion from re-use to
single use dialyzers ($3 million), higher expenses for certification of de novo
clinics ($2) and higher provisions for doubtful accounts ($2 million). These
increases were partially offset by the impact of increased Medicare
reimbursement rates ($3 million), general cost improvements ($2 million) and
lower amortization expense ($11 million) as a result of the adoption of SFAS
142, which became effective January 1, 2002.

DIALYSIS PRODUCTS

Dialysis Products gross revenues increased by 2% to $183 million in the
first quarter of 2002 as compared to $179 million in the comparable period 2001.
Internal sales to Dialysis Services increased by 7% to $73 million and were
partially offset by a decrease in external sales of 1% to $108 million. External
sales include sales of machines to a third party leasing company which are
utilized by Dialysis Services to provide services to our customers and Method II
PD revenues for dialysis services patients. Dialysis Products measures its
external sales performance based on its sales to the "net available external
market". The net available external market excludes machine sales to third
parties for machines utilized by the service division, Method II revenues and
sales to other vertically integrated dialysis companies. Net available external
market sales increased by 8% to $89 million in the first quarter 2002 over the
comparable period 2001.

Dialysis Products operating earnings for the first three months of 2002
increased by 21% ($6 million) over the comparable period of 2001. This increase
was primarily due to improvements in gross margin and reductions in other
manufacturing costs, as well as lower amortization expense ($2 million) as a
result of the adoption of SFAS 142, which became effective January 1, 2002,
partially offset by costs related to the conversion from re-use to single use
dialyzers.

OTHER EXPENSES

The Company's other expenses for the first three months of 2002
decreased by 31% ($28 million) over the comparable period of 2001. General
corporate expenses decreased by $29 million and interest expense remained
constant. The decreases in general corporate expenses were primarily due to
foreign exchange fluctuations ($7 million resulting from $2 million foreign
exchange losses for the three months ended 2002 versus $9 million foreign
exchange losses for the three months ended 2001), a gain on the curtailment of
the Company's defined benefit and supplemental executive retirement plan ($13
million), and decreased amortization expense ($16 million, resulting from the
adoption of SFAS 142) offset somewhat by increases in other general corporate
expenses ($7 million).

INCOME TAX RATE

The effective tax rate from operations for the first three months of
2002 (39.8%) is lower than the rate for the comparable period of 2001 (47.7%),
due to the expected higher earnings and the adoption of SFAS 142 which
eliminates the amortization of non-deductible goodwill.

LIQUIDITY AND CAPITAL RESOURCES

Cash from operations decreased by $22 million from $59 million for the
three months ended March 31, 2001 to $37 million for the three months ended
March 31, 2002. This decrease is primarily related to unfavorable changes in
operating assets and liabilities of $44 million partially offset by increases in
net income adjustments of $4 million and increased earnings of $18 million.

Increases in accounts receivable of $22 million for the three months ended
March 31, 2002 are primarily due to the Company's revenue growth and impact of
acquisitions. Increases in accounts payable were primarily due to timing of
disbursements. Cash on hand was $34 million and $41 million at March 31, 2002
and 2001, respectively.

Net cash flows used in investing activities of operations totaled $30
million in 2002 compared to $282 million in 2001. The Company funded its
acquisitions and capital expenditures primarily through cash flows from
operations and intercompany borrowings. Cash expenditures for acquisitions
totaled $2 million and $247 million in 2002 and 2001, respectively, net of cash
acquired. The decrease in acquisition spending in 2002 over the comparable
period in 2001 is primarily due to the Everest acquisition in 2001. In January
2001, the Company completed the acquisition of Everest. Approximately $99
million was funded by the issuance of 2.25 million FMC preference shares to
Everest. The remaining purchase price was paid with cash of $242 million
including assumed debt. Capital expenditures of $27 million and $35 million in
2002 and 2001, respectively, were made for new clinics improvements to existing
clinics, and expansion and maintenance of production facilities.

For the three months ended March 31, 2002, net cash flows provided by
financing activities totaled $1 million in 2002 compared to $231 million in
2001. The Company increased its borrowings under its accounts receivable
facility (the "Accounts Receivable Facility") by $29 million to $471 million at
March 31, 2002. The proceeds from the accounts receivable facility were offset
by payments of $29 million on debt and capital lease obligations.

Outstanding amounts under the Accounts Receivable Facility are reflected
as reductions in accounts receivable. The Company's capacity to generate cash
flow from the accounts receivable facility depends on the availability of
sufficient accounts receivable that meet certain criteria defined in the
agreement with the third party funding corporation. A lack of availability of
such accounts receivable may have a material impact on the Company's ability to
utilize the facility for its financial needs.

CRITICAL ACCOUNTING POLICIES

The Company has identified the following selected accounting policies and
issues that the Company believes are critical to understand the financial
reporting risks presented in the current economic environment. These matters and
judgments, and uncertainties affecting them, are also essential to understanding
the Company's reported and future operating results. See Notes to Consolidated
Financial Statements - Note 2, "Summary of Significant Accounting Policies"
included in the Company's 2001 report on Form 10K.

RECOVERABILITY OF GOODWILL AND INTANGIBLE ASSETS

The growth of the Company's business through acquisitions has created a
significant amount of intangible assets, including goodwill, patient
relationships, tradenames and other. At March 31, 2002, the carrying amount of
net intangible assets amounted to $3,409 million representing approximately 68%
of the Company's total assets. In accordance with Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, the Company reviews the carrying value of our long-lived
assets for impairment whenever events or changes in circumstances indicate that
the carrying amount of assets may not be recoverable. As discussed in Note 2 to
the Consolidated Financial Statements, any impairment is tested by a comparison
of the carrying amount of intangible assets to future net cash flows expected to
be generated. If such intangible assets are considered impaired, the impairment
recognized is measured as the amount by which the carrying amount of the assets
exceeds the fair value of the assets.

A prolonged downturn in the healthcare industry with lower than expected
increases in reimbursement rates and/or higher than expected costs for providing
our healthcare services could adversely affect the Company's estimates of future
net cash flows in any segment. Consequently, it is possible that the Company's
future operating results could be materially and adversely affected by
impairment charges related to goodwill or other indefinite lived intangibles.

LEGAL CONTINGENCIES

The Company is a party to litigation relating to a number of matters,
including the commercial insurer litigation, OBRA 93, W.R. Grace & Co.
bankruptcy and Sealed Air Corporation indemnification litigation and other
litigation arising in the ordinary course of the Company's business as described
in Note 8 "Commitments and Contingencies" in the Company's Consolidated
Financial Statements. Any adverse outcome in any of these matters would have a
material adverse effect on the Company's financial position, results of
operations and cash flows.

The Company regularly analyzes current information relating to these
litigation matters and provides accruals for probable contingent losses
including the estimated legal expenses to resolve the matter. The Company's
internal legal department and external lawyers participate in the assessments.
In its decisions regarding the recording of litigation accruals, the Company
considers the probability of an unfavorable outcome and its ability to make a
reasonable estimate of the amount of contingent loss.

If an unfavorable outcome is probable but the amount of loss cannot be
reasonably estimated by management, appropriate disclosure is provided, but no
contingent losses are accrued. The mere filing of a suit or formal assertion of
a claim or assessment does not necessarily require the recording of an accrual.

REVENUE RECOGNITION

Revenues are recognized on the date services and related products are
provided/shipped and are recorded at amounts estimated to be received under
reimbursement arrangements with third-party payors, including Medicare and
Medicaid. The Company records an allowance for estimated uncollectible accounts
receivable based upon an analysis of historical collection experience. The
analysis considers difference in collection experience by payor mix and aging of
the accounts receivable. From time to time, the Company reviews the accounts
receivable for changes in historical collection experience to ensure the
appropriateness of the allowances. Retroactive adjustments are accrued on an
estimated basis in the period the related services are rendered and adjusted in
future periods as final settlements are determined.

Net Revenues from machines sales for the three months ended March 31, 2002
and 2001 was $6.7 million and $10.3 million, respectively, of net revenues for
machines sold to a third party leasing company which are utilized by the
dialysis services division to provide services to our customers. The profits on
these sales are deferred and amortized to earnings over the lease terms.

SELF INSURANCE PROGRAMS

The Company is self-insured for professional, product and general
liability, auto and worker's compensation claims up to predetermined amounts
above which third party insurance applies. Estimates include ultimate costs for
both reported and incurred but not reported claims.

IMPACT OF INFLATION

A substantial portion of the Company's net revenue is subject to
reimbursement rates which are regulated by the federal government and do not
automatically adjust for inflation. Moreover non-governmental payors continue to
exert downward pressure on reimbursement levels. Increased operating costs that
are subject to inflation, such as labor and supply costs, without a compensating
increase in reimbursement rates, may adversely affect the Company's business and
results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks due to changes in interest rates
and foreign currency rates. The Company uses derivative financial instruments,
including interest rate swaps and foreign exchange contracts, as part of its
market risk management strategy. These instruments are used as a means of
hedging exposure to interest rate and foreign currency fluctuations in
connection with debt obligations and purchase commitments. The Company does not
hold or issue derivative instruments for trading or speculative purposes.

Hedge accounting is applied if the derivative reduces the risk of the
underlying hedged item and is designated at inception as a hedge. Additionally,
changes in the value of the derivative must result in payoffs that are highly
correlated to the changes in value of the hedged item. Derivatives are measured
for effectiveness both at inception and on an ongoing basis.

The Company enters into foreign exchange contracts that are designated as,
and effective as, hedges for forecasted purchase transactions. Also, since the
Company carries a substantial amount of floating rate debt, the Company uses
interest rate swaps to synthetically change certain variable-rate debt
obligations to fixed-rate obligations to mitigate the impact of interest rate
fluctuations.

Gains and losses on foreign exchange contracts accounted for as hedges are
deferred in other assets or liabilities. The deferred gains and losses are
recognized as adjustments to the underlying hedged transaction when the future
sales or purchases are recognized. Interest rate swap payments and receipts are
recorded as part of interest expense. The fair value of the swap contracts is
recognized in other liabilities in the financial statements. Cash flows from
derivatives are recognized in the consolidated statement of cash flows in the
same category as the item being hedged.

At March 31, 2002, the fair value of the Company's interest rate
agreements, which consisted entirely of interest rate swaps, is approximately
($55.8 million) and the fair value of Company's foreign exchange contracts,
which consisted entirely of forward agreements, is valued at approximately
($25.7 million). The Company had outstanding contracts covering the purchase of
653.4 million Euros ("EUR") at an average contract price of $.90751 per EUR, for
delivery between April 2002 and November 2003, contracts for the purchases of
63.0 million Mexican Pesos at an average contract price of 10.1211 pesos per US
dollar, and contracts for the delivery of 10.6 million Canadian Dollars at an
average contract price of $.6386 per Canadian Dollar.

PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

COMMERCIAL LITIGATION

The Company was formed as a result of a series of transactions
pursuant to the Agreement and Plan of Reorganization (the "Merger") dated as of
February 4, 1996 by and between W.R. Grace & Co. and Fresenius AG. 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 potential liabilities arising out of
product-liability related litigation, pre-merger tax claims and other claims
unrelated to NMC, which was Grace's dialysis business prior to the Merger. In
connection with the Merger, W.R. Grace & Co.-Conn. agreed to indemnify the
Company 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 NMC's operations. Proceedings have been brought against W.R.
Grace & Co. and the Company by plaintiffs claiming to be creditors of W.R. Grace
& Co.-Conn., principally alleging that the Merger was a fraudulent conveyance,
violated the uniform fraudulent transfer act, and constituted a conspiracy. See
discussion of "Mesquita v. W.R. Grace and Company" below.

Other insurance companies have filed claims against the Company, similar
to those filed by Aetna, that seek unspecified damages and costs. The Company,
NMC and its subsidiaries believe that there are substantial defenses to the
claims asserted, and intend to vigorously defend all lawsuits. The Company has
filed counterclaims against the plaintiffs in these matters based on
inappropriate claim denials and delays in claim payments. Other private payors
have contacted the Company and may assert that NMC received excess payments and,
similarly, may join the lawsuits or file their own lawsuit seeking reimbursement
and other damages. Although the ultimate outcome on the Company of these
proceedings cannot be predicted at this time, an adverse result could have a
material adverse effect on the Company's business, financial condition and
results of operations.

insurers' beneficiaries. No assurance can be given that the anticipated Aetna
settlement will be consummated or that the costs associated with such a
settlement or a litigated resolution of Aetna's claims and the other commercial
insurers' claims will not exceed the $55 million pre-tax accrual.

OBRA 93

On May 5, 1995, NMC filed a complaint in the U.S. District Court for
the District of Columbia (National Medical Care, Inc. and Bio-Medical
Applications of Colorado, Inc. d/b/a Northern Colorado Kidney Center v. Shalala,
C.A. No.95-0860 (WBB)) seeking to preclude CMS from retroactively enforcing its
April 24, 1995 implementation of the Omnibus Budget Reconciliation Act of 1993
provision relating to the coordination of benefits for dual eligible ESRD
patients. On May 9, 1995, NMC moved for a preliminary injunction to preclude CMS
from enforcing its new policy retroactively, that is, to billing for services
provided between August 10, 1993 and April 23, 1995. On June 6, 1995, the court
granted NMC's request for a preliminary injunction and in December of 1996, NMC
moved for partial summary judgment seeking a declaration from the Court that
CMS' retroactive application of the April 1995 rule was legally invalid. CMS
cross-moved for summary judgment on the grounds that the April 1995 rule was
validly applied prospectively. In January 1998, the court granted NMC's motion
for partial summary judgment and entered a declaratory judgment in favor of NMC,
holding CMS' retroactive application of the April 1995 rule legally invalid.
Based on its finding, the Court also permanently enjoined CMS from enforcing and
applying the April 1995 rule retroactively against NMC. The Court took no action
on CMS' motion for summary judgment pending completion of the outstanding
discovery. On October 5, 1998, NMC filed its own motion for summary judgment
requesting that the Court declare CMS' prospective application of the April 1995
rule invalid and permanently enjoin CMS from prospectively enforcing and
applying the April 1995 rule. The Court has not yet ruled on the parties'
motions. CMS elected not to appeal the Court's June 1995 and January 1998
orders. CMS may, however, appeal all rulings at the conclusion of the
litigation. If CMS should successfully appeal so that the revised interpretation
would be applied retroactively, NMC may be required to refund the payment
received from employer health plans for services provided after August 10, 1993
under the CMS' original implementation, and to re-bill Medicare for the same
services, which would result in a loss to NMC of approximately

$120 million attributable to all periods prior to December 31, 1995. Also, in
this event, the Company's business, financial condition and results of
operations would be materially adversely affected.

OTHER LITIGATION AND POTENTIAL EXPOSURES

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

EXHIBIT NO. DESCRIPTION
- ----------- -----------

Exhibit 2.1 Agreement and Plan of Reorganization dated as of February 4,
1996 between W. R. Grace & Co. and Fresenius AG
(incorporated herein by reference to Appendix A to the Joint
Proxy Statement-Prospectus of Fresenius Medical Care AG, W.
R. Grace & Co. and Fresenius USA, Inc. dated August 2, 1996
and filed with the Commission on August 5, 1996).

Exhibit 2.2 Distribution Agreement by and among W. R. Grace & Co., W. R.
Grace & Co.-Conn. and Fresenius AG dated as of February 4,
1996 (incorporated herein by reference to Exhibit A to
Appendix A to the Joint Proxy Statement-Prospectus of
Fresenius Medical Care AG, W. R. Grace & Co. and Fresenius
USA, Inc. dated August 2, 1996 and filed with the Commission
on August 5, 1996).

Exhibit 2.3 Contribution Agreement by and among Fresenius AG, Sterilpharma
GmbH and W. R. Grace & Co.-Conn. dated February 4, 1996
(incorporated herein by reference to Exhibit E to Appendix A
to the Joint Proxy-Statement Prospectus of Fresenius Medical
Care AG, W. R. Grace & Co. and Fresenius USA, Inc. dated
August 2, 1996 and filed with the Commission on August 5,
1996).

Exhibit 3.1 Certificate of Incorporation of Fresenius Medical Care
Holdings, Inc. (f/k/a W. R. Grace & Co.) under Section 402 of
the New York Business Corporation Law dated March 23, 1988
(incorporated herein by reference to the Form 8-K of the
Company filed on May 9, 1988).

Exhibit 3.2 Certificate of Amendment of the Certificate of Incorporation
of Fresenius Medical Care Holdings, Inc. (f/k/a W. R. Grace &
Co.) under Section 805 of the New York Business Corporation
Law dated May 25, 1988 (changing the name to W. R. Grace &
Co., incorporated herein by reference to the Form 8-K of the
Company filed on May 9, 1988).

Exhibit 3.3 Certificate of Amendment of the Certificate of Incorporation
of Fresenius Medical Care Holdings, Inc. (f/k/a W. R. Grace &
Co.) under Section 805 of the New York Business Corporation
Law dated September 27, 1996 (incorporated herein by reference
to the Form 8-K of the Company filed with the Commission on
October 15, 1996).

Exhibit 3.4 Certificate of Amendment of the Certificate of Incorporation
of Fresenius Medical Care Holdings, Inc. (f/k/a W. R. Grace &
Co.) under Section 805 of the New York Business Corporation
Law dated September 27, 1996 (changing the name to Fresenius
National Medical Care Holdings, Inc., incorporated herein by
reference to the Form 8-K of the Company filed with the
Commission on October 15, 1996).

Exhibit 3.5 Certificate of Amendment of the Certificate of
Incorporation of Fresenius Medical Care Holdings, Inc. under
Section 805 of the New York Business Corporation Law dated
June 12, 1997 (changing name to Fresenius Medical Care
Holdings, Inc., incorporated herein by reference to the Form
10-Q of the Company filed with the Commission on August 14,
1997).

Exhibit 3.6 Certificate of Amendment of the Certificate of Incorporation
of Fresenius Medical Care Holdings, Inc. dated July 6, 2001
(authorizing action by majority written consent of the
shareholders) (incorporated herein by reference to the
Form 10-Q of the Company filed with the Commission on August
14, 2001).

Exhibit 3.7 Amended and Restated By-laws of Fresenius Medical Care
Holdings, Inc. (incorporated herein by reference to the Form
10-Q of the Company filed with the Commission on August 14,
1997).

Exhibit 4.1 Credit Agreement dated as of September 27, 1996 among
National Medical Care, Inc. and Certain Subsidiaries and
Affiliates, as Borrowers, Certain Subsidiaries and Affiliates,
as Guarantors, the Lenders named therein, NationsBank, N.A.,
as paying agent and The Bank of Nova Scotia, The Chase
Manhattan Bank, Dresdner Bank AG and Bank of America, N.A.
(formerly known as NationsBank, N.A.), as Managing Agents
(incorporated herein by reference to the Form 6-K of Fresenius
Medical Care AG filed with the Commission on October 15,
1996).

Exhibit 4.2 Amendment dated as of November 26, 1996 (amendment to the
Credit Agreement dated as of September 27, 1996, incorporated
herein by reference to the Form 8-K of Registrant filed with
the Commission on December 16, 1996).

Exhibit 4.3 Amendment No. 2 dated December 12, 1996 (second amendment
to the Credit Agreement dated as of September 27, 1996,
incorporated herein by reference to the Form 10-K of
Registrant filed with the Commission on March 31, 1997).

Exhibit 4.4 Amendment No. 3 dated June 13, 1997 to the Credit Agreement
dated as of September 27, 1996, among National Medical Care,
Inc. and Certain Subsidiaries and Affiliates, as Borrowers,
Certain Subsidiaries and Affiliates, as Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank AG and Bank of
America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agents, as previously amended (incorporated herein by
reference to the Form 10-Q of the Registrant filed with the
Commission on November 14, 1997).

Exhibit 4.5 Amendment No. 4, dated August 26, 1997 to the Credit Agreement
dated as of September 27, 1996, among National Medical Care,
Inc. and Certain Subsidiaries and Affiliates, as Borrowers,
Certain Subsidiaries and Affiliates, as Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank AG and Bank of
America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agents, as previously amended (incorporated herein by
reference to the Form 10-Q of Registrant filed with Commission
on November 14, 1997).

Exhibit 4.6 Amendment No. 5 dated December 12, 1997 to the Credit
Agreement dated as of September 27, 1996, among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates, as Guarantors,
the Lenders named therein, Bank of America, N.A. (formerly
known as NationsBank, N.A.), as paying agent and The Bank of
Nova Scotia, The Chase Manhattan Bank, Dresdner Bank AG and
Bank of America, N.A. (formerly known as NationsBank, N.A.),
as Managing Agents, as previously amended (incorporated herein
by reference to the Form 10-K of Registrant filed with
Commission on March 23, 1998).

Exhibit 4.7 Form of Consent to Modification of Amendment No. 5 dated
December 12, 1997 to the Credit Agreement dated as of
September 27, 1996 among National Medical Care, Inc. and
Certain Subsidiaries and Affiliates, as Borrowers, Certain
Subsidiaries and Affiliates, as Guarantors, the Lenders named
therein, Bank of America, N.A. (formerly known as NationsBank,
N.A.), as paying agent and The Bank of Nova Scotia, The Chase
Manhattan Bank, Dresdner Bank AG and Bank of America, N.A.
(formerly known as NationsBank, N.A.), as Managing Agents
(incorporated herein by reference to the Form 10-K of
Registrant filed with Commission on March 23, 1998).

Exhibit 4.8 Amendment No. 6 dated effective September 30, 1998 to the
Credit Agreement dated as of September 27, 1996, among
National Medical Care, Inc. and Certain Subsidiaries and
Affiliates, as Borrowers, Certain Subsidiaries and Affiliates,
as Guarantors, the Lenders named therein, Bank of America,
N.A. (formerly known as NationsBank, N.A.), as paying agent
and The Bank of Nova Scotia, The Chase Manhattan Bank, N.A.,
Dresdner Bank AG and Bank of America, N.A. (formerly known as
NationsBank, N.A.), as Managing Agents, as previously amended
(incorporated herein by reference to the Form 10-Q of
Registrant filed with Commission on November 12, 1998).

Exhibit 4.9 Amendment No. 7 dated as of December 31, 1998 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors ,
the Lenders named therein, Bank of America, N.A. (formerly
known as NationsBank, N.A.), paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A. G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.). as
Managing Agents, (incorporated herein by reference to the Form
10-K of registrant filed with Commission on March 9, 1999).

Exhibit 4.10 Amendment No. 8 dated as of June 30, 1999 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A.G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agent (incorporated herein by reference to the Form
10-K of registrant filed with Commission on March 30, 2000).

Exhibit 4.11 Amendment No. 9 dated as of December 15, 1999 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A.G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agent (incorporated herein by reference to the Form
10-K of registrant filed with Commission on March 30, 2000).

Exhibit 4.12 Amendment No. 10 dated as of September 21, 2000 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A.G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agent (incorporated herein by reference to the Form
10-K of registrant filed with Commission on November 11,
2000).

Exhibit 4.13 Amendment No. 11 dated as of May 31, 2001 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A). as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A.G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agent (incorporated by reference to the Registration
Statement on Form F-4 of Fresenius Medical Care AG
(Registration No. 333-66558)).

Exhibit 4.14 Amendment No. 12 dated as of June 30, 2001 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A.G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agent (incorporated by reference to the Registration
Statement on Form F-4 of Fresenius Medical Care AG
(Registration No. 333-66558)).

Exhibit 4.15 Amendment No. 13 dated as of December 17, 2001 to the Credit
Agreement dated as of September 27, 1996 among National
Medical Care, Inc. and Certain Subsidiaries and Affiliates, as
Borrowers, Certain Subsidiaries and Affiliates Guarantors, the
Lenders named therein, Bank of America, N.A. (formerly known
as NationsBank, N.A.), as paying agent and The Bank of Nova
Scotia, The Chase Manhattan Bank, Dresdner Bank A.G. and Bank
of America, N.A. (formerly known as NationsBank, N.A.), as
Managing Agent (incorporated herein by reference to the Form
10-K of Registrant filed with Commission on April 1, 2001).

Exhibit 4.16 Fresenius Medical Care AG 1998 Stock Incentive Plan as amended
effective as of August 3, 1998 (incorporated herein by
reference to the Form 10-Q of Registrant filed with Commission
on May 14, 1998).

Exhibit 4.17 Fresenius Medical Care Aktiengesellschaft 2001
International Stock Incentive Plan (incorporated by reference
to the Registration Statement on Form F-4 of Fresenius Medical
Care AG filed August 2, 2001 (Registration No. 333-66558)).

Exhibit 4.18 Senior Subordinated Indenture dated November 27, 1996,
among Fresenius Medical Care AG, State Street Bank and Trust
Company, as successor to Fleet National Bank, as Trustee and
the Subsidiary Guarantors named therein (incorporated herein
by reference to the Form 10-K of Registrant filed with the
Commission on March 31, 1997).

Exhibit 4.19 Senior Subordinated Indenture dated as of February 19,
1998, among Fresenius Medical Care AG, State Street Bank and
Trust Company as Trustee and Fresenius Medical Care Holdings,
Inc., and Fresenius Medical Care AG, as Guarantors with
respect to the issuance of 7 7/8% Senior Subordinated Notes
due 2008 (incorporated herein by reference to the Form 10-K of
Registrant filed with Commission on March 23, 1998).

Exhibit 4.20 Senior Subordinated Indenture dated as of February 19,
1998 among FMC Trust Finance S.a.r.l. Luxemborg, as Insurer,
State Street Bank and Trust Company as Trustee and Fresenius
Medical Care Holdings, Inc., and Fresenius Medical Care AG, as
Guarantors with respect to the issuance of 7 3/8% Senior
Subordinated Notes due 2008

(incorporated herein by reference to the Form 10-K of
Registrant filed with Commission on March 23, 1998).

Exhibit 4.21 Senior Subordinated Indenture dated as of June 6, 2001
among Fresenius Medical Care AG, FMC Trust Finance S.a.r.l.
Luxemborg - III, Fresenius Medical Care Holdings, Inc.,
Fresenius Medical Care Deutschland GmbH and State Street Bank
and Trust Company with respect to 7 7/8% Senior Subordinated
Notes due 2011 (incorporated herein by reference to the
Registration Statement on Form F-4 of Fresenius Medical Care
AG dated August 2, 2001 (Registration No. 333-66558)).

Exhibit 4.22 Senior Subordinated Indenture dated as of June 15, 2001
among Fresenius Medical Care AG, FMC Trust Finance S.a.r.l.
Luxemborg - III, Fresenius Medical Care Holdings, Inc.,
Fresenius Medical Care Deutschland GmbH and State Street Bank
and Trust Company with respect to 7 7/8% Senior Subordinated
Notes due 2011 (incorporated herein by reference to the
Registration Statement on Form F-4 of Fresenius Medical Care
AG dated August 2, 2001 (Registration No. 333-66558)).

Exhibit 10.1 Employee Benefits and Compensation Agreement dated September
27, 1996 by and among W. R. Grace & Co., National Medical
Care, Inc., and W. R. Grace & Co.-- Conn. (incorporated herein
by reference to the Registration Statement on Form F-1 of
Fresenius Medical Care AG, as amended (Registration No.
333-05922), dated November 22, 1996 and the exhibits thereto).

Exhibit 10.2 Purchase Agreement, effective January 1, 1995, between
Baxter Health Care Corporation and National Medical Care,
Inc., including the addendum thereto (incorporated by
reference to the Form SE of Fresenius Medical Care dated July
29, 1996 and the exhibits thereto).

Exhibit 10.3* Product Purchase Agreement effective January 1, 2002 between
Amgen USA, Inc. and National Medical Care, Inc. (filed
herewith).

Exhibit 10.4 Receivables Purchase Agreement dated August 28, 1997
between National Medical Care, Inc. and NMC Funding
Corporation (incorporated herein by reference to the Form 10-Q
of the Registrant filed with the Commission on November 14,
1997).

Exhibit 10.5 Amendment dated as of September 28, 1998 to the
Receivables Purchase Agreement dated as of August 28, 1997, by
and between NMC Funding Corporation, as Purchaser and National
Medical Care, Inc., as Seller (incorporated herein by
reference to the Form 10-Q of Registrant filed with Commission
on November 12, 1998).

Exhibit 10.6 Amended and Restated Transfer and Administration
Agreement dated as September 27, 1999 among Compass US
Acquisition, LLC, NMC Funding Corporation, National Medical
Care, Inc., Enterprise Funding Corporation, the Bank Investors
listed therein, Westdeutsche Landesbank Girozentrale, New York
Branch, as an administrative agent and Bank of America, N.A.,
as an administrative agent (incorporated herein by reference
to the Form 10-K of Registrant filed with Commission on March
30, 2000).

Exhibit 10.7 Amendment No. 2 to Amended and Restated Transfer and
Administration Agreement dated as October 26, 2000 among
Compass US Acquisition, LLC, NMC Funding Corporation, National
Medical Care, Inc., Enterprise Funding Corporation, the Bank
Investors listed therein, Westdeutsche Landesbank
Girozentrale, New York Branch, as an administrative agent and
Bank of America, N.A., as an administrative agent
(incorporated herein by reference to the Form 10-K of
Registrant filed with Commission on April 2, 2001).

Exhibit 10.8 Amendment No. 5 to Amended and Restated Transfer and
Administration Agreement dated as December 21, 2001 among
Compass US Acquisition, LLC, NMC Funding Corporation, National
Medical Care, Inc., Enterprise Funding Corporation, the Bank
Investors listed therein, Westdeutsche Landesbank
Girozentrale, New York Branch, as an administrative agent and
Bank of America, N.A., as an administrative agent
(incorporated herein by reference to the Form 10-K of
Registrant filed with Commission on April 1, 2001).

Exhibit 10.9 Employment Agreement dated January 1, 1992 by and between Ben
J. Lipps and Fresenius USA, Inc. (incorporated herein by
reference to the Annual Report on Form 10-K of Fresenius USA,
Inc., for the year ended December 31, 1992).

Exhibit 10.10 Modification to FUSA Employment Agreement effective as
of January 1, 1998 by and between Ben J. Lipps and Fresenius
Medical Care AG (incorporated herein by reference to the Form
10-Q of Registrant filed with Commission on May 14, 1998).

Exhibit 10.11 Employment Agreement dated March 15, 2000 by and between
Jerry A. Schneider and National Medical Care, Inc
(incorporated herein by reference to the Form 10-Q of
Registrant filed with Commission on May 12, 2000).

Exhibit 10.12 Employment Agreement dated March 15, 2000 by and between
Ronald J. Kuerbitz and National Medical Care, Inc.
(incorporated herein by reference to the Form 10-Q of
Registrant filed with Commission on May 12, 2000).

Exhibit 10.13 Employment Agreement dated March 15, 2000 by and between J.
Michael Lazarus and National Medical Care, Inc. (incorporated
herein by reference to the Form 10-Q of Registrant filed with
Commission on May 12, 2000).

Exhibit 10.14 Employment Agreement dated March 15, 2000 by and between
Robert "Rice" M. Powell, Jr. and National Medical Care, Inc.
(incorporated herein by reference to the Form 10-K of
Registrant filed with Commission on April 2, 2001).

Exhibit 10.15 Employment Agreement dated June 1, 2000 by and between John F.
Markus and National Medical Care, Inc. (incorporated herein by
reference to the Form 10-K of Registrant filed with Commission
on April 2, 2001).

Exhibit 10.16 Subordinated Loan Note dated as of May 18, 1999, among
National Medical Care, Inc. and certain Subsidiaries with
Fresenius AG as lender (incorporated herein by reference to
the Form 10-Q of Registrant filed with Commission on November
22, 1999).

Exhibit 10.17 Corporate Integrity Agreement between the Offices of
Inspector General of the Department of Health and Human
Services and Fresenius Medical Care Holdings, Inc. dated as of
January 18, 2000 (incorporated herein by reference to the Form
8-K of the Registrant filed with the Commission on January 21,
2000).

Exhibit 11 Statement re: Computation of Per Share Earnings.

(b) Reports on Form 8-K

On February 13, 2002, Fresenius Medical Care Holdings, Inc., filed a
report on Form 8-K with respect to the announcement by Fresenius Medical Care
AG, the parent corporation of Fresenius Medical Care Holdings, Inc., that a
special charge was to be taken in the fourth quarter of 2001.

On March 27, 2002, Fresenius Medical Care Holdings, Inc., filed a report
on Form 8-K with respect to the announcement by Fresenius Medical Care AG, the
parent corporation of Fresenius Medical Care Holdings, Inc., that based on its
calculation of its cumulative adjusted cash flow for the five years ended
December 31, 2001, no special dividend would be payable on the Class D Special
Dividend Preferred Stock of Fresenius Medical Care Holdings, Inc.

* Confidential treatment has been requested as to certain portions of this
Exhibit

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Fresenius Medical Care Holdings, Inc.

DATE: May 15, 2002 /s/ Ben J. Lipps
-------------- ------------------------------------------
NAME: Ben J. Lipps
TITLE: President (Chief Executive Officer)

DATE: May 15, 2002 /s/ Jerry A. Schneider
------------- ------------------------------------------
NAME: Jerry Schneider
TITLE: Chief Financial Officer