Notes to Consolidated Financial Statements
(unaudited)
(in thousands, 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 the 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 sales and number of patients treated. The Company provides dialysis treatment and related dialysis care
services to persons who suffer from end-stage renal disease ("ESRD"), as well as other health care services. The Company also develops and manufactures a full range 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 the coordinated delivery of pharmacy services, vascular, cardiovascular and endovascular specialty services, non-dialysis
laboratory testing services, physician nephrology and cardiology services, hospitalist and intensivist services, health plan services, ambulatory surgery center services and urgent care services,
which, 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, a German partnership limited by shares resulting from the
change of legal form of Fresenius SE (effective as of January 2011), a European Company (Societas Europaea) previously called Fresenius AG, a German stock corporation. "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 13 "Segment and Corporate
Information."
Basis of Presentation
Since 1996, the Company has prepared and filed with the U.S. Securities and Exchange Commission ("SEC") Consolidated Financial Statements on
Form 20-F in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). Since 2007, the Company has also been required by German and European law to prepare
Consolidated Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
36
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
In
2007, the Company adopted IFRS 1 and began publishing Consolidated Financial Statements based upon IFRS as adopted by the European Union with the federal gazette in Germany.
The Company's effective date of transition to IFRS was January 1, 2006. As required by IFRS 1, The Company has applied all IFRS standards and interpretations that were effective as of
December 31, 2007, the reporting date for the first IFRS consolidated Financial Statements for the year ending 31, 2007, consistently and retrospectively through the transition date.
As
of January 1, 2017, the Company will file its quarterly reports on 6-K and its Annual Report on 20-F solely in accordance with IFRS as issued by the International Accounting
Standards Board ("IASB") and has discontinued preparing U.S. GAAP financial information. At March 31, 2017, there were no IFRS or International Financial Reporting Interpretation
Committee ("IFRIC") interpretations as endorsed by the European Union relevant for interim reporting that differed from IFRS as issued by the IASB. As such, the accompanying condensed interim report
complies with the requirements of International Accounting Standard ("IAS") 34, Interim Financial Reporting as well as with the rules concerning interim reporting as issued by the IASB.
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 revenue and expense 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.
The
results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results of operations for the year ending December 31, 2017.
Recently Implemented Accounting Pronouncements
The Company has prepared its Consolidated Financial Statements at March 31, 2017 in conformity with IFRS in force for the interim periods
on January 1, 2017. In the first quarter of 2017, the Company did not apply any new standards which would be relevant for its business.
Recent Accounting Pronouncements Not Yet Adopted
The IASB issued the following new standards which are relevant for the Company:
-
-
IFRS 15, Revenue from Contracts with Customers
-
-
IFRS 9, Financial Instruments
-
-
IFRS 16, Leases
-
-
Amendments to IAS 7, Statement of Cash Flows
37
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
In
May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers. This new standard specifies how and when companies reporting under IFRS will recognize revenue as well
as providing users of financial statements with more informative and relevant disclosures. IFRS 15 supersedes IAS 18, Revenue, IAS 11, Construction Contracts and a number of
revenue-related interpretations. While this standard applies to nearly all contracts with customers, the main exceptions are leases, financial instruments and insurance contracts. In September 2015,
the IASB issued the amendment "Effective Date of IFRS 15", which defers the effective date of IFRS 15 by one year to fiscal years beginning on or after January 1, 2018. Earlier
adoption is permitted. The Company decided that IFRS 15 will not be adopted early and is currently evaluating the impact of IFRS 15, in conjunction with all amendments to the standard,
on its Consolidated Financial Statements. Based on findings the Company obtained so far, it expects differences to the current accounting mainly in the calculation of the transaction price for health
care services provided. IFRS 15 requires the consideration of implicit price concessions when determining the transaction price. This will lead to a corresponding decrease of revenue from
health care services and thus, the implicit price concessions will no longer be included in selling, general and administrative expenses as an allowance for doubtful accounts. The first analysis of
this issue showed a decrease of revenue by approximately 2-3% without any effect on net income. A more detailed quantification of the impact of IFRS 15 is not yet possible. The Company is also
evaluating accounting policy options and transition methods of IFRS 15.
In
July 2014, the IASB issued a new version of IFRS 9, Financial Instruments. This IFRS 9 version is considered the final and complete version, thus, mainly replacing
IAS 39 as soon IFRS 9 is applied. It includes all prior guidance on the classification and measurement of financial assets and financial liabilities as well as hedge accounting and
introduces requirements for impairment of financial instruments as well as modified requirements for the measurement categories of financial assets. The impairment provisions reflect a model that
relies on expected losses (expected loss model). This model comprises a two stage approach. Upon recognition an entity shall recognize losses that are expected within the next 12 months. If
credit risk deteriorates significantly, from that point in time, impairment losses shall amount to lifetime expected losses. The provisions for classification and measurement are amended by
introducing an additional third measurement category for certain debt instruments. Such instruments shall be measured at fair value with changes recognized in other comprehensive income (fair value
through other comprehensive income). The standard is accompanied by additional disclosure requirements and is effective for fiscal years beginning on or after January 1, 2018. Earlier adoption
is permitted. The Company decided that IFRS 9 will not be adopted early and is currently evaluating the impact on its Consolidated Financial Statements. In accordance with IAS 39, the
majority of the non-derivative financial assets are measured at amortized costs. The analysis on the business model and the contractual cash flow characteristics of each instrument is still ongoing.
The requirements on the classification and measurement of non-derivative financial liabilities have not changed significantly. Thus, the Company expects a limited impact on its Consolidated Financial
Statements. Derivatives not designated as hedging instruments will continue to be classified and measured at fair value through profit and loss.
The
Company intends to implement the simplified method to determine the provisions for risks from trade accounts receivable, receivables from lease contracts and capitalized contract
costs according to IFRS 15. A quantification of the impact is not yet possible. Based on currently available information, derivative financial instruments presently designated as hedging
instruments are also qualified for hedge accounting according to the requirements of IFRS 9. The Company also evaluates accounting policy choices and transition methods of IFRS 9.
In
January 2016, the IASB issued IFRS 16, Leases, which supersedes the current standard on lease-accounting, IAS 17, as well as the interpretations IFRIC 4, SIC-15
and SIC-27. IFRS 16 significantly
38
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
improves
lessee accounting. For all leases, a lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its
obligation to make lease payments. Depreciation of the right-of-use asset and interest on the lease liability must be recognized in the income statement for every lease contract. Therefore,
straight-line rental expenses will no longer be shown. The lessor accounting requirements in IAS 17 are substantially carried forward. The standard is effective for fiscal years beginning on or
after January 1, 2019. Earlier application is permitted for entities that have also adopted IFRS 15 Revenue from Contracts with Customers. The Company expects a balance sheet extension
due to the on balance sheet recognition of right of use assets and liabilities for agreed lease payment obligations, currently classified as operating leases, resulting in particular from leased
clinics and buildings. Based on a first impact analysis as of December 31, 2015, using certain assumptions and simplifications, the Company expects a financial debt increase of approximately
€4,000,000. Referring to the consolidated statement of income, the Company expects an operating income improvement due to the split of rent expenses in depreciation and interest
expenses, by having unchanged cash outflows. The Company also expects that its Leverage Ratio (debt as compared to EBITDA, Earnings before Interest, Taxes, Depreciation and Amortization, adjusted for
acquisitions made during the year with a purchase price above a $50,000
threshold as defined in the Amended 2012 Credit Agreement and non-cash charges) will increase by about 0.5. The impact on the Company will depend on the contract portfolio at the effective date, as
well as the transition method. Based on a first impact analysis, the Company decided to apply the modified retrospective method. Currently, the Company is evaluating the accounting policy options of
IFRS 16.
In
January 2016, the IASB issued amendments to IAS 7, Statement of Cash Flows. The amendments are intended to improve the information related to the change in a company's debt by
providing additional annual disclosures. The standard is effective for fiscal years beginning on or after January 1, 2017. Earlier application is permitted. The Company will initially present
the amendments to IAS 7 in the Consolidated Financial Statements as of December 31, 2017.
In
the Company's view, all other pronouncements issued by the IASB do not have a material impact on the Consolidated Financial Statements, as expected.
2. Notes to the Consolidated Statements of Income
a) Research and Development Expenses
Research
and development expenses of €32,136 for the three months ended March 31, 2017 (for the three months ended March 31, 2016: €34,424)
include expenditure for research and non-capitalizable development costs as well as depreciation and amortization expenses related to capitalized development costs of €104 (for the
three months ended March 31, 2016: €418).
39
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
b) Earnings per Share
The
following table contains reconciliations of the numerators and denominators of the basic and fully diluted earnings per share computations for 2017 and 2016:
|
|
|
|
|
|
|
|
Reconciliation of Basic and Diluted Earnings per Share
|
|
in € thousands, except share and per share data
|
|
|
|
|
|
|
|
For the three months
ended March 31,
|
|
|
|
2017
|
|
2016
|
|
Numerator:
|
|
|
|
|
|
|
|
Net income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
308,175
|
|
|
213,164
|
|
|
|
|
|
|
|
|
|
Denominators:
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
306,241,321
|
|
|
305,325,185
|
|
Potentially dilutive shares
|
|
|
519,712
|
|
|
563,182
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
1.01
|
|
|
0.70
|
|
Fully diluted earnings per share
|
|
|
1.00
|
|
|
0.70
|
|
By
resolution of the Company's annual general meeting on May 12, 2011, the Company was authorized to conduct a share buy-back program to repurchase ordinary shares. The buy-back
program commenced on May 20, 2013 and was completed on August 14, 2013 after 7,548,951 shares had been repurchased in the amount of €384,966. On February 16, 2016,
the Company retired 6,549,000 of the repurchased shares from the buy-back program at an average weighted price of €51 per share.
3. Related Party Transactions
Fresenius SE is also the Company's largest shareholder and owns 30.8% of the Company's outstanding shares, excluding treasury shares held by the Company, at March 31, 2017. The
Company has entered into certain arrangements for services, leases 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 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. Financing arrangements as described in item b) 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 c)
below. Our related party transactions are settled through Fresenius SE's cash management system where appropriate.
a) Service Agreements, Lease 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
40
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
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 1-5 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 is a party to real estate operating lease agreements with the Fresenius SE Companies, which mainly include leases for the Company's corporate headquarters in Bad Homburg,
Germany and production sites in Schweinfurt and St. Wendel, Germany. The majority of the leases expire in 2027.
In
addition to the above mentioned service and lease agreements, the Company sold products to the Fresenius SE Companies and made purchases from the Fresenius SE Companies and equity
method investees. In addition, Fresenius Medical Care Holdings, Inc. ("FMCH") purchases heparin supplied by Fresenius Kabi USA, Inc. ("Kabi USA"), through an independent group purchasing
organization ("GPO"). Kabi USA is an indirect, wholly-owned subsidiary of Fresenius SE. The Company has no direct supply agreement with Kabi USA and does not submit purchase orders directly to Kabi
USA. FMCH acquires heparin from Kabi USA, through the GPO contract, which was negotiated by the GPO at arm's length on behalf of all members of the GPO.
In
December 2010, the Company formed a renal pharmaceutical company with Galenica Ltd., named Vifor Fresenius Medical Care Renal Pharma Ltd., ("VFMCRP"), an equity method
investee of which the Company owns 45%. The Company has entered into exclusive supply agreements to purchase certain pharmaceuticals from VFMCRP.
Below
is a summary, including the Company's receivables from and payables to the indicated parties resulting from the above described transactions with related parties.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Agreements, Lease Agreements and Products
|
|
in € thousands
|
|
|
|
For the three months ended
March 31, 2017
|
|
For the three months ended
March 31, 2016
|
|
March 31,
2017
|
|
December 31,
2016
|
|
|
|
Sales of
goods and
services
|
|
Purchases
of goods
and services
|
|
Sales of
goods and
services
|
|
Purchases
of goods
and services
|
|
Accounts
Receivables
|
|
Accounts
Payables
|
|
Accounts
Receivables
|
|
Accounts
Payables
|
|
Service Agreements
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE
|
|
|
54
|
|
|
5,454
|
|
|
44
|
|
|
4,787
|
|
|
228
|
|
|
17,102
|
|
|
132
|
|
|
51
|
|
Fresenius SE affiliates
|
|
|
840
|
|
|
18,370
|
|
|
754
|
|
|
18,894
|
|
|
639
|
|
|
2,894
|
|
|
822
|
|
|
2,856
|
|
Equity method investees
|
|
|
4,236
|
|
|
-
|
|
|
4,451
|
|
|
-
|
|
|
2,214
|
|
|
-
|
|
|
2,506
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,130
|
|
|
23,824
|
|
|
5,249
|
|
|
23,681
|
|
|
3,081
|
|
|
19,996
|
|
|
3,460
|
|
|
2,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE
|
|
|
-
|
|
|
2,211
|
|
|
-
|
|
|
2,302
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Fresenius SE affiliates
|
|
|
-
|
|
|
3,153
|
|
|
-
|
|
|
3,403
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
-
|
|
|
5,364
|
|
|
-
|
|
|
5,705
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fresenius SE
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Fresenius SE affiliates
|
|
|
7,456
|
|
|
10,221
|
|
|
5,488
|
|
|
9,901
|
|
|
9,831
|
|
|
5,041
|
|
|
7,948
|
|
|
4,787
|
|
Equity method investees
|
|
|
-
|
|
|
98,363
|
|
|
-
|
|
|
100,359
|
|
|
-
|
|
|
62,514
|
|
|
-
|
|
|
55,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
7,456
|
|
|
108,584
|
|
|
5,490
|
|
|
110,260
|
|
|
9,831
|
|
|
67,555
|
|
|
7,948
|
|
|
60,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In addition to the above shown Accounts Payable, Accrued Expenses for Service Agreements with related parties amounted
to €1,914 and €3,359 at March 31, 2017 and December 31, 2016.
41
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
b) 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 March 31, 2017 and December 31, 2016, the Company had accounts
receivable from Fresenius SE related to short-term financing in the amount of €198,573 and €197,883, respectively. As of March 31, 2017 and December 31,
2016, the Company had accounts payable to Fresenius SE related to short-term financing in the amount of €166,079 and €186,350, respectively. The interest rates for
these cash management arrangements are set on a daily basis and are based on the then-prevailing overnight reference rate 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 22, 2017 with an interest rate of 1.054%. On November 28, 2013, the Company borrowed an additional €1,500 with an interest rate of 1.875% from the
General Partner. This loan is due on November 25, 2017 with an interest rate of 1.021%.
At
March 31, 2017 and December 31, 2016, a subsidiary of Fresenius SE held unsecured Senior Notes issued by the Company in the amount of €8,300 and
€8,300, respectively. The Senior Notes were issued in 2011 and 2012, mature in 2021 and 2019, respectively, and each has a coupon rate of 5.25% with interest payable semiannually.
At
March 31, 2017, the Company received a one-month short term advance from Fresenius SE in the amount of €116,000 on an unsecured basis at an interest rate of
1.100%. On December 31, 2016 the Company provided a cash advance to Fresenius SE in the amount of €36,245 on an unsecured basis at an interest rate of 0.771% which was repaid on
January 2, 2017. For further information on this loan agreement, see Note 7. "Short-Term Debt and Short-Term Debt from Related Parties Short-Term Debt from Related
Parties."
c) Key Management Personnel
Due
to the 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 €5,383 and
€4,967, respectively, for its management services during the three months ended March 31, 2017 and 2016. As of March 31, 2017, the Company did not have any accounts
receivable from the General Partner. As of December 31, 2016, the Company had accounts receivable from the General Partner in the amount of €174. As of March 31, 2017 and
December 31, 2016, the Company had accounts payable to the General Partner in the amount of €17,782 and €14,696, respectively.
42
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
4. Cash and Cash Equivalents
At March 31, 2017 and December 31, 2016, cash and cash equivalents consisted of the following:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
in € thousands
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Cash
|
|
|
658,207
|
|
|
667,139
|
|
Securities and Time deposits (with a maturity of up to 90 days)
|
|
|
12,368
|
|
|
41,743
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
670,575
|
|
|
708,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Trade Accounts Receivable
At March 31, 2017 and December 31, 2016, trade accounts receivable consisted of the following:
|
|
|
|
|
|
|
|
Trade accounts receivable, less allowance for doubtful accounts
|
|
in € thousands
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Trade accounts receivable
|
|
|
4,101,892
|
|
|
3,826,280
|
|
less allowance for doubtful accounts
|
|
|
528,917
|
|
|
482,461
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable, net
|
|
|
3,572,975
|
|
|
3,343,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. Inventories
At March 31, 2017 and December 31, 2016, inventories consisted of the following:
|
|
|
|
|
|
|
|
Inventories
|
|
in € thousands
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Finished goods
|
|
|
732,016
|
|
|
687,615
|
|
Health care supplies
|
|
|
326,897
|
|
|
362,307
|
|
Raw materials and purchased components
|
|
|
210,931
|
|
|
214,286
|
|
Work in process
|
|
|
75,371
|
|
|
73,269
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
1,345,215
|
|
|
1,337,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
7. Short-term Debt and Short-term Debt from Related Parties
At March 31, 2017 and December 31, 2016, 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 € thousands
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Borrowings under lines of credit
|
|
|
89,766
|
|
|
89,451
|
|
Commercial Paper Program
|
|
|
606,932
|
|
|
475,915
|
|
Other
|
|
|
-
|
|
|
6,644
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
696,698
|
|
|
572,010
|
|
Short-term debt from related parties (see Note 3.b)
|
|
|
119,015
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
Short-term debt and short-term debt from related parties
|
|
|
815,713
|
|
|
575,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 March 31, 2017 and December 31, 2016, cash and borrowings under lines of credit in the amount of €313,728 and €325,485 were
offset under this cash management system.
Commercial Paper Program
Commercial paper programs are flexible financing instruments to obtain short-term funding on the money market. Typically, commercial paper
maturities range from a few days up to under two years. The Company established a commercial paper program on January 19, 2016 under which short-term notes of up to €1,000,000
can be issued. At March 31, 2017 and December 31, 2016, the outstanding commercial paper amounted to €607,000 and €476,000, respectively.
Other
At March 31, 2017, the Company did not have other debt outstanding. At December 31, 2016, the Company had €6,644
of other debt which was mainly related to fixed payments outstanding for acquisitions.
Short-term Debt from Related Parties
The Company is party to an unsecured loan agreement with Fresenius SE under which the Company or its subsidiaries may request and receive one or
more short-term advances up to an aggregate amount of
44
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
$400,000
until maturity on October 30, 2017. The interest on the advance(s) will be at a fluctuating rate per annum equal to LIBOR or EURIBOR as applicable plus an applicable margin. Advances
can be repaid and reborrowed. At March 31, 2017, the Company received a one-month short term advance from Fresenius SE in the amount of €116,000. At December 31, 2016,
there were no advances from Fresenius SE under this facility. For further information on short-term debt from related parties, see Note 3 b).
8. Long-term Debt and Capital Lease Obligations
As of March 31, 2017 and December 31, 2016, long-term debt and capital lease obligations consisted of the following:
|
|
|
|
|
|
|
|
Long-term Debt and Capital Lease Obligations
|
|
in € thousands
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Amended 2012 Credit Agreement
|
|
|
2,194,869
|
|
|
2,244,115
|
|
Senior Notes
|
|
|
4,620,861
|
|
|
4,670,786
|
|
Convertible Bonds
|
|
|
382,298
|
|
|
380,735
|
|
Accounts Receivable Facility
|
|
|
158,127
|
|
|
165,037
|
|
Capital lease obligations
|
|
|
43,742
|
|
|
43,775
|
|
Other
|
|
|
54,433
|
|
|
52,656
|
|
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
|
7,454,330
|
|
|
7,557,104
|
|
Less current portion
|
|
|
(715,439
|
)
|
|
(724,218
|
)
|
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations, less current portion
|
|
|
6,738,891
|
|
|
6,832,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended 2012 Credit Agreement
The following table shows the available and outstanding amounts under the Amended 2012 Credit Agreement at March 31, 2017 and
December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended 2012 Credit Agreement Maximum Amount Available and Balance Outstanding
|
|
in thousands
|
|
|
|
Maximum Amount Available
March 31, 2017
|
|
Balance Outstanding
March 31, 2017
(1)
|
|
Revolving Credit USD
|
|
$
|
1,000,000
|
|
€
|
935,366
|
|
$
|
42,948
|
|
€
|
40,172
|
|
Revolving Credit EUR
|
|
€
|
400,000
|
|
€
|
400,000
|
|
€
|
-
|
|
€
|
-
|
|
USD Term Loan
|
|
$
|
2,050,000
|
|
€
|
1,917,501
|
|
$
|
2,050,000
|
|
€
|
1,917,501
|
|
EUR Term Loan
|
|
€
|
246,000
|
|
€
|
246,000
|
|
€
|
246,000
|
|
€
|
246,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
€
|
3,498,867
|
|
|
|
|
€
|
2,203,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Amount Available
December 31, 2016
|
|
Balance Outstanding
December 31, 2016
(1)
|
|
Revolving Credit USD
|
|
$
|
1,000,000
|
|
€
|
948,676
|
|
$
|
10,187
|
|
€
|
9,664
|
|
Revolving Credit EUR
|
|
€
|
400,000
|
|
€
|
400,000
|
|
€
|
-
|
|
€
|
-
|
|
USD Term Loan
|
|
$
|
2,100,000
|
|
€
|
1,992,221
|
|
$
|
2,100,000
|
|
€
|
1,992,221
|
|
EUR Term Loan
|
|
€
|
252,000
|
|
€
|
252,000
|
|
€
|
252,000
|
|
€
|
252,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
€
|
3,592,897
|
|
|
|
|
€
|
2,253,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts shown are excluding debt issuance costs.
At
March 31, 2017 and December 31, 2016, the Company had letters of credit outstanding in the amount of $2,050 and $3,550 (€1,918 and
€3,368), respectively, under the USD revolving credit facility, which are not included above as part of the balance outstanding at those dates, but which reduce available borrowings
under the applicable revolving credit facility.
Accounts Receivable Facility
The following table shows the available and outstanding amounts under the Accounts Receivable Facility at March 31, 2017 and at
December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable Facility Maximum Amount Available and Balance Outstanding
|
|
in thousands
|
|
|
|
Maximum Amount Available
March 31, 2017
(1)
|
|
Balance Outstanding
March 31, 2017
(2)
|
|
Accounts Receivable Facility
|
|
$
|
800,000
|
|
€
|
748,293
|
|
$
|
170,000
|
|
€
|
159,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Amount Available
December 31, 2016
(1)
|
|
Balance Outstanding
December 31, 2016
(2)
|
|
Accounts Receivable Facility
|
|
$
|
800,000
|
|
€
|
758,941
|
|
$
|
175,000
|
|
€
|
166,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $15,647 and $15,647 at March 31, 2017 and December 31, 2016
(€14,636 and €14,844), respectively. These letters of credit are not included above as part of the balance outstanding at March 31, 2017 and December 31,
2016; however, they reduce available borrowings under the Accounts Receivable Facility.
9. Supplementary Information on Capital Management
The principle objectives of the Company's capital management strategy are to optimize the weighted average cost of capital and to achieve a balanced mix of shareholders' equity and
financial debt. The
46
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
dialysis
industry, in which the Company has a strong market position in global, growing and largely non-cyclical markets, is characterized by stable cash flows. Due to the Company's payors' mostly
high credit quality, it is able to generate high, stable, predictable and sustainable cash flows.
These
generated cash flows allow the Company to utilize an extensive mix of financial liabilities.
As
of March 31, 2017 and December 31, 2016 equity and debt were as follows:
|
|
|
|
|
|
|
|
Shareholders' Equity, Financial Liabilities and Total Assets
|
|
in € thousands, unless otherwise specified
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Shareholders' equity, including noncontrolling interests
|
|
|
11,298,053
|
|
|
11,051,132
|
|
Financial debt
|
|
|
8,270,043
|
|
|
8,132,114
|
|
Total assets
|
|
|
25,779,672
|
|
|
25,503,540
|
|
Financial debt in % of total assets
|
|
|
32.1%
|
|
|
31.9%
|
|
Total equity in % of total assets
|
|
|
43.8%
|
|
|
43.3%
|
|
A
key financial performance indicator for the Company is the debt/EBITDA ratio which compares financial debt to EBITDA, for the last twelve months, adjusted for acquisitions made during
the period with a purchase price above a $50,000 threshold (as defined in the Amended 2012 Credit Agreement) and other non-cash charges. This ratio was 2.5 as of March 31, 2017. Additionally,
at both March 31, 2017 and December 31, 2016, the net debt/EBITDA ratio was 2.3.
The
Company is covered by the three leading rating agencies, Moody's, Standard & Poor's and Fitch. The Company currently has a BBB rating from Standard &
Poor's, a Ba1 rating from Moody's and a BBB rating from Fitch.
|
|
|
|
|
|
|
Rating
(1)
|
|
|
Standard &
Poor's
|
|
Moody's
|
|
Fitch
|
Corporate Credit Rating
|
|
BBB
|
|
Ba1
|
|
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.
10. Employee Benefit Plans
The Company currently has five principal pension plans, one for German employees, three for French employees and the other covering employees in the United States, the latter of which
was curtailed in 2002. Plan benefits are generally based on years of service and final salary. As there is no legal requirement in Germany to fund defined benefit plans, the Company's pension
obligations in Germany are unfunded. Each year FMCH contributes to the plan covering United States employees at least the minimum required by the Employee Retirement Income Security Act of 1974, as
amended. In 2017, FMCH did not have a minimum funding requirement. For the first three months of 2017, the Company voluntarily provided €309
47
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
to
the defined benefit plan. For the remaining period of 2017, the Company expects further voluntarily contributions of €791.
The
following table provides the calculations of net periodic benefit cost for the three months ended March 31, 2017 and 2016, respectively.
|
|
|
|
|
|
|
|
Net Periodic Benefit Cost
|
|
in € thousands
|
|
|
|
For the three months ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
Service cost
|
|
|
7,107
|
|
|
6,390
|
|
Net interest cost
|
|
|
2,785
|
|
|
4,154
|
|
|
|
|
|
|
|
|
|
Net periodic benefit costs
|
|
|
9,892
|
|
|
10,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11. 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. For the matters described below
in which the Company believes a loss is both reasonably possible and estimable, an estimate of the loss or range of loss exposure is provided. 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.
Commercial Litigation
On April 5, 2013, the U.S. Judicial Panel on Multidistrict Litigation ordered that the numerous lawsuits pending in various federal
courts alleging wrongful death and personal injury claims against FMCH and certain of its affiliates relating to FMCH's acid concentrate products NaturaLyte® and GranuFlo® be
transferred and consolidated for pretrial management purposes into a consolidated multidistrict litigation in the United States District Court for the District of Massachusetts.
See
, In Re: Fresenius
GranuFlo/NaturaLyte Dialysate Products Liability Litigation, Case No. 2013-md-02428. The Massachusetts state courts and the
St. Louis City (Missouri) court subsequently established similar consolidated litigation for their cases.
See
, In Re: Consolidated Fresenius
Cases, Case No. MICV 2013-03400-O (Massachusetts Superior Court, Middlesex County). Although similar cases were filed in other state courts, the Massachusetts federal and state courts
and the St. Louis court are
48
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
responsible,
together, for more than 95% of all cases. The lawsuits alleged generally that inadequate labeling and warnings for these products caused harm to patients. On February 17, 2016, the
Company
reached with a committee of plaintiffs' counsel and reported to the courts an agreement in principle for settlement of potentially all cases. The agreement in principle calls for the Company to pay
$250,000 into a settlement fund in exchange for releases of substantially all the plaintiffs' claims, subject to the Company's right to void the settlement under certain conditions.
As
subsequently agreed and refined between the Company and the plaintiff committee, and ordered by the courts, plaintiffs may enforce the settlement and compel payment by the Company if
the total of cases electing to participate in the settlement and dismissed by the courts with prejudice, voluntarily or involuntarily, comes to comprise 97% of all cases as defined under the
agreement. The three primary courts entered "
Lone Pine
" orders requiring plaintiffs, on pain of dismissal, who have not elected to participate in the
settlement to submit specific justification satisfactory to the courts for their complaints, including attorney verification of certain material factual representations and expert medical opinions
relating to causation. The Company may elect to void the settlement if the 97% threshold is not achieved or if plaintiffs' non-participation falls into suspect patterns. For cases not participating in
the settlement and not dismissed under
Lone Pine
orders, active litigation may resume in the discretion of their respective courts.
The
deadline for plaintiffs to elect participation in the settlement has passed, although the plaintiff committee and FMCH continue to entertain late requests for good cause by
individual participants. Based on participation elections already received and
Lone Pine
orders already issued, the plaintiff committee and FMCH expect,
and have advised the courts that they expect, the settlement to be consummated. However, because of difficulties and delays in assembling and verifying individual participation elections and in the
courts' processing of individual
Lone Pine
dismissals for the required number of cases, the committee and FMCH have agreed that consummation will occur
promptly upon sufficient verification of fulfillment of the participation threshold, providing only that consummation will not be required before June 1, 2017 and must occur by
February 28, 2018. Court approval of the schedule revision is expected.
FMCH
believes that a significant number of cases, in various jurisdictions, will not participate in the settlement and will require some level of additional litigation activity in their
respective trial courts to resolve. Appeals by plaintiffs are pending in the two bellwether cases (
Ogburn
and
Dial
) that have been tried, in both of which
jury verdicts were entered in FMCH's favor.
The
Company's affected insurers have agreed to fund $220,000 of the settlement fund if the settlement is not voided, with a reservation of rights regarding certain coverage issues
between and among the Company and its insurers. The Company has accrued a net expense of $60,000 for consummation of the settlement, including legal fees and other anticipated costs.
Following
entry of the agreement in principle, the Company's insurers in the AIG group and the Company each initiated litigation against the other, in New York and Massachusetts state
courts respectively, relating to the AIG group's coverage obligations under applicable policies. The affected carriers have confirmed that the coverage litigation does not impact their commitment to
fund $220,000 of the settlement with plaintiffs. In the coverage litigation, the AIG group seeks to reduce its obligation to less than $220,000 and to be indemnified by the Company for a portion of
its $220,000 outlay; the Company seeks to confirm the AIG group's $220,000 funding obligation, to recover defense costs already incurred by the Company, and to compel the AIG group to honor defense
and indemnification obligations, if any, required for resolution of cases not participating in the settlement.
49
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Certain
of the complaints in the GranuFlo®/NaturaLyte® litigation named combinations of FMC-AG & Co. KGaA, Management AG, Fresenius SE and Fresenius
Management SE as defendants, in addition to FMCH and its domestic United States affiliates. The agreement in principle provides for dismissals and releases of claims encompassing the European
defendants.
Four
institutional plaintiffs have 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 remedy the repayment of sums paid to FMCH attributable to the GranuFlo®/NaturaLyte®
products. These cases implicate different legal standards, theories of liability and forms of potential recovery from those in the personal injury litigation and their claims will not be extinguished
by the personal injury litigation settlement described above. The four plaintiffs are the Attorneys General for the States of Kentucky, Louisiana and Mississippi and the commercial insurance company
Blue Cross Blue Shield of Louisiana in its private capacity.
See
, State of Mississippi ex rel. Hood, v. Fresenius Medical Care
Holdings, Inc., No. 14-cv-152 (Chancery Court, DeSoto County); State of Louisiana ex re. Caldwell and Louisiana Health Service & Indemnity Company v. Fresenius Medical Care
Airline, 2016 Civ. 11035 (U.S.D.C. D. Mass.); Commonwealth of Kentucky ex rel. Beshear v. Fresenius Medical Care Holdings, Inc. et al., No. 16-CI-00946 (Circuit Court, Franklin County).
Other Litigation and Potential Exposures
On February 15, 2011, a whistleblower (relator) action under the False Claims Act against FMCH was unsealed by order of the United States
District Court for the District of Massachusetts and served by the relator.
See
, United States ex rel. Chris Drennen v. Fresenius Medical Care
Holdings, Inc., 2009 Civ. 10179 (D. Mass.). The relator's complaint, which was first filed under seal in February 2009, alleged that the Company sought and received reimbursement from
government payors for serum ferritin and multiple forms of hepatitis B laboratory tests that were medically unnecessary or not properly ordered by a physician. Discovery on the relator's complaint
closed in May 2015. Although the United States initially declined to intervene in the case, the government subsequently changed position. On April 3, 2017, the court allowed the government to
intervene with respect only to certain Hepatitis B surface antigen tests performed prior to 2011, when Medicare reimbursement rules for such tests changed. The court rejected the government's request
to conduct new discovery, but allowed FMCH to take discovery against the government as if the government had been intervened at the outset.
On
October 6, 2015, the Office of Inspector General of the United States Department of Health and Human Services ("OIG") issued a subpoena to the Company seeking information about
utilization and invoicing by Fresenius Vascular Care facilities as a whole for a period beginning after the Company's acquisition of American Access Care LLC in October 2011 ("AAC"). The
Company is cooperating in the government's inquiry, which is being managed by the United States Attorney for the Eastern District of New York. Allegations against AAC arising in districts in
Connecticut, Florida and Rhode Island relating to utilization and invoicing were settled in 2015.
The
Company has received communications alleging conduct in countries outside the U.S. that may violate the U.S. Foreign Corrupt Practices Act ("FCPA") or other anti-bribery laws. The
Company's Supervisory Board, through its Audit and Corporate Governance Committee is conducting investigations with the assistance of independent counsel. The Company voluntarily advised the U.S.
Securities and Exchange Commission ("SEC") and the U.S. Department of Justice ("DOJ"). The Company's
50
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
investigations
and dialogue with the SEC and DOJ are ongoing. The Company is cooperating with the government investigations.
The
Company has identified and reported to the government, and has taken remedial actions including employee disciplinary actions with respect to, conduct that may result in monetary
penalties or other sanctions under the FCPA or other anti-bribery laws. In addition, the Company's ability to conduct business in certain jurisdictions could be negatively impacted. The Company has
recorded in prior periods a non-material accrual for an identified matter. Given the current status of the investigations and remediation activities, the Company cannot reasonably estimate the range
of possible loss that may result from identified matters or from the final outcome of the investigations or remediation activities.
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 FCPA and other anti-bribery law compliance.
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,
including contracts relating to the management of in-patient acute dialysis services. FMCH is cooperating in the investigation.
In
July 2015, the Attorney General for Hawaii issued a civil complaint under the Hawaii False Claims Act alleging a conspiracy pursuant to which certain Liberty Dialysis subsidiaries of
FMCH overbilled Hawaii Medicaid for Liberty's Epogen® administrations to Hawaii Medicaid patients during the period from 2006 through 2010, prior to the time of FMCH's acquisition of
Liberty.
See
, Hawaii v. Liberty Dialysis Hawaii, LLC et al., Case No. 15-1-1357-07 (Hawaii
1
st
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. FMCH filed 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.
On
August 31 and November 25, 2015, respectively, FMCH received subpoenas from the United States Attorneys for the District of Colorado and the Eastern District of New York
inquiring into FMCH's participation in and management of dialysis facility joint ventures in which physicians are partners. On March 20, 2017, FMCH received a subpoena in the Western District
of Tennessee inquiring into certain of the operations of dialysis facility joint ventures with the University of Tennessee Medical Group, including joint ventures in which FMCH's interests were
divested to Satellite Dialysis in connection with FMCH's acquisition of Liberty Dialysis in 2012. FMCH is cooperating in these investigations.
On
June 30, 2016, FMCH received a subpoena from the United States Attorney for the Northern District of Texas (Dallas) seeking information about the use and management of
pharmaceuticals including Velphoro® as well as FMCH's interactions with DaVita Healthcare Partners, Inc. The Company
51
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
understands
that the subpoena relates to an investigation previously disclosed by DaVita and that the investigation encompasses DaVita, Amgen, and Sanofi. FMCH is cooperating in the investigation.
On
November 18, 2016, FMCH received a subpoena from the United States Attorney for the Eastern District of New York seeking documents and information relating to the operations of
Shiel Medical Laboratory, Inc., which FMCH acquired in October 2013. In the course of cooperating in the investigation and preparing to respond to the subpoena, FMCH identified falsifications
and misrepresentations in documents submitted by a Shiel salesperson that relate to the integrity of certain invoices submitted by Shiel for laboratory testing for patients in long term care
facilities. On February 21, 2017, FMCH terminated the employee and notified the United States Attorney of the termination and its circumstances. The terminated employee's conduct may subject
the Company to liability for overpayments and penalties under applicable laws. The Company continues to cooperate in the government's ongoing investigation.
On
January 3, 2017, the Company received a subpoena from the United States Attorney for the District of Massachusetts inquiring into the Company's interactions and relationships
with the American Kidney Fund ("AKF" or "the Fund"), including the Company's charitable contributions to the Fund and the Fund's financial assistance to patients for insurance premiums. FMCH is
cooperating in the investigation, which the Company understands to be part of a broader investigation into charitable contributions in the medical industry.
On
December 14, 2016, CMS published an Interim Final Rule ("IFR") titled "Medicare Program; Conditions for Coverage for End-Stage Renal Disease Facilities-Third Party Payment"
that would amend the Conditions for Coverage for dialysis providers, like Fresenius Medical Care North America ("FMCNA"). The IFR would have effectively enabled insurers to reject premium payments
made by patients who received grants for individual market coverage from the AKF and therefore, could have resulted in those patients losing their individual market coverage. The loss of individual
market coverage for these patients would have had a material and adverse impact on the operating results of the Company.
On
January 25, 2017, a federal district court in Texas, responding to litigation initiated by a patient advocacy group and dialysis providers including FMCNA, preliminarily
enjoined CMS from implementing the IFR. Dialysis Patient Citizens v. Burwell (E.D. Texas, Sherman Div.). The preliminary injunction is based on CMS' failure to follow appropriate notice-and-comment
procedures in adopting the IFR. The preliminary injunction will remain in place in the absence of a contrary ruling by the district or appellate courts.
CMS
has requested, and been granted by the court, until June 23, 2017 to determine its position with respect to the subject matter of the litigation. The operation of charitable
assistance programs is also receiving increased attention by state regulators, including State Departments of Insurance. The result may be a regulatory framework that differs from state to state. Even
in the absence of the IFR or similar administrative actions, insurers are expected to continue to take steps to thwart the premium assistance provided to our patients for individual market plans as
well as other insurance coverages. This would have a material adverse impact on the Company's operating results.
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.
52
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
The
Company, like other healthcare 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 U.S. Food and Drug Administration ("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 personal health information of its patients and beneficiaries throughout the United States and other parts of the world. In such a
decentralized system, it is often difficult to maintain the desired level of oversight and control over the thousands of individuals employed by many affiliated companies. The Company relies upon its
management structure, regulatory and legal resources, and the effective operation of its compliance program to direct, manage and monitor the activities of these employees. On occasion, the Company
may identify instances where employees 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, Health Insurance Portability and Accountability Act, the Health Information
Technology for Economic and Clinical Health Act and the Foreign Corrupt Practices Act, among other laws and comparable laws of other countries.
Physicians,
hospitals and other participants in the healthcare 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.
53
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
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.
The
Company is also subject to ongoing and future tax audits in the U.S., Germany and other jurisdictions. With respect to other potential adjustments and disallowances of tax matters
currently under review, the Company does not anticipate that an unfavorable ruling could have a material impact on its results of operations. The Company is not currently able to determine the timing
of these potential additional tax payments.
Other
than those individual contingent liabilities mentioned above, the current estimated amount of the Company's other known individual contingent liabilities is immaterial.
12. Financial Instruments
The Company applies IFRS 7 (Financial Instruments: Disclosures). Thereby the following categories according to IAS 39 (Financial Instruments: Recognition and Measurement)
are relevant: financial assets at fair value through profit or loss, loans and receivables, financial liabilities at fair value through profit or loss as well as financial liabilities recognized at
amortized cost and available for sale financial assets.
54
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
The following table demonstrates the combination between categories and classes as well as the classes allocated to the balance sheet items:
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Classes
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Categories
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Cash and
cash
equivalents
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Assets
recognized
at carrying
amount
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Liabilities
recognized
at carrying
amount
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Assets
recognized at
fair value
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Liabilities
recognized at
fair value
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Noncontrolling
interests
subject to put
provisions
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Derivatives not
designated as
hedging
instruments
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Derivatives
designated
as hedging
instruments
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Financial Assets at fair value through profit or loss
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Other current and non-current assets
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Loans and Receivables
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Trade accounts receivable, Accounts receivable from related parties, Other current and non-current assets
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Financial liabilities at fair value through profit or loss
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Current and non-current provisions and other current and non-current liabilities
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Current and non-current provisions and other current and non-current liabilities
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Financial liabilities recognized at amortized cost
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Accounts payable, Accounts payable to related parties, Short-term debt, Short-term debt from related parties, Long-term debt and capital lease obligations
(1)
, Current provisions
and other current liabilities
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Available for sale financial assets
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Other current assets and non-current assets
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Not assigned to a category
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Cash and cash equivalents
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Other current and non-current assets
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Long-term debt and capital lease obligations
(2)
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Other current and non-current liabilities
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Other current and non-current assets, Current and non-current provisions and other current and non-current liabilities
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(1) Excluding capital lease obligations
(2) Exclusively capital lease obligations
55
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Valuation of Financial Instruments
The carrying amounts of financial instruments at March 31, 2017 and December 31, 2016, classified into categories according to
IAS 39, can be seen in the following table.
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Carrying Amount of Financial Instrument Categories
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in € thousands
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March 31,
2017
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December 31,
2016
|
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Loans and Receivables
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4,094,527
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3,835,800
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Financial Liabilities recognized at amortized cost
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(10,177,399
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)
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(10,210,287
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)
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Financial Assets at fair value through profit or loss
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88,278
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132,406
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Financial Liabilities at fair value through profit or loss
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(344,700
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)
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(339,701
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)
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Available for sale financial assets
(1)
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321,444
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256,437
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Not assigned to a category
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(224,396
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)
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(194,176
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)
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(1) The impact on the Consolidated Statements of Income and the Consolidated Statements of Shareholders' Equity is not
material.
The
following table presents the carrying amounts and fair values of the Company's financial instruments at March 31, 2017 and December 31, 2016.
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Carrying Amount and Fair Value of Financial Instruments
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in € thousands
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March 31, 2017
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December 31, 2016
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Carrying
amount
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Fair
Value
|
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Carrying
amount
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Fair
Value
|
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Non-derivative Financial Instruments
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Cash and cash equivalents
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670,575
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670,575
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708,882
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708,882
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Assets recognized at carrying amount
(1)
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4,253,524
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4,253,524
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3,987,806
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3,987,806
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Assets recognized at fair value
|
|
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321,444
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|
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321,444
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|
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256,437
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|
256,437
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Liabilities recognized at carrying amount
(2)
|
|
|
(10,221,141
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)
|
|
(10,811,599
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)
|
|
(10,254,062
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)
|
|
(10,754,495
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)
|
Liabilities recognized at fair value
|
|
|
(219,350
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)
|
|
(219,350
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)
|
|
(223,504
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)
|
|
(223,504
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)
|
Noncontrolling interests subject to put provisions
|
|
|
(1,009,344
|
)
|
|
(1,009,344
|
)
|
|
(1,007,733
|
)
|
|
(1,007,733
|
)
|
Derivative Financial Instruments
|
|
|
|
|
|
|
|
|
|
|
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|
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Derivatives not designated as hedging instruments
|
|
|
(37,072
|
)
|
|
(37,072
|
)
|
|
16,209
|
|
|
16,209
|
|
Derivatives designated as hedging instruments
|
|
|
(882
|
)
|
|
(882
|
)
|
|
(3,556
|
)
|
|
(3,556
|
)
|
(1) Not included are "Other current and non-current assets" that do not qualify as financial instruments
(March 31, 2017: €843,828 and December 31, 2016: €850,630).
(2) Not included are "Current and non-current provisions and other current and non-current liabilities" that do not
qualify as financial instruments (March 31, 2017: €1,434,078 and December 31, 2016: €1,429,344) .
56
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Non-derivative Financial Instruments
The significant methods and assumptions used in estimating the fair values of non-derivative financial instruments are as follows:
Cash
and cash equivalents are stated at nominal value which equals the fair value.
Short-term
financial instruments such as trade accounts receivable, accounts receivable from related parties, accounts payable, accounts payable to related parties and short-term debt as
well as certain other financial instruments are valued at their carrying amounts, which are reasonable estimates of the fair value due to the relatively short period to maturity of these instruments.
The
fair value of available for sale financial assets quoted in an active market is based on price quotations at the period-end date (Level 1).
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 (Level 2). 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 (Level 3). The Company assesses the likelihood and timing of achieving the relevant objectives. The
underlying assumptions are reviewed regularly.
Noncontrolling
interests subject to put provisions are recognized at their fair value. The methodology the Company uses to estimate the fair values assumes the greater of net book value
or a multiple of earnings, based on historical earnings, development stage of the underlying business and other factors (Level 3). Additionally, there are put provisions that are valued by an
external valuation firm. The external valuation estimates the fair values using a combination of discounted cash flows and a multiple of earnings and/or revenue (Level 3). 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.
57
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Following
is a roll forward of noncontrolling interests subject to put provisions at March 31, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
Noncontrolling interests subject to put provisions
|
|
in € thousands
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Beginning balance at January 1,
|
|
|
1,007,733
|
|
|
791,075
|
|
Contributions to noncontrolling interests
|
|
|
(32,023
|
)
|
|
(169,260
|
)
|
Purchase of noncontrolling interests
|
|
|
(8,388
|
)
|
|
(1,785
|
)
|
Sale of noncontrolling interests
|
|
|
6,297
|
|
|
53,919
|
|
Contributions from noncontrolling interests
|
|
|
1,088
|
|
|
29,144
|
|
Expiration of put provisions and other reclassifications
|
|
|
(1,991
|
)
|
|
(8,814
|
)
|
Changes in fair value of noncontrolling interests
|
|
|
5,670
|
|
|
115,627
|
|
Net income
|
|
|
44,438
|
|
|
164,515
|
|
Foreign Currency Translation
|
|
|
(13,480
|
)
|
|
33,312
|
|
|
|
|
|
|
|
|
|
Ending balance as of March 31, 2017 and December 31, 2016
|
|
|
1,009,344
|
|
|
1,007,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
risk resulting from a decrease in the value of the Company's financing receivables and allowances on credit losses of financing receivables are immaterial.
Derivative Financial Instruments
Market Risk
In order to manage the risk of currency exchange rate and interest rate fluctuations, the Company enters into various hedging transactions by
means of derivative instruments with highly rated financial institutions as authorized by the Company's General Partner. On a quarterly basis, the Company performs an assessment of its counterparty
credit risk. The Company currently considers this risk to be low. The Company's policy, which has been consistently followed, is that financial derivatives be used only for the purpose of hedging
foreign currency and interest rate exposure.
In
certain instances, the Company enters into derivative contracts that do not qualify for hedge accounting but are utilized for economic purposes ("economic hedges"). The Company does
not use financial instruments for trading purposes. The Company established guidelines for risk assessment procedures and controls for the use of financial instruments. They include a clear
segregation of duties with regard to execution on one side and administration, accounting and controlling on the other.
To
reduce the credit risk arising from derivatives the Company entered into Master Netting Agreements with banks. Through such agreements, positive and negative fair values of the
derivative contracts could be offset against one another if a partner becomes insolvent. This offsetting is valid for transactions where the aggregate amount of obligations owed to and receivable from
are not equal. If insolvency occurs, the party which owes the larger amount is obliged to pay the other party the difference between the amounts owed in the form of one net payment.
58
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
These master netting agreements do not provide a basis for offsetting the fair values of derivative financial instruments in the statement of financial position
as the offsetting criteria under IFRS are not satisfied.
At
March 31, 2017 and December 31, 2016, the Company had €7,154 and €24,312 of derivative financial assets subject to netting arrangements
and €48,709 and €26,751 of derivative financial liabilities subject to netting arrangements. Offsetting these derivative financial instruments would have resulted in
net assets of €104 and €13,673 as well as net liabilities of €41,659 and €16,112 at March 31, 2017 and December 31, 2016,
respectively.
In
connection with the issuance of the Convertible Bonds in September 2014, the Company purchased share options. Any change in the Company's share price above the conversion price would
be offset by a corresponding value change in the share options.
Foreign Exchange Risk Management
The Company conducts business on a global basis in various currencies, though a majority of its operations are in Germany and the United States.
For financial reporting purposes in accordance with Section 315a of the German Commercial Code ("HGB") the Company has chosen the euro as its reporting currency. Therefore, changes in the rate
of exchange between the euro and the local currencies in which the financial statements of the Company's international operations are maintained, affect its results of operations and financial
position as reported in its Consolidated Financial Statements.
Additionally,
individual subsidiaries are exposed to transactional risks mainly resulting from intercompany purchases between production sites and other subsidiaries with different
functional currencies. This exposes the subsidiaries to fluctuations in the rate of exchange between the invoicing currencies and the currency in which their local operations are conducted. For the
purpose of hedging existing and foreseeable foreign exchange transaction exposures the Company enters into foreign exchange forward contracts and, on a small scale, foreign exchange options. At
March 31, 2017 and December 31, 2016, the Company had no foreign exchange options.
Changes
in the fair value of the effective portion of foreign exchange forward contracts designated and qualifying as cash flow hedges of forecasted product purchases and sales are
reported in Accumulated Other Comprehensive Income ("AOCI"). Additionally, in connection with intercompany loans in foreign currency, the Company uses foreign exchange swaps to assure that no foreign
exchange risks arise from those loans, which, if they qualify for cash flow hedge accounting, are also reported in AOCI. These amounts recorded in AOCI are subsequently reclassified into earnings as a
component of cost of revenue for those contracts that hedge product purchases and sales or as an adjustment of interest income/expense for those contracts that hedge loans, in the same period in which
the hedged transaction affects earnings. The notional amounts of foreign exchange contracts in place that are designated and qualify as cash flow hedges totalled €84,658 and
€103,358 March 31, 2017 and December 31, 2016, respectively.
The
Company also enters into derivative contracts for forecasted product purchases and sales and for intercompany loans in foreign currencies which do not qualify for hedge accounting
but are utilized for economic hedges as defined above. In these two cases, the change in value of the economic hedge is recorded in the income statement and usually offsets the change in value
recorded in the income statement
59
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
for
the underlying asset or liability. The notional amounts of economic hedges that do not qualify for hedge accounting totalled €1,839,956 and €1,407,611 at
March 31, 2017 and December 31, 2016, respectively.
Interest Rate Risk Management
The Company enters into derivatives, particularly interest rate swaps and, to a certain extent, interest rate options to protect against the
risk of rising interest rates. These interest rate derivatives are designated as cash flow hedges and have been entered into in order to effectively convert payments based on variable interest rates
into payments at a fixed interest rate. The euro-denominated interest rate swaps expire in 2019 and have a weighted average interest rate of 0.32%. Interest payable and receivable under the swap
agreements is accrued and recorded as an adjustment to interest expense.
The
effective portion of gains and losses of derivatives designated as cash flow hedges is deferred in AOCI; the amount of gains and losses reclassified from AOCI are recorded in
interest income and interest expenses.
At
March 31, 2017 and December 31, 2016, the notional amount of the euro-denominated interest rate swaps in place was €246,000 and
€252,000.
In
addition, the Company also enters into interest rate hedges ("pre-hedges") in anticipation of future long-term debt issuance. These pre-hedges are used to hedge interest rate
exposures with regard to interest rates which are relevant for the future long-term debt issuance and which could rise until the respective debt is actually issued. These pre-hedges were settled at
the issuance date of the corresponding long-term debt with the settlement amount recorded in AOCI amortized to interest expense over the life of the debt. At March 31, 2017 and
December 31, 2016, the Company had €31,103 and €35,814, respectively, related to settlements of pre-hedges deferred in AOCI, net of tax.
60
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Derivative Financial Instruments Valuation
The following table shows the carrying amounts of the Company's derivatives at March 31, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Financial Instrument Valuation
|
|
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
|
Assets
(2)
|
|
Liabilities
(2)
|
|
Assets
(2)
|
|
Liabilities
(2)
|
|
Derivatives in cash flow hedging relationships
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
1,758
|
|
|
(1,483
|
)
|
|
2,018
|
|
|
(4,101
|
)
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
-
|
|
|
17
|
|
|
(76
|
)
|
Interest rate contracts
|
|
|
-
|
|
|
(1,157
|
)
|
|
-
|
|
|
(1,414
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,758
|
|
|
(2,640
|
)
|
|
2,035
|
|
|
(5,591
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
9,021
|
|
|
(46,093
|
)
|
|
37,743
|
|
|
(21,415
|
)
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(119
|
)
|
Derivatives embedded in the Convertible Bonds
|
|
|
-
|
|
|
(79,257
|
)
|
|
-
|
|
|
(94,663
|
)
|
Share options to secure the Convertible Bonds
|
|
|
79,257
|
|
|
-
|
|
|
94,663
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
88,278
|
|
|
(125,350
|
)
|
|
132,406
|
|
|
(116,197
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) At March 31, 2017 and December 31, 2016, the valuation of the Company's derivatives was determined
using Significant Other Observable Inputs (Level 2).
(2) Derivative instruments are marked to market each reporting period resulting in carrying amounts being equal to fair
values at the reporting date.
The
carrying amounts for the current portion of derivatives indicated as assets in the table above are included in Other current assets in the Consolidated Balance Sheets while the
current portion of those indicated as liabilities are included in Current provisions and other current liabilities. The non-current portions indicated as assets or liabilities are included in the
Consolidated Balance Sheets in Other non-current assets or Non-current provisions and other non-current liabilities, respectively.
The
significant methods and assumptions used in estimating the fair values of derivative financial instruments are as follows:
The
fair value of interest rate swaps is calculated by discounting the future cash flows on the basis of the market interest rates applicable for the remaining term of the contract as of
the balance sheet date. To determine the fair value of foreign exchange forward contracts, the contracted forward rate is compared to the current forward rate for the remaining term of the contract as
of the balance sheet date. The result is then discounted on the basis of the market interest rates prevailing at the balance sheet date for the applicable currency. The fair value of the embedded
derivative of the convertible bonds is calculated using
61
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
the
difference between the market value of the convertible bond and the market value of an adequate straight bond discounted with the market interest rates as of the reporting date.
The
Company's own credit risk is incorporated in the fair value estimation of derivatives that are liabilities. Counterparty credit risk adjustments are factored into the valuation of
derivatives that are assets. The Company monitors and analyses the credit risk from derivative financial instruments on a regular basis. For the valuation of derivative financial instruments, the
credit risk is considered in the fair value of every individual instrument. The default probability is based upon the credit default swap spreads of each counterparty appropriate for the duration. The
calculation of the credit risk considered in the valuation is performed by multiplying the default probability appropriate for the duration with the expected discounted cash flows of the derivative
financial instrument.
The Effect of Derivatives on the Consolidated Financial Statements
The following table shows the effect of derivatives on the Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Effect of Derivatives on the Consolidated Financial Statements
|
|
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain (Loss) recognized in AOCI on
Derivatives
(Effective Portion)
for the three months ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
Amount of (Gain) Loss reclassified from AOCI
in Income (Effective Portion)
for the three months ended March 31,
|
|
|
|
Location of (Gain)
Loss reclassified from
AOCI in Income
(Effective Portion)
|
|
Derivatives in Cash Flow
Hedging Relationships
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Interest rate contracts
|
|
|
58
|
|
|
(3,172
|
)
|
Interest income/expense
|
|
|
6,805
|
|
|
5,657
|
|
Foreign exchange contracts
|
|
|
1,568
|
|
|
2,095
|
|
Costs of Revenue
|
|
|
938
|
|
|
(436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,626
|
|
|
(1,077
|
)
|
|
|
|
7,743
|
|
|
5,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of (Gain) Loss recognized in Income on
Derivatives
for the three months ended March 31,
|
|
Derivatives not designated
as Hedging Instruments
|
|
Location of (Gain)
Loss recognized in
Income on Derivatives
|
|
|
2017
|
|
2016
|
|
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
|
20,717
|
|
|
24,229
|
|
Foreign exchange contracts
|
|
Interest income/expense
|
|
|
1,483
|
|
|
642
|
|
Derivatives embedded in the Convertible Bonds
|
|
Interest income/expense
|
|
|
(15,406
|
)
|
|
(3,361
|
)
|
Share options to secure the Convertible Bonds
|
|
Interest income/expense
|
|
|
15,406
|
|
|
3,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,200
|
|
|
24,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
March 31, 2017, the Company had foreign exchange derivatives with maturities of up to 12 months and interest rate swaps with maturities of up to 31 months.
13. 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.
62
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
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 IFRS measures are revenue, operating income and operating income margin. The Company does not include income taxes as it believes this is outside the segments'
control. Financing is a corporate function, which the Company's segments do not control. Therefore, the Company does not include interest expense relating to financing as a segment measurement.
Similarly, the Company does not allocate certain costs, which relate primarily to certain headquarters' overhead charges, including accounting and finance, because the Company believes that these
costs are also not within the control of the individual segments. Production of products, production asset management, quality management and procurement related to production are centrally managed at
Corporate. The Company's global research and development is also centrally managed at Corporate. These Corporate activities do not fulfill the definition of a segment according to IFRS 8.
Products are transferred to the segments at cost; therefore no internal profit is generated. The associated internal revenue for the product transfers and their elimination are recorded as Corporate
activities. Capital expenditures for production are based on the expected demand of the segments and consolidated profitability considerations. In addition, certain revenues, investments and
intangible assets, as well as any related expenses, are not allocated to a segment but are accounted for as Corporate.
Information
pertaining to the Company's segment and Corporate activities for the three months ended March 31, 2017 and 2016 is set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment and Corporate Information
|
|
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
Segment
|
|
EMEA
Segment
|
|
Asia-Pacific
Segment
|
|
Latin
America
Segment
|
|
Segment
Total
|
|
Corporate
|
|
Total
|
|
Three months ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
3,374,842
|
|
|
613,687
|
|
|
377,545
|
|
|
177,409
|
|
|
4,543,483
|
|
|
4,637
|
|
|
4,548,120
|
|
Inter - segment revenue
|
|
|
674
|
|
|
-
|
|
|
19
|
|
|
57
|
|
|
750
|
|
|
(750
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
3,375,516
|
|
|
613,687
|
|
|
377,564
|
|
|
177,466
|
|
|
4,544,233
|
|
|
3,887
|
|
|
4,548,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
525,815
|
|
|
114,479
|
|
|
81,835
|
|
|
14,405
|
|
|
736,534
|
|
|
(85,255
|
)
|
|
651,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(92,728
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
558,551
|
|
Depreciation and amortization
|
|
|
(105,007
|
)
|
|
(30,453
|
)
|
|
(11,655
|
)
|
|
(4,508
|
)
|
|
(151,623
|
)
|
|
(38,285
|
)
|
|
(189,908
|
)
|
Income (loss) from equity method investees
|
|
|
14,808
|
|
|
(846
|
)
|
|
804
|
|
|
119
|
|
|
14,885
|
|
|
-
|
|
|
14,885
|
|
Total assets
|
|
|
17,434,931
|
|
|
3,656,704
|
|
|
1,829,306
|
|
|
704,626
|
|
|
23,625,567
|
|
|
2,154,105
|
|
|
25,779,672
|
|
thereof investments in equity method investees
|
|
|
304,409
|
|
|
187,658
|
|
|
97,321
|
|
|
23,851
|
|
|
613,239
|
|
|
-
|
|
|
613,239
|
|
Capital expenditures, acquisitions and investments
(1)(2)
|
|
|
263,642
|
|
|
37,691
|
|
|
7,426
|
|
|
7,938
|
|
|
316,697
|
|
|
41,062
|
|
|
357,759
|
|
Three months ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue external customers
|
|
|
2,862,352
|
|
|
572,400
|
|
|
339,686
|
|
|
139,068
|
|
|
3,913,506
|
|
|
2,875
|
|
|
3,916,381
|
|
Inter - segment revenue
|
|
|
926
|
|
|
-
|
|
|
5
|
|
|
29
|
|
|
960
|
|
|
(960
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
2,863,278
|
|
|
572,400
|
|
|
339,691
|
|
|
139,097
|
|
|
3,914,466
|
|
|
1,915
|
|
|
3,916,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
401,808
|
|
|
117,969
|
|
|
59,386
|
|
|
9,779
|
|
|
588,942
|
|
|
(92,026
|
)
|
|
496,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(95,544
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401,372
|
|
Depreciation and amortization
|
|
|
(91,947
|
)
|
|
(26,029
|
)
|
|
(10,427
|
)
|
|
(3,267
|
)
|
|
(131,670
|
)
|
|
(33,656
|
)
|
|
(165,326
|
)
|
Income (loss) from equity method investees
|
|
|
15,002
|
|
|
1,243
|
|
|
507
|
|
|
100
|
|
|
16,852
|
|
|
-
|
|
|
16,852
|
|
Total assets
|
|
|
15,399,683
|
|
|
3,035,763
|
|
|
1,570,782
|
|
|
577,543
|
|
|
20,583,771
|
|
|
2,263,076
|
|
|
22,846,847
|
|
thereof investments in equity method investees
|
|
|
248,875
|
|
|
190,785
|
|
|
95,847
|
|
|
23,794
|
|
|
559,301
|
|
|
-
|
|
|
559,301
|
|
Capital expenditures, acquisitions and investments
(3)
|
|
|
220,935
|
|
|
26,355
|
|
|
7,778
|
|
|
4,347
|
|
|
259,415
|
|
|
50,237
|
|
|
309,652
|
|
(1) North America and EMEA acquisitions exclude €3,814 and €13,731
respectively of non-cash acquisitions for 2017.
(2) Acquisitions of the last twelve months increased consolidated earnings in the amount of €5,637.
(3) North America and EMEA acquisitions exclude €7,595 and €10 of non-cash acquisitions
for 2016.
63
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
14. Supplementary Cash Flow Information
The following additional information is provided with respect to the Consolidated Statements of Cash Flows:
|
|
|
|
|
|
|
|
Supplementary Cash Flow Information
|
|
in € thousands
|
|
|
|
|
|
|
|
For the three months
ended March 31,
|
|
|
|
2017
|
|
2016
|
|
Details for acquisitions:
|
|
|
|
|
|
|
|
Assets acquired
|
|
|
(155,397
|
)
|
|
(65,389
|
)
|
Liabilities assumed
|
|
|
6,137
|
|
|
-
|
|
Noncontrolling interest subject to put provisions
|
|
|
5,700
|
|
|
1,634
|
|
Noncontrolling interest
|
|
|
563
|
|
|
3,492
|
|
Non-cash consideration
|
|
|
(9,917
|
)
|
|
7,605
|
|
|
|
|
|
|
|
|
|
Cash paid
|
|
|
(152,914
|
)
|
|
(52,658
|
)
|
Less cash acquired
|
|
|
383
|
|
|
2,179
|
|
|
|
|
|
|
|
|
|
Net cash paid for acquisitions
|
|
|
(152,531
|
)
|
|
(50,479
|
)
|
Cash paid for investments
|
|
|
(3,693
|
)
|
|
(29,243
|
)
|
Cash paid for intangible assets
|
|
|
(3,987
|
)
|
|
(2,908
|
)
|
|
|
|
|
|
|
|
|
Total cash paid for acquisitions and investments, net of cash acquired, and purchases of intangible assets
|
|
|
(160,211
|
)
|
|
(82,630
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15. Events Occurring after the Balance Sheet Date
On April 28, 2017, the Company successfully closed the acquisition of Cura Day Hospital Group Pty Ltd. ("Cura") in Australia the first step into Care
Coordination outside the North America Segment. Cura generated €87,000 in revenue for their 2016 fiscal year.
No
further significant activities have taken place subsequent to the balance sheet date March 31, 2017 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.
16. Supplemental Condensed Combining Information
FMC Finance III S.A., a former wholly-owned subsidiary of the Company, issued 6
7
/
8
% Senior Notes due 2017 in July 2007. On June 20, 2011, Fresenius Medical
Care US Finance, Inc. ("US Finance") acquired substantially all of the assets of FMC Finance III S.A. and assumed its obligations, including the 6
7
/
8
% Senior Notes and the
related indenture. The 6
7
/
8
% Senior Notes are fully and unconditionally guaranteed, jointly and severally on a senior basis, by the Company and by FMCH and D-GmbH, together the
("Guarantor Subsidiaries"). The 6
7
/
8
% Senior Notes and related guarantees were issued in an exchange
64
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
offer
registered under the Securities Act of 1933. The financial statements in this report present the financial condition of the Company, on a consolidated basis at March 31, 2017 and
December 31, 2016 and its results of operations and cash flows for the three-months periods ended March 31, 2017 and 2016. The following combining financial information for the Company
is at March 31, 2017 and December 31, 2016 and for the three-months periods ended March 31, 2017 and 2016, segregated between US Finance as issuer, the Company, D-GmbH and FMCH as
guarantors, and the Company's other businesses (the "Non-Guarantor Subsidiaries"). For purposes of the condensed combining information, the Company and the guarantors carry their investments under the
equity method. Other (income) expense includes income (loss) related to investments in consolidated subsidiaries recorded under the equity method for purposes of the condensed combining information.
In addition, other (income) expense includes income and losses from profit and loss transfer agreements as well as dividends received.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement Supplemental Condensed Combining Information
|
|
in € thousands
|
|
|
|
For the three months ended March 31, 2017
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC - AG &
Co. KGaA
|
|
D-GmbH
|
|
FMCH
|
|
Non-Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Revenue
|
|
|
-
|
|
|
-
|
|
|
439,052
|
|
|
-
|
|
|
4,873,614
|
|
|
(764,546
|
)
|
|
4,548,120
|
|
Costs of revenue
|
|
|
-
|
|
|
-
|
|
|
276,873
|
|
|
-
|
|
|
3,447,267
|
|
|
(767,681
|
)
|
|
2,956,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
-
|
|
|
-
|
|
|
162,179
|
|
|
-
|
|
|
1,426,347
|
|
|
3,135
|
|
|
1,591,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (income) expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
(1)
|
|
|
-
|
|
|
36,666
|
|
|
54,582
|
|
|
(15,104
|
)
|
|
831,554
|
|
|
548
|
|
|
908,246
|
|
Research and development
|
|
|
-
|
|
|
-
|
|
|
13,750
|
|
|
-
|
|
|
17,732
|
|
|
654
|
|
|
32,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
-
|
|
|
(36,666
|
)
|
|
93,847
|
|
|
15,104
|
|
|
577,061
|
|
|
1,933
|
|
|
651,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, net
|
|
|
(1,709
|
)
|
|
37,249
|
|
|
129
|
|
|
65,740
|
|
|
(8,681
|
)
|
|
-
|
|
|
92,728
|
|
Other, net
|
|
|
-
|
|
|
(404,032
|
)
|
|
60,884
|
|
|
(266,960
|
)
|
|
-
|
|
|
610,108
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
1,709
|
|
|
330,117
|
|
|
32,834
|
|
|
216,324
|
|
|
585,742
|
|
|
(608,175
|
)
|
|
558,551
|
|
Income tax expense (benefit)
|
|
|
620
|
|
|
21,942
|
|
|
28,213
|
|
|
(19,976
|
)
|
|
225,167
|
|
|
(74,398
|
)
|
|
181,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
1,089
|
|
|
308,175
|
|
|
4,621
|
|
|
236,300
|
|
|
360,575
|
|
|
(533,777
|
)
|
|
376,983
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
68,808
|
|
|
-
|
|
|
68,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
1,089
|
|
|
308,175
|
|
|
4,621
|
|
|
236,300
|
|
|
291,767
|
|
|
(533,777
|
)
|
|
308,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Selling, general and administrative is presented net of income from equity method investees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement Supplemental Condensed Combining Information
|
|
in € thousands
|
|
|
|
For the three months ended March 31, 2016
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC - AG &
Co. KGaA
|
|
D-GmbH
|
|
FMCH
|
|
Non-Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Revenue
|
|
|
-
|
|
|
-
|
|
|
413,054
|
|
|
-
|
|
|
4,224,541
|
|
|
(721,214
|
)
|
|
3,916,381
|
|
Costs of revenue
|
|
|
-
|
|
|
-
|
|
|
284,448
|
|
|
-
|
|
|
3,052,966
|
|
|
(715,623
|
)
|
|
2,621,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
-
|
|
|
-
|
|
|
128,606
|
|
|
-
|
|
|
1,171,575
|
|
|
(5,591
|
)
|
|
1,294,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (income) expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
(1)
|
|
|
-
|
|
|
52,118
|
|
|
44,358
|
|
|
(60,605
|
)
|
|
718,888
|
|
|
8,491
|
|
|
763,250
|
|
Research and development
|
|
|
-
|
|
|
-
|
|
|
21,015
|
|
|
-
|
|
|
13,409
|
|
|
-
|
|
|
34,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
-
|
|
|
(52,118
|
)
|
|
63,233
|
|
|
60,605
|
|
|
439,278
|
|
|
(14,082
|
)
|
|
496,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, net
|
|
|
(1,606
|
)
|
|
41,871
|
|
|
(328
|
)
|
|
53,118
|
|
|
2,489
|
|
|
-
|
|
|
95,544
|
|
Other, net
|
|
|
-
|
|
|
(312,611
|
)
|
|
57,494
|
|
|
(179,453
|
)
|
|
-
|
|
|
434,570
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
1,606
|
|
|
218,622
|
|
|
6,067
|
|
|
186,940
|
|
|
436,789
|
|
|
(448,652
|
)
|
|
401,372
|
|
Income tax expense (benefit)
|
|
|
583
|
|
|
5,458
|
|
|
24,087
|
|
|
2,954
|
|
|
149,978
|
|
|
(57,176
|
)
|
|
125,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
1,023
|
|
|
213,164
|
|
|
(18,020
|
)
|
|
183,986
|
|
|
286,811
|
|
|
(391,476
|
)
|
|
275,488
|
|
Net income (loss) attributable to noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
62,324
|
|
|
-
|
|
|
62,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
1,023
|
|
|
213,164
|
|
|
(18,020
|
)
|
|
183,986
|
|
|
224,487
|
|
|
(391,476
|
)
|
|
213,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Selling, general and administrative is presented net of income from equity method investees.
65
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Statement Supplemental Condensed Combining Information
|
|
in € thousands
|
|
|
|
For the three months ended March 31, 2017
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC - AG &
Co. KGaA
|
|
D-GmbH
|
|
FMCH
|
|
Non-Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Net Income
|
|
|
1,089
|
|
|
308,175
|
|
|
4,621
|
|
|
236,300
|
|
|
360,575
|
|
|
(533,777
|
)
|
|
376,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) related to foreign currency translation
|
|
|
(1,108
|
)
|
|
-
|
|
|
-
|
|
|
(83,295
|
)
|
|
21,269
|
|
|
1,765
|
|
|
(61,369
|
)
|
Gain (loss) related to cash flow hedges
|
|
|
-
|
|
|
6,864
|
|
|
(488
|
)
|
|
-
|
|
|
2,993
|
|
|
-
|
|
|
9,369
|
|
Income tax (expense) benefit related to components of other comprehensive income that may be reclassified
|
|
|
-
|
|
|
1,969
|
|
|
(143
|
)
|
|
-
|
|
|
(4,804
|
)
|
|
-
|
|
|
(2,978
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
(1,108
|
)
|
|
8,833
|
|
|
(631
|
)
|
|
(83,295
|
)
|
|
19,458
|
|
|
1,765
|
|
|
(54,978
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
(19
|
)
|
|
317,008
|
|
|
3,990
|
|
|
153,005
|
|
|
380,033
|
|
|
(532,012
|
)
|
|
322,005
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
56,080
|
|
|
56,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
(19
|
)
|
|
317,008
|
|
|
3,990
|
|
|
153,005
|
|
|
380,033
|
|
|
(588,092
|
)
|
|
265,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Statement Supplemental Condensed Combining Information
|
|
in € thousands
|
|
|
|
For the three months ended March 31, 2016
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC - AG &
Co. KGaA
|
|
D-GmbH
|
|
FMCH
|
|
Non-Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Net Income
|
|
|
1,023
|
|
|
213,164
|
|
|
(18,020
|
)
|
|
183,986
|
|
|
286,811
|
|
|
(391,476
|
)
|
|
275,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) related to foreign currency translation
|
|
|
(3,182
|
)
|
|
-
|
|
|
-
|
|
|
(261,170
|
)
|
|
(81,265
|
)
|
|
-
|
|
|
(345,617
|
)
|
Gain (loss) related to cash flow hedges
|
|
|
-
|
|
|
2,486
|
|
|
-
|
|
|
-
|
|
|
1,658
|
|
|
-
|
|
|
4,144
|
|
Income tax (expense) benefit related to components of other comprehensive income that may be reclassified
|
|
|
-
|
|
|
(707
|
)
|
|
-
|
|
|
-
|
|
|
(598
|
)
|
|
-
|
|
|
(1,305
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of tax
|
|
|
(3,182
|
)
|
|
1,779
|
|
|
-
|
|
|
(261,170
|
)
|
|
(80,205
|
)
|
|
-
|
|
|
(342,778
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
(2,159
|
)
|
|
214,943
|
|
|
(18,020
|
)
|
|
(77,184
|
)
|
|
206,606
|
|
|
(391,476
|
)
|
|
(67,290
|
)
|
Comprehensive income attributable to noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
23,556
|
|
|
23,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to shareholders of FMC-AG & Co. KGaA
|
|
|
(2,159
|
)
|
|
214,943
|
|
|
(18,020
|
)
|
|
(77,184
|
)
|
|
206,606
|
|
|
(415,032
|
)
|
|
(90,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Balance Sheet Supplemental Condensed Combining Information
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2017
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC
US Finance
|
|
FMC - AG &
Co. KGaA
|
|
D-GmbH
|
|
FMCH
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
1
|
|
|
419
|
|
|
524
|
|
|
-
|
|
|
980,936
|
|
|
(311,305
|
)
|
|
670,575
|
|
Trade accounts receivable, less allowance for doubtful accounts
|
|
|
-
|
|
|
-
|
|
|
147,975
|
|
|
-
|
|
|
3,425,606
|
|
|
(606
|
)
|
|
3,572,975
|
|
Accounts receivable from related parties
|
|
|
1,168,250
|
|
|
2,550,045
|
|
|
744,918
|
|
|
1,212,101
|
|
|
3,311,857
|
|
|
(8,775,686
|
)
|
|
211,485
|
|
Inventories
|
|
|
-
|
|
|
-
|
|
|
247,924
|
|
|
-
|
|
|
1,268,647
|
|
|
(171,356
|
)
|
|
1,345,215
|
|
Other current assets
|
|
|
-
|
|
|
35,319
|
|
|
56,491
|
|
|
125
|
|
|
1,200,109
|
|
|
(15,655
|
)
|
|
1,276,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,168,251
|
|
|
2,585,783
|
|
|
1,197,832
|
|
|
1,212,226
|
|
|
10,187,155
|
|
|
(9,274,608
|
)
|
|
7,076,639
|
|
Property, plant and equipment, net
|
|
|
-
|
|
|
575
|
|
|
251,451
|
|
|
-
|
|
|
3,439,031
|
|
|
(97,065
|
)
|
|
3,593,992
|
|
Intangible assets
|
|
|
-
|
|
|
519
|
|
|
44,939
|
|
|
-
|
|
|
767,452
|
|
|
4,942
|
|
|
817,852
|
|
Goodwill
|
|
|
-
|
|
|
-
|
|
|
50,193
|
|
|
-
|
|
|
12,870,224
|
|
|
-
|
|
|
12,920,417
|
|
Deferred taxes
|
|
|
-
|
|
|
109,326
|
|
|
46,101
|
|
|
-
|
|
|
164,803
|
|
|
(10,680
|
)
|
|
309,550
|
|
Other non-current assets
(1)
|
|
|
-
|
|
|
12,718,330
|
|
|
34,289
|
|
|
14,060,539
|
|
|
5,450,112
|
|
|
(31,202,048
|
)
|
|
1,061,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
-
|
|
|
12,828,750
|
|
|
426,973
|
|
|
14,060,539
|
|
|
22,691,622
|
|
|
(31,304,851
|
)
|
|
18,703,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
1,168,251
|
|
|
15,414,533
|
|
|
1,624,805
|
|
|
15,272,765
|
|
|
32,878,777
|
|
|
(40,579,459
|
)
|
|
25,779,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
-
|
|
|
494
|
|
|
26,080
|
|
|
-
|
|
|
469,711
|
|
|
-
|
|
|
496,285
|
|
Accounts payable to related parties
|
|
|
-
|
|
|
259,945
|
|
|
564,961
|
|
|
1,554,431
|
|
|
5,916,496
|
|
|
(8,024,421
|
)
|
|
271,412
|
|
Current provisions and other current liabilities
|
|
|
11,068
|
|
|
67,595
|
|
|
139,887
|
|
|
129,903
|
|
|
2,591,632
|
|
|
(17,342
|
)
|
|
2,922,743
|
|
Short-term debt
|
|
|
-
|
|
|
920,769
|
|
|
-
|
|
|
-
|
|
|
89,657
|
|
|
(313,728
|
)
|
|
696,698
|
|
Short-term debt from related parties
|
|
|
-
|
|
|
1,098,635
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(979,620
|
)
|
|
119,015
|
|
Current portion of long-term debt and capital lease obligations
|
|
|
469,028
|
|
|
24,000
|
|
|
1,287
|
|
|
187,073
|
|
|
34,051
|
|
|
-
|
|
|
715,439
|
|
Income tax payable
|
|
|
-
|
|
|
45,315
|
|
|
-
|
|
|
-
|
|
|
118,016
|
|
|
(8,417
|
)
|
|
154,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
480,096
|
|
|
2,416,753
|
|
|
732,215
|
|
|
1,871,407
|
|
|
9,219,563
|
|
|
(9,343,528
|
)
|
|
5,376,506
|
|
Long term debt and capital lease obligations, less current portion
|
|
|
607,988
|
|
|
593,000
|
|
|
4,574
|
|
|
1,758,697
|
|
|
6,507,099
|
|
|
(2,732,467
|
)
|
|
6,738,891
|
|
Long term debt from related parties
|
|
|
-
|
|
|
2,091,118
|
|
|
-
|
|
|
3,399,897
|
|
|
-
|
|
|
(5,491,015
|
)
|
|
-
|
|
Non-current provisions and other non-current liabilities
|
|
|
-
|
|
|
81,730
|
|
|
3,509
|
|
|
361,465
|
|
|
589,801
|
|
|
14,915
|
|
|
1,051,420
|
|
Pension liabilities
|
|
|
-
|
|
|
19,531
|
|
|
367,592
|
|
|
-
|
|
|
171,953
|
|
|
(34,862
|
)
|
|
524,214
|
|
Income tax payable
|
|
|
1,531
|
|
|
9,876
|
|
|
-
|
|
|
-
|
|
|
21,083
|
|
|
89,046
|
|
|
121,536
|
|
Deferred taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
716,550
|
|
|
(47,498
|
)
|
|
669,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
609,519
|
|
|
2,795,255
|
|
|
375,675
|
|
|
5,520,059
|
|
|
8,006,486
|
|
|
(8,201,881
|
)
|
|
9,105,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,089,615
|
|
|
5,212,008
|
|
|
1,107,890
|
|
|
7,391,466
|
|
|
17,226,049
|
|
|
(17,545,409
|
)
|
|
14,481,619
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total FMC-AG & Co. KGaA shareholders' equity
|
|
|
78,636
|
|
|
10,202,525
|
|
|
516,915
|
|
|
7,881,299
|
|
|
14,557,200
|
|
|
(23,034,050
|
)
|
|
10,202,525
|
|
Noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,095,528
|
|
|
-
|
|
|
1,095,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
78,636
|
|
|
10,202,525
|
|
|
516,915
|
|
|
7,881,299
|
|
|
15,652,728
|
|
|
(23,034,050
|
)
|
|
11,298,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
1,168,251
|
|
|
15,414,533
|
|
|
1,624,805
|
|
|
15,272,765
|
|
|
32,878,777
|
|
|
(40,579,459
|
)
|
|
25,779,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other non-current assets are presented net of investment in equity method investees.
67
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
Balance Sheet Supplemental Condensed Combining Information
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2016
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC - AG &
Co. KGaA
|
|
D-GmbH
|
|
FMCH
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
0
|
|
|
36,246
|
|
|
937
|
|
|
-
|
|
|
960,940
|
|
|
(289,241
|
)
|
|
708,882
|
|
Trade accounts receivable, less allowance for doubtful accounts
|
|
|
-
|
|
|
-
|
|
|
144,237
|
|
|
-
|
|
|
3,200,187
|
|
|
(605
|
)
|
|
3,343,819
|
|
Accounts receivable from related parties
|
|
|
-
|
|
|
76,277
|
|
|
47,376
|
|
|
174
|
|
|
99,695
|
|
|
(14,057
|
)
|
|
209,465
|
|
Inventories
|
|
|
1,201,336
|
|
|
1,771,563
|
|
|
943,640
|
|
|
2,223,743
|
|
|
5,040,831
|
|
|
(9,843,636
|
)
|
|
1,337,477
|
|
Other current assets
|
|
|
-
|
|
|
-
|
|
|
225,989
|
|
|
-
|
|
|
1,231,300
|
|
|
(172,983
|
)
|
|
1,284,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
1,201,336
|
|
|
1,884,086
|
|
|
1,362,179
|
|
|
2,223,917
|
|
|
10,532,953
|
|
|
(10,320,522
|
)
|
|
6,883,949
|
|
Property, plant and equipment, net
|
|
|
-
|
|
|
616
|
|
|
259,977
|
|
|
-
|
|
|
3,416,538
|
|
|
(97,505
|
)
|
|
3,579,626
|
|
Intangible assets
|
|
|
-
|
|
|
623
|
|
|
42,858
|
|
|
-
|
|
|
754,697
|
|
|
4,942
|
|
|
803,120
|
|
Goodwill
|
|
|
-
|
|
|
-
|
|
|
50,193
|
|
|
-
|
|
|
12,905,381
|
|
|
-
|
|
|
12,955,574
|
|
Deferred taxes
|
|
|
-
|
|
|
107,013
|
|
|
45,910
|
|
|
-
|
|
|
168,985
|
|
|
(30,514
|
)
|
|
291,394
|
|
Other non-current assets
|
|
|
-
|
|
|
13,280,665
|
|
|
34,337
|
|
|
12,973,408
|
|
|
6,864,628
|
|
|
(32,163,161
|
)
|
|
989,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
(1)
|
|
|
-
|
|
|
13,388,917
|
|
|
433,275
|
|
|
12,973,408
|
|
|
24,110,229
|
|
|
(32,286,238
|
)
|
|
18,619,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
1,201,336
|
|
|
15,273,003
|
|
|
1,795,454
|
|
|
15,197,325
|
|
|
34,643,182
|
|
|
(42,606,760
|
)
|
|
25,503,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
-
|
|
|
1,210
|
|
|
24,016
|
|
|
-
|
|
|
550,330
|
|
|
-
|
|
|
575,556
|
|
Accounts payable to related parties
|
|
|
-
|
|
|
343,096
|
|
|
767,031
|
|
|
1,586,440
|
|
|
6,414,326
|
|
|
(8,846,824
|
)
|
|
264,069
|
|
Current provisions and other current liabilities
|
|
|
28,243
|
|
|
37,179
|
|
|
120,275
|
|
|
142,943
|
|
|
2,722,315
|
|
|
(14,247
|
)
|
|
3,036,708
|
|
Short-term debt
|
|
|
-
|
|
|
801,442
|
|
|
-
|
|
|
-
|
|
|
96,053
|
|
|
(325,485
|
)
|
|
572,010
|
|
Short-term debt from related parties
|
|
|
-
|
|
|
1,243,224
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,240,224
|
)
|
|
3,000
|
|
Current portion of long-term debt and capital lease obligations
|
|
|
476,872
|
|
|
24,000
|
|
|
1,218
|
|
|
189,735
|
|
|
32,393
|
|
|
-
|
|
|
724,218
|
|
Income tax payable
|
|
|
-
|
|
|
9,876
|
|
|
-
|
|
|
-
|
|
|
113,460
|
|
|
-
|
|
|
123,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
505,115
|
|
|
2,460,027
|
|
|
912,540
|
|
|
1,919,118
|
|
|
9,928,877
|
|
|
(10,426,780
|
)
|
|
5,298,897
|
|
Long term debt and capital lease obligations, less current portion
|
|
|
616,640
|
|
|
596,292
|
|
|
4,329
|
|
|
1,799,119
|
|
|
6,093,769
|
|
|
(2,277,263
|
)
|
|
6,832,886
|
|
Long term debt from related parties
|
|
|
-
|
|
|
2,091,118
|
|
|
-
|
|
|
3,079,893
|
|
|
-
|
|
|
(5,171,011
|
)
|
|
-
|
|
Non-current provisions and other non-current liabilities
|
|
|
-
|
|
|
97,329
|
|
|
3,628
|
|
|
389,388
|
|
|
522,723
|
|
|
14,915
|
|
|
1,027,983
|
|
Pension liabilities
|
|
|
-
|
|
|
19,059
|
|
|
362,193
|
|
|
-
|
|
|
166,149
|
|
|
(34,862
|
)
|
|
512,539
|
|
Income tax payable
|
|
|
926
|
|
|
31,521
|
|
|
-
|
|
|
-
|
|
|
(2,247
|
)
|
|
87,982
|
|
|
118,182
|
|
Deferred taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
691,094
|
|
|
(29,173
|
)
|
|
661,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
617,566
|
|
|
2,835,319
|
|
|
370,150
|
|
|
5,268,400
|
|
|
7,471,488
|
|
|
(7,409,412
|
)
|
|
9,153,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,122,681
|
|
|
5,295,346
|
|
|
1,282,690
|
|
|
7,187,518
|
|
|
17,400,365
|
|
|
(17,836,192
|
)
|
|
14,452,408
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total FMC-AG & Co. KGaA shareholders' equity
|
|
|
78,655
|
|
|
9,977,657
|
|
|
512,764
|
|
|
8,009,807
|
|
|
16,169,342
|
|
|
(24,770,568
|
)
|
|
9,977,657
|
|
Noncontrolling interests
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,073,475
|
|
|
-
|
|
|
1,073,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
78,655
|
|
|
9,977,657
|
|
|
512,764
|
|
|
8,009,807
|
|
|
17,242,817
|
|
|
(24,770,568
|
)
|
|
11,051,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
1,201,336
|
|
|
15,273,003
|
|
|
1,795,454
|
|
|
15,197,325
|
|
|
34,643,182
|
|
|
(42,606,760
|
)
|
|
25,503,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other non-current assets are presented net of investment in equity method investees.
68
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows Supplemental Condensed Combining Information
|
|
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2017
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC AG &
Co. KGaA
|
|
DGmbH
|
|
FMCH
|
|
Non
Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
1,089
|
|
|
308,175
|
|
|
4,621
|
|
|
236,300
|
|
|
360,575
|
|
|
(533,777
|
)
|
|
376,983
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity affiliate income
|
|
|
-
|
|
|
459,394
|
|
|
-
|
|
|
(266,960
|
)
|
|
-
|
|
|
(192,434
|
)
|
|
-
|
|
Depreciation and amortization
|
|
|
-
|
|
|
166
|
|
|
15,360
|
|
|
-
|
|
|
182,014
|
|
|
(7,632
|
)
|
|
189,908
|
|
Change in deferred taxes, net
|
|
|
-
|
|
|
(5,128
|
)
|
|
(1
|
)
|
|
-
|
|
|
(13,189
|
)
|
|
1,194
|
|
|
(17,124
|
)
|
(Gain) loss on sale of fixed assets and investments
|
|
|
-
|
|
|
(301
|
)
|
|
(64
|
)
|
|
-
|
|
|
3,508
|
|
|
-
|
|
|
3,143
|
|
Compensation expense related to share-based plans
|
|
|
-
|
|
|
2,163
|
|
|
-
|
|
|
-
|
|
|
12,444
|
|
|
-
|
|
|
14,607
|
|
Investments in equity method investees, net
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,640
|
)
|
|
-
|
|
|
(12,640
|
)
|
Changes in assets and liabilities, net of amounts from businesses acquired:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable, net
|
|
|
-
|
|
|
-
|
|
|
(3,738
|
)
|
|
-
|
|
|
(239,335
|
)
|
|
-
|
|
|
(243,073
|
)
|
Inventories
|
|
|
-
|
|
|
-
|
|
|
(21,935
|
)
|
|
-
|
|
|
13,281
|
|
|
(3,036
|
)
|
|
(11,690
|
)
|
Other current and non-current assets
|
|
|
(19,713
|
)
|
|
58,432
|
|
|
(6,328
|
)
|
|
(20,589
|
)
|
|
(329,116
|
)
|
|
291,654
|
|
|
(25,660
|
)
|
Accounts receivable from / payable to related parties
|
|
|
18,038
|
|
|
(898,811
|
)
|
|
101,121
|
|
|
1,008,602
|
|
|
(958,506
|
)
|
|
735,515
|
|
|
5,959
|
|
Accounts payable, provisions and other current and non-current liabilities
|
|
|
16,846
|
|
|
11,666
|
|
|
23,125
|
|
|
6,012
|
|
|
(74,171
|
)
|
|
-
|
|
|
(16,522
|
)
|
Paid interest
|
|
|
(33,692
|
)
|
|
(5,218
|
)
|
|
(262
|
)
|
|
(11,454
|
)
|
|
(91,369
|
)
|
|
-
|
|
|
(141,995
|
)
|
Received interest
|
|
|
19,713
|
|
|
14,213
|
|
|
866
|
|
|
31,054
|
|
|
(52,566
|
)
|
|
-
|
|
|
13,280
|
|
Income tax payable
|
|
|
620
|
|
|
25,842
|
|
|
-
|
|
|
(19,976
|
)
|
|
180,739
|
|
|
-
|
|
|
187,225
|
|
Paid income taxes
|
|
|
-
|
|
|
(12,049
|
)
|
|
-
|
|
|
-
|
|
|
(133,403
|
)
|
|
(7,353
|
)
|
|
(152,805
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
2,901
|
|
|
(41,456
|
)
|
|
112,765
|
|
|
962,989
|
|
|
(1,151,734
|
)
|
|
284,131
|
|
|
169,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
-
|
|
|
(20
|
)
|
|
(9,954
|
)
|
|
-
|
|
|
(195,107
|
)
|
|
7,533
|
|
|
(197,548
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
-
|
|
|
-
|
|
|
136
|
|
|
-
|
|
|
2,344
|
|
|
-
|
|
|
2,480
|
|
Disbursement of loans to related parties
|
|
|
-
|
|
|
(225,344
|
)
|
|
-
|
|
|
(481,728
|
)
|
|
846,744
|
|
|
(139,672
|
)
|
|
-
|
|
Acquisitions and investments, net of cash acquired, and purchases of intangible assets
|
|
|
-
|
|
|
(2,273
|
)
|
|
(397
|
)
|
|
188
|
|
|
(160,302
|
)
|
|
2,573
|
|
|
(160,211
|
)
|
Proceeds from divestitures
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
299
|
|
|
-
|
|
|
299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
-
|
|
|
(227,637
|
)
|
|
(10,215
|
)
|
|
(481,540
|
)
|
|
493,978
|
|
|
(129,566
|
)
|
|
(354,980
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shortterm debt, net
|
|
|
-
|
|
|
235,311
|
|
|
(103,276
|
)
|
|
-
|
|
|
428,119
|
|
|
(313,728
|
)
|
|
246,426
|
|
Longterm debt and capital lease obligations, net
|
|
|
(2,900
|
)
|
|
(6,000
|
)
|
|
313
|
|
|
276,848
|
|
|
(435,157
|
)
|
|
139,672
|
|
|
(27,224
|
)
|
Increase (decrease) of accounts receivable securitization program
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,696
|
)
|
|
-
|
|
|
(4,696
|
)
|
Proceeds from exercise of stock options
|
|
|
-
|
|
|
3,955
|
|
|
-
|
|
|
-
|
|
|
481
|
|
|
-
|
|
|
4,436
|
|
Capital increase (decrease)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(758,297
|
)
|
|
760,870
|
|
|
(2,573
|
)
|
|
-
|
|
Distributions to noncontrolling interest
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(80,119
|
)
|
|
-
|
|
|
(80,119
|
)
|
Contributions from noncontrolling interest
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,562
|
|
|
-
|
|
|
7,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(2,900
|
)
|
|
233,266
|
|
|
(102,963
|
)
|
|
(481,449
|
)
|
|
677,060
|
|
|
(176,629
|
)
|
|
146,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
692
|
|
|
-
|
|
|
692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
1
|
|
|
(35,827
|
)
|
|
(413
|
)
|
|
-
|
|
|
19,996
|
|
|
(22,064
|
)
|
|
(38,307
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
0
|
|
|
36,246
|
|
|
937
|
|
|
-
|
|
|
960,940
|
|
|
(289,241
|
)
|
|
708,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
1
|
|
|
419
|
|
|
524
|
|
|
-
|
|
|
980,936
|
|
|
(311,305
|
)
|
|
670,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69
Table of Contents
FRESENIUS MEDICAL CARE AG & Co. KGaA
Notes to Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows Supplemental Condensed Combining Information
|
|
in € thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2016
|
|
|
|
Issuer
|
|
Guarantors
|
|
|
|
|
|
|
|
|
|
FMC US
Finance
|
|
FMC AG &
Co. KGaA
|
|
DGmbH
|
|
FMCH
|
|
Non
Guarantor
Subsidiaries
|
|
Combining
Adjustment
|
|
Combined
Total
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
1,023
|
|
|
213,166
|
|
|
10,253
|
|
|
183,987
|
|
|
258,535
|
|
|
(391,476
|
)
|
|
275,488
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity affiliate income
|
|
|
-
|
|
|
(186,846
|
)
|
|
-
|
|
|
(179,453
|
)
|
|
-
|
|
|
366,299
|
|
|
-
|
|
Depreciation and amortization
|
|
|
-
|
|
|
192
|
|
|
13,182
|
|
|
-
|
|
|
158,434
|
|
|
(6,482
|
)
|
|
165,326
|
|
Change in deferred taxes, net
|
|
|
-
|
|
|
(7,279
|
)
|
|
(3,853
|
)
|
|
-
|
|
|
21
|
|
|
(54
|
)
|
|
(11,165
|
)
|
(Gain) loss on sale of fixed assets and investments
|
|
|
-
|
|
|
(13
|
)
|
|
(63
|
)
|
|
-
|
|
|
884
|
|
|
-
|
|
|
808
|
|
(Write Up) write-off loans from related parties
|
|
|
-
|
|
|
(372
|
)
|
|
(4,833
|
)
|
|
-
|
|
|
(0
|
)
|
|
5,205
|
|
|
-
|
|
Compensation expense related to share-based plans
|
|
|
-
|
|
|
5,065
|
|
|
-
|
|
|
-
|
|
|
27
|
|
|
-
|
|
|
5,092
|
|
Investments in equity method investees, net
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(14,836
|
)
|
|
-
|
|
|
(14,836
|
)
|
Changes in assets and liabilities, net of amounts from businesses acquired:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable, net
|
|
|
-
|
|
|
-
|
|
|
(4,773
|
)
|
|
-
|
|
|
(237,575
|
)
|
|
1,281
|
|
|
(241,067
|
)
|
Inventories
|
|
|
-
|
|
|
-
|
|
|
(25,020
|
)
|
|
-
|
|
|
1,544
|
|
|
6,015
|
|
|
(17,461
|
)
|
Other current and non-current assets
|
|
|
(19,003
|
)
|
|
42,467
|
|
|
(12,326
|
)
|
|
(96,266
|
)
|
|
62,871
|
|
|
57,213
|
|
|
34,956
|
|
Accounts receivable from / payable to related parties
|
|
|
17,427
|
|
|
(370,780
|
)
|
|
98,770
|
|
|
7,427
|
|
|
330,104
|
|
|
(12,497
|
)
|
|
70,451
|
|
Accounts payable, provisions and other current and non-current liabilities
|
|
|
16,277
|
|
|
19,016
|
|
|
24,021
|
|
|
5,068
|
|
|
(69,028
|
)
|
|
-
|
|
|
(4,646
|
)
|
Paid interest
|
|
|
(32,554
|
)
|
|
(6,191
|
)
|
|
(154
|
)
|
|
(9,678
|
)
|
|
(89,066
|
)
|
|
-
|
|
|
(137,643
|
)
|
Received interest
|
|
|
19,003
|
|
|
9,246
|
|
|
939
|
|
|
30,961
|
|
|
2,932
|
|
|
(56,386
|
)
|
|
6,695
|
|
Income tax payable
|
|
|
583
|
|
|
14,888
|
|
|
-
|
|
|
2,954
|
|
|
65,133
|
|
|
(1,627
|
)
|
|
81,931
|
|
Paid income taxes
|
|
|
-
|
|
|
(11,442
|
)
|
|
-
|
|
|
-
|
|
|
(39,328
|
)
|
|
-
|
|
|
(50,770
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
2,756
|
|
|
(278,883
|
)
|
|
96,143
|
|
|
(55,000
|
)
|
|
430,652
|
|
|
(32,509
|
)
|
|
163,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
-
|
|
|
(82
|
)
|
|
(19,632
|
)
|
|
-
|
|
|
(213,896
|
)
|
|
6,588
|
|
|
(227,022
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
-
|
|
|
18
|
|
|
122
|
|
|
-
|
|
|
3,417
|
|
|
-
|
|
|
3,557
|
|
Disbursement of loans to related parties
|
|
|
-
|
|
|
9,473
|
|
|
-
|
|
|
103,445
|
|
|
(1
|
)
|
|
(112,917
|
)
|
|
-
|
|
Acquisitions and investments, net of cash acquired, and purchases of intangible assets
|
|
|
-
|
|
|
(15,638
|
)
|
|
(41
|
)
|
|
(454
|
)
|
|
(82,135
|
)
|
|
15,638
|
|
|
(82,630
|
)
|
Proceeds from divestitures
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
196
|
|
|
-
|
|
|
196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
-
|
|
|
(6,229
|
)
|
|
(19,551
|
)
|
|
102,991
|
|
|
(292,419
|
)
|
|
(90,691
|
)
|
|
(305,899
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shortterm debt, net
|
|
|
-
|
|
|
289,112
|
|
|
(81,235
|
)
|
|
-
|
|
|
84,154
|
|
|
(46,917
|
)
|
|
245,114
|
|
Longterm debt and capital lease obligations, net
|
|
|
(2,757
|
)
|
|
(6,000
|
)
|
|
-
|
|
|
(47,992
|
)
|
|
(104,659
|
)
|
|
112,918
|
|
|
(48,490
|
)
|
Increase (decrease) of accounts receivable securitization program
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(46,279
|
)
|
|
-
|
|
|
(46,279
|
)
|
Proceeds from exercise of stock options
|
|
|
-
|
|
|
1,728
|
|
|
-
|
|
|
-
|
|
|
581
|
|
|
-
|
|
|
2,309
|
|
Dividends paid
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(14,594
|
)
|
|
14,594
|
|
|
-
|
|
Capital increase (decrease)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,142
|
|
|
(3,142
|
)
|
|
-
|
|
Distributions to noncontrolling interest
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(60,413
|
)
|
|
-
|
|
|
(60,413
|
)
|
Contributions from noncontrolling interest
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,068
|
|
|
-
|
|
|
12,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(2,757
|
)
|
|
284,840
|
|
|
(81,235
|
)
|
|
(47,992
|
)
|
|
(126,000
|
)
|
|
77,453
|
|
|
104,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
|
1
|
|
|
(11,516
|
)
|
|
-
|
|
|
(11,516
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(2
|
)
|
|
(272
|
)
|
|
(4,643
|
)
|
|
-
|
|
|
717
|
|
|
(45,747
|
)
|
|
(49,947
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
2
|
|
|
411
|
|
|
4,643
|
|
|
-
|
|
|
500,085
|
|
|
(411
|
)
|
|
504,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
0
|
|
|
139
|
|
|
-
|
|
|
-
|
|
|
500,802
|
|
|
(46,158
|
)
|
|
454,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70
Table of Contents
Quantitative and Qualitative Disclosures About Market Risk
As of January 1, 2017, the Company migrated to reporting in accordance with International Financial Reporting Standards ("IFRS") as
adopted by the International Accounting Standards Board ("IASB"). During the period ended March 31, 2017, no material changes occurred to the information presented in Note 23 "Financial
Instruments" of the Company's Consolidated Financial Statements in accordance with IFRS, as adopted in the European Union, for the year ended December 31, 2016.
71
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. Based on that evaluation, 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 are designed to ensure that the information the Company is required to disclose in the reports filed or furnished under the Act is
recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and are effective to ensure that the information the Company is required to disclose
in its reports is accumulated and communicated to the General Partner's Management Board, including the General Partner's Chief Executive Officer and the Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure. During the past fiscal quarter, there have been no significant changes in internal controls, or in factors that could significantly affect
internal controls.
During
the three-month period ended March 31, 2017, our Supervisory Board, through its Audit and Corporate Governance Committee, conducted investigations, with the assistance of
independent counsel, into allegations of conduct outside the U.S. that may violate the U.S. Foreign Corrupt Practices Act or other anti-bribery laws. For information with respect to compliance
investigations, see Note 11 of the Notes to the Consolidated Financial Statements (unaudited), "Commitments and Contingencies Legal and Regulatory
Matters Other Litigation and Potential Exposures," presented elsewhere in this Report. The Company is implementing enhancements to its anti-corruption compliance program,
including internal controls related to compliance with international anti-bribery laws.
72
Table of Contents
OTHER INFORMATION
Legal and Regulatory Matters
The information in Note 11 of the Notes to Consolidated Financial Statements (Unaudited), "Commitments and Contingencies" presented
elsewhere in this report is incorporated by this reference.
73
Table of Contents
Exhibits
|
|
|
Exhibit No.
|
|
|
|
|
|
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).
|
74
Table of Contents