Asia-Pacific Segment
Key indicators and business metrics for the Asia-Pacific Segment
in € M, except where otherwise specified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended
June 30
|
|
Change in %
|
|
|
|
As
reported
|
|
Currency
translation
effects
|
|
Constant
Currency(1)
|
|
|
|
2020
|
|
2019
|
|
Total Asia-Pacific Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
893
|
|
|
886
|
|
|
1
|
%
|
|
1
|
%
|
|
0
|
%
|
Health care services
|
|
|
414
|
|
|
409
|
|
|
1
|
%
|
|
2
|
%
|
|
(1
|
)%
|
Health care products
|
|
|
479
|
|
|
477
|
|
|
1
|
%
|
|
0
|
%
|
|
1
|
%
|
Operating income
|
|
|
140
|
|
|
164
|
|
|
(15
|
)%
|
|
0
|
%
|
|
(15
|
)%
|
Operating income margin in %
|
|
|
15.7
|
%
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
|
Delivered Operating Income(2)
|
|
|
137
|
|
|
160
|
|
|
(14
|
)%
|
|
1
|
%
|
|
(15
|
)%
|
Dialysis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
792
|
|
|
777
|
|
|
2
|
%
|
|
1
|
%
|
|
1
|
%
|
Number of dialysis treatments
|
|
|
2,284,425
|
|
|
2,237,630
|
|
|
2
|
%
|
|
|
|
|
|
|
Same market treatment growth in %
|
|
|
2.9
|
%
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
144
|
|
|
154
|
|
|
(6
|
)%
|
|
1
|
%
|
|
(7
|
)%
|
Operating income margin in %
|
|
|
18.2
|
%
|
|
19.8
|
%
|
|
|
|
|
|
|
|
|
|
Delivered Operating Income(2)
|
|
|
141
|
|
|
150
|
|
|
(6
|
)%
|
|
1
|
%
|
|
(7
|
)%
|
Care Coordination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
101
|
|
|
109
|
|
|
(8
|
)%
|
|
(1
|
)%
|
|
(7
|
)%
|
Operating income
|
|
|
(4
|
)
|
|
10
|
|
|
(143
|
)%
|
|
(7
|
)%
|
|
(136
|
)%
|
Operating income margin in %
|
|
|
(4.5
|
)%
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
Delivered Operating Income(2)
|
|
|
(4
|
)
|
|
10
|
|
|
(136
|
)%
|
|
(7
|
)%
|
|
(129
|
)%
|
Care Coordination Patient Encounters(3)
|
|
|
388,011
|
|
|
464,580
|
|
|
(16
|
)%
|
|
|
|
|
|
|
-
(1)
-
For
further information on Constant Exchange Rates, see "II. Discussion of measuresNon-IFRS measures" above.
38
Table of Contents
-
(2)
-
For
further information on Delivered Operating Income, including a reconciliation of Delivered Operating Income to operating income on a consolidated basis and for
each of our operating segments, see "II. Discussion of measuresNon-IFRS measuresDelivered Operating Income (Non-IFRS Measure)" above.
-
(3)
-
For
further information on patient encounters, please refer to the discussion above of our Care Coordination measures under II. Discussion of
measuresBusiness metrics for Care Coordination."
Dialysis
Revenue
Dialysis revenue increased by 2% including a 1% positive impact resulting from foreign currency translation. At Constant Exchange Rates, dialysis revenue
increased by 1%. Dialysis revenue is comprised of dialysis care revenue and health care product revenue.
Dialysis
care service revenue increased by 4% to €313 M from €300 M. Including a 3% positive impact resulting from foreign currency translation, dialysis care service
revenue increased by 1% as a result of growth in same market treatments (3%), increases in organic revenue per treatment (2%) and an increase in dialysis days (1%), partially offset by the effect of
closed or sold clinics (5%).
Dialysis
treatments increased by 2% mainly due to growth in same market treatments (3%) and an increase in dialysis days (1%), partially offset by the effect of closed or sold clinics (2%).
Health
care product revenue increased by 1% with virtually no impact resulting from foreign currency translation. Dialysis product revenue remained relatively stable with virtually no impact from
foreign currency translation. Non-Dialysis product revenue increased to €5 M (2019: €0 M) due to higher sales of acute cardiopulmonary products.
Operating income margin
The decrease period over period in the operating income margin was 1.6 percentage points. Foreign currency translation effects represented a
0.1 percentage point decrease in the operating income margin. The decrease was primarily due to impacts from unfavorable foreign currency transaction effects and lower income from equity method
investees, partially offset by a gain related to the deconsolidation of clinics.
Delivered Operating Income
Delivered Operating Income decreased by 6%. Including a 1% positive impact resulting from foreign currency translation, Delivered Operating Income decreased
by 7% mainly due to decreased operating income.
Care Coordination
Revenue
Care Coordination revenue decreased by 8%. Including a 1% negative impact resulting from foreign currency translation, Care Coordination revenue decreased by
7% mainly driven by decreases in organic revenue as a result of COVID-19 (14%) and the effects of closed or sold centers (1%), partially offset by contributions from acquisitions (8%).
Operating income margin
The decrease period over period in the Care Coordination operating income margin was 14.1 percentage points. Foreign currency translation effects
represented a 0.7 percentage point decrease in the operating income margin. The decrease was driven by unfavorable effects related to COVID-19.
Delivered Operating Income
Care Coordination Delivered Operating Income decreased by 136%. In addition to a 7% negative impact resulting from foreign currency translation, Care
Coordination Delivered Operating Income decreased by 129% mainly as a result of decreased operating income.
Care Coordination business metrics
The number of patient encounters decreased primarily due to the impacts of COVID-19.
39
Table of Contents
Latin America Segment
Key indicators for the Latin America Segment
in € M, except where otherwise specified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended
June 30
|
|
Change in %
|
|
|
|
As
reported
|
|
Currency
translation
effects
|
|
Constant
Currency(1)
|
|
|
|
2020
|
|
2019
|
|
Revenue
|
|
|
338
|
|
|
334
|
|
|
1
|
%
|
|
(23
|
)%
|
|
24
|
%
|
Health care services
|
|
|
240
|
|
|
236
|
|
|
2
|
%
|
|
(25
|
)%
|
|
27
|
%
|
Health care products
|
|
|
98
|
|
|
98
|
|
|
(1
|
)%
|
|
(18
|
)%
|
|
17
|
%
|
Number of dialysis treatments
|
|
|
2,881,731
|
|
|
2,607,728
|
|
|
11
|
%
|
|
|
|
|
|
|
Same market treatment growth in %
|
|
|
4.2
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
18
|
|
|
17
|
|
|
3
|
%
|
|
(8
|
)%
|
|
11
|
%
|
Operating income margin in %
|
|
|
5.3
|
%
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
Delivered Operating Income(2)
|
|
|
18
|
|
|
17
|
|
|
3
|
%
|
|
(9
|
)%
|
|
12
|
%
|
-
(1)
-
For
further information on Constant Exchange Rates, see "II. Discussion of measuresNon-IFRS measures" above.
-
(2)
-
For
further information on Delivered Operating Income, including a reconciliation of Delivered Operating Income to operating income on a consolidated basis and for
each of our operating segments, see "II. Discussion of measuresNon-IFRS measuresDelivered Operating Income (Non-IFRS Measure)" above.
Revenue
Health care service revenue increased by 2%. Including a 25% negative impact resulting from foreign currency translation, health care service revenue
increased by 27% as a result of increases in organic revenue per treatment (15%), contributions from acquisitions (8%) and growth in same market treatments (4%).
Dialysis
treatments increased by 11% mainly due to contributions from acquisitions (6%), growth in same market treatments (4%) and an increase in dialysis days (1%).
Health
care product revenue decreased by 1%. Including a 18% negative impact resulting from foreign currency translation, health care product revenue increased by 17% due to higher sales of in-center
disposables and products for acute care treatments.
Operating income margin
The increase period over period in the operating income margin was 0.1 percentage points. Foreign currency translation effects represented a
0.7 percentage point increase in the operating income margin in the current period. The increase was mainly due to unfavorable foreign currency transaction effects.
Delivered Operating Income
Delivered Operating Income increased by 3%. Including a 9% negative impact resulting from foreign currency translation, Delivered Operating Income increased
by 12% due to increased operating income.
Financial position
Sources of liquidity
Our primary sources of liquidity are typically cash provided by operating activities, cash provided by short-term debt from third parties and related parties,
proceeds from the issuance of long-term debt and divestitures. We require this capital primarily to finance working capital needs, fund acquisitions, operate clinics, develop free-standing renal
dialysis clinics and other health care facilities, purchase equipment for existing or new renal dialysis clinics and production sites, repay debt, pay dividends and repurchase shares, (see "Net cash
provided by (used in) investing activities" and "Net cash provided by (used in) financing activities" below).
As
of June 30, 2020, our available borrowing capacity resulting from unutilized credit facilities amounted to approximately €2.5 billion. The Amended 2012 Credit
Agreement accounted for approximately €1.4 billion in unutilized available borrowing capacity.
40
Table of Contents
In
our long-term financial planning, we focus primarily on the net leverage ratio, a Non-IFRS measure, see "II. Discussion of measuresNon-IFRS measuresNet leverage ratio
(Non-IFRS Measure)" above. At June 30, 2020 and December 31, 2019, the net leverage ratio was 2.8 and 3.2, respectively.
At
June 30, 2020, we had cash and cash equivalents of €1,889 M (December 31, 2019: €1,008 M).
Free
cash flow (Net cash provided by (used in) operating activities, after capital expenditures, before acquisitions and investments) amounted to €2,407 M and €435 M
for the six months ended June 30, 2020 and June 30, 2019, respectively. Free cash flow is a Non-IFRS Measure and is reconciled to net cash provided by (used in) operating activities, the
most directly comparable IFRS measure, see "II. Discussion of measuresNon-IFRS measuresCash flow measures" above. Free cash flow in percent of revenue was 26.6% and 5.1% for
the six months ended June 30, 2020 and 2019, respectively.
Net cash provided by (used in) operating activities
In the first six months of 2020, net cash provided by operating activities was €2,903 M as compared to net cash provided by operating
activities of €928 M in the first six months of 2019. Net cash provided by operating activities in percent of revenue increased to 32% for the first six months of 2020 as compared to
11% for 2019. Cash provided by (used in) operating activities is impacted by the profitability of our business, the development of our working capital, principally inventories, receivables and cash
outflows that occur due to a number of specific items as discussed below. The increase in net cash provided by operating activities was largely driven by U.S. federal relief funding and advanced
payments under the CARES Act and other COVID-19 relief (see note 2 of the notes to the consolidated financial statements included in this report), including lower tax payments in the U.S., as
well as working capital improvement driven by a positive effect from cash collections.
The
profitability of our business depends significantly on reimbursement rates for our services. Approximately 80% of our revenue is generated by providing health care services, a major portion of
which is reimbursed by either public health care organizations or private insurers. For the six months ended June 30, 2020, approximately 33% of our consolidated revenue was attributable to
reimbursements from U.S. federal health care benefit programs, such as Medicare and Medicaid. Legislative changes could affect Medicare reimbursement rates for a significant portion of the services
we provide as well as the scope of Medicare coverage. A decrease in reimbursement rates or the scope of coverage could have a material adverse effect on our business, financial position and results of
operations and thus on our capacity to generate cash flow. See "I. Overview," above.
We
intend to continue to address our current cash and financing requirements using cash provided by operating activities, our existing and future credit agreements, issuances under our commercial
paper program (see note 5 of the notes to the consolidated financial statements (unaudited) included in this report) as well as from the use of our Accounts Receivable Facility. In addition, to
finance acquisitions or meet other needs, we expect to successfully complete long-term financing arrangements, such as the issuance of bonds. We aim to preserve financial resources with a minimum of
€500 M of committed and unutilized credit facilities.
Net
cash provided by (used in) operating activities depends on the collection of accounts receivable. Commercial customers and government institutions generally have different payment cycles.
Lengthening their payment cycles could have a material adverse effect on our capacity to generate cash flow. In addition, we could face difficulties in enforcing and collecting accounts receivable
under the legal systems of, and due to the economic conditions in, some countries. Accounts receivable balances, net of valuation allowances, represented Days Sales Outstanding ("DSO") of
53 days at June 30, 2020, a decrease as compared to 73 days at December 31, 2019.
DSO
by segment is calculated by dividing the segment's accounts and other receivable and contract liabilities, converted to euro using the average exchange rate for the period presented, less any
sales or value added tax included in the receivables, by the average daily sales for the last twelve months of that segment, converted to euro using the average exchange rate for the period.
Receivables and revenues are adjusted for amounts related to acquisitions and divestitures made within the reporting period with a
41
Table of Contents
purchase
price above a €50 M threshold as defined in the Amended 2012 Credit Agreement. The development of DSO by reporting segment is shown in the table below:
Development of days sales outstanding
in days
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Increase/decrease primarily driven by:
|
North America Segment
|
|
|
30
|
|
|
58
|
|
Federal relief funding and advanced payments under the CARES Act and other COVID-19 relief
|
EMEA Segment
|
|
|
92
|
|
|
96
|
|
Improvement of payment collections in the region
|
Asia-Pacific Segment
|
|
|
113
|
|
|
113
|
|
Remained stable
|
Latin America Segment
|
|
|
139
|
|
|
127
|
|
Periodic delays in payment of public health care organizations in certain countries
|
FMC-AG & Co. KGaA average days sales outstanding
|
|
|
53
|
|
|
73
|
|
|
Due
to the fact that a large portion of our reimbursement is provided by public health care organizations and private insurers, we expect that most of our accounts receivable will be collectible.
Net cash provided by (used in) investing activities
In the first six months of 2020, net cash used in investing activities was €593 M as compared to net cash used in investing activities of
€2,392 M in the comparable period of 2019. The following table shows our capital expenditures for property, plant and equipment, net of proceeds from sales of property, plant and
equipment as well as acquisitions, investments and purchases of intangible assets for the first six months of 2020 and 2019:
Capital expenditures (net), acquisitions, investments and purchases of intangible assets
in € M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures,
net
|
|
Acquisitions,
investments
and
purchases of
intangible
assets
|
|
|
|
For the six months ended June 30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
North America Segment
|
|
|
267
|
|
|
262
|
|
|
47
|
|
|
1,861
|
|
thereof investments in debt securities
|
|
|
|
|
|
|
|
|
29
|
|
|
9
|
|
EMEA Segment
|
|
|
56
|
|
|
56
|
|
|
17
|
|
|
21
|
|
Asia-Pacific Segment
|
|
|
49
|
|
|
26
|
|
|
13
|
|
|
4
|
|
Latin America Segment
|
|
|
13
|
|
|
10
|
|
|
20
|
|
|
28
|
|
Corporate
|
|
|
111
|
|
|
139
|
|
|
10
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
496
|
|
|
493
|
|
|
107
|
|
|
1,923
|
|
The
majority of our capital expenditures in the first six months of 2020 was used for maintaining existing clinics, equipping new clinics, maintaining and expanding production facilities,
capitalization of machines provided to our customers and for Care Coordination as well as capitalization of certain development costs. Capital expenditures decreased to approximately 5% of total
revenue in the first six months of 2020 as compared to approximately 6% of total revenue during the same period in 2019.
Acquisitions
in the first six months of 2019 were primarily driven by the acquisition of NxStage on February 21, 2019 as well as dialysis clinics.
In
2020, we anticipate capital expenditures of €1.1 to €1.3 billion and expect to make acquisitions and investments, excluding investments in debt securities, of
approximately €500 to €700 M.
42
Table of Contents
Net cash provided by (used in) financing activities
In the first six months of 2020, net cash used in financing activities was €1,402 M as compared to net cash provided by financing activities
of €223 M in the first six months of 2019.
In
the first six months of 2020, cash was mainly used in the repayment of long-term debt (including the repayment of Convertible Bonds at maturity in January 2020 and the early repayment of the EUR
term loan 2017 / 2020 under the Amended 2012 Credit Agreement (originally due on July 30, 2020) on May 29, 2020) and short-term debt (including short-term debt from related parties),
repayments of the Accounts Receivable Facility, shares repurchased as part of a share buy-back program, the repayment of lease liabilities as well as distributions to noncontrolling interests,
partially offset by proceeds from long-term debt (including proceeds from the issuance of bonds in an aggregate principal amount of €1,250 M on May 29, 2020) and short-term debt
(including short-term debt from related parties).
In
the first six months of 2019, cash was mainly provided by proceeds from long-term debt (including additional drawings under the euro revolving credit facility of the Amended 2012 Credit Agreement
and the issuance of bonds with a principal amount of $500 M) and short-term debt as well as the utilization of the accounts receivable facility, partially offset by the payment of dividends,
repayment of lease liabilities, shares repurchased as part of a share buy-back program, repayments of long-term debt and short-term debt as well as repayments of short-term debt from related parties.
Balance sheet structure
Total assets as of June 30, 2020 increased by 4% to €34.2 billion as compared to €32.9 billion at
December 31, 2019. In addition to a 1% negative impact resulting from foreign currency translation, total assets increased by 5% to €34.4 billion from
€32.9 billion primarily driven by increases in cash and cash equivalents, property, plant and equipment as well as inventories.
Current
assets as a percent of total assets increased to 24% at June 30, 2020 as compared to 22% at December 31, 2019, primarily driven by an increase in cash and cash equivalents as
well as an increase in inventories. The equity ratio, the ratio of our equity divided by total liabilities and shareholders' equity, decreased to 39% at June 30, 2020 as compared to 40% at
December 31, 2019, primarily driven by an increase in accrued expenses and other current liabilities related to U.S. federal relief funding and advanced payments under the CARES Act and other
COVID-19 relief. ROIC increased to 6.3% at June 30, 2020 as compared to 6.1% at December 31, 2019. Adjusted for IFRS 16, ROIC was 7.1% at June 30, 2020. For further
information on ROIC, see "II. Discussion of measuresNon-IFRS measures" above.
Report on post-balance sheet date events
Refer to note 11 in the notes to the consolidated financial statements (unaudited) included in this report.
Recently issued accounting standards
Refer to note 1 of the notes to the consolidated financial statements (unaudited) included in this report for information regarding recently issued
accounting standards.
43
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Financial statements
Consolidated statements of income
(unaudited)
Consolidated statements of income
in € thousands ("THOUS"), except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended June 30,
|
|
For the six months ended
June 30,
|
|
|
|
Note
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care services
|
|
|
|
|
3,613,869
|
|
|
3,455,197
|
|
|
7,208,532
|
|
|
6,772,505
|
|
Health care products
|
|
|
|
|
943,476
|
|
|
889,835
|
|
|
1,836,609
|
|
|
1,705,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2a, 10
|
|
|
4,557,345
|
|
|
4,345,032
|
|
|
9,045,141
|
|
|
8,477,589
|
|
Costs of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care services
|
|
|
|
|
2,692,222
|
|
|
2,605,732
|
|
|
5,392,200
|
|
|
5,111,155
|
|
Health care products
|
|
|
|
|
429,113
|
|
|
408,378
|
|
|
806,163
|
|
|
770,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,121,335
|
|
|
3,014,110
|
|
|
6,198,363
|
|
|
5,881,379
|
|
Gross profit
|
|
|
|
|
1,436,010
|
|
|
1,330,922
|
|
|
2,846,778
|
|
|
2,596,210
|
|
Operating (income) expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
738,077
|
|
|
795,163
|
|
|
1,592,539
|
|
|
1,515,336
|
|
(Gain) loss related to divestitures of Care Coordination activities
|
|
|
|
|
(4,592
|
)
|
|
(11,400
|
)
|
|
(28,924
|
)
|
|
(11,400
|
)
|
Research and development
|
|
2b
|
|
|
50,506
|
|
|
48,383
|
|
|
96,423
|
|
|
76,981
|
|
Income from equity method investees
|
|
10
|
|
|
(3,905
|
)
|
|
(22,481
|
)
|
|
(24,314
|
)
|
|
(42,514
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
655,924
|
|
|
521,257
|
|
|
1,211,054
|
|
|
1,057,807
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
2c
|
|
|
(11,187
|
)
|
|
2,046
|
|
|
(19,938
|
)
|
|
(25,898
|
)
|
Interest expense
|
|
|
|
|
103,127
|
|
|
112,309
|
|
|
216,097
|
|
|
248,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
563,984
|
|
|
406,902
|
|
|
1,014,895
|
|
|
835,604
|
|
Income tax expense
|
|
|
|
|
137,068
|
|
|
92,265
|
|
|
237,610
|
|
|
193,209
|
|
Net income
|
|
|
|
|
426,916
|
|
|
314,637
|
|
|
777,285
|
|
|
642,395
|
|
Net income attributable to noncontrolling interests
|
|
|
|
|
75,944
|
|
|
60,857
|
|
|
143,594
|
|
|
117,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to shareholders of FMC-AG & Co. KGaA
|
|
2e
|
|
|
350,972
|
|
|
253,780
|
|
|
633,691
|
|
|
524,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
2d
|
|
|
1.20
|
|
|
0.84
|
|
|
2.15
|
|
|
1.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
2d
|
|
|
1.20
|
|
|
0.84
|
|
|
2.14
|
|
|
1.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
44
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated statements of comprehensive income
(unaudited)
Consolidated statements of comprehensive income
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended June 30,
|
|
For the six months
ended June 30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net income
|
|
|
426,916
|
|
|
314,637
|
|
|
777,285
|
|
|
642,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity method investeesshare of OCI
|
|
|
51,304
|
|
|
|
|
|
51,304
|
|
|
|
|
FVOCI equity investments
|
|
|
18,829
|
|
|
|
|
|
18,829
|
|
|
|
|
Actuarial gain (loss) on defined benefit pension plans
|
|
|
5,200
|
|
|
|
|
|
5,200
|
|
|
|
|
Income tax (expense) benefit related to components of other comprehensive income not reclassified
|
|
|
(4,712
|
)
|
|
|
|
|
(4,712
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,621
|
|
|
|
|
|
70,621
|
|
|
|
|
Components that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) related to foreign currency translation
|
|
|
(278,277
|
)
|
|
(144,919
|
)
|
|
(172,599
|
)
|
|
130,430
|
|
FVOCI debt securities
|
|
|
31,405
|
|
|
|
|
|
31,405
|
|
|
|
|
Gain (loss) related to cash flow hedges
|
|
|
(809
|
)
|
|
(12,322
|
)
|
|
6,618
|
|
|
(12,725
|
)
|
Cost of hedging
|
|
|
1,352
|
|
|
131
|
|
|
213
|
|
|
(762
|
)
|
Income tax (expense) benefit related to components of other comprehensive income that may be reclassified
|
|
|
(5,425
|
)
|
|
2,743
|
|
|
(7,303
|
)
|
|
3,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(251,754
|
)
|
|
(154,367
|
)
|
|
(141,666
|
)
|
|
120,112
|
|
Other comprehensive income (loss), net of tax
|
|
|
(181,133
|
)
|
|
(154,367
|
)
|
|
(71,045
|
)
|
|
120,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
245,783
|
|
|
160,270
|
|
|
706,240
|
|
|
762,507
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
54,524
|
|
|
45,552
|
|
|
144,618
|
|
|
123,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
191,259
|
|
|
114,718
|
|
|
561,622
|
|
|
638,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
45
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated balance sheets
(unaudited)
Consolidated balance sheets
in € THOUS, except share data
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
1,889,433
|
|
|
1,007,723
|
|
Trade accounts and other receivables
|
|
|
|
|
3,448,171
|
|
|
3,421,346
|
|
Accounts receivable from related parties
|
|
3
|
|
|
133,214
|
|
|
159,196
|
|
Inventories
|
|
4
|
|
|
1,840,855
|
|
|
1,663,278
|
|
Other current assets
|
|
|
|
|
869,848
|
|
|
913,603
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
8,181,521
|
|
|
7,165,146
|
|
Property, plant and equipment
|
|
|
|
|
4,193,855
|
|
|
4,190,281
|
|
Right-of-use assets
|
|
|
|
|
4,428,423
|
|
|
4,325,115
|
|
Intangible assets
|
|
|
|
|
1,447,308
|
|
|
1,426,330
|
|
Goodwill
|
|
|
|
|
14,060,205
|
|
|
14,017,255
|
|
Deferred taxes
|
|
|
|
|
391,344
|
|
|
361,196
|
|
Investment in equity method investees
|
|
10
|
|
|
686,025
|
|
|
696,872
|
|
Other non-current assets
|
|
|
|
|
801,172
|
|
|
752,540
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
|
|
26,008,332
|
|
|
25,769,589
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
34,189,853
|
|
|
32,934,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
678,121
|
|
|
716,526
|
|
Accounts payable to related parties
|
|
3
|
|
|
135,309
|
|
|
118,663
|
|
Current provisions and other current liabilities
|
|
2e
|
|
|
4,091,404
|
|
|
2,864,250
|
|
Short-term debt
|
|
5
|
|
|
875,631
|
|
|
1,149,988
|
|
Short-term debt from related parties
|
|
5
|
|
|
3,000
|
|
|
21,865
|
|
Current portion of long-term debt
|
|
6
|
|
|
1,512,658
|
|
|
1,447,239
|
|
Current portion of long-term lease liabilities
|
|
|
|
|
622,321
|
|
|
622,227
|
|
Current portion of long-term lease liabilities from related parties
|
|
3
|
|
|
20,592
|
|
|
16,514
|
|
Income tax payable
|
|
|
|
|
124,977
|
|
|
101,793
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
8,064,013
|
|
|
7,059,065
|
|
Long-term debt, less current portion
|
|
6
|
|
|
6,273,995
|
|
|
6,458,318
|
|
Long-term lease liabilities, less current portion
|
|
|
|
|
4,039,325
|
|
|
3,959,865
|
|
Long-term lease liabilities from related parties, less current portion
|
|
3
|
|
|
129,995
|
|
|
106,432
|
|
Non-current provisions and other non-current liabilities
|
|
|
|
|
743,293
|
|
|
616,916
|
|
Pension liabilities
|
|
|
|
|
708,991
|
|
|
689,195
|
|
Income tax payable
|
|
|
|
|
87,185
|
|
|
78,005
|
|
Deferred taxes
|
|
|
|
|
820,434
|
|
|
739,702
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
|
|
12,803,218
|
|
|
12,648,433
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
20,867,231
|
|
|
19,707,498
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
Ordinary shares, no par value, €1.00 nominal value, 374,165,226 shares authorized, 304,607,990 issued and 292,812,888 outstanding as of
June 30, 2020 and 374,165,226 shares authorized, 304,436,876 issued and 298,329,247 outstanding as of December 31, 2019
|
|
|
|
|
304,608
|
|
|
304,437
|
|
Treasury stock, at cost
|
|
2d
|
|
|
(736,490
|
)
|
|
(370,502
|
)
|
Additional paid-in capital
|
|
|
|
|
3,590,176
|
|
|
3,607,662
|
|
Retained earnings
|
|
|
|
|
10,077,917
|
|
|
9,454,861
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
(1,110,614
|
)
|
|
(1,038,545
|
)
|
|
|
|
|
|
|
|
|
|
|
Total FMC-AG & Co. KGaA shareholders' equity
|
|
|
|
|
12,125,597
|
|
|
11,957,913
|
|
Noncontrolling interests
|
|
|
|
|
1,197,025
|
|
|
1,269,324
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
|
13,322,622
|
|
|
13,227,237
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
|
|
34,189,853
|
|
|
32,934,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
46
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated statements of cash flows
(unaudited)
Consolidated statements of cash flows
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30,
|
|
|
|
Note
|
|
2020
|
|
2019
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
777,285
|
|
|
642,395
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, amortization and impairment loss
|
|
10
|
|
|
810,967
|
|
|
749,377
|
|
Change in deferred taxes, net
|
|
|
|
|
43,830
|
|
|
23,937
|
|
(Gain) loss from the sale of fixed assets, right-of-use assets, investments and divestitures
|
|
|
|
|
(34,042
|
)
|
|
(21,268
|
)
|
Compensation expense related to share-based plans
|
|
|
|
|
|
|
|
2,640
|
|
Income from equity method investees
|
|
|
|
|
(24,314
|
)
|
|
(42,514
|
)
|
Interest expense, net
|
|
|
|
|
196,159
|
|
|
222,203
|
|
Changes in assets and liabilities, net of amounts from businesses acquired:
|
|
|
|
|
|
|
|
|
|
Trade accounts and other receivables
|
|
|
|
|
(81,218
|
)
|
|
(208,302
|
)
|
Inventories
|
|
|
|
|
(201,896
|
)
|
|
(154,967
|
)
|
Other current and non-current assets
|
|
|
|
|
47,948
|
|
|
(32,095
|
)
|
Accounts receivable from related parties
|
|
|
|
|
25,729
|
|
|
32,667
|
|
Accounts payable to related parties
|
|
|
|
|
17,663
|
|
|
2,048
|
|
Accounts payable, provisions and other current and non-current liabilities
|
|
2e
|
|
|
1,391,949
|
|
|
(108,790
|
)
|
Income tax payable
|
|
|
|
|
120,380
|
|
|
232,680
|
|
Cash inflow (outflow) from hedging
|
|
|
|
|
|
|
|
(12,628
|
)
|
Received dividends from investments in equity method investees
|
|
|
|
|
87,120
|
|
|
42,230
|
|
Paid interest
|
|
|
|
|
(204,885
|
)
|
|
(230,576
|
)
|
Received interest
|
|
|
|
|
19,938
|
|
|
21,975
|
|
Paid income taxes
|
|
|
|
|
(89,295
|
)
|
|
(233,210
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
|
|
2,903,318
|
|
|
927,802
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
|
(500,168
|
)
|
|
(497,059
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
|
|
3,543
|
|
|
4,524
|
|
Acquisitions and investments, net of cash acquired, and purchases of intangible assets
|
|
|
|
|
(107,254
|
)
|
|
(1,922,745
|
)
|
Proceeds from divestitures
|
|
|
|
|
10,955
|
|
|
22,972
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
|
|
(592,924
|
)
|
|
(2,392,308
|
)
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from short-term debt
|
|
|
|
|
190,277
|
|
|
285,302
|
|
Repayments of short-term debt
|
|
|
|
|
(467,046
|
)
|
|
(134,216
|
)
|
Proceeds from short-term debt from related parties
|
|
|
|
|
498,811
|
|
|
|
|
Repayments of short-term debt from related parties
|
|
|
|
|
(517,600
|
)
|
|
(112,200
|
)
|
Proceeds from long-term debt
|
|
|
|
|
1,264,223
|
|
|
1,273,770
|
|
Repayments of long-term debt
|
|
|
|
|
(1,060,896
|
)
|
|
(292,437
|
)
|
Repayments of lease liabilities
|
|
|
|
|
(347,552
|
)
|
|
(319,927
|
)
|
Repayments of lease liabilities from related parties
|
|
|
|
|
(9,939
|
)
|
|
(8,232
|
)
|
Increase (decrease) of accounts receivable facility
|
|
|
|
|
(387,460
|
)
|
|
265,538
|
|
Proceeds from exercise of stock options
|
|
|
|
|
9,379
|
|
|
10,586
|
|
Purchase of treasury stock
|
|
|
|
|
(365,988
|
)
|
|
(298,979
|
)
|
Dividends paid
|
|
|
|
|
|
|
|
(354,636
|
)
|
Distributions to noncontrolling interests
|
|
|
|
|
(221,514
|
)
|
|
(123,235
|
)
|
Contributions from noncontrolling interests
|
|
|
|
|
13,005
|
|
|
31,256
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
|
(1,402,300
|
)
|
|
222,590
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
(26,384
|
)
|
|
18,386
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
881,710
|
|
|
(1,223,530
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
1,007,723
|
|
|
2,145,632
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
1,889,433
|
|
|
922,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited consolidated financial statements.
47
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Consolidated statements of shareholders' equity
For the six months ended June 30, 2020 and 2019 (unaudited)
Consolidated statements of shareholders' equity
in € THOUS, except share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
|
|
Treasury stock
|
|
|
|
|
|
Total FMC-
AG & Co.
KGaA
shareholders'
equity
|
|
|
|
|
|
|
|
Note
|
|
Number of
shares
|
|
No par
value
|
|
Number of
shares
|
|
Amount
|
|
Additional
paid in
capital
|
|
Retained
earnings
|
|
Foreign
currency
translation
|
|
Cash flow
hedges
|
|
Pensions
|
|
Fair
value
changes
|
|
Noncontrolling
interests
|
|
Total
equity
|
|
Balance at December 31, 2018
|
|
|
|
|
307,878,652
|
|
|
307,879
|
|
|
(999,951
|
)
|
|
(50,993
|
)
|
|
3,873,345
|
|
|
8,831,930
|
|
|
(911,473
|
)
|
|
(1,528
|
)
|
|
(290,749
|
)
|
|
|
|
|
11,758,411
|
|
|
1,143,547
|
|
|
12,901,958
|
|
Adjustment due to initial application of IFRS 16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(120,809
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(120,809
|
)
|
|
(15,526
|
)
|
|
(136,335
|
)
|
Adjusted balance at December 31, 2018
|
|
|
|
|
307,878,652
|
|
|
307,879
|
|
|
(999,951
|
)
|
|
(50,993
|
)
|
|
3,873,345
|
|
|
8,711,121
|
|
|
(911,473
|
)
|
|
(1,528
|
)
|
|
(290,749
|
)
|
|
|
|
|
11,637,602
|
|
|
1,128,021
|
|
|
12,765,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options and related tax effects
|
|
|
|
|
228,418
|
|
|
228
|
|
|
|
|
|
|
|
|
11,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,635
|
|
|
|
|
|
11,635
|
|
Compensation expense related to stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,640
|
|
|
|
|
|
2,640
|
|
Purchase of treasury stock
|
|
2d
|
|
|
|
|
|
|
|
|
(4,275,444
|
)
|
|
(303,666
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(303,666
|
)
|
|
|
|
|
(303,666
|
)
|
Withdrawal of treasury stock
|
|
2d
|
|
|
(3,770,772
|
)
|
|
(3,771
|
)
|
|
3,770,772
|
|
|
269,796
|
|
|
(266,025
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(354,636
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(354,636
|
)
|
|
|
|
|
(354,636
|
)
|
Purchase/ sale of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,553
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,553
|
)
|
|
36,172
|
|
|
29,619
|
|
Contributions from/ to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(95,369
|
)
|
|
(95,369
|
)
|
Noncontrolling interests subject to put provisions
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,902
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,902
|
)
|
|
|
|
|
(17,902
|
)
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
524,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
524,529
|
|
|
117,866
|
|
|
642,395
|
|
Other comprehensive income (loss) related to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,613
|
|
|
68
|
|
|
(959
|
)
|
|
|
|
|
124,722
|
|
|
5,708
|
|
|
130,430
|
|
Cash flow hedges, net of related tax effects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,318
|
)
|
|
|
|
|
|
|
|
(10,318
|
)
|
|
|
|
|
(10,318
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
638,933
|
|
|
123,574
|
|
|
762,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2019
|
|
|
|
|
304,336,298
|
|
|
304,336
|
|
|
(1,504,623
|
)
|
|
(84,863
|
)
|
|
3,614,814
|
|
|
8,863,112
|
|
|
(785,860
|
)
|
|
(11,778
|
)
|
|
(291,708
|
)
|
|
|
|
|
11,608,053
|
|
|
1,192,398
|
|
|
12,800,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2019
|
|
|
|
|
304,436,876
|
|
|
304,437
|
|
|
(6,107,629
|
)
|
|
(370,502
|
)
|
|
3,607,662
|
|
|
9,454,861
|
|
|
(664,987
|
)
|
|
(10,460
|
)
|
|
(363,098
|
)
|
|
|
|
|
11,957,913
|
|
|
1,269,324
|
|
|
13,227,237
|
|
Proceeds from exercise of options and related tax effects
|
|
|
|
|
171,114
|
|
|
171
|
|
|
|
|
|
|
|
|
10,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,342
|
|
|
|
|
|
10,342
|
|
Purchase of treasury stock
|
|
2d
|
|
|
|
|
|
|
|
|
(5,687,473
|
)
|
|
(365,988
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(365,988
|
)
|
|
|
|
|
(365,988
|
)
|
Purchase/ sale of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,657
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,657
|
)
|
|
(82,859
|
)
|
|
(110,516
|
)
|
Contributions from/ to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(134,058
|
)
|
|
(134,058
|
)
|
Noncontrolling interests subject to put provisions
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,635
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,635
|
)
|
|
|
|
|
(10,635
|
)
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
633,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
633,691
|
|
|
143,594
|
|
|
777,285
|
|
Other comprehensive income (loss) related to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(173,465
|
)
|
|
(54
|
)
|
|
(207
|
)
|
|
103
|
|
|
(173,623
|
)
|
|
1,024
|
|
|
(172,599
|
)
|
Cash flow hedges, net of related tax effects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,873
|
|
|
|
|
|
|
|
|
4,873
|
|
|
|
|
|
4,873
|
|
Pensions, net of related tax effects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,537
|
|
|
|
|
|
2,537
|
|
|
|
|
|
2,537
|
|
Fair value changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,144
|
|
|
94,144
|
|
|
|
|
|
94,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
561,622
|
|
|
144,618
|
|
|
706,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2020
|
|
|
|
|
304,607,990
|
|
|
304,608
|
|
|
(11,795,102
|
)
|
|
(736,490
|
)
|
|
3,590,176
|
|
|
10,077,917
|
|
|
(838,452
|
)
|
|
(5,641
|
)
|
|
(360,768
|
)
|
|
94,247
|
|
|
12,125,597
|
|
|
1,197,025
|
|
|
13,322,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to unaudited consolidated financial statements.
48
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements
(unaudited)
(in THOUS, except share and per share
data)
1. The Company and basis of presentation
The Company
Fresenius Medical Care AG & Co. KGaA ("FMC-AG & Co. KGaA" or the "Company"), a German partnership limited by shares
(Kommanditgesellschaft auf Aktien) registered in the commercial registry of Hof an der Saale under HRB 4019, with its business address at Else-Kröner-Str. 1, 61352 Bad
Homburg v. d. Höhe, is the world's largest kidney dialysis company, based on publicly reported revenue and number of patients treated. The Company provides dialysis care
and related dialysis care services to persons who suffer from end-stage renal disease ("ESRD"), as well as other health care services. The Company also develops, manufactures and distributes a wide
variety of health care products, which includes dialysis and non-dialysis products. The Company's dialysis products include hemodialysis machines, peritoneal cyclers, dialyzers, peritoneal solutions,
hemodialysis concentrates, solutions and granulates, bloodlines, renal pharmaceuticals and systems for water treatment. The Company's non-dialysis products include acute cardiopulmonary and apheresis
products. The Company supplies dialysis clinics it owns, operates or manages with a broad range of products and also sells dialysis products to other dialysis service providers. The Company describes
certain of its other health care services as "Care Coordination." Care Coordination currently includes, but is not limited to, value and risk-based arrangements, pharmacy services, vascular,
cardiovascular and endovascular specialty services as well as ambulatory surgery center services, physician nephrology and cardiology services, urgent care services and ambulant treatment services.
All of these Care Coordination services together with dialysis care and related services represent the Company's health care services.
In
these unaudited consolidated financial statements, "FMC-AG & Co. KGaA," or the "Company" refers to the Company or the Company and its subsidiaries on a consolidated basis, as the
context requires. "Fresenius SE" and "Fresenius SE & Co. KGaA" refer to Fresenius SE & Co. KGaA. "Management AG" and the "General Partner" refer to Fresenius Medical Care
Management AG which is FMC-AG & Co. KGaA's general partner and is wholly owned by Fresenius SE. "Management Board" refers to the members of the management board of Management AG and,
except as otherwise specified, "Supervisory Board" refers to the supervisory board of FMC-AG & Co. KGaA. The term "North America Segment" refers to the North America operating segment,
the term "EMEA Segment" refers to the Europe, Middle East and Africa operating segment, the term "Asia-Pacific Segment" refers to the Asia-Pacific operating segment, and the term "Latin America
Segment" refers to the Latin America operating segment. For further discussion of the Company's operating segments, see note 10.
Basis of presentation
The consolidated financial statements and other financial information included in the Company's quarterly reports on Form 6-K and its Annual Report on
Form 20-F are prepared solely in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), using the euro as the
Company's reporting currency. The quarterly financial report is prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, and contains condensed financial
statements, in that it does not include all of the notes that would be required in a complete set of financial statements, but rather selected explanatory notes. However, the primary financial
statements are presented in the format consistent with the consolidated financial statements as presented in the Company's Annual Report on Form 20-F for the year ended December 31, 2019
(the "2019 Form 20-F") in accordance with IAS 1, Presentation of Financial Statements.
The
consolidated financial statements at June 30, 2020 and for the three and six months ended June 30, 2020 and 2019 contained in this report are unaudited and should be read in
conjunction with the consolidated financial statements contained in the Company's 2019 Form 20-F. The preparation of consolidated financial statements in conformity with IFRS requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues
49
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
1. The Company and basis of presentation (Continued)
and
expenses during the reporting period. Actual results could differ from those estimates. Such financial statements reflect all adjustments that, in the opinion of management, are necessary for a
fair presentation of the results of the periods presented. All such adjustments are of a normal recurring nature.
Starting
on July 1, 2018, the Company's subsidiaries in Argentina applied IAS 29, Financial Reporting in Hyperinflationary Economies, due to the inflation in Argentina. Pursuant to
IAS 29, the Company recorded a loss on its net monetary position of €7,556 for the six months ended June 30, 2020. The Company calculated the loss with the use of the
Consumer Price Index (Índice de precios al consumidor) as published by the Argentine Statistics and Census Institute for the six months ended June 30, 2020, which lists the level
at 322.0 index points, a 14% increase since January 1, 2020.
In
the consolidated statements of income, "Selling, general and administrative" expense in the amount of €7,363 for the three months ended June 30, 2019 and
€2,347 for the six months ended June 30, 2019 have been reclassified to "Research and development" expense to conform to the current year's presentation.
In
the consolidated statements of cash flows, a decrease in receivables from equity-method investees in the amount of €14,372 for the six months ended June 30, 2019 has been
reclassified from line item "Trade accounts and other receivables" to line item "Accounts receivable from related parties" to conform to the current year's presentation.
In
the consolidated balance sheets, "Non-current provisions and other non-current liabilities" in the amount of €51,831 as of December 31, 2019 have been reclassified to line
item "current provisions and other current liabilities" to conform to the current year's presentation.
The
results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results of operations for the year ending December 31, 2020.
At
July 30, 2020, the Management Board authorized the consolidated financial statements for issue.
New accounting pronouncements
Recently implemented accounting pronouncements
The Company has prepared its consolidated financial statements at and for the six months ended June 30, 2020 in conformity with IFRS that must be
applied for the interim periods starting on or after January 1, 2020. In the six months ended June 30, 2020, there were no recently implemented accounting pronouncements that had a
material effect on the Company's consolidated financial statements.
Recent accounting pronouncements not yet adopted
The IASB issued the following new standards which are relevant for the Company:
IFRS 17, Insurance Contracts
In May 2017, the IASB issued IFRS 17, Insurance Contracts. IFRS 17 establishes principles for the recognition, measurement, presentation and
disclosure related to the issuance of insurance contracts. IFRS 17 replaces IFRS 4, Insurance Contracts, which was brought in as an interim standard in 2004. IFRS 4 permitted the
use of national accounting standards for the accounting of insurance contracts under IFRS. As a result of the varied application for insurance contracts there was a lack of comparability among peer
groups. IFRS 17 eliminates this diversity in practice by requiring all insurance contracts to be accounted for using current values. The frequent updates to the insurance values are expected to
provide more useful information to users of financial statements. On June 25, 2020, the IASB issued amendments to IFRS 17, which among others, defer the effective date to fiscal years
beginning on or after January 1, 2023. Earlier adoption is permitted for entities that have also adopted IFRS 9, Financial Instruments and IFRS 15, Revenue from Contracts with
Customers. The Company is evaluating the impact of IFRS 17 on the consolidated financial statements.
50
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
1. The Company and basis of presentation (Continued)
Amendments to IAS 1, Classification of Liabilities as Current and Non-current
In January 2020, the IASB issued Amendments to IAS 1, Classification of Liabilities as Current and Non-current. The amendments clarify under which
circumstances debt and other liabilities with an uncertain settlement date should be classified as current or non-current. Among others, the amendments state that liabilities shall be classified
depending on rights that exist at the end of the reporting period and define under which conditions liabilities might be settled by cash, other economic resources or equity.
On
July 15th, the IASB deferred the effective date by one year to provide companies with more time to implement any classification changes resulting from the amendments. The
Amendments to IAS 1 are now effective for annual reporting periods beginning on or after January 1, 2023. Earlier adoption is permitted. The Company is currently evaluating the impact of
the amendments to IAS 1 on the consolidated financial statements.
In
the Company's view, no other pronouncements issued by the IASB are expected to have a material impact on the consolidated financial statements.
2. Notes to the consolidated statements of income
a) Revenue
The Company has recognized the following revenue in the consolidated statement of income for the three and six months ended June 30, 2020 and 2019:
Revenue
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30,
|
|
|
|
2020
|
|
2019
|
|
|
|
Revenue from
contracts with
customers
|
|
Other
revenue
|
|
Total
|
|
Revenue from
contracts with
customers
|
|
Other
revenue
|
|
Total
|
|
Health care services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis services
|
|
|
3,223,998
|
|
|
|
|
|
3,223,998
|
|
|
3,120,267
|
|
|
|
|
|
3,120,267
|
|
Care Coordination
|
|
|
310,971
|
|
|
78,900
|
|
|
389,871
|
|
|
278,937
|
|
|
55,993
|
|
|
334,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,534,969
|
|
|
78,900
|
|
|
3,613,869
|
|
|
3,399,204
|
|
|
55,993
|
|
|
3,455,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis products
|
|
|
891,599
|
|
|
28,490
|
|
|
920,089
|
|
|
839,369
|
|
|
33,097
|
|
|
872,466
|
|
Non-dialysis products
|
|
|
23,387
|
|
|
|
|
|
23,387
|
|
|
17,369
|
|
|
|
|
|
17,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
914,986
|
|
|
28,490
|
|
|
943,476
|
|
|
856,738
|
|
|
33,097
|
|
|
889,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,449,955
|
|
|
107,390
|
|
|
4,557,345
|
|
|
4,255,942
|
|
|
89,090
|
|
|
4,345,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30,
|
|
|
|
2020
|
|
2019
|
|
|
|
Revenue from
contracts with
customers
|
|
Other
revenue
|
|
Total
|
|
Revenue from
contracts with
customers
|
|
Other
revenue
|
|
Total
|
|
Health care services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis services
|
|
|
6,422,250
|
|
|
|
|
|
6,422,250
|
|
|
6,077,648
|
|
|
|
|
|
6,077,648
|
|
Care Coordination
|
|
|
628,291
|
|
|
157,991
|
|
|
786,282
|
|
|
578,481
|
|
|
116,376
|
|
|
694,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,050,541
|
|
|
157,991
|
|
|
7,208,532
|
|
|
6,656,129
|
|
|
116,376
|
|
|
6,772,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dialysis products
|
|
|
1,733,462
|
|
|
51,261
|
|
|
1,784,723
|
|
|
1,602,254
|
|
|
66,887
|
|
|
1,669,141
|
|
Non-dialysis products
|
|
|
51,886
|
|
|
|
|
|
51,886
|
|
|
35,943
|
|
|
|
|
|
35,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,785,348
|
|
|
51,261
|
|
|
1,836,609
|
|
|
1,638,197
|
|
|
66,887
|
|
|
1,705,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
8,835,889
|
|
|
209,252
|
|
|
9,045,141
|
|
|
8,294,326
|
|
|
183,263
|
|
|
8,477,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b) Research and development expenses
Research and development expenses of €96,423 for the six months ended June 30, 2020 (for the six months ended June 30, 2019:
€76,981) included research and non-capitalizable development costs as well as depreciation and amortization expenses related to capitalized development costs of €2,531
(for the six months ended June 30, 2019: €369).
c) Interest income
In 2014, the Company issued equity-neutral convertible bonds (the "Convertible Bonds"). From November 2017 until January 2020 when the Convertible Bonds were repaid, bond
holders could exercise their conversion rights embedded in the bonds at certain dates ("Embedded Derivatives"). To fully offset the economic exposure from the conversion feature, the Company purchased
call options on its shares ("Share Options").
During
the six months ended June 30, 2019, the fair value of the Share Options increased and, as such, the increase is shown as interest income. However, the increase in the fair value of the
Share Options for the six-month period ended June 30, 2019 was lower than for the three months ended March 31, 2019, which leads to the presentation of negative interest income for the
three months ended June 30, 2019.
52
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
d) Earnings per share
The following table contains reconciliations of the numerators and denominators of the basic and fully diluted earnings per share computations for 2020 and 2019:
Reconciliation of basic and diluted earnings per share
in € THOUS, except share and per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
June 30,
|
|
For the six months ended
June 30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
350,972
|
|
|
253,780
|
|
|
633,691
|
|
|
524,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
292,733,283
|
|
|
303,456,178
|
|
|
295,287,813
|
|
|
305,048,922
|
|
Potentially dilutive shares
|
|
|
240,359
|
|
|
107,755
|
|
|
221,971
|
|
|
118,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
1.20
|
|
|
0.84
|
|
|
2.15
|
|
|
1.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
1.20
|
|
|
0.84
|
|
|
2.14
|
|
|
1.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share buy-back program
In 2020, the Company continued to utilize the authorization granted by the Company's Annual General Meeting on May 12, 2016 to conduct a share buy-back
program. The current share buy-back program, announced on June 14, 2019 allowed for repurchase of a maximum of 12,000,000 shares at a total purchase price, excluding ancillary transaction
costs, of up to €660,000 between June 17, 2019 and June 17, 2020. On April 1, 2020, the Company concluded the current buy-back program. The prior buy-back program
expired on May 10, 2019 and the repurchased shares were retired. The following tabular disclosure provides the
53
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
number
of shares acquired in the context of the share buy-back programs as well as the retired treasury stock:
Treasury Stock
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Average price
per share
|
|
Total number of shares
purchased and retired
as part of publicly
announced plans or
programs
|
|
Total value of
shares(1)
|
|
|
|
in €
|
|
|
|
in € THOUS
|
|
December 31, 2018
|
|
|
51.00
|
|
|
999,951
|
|
|
50,993
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of Treasury Stock
|
|
|
|
|
|
|
|
|
|
|
March 2019
|
|
|
69.86
|
|
|
1,629,240
|
|
|
113,816
|
|
April 2019
|
|
|
72.83
|
|
|
1,993,974
|
|
|
145,214
|
|
May 2019
|
|
|
72.97
|
|
|
147,558
|
|
|
10,766
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchased Treasury Stock
|
|
|
71.55
|
|
|
3,770,772
|
|
|
269,796
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement of repurchased Treasury Stock
|
|
|
|
|
|
|
|
|
|
|
June 2019
|
|
|
71.55
|
|
|
3,770,772
|
|
|
269,796
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of Treasury Stock
|
|
|
|
|
|
|
|
|
|
|
June 2019
|
|
|
67.11
|
|
|
504,672
|
|
|
33,870
|
|
July 2019
|
|
|
66.77
|
|
|
1,029,655
|
|
|
68,748
|
|
August 2019
|
|
|
57.53
|
|
|
835,208
|
|
|
48,050
|
|
September 2019
|
|
|
59.67
|
|
|
627,466
|
|
|
37,445
|
|
October 2019
|
|
|
57.85
|
|
|
692,910
|
|
|
40,084
|
|
November 2019
|
|
|
64.78
|
|
|
852,859
|
|
|
55,245
|
|
December 2019
|
|
|
63.85
|
|
|
564,908
|
|
|
36,067
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchased Treasury Stock
|
|
|
62.55
|
|
|
5,107,678
|
|
|
319,509
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
|
60.66
|
|
|
6,107,629
|
|
|
370,502
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of Treasury Stock
|
|
|
|
|
|
|
|
|
|
|
January 2020
|
|
|
84.37
|
|
|
124,398
|
|
|
10,495
|
|
February 2020(2)
|
|
|
249.10
|
|
|
25,319
|
|
|
6,307
|
|
March 2020
|
|
|
63.05
|
|
|
4,842,943
|
|
|
305,362
|
|
April 2020
|
|
|
63.07
|
|
|
694,813
|
|
|
43,824
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchased Treasury Stock
|
|
|
64.35
|
|
|
5,687,473
|
|
|
365,988
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
62.44
|
|
|
11,795,102
|
|
|
736,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
value of shares previously repurchased and included above as of December 31, 2018 is inclusive of fees (net of taxes) paid in the amount of approximately
€11 (in € THOUS) for services rendered.
-
(2)
-
The
purchase price of the shares of the program beginning on June 17, 2019 is based on the volume weighted average price of the Company's shares for the
period and changes in the volume weighted average price resulted in retroactive adjustments to the purchase price, even if no shares were purchased. The February adjustment, in combination with lower
shares purchased, resulted in a particularly high average price per share for the month.
As
of June 30, 2020, the Company holds 11,795,102 treasury shares. These shares will be used solely to reduce the registered share capital of the Company by cancellation of the acquired shares.
54
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
-
e)
-
Impacts of severe acute respiratory syndrome coronavirus 2 ("COVID-19")
The
Company and its patient population have been impacted by the severe acute respiratory syndrome coronavirus 2 ("COVID-19"). The Company provides life-sustaining dialysis treatments and other
critical healthcare services and products to patients. Its patients need regular and frequent dialysis treatments, or else they face significant health consequences that would result in either
hospitalization or death. To be able to continue care for its patients, the Company determined that it needed to implement a number of measures, both operational and financial, to maintain an adequate
workforce, protect its patients and employees through expanded personal protective equipment protocols and to develop surge capacity for patients suspected or confirmed to have COVID-19. Additionally,
the Company experienced a loss of revenue due to the pandemic in certain parts of its business, offset by increased demand for its services and products in other parts. Various governments in regions
in which the Company operates have provided economic assistance programs to address the consequences of the pandemic on companies and support healthcare providers and patients. The Company has
recorded €181,525 of related reimbursement payments and funding reflecting the specific terms and regulations set forth in the local laws and regulations, primarily directly against
the respective cost of revenue line item, and the rest against the selling, general and administrative expense line item in the statement of profit and loss in accordance with IAS 20,
Accounting for Government Grants and Disclosure of Government Assistance. In addition to the costs incurred which are eligible for the discussed government funding in various countries, the Company
was affected by impacts that COVID-19 had on the global economy and financial markets, e.g. impacting valuations of certain of the Company's investments (see note 9), as well as effects
related to lockdowns. At the same time the Company incurred lower costs in certain areas, for example for incentive plans and travel. Overall, including COVID-19 reimbursements, the Company concluded
that COVID-19 resulted in an immaterial impact to net income attributable to shareholders of FMC-AG & Co. KGaA in the first half of 2020.
On
March 27, 2020, the U.S. administration signed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") which provides relief funds to hospitals and other healthcare providers in
connection with the impact of the on-going COVID-19 pandemic. The Company received U.S. federal relief funding under the CARES Act in the amount of $276,700 (€251,078 as of
June 30, 2020). The part of this funding that is not yet offset with qualifying costs incurred in relation to COVID-19 for the three-and-six months ended June 30, 2020 is recorded as a
liability on the Company's consolidated balance sheet within current provisions and other current liabilities as of June 30, 2020 and will be offset against all qualifying costs that are
incurred in the second half of 2020.
All
funds received from grants comply with the terms and conditions associated with the funding received. All funding received under the CARES Act in the U.S. is to be applied solely to the Company's
U.S. operations. In accordance with the conditions of the funding received under the grants, the Company is obliged and committed to fulfilling all the requirements of the grant funding arrangements
in the respective jurisdictions in which funding was received. The Company has determined that there is reasonable assurance that it will continue to be entitled to the amounts received and comply
with the requirements related to the grants.
Additionally,
the Company received advance payments under the CMS Accelerated and Advance Payment program which are recorded as a contract liability upon receipt and recognized as revenue when the
respective services are provided. The Company recorded a contract liability within current provisions and other current liabilities in the amount of €930,700 as of June 30,
2020.
-
f)
-
Impairment test in the Latin America Segment
The
growth of the business through acquisitions has created a significant amount of intangible assets, including goodwill, trade names, management contracts, non-compete agreements, technology and
customer relationships as well as licenses and distribution agreements. In addition, the Company
55
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
recognizes
internally developed intangible assets related to research and development and software development projects. In accordance with IAS 36, the Company performs an impairment test of
goodwill and non-amortizable intangible assets at least once a year for each cash-generating unit ("CGU") or more frequently if the Company becomes aware of events that occur or if circumstances
change that would indicate the carrying value may not be recoverable.
To
perform the impairment test of goodwill, the Company identified its groups of CGUs and determined their carrying value by assigning the assets and liabilities, including the existing goodwill and
intangible assets, to those CGUs. CGUs reflect the level on which goodwill is monitored for internal management purposes.
The
North America Segment, the EMEA Segment, the Asia-Pacific Segment and the Latin America Segment have been identified as CGUs. For the purpose of goodwill impairment testing, all corporate assets
and liabilities are allocated to these CGUs. The Company compares the recoverable amount of each CGU to the CGU's carrying amount. The recoverable amount (value in use) of a CGU is determined using a
discounted cash flow approach based upon the cash flow expected to be generated by the CGU. When the value in use of the CGU is less than its carrying amount, the difference is at first recorded as an
impairment of the carrying amount of the goodwill.
The
value in use of each CGU is determined using estimated future cash flows for the unit discounted by a pre-tax discount rate ("WACC") specific to that CGU. The Company's WACC consists of a basic
rate adjusted by a weighted average country risk rate and, if appropriate, by a factor to reflect higher risks associated with the cash flows from recent material acquisitions within each CGU, until
they are appropriately integrated. Estimating the future cash flows involves significant assumptions, especially regarding future reimbursement rates and sales prices, number of treatments, sales
volumes and costs. The key assumptions represent management's assessment of future trends and have been based on historical data from both external and internal sources. In determining discounted cash
flows, the Company utilizes for every CGU its three-year budget, projections for years four to ten and a representative growth rate for all remaining years. Projections for up to ten years are
possible due to the non-discretionary nature of the health care services the Company provides, the need for health care products utilized to provide such services and the availability of government
reimbursement for a substantial portion of its services.
The
Company considered adverse changes in the Latin America Segment's economic environment, in part exacerbated by COVID-19, specifically in relation to a negative impact from country-specific risk
rates increasing the WACC in the CGU, as a trigger for an impairment test of the Latin America Segment. The Company did not identify any indicators of impairment in any CGU not included within this
impairment test of goodwill. At June 30, 2020, the recoverable amount of the Latin America Segment exceeds the carrying amount by €23,096. As such, the Company did not recognize
an impairment in the Latin America Segment as at June 30, 2020. Any adverse developments in future periods would likely lead to impairment charges on this CGU. At June 30, 2020, the
carrying amount of goodwill and non-amortizable intangible assets of the Latin America Segment amounted to €184,277 (€195,606 at December 31, 2019). The
following table shows the key assumptions and amounts by which the key assumptions would need to change that the recoverable amount equals the carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key assumptions
in %
|
|
Sensitivity analysis
Change in percentage points
|
|
|
|
Latin America
|
|
|
|
Latin
America
|
|
|
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
Pre-tax WACC
|
|
|
11.90 - 25.57
|
|
|
10.45 - 20.02
|
|
Pre-tax WACC
|
|
|
0.22
|
|
|
1.87
|
|
After-tax WACC
|
|
|
8.83 - 22.50
|
|
|
8.06 - 17.63
|
|
After-tax WACC
|
|
|
0.15
|
|
|
1.24
|
|
56
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
2. Notes to the consolidated statements of income (Continued)
For
further information related to significant assumptions and sensitivities related to impairment, see notes 1 g) and 2 a) included in our 2019 Form 20-F.
3. Related party transactions
Fresenius SE is the Company's largest shareholder and owns 32.23% of the Company's outstanding shares, excluding treasury shares held by the Company, at June 30, 2020. The Company has entered
into certain arrangements for services and products with Fresenius SE or its subsidiaries and with certain of the Company's equity method investees as described in item a) below. The
arrangements for leases with Fresenius SE or its subsidiaries are described in item b) below. The Company's terms related to the receivables or payables for these services, leases and products
are generally consistent with the normal terms of the Company's ordinary course of business transactions with unrelated parties and the Company believes that these arrangements reflect fair market
terms. The Company utilizes various methods to verify the commercial reasonableness of its related party arrangements. Financing arrangements as described in item c) below have agreed upon
terms which are determined at the time such financing transactions occur and reflect market rates at the time of the transaction. The relationship between the Company and its key management personnel
who are considered to be related parties is described in item d) below. Our related party transactions are settled through Fresenius SE's cash management system where appropriate.
-
a)
-
Service agreements and products
The
Company is party to service agreements with Fresenius SE and certain of its affiliates (collectively the "Fresenius SE Companies") to receive services, including, but not limited to:
administrative services, management information services, employee benefit administration, insurance, information technology services, tax services and treasury management services. The Company also
provides central purchasing services to the Fresenius SE Companies. These related party agreements generally have a duration of 1 to 5 years and are renegotiated on an as needed basis when the
agreement comes due. The Company provides administrative services to one of its equity method investees.
The
Company sells products to the Fresenius SE Companies and purchases products from the Fresenius SE Companies and equity method investees. In addition, Fresenius Medical Care Holdings, Inc.
("FMCH") purchases heparin supplied by Fresenius Kabi USA, Inc. ("Kabi USA"), through an independent group purchasing organization ("GPO"). Kabi USA is an indirect, wholly-owned subsidiary of
Fresenius SE. The Company has no direct supply agreement with Kabi USA and does not submit purchase orders directly to Kabi USA. FMCH acquires heparin from Kabi USA, through the GPO contract,
which was negotiated by the GPO at arm's length on behalf of all members of the GPO.
In
December 2010, the Company and Galenica Ltd. (now known as Vifor Pharma Ltd.) formed the renal pharmaceutical company Vifor Fresenius Medical Care Renal Pharma Ltd., an equity
method investee of which the Company owns 45%. The Company has entered into exclusive supply agreements to purchase certain pharmaceuticals from, as well as certain exclusive distribution agreements
with, Vifor Fresenius Medical Care Renal Pharma Ltd.
Under
the Centers for Medicare and Medicaid Services' ("CMS") Comprehensive ESRD Care Model, the Company and participating physicians formed entities known as ESCOs as part of a payment and care
delivery model that seeks to deliver better health outcomes for Medicare ESRD patients while lowering CMS's costs. The Company has entered into participation/service agreements with these ESCOs, which
are accounted for as equity method investees.
Below
is a summary, including the Company's receivables from and payables to the indicated parties, resulting from the above described transactions with related parties.
57
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
3. Related party transactions (Continued)
Service agreements and products with related parties
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months
ended
June 30, 2020
|
|
For the six months
ended
June 30, 2019
|
|
June 30, 2020
|
|
December 31, 2019
|
|
|
|
Sales of
goods and
services
|
|
Purchases of
goods and
services
|
|
Sales of
goods and
services
|
|
Purchases of
goods and
services
|
|
Accounts
receivable
|
|
Accounts
payable
|
|
Accounts
receivable
|
|
Accounts
payable
|
|
Service agreements(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE
|
|
|
155
|
|
|
13,958
|
|
|
77
|
|
|
11,972
|
|
|
40
|
|
|
5,339
|
|
|
35
|
|
|
360
|
|
Fresenius SE affiliates
|
|
|
2,021
|
|
|
53,703
|
|
|
1,651
|
|
|
47,651
|
|
|
884
|
|
|
5,124
|
|
|
2,003
|
|
|
6,416
|
|
Equity method investees
|
|
|
2,778
|
|
|
|
|
|
(12,946
|
)
|
|
|
|
|
67,653
|
|
|
|
|
|
68,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,954
|
|
|
67,661
|
|
|
(11,218
|
)
|
|
59,623
|
|
|
68,577
|
|
|
10,463
|
|
|
70,338
|
|
|
6,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE affiliates
|
|
|
21,918
|
|
|
20,139
|
|
|
21,655
|
|
|
17,559
|
|
|
15,754
|
|
|
4,267
|
|
|
16,803
|
|
|
3,405
|
|
Equity method investees
|
|
|
|
|
|
243,148
|
|
|
|
|
|
224,618
|
|
|
|
|
|
73,143
|
|
|
|
|
|
36,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
21,918
|
|
|
263,287
|
|
|
21,655
|
|
|
242,177
|
|
|
15,754
|
|
|
77,410
|
|
|
16,803
|
|
|
39,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
In
addition to the above shown accounts payable, accrued expenses for service agreements with related parties amounted to €5,485 and
€8,352 at June 30, 2020 and December 31, 2019, respectively.
-
b)
-
Lease agreements
In
addition to the above-mentioned product and service agreements, the Company is a party to real estate lease agreements with the Fresenius SE Companies, which mainly include leases for the Company's
corporate headquarters in Bad Homburg, Germany and production sites in Schweinfurt and St. Wendel, Germany. The leases have maturities up to the end of 2029.
Below
is a summary resulting from the above described lease agreements with related parties.
Lease agreements with related parties
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended
June 30, 2020
|
|
For the six months ended
June 30, 2019
|
|
June 30, 2020
|
|
December 31,
2019
|
|
|
|
Depreciation
|
|
Interest
expense
|
|
Lease
expense(1)
|
|
Depreciation
|
|
Interest
expense
|
|
Lease
expense(1)
|
|
Right-of-
use asset
|
|
Lease
liability
|
|
Right-of-
use asset
|
|
Lease
liability
|
|
Fresenius SE
|
|
|
3,995
|
|
|
375
|
|
|
398
|
|
|
2,524
|
|
|
250
|
|
|
1,955
|
|
|
62,447
|
|
|
62,837
|
|
|
30,336
|
|
|
30,820
|
|
Fresenius SE affiliates
|
|
|
6,644
|
|
|
657
|
|
|
175
|
|
|
6,299
|
|
|
715
|
|
|
275
|
|
|
86,703
|
|
|
87,750
|
|
|
91,879
|
|
|
92,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
10,639
|
|
|
1,032
|
|
|
573
|
|
|
8,823
|
|
|
965
|
|
|
2,230
|
|
|
149,150
|
|
|
150,587
|
|
|
122,215
|
|
|
122,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Short-term
leases and expenses relating to variable lease payments are exempted from balance sheet recognition.
-
c)
-
Financing
The
Company receives short-term financing from and provides short-term financing to Fresenius SE. The Company also utilizes Fresenius SE's cash management system for the settlement of certain
intercompany receivables and payables with its subsidiaries and other related parties. As of June 30, 2020 and December 31, 2019, the Company had accounts receivable from Fresenius SE
related to short-term financing in the amount of €48,818 and €71,078, respectively. As of June 30, 2020, the Company did not have accounts payable to Fresenius
SE related to short-term financing. As of December 31, 2019, the Company had accounts payable to Fresenius SE related to short-term financing in the amount of €38,050.
58
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FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
3. Related party transactions (Continued)
The
interest rates for these cash management arrangements are set on a daily basis and are based on the then-prevailing overnight reference rate, with a floor of zero, for the respective currencies.
On
August 19, 2009, the Company borrowed €1,500 from the General Partner on an unsecured basis at 1.335%. The loan repayment has been extended periodically and is currently due
August 21, 2020 with an interest rate of 0.930%. On November 28, 2013, the Company borrowed an additional €1,500 with an interest rate of 1.875% from the General Partner.
The loan repayment has been extended periodically and is currently due on November 23, 2020 with an interest rate of 0.930%.
At
June 30, 2020 and December 31, 2019, a subsidiary of Fresenius SE held unsecured bonds issued by the Company in the amount of €1,000 and €1,000,
respectively. These bonds were issued in 2011 with a coupon of 5.25% and interest payable semiannually until maturity in 2021.
At
June 30, 2020, the Company lent to Fresenius SE €3,400 on an unsecured basis at an interest rate of 0.930%. This loan was repaid on July 1, 2020. At
December 31, 2019, the Company borrowed from Fresenius SE in the amount of €18,865 on an unsecured basis at an interest rate of 0.930%, respectively. For further information on
this loan agreement, see note 5.
-
d)
-
Key management personnel
Due
to the Company's legal form of a German partnership limited by shares, the General Partner holds a key management position within the Company. In addition, as key management personnel, members of
the Management Board and the Supervisory Board, as well as their close relatives, are considered related parties.
The
Company's Articles of Association provide that the General Partner shall be reimbursed for any and all expenses in connection with management of the Company's business, including remuneration of
the members of the General Partner's supervisory board and the members of the Management Board. The aggregate amount reimbursed to the General Partner was €17,299 and
€13,029 for its management services during the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020 and December 31, 2019, the Company had
accounts receivable from the General Partner in the amount of €65 and €977, respectively. As of June 30, 2020 and December 31, 2019, the Company had
accounts payable to the General Partner in the amount of €47,436 and €34,170, respectively.
4. Inventories
At June 30, 2020 and December 31, 2019, inventories consisted of the following:
Inventories
in € THOUS
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Finished goods
|
|
|
1,054,637
|
|
|
940,407
|
|
Health care supplies
|
|
|
424,616
|
|
|
399,585
|
|
Raw materials and purchased components
|
|
|
240,789
|
|
|
227,654
|
|
Work in process
|
|
|
120,813
|
|
|
95,632
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
1,840,855
|
|
|
1,663,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
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FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
5. Short-term debt and short-term debt from related parties
At June 30, 2020 and December 31, 2019, short-term debt and short-term debt from related parties consisted of the following:
Short-term debt and short-term debt from related parties
in € THOUS
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Commercial paper program
|
|
|
838,856
|
|
|
999,732
|
|
Borrowings under lines of credit
|
|
|
34,379
|
|
|
143,875
|
|
Other
|
|
|
2,396
|
|
|
6,381
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
875,631
|
|
|
1,149,988
|
|
Short-term debt from related parties (see note 3 c)
|
|
|
3,000
|
|
|
21,865
|
|
|
|
|
|
|
|
|
|
Short-term debt and short-term debt from related parties
|
|
|
878,631
|
|
|
1,171,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Company and certain consolidated entities operate a multi-currency notional pooling cash management system. The Company met the conditions to offset balances within this cash pool for reporting
purposes. At June 30, 2020 and December 31, 2019, cash and borrowings under lines of credit in the amount of €268,019 and €152,598 were offset under this
cash management system.
Commercial paper program
The Company maintains a commercial paper program under which short-term notes of up to €1,000,000 can be issued. At June 30, 2020, the
outstanding commercial paper amounted to €839,000 (December 31, 2019: €1,000,000).
Other
At June 30, 2020, the Company had €2,396 (December 31, 2019: €6,381) of other debt outstanding related to fixed
payments outstanding for acquisitions.
Short-term debt from related parties
On July 31, 2019, the Company and one of its subsidiaries, as borrowers, and Fresenius SE, as lender, amended and restated an unsecured loan agreement
to increase the aggregate amount from $400,000 to €600,000. The Company and one of its subsidiaries may request and receive one or more short-term advances until maturity on
July 31, 2022. For further information on short-term debt from related parties, see note 3 c).
60
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FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
6. Long-term debt
As of June 30, 2020 and December 31, 2019, long-term debt consisted of the following:
Long-term debt
in € THOUS
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Amended 2012 Credit Agreement
|
|
|
1,315,192
|
|
|
1,901,372
|
|
Bonds
|
|
|
6,219,222
|
|
|
4,966,619
|
|
Convertible Bonds
|
|
|
|
|
|
399,939
|
|
Accounts Receivable Facility
|
|
|
|
|
|
379,570
|
|
Other
|
|
|
252,239
|
|
|
258,057
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
7,786,653
|
|
|
7,905,557
|
|
Less current portion
|
|
|
(1,512,658
|
)
|
|
(1,447,239
|
)
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
6,273,995
|
|
|
6,458,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On
May 29, 2020, the Company issued bonds in two tranches with an aggregate principal amount of €1,250,000 under the European Medium-Term Notes
Program:
-
-
bonds of €500,000 with a maturity of 6 years and a coupon rate of 1.00% issued at a price of 99.405%, and
-
-
bonds of €750,000 have a maturity of 10 years and a coupon rate of 1.50% issued at a price of 99.742%.
The
proceeds were used for general corporate purposes and the refinancing of maturing liabilities.
Amended 2012 Credit Agreement
The following table shows the available and outstanding amounts under the Amended 2012 Credit Agreement at June 30, 2020 and December 31, 2019:
Amended 2012 Credit AgreementMaximum amount available and balance outstanding
in THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available June 30, 2020
|
|
Balance outstanding June 30, 2020(1)
|
|
Revolving credit USD 2017 / 2022
|
|
$
|
900,000
|
|
€
|
803,715
|
|
$
|
|
|
€
|
|
|
Revolving credit EUR 2017 / 2022
|
|
€
|
600,000
|
|
€
|
600,000
|
|
€
|
|
|
€
|
|
|
USD term loan 2017 / 2022
|
|
$
|
1,170,000
|
|
€
|
1,044,829
|
|
$
|
1,170,000
|
|
€
|
1,044,829
|
|
EUR term loan 2017 / 2022
|
|
€
|
273,000
|
|
€
|
273,000
|
|
€
|
273,000
|
|
€
|
273,000
|
|
EUR term loan 2017 / 2020(2)
|
|
€
|
|
|
€
|
|
|
€
|
|
|
€
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
€
|
2,721,544
|
|
|
|
|
€
|
1,317,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
6. Long-term debt (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available December 31, 2019
|
|
Balance outstanding December 31, 2019(1)
|
|
Revolving credit USD 2017 / 2022
|
|
$
|
900,000
|
|
€
|
801,139
|
|
$
|
138,700
|
|
€
|
123,464
|
|
Revolving credit EUR 2017 / 2022
|
|
€
|
600,000
|
|
€
|
600,000
|
|
€
|
|
|
€
|
|
|
USD term loan 2017 / 2022
|
|
$
|
1,230,000
|
|
€
|
1,094,891
|
|
$
|
1,230,000
|
|
€
|
1,094,891
|
|
EUR term loan 2017 / 2022
|
|
€
|
287,000
|
|
€
|
287,000
|
|
€
|
287,000
|
|
€
|
287,000
|
|
EUR term loan 2017 / 2020
|
|
€
|
400,000
|
|
€
|
400,000
|
|
€
|
400,000
|
|
€
|
400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
€
|
3,183,030
|
|
|
|
|
€
|
1,905,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Amounts
shown are excluding debt issuance costs.
-
(2)
-
The
EUR term loan 2017 / 2020 in the amount of €400,000 due on July 30, 2020, was repaid on May 29, 2020.
Accounts Receivable Facility
The following table shows the available and outstanding amounts under the Accounts Receivable Facility at June 30, 2020 and at December 31,
2019:
Accounts Receivable FacilityMaximum amount available and balance outstanding
in THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available June 30, 2020(1)
|
|
Balance outstanding June 30, 2020(2)
|
|
Accounts Receivable Facility
|
|
$
|
900,000
|
|
€
|
803,715
|
|
$
|
|
|
€
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum amount available December 31, 2019(1)
|
|
Balance outstanding December 31, 2019(2)
|
|
Accounts Receivable Facility
|
|
$
|
900,000
|
|
€
|
801,139
|
|
$
|
427,000
|
|
€
|
380,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Subject
to availability of sufficient accounts receivable meeting funding criteria.
-
(2)
-
Amounts
shown are excluding debt issuance costs.
The
Company also had letters of credit outstanding under the Accounts Receivable Facility in the amount of $12,522 and $23,460 (€11,182 and €20,883) at June 30,
2020 and December 31, 2019, respectively. These letters of credit are not included above as part of the balance outstanding at June 30, 2020 and December 31, 2019; however, they
reduce available borrowings under the Accounts Receivable Facility.
7. Capital management
As of June 30, 2020 and December 31, 2019 total equity in percent of total assets was 39.0% and 40.2%, respectively, and debt and lease liabilities in percent of total assets was 39.4%
and 41.8%, respectively.
Further
information on the Company's capital management is available in the 2019 Form 20-F.
The
Company's financing structure and business model are reflected in the investment grade ratings. The Company is covered and rated investment grade by the three leading rating agencies, Moody's,
Standard & Poor's and Fitch.
62
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
7. Capital management (Continued)
Rating(1)
|
|
|
|
|
|
|
|
|
Standard & Poor´s
|
|
Moody´s
|
|
Fitch
|
Corporate Credit Rating
|
|
BBB
|
|
Baa3
|
|
BBB
|
Outlook
|
|
stable
|
|
stable
|
|
stable
|
-
(1)
-
A
rating is not a recommendation to buy, sell or hold securities of the Company, and may be subject to suspension, change or withdrawal at any time by the assigning
rating agency.
8. Commitments and contingencies
Legal and regulatory matters
The Company is routinely involved in claims, lawsuits, regulatory and tax audits, investigations and other legal matters arising, for the most part, in the
ordinary course of its business of providing health care services and products. Legal matters that the Company currently deems to be material or noteworthy are described below. The Company records its
litigation reserves for certain legal proceedings and regulatory matters to the extent that the Company determines an unfavorable outcome is probable and the amount of loss can be reasonably
estimated. For the other matters described below, the Company believes that the loss probability is remote and/or the loss or range of possible losses cannot be reasonably estimated at this time. The
outcome of litigation and other legal matters is always difficult to predict accurately and outcomes that are not consistent with the Company's view of the merits can occur. The Company believes that
it has valid defenses to the legal matters pending against it and is defending itself vigorously. Nevertheless, it is possible that the resolution of one or more of the legal matters currently pending
or threatened could have a material adverse effect on its business, results of operations and financial condition.
Beginning
in 2012, the Company received certain communications alleging conduct in countries outside the United States that might violate the Foreign Corrupt Practices Act or other anti-bribery laws.
The Company conducted investigations with the assistance of outside counsel and, in a continuing dialogue, advised the Securities and Exchange Commission ("SEC") and the United States Department of
Justice ("DOJ") about these investigations. The DOJ and the SEC also conducted their own investigations, in which the Company cooperated.
In
the course of this dialogue, the Company identified and reported to the DOJ and the SEC, and took remedial actions with respect to, conduct that resulted in the DOJ and the SEC seeking monetary
penalties including disgorgement of profits and other remedies. This conduct revolved principally around the Company's products business in countries outside the United States.
The
Company recorded charges of €200,000 in 2017 and €77,200 in 2018 encompassing estimates for the claims from the DOJ and the SEC for profit disgorgement,
penalties, certain legal expenses, and other related costs or asset impairments believed likely to be necessary for full and final resolution, by litigation or settlement, of the claims and issues
arising from the investigation. The increase recorded in 2018 took into consideration preliminary understandings with the DOJ and the SEC on the financial terms of a potential settlement. Following
this increase, which takes into account incurred and anticipated legal expenses, impairments and other costs, the provision totaled €223,980 as of December 31, 2018.
On
March 29, 2019, the Company entered into a non-prosecution agreement with the DOJ and a separate agreement with the SEC intended to resolve fully and finally the claims against the Company
arising from the investigations. The Company paid a combined total in penalties and disgorgement of approximately $231,700 to the DOJ and the SEC in connection with these agreements. The entire amount
paid to the DOJ and the SEC was reserved for in charges that the Company recorded in 2017 and 2018 and announced in 2018. As part of the settlement, the Company agreed to retain an independent
compliance
63
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Commitments and contingencies (Continued)
monitor
for a period of at least two years and to an additional year of self-reporting. As of July 26, 2019, the monitor was appointed and the monitorship period commenced.
In
2015, the Company self-reported to the German prosecutor conduct with a potential nexus to Germany and continues to cooperate with government authorities in Germany in their review of the conduct
that prompted the Company's and United States government investigations.
Since
2012, the Company has made and continues to make further significant investments in its compliance and financial controls and in its compliance, legal and financial organizations. The Company's
remedial actions included separation from those employees responsible for the above-mentioned conduct. The Company is dealing with post-FCPA review matters on various levels. The Company continues to
be fully committed to compliance with the FCPA and other applicable anti-bribery laws.
Personal
injury litigation involving FMCH's acid concentrate product, labeled as Granuflo® or Naturalyte®, first arose in 2012 and was substantially resolved by settlement
agreed in principle in February 2016 and consummated in November 2017. Remaining individual personal injury cases do not present material risk.
In
addition to the personal injury cases, four institutional plaintiffs filed complaints against FMCH or its affiliates under state deceptive practices statutes resting on certain background
allegations common to the GranuFlo®/NaturaLyte® personal injury litigation but seeking as a remedy the repayment of sums paid to FMCH that were attributable to the
GranuFlo®/NaturaLyte® products. The claims of two of these plaintiffs were resolved by settlement, and FMCH has increased its litigation reserves to account for anticipated
resolution of the other two. See State of Louisiana ex re. Caldwell and Louisiana Health Service & Indemnity Company v. Fresenius Medical Care Airline, et al 2016 Civ. 11035
(U.S.D.C. D. Mass.).
In
March 2019, a special-purpose entity organized under Delaware law for the purpose of pursuing litigation amended its complaint to claim rights to recover monetary damages on behalf of various
persons and entities who are alleged to have assigned to plaintiff their rights to recover monetary damages arising from their having provided or paid for medical services for dialysis patients
receiving treatments using FMCH's acid concentrate product. FMCH is contesting the special-purpose entity's claims.
FMCH
believes that the remaining few personal injury, institutional, and special-purpose entity claims described above present only remote and immaterial risks, whether considered individually or in
the aggregate. Accordingly, specific reporting on these matters will be discontinued.
FMCH's
insurers agreed to the settlement of the acid concentrate personal injury litigation and funded $220,000 of the settlement fund under a reciprocal reservation of rights encompassing certain
coverage issues raised by insurers and the FMCH's claims for indemnification of defense costs. FMCH accrued a net expense of $60,000 in connection with the settlement, including legal fees and other
anticipated costs. Following entry into the settlement, FMCH's insurers in the AIG group and FMCH each initiated litigation against the other relating to the AIG group's coverage obligations under
applicable policies. In the coverage litigation, the AIG group seeks to be indemnified by FMCH for some or all of its $220,000 outlay; FMCH seeks to confirm the AIG group's $220,000 funding
obligation, to recover defense costs already incurred by FMCH, and to compel the AIG group to honor defense and indemnification obligations required for resolution of cases not participating in the
settlement. As a result of decisions on issues of venue, the coverage litigation is proceeding in the New York state trial court for Manhattan. (National Union Fire Insurance v. Fresenius Medical
Care, 2016 Index No. 653108 (Supreme Court of New York for New York County)).
In
August 2014, FMCH received a subpoena from the United States Attorney for the District of Maryland inquiring into FMCH's contractual arrangements with hospitals and physicians involving contracts
relating to the management of in-patient acute dialysis services. FMCH is cooperating in the investigation.
64
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Commitments and contingencies (Continued)
In
July 2015, the Attorney General for Hawaii issued a civil complaint under the Hawaii False Claims Act alleging a conspiracy pursuant to which certain Liberty Dialysis subsidiaries of FMCH
overbilled Hawaii Medicaid for Liberty's Epogen® administrations to Hawaii Medicaid patients during the period from 2006 through 2010, prior to the time of FMCH's acquisition of Liberty.
Hawaii v. Liberty DialysisHawaii, LLC et al., Case No. 15-1-1357-07 (Hawaii 1st Circuit). The State alleges that Liberty acted unlawfully by relying on incorrect and
unauthorized billing guidance provided to Liberty by Xerox State Healthcare LLC, which acted as Hawaii's contracted administrator for its Medicaid program reimbursement operations during the
relevant period. The amount of the overpayment claimed by the State is approximately $8,000, but the State seeks civil remedies, interest, fines, and penalties against Liberty and FMCH under the
Hawaii False Claims Act substantially in excess of the overpayment. After prevailing on motions by Xerox to preclude it from doing so, FMCH is pursuing third-party claims for contribution and
indemnification against Xerox. The State's False Claims Act complaint was filed after Liberty initiated an administrative action challenging the State's recoupment of alleged overpayments from sums
currently owed to Liberty. The civil litigation and administrative action are proceeding in parallel. Trial in the civil litigation is scheduled for March 8, 2021.
On
August 31, 2015, FMCH received a subpoena under the False Claims Act from the United States Attorney for the District of Colorado (Denver) inquiring into FMCH's participation in and
management of dialysis facility joint ventures in which physicians are partners. FMCH continues to cooperate in the Denver United States Attorney's Office ("USAO") investigation, which has come to
focus on purchases and sales of minority interests in ongoing outpatient facilities between FMCH and physician groups.
On
November 25, 2015, FMCH received a subpoena under the False Claims Act from the United States Attorney for the Eastern District of New York (Brooklyn) also inquiring into FMCH's involvement
in certain dialysis facility joint ventures in New York. On September 26, 2018, the Brooklyn USAO declined to intervene on the qui tam complaint filed under seal in 2014 that gave rise to this
investigation. CKD Project LLC v. Fresenius Medical Care, 2014 Civ. 06646 (E.D.N.Y. November 12, 2014). The court unsealed the complaint, allowing the relator to serve and proceed on its
own. The relatora special-purpose entity formed by law firms to pursue qui tam proceedingshas served its complaint and litigation is proceeding.
Beginning
October 6, 2015, the United States Attorney for the Eastern District of New York (Brooklyn) has led an investigation, through subpoenas issued under the False Claims Act, of
utilization and invoicing by FMCH's subsidiary Azura Vascular Care for a period beginning after FMCH's acquisition of American Access Care LLC ("AAC") in October 2011. FMCH is cooperating in
the Brooklyn USAO investigation. The Brooklyn USAO has indicated that its investigation is nationwide in scope and is focused on whether certain access procedures performed at Azura facilities have
been medically necessary and whether certain physician assistants employed by Azura exceeded their permissible scope of practice. Allegations against AAC arising in districts in Connecticut, Florida
and Rhode Island relating to utilization and invoicing were settled in 2015.
On
June 30, 2016, FMCH received a subpoena from the United States Attorney for the Northern District of Texas (Dallas) seeking information under the False Claims Act about the use and
management of pharmaceuticals including Velphoro®. The investigation encompasses DaVita, Amgen, Sanofi, and other pharmaceutical manufacturers and includes inquiries into whether certain
compensation transfers between manufacturers and pharmacy vendors constituted unlawful kickbacks. FMCH understands that this investigation is substantively independent of the $63,700 settlement by
DaVita Rx announced on December 14, 2017 in the matter styled United States ex rel. Gallian v. DaVita Rx, 2016 Civ. 0943 (N.D. Tex.). FMCH has cooperated in the investigation.
On
November 18, 2016, FMCH received a subpoena under the False Claims Act from the United States Attorney for the Eastern District of New York (Brooklyn) seeking documents and information
relating to the operations of Shiel Medical Laboratory, Inc. ("Shiel"), which FMCH acquired in October 2013. In the
65
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Commitments and contingencies (Continued)
course
of cooperating in the investigation and preparing to respond to the subpoena, FMCH identified falsifications and misrepresentations in documents submitted by a Shiel salesperson that relate to
the integrity of certain invoices submitted by Shiel for laboratory testing for patients in long term care facilities. On February 21, 2017, FMCH terminated the employee and notified the United
States
Attorney of the termination and its circumstances. The terminated employee's conduct is expected to result in demands for FMCH to refund overpayments and to pay related penalties under applicable
laws, but the monetary value of such payment demands cannot yet be reasonably estimated. FMCH contends that, under the asset sale provisions of its 2013 Shiel acquisition, it is not responsible for
misconduct by the terminated employee or other Shiel employees prior to the date of the acquisition. The Brooklyn USAO continues to investigate a range of issues involving Shiel, including allegations
of improper compensation (kickbacks) to physicians, and has disclosed that multiple sealed qui tam complaints underlie the investigation.
On
December 12, 2017, FMCH sold to Quest Diagnostics certain Shiel operations that are the subject of this Brooklyn subpoena, including the misconduct reported to the United States Attorney.
Under the Quest Diagnostics sale agreement, FMCH retains responsibility for responding to the Brooklyn investigation and for liabilities arising from conduct occurring after its 2013 acquisition of
Shiel and prior to its sale of Shiel to Quest Diagnostics. FMCH is cooperating in the investigation.
On
December 14, 2016, CMS, which administers the federal Medicare program, published an Interim Final Rule ("IFR") titled "Medicare Program; Conditions for Coverage for End-Stage Renal Disease
Facilities-Third Party Payment." The IFR would have amended the Conditions for Coverage for dialysis providers, like FMCH and would have effectively enabled insurers to reject premium payments made by
or on behalf of patients who received grants for individual market coverage from the American Kidney Fund ("AKF" or "the Fund"). The IFR could thus have resulted in those patients losing individual
insurance market coverage. The loss of coverage for these patients would have had a material and adverse impact on the operating results of FMCH.
On
January 25, 2017, a federal district court in Texas responsible for litigation initiated by a patient advocacy group and dialysis providers including FMCH preliminarily enjoined CMS from
implementing the IFR. Dialysis Patient Citizens v. Burwell, 2017 Civ. 0016 (E.D. Texas, Sherman Div.). The preliminary injunction was based on CMS's failure to follow appropriate notice-and-comment
procedures in adopting the IFR. The injunction remains in place and the court retains jurisdiction over the dispute.
On
June 22, 2017, CMS requested a stay of proceedings in the litigation pending further rulemaking concerning the IFR. CMS stated, in support of its request, that it expects to publish a Notice
of Proposed Rulemaking in the Federal Register and otherwise pursue a notice-and-comment process. Plaintiffs in the litigation, including FMCH, consented to the stay, which was granted by the court on
June 27, 2017.
On
January 3, 2017, FMCH received a subpoena from the United States Attorney for the District of Massachusetts under the False Claims Act inquiring into FMCH's interactions and relationships
with the AKF, including FMCH's charitable contributions to the Fund and the Fund's financial assistance to patients for insurance premiums. FMCH cooperated in the investigation, which was part of a
broader investigation into charitable contributions in the medical industry. On August 1, 2019, the United States District Court for the District of Massachusetts entered an order announcing
that the United States had declined to intervene on a qui tam complaint underlying the USAO Boston investigation and unsealing the relator's complaint so as to permit the relator to serve the
complaint and proceed on his own. The relator did not serve the complaint within the time allowed. On July 17, 2020, the relator filed a notice of dismissal and the court thereafter closed the
case.
On
April 8, 2019, United Healthcare served a demand for arbitration against FMCH. The demand asserts that FMCH unlawfully "steered" patients by waiving co-payments and other means away from
coverage under government-funded insurance plans including Medicare into United Healthcare's commercial plans,
66
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Commitments and contingencies (Continued)
including
Affordable Care Act exchange plans. FMCH is contesting United Healthcare's claims and demands. A final hearing date has been scheduled in the arbitration for August 23, 2021.
In
early May 2017, the United States Attorney for the Middle District of Tennessee (Nashville) issued identical subpoenas to FMCH and two subsidiaries under the False Claims Act concerning FMCH's
retail pharmaceutical business. The investigation is exploring allegations related to improper inducements to dialysis patients to fill oral prescriptions through FMCH's pharmacy service, improper
billing for returned pharmacy products and other allegations similar to those underlying the $63,700 settlement by DaVita Rx in Texas announced on December 14, 2017. United States ex rel.
Gallian, 2016 Civ. 00943 (N.D. Tex.). FMCH is cooperating in the investigation.
On
March 12, 2018, Vifor Fresenius Medical Care Renal Pharma Ltd. and Vifor Fresenius Medical Care Renal Pharma France S.A.S. (collectively, "VFMCRP") (the joint venture between
Vifor Pharma and FMC-AG & Co. KGaA), filed a complaint for patent infringement against Lupin Atlantis Holdings SA and Lupin Pharmaceuticals Inc. (collectively, "Lupin"),
and Teva Pharmaceuticals USA, Inc. ("Teva") in the U.S. District Court for the District of Delaware (Case 1:18-cv-00390-LPS). The patent infringement action is in response to Lupin and Teva's
filings of Abbreviated New Drug Applications ("ANDA") with the U.S. Food and Drug Administration ("FDA") for generic versions of Velphoro®. Velphoro® is protected by patents
listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the Orange Book. The complaint was filed within the 45-day period provided for under the Hatch-Waxman
legislation, and triggered a stay of FDA approval of the ANDAs for 30 months (specifically, up to July 29, 2020 for Lupin's ANDA; and August 6, 2020 for Teva's ANDA), or a shorter
time if a decision in the infringement suit is reached that the patents-at-issue are invalid or not infringed. In response to another ANDA being filed for a generic Velphoro®, VFMCRP filed
a complaint for patent infringement against Annora Pharma Private Ltd., and Hetero Labs Ltd. (collectively, "Annora"), in the U.S. District Court for the District of Delaware on
December 17, 2018. A 30-month stay of FDA approval of Annora's ANDA will run through to May 30, 2021. On May 26, 2020, VFMCRP filed a further complaint for patent infringement
against Lupin in the U.S. District Court for the District of Delaware (Case No. 1:20-cv-00697-MN) in response to Lupin's ANDA for a generic version of Velphoro® and on the basis of
a newly listed patent in the Orange Book. On July 6, 2020, VFMCRP filed an additional complaint for patent infringement against Lupin and Teva in the U.S. District Court for the District
of Delaware (Case No. 1:20-cv-00911-MN) in response to the companies' ANDA for generic versions of Velphoro® and on the basis of two newly listed patents in the Orange Book.
On
December 17, 2018, FMCH was served with a subpoena under the False Claims Act from the United States Attorney for the District of Colorado (Denver) as part of an investigation of allegations
against DaVita, Inc. involving transactions between FMCH and DaVita. The subject transactions include sales and purchases of dialysis facilities, dialysis-related products and pharmaceuticals,
including dialysis machines and dialyzers, and contracts for certain administrative services. FMCH is cooperating in the investigation.
On
June 28, 2019, certain FMCH subsidiaries filed a complaint against the United States seeking to recover monies owed to them by the United States Department of Defense under the Tricare
program, and to preclude Tricare from recouping monies previously paid. Bio-Medical Applications of Georgia, Inc., et al. v. United States, CA 19-947, United States Court of Federal Claims.
Tricare provides reimbursement for dialysis treatments and other medical care provided to members of the military services, their dependents and retirees. The litigation challenges unpublished
administrative actions by Tricare administrators reducing the rate of compensation paid for dialysis treatments provided to Tricare beneficiaries based on a recasting or "crosswalking" of codes used
and followed in invoicing without objection for many years. Tricare administrators have acknowledged the unpublished administrative action and declined to change or abandon it. On July 8, 2020,
the U.S. government filed its answer (and confirmed their position). The parties will proceed to discovery. The court has not yet set a date for trial in
67
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Commitments and contingencies (Continued)
this
matter. FMCH has imposed a constraint on revenue otherwise recognized from the Tricare program that it believes, in consideration of facts currently known, sufficient to account for the risk of
this litigation.
From
time to time, the Company is a party to or may be threatened with other litigation or arbitration, claims or assessments arising in the ordinary course of its business. Management regularly
analyzes current information including, as applicable, the Company's defenses and insurance coverage and, as necessary, provides accruals for probable liabilities for the eventual disposition of these
matters.
The
Company, like other health care providers, insurance plans and suppliers, conducts its operations under intense government regulation and scrutiny. It must comply with regulations which relate to
or govern the safety and efficacy of medical products and supplies, the marketing and distribution of such products, the operation of manufacturing facilities, laboratories, dialysis clinics and other
health care facilities, and environmental and occupational health and safety. With respect to its development, manufacture, marketing and distribution of medical products, if such compliance is not
maintained, the Company could be subject to significant adverse regulatory actions by the FDA and comparable regulatory authorities outside the U.S. These regulatory actions could include warning
letters or other enforcement notices from the FDA, and/or comparable foreign regulatory authority which may require the Company to expend significant time and resources in order to implement
appropriate corrective actions. If the Company does not address matters raised in warning letters or other enforcement notices to the satisfaction of the FDA and/or comparable regulatory authorities
outside the U.S., these regulatory authorities could take additional actions, including product recalls, injunctions against the distribution of products or operation of manufacturing plants, civil
penalties, seizures of the Company's products and/or criminal prosecution. FMCH is currently engaged in remediation efforts with respect to one pending FDA warning letter. The Company must also comply
with the laws of the United States, including the federal Anti-Kickback Statute, the federal False Claims Act, the federal Stark Law, the federal Civil Monetary Penalties Law and the federal Foreign
Corrupt Practices Act as well as other federal and state fraud and abuse laws. Applicable laws or regulations may be amended, or enforcement agencies or courts may make interpretations that differ
from the Company's interpretations or the manner in which it conducts its business. Enforcement has become a high priority for the federal government and some states. In addition, the provisions of
the False Claims Act authorizing payment of a portion of any recovery to the party bringing the suit encourage private plaintiffs to commence whistleblower actions. By virtue of this regulatory
environment, the Company's business activities and practices are subject to extensive review by regulatory authorities and private parties, and continuing audits, subpoenas, other inquiries, claims
and litigation relating to the Company's compliance with applicable laws and regulations. The Company may not always be aware
that an inquiry or action has begun, particularly in the case of whistleblower actions, which are initially filed under court seal.
The
Company operates many facilities and handles the personal data ("PD") of its patients and beneficiaries throughout the United States and other parts of the world and engages with other business
associates to help it carry out its health care activities. In such a decentralized system, it is often difficult to maintain the desired level of oversight and control over the thousands of
individuals employed by many affiliated companies and its business associates. On occasion, the Company or its business associates may experience a breach under the Health Insurance Portability and
Accountability Act Privacy Rule and Security Rules, the EU's General Data Protection Regulation and or other similar laws ("Data Protection Laws") when there has been impermissible use, access, or
disclosure of unsecured PD or when the Company or its business associates neglect to implement the required administrative, technical and physical safeguards of its electronic systems and devices, or
a data breach that results in impermissible use, access or disclosure of personal identifying information of its employees, patients and beneficiaries. On those occasions, the Company must comply with
applicable breach notification requirements.
The
Company relies upon its management structure, regulatory and legal resources, and the effective operation of its compliance program to direct, manage and monitor the activities of its employees.
On
68
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
8. Commitments and contingencies (Continued)
occasion,
the Company may identify instances where employees or other agents deliberately, recklessly or inadvertently contravene the Company's policies or violate applicable law. The actions of such
persons may subject the Company and its subsidiaries to liability under the Anti-Kickback Statute, the Stark Law, the False Claims Act, Data Protection Laws, the Health Information Technology for
Economic and Clinical Health Act and the Foreign Corrupt Practices Act, among other laws and comparable state laws or laws of other countries.
Physicians,
hospitals and other participants in the health care industry are also subject to a large number of lawsuits alleging professional negligence, malpractice, product liability, worker's
compensation or related claims, many of which involve large claims and significant defense costs. The Company has been and is currently subject to these suits due to the nature of its business and
expects that those types of lawsuits may continue. Although the Company maintains insurance at a level which it believes to be prudent, it cannot assure that the coverage limits will be adequate or
that insurance will cover all asserted claims. A successful claim against the Company or any of its subsidiaries in excess of insurance coverage could have a material adverse effect upon it and the
results of its operations. Any claims, regardless of their merit or eventual outcome, could have a material adverse effect on the Company's reputation and business.
The
Company has also had claims asserted against it and has had lawsuits filed against it relating to alleged patent infringements or businesses that it has acquired or divested. These claims and
suits relate both to operation of the businesses and to the acquisition and divestiture transactions. The Company has, when appropriate, asserted its own claims, and claims for indemnification. A
successful claim against the Company or any of its subsidiaries could have a material adverse effect upon its business, financial condition, and the results of its operations. Any claims, regardless
of their merit or eventual outcome, could have a material adverse effect on the Company's reputation and business.
In
Germany, the tax audits for the years 2006 through 2009 have been substantially completed. The German tax authorities have indicated a re-qualification of dividends received in connection with
intercompany mandatorily redeemable preferred shares into fully taxable interest payments for these and subsequent years until 2013. The Company has defended its position and will avail itself of
appropriate remedies. The Company is also subject to ongoing and future tax audits in the U.S., Germany and other jurisdictions in the ordinary course of business. Tax authorities routinely pursue
adjustments to the Company's tax returns and disallowances of claimed tax deductions. When appropriate, the Company defends these adjustments and disallowances and asserts its own claims. A successful
tax related claim against the Company or any of its subsidiaries could have a material adverse effect upon its business, financial condition and results of operations.
Other
than those individual contingent liabilities mentioned above, the current estimated amount of the Company's other known individual contingent liabilities is immaterial.
69
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Financial instruments
The following tables show the carrying amounts and fair values of the Company's financial instruments at June 30, 2020 and December 31, 2019:
Carrying amount and fair value of financial instruments
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
Fair value
|
|
June 30, 2020
|
|
Amortized
cost
|
|
FVPL
|
|
FVOCI
|
|
Not
classified
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Cash and cash equivalents(1)
|
|
|
956,299
|
|
|
933,134
|
|
|
|
|
|
|
|
|
1,889,433
|
|
|
932,978
|
|
|
156
|
|
|
|
|
Trade accounts and other receivables
|
|
|
3,372,527
|
|
|
|
|
|
|
|
|
75,644
|
|
|
3,448,171
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related parties
|
|
|
133,214
|
|
|
|
|
|
|
|
|
|
|
|
133,214
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
4,225
|
|
|
4,225
|
|
|
|
|
|
4,225
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
7,000
|
|
|
|
|
Equity investments
|
|
|
|
|
|
207,425
|
|
|
61,404
|
|
|
|
|
|
268,829
|
|
|
11,788
|
|
|
59,094
|
|
|
197,947
|
|
Debt securities
|
|
|
|
|
|
97,302
|
|
|
288,377
|
|
|
|
|
|
385,679
|
|
|
379,798
|
|
|
5,881
|
|
|
|
|
Other financial assets
|
|
|
165,188
|
|
|
|
|
|
|
|
|
107,230
|
|
|
272,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current assets
|
|
|
165,188
|
|
|
311,727
|
|
|
349,781
|
|
|
111,455
|
|
|
938,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
4,627,228
|
|
|
1,244,861
|
|
|
349,781
|
|
|
187,099
|
|
|
6,408,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
678,121
|
|
|
|
|
|
|
|
|
|
|
|
678,121
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties
|
|
|
135,309
|
|
|
|
|
|
|
|
|
|
|
|
135,309
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and short-term debt from related parties
|
|
|
878,631
|
|
|
|
|
|
|
|
|
|
|
|
878,631
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
7,786,653
|
|
|
|
|
|
|
|
|
|
|
|
7,786,653
|
|
|
6,470,321
|
|
|
1,557,796
|
|
|
|
|
Long-term lease liabilities and long-term lease liabilities from related parties
|
|
|
|
|
|
|
|
|
|
|
|
4,812,233
|
|
|
4,812,233
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
667
|
|
|
667
|
|
|
|
|
|
667
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
10,090
|
|
|
|
|
|
|
|
|
10,090
|
|
|
|
|
|
10,090
|
|
|
|
|
Variable payments outstanding for acquisitions
|
|
|
|
|
|
71,441
|
|
|
|
|
|
|
|
|
71,441
|
|
|
|
|
|
|
|
|
71,441
|
|
Noncontrolling interest subject to put provisions
|
|
|
|
|
|
|
|
|
|
|
|
944,252
|
|
|
944,252
|
|
|
|
|
|
|
|
|
944,252
|
|
Other financial liabilities
|
|
|
1,670,965
|
|
|
|
|
|
|
|
|
|
|
|
1,670,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current liabilities
|
|
|
1,670,965
|
|
|
81,531
|
|
|
|
|
|
944,919
|
|
|
2,697,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
11,149,679
|
|
|
81,531
|
|
|
|
|
|
5,757,152
|
|
|
16,988,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Highly
liquid short-term investments are mainly categorized in level 1 of the fair value hierarchy. Cash and cash equivalents measured at amortized cost is
not categorized.
70
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Financial instruments (Continued)
Carrying amount and fair value of financial instruments
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
Fair value
|
|
December 31, 2019
|
|
Amortized
cost
|
|
FVPL
|
|
FVOCI
|
|
Not
classified
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Cash and cash equivalents(1)
|
|
|
841,046
|
|
|
166,677
|
|
|
|
|
|
|
|
|
1,007,723
|
|
|
166,677
|
|
|
|
|
|
|
|
Trade accounts and other receivables
|
|
|
3,343,873
|
|
|
|
|
|
|
|
|
77,473
|
|
|
3,421,346
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable from related parties
|
|
|
159,196
|
|
|
|
|
|
|
|
|
|
|
|
159,196
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
107
|
|
|
107
|
|
|
|
|
|
107
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
2,406
|
|
|
|
|
|
|
|
|
2,406
|
|
|
|
|
|
2,406
|
|
|
|
|
Equity investments
|
|
|
|
|
|
186,273
|
|
|
50,975
|
|
|
|
|
|
237,248
|
|
|
13,110
|
|
|
41,084
|
|
|
183,054
|
|
Debt securities
|
|
|
|
|
|
107,988
|
|
|
261,833
|
|
|
|
|
|
369,821
|
|
|
365,170
|
|
|
4,651
|
|
|
|
|
Other financial assets
|
|
|
141,355
|
|
|
|
|
|
|
|
|
111,649
|
|
|
253,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current assets
|
|
|
141,355
|
|
|
296,667
|
|
|
312,808
|
|
|
111,756
|
|
|
862,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
4,485,470
|
|
|
463,344
|
|
|
312,808
|
|
|
189,229
|
|
|
5,450,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
716,526
|
|
|
|
|
|
|
|
|
|
|
|
716,526
|
|
|
|
|
|
|
|
|
|
|
Accounts payable to related parties
|
|
|
118,663
|
|
|
|
|
|
|
|
|
|
|
|
118,663
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and short-term debt from related parties
|
|
|
1,171,853
|
|
|
|
|
|
|
|
|
|
|
|
1,171,853
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
7,905,557
|
|
|
|
|
|
|
|
|
|
|
|
7,905,557
|
|
|
5,555,475
|
|
|
2,537,932
|
|
|
|
|
Long-term lease liabilities and long-term lease liabilities from related parties
|
|
|
|
|
|
|
|
|
|
|
|
4,705,038
|
|
|
4,705,038
|
|
|
|
|
|
|
|
|
|
|
Derivativescash flow hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
2,534
|
|
|
2,534
|
|
|
|
|
|
2,534
|
|
|
|
|
Derivativesnot designated as hedging instruments
|
|
|
|
|
|
10,762
|
|
|
|
|
|
|
|
|
10,762
|
|
|
|
|
|
10,762
|
|
|
|
|
Variable payments outstanding for acquisitions
|
|
|
|
|
|
89,677
|
|
|
|
|
|
|
|
|
89,677
|
|
|
|
|
|
|
|
|
89,677
|
|
Noncontrolling interest subject to put provisions
|
|
|
|
|
|
|
|
|
|
|
|
934,425
|
|
|
934,425
|
|
|
|
|
|
|
|
|
934,425
|
|
Other financial liabilities
|
|
|
1,414,464
|
|
|
|
|
|
|
|
|
|
|
|
1,414,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current and non-current liabilities
|
|
|
1,414,464
|
|
|
100,439
|
|
|
|
|
|
936,959
|
|
|
2,451,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
11,327,063
|
|
|
100,439
|
|
|
|
|
|
5,641,997
|
|
|
17,069,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Highly
liquid short-term investments are categorized in level 1 of the fair value hierarchy. Cash and cash equivalents measured at amortized cost is not
categorized.
Derivative
and non-derivative financial instruments are categorised in the following three-tier fair value hierarchy that reflects the significance of the inputs in making the measurements.
Level 1 is defined as observable inputs, such as quoted prices in active markets. Level 2 is defined as inputs other than quoted prices in active markets that are directly or indirectly
observable. Level 3 is defined as unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. Fair value information is not
provided for financial instruments, if the carrying amount is a reasonable estimate of fair value due to the relatively short period of maturity of these instruments. Transfers between levels of the
fair value hierarchy have not occurred as of June 30, 2020 and December 31, 2019. The Company accounts for transfers at the end of the reporting period.
71
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Financial instruments (Continued)
Derivative financial instruments
In order to manage the risk of currency exchange rate fluctuations and interest rate fluctuations, the Company enters into various hedging transactions by
means of derivative instruments with highly rated financial institutions. The Company primarily enters into foreign exchange forward contracts and interest rate swaps. Derivative contracts that do not
qualify for hedge accounting are utilized for economic purposes. The Company does not use financial instruments for trading purposes.
Non-derivative financial instruments
The significant methods and assumptions used for the classification and measurement of non-derivative financial instruments are as follows:
The
Company assessed its business models and the cash flow characteristics of its financial assets. The vast majority of the non-derivative financial assets are held in order to collect the
contractual cash flows. The contractual terms of the financial assets allow the conclusion that the cash flows represent payment of principle and interest only. Trade accounts and other receivables,
Accounts receivable from related parties and Other financial assets are consequently measured at amortized cost.
Cash
and cash equivalents are comprised of cash funds and other short-term investments. Cash funds are measured at amortized cost. Short-term investments are highly liquid and readily convertible to
known amounts of cash. Short-term investments are measured at FVPL. The risk of changes in fair value is insignificant.
Equity
investments are not held for trading. At initial recognition the Company elected, on an instrument-by-instrument basis, to represent subsequent changes in the fair value of individual strategic
investments in OCI. If equity instruments are quoted in an active market, the fair value is based on price quotations at the period-end-date. From time to time the Company engages external valuation
firms to determine the fair value of Level 3 equity investments. The external valuation uses a discounted cash flow model, which includes significant unobservable inputs such as investment
specific forecasted financial statements, weighted average cost of capital, that reflects current market assessments as well as a terminal growth rate.
The
majority of the debt securities are held within a business model whose objective is achieving both contractual cash flows and sell the securities. The standard coupon bonds give rise on specified
dates to cash flows that are solely payments of principal and interest on the outstanding principal amount. Subsequently these financial assets have been classified as FVOCI. The smaller part of debt
securities does not give rise to cash flows that are solely payments of principle and interest. Consequently, these securities are measured at FVPL. In general, most of the debt securities are quoted
in an active market.
Long-term
debt is recognized at its carrying amount. The fair values of major long-term debt are calculated on the basis of market information. Liabilities for which market quotes are available are
measured using these quotes. The fair values of the other long-term debt are calculated at the present value of the respective future cash flows. To determine these present values, the prevailing
interest rates and credit spreads for the Company as of the balance sheet date are used.
Variable
payments outstanding for acquisitions are recognized at their fair value. The estimation of the individual fair values is based on the key inputs of the arrangement that determine the future
contingent payment as well as the Company's expectation of these factors. The Company assesses the likelihood and timing of achieving the relevant objectives. The underlying assumptions are reviewed
regularly.
Noncontrolling
interests subject to put provisions are recognized at the present value of the exercise price of the option. The exercise price of the option is generally based on fair value. The
methodology the Company uses to estimate the fair values assumes the greater of net book value or a multiple of earnings, based on historical earnings, development stage of the underlying business and
other factors. From time to
72
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
9. Financial instruments (Continued)
time
the Company engages external valuation firms for the valuation of the put provisions. The external valuation estimates the fair values using a combination of discounted cash flows and a multiple
of earnings and/or revenue. When applicable, the obligations are discounted at a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
liability. The estimated fair values of the noncontrolling interests subject to these put provisions can also fluctuate, and the discounted cash flows as well as the implicit multiple of earnings
and/or revenue at which these noncontrolling interest obligations may ultimately be settled could vary significantly from the Company's current estimates depending upon market conditions. For the
purpose of analyzing the impact of changes in unobservable inputs on the fair value measurement of noncontrolling interest subject to put provisions, the Company assumes an increase on earnings of 10%
compared to the actual estimation as of the balance sheet date. The corresponding increase in fair value of €67,924 is then compared to the total liabilities and the shareholder's
equity of the Company. This analysis shows that an increase of 10% in the relevant earnings would have an effect of less than 1% on the total liabilities and less than 1% on the shareholder's equity
of the Company.
Following
is a roll forward of Level 3 financial instruments at June 30, 2020 and December 31, 2019:
Reconciliation from beginning to ending balance of level 3 financial instruments
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
Equity
investments
|
|
Variable
payments
outstanding
for
acquisitions
|
|
Noncontrolling
interests
subject to put
provisions
|
|
Equity
investments
|
|
Variable
payments
outstanding
for
acquisitions
|
|
Noncontrolling
interests
subject to put
provisions
|
|
Beginning balance at January 1,
|
|
|
183,054
|
|
|
89,677
|
|
|
934,425
|
|
|
|
|
|
172,278
|
|
|
818,871
|
|
Transfer from Level 2
|
|
|
|
|
|
|
|
|
|
|
|
186,427
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
11,826
|
|
|
16,096
|
|
|
2,233
|
|
|
4,828
|
|
|
109,109
|
|
Decrease
|
|
|
|
|
|
(28,506
|
)
|
|
(87,155
|
)
|
|
|
|
|
(43,941
|
)
|
|
(20,269
|
)
|
(Gain) loss recognized in profit or loss
|
|
|
14,535
|
|
|
166
|
|
|
|
|
|
128
|
|
|
(41,537
|
)
|
|
|
|
(Gain) loss recognized in equity
|
|
|
|
|
|
|
|
|
82,537
|
|
|
|
|
|
|
|
|
14,523
|
|
Foreign currency translation and other changes
|
|
|
358
|
|
|
(1,722
|
)
|
|
(1,651
|
)
|
|
(5,734
|
)
|
|
(1,951
|
)
|
|
12,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance at June 30, and December 31,
|
|
|
197,947
|
|
|
71,441
|
|
|
944,252
|
|
|
183,054
|
|
|
89,677
|
|
|
934,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10. Segment and corporate information
The Company's operating segments are the North America Segment, the EMEA Segment, the Asia-Pacific Segment and the Latin America Segment. The operating segments are determined based upon how the
Company manages its businesses with geographical responsibilities. All segments are primarily engaged in providing health care services and the distribution of products and equipment for the treatment
of ESRD and other extracorporeal therapies.
Management
evaluates each segment using measures that reflect all of the segment's controllable revenues and expenses. With respect to the performance of business operations, management believes that
the most appropriate measures are revenue, operating income and operating income margin. The Company does not include income taxes as it believes this is outside the segments' control. Financing is a
corporate function, which the Company's segments do not control. Therefore, the Company does not include interest expense relating to financing as a segment measurement. Similarly, the Company does
not allocate certain costs, which relate primarily to certain headquarters' overhead charges, including accounting and finance, because the Company believes that these costs are also not within the
control of the individual segments.
73
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
10. Segment and corporate information (Continued)
Production
of products, production asset management, quality and supply chain management as well as procurement related to production are centrally managed. Products transferred to the segments are
transferred at cost; therefore, no internal profit is generated. The associated internal revenue for the product transfers and their elimination are recorded as corporate activities. Capital
expenditures for production are based on the expected demand of the segments and consolidated profitability considerations. The Company's global research and development as well as its Global Medical
Office (as of January 1, 2020), which seeks to standardize medical treatments and clinical processes within the Company, are also centrally managed. These corporate activities ("Corporate") do
not fulfill the
definition of a segment according to IFRS 8, Operating Segments. In addition, certain revenues, investments and intangible assets, as well as any related expenses, are not allocated to a
segment but are accounted for as Corporate.
Information
pertaining to the Company's segment and Corporate activities for the six months ended June 30, 2020 and 2019 is set forth below:
74
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
10. Segment and corporate information (Continued)
Segment and corporate information
in € THOUS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
Segment
|
|
EMEA
Segment
|
|
Asia-
Pacific
Segment
|
|
Latin
America
Segment
|
|
Segment
Total
|
|
Corporate
|
|
Total
|
|
Three months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with customers
|
|
|
3,155,924
|
|
|
679,363
|
|
|
435,351
|
|
|
168,602
|
|
|
4,439,240
|
|
|
10,715
|
|
|
4,449,955
|
|
Other revenue external customers
|
|
|
83,865
|
|
|
7,713
|
|
|
14,861
|
|
|
951
|
|
|
107,390
|
|
|
|
|
|
107,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
3,239,789
|
|
|
687,076
|
|
|
450,212
|
|
|
169,553
|
|
|
4,546,630
|
|
|
10,715
|
|
|
4,557,345
|
|
Inter-segment revenue
|
|
|
6,848
|
|
|
1,264
|
|
|
24
|
|
|
69
|
|
|
8,205
|
|
|
(8,205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
3,246,637
|
|
|
688,340
|
|
|
450,236
|
|
|
169,622
|
|
|
4,554,835
|
|
|
2,510
|
|
|
4,557,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
609,414
|
|
|
77,622
|
|
|
63,311
|
|
|
10,921
|
|
|
761,268
|
|
|
(105,344
|
)
|
|
655,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(91,940
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
563,984
|
|
Depreciation and amortization
|
|
|
(257,538
|
)
|
|
(48,776
|
)
|
|
(27,028
|
)
|
|
(8,534
|
)
|
|
(341,876
|
)
|
|
(62,997
|
)
|
|
(404,873
|
)
|
Impairment loss
|
|
|
395
|
|
|
(5,769
|
)
|
|
|
|
|
|
|
|
(5,374
|
)
|
|
(34
|
)
|
|
(5,408
|
)
|
Income (loss) from equity method investees
|
|
|
29,464
|
|
|
(22,893
|
)
|
|
(2,385
|
)
|
|
(102
|
)
|
|
4,084
|
|
|
(179
|
)
|
|
3,905
|
|
Additions of property, plant and equipment, intangible assets and right of use assets
|
|
|
246,740
|
|
|
74,403
|
|
|
26,983
|
|
|
13,532
|
|
|
361,658
|
|
|
148,439
|
|
|
510,097
|
|
Three months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with customers
|
|
|
3,000,624
|
|
|
639,324
|
|
|
439,091
|
|
|
171,511
|
|
|
4,250,550
|
|
|
5,392
|
|
|
4,255,942
|
|
Other revenue external customers
|
|
|
60,470
|
|
|
8,856
|
|
|
18,907
|
|
|
857
|
|
|
89,090
|
|
|
|
|
|
89,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
3,061,094
|
|
|
648,180
|
|
|
457,998
|
|
|
172,368
|
|
|
4,339,640
|
|
|
5,392
|
|
|
4,345,032
|
|
Inter-segment revenue
|
|
|
399
|
|
|
(1
|
)
|
|
222
|
|
|
17
|
|
|
637
|
|
|
(637
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
3,061,493
|
|
|
648,179
|
|
|
458,220
|
|
|
172,385
|
|
|
4,340,277
|
|
|
4,755
|
|
|
4,345,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
428,880
|
|
|
96,389
|
|
|
69,357
|
|
|
5,887
|
|
|
600,513
|
|
|
(79,256
|
)
|
|
521,257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(114,355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
406,902
|
|
Depreciation and amortization
|
|
|
(249,451
|
)
|
|
(47,372
|
)
|
|
(22,829
|
)
|
|
(7,668
|
)
|
|
(327,320
|
)
|
|
(59,681
|
)
|
|
(387,001
|
)
|
Income (loss) from equity method investees
|
|
|
24,467
|
|
|
(3,204
|
)
|
|
856
|
|
|
362
|
|
|
22,481
|
|
|
|
|
|
22,481
|
|
Additions of property, plant and equipment and intangible assets
|
|
|
302,901
|
|
|
38,030
|
|
|
32,175
|
|
|
14,023
|
|
|
387,129
|
|
|
80,078
|
|
|
467,207
|
|
Six months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with customers
|
|
|
6,258,201
|
|
|
1,351,857
|
|
|
867,287
|
|
|
335,864
|
|
|
8,813,209
|
|
|
22,680
|
|
|
8,835,889
|
|
Other revenue external customers
|
|
|
167,811
|
|
|
13,965
|
|
|
25,819
|
|
|
1,657
|
|
|
209,252
|
|
|
|
|
|
209,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
6,426,012
|
|
|
1,365,822
|
|
|
893,106
|
|
|
337,521
|
|
|
9,022,461
|
|
|
22,680
|
|
|
9,045,141
|
|
Inter-segment revenue
|
|
|
14,023
|
|
|
2,577
|
|
|
28
|
|
|
190
|
|
|
16,818
|
|
|
(16,818
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
6,440,035
|
|
|
1,368,399
|
|
|
893,134
|
|
|
337,711
|
|
|
9,039,279
|
|
|
5,862
|
|
|
9,045,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,072,825
|
|
|
178,676
|
|
|
140,120
|
|
|
17,778
|
|
|
1,409,399
|
|
|
(198,345
|
)
|
|
1,211,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(196,159
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,014,895
|
|
Depreciation and amortization
|
|
|
(514,167
|
)
|
|
(94,751
|
)
|
|
(52,987
|
)
|
|
(17,246
|
)
|
|
(679,151
|
)
|
|
(125,396
|
)
|
|
(804,547
|
)
|
Impairment loss
|
|
|
(604
|
)
|
|
(5,783
|
)
|
|
|
|
|
|
|
|
(6,387
|
)
|
|
(34
|
)
|
|
(6,421
|
)
|
Income (loss) from equity method investees
|
|
|
50,514
|
|
|
(24,555
|
)
|
|
(1,435
|
)
|
|
(31
|
)
|
|
24,493
|
|
|
(179
|
)
|
|
24,314
|
|
Total assets
|
|
|
22,912,147
|
|
|
3,891,296
|
|
|
2,767,942
|
|
|
902,360
|
|
|
30,473,745
|
|
|
3,716,108
|
|
|
34,189,853
|
|
thereof investments in equity method investees
|
|
|
376,697
|
|
|
183,193
|
|
|
100,120
|
|
|
26,015
|
|
|
686,025
|
|
|
|
|
|
686,025
|
|
Additions of property, plant and equipment, intangible assets and right of use assets
|
|
|
606,606
|
|
|
119,576
|
|
|
72,273
|
|
|
30,699
|
|
|
829,154
|
|
|
224,224
|
|
|
1,053,378
|
|
Six months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with customers
|
|
|
5,826,836
|
|
|
1,275,124
|
|
|
850,694
|
|
|
332,112
|
|
|
8,284,766
|
|
|
9,560
|
|
|
8,294,326
|
|
Other revenue external customers
|
|
|
121,034
|
|
|
25,669
|
|
|
34,878
|
|
|
1,682
|
|
|
183,263
|
|
|
|
|
|
183,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
5,947,870
|
|
|
1,300,793
|
|
|
885,572
|
|
|
333,794
|
|
|
8,468,029
|
|
|
9,560
|
|
|
8,477,589
|
|
Inter-segment revenue
|
|
|
975
|
|
|
|
|
|
456
|
|
|
82
|
|
|
1,513
|
|
|
(1,513
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
5,948,845
|
|
|
1,300,793
|
|
|
886,028
|
|
|
333,876
|
|
|
8,469,542
|
|
|
8,047
|
|
|
8,477,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
801,274
|
|
|
234,165
|
|
|
164,059
|
|
|
17,282
|
|
|
1,216,780
|
|
|
(158,973
|
)
|
|
1,057,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(222,203
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
835,604
|
|
Depreciation and amortization
|
|
|
(478,186
|
)
|
|
(94,345
|
)
|
|
(45,430
|
)
|
|
(16,031
|
)
|
|
(633,992
|
)
|
|
(115,385
|
)
|
|
(749,377
|
)
|
Income (loss) from equity method investees
|
|
|
45,829
|
|
|
(4,521
|
)
|
|
562
|
|
|
644
|
|
|
42,514
|
|
|
|
|
|
42,514
|
|
Total assets
|
|
|
21,436,560
|
|
|
4,240,496
|
|
|
2,688,054
|
|
|
870,927
|
|
|
29,236,037
|
|
|
2,719,964
|
|
|
31,956,001
|
|
thereof investments in equity method investees
|
|
|
357,756
|
|
|
174,557
|
|
|
97,487
|
|
|
24,322
|
|
|
654,122
|
|
|
|
|
|
654,122
|
|
Additions of property, plant and equipment and intangible assets
|
|
|
491,051
|
|
|
85,144
|
|
|
45,918
|
|
|
28,806
|
|
|
650,919
|
|
|
153,565
|
|
|
804,484
|
|
75
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to consolidated financial statements (Continued)
(unaudited)
(in THOUS, except share and per share data)
11. Events occurring after the balance sheet date
On July 8, 2020 the Company announced that it will hold its 2020 Annual General Meeting ("AGM") on August 27, 2020. The AGM was postponed from its originally scheduled date of
May 19, 2020 due to COVID-19 and will be held as a virtual event given the uncertainty regarding restrictions on large public events in Germany. The proposed dividend by the General Partner and
the Supervisory Board, which has also been delayed as a result of the postponement of the AGM, remains unchanged at €1.20 per share. The invitation and agenda for the AGM were
published in the German Federal Gazette with a convenience translation subsequently posted on the Company's website at www.freseniusmedicalcare.com/en/agm.
The
bonds issued by Fresenius Medical Care US Finance II, Inc. in the amount of $500,000, originally due on October 15, 2020, were redeemed prior to maturity on July 17, 2020.
No
further significant activities have taken place subsequent to the balance sheet date June 30, 2020 that have a material impact on the key figures and earnings presented. Currently, there are
no other significant changes in the Company's structure, management, legal form or personnel.
76
Table of Contents
Quantitative and qualitative disclosures about market risk
The information in note 9 of the notes to consolidated financial statements (unaudited), presented elsewhere in this report is incorporated by this
reference.
77
Table of Contents
Controls and procedures
The Company is a "foreign private issuer" within the meaning of Rule 3b-4(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As such, the Company is not required to file quarterly reports with the Securities and Exchange Commission and is required to provide an evaluation of the effectiveness of its disclosure
controls and procedures, to disclose significant changes in its internal control over financial reporting and to provide certifications of its Chief Executive Officer and Chief Financial Officer under
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 only in its Annual Report on Form 20-F. The Company furnishes quarterly financial information to the Securities and Exchange
Commission (the "Commission") and such certifications under cover of Form 6-K on a voluntary basis and pursuant to the provisions of the Company's pooling agreement entered into for the benefit
of the public holders of our shares. In connection with such voluntary reporting, the Company's management, including the Chief Executive Officer and the Chief Financial Officer of the Company's
General Partner, has conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report, of the type contemplated by
Securities Exchange Act Rule 13a-15. During the third quarter of fiscal 2019, we identified a material weakness in internal control relating to revenue recognition, specifically for estimating
the transaction price and constraining the variable consideration of the transaction price for certain fee-for-service revenue arrangements under legal consideration and timely adjusting the
constraint of variable consideration when new information arises and determined that this material weakness existed as of December 31, 2018. This material weakness continues to exist as of the
date of June 30, 2020 (for further detail regarding this material weakness, see Item 15D. "Changes in internal control over financial reporting" included within our Annual Report on
Form 20-F for the year ended December 31, 2019). As a result, the Chief Executive Officer and the Chief Financial Officer concluded in connection with the furnishing of this report, that
the Company's disclosure controls and procedures were not effective as of June 30, 2020.
We
have advised our audit committee of this deficiency in our internal control over financial reporting, and the fact that this deficiency constitutes a material weakness. A material weakness in
internal control over financial reporting is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.
Because
a material weakness was determined to exist, we performed additional procedures to ensure our consolidated financial statements included in this report on Form 6-K are presented fairly,
in all material respects, and that our financial condition, results of operations and cash flows for the periods are presented in conformity with International Financial Reporting Standards ("IFRS")
as issued by the International Accounting Standards Board ("IASB"). This control deficiency did not result in errors to accounts receivable and revenue from specific fee-for-service arrangements in
the Company's consolidated financial statements for the six months ended June 30, 2020.
We
are undertaking steps to strengthen the Company's controls relating to revenue recognition, specifically for estimating the transaction price and constraining the variable consideration of the
transaction price for certain fee-for-service revenue arrangements under legal consideration and its related accounts receivable, including:
-
-
Increasing oversight by management over revenue recognition specific to fee-for-service matters in legal consideration as well as the
accounting and reporting of the related receivable balances;
-
-
Enhancing policies and procedures;
-
-
Strengthening communication and information flows between the legal and finance departments specific to fee-for-service matters in legal
consideration; and
-
-
Increasing the role of the finance function in its oversight of revenue recognition specific to fee-for-service matters in legal consideration
and their related accounts receivable balances, including responsibility for the final estimation and reporting.
We
are committed to maintaining a strong internal control environment and believe the above noted remediation efforts will represent significant improvements to the internal control environment. The
identified material weakness in internal control will not be considered fully remediated until the applicable controls operate for a sufficient period of time and management has concluded, through
testing, that these controls are operating effectively.
78
Table of Contents
On
March 29, 2019, the Company entered into a non-prosecution agreement with the DOJ and a separate agreement with the SEC intended to resolve fully and finally the government's claims against
the Company arising from the investigations, see note 8 of the notes to the consolidated financial statements (unaudited) presented elsewhere in this Report. The Company continues to implement
enhancements to its anti-corruption compliance program, including internal controls related to compliance with international anti-bribery laws. The Company continues to be fully committed to
compliance with the Foreign Corrupt Practices Act and other applicable anti-bribery laws.
In
2015, the Company self-reported to the German prosecutor conduct with a potential nexus to Germany and continues to cooperate with government authorities in Germany in their review of the conduct
that prompted the Company's and United States government investigations.
Since
2012, the Company has made and continues to make further significant investments in its compliance and financial controls and in its compliance, legal and financial organizations. The Company's
remedial actions included separation from those employees responsible for the above-mentioned conduct. The Company is dealing with post-FCPA review matters on various levels. The Company continues to
be fully committed to compliance with the FCPA and other applicable anti-bribery laws.
Except
as noted in the preceding paragraphs, there has not been any change in our system of internal control over financial reporting during the quarter ended June 30, 2020 that has materially
affected, or is reasonably likely to materially affect, internal control over financial reporting.
79
Table of Contents
OTHER INFORMATION
Legal proceedings
The information in note 8 of the notes to consolidated financial statements (unaudited), presented elsewhere in this report is incorporated by this
reference.
80
Table of Contents
Exhibits
|
|
|
|
Exhibit No.
|
|
|
|
10.1
|
|
Final Terms dated May 27, 2019 for EUR 750,000,000 1.500% Fixed Rate Euro-Denominated Bonds due 2030 (filed herewith).
|
|
10.2
|
|
Final Terms dated May 27, 2019 for EUR 500,000,000 1.000% Fixed Rate Euro-Denominated Bonds due 2026 (filed herewith).
|
|
31.1
|
|
Certification of Chief Executive Officer and Chairman of the Management Board of the Company's General Partner Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
|
Certification of Chief Financial Officer and member of the Management Board of the Company's General Partner Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
|
Certification of Chief Executive Officer and Chairman of the Management Board of the Company's General Partner and Chief Financial Officer and member of the Management Board of the Company's General Partner Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (this exhibit accompanies this report as required by the Sarbanes-Oxley Act of 2002 and is not to be deemed "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended).
|
|
101
|
|
The following financial statements as of and for the three- and six-month periods ended June 30, 2020 from FMC-AG & Co. KGaA's Report on Form 6-K for the month of July 2020, formatted in XBRL (eXtensible Business Reporting
Language): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of
Shareholders' Equity and (vi) Notes to Consolidated Financial Statements.
|
81
Table of Contents
SIGNATURES
Pursuant to the requirements 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.
DATE:
July 30, 2020
|
|
|
|
|
|
|
|
|
FRESENIUS MEDICAL CARE AG & Co. KGaA a partnership limited by shares, represented by:
|
|
|
FRESENIUS MEDICAL CARE MANAGEMENT AG, its General Partner
|
|
|
By:
|
|
/s/ RICE POWELL
|
|
|
|
|
Name:
|
|
Rice Powell
|
|
|
|
|
Title:
|
|
Chief Executive Officer and Chairman of the Management Board of the General Partner
|
|
|
By:
|
|
/s/ HELEN GIZA
|
|
|
|
|
Name:
|
|
Helen Giza
|
|
|
|
|
Title:
|
|
Chief Financial Officer and member of the Management Board of the General Partner
|
82
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