##### Table of Contents









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 20-F/A






|  |                                                                   
|- | ------------------------------------------------------------------
|o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
    OF THE

SECURITIES EXCHANGE ACT OF
1934


OR




|  |                                                     
|- | ----------------------------------------------------
|þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF
1934


For the fiscal year ended December 31, 2005


OR




|  |                                                             
|- | ------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE

SECURITIES EXCHANGE ACT OF
1934


For the transition period
from                   to


OR




|  |                                                                
|- | ---------------------------------------------------------------
|o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE

SECURITIES EXCHANGE ACT OF
1934


Date of event requiring this shell company
report


Commission file number 001-32749





FRESENIUS MEDICAL CARE AG & Co. KGaA




FRESENIUS MEDICAL CARE AG & Co. KGaA




Germany







Else-Kröner Strasse 1, 61352 Bad Homburg, Germany




Securities
registered or to be registered pursuant to Section 12(b) of
the Act:


|                                                          |  |                                          
|--------------------------------------------------------- |  | -----------------------------------------
|Title of each class                                       |  | Name of each exchange on which registered
|                                                          |  |                                          
|American Depositary Shares representing Preference Shares |  | New York Stock Exchange                  
|Preference Shares, no par value                           |  | New York Stock
    Exchange(1)           
|American Depositary Shares representing Ordinary Shares   |  | New York Stock Exchange                  
|Ordinary Shares, no par value                             |  | New York Stock
    Exchange(1)           






|    |                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------
|(1) | Not for trading, but only in connection with the registration of
    American Depositary Shares representing such shares.



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Securities registered or to be
    registered pursuant to Section 12(g) of the
    Act:None

Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:


77/8%
USD Trust Preferred Securities due 2008


73/8%
DM Trust Preferred Securities due 2008


77/8%
USD Trust Preferred Securities due 2011


73/8%
Euro Trust Preferred Securities due 2011


Subsidiary guarantees of each of the foregoing issues of
Securities










þ o




o þ






þ o




|                          |  |                     |  |                        
|------------------------- |  | ------------------- |  | -----------------------
|Large accelerated filer þ |  | Accelerated filer o |  | Non-accelerated filer o



o þ


12b-2


o þ










---



##### 










20-F/A 20-F


TABLE OF CONTENTS


|                          |  |     |  |                                                                                  |  |      |     | 
|------------------------- |  | --- |  | -------------------------------------------------------------------------------- |  | ---- | --- | 
|                          |  |     |  |                                                                                  |  | Page |    
|                          |  |     |  |                                                                                  |  |      |    
|INTRODUCTION              |  |     |  |                                                                                  |  |      |     | 
|PART I                    |  |     |  |                                                                                  |  |      |     | 
|Item 1.                   |  | N/A |  | Identity of Directors, Senior Management
    and Advisors                        |  |      | 3   | 
|Item 2.                   |  | N/A |  | Offer Statistics and Expected Timetable                                          |  |      | 3   | 
|Item 3.                   |  |     |  | Key Information                                                                  |  |      | 3   | 
|Item 4.                   |  |     |  | Information on the Company                                                       |  |      | 13  | 
|Item 4A.                  |  | N/A |  | Unresolved Staff Comments                                                        |  |      | 47  | 
|Item 5.                   |  |     |  | Operating and Financial Review and
    Prospects                                 |  |      | 47  | 
|Item 6.                   |  |     |  | Directors, Senior Management and
    Employees                                   |  |      | 71  | 
|Item 7.                   |  |     |  | Major Shareholders and Related Party
    Transactions                            |  |      | 84  | 
|Item 8.                   |  |     |  | Financial Information                                                            |  |      | 88  | 
|Item 9.                   |  |     |  | The Offer and Listing Details                                                    |  |      | 92  | 
|Item 10.                  |  |     |  | Additional Information                                                           |  |      | 97  | 
|Item 11.                  |  |     |  | Quantitative and Qualitative Disclosures
    About Market Risk                   |  |      | 111 | 
|Item 12.                  |  | N/A |  | Description of Securities other than Equity
    Securities                       |  |      | 114 | 
|PART II                   |  |     |  |                                                                                  |  |      |     | 
|Item 13.                  |  | N/A |  | Defaults, Dividend Arrearages and
    Delinquencies                              |  |      | 114 | 
|Item 14.                  |  |     |  | Material Modifications to the Rights of
    Security Holders and Use of Proceeds |  |      | 114 | 
|Item 15A.                 |  |     |  | Disclosure Controls and Procedures                                               |  |      | 115 | 
|Item 15B.                 |  |     |  | Managements annual report on internal
    control over financial reporting      |  |      | 115 | 
|Item 15C                  |  |     |  | Attestation report of the registered public
    accounting firm                  |  |      | 116 | 
|Item 15D.                 |  |     |  | Changes in Internal Control over Financial
    Reporting                         |  |      | 116 | 
|Item 16A.                 |  |     |  | Audit Committee Financial Expert                                                 |  |      | 116 | 
|Item 16B.                 |  |     |  | Code of Ethics                                                                   |  |      | 116 | 
|Item 16C.                 |  |     |  | Principal Accountant Fees and Services                                           |  |      | 116 | 
|Item 16D.                 |  | N/A |  | Exemptions from the Listing Standards for
    Audit Committees                   |  |      | 117 | 
|Item 16E.                 |  |     |  | Purchase of Equity Securities by the Issuer
    and Affiliated Purchaser         |  |      | 117 | 
|PART III                  |  |     |  |                                                                                  |  |      |     | 
|Item 17.                  |  | N/A |  | Financial Statements                                                             |  |      | 117 | 
|Item 18.                  |  |     |  | Financial Statements                                                             |  |      | 117 | 
|Item 19.                  |  |     |  | Exhibits                                                                         |  |      | 117 | 
|N/A means: Not applicable |  |     |  |                                                                                 
|ex-12.1                  
|ex-12.2                  
|ex-13.1                  



i



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##### Table of Contents






INTRODUCTION


Forward Looking Statements






| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | dependence on government reimbursements for dialysis services;                                                                                              
|
| |  | a possible decline in EPO utilization or EPO reimbursement;                                                                                                 
|
| |  | creditors claims and tax risks relating to the merger with
    W.R. Grace & Co.;                                                                           
|
| |  | the influence of managed care organizations and healthcare
    reforms;                                                                                     
|
| |  | our ability to remain competitive in our markets;                                                                                                           
|
| |  | product liability risks;                                                                                                                                    
|
| |  | risks relating to the integration of acquisitions and our
    dependence on additional acquisitions;                                                        
|
| |  | the impact of currency fluctuations; and                                                                                                                    
|
| |  | other statements of our expectations, beliefs, future plans and
    strategies, anticipated development and other matters that are
    not historical facts.



Nephrology News & Issues


1



---



##### Table of Contents





Transformation of Legal Form


(FMC-AG) (FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG


2



---



##### Table of Contents






PART I







|        |                                                          
|------- | ---------------------------------------------------------
|Item 1. | Identity of Directors, Senior Management and
    Advisors








|        |                                        
|------- | ---------------------------------------
|Item 2. | Other Statistics and Expected Timetable








|        |                
|------- | ---------------
|Item 3. | Key Information

Selected Financial Data




|                                                        |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |       |            |  |   |       |            | 
|------------------------------------------------------- | ----------------------------- | ------------- | ----- | ---------- | ------- | - | ----- | ---------- |  | - | ------- | ---------- |  | ------- | ----- | ---------- |  | - | ----- | ---------- | 
|                                                        |                               | 2005(A)       |       |            | 2004(A) |   |       | 2003(A)    |  |   | 2002(A) |            |  | 2001(B) |      
|                                                        |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |      
|                                                        |                               | (In millions) |      
|Statement of Operations Data:                           |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |       |            |  |   |       |           
|Net revenues                                            |                               | $             | 6,772 |            |         | $ | 6,228 |            |  | $ | 5,528   |            |  | $       | 5,084 |            |  | $ | 4,859 |           
|Cost of revenues                                        |                               |               | 4,439 |            |         |   | 4,142 |            |  |   | 3,699   |            |  |         | 3,428 |            |  |   | 3,220 |           
|                                                        |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |      
|Gross profit                                            |                               |               | 2,333 |            |         |   | 2,086 |            |  |   | 1,829   |            |  |         | 1,656 |            |  |   | 1,639 |           
|Selling, general and administrative                     |                               |               | 1,343 |            |         |   | 1,183 |            |  |   | 1,022   |            |  |         | 914   |            |  |   | 966   |           
|Research and development                                |                               |               | 51    |            |         |   | 51    |            |  |   | 50      |            |  |         | 47    |            |  |   | 36    |           
|Special charge                                          |                               |               |      |            |         |   |      |            |  |   |        |            |  |         |      |            |  |   | 258   |           
|                                                        |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |      
|Operating income                                        |                               |               | 939   |            |         |   | 852   |            |  |   | 757     |            |  |         | 695   |            |  |   | 379   |           
|Interest expense, net                                   |                               |               | 173   |            |         |   | 183   |            |  |   | 211     |            |  |         | 226   |            |  |   | 223   |           
|                                                        |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |      
|Income before income taxes                              |                               |               | 766   |            |         |   | 669   |            |  |   | 546     |            |  |         | 469   |            |  |   | 156   |           
|Net income                                              |                               | $             | 455   |            |         | $ | 402   |            |  | $ | 331     |            |  | $       | 290   |            |  | $ | 63    |           
|                                                        |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |      
|Weighted average of:                                    |                               |               |       |            |         |   |       |            |  |   |         |            |  |         |       |            |  |   |       |           
|                                                        | Preference shares outstanding |               |       | 26,789,816 |         |   |       | 26,243,059 |  |   |         | 26,191,011 |  |         |       | 26,185,178 |  |   |       | 26,035,330 | 
|                                                        | Ordinary shares outstanding   |               |       | 70,000,000 |         |   |       | 70,000,000 |  |   |         | 70,000,000 |  |         |       | 70,000,000 |  |   |       | 70,000,000 | 
|Basic earnings per Ordinary share                       |                               | $             | 4.68  |            |         | $ | 4.16  |            |  | $ | 3.42    |            |  | $       | 3.00  |            |  | $ | 0.65  |           
|Fully diluted earnings per Ordinary share               |                               |               | 4.64  |            |         |   | 4.14  |            |  |   | 3.42    |            |  |         | 3.00  |            |  |   | 0.64  |           
|Basic earnings per Preference share                     |                               |               | 4.75  |            |         |   | 4.23  |            |  |   | 3.49    |            |  |         | 3.06  |            |  |   | 0.70  |           
|Fully diluted earnings per Preference share             |                               |               | 4.72  |            |         |   | 4.21  |            |  |   | 3.49    |            |  |         | 3.06  |            |  |   | 0.69  |           
|Basic earnings per Ordinary ADS                         |                               |               | 1.56  |            |         |   | 1.39  |            |  |   | 1.14    |            |  |         | 1.00  |            |  |   | 0.22  |           
|Fully diluted earnings per Ordinary ADS                 |                               |               | 1.55  |            |         |   | 1.38  |            |  |   | 1.14    |            |  |         | 1.00  |            |  |   | 0.21  |           
|Basic earnings per Preference ADS                       |                               |               | 1.58  |            |         |   | 1.41  |            |  |   | 1.16    |            |  |         | 1.02  |            |  |   | 0.23  |           
|Fully diluted earnings per Preference ADS               |                               |               | 1.57  |            |         |   | 1.40  |            |  |   | 1.16    |            |  |         | 1.02  |            |  |   | 0.23  |           
|Dividends declared per Ordinary
    share ()(a)        |                               |               | 1.23  | (b)        |         |   | 1.12  |            |  |   | 1.02    |            |  |         | 0.94  |            |  |   | 0.85  |           
|Dividends declared per Preference
    share ()
    (a) |                               |               | 1.29  | (b)        |         |   | 1.18  |            |  |   | 1.08    |            |  |         | 1.00  |            |  |   | 0.91  |           
|Dividends declared per Ordinary
    share ($)(a)        |                               |               |      |            |         |   | 1.41  |            |  |   | 1.25    |            |  |         | 1.10  |            |  |   | 0.78  |           
|Dividends declared per Preference share ($)
    (a)     |                               |               |      |            |         |   | 1.48  |            |  |   | 1.32    |            |  |         | 1.17  |            |  |   | 0.84  |           

3



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##### Table of Contents



|                                                      |  |               |       |  |         |   |       |         |  |   |         |  |  |         |       |  |  |   |       | 
|----------------------------------------------------- |  | ------------- | ----- |  | ------- | - | ----- | ------- |  | - | ------- |  |  | ------- | ----- |  |  | - | ----- | 
|                                                      |  | 2005(A)       |       |  | 2004(A) |   |       | 2003(A) |  |   | 2002(A) |  |  | 2001(B) |      
|                                                      |  |               |       |  |         |   |       |         |  |   |         |  |  |         |      
|                                                      |  | (In millions) |      
|Balance Sheet Data                                    |  |               |       |  |         |   |       |         |  |   |         |  |  |         |       |  |  |   |       | 
|Working capital                                       |  | $             | 883   |  |         | $ | 508   |         |  | $ | 794     |  |  | $       | 526   |  |  | $ | 402   | 
|Total assets                                          |  |               | 7,983 |  |         |   | 7,962 |         |  |   | 7,503   |  |  |         | 6,780 |  |  |   | 6,516 | 
|Total long-term
    debt(c)                           |  |               | 1,895 |  |         |   | 1,824 |         |  |   | 2,354   |  |  |         | 2,234 |  |  |   | 2,165 | 
|Shareholders equity                                  |  |               | 3,974 |  |         |   | 3,635 |         |  |   | 3,244   |  |  |         | 2,807 |  |  |   | 2,617 | 
|Capital Stock  Preference shares  Nominal
    Value |  |               | 74    |  |         |   | 70    |         |  |   | 70      |  |  |         | 70    |  |  |   | 70    | 
|Capital Stock  Ordinary shares  Nominal
    Value   |  |               | 229   |  |         |   | 229   |         |  |   | 229     |  |  |         | 229   |  |  |   | 229   | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Includes the effect of an accounting change in 2002 relating to
    the adoption of SFAS No. 142, Goodwill and Other
    Intangible Assets, as of January 1, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(B) | Includes the special charge to address 1996 merger related legal
    matters, estimated liabilities and legal expenses arising in
    connection with the W.R. Grace Chapter 11 proceedings and
    the cost of resolving pending litigation and other disputes with
    certain commercial insurers. You can find a more detailed
    discussion of this special charge in Notes 8 and 18 of the
    Notes to our Consolidated Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(a) | Amounts shown for each year from 2001 to 2005 represent
    dividends paid with respect to such year. The actual declaration
    and payment of the dividend was made in the following year,
    after approval of the dividend at our Annual General Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(b) | Our general partners Management Board has proposed
    dividends for 2005 of
    1.23 per
    Ordinary share and
    1.29 per
    Preference share. These dividends are subject to approval by our
    shareholders at our Annual General Meeting to be held on
    May 9, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(c) | Total long-term debt represents long-term debt and capital lease
    obligations, less current portions and (i) at
    December 31, 2001, the mandatorily redeemable preferred
    securities of Fresenius Medical Care Capital Trust, Fresenius
    Medical Care Capital Trust II, Fresenius Medical Care
    Capital Trust III, Fresenius Medical Care Capital
    Trust IV, and Fresenius Medical Care Capital Trust V,
    (ii) at December 31, 2002, 2003, 2004, and 2005, the
    mandatorily redeemable preferred securities of Fresenius Medical
    Care Capital Trust II, Fresenius Medical Care Capital
    Trust III, Fresenius Medical Care Capital Trust IV,
    and Fresenius Medical Care Capital Trust V. On
    February 14, 2002, we redeemed the entire $360 million
    aggregate liquidation amount of the trust preferred securities
    of Fresenius Medical Care Capital Trust.

RISK FACTORS


Risks Relating to Litigation and Regulatory Matters in the
U.S.


If we do not comply with the many governmental regulations
applicable to our business or with the corporate integrity
agreement between us and the U.S. government, we could be
excluded from government health care reimbursement programs or
our authority to conduct business could be terminated, either of
which would result in a material decrease in our revenue.






| |   |                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | the quality, safety and efficacy of medical and pharmaceutical
    products and supplies;                         
|
| |  | the operation of manufacturing facilities, laboratories and
    dialysis clinics;                                 
|
| |  | the rate of, and accurate reporting and billing for, government
    and third-party reimbursement; and            
|
| |  | compensation of medical directors and other financial
    arrangements with physicians and other referral sources.



4



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A change in U.S. government reimbursement for
dialysis care could materially decrease our revenues and
operating profit




5



---



##### Table of Contents



A reduction in reimbursement for or a change in the
utilization of EPO could materially reduce our revenue and
operating profit. An interruption of supply or our inability to
obtain satisfactory terms for EPO could reduce our
revenues






Creditors of W.R. Grace & Co. Conn. have asserted
claims against us


Co.-Conn.






6



---



##### Table of Contents







Managed care plans usually negotiate lower reimbursement
rates than other health plans. As such plans grow, amounts paid
for our services and products by non-governmental payors could
decrease






Proposals for health care reform could decrease our
revenues and operating profit




Risks Relating to our Business


Our competitors recent combination could foreclose
certain sales to an important customer




7



---



##### Table of Contents







The risks associated with the Renal Care Group merger and
other acquisitions could have an adverse effect on our financial
condition and results of operation








8



---



##### Table of Contents







Our growth depends, in part, on our ability to continue to
make acquisitions






Our competitors could develop superior technology or
otherwise impact our product sales




We are exposed to products liability and other claims
which could result in significant costs and liability which we
may not be able to insure on acceptable terms in the
future






9



---



##### Table of Contents



If physicians and other referral sources cease referring
patients to our dialysis clinics or cease purchasing our
dialysis products, our revenues would decrease






If we are unable to attract and retain skilled medical,
technical and engineering personnel, we may be unable to manage
our growth or continue our technological development






We face additional risks from international
operations






| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | The economic situation in developing countries could deteriorate;                                                              
|
| |  | Fluctuations in exchange rates could adversely affect
    profitability;                                                       
|
| |  | We could face difficulties in enforcing and collecting accounts
    receivable under some countries legal systems;            
|
| |  | Local regulations could restrict our ability to obtain a direct
    ownership interest in dialysis clinics or other operations;

10



---



##### Table of Contents





| |   |                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------
| |  | Political and economic instability, especially in developing and
    newly industrializing countries, could disrupt our operations;
|
| |  | Some customers and governments could have longer payment cycles,
    with resulting adverse effects on our cash flow; and          
|
| |  | Some countries could impose additional taxes or restrict the
    import of our products.                                           



Diverging views of the financial authorities could require
us to make additional tax payments




Risks Relating to our Securities


Capital markets may be unfamiliar with the KGaA form,
which may adversely affect our share price




The public market for our preference shares and our
preference share ADSs is limited and highly illiquid. The
delisting of or preference share ADSs would further reduce the
market for our preference shares




Our substantial indebtedness may limit our ability to pay
dividends or implement certain elements of our business
strategy




11



---



##### Table of Contents









Fresenius AG owns 100% of the shares in the general
partner of our Company and is able to control our management and
strategy


Aufsichtsrat


Because we are not organized under U.S. law, we are
subject to certain less detailed disclosure requirements under
U.S. federal securities laws




12



---



##### Table of Contents












|        |                           
|------- | --------------------------
|Item 4. | Information on the Company

A.             History
and Development of the Company


General


Fresenius Medical Care AG & Co. Kommanditgesellschaft auf Aktien Aktiengesellschaft


Amtsgericht Sitz


History


Gesellschaft mit beschränkter
Haftung Aktiengesellschaft






| |   |                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | all of the outstanding common stock of W.R. Grace &
    Co., whose sole business at the time of the transaction
    consisted of National Medical Care, Inc., its global dialysis
    business, in exchange for 31,360,000 Ordinary shares; and
|
| |  | the publicly-held minority interest in Fresenius USA, Inc., in
    exchange for 3,430,000 Ordinary shares.                                                                                                                                     





13



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Aktiengesellschaft Kommanditgesellschaft auf Aktien FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG Genehmigtes Kapital





       


14



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Capital Expenditures




|                                                       |               |                            |   |     |        |  |   |      |     |  |      |     |     |  |  |   |     | 
|------------------------------------------------------ | ------------- | -------------------------- | - | --- | ------ |  | - | ---- | --- |  | ---- | --- | --- |  |  | - | --- | 
|                                                       |               | Actual                     |   |     |       
|                                                       |               |                            |   |     | Budget | 
|                                                       |               | 2005                       |   |     | 2004   |  |   | 2003 |     |  | 2006 |    
|                                                       |               |                            |   |     |        |  |   |      |     |  |      |    
|                                                       |               | (in millions)              |  
|Acquisitions                                           |               |                            |   |     |        |  |   |      |     |  |      |     |     |  |  |  
|                                                       | North America |                            | $ | 77  |        |  | $ | 65   |     |  | $    | 43  |     |  |  |   |    
|                                                       | International |                            |   | 57  |        |  |   | 55   |     |  |      | 58  |     |  |  |   |    
|                                                       |               |                            |   |     |        |  |   |      |     |  |      |    
|                                                       |               | Total Acquisitions         |   | $   | 134    |  |   | $    | 120 |  |      | $   | 101 |  |  | $ | 100 | 
|                                                       |               |                            |   |     |        |  |   |      |     |  |      |    
|Capital expenditures for property, plant and equipment |               |                            |   |     |        |  |   |      |     |  |      |     |     |  |  |  
|                                                       | North America |                            | $ | 176 |        |  | $ | 166  |     |  | $    | 182 |     |  |  |   |    
|                                                       | International |                            |   | 139 |        |  |   | 113  |     |  |      | 109 |     |  |  |   |    
|                                                       |               |                            |   |     |        |  |   |      |     |  |      |    
|                                                       |               | Total Capital Expenditures |   | $   | 315    |  |   | $    | 279 |  |      | $   | 291 |  |  | $ | 450 | 
|                                                       |               |                            |   |     |        |  |   |      |     |  |      |    









B.  Business Overview


Our Business


Nephrology News & Issues,


15



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|              |                   |               |       |       |      |  |       |       |  |  |       |       | 
|------------- | ----------------- | ------------- | ----- | ----- | ---- |  | ----- | ----- |  |  | ----- | ----- | 
|              |                   | 2005          |       |       | 2004 |  |       | 2003  | 
|              |                   |               |       |       |      |  |       |       | 
|              |                   | (in millions) |      
|North America |                   |               |       |       |      |  |       |       |  |  |       |      
|              | Dialysis Care     |               | $     | 4,054 |      |  | $     | 3,802 |  |  | $     | 3,435 | 
|              | Dialysis Products |               |       | 523   |      |  |       | 446   |  |  |       | 443   | 
|              |                   |               |       |       |      |  |       |       | 
|              |                   |               | 4,577 |       |      |  | 4,248 |       |  |  | 3,878 |      
|             
|International |                   |               |       |       |      |  |       |       |  |  |       |      
|              | Dialysis Care     |               |       | 813   |      |  |       | 699   |  |  |       | 544   | 
|              | Dialysis Products |               |       | 1,382 |      |  |       | 1,281 |  |  |       | 1,106 | 
|              |                   |               |       |       |      |  |       |       | 
|              |                   |               | 2,195 |       |      |  | 1,980 |       |  |  | 1,650 |      

Renal Industry Overview




End-Stage Renal Disease






16



---



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| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | increased general life expectancy and the overall aging of the
    general U.S. and European population;        
|
| |  | shortage of donor organs for kidney transplants;                                                                
|
| |  | improved dialysis technology that makes life-prolonging dialysis
    available to a larger patient population;  
|
| |  | greater access to treatment in developing countries; and                                                        
|
| |  | better treatment and survival of patients with hypertension,
    diabetes and other illnesses that lead to ESRD.

Dialysis Treatment Options for ESRD


Hemodialysis.






17



---



##### Table of Contents







Peritoneal Dialysis.


Our Strategy






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Improve our Leading Market Position and Expand Presence in
    Attractive Growth Markets Worldwide. Based on publicly
    reported sales and number of patients treated, we are the
    worlds largest dialysis company. Through our planned
    acquisition of RCG, we will further strengthen our position in
    the United States. We also intend to expand our global product
    business by acquiring and establishing new dialysis clinics
    within attractive international markets. We believe that we will
    obtain an increasing percentage of our dialysis care growth from
    worldwide markets. We believe that increases in per capita
    income in developing countries will make general health care
    benefits, which may include payment for dialysis treatment, more
    widely available and present significant opportunities.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Increase Our Spectrum of Dialysis Services.We plan to
    continue to expand our role within the broad spectrum of
    services for dialysis patients. We implement this strategy by
    providing expanded and enhanced patient services, including
    laboratory services, to both our own clinics and those of third
    parties. We estimate that our Spectra Renal Management division
    provides laboratory services for approximately 40% of the ESRD
    patients in the U.S. We have developed disease state
    management methodologies, which involve the coordination of
    total patient care for ESRD patients and which we believe are
    attractive to managed care payors. We formed Optimal Renal Care,
    LLC, a joint venture with The Permanente Federation and
    Renaissance Health Care as a joint venture with participating
    nephrologists. We recently acquired the joint venture interest
    in Optimal Renal Care and the minority interests in Renaissance
    Health Care and merged the two companies. We provide ESRD and
    Chronic Kidney Disease management programs to more than
    3,000 patients. We also operate a surgical center for the
    management and care of vascular access for ESRD patients, which
    decreases hospitalization.
|
| |  | Differentiated Patient Care Programs from those of Our
    Competitors. We believe that our
    UltraCare®
    Patient Care program offered at our North America dialysis
    facilities distinguishes and differentiates our                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

18



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##### Table of Contents



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | patient care programs from those of our competitors.
    UltraCare®
    therapy employs single-use high flux polysulfone dialyzers,
    on-line quality measurement, and Ultra Pure Dialysate all of
    which we feel improve mortality and increase the quality of
    patient care. The change to single-use dialyzers has increased
    our per treatment dialyzer costs relative to use of multi-use
    dialyzers. These cost increases have been offset, however, by
    our ability to achieve economies of scale in the production of
    these dialyzers, due to our large-scale single-use dialyzer
    manufacturing capacity. Moreover, we have implemented a staffing
    model based on single-use that reduces our personnel costs per
    treatment. Finally, automated controls in our 2008 Series
    dialysis machine reduces concentrate usage and associated costs.                                                                                                                                                                     
|
| |  | Continue to Provide High Standards of Patient Care. We
    believe that our reputation for providing the highest standards
    of patient care is a competitive advantage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Extend Our Position as an Innovator in Product and Process
    Technology. We are committed to technological leadership in
    both hemodialysis and peritoneal dialysis products. We have more
    than 350 full time equivalents as members of our research
    and development team that focuses on developing dialysis systems
    that are safer, more effective and easier to use and that can be
    easily customized to meet the differing needs of customers
    around the world. We believe that our extensive expertise in
    patient treatment and clinical data will further enhance our
    ability to develop more effective products and treatment
    methodologies. Our ability to manufacture dialysis products on a
    cost-effective and competitive basis results in large part from
    our process technologies. Over the past several years, we have
    reduced manufacturing costs per unit through development of
    proprietary manufacturing technologies that have streamlined and
    automated our production processes.
|
| |  | Offer Complete Dialysis Product Lines with Recurring
    Disposable Products Revenue Streams. We offer broad and
    competitive hemodialysis and peritoneal dialysis product lines.
    These product lines enjoy broad market acceptance and enable us
    to serve as our customers single source for all of their
    dialysis machines, systems and disposable products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Proposed Acquisition of Renal Care Group, Inc.






Dialysis Care


Dialysis Services




19



---



##### Table of Contents









| |   |                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------
| |  | our reputation for quality patient care and treatment;                                                                                  
|
| |  | our extensive network of dialysis clinics, which enables
    physicians to refer their patients to conveniently located
    clinics; and
|
| |  | our reputation for technologically advanced products for
    dialysis treatment.                                                        











20



---



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Fresenius
UltraCare®
Program


® ® ® tm ® ®


Laboratory Services




Other Services




Acquisitions




21



---



##### Table of Contents











Quality Assurance in Dialysis Care










| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | Improvement of risk management systems in dialysis clinics.                                                        
|
| |  | Implementation of an audit management system tool 
    first pilots are planned for the Czech Republic and Poland.
|
| |  | Extension of matrix certification of environmental management
    system to Italy and Poland.                      



Sources of U.S. Dialysis Care Net Revenue




22



---



##### Table of Contents





|                                      |  |                         |        |  |      |  |        |      |  |  |        | 
|------------------------------------- |  | ----------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                      |  | Year Ended December 31, |       
|                                      |  |                         |       
|                                      |  | 2005                    |        |  | 2004 |  |        | 2003 | 
|                                      |  |                         |        |  |      |  |        |      | 
|Medicare ESRD program                 |  |                         | 56.0%  |  |      |  | 58.3%  |      |  |  | 61.0%  | 
|Private/alternative payors            |  |                         | 31.6%  |  |      |  | 30.0%  |      |  |  | 29.2%  | 
|Medicaid and other government sources |  |                         | 4.2%   |  |      |  | 4.1%   |      |  |  | 3.9%   | 
|Hospitals                             |  |                         | 8.2%   |  |      |  | 7.6%   |      |  |  | 5.9%   | 
|                                      |  |                         |        |  |      |  |        |      | 
|Total                                 |  |                         | 100.0% |  |      |  | 100.0% |      |  |  | 100.0% | 
|                                      |  |                         |        |  |      |  |        |      | 



Patient, Physician and Other Relationships








Competition


Dialysis Services.


23



---



##### Table of Contents











Laboratory Services.


Dialysis Products








| |   |                                          
| | - | -----------------------------------------
| |  | HD machines and PD cyclers               
|
| |  | Dialyzers, our largest product group     
|
| |  | PD solutions in flexible bags            
|
| |  | HD concentrates, solutions and granulates
|
| |  | Bloodlines                               
|
| |  | Systems for water treatment              



24



---



##### Table of Contents



Overview




|                             |  |                            |         |  |       |  |       |          |  |   |         |       |  |          |     |  |       |   |         |  |  |  |     | 
|---------------------------- |  | -------------------------- | ------- |  | ----- |  | ----- | -------- |  | - | ------- | ----- |  | -------- | --- |  | ----- | - | ------- |  |  |  | --- | 
|                             |  | Year Ended December 31,    |        
|                             |  |                            |        
|                             |  | 2005                       |         |  | 2004  |  |       | 2003     | 
|                             |  |                            |         |  |       |  |       |          | 
|                             |  | Total                      |         |  |       |  | Total |          |  |   |         | Total |  |          |    
|                             |  | Product                    |         |  | % of  |  |       | Product  |  |   | % of    |       |  | Product  |     |  | % of  |  
|                             |  | Revenues                   |         |  | Total |  |       | Revenues |  |   | Total   |       |  | Revenues |     |  | Total |  
|                             |  |                            |         |  |       |  |       |          |  |   |         |       |  |          |     |  |       |  
|                             |  | (U.S. dollars in millions) |        
|Hemodialysis Products        |  | $                          | 1,588.6 |  |       |  | 83    |          |  | $ | 1,453.0 |       |  |          | 84  |  |       | $ | 1,326.1 |  |  |  | 85  | 
|Peritoneal Dialysis Products |  |                            | 275.5   |  |       |  | 15    |          |  |   | 242.9   |       |  |          | 14  |  |       |   | 211.5   |  |  |  | 14  | 
|Adsorbers                    |  |                            | 40.9    |  |       |  | 2     |          |  |   | 30.9    |       |  |          | 2   |  |       |   | 11.6    |  |  |  | 1   | 
|                             |  |                            |         |  |       |  |       |          |  |   |         |       |  |          |     |  |       |  
|Total                        |  | $                          | 1,905.0 |  |       |  | 100   |          |  | $ | 1,726.8 |       |  |          | 100 |  |       | $ | 1,549.2 |  |  |  | 100 | 
|                             |  |                            |         |  |       |  |       |          |  |   |         |       |  |          |     |  |       |  

Hemodialysis Products




Dialysis Machines. tm






| |   |                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Volumetric dialysate balancing and ultrafiltration control
    system. This system, which we introduced in 1977, provides for
    safe and more efficient use of highly permeable dialyzers,
    permitting efficient dialysis with controlled rates of fluid
    removal;                                                                                                                    
|
| |  | Proven hydraulic systems, providing reliable operation and
    servicing flexibility;                                                                                                                                                                                                                                                                                                         
|
| |  | Compatibility with all manufacturers dialyzers and a wide
    variety of blood-lines and dialysis solutions, permitting
    maximum flexibility in both treatment and disposable products
    usage;                                                                                                                                                                                         
|
| |  | Modular design, which permits us to offer dialysis clinics a
    broad range of options to meet specific patient or regional
    treatment requirements. Modular design also allows upgrading
    through module substitution without replacing the entire machine;                                                                                                                           
|
| |  | Specialized modules that provide monitoring and response
    capability for selected bio-physical patient parameters, such as
    body temperature and relative blood volume. This concept, known
    as physiological dialysis, permits hemodialysis treatments with
    lower incidence of a variety of symptoms or side effects, which
    still occur frequently in standard hemodialysis.
|
| |  | Sophisticated microprocessor controls, and display and readout
    panels that are adaptable to meet local language requirements;                                                                                                                                                                                                                                                             
|
| |  | Battery backup, which continues operation of the blood circuit
    and all protective systems up to 20 minutes following a
    power failure;                                                                                                                                                                                                                                                 

25



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##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Online clearance, measurement of dialyzer clearance for quality
    assurance with On-Line Clearance Monitoring, providing immediate
    effective clearance information, real time treatment outcome
    monitoring, and therapy adjustment during dialysis without
    requiring invasive procedures or blood samples;
|
| |  | On-line data collection capabilities and computer interfacing
    with our FINESSE module and FDS08 system. Our systems enable us
    to:                                                                                                                                                                               



| |   |                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | monitor and assess prescribed therapy;                                                                                                                                                        
|
| |  | connect a large number of hemodialysis machines and peripheral
    devices, such as patient scales, blood chemistry analyzers and
    blood pressure monitors, to a personal computer network;
|
| |  | enter nursing records automatically at bedside to register and
    document patient treatment records, facilitate billing, and
    improve record-keeping and staff efficiency;               
|
| |  | adapt to new data processing devices and trends;                                                                                                                                              
|
| |  | perform home hemodialysis with remote monitoring by a staff
    caregiver; and                                                                                                                
|
| |  | record and analyze trends in medical outcome factors in
    hemodialysis patients.                                                                                                            

Dialyzers. ®




| |   |                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | higher biological compatibility, resulting in reduced incidence
    of adverse reactions to the fibers;                                                                                                                                             
|
| |  | greater capacity to clear uremic toxins from patient blood
    during dialysis, permitting more thorough, more rapid dialysis,
    resulting in shorter treatment time; and                                                                         
|
| |  | a complete range of permeability, or membrane pore size, which
    permits dialysis at prescribed rates  high flux and
    low flux, as well as ultra flux for acute dialysis, and allows
    tailoring of dialysis therapy to individual patients.

Other Hemodialysis Products




Peritoneal Dialysis Products






Fewer possibilities for touch contamination.


26



---



##### Table of Contents







| |   |                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Improved biocompatibility. The new balance and
    bicaVera solutions are pH neutral snf have very low
    glucose degradation products (GDPs) providing greater protection
    for the peritoneal membrane.                        
|
| |  | Environmentally friendly material: Our
    staysafe®
    system is made of Biofine, a material, developed by Fresenius,
    which upon combustion is reduced to carbon dioxide and water and
    does not contain any plasticizers.

APD Therapy:




| |   |                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Improved quality of life. The patient is treated at night
    and can lead a more normal life during the day without fluid
    exchange every few hours.                                                                                                                                                                                 
|
| |  | Improved adequacy of dialysis. By adjusting the
    parameters of treatment it is possible to provide more dialysis
    to the patient compared to conventional CAPD therapy. This
    therapy offers important options to physicians such as treating
    patients with larger body sizes or those who have
    ultrafiltration failure.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | sleepsafe: The sleepsafe machine has
    been used since 1999. It has automated connection technology
    thus further reducing the risk on touch contamination. Another
    key safety feature is the barcode recognition system for the
    types of solution bags used. This improves compliance and
    ensures that the prescribed dosage is administered to the
    patient. There is also a pediatric option for the treatment of
    infants.                                                                                                  
|
| |  | North American cycler portfolio: This includes the
    (a) Freedom®
    and
    90/2®
    cyclers for pediatric and acute markets, (b) the
    Freedom®
    Cycler PD+ with IQ card and (c) the Newton
    IQ®
    Cycler. The credit card-sized IQcard can provide actual
    treatment details and results for compliance monitoring to the
    physician and, when used with the Newton IQ Cycler, can
    upload the patients prescription into the machine. The
    Newton IQ Cycler also pumps waste dialysate directly into
    a receptacle.

Patient Management Software: ®


Customers, Marketing, Distribution and Service




27



---



##### Table of Contents







Manufacturing Operations










Environmental Management






28



---



##### Table of Contents





Sources of Supply






New Product Introductions








| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 2008K@Home  converting the 2008K dialysis machine for
    the U.S. home hemodialysis market, including task oriented
    prompts, integrated leakage and pulse sensors and devices for
    remote monitoring.
|
| |  | POL  PatientOnLine improved software covering all
    aspects of PD, including management of medical data,
    prescription editor and adequacy tests.                                                       
|
| |  | Improved PD Product Line  including new connections
    and color coding for ease of identification of glucose and
    calcium concentrations.                                                               
|
| |  | sleep.safe BicaVera  sleep.safe with a more
    biocompatible PD solution containing bicarbonate as a buffer.                                                                                                



Patents, Trademarks and Licenses


®


29



---



##### Table of Contents















Competition




Risk Management






30



---



##### Table of Contents









Regulatory and Legal Matters


Regulatory Overview








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | failure to receive required licenses, certifications or other
    approvals for new facilities or products or significant delays
    in such receipt;                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | complete or partial loss of various federal certifications,
    licenses, or other permits required under the laws of any state
    or other governmental authority by withdrawal, revocation,
    suspension, or termination or restrictions of such certificates
    and licenses by the imposition of additional requirements or
    conditions, or the initiation of proceedings possibly leading to
    such restrictions or the partial or complete loss of the
    required certificates, licenses or permits; and
|
| |  | changes resulting from health care reform or other government
    actions that reduce reimbursement or reduce or eliminate
    coverage for particular services we provide.                                                                                                                                                                                                                                                                                                                                              



31



---



##### Table of Contents







Product Regulation


U.S.










32



---



##### Table of Contents



International (Including Germany and Other Non-U.S).




Drugs. (Arzneimittelgesetz)




Stufenplanbeauftragter




33



---



##### Table of Contents





Medical Devices.








34



---



##### Table of Contents









Environmental Regulation




Facilities and Operational Regulation


U.S.












35



---



##### Table of Contents







International (Including Germany and Other Non-U.S.)










Reimbursement








36



---



##### Table of Contents



U.S.


Dialysis Services.












37



---



##### Table of Contents



(CBSA)-based








Laboratory Tests.






38



---



##### Table of Contents



Erythropoetin (EPO).










| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | future changes in the EPO reimbursement rate;                                                  
|
| |  | inclusion of EPO in the Medicare composite rate without
    offsetting increases to such rate; 
|
| |  | reduction in the typical dosage per administration;                                            
|
| |  | increases in the cost of EPO without offsetting increases in the
    EPO reimbursement rate; or
|
| |  | reduction by the manufacturer of EPO of the amount of overfill
    in the EPO vials.           

Coordination of Benefits.




Possible Changes in Medicare.


39



---



##### Table of Contents





International (Including Germany and Other
Non-U.S.)
















40



---



##### Table of Contents







Anti-kickback Statutes, False Claims Act, Health Care Fraud,
Stark Law and Fraud and Abuse Laws in North America






Anti-kickback Statutes






False Claims Act and Related Criminal Provisions




41



---



##### Table of Contents





The Health Insurance Portability and Accountability Act of
1996








Balanced Budget Act of 1997






Stark Law




42



---



##### Table of Contents











Other Fraud and Abuse Laws








Health Care Reform




43



---



##### Table of Contents



C.  Organizational Structure







44



---



##### Table of Contents



D.  Property, plant and equipment


Property




|                        |  |                |        |           |              |  |        |            |  |                                                 |  |                                                                                                                   
|----------------------- |  | -------------- | ------ | --------- | ------------ |  | ------ | ---------- |  | ----------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------
|                        |  |                |        | Currently |              |  |        |            | 
|                        |  |                |        | Owned     |              |  |        |            | 
|                        |  | Floor Area     |        |           | or Leased    |  |        |            |  |                                                
|                        |  | (Approximate   |        |           | by Fresenius |  |        | Lease      |  |                                                
|Location                |  | Square Meters) |        |           | Medical Care |  |        | Expiration |  | Use                                            
|                        |  |                |        |           |              |  |        |            |  |                                                
|Bad Homburg, Germany    |  |                | 11,524 |           |              |  | leased |            |  | December 2006                                   |  | Corporate headquarters and administration                                                                         
|St. Wendel, Germany     |  |                | 49,732 |           |              |  | leased |            |  | December 2006                                   |  | Manufacture of polysulfone membranes, dialyzers and peritoneal
    dialysis solutions; research and development   
|Schweinfurt, Germany    |  |                | 19,605 |           |              |  | leased |            |  | December 2006                                   |  | Manufacture of hemodialysis machines and peritoneal dialysis
    cyclers; research and development                
|Bad Homburg (OE)        |  |                | 10,304 |           |              |  | leased |            |  | December 2006                                   |  | Manufacture of hemodialysis concentrate solutions / Technical
    Services / Logistics services Amgen             
|Darmstadt               |  |                | 18,297 |           |              |  | leased |            |  | December 2008
    (2 x 6 months renewal option) |  | Regional Distribution Center Central Europe                                                                       
|Palazzo Pignano, Italy  |  |                | 70,212 |           |              |  | owned  |            |  |                                                 |  | Manufacture of bloodlines and tubing                                                                              
|LArbresle, France      |  |                | 13,524 |           |              |  | owned  |            |  |                                                 |  | Manufacture of polysulfone dialyzers, special filters and dry
    hemodialysis concentrates                       
|Nottinghamshire, UK     |  |                | 5,110  |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate solutions                                                                 
|Barcelona, Spain        |  |                | 2,000  |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate solutions                                                                 
|Antalya, Turkey         |  |                | 8,676  |           |              |  | leased |            |  | December 2022                                   |  | Manufacture of bloodlines                                                                                         
|Ankara, Turkey          |  |                | 1,000  |           |              |  | leased |            |  | February 2009                                   |  | Manufacture of hemodialysis concentrate solutions                                                                 
|Casablanca, Morocco     |  |                | 2,823  |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate solutions                                                                 
|Guadalajara, México     |  |                | 26,984 |           |              |  | owned  |            |  |                                                 |  | Manufacture of peritoneal dialysis bags                                                                           
|Buenos Aires, Argentina |  |                | 10,100 |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate solutions, dry
    hemodialysis concentrates, bloodlines and desinfectants
|São Paulo, Brazil       |  |                | 5,734  |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate solutions                                                                 
|Bogotá, Colombia        |  |                | 5,700  |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate solutions, peritoneal
    dialysis bags, intravenous solutions            
|Hong Kong               |  |                | 1,260  |           |              |  | leased |            |  | February 2006                                   |  | Corporate headquarters and administration 
    Asia-Pacific                                                      
|Hong Kong               |  |                | 3,515  |           |              |  | leased |            |  | November 2005  November 2006                   |  | various leases of Warehouse facility                                                                              
|Shanghai, China         |  |                | 408    |           |              |  | leased |            |  | July 2006                                       |  | Warehouse                                                                                                         
|Shanghai, China         |  |                | 300    |           |              |  | leased |            |  | July 2006                                       |  | Administration                                                                                                    
|Taiwan                  |  |                | 1,315  |           |              |  | leased |            |  | November  December 2006                        |  | Sales & Technical & Administration
    office-FMC & Nephrocare                                                    
|Smithfield, Australia   |  |                | 5,350  |           |              |  | owned  |            |  |                                                 |  | Manufacture of hemodialysis concentrate                                                                           
|Altona VIC, Australia   |  |                | 2,400  |           |              |  | leased |            |  | March 2009                                      |  | Warehouse                                                                                                         
|Petaling Jaya, Malaysia |  |                | 1,173  |           |              |  | leased |            |  | November 2007                                   |  | Administration & Warehouse                                                                                        

45



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##### Table of Contents



|                             |  |                |        |           |              |  |        |            |  |                                            |  |                                                                                                                    
|---------------------------- |  | -------------- | ------ | --------- | ------------ |  | ------ | ---------- |  | ------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------
|                             |  |                |        | Currently |              |  |        |            | 
|                             |  |                |        | Owned     |              |  |        |            | 
|                             |  | Floor Area     |        |           | or Leased    |  |        |            |  |                                           
|                             |  | (Approximate   |        |           | by Fresenius |  |        | Lease      |  |                                           
|Location                     |  | Square Meters) |        |           | Medical Care |  |        | Expiration |  | Use                                       
|                             |  |                |        |           |              |  |        |            |  |                                           
|Yongin, South Korea          |  |                | 2,116  |           |              |  | leased |            |  | January 2007                               |  | Warehouse                                                                                                          
|Yangsan, South Korea         |  |                | 661    |           |              |  | leased |            |  | October 2006                               |  | Warehouse                                                                                                          
|Bangkok, Thailand            |  |                | 800    |           |              |  | leased |            |  | December 2006                              |  | Warehouse                                                                                                          
|Tokyo, Japan                 |  |                | 1,153  |           |              |  | leased |            |  | December 2006 with 3-year renewal option   |  | Headquarter and administration                                                                                     
|Tokyo, Japan                 |  |                | 592    |           |              |  | leased |            |  | March 2010                                 |  | Warehouse                                                                                                          
|Oita, Japan (Inukai Plant)   |  |                | 24,084 |           |              |  | owned  |            |  |                                            |  | Manufacture of polysulfone filters                                                                                 
|Oita, Japan                  |  |                | 3,598  |           |              |  | owned  |            |  |                                            |  | Building                                                                                                           
|Fukuoka, Japan (Buzen Plant) |  |                | 37,092 |           |              |  | owned  |            |  |                                            |  | Manufacture of peritoneal dialysis bags                                                                            
|Fukuoka, Japan               |  |                | 8,369  |           |              |  | owned  |            |  |                                            |  | Building                                                                                                           
|Saga, Japan                  |  |                | 4,972  |           |              |  | leased |            |  | March 2010                                 |  | Warehouse                                                                                                          
|Osaka, Japan                 |  |                | 83     |           |              |  | leased |            |  | September 2007 with 2-years renewal option |  | Kansai Sales Office                                                                                                
|Lexington, Massachusetts     |  |                | 21,570 |           |              |  | leased |            |  | October 2006                               |  | Corporate headquarters and administration  North
    America                                                      
|Newport Beach                |  |                | 143    |           |              |  | leased |            |  | February 2007 with 2-year renewal option   |  | General offica use and administration  North America                                                              
|Walnut Creek, California     |  |                | 9,522  |           |              |  | leased |            |  | June 2012 with 5-year renewal option       |  | Manufacture of Hemodialysis machines and peritoneal dialysis
    cyclers; research and development; warehouse space
|Ogden, Utah                  |  |                | 52,920 |           |              |  | owned  |            |  |                                            |  | Manufacture polysulfone membranes and dialyzers and peritoneal
    dialysis solutions; research and development    
|Oregon, Ohio                 |  |                | 13,934 |           |              |  | leased |            |  | April 2019                                 |  | Manufacture of liquid hemodialysis concentrate solutions                                                           
|Perrysburg, Ohio             |  |                | 3,252  |           |              |  | leased |            |  | August 2008                                |  | Manufacture of dry hemodialysis concentrates                                                                       
|Livingston, California       |  |                | 2,973  |           |              |  | leased |            |  | October 2011 with a 5-year renewal option  |  | Manufacture of liquid hemodialysis concentrates                                                                    
|Freemont, California         |  |                | 6,645  |           |              |  | leased |            |  | August 2007 with 2-year renewal option     |  | Clinical laboratory testing  3 Buildings                                                                          
|Rockleigh, New Jersey        |  |                | 9,727  |           |              |  | leased |            |  | May 2012                                   |  | Clinical laboratory testing                                                                                        
|Irving, Texas                |  |                | 6,506  |           |              |  | leased |            |  | December 2010                              |  | Manufacture of liquid hemodialysis solution                                                                        
|Reynosa, Mexico              |  |                | 13,936 |           |              |  | leased |            |  | June 2013                                  |  | Manufacture of bloodlines                                                                                          
|Reynosa, Mexico              |  |                | 4,645  |           |              |  | owned  |            |  |                                            |  | Warehouse                                                                                                          
|Pharr, Texas                 |  |                | 511    |           |              |  | leased |            |  | Month to Month                             |  | Warehouse                                                                                                          
|Redmond, Washington          |  |                | 1,944  |           |              |  | leased |            |  | December 2008                              |  | Manufacture of Prosorba Columns                                                                                    
|Province of Quebec, Canada   |  |                | 1,516  |           |              |  | leased |            |  | April 2012                                 |  | Plant Building #1  Manufacture of dry and liquid
    concentrates                                                 
|Province of Quebec, Canada   |  |                | 1,516  |           |              |  | leased |            |  | April 2008                                 |  | Warehouse Building #2                                                                                              





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Item 4. A.     Unresolved
Staff Comments







Item 5.     Operating and
Financial Review and Prospects






Critical Accounting Policies




Recoverability of Goodwill and Intangible Assets




Goodwill and Other Intangible
Assets,








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Legal Contingencies








Accounts Receivable and Allowance for Doubtful
Accounts










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|                                                    |  |      |      |  |      |  |      | 
|--------------------------------------------------- |  | ---- | ---- |  | ---- |  | ---- | 
|Composition of Trade Accounts Receivables           |  |      |      | 
|in %, December 31                                   |  | 2005 |      |  | 2004 | 
|                                                    |  |      |      |  |      | 
|U.S. Medicare and Medicaid Programs                 |  |      | 22%  |  |      |  | 22%  | 
|U.S. Commercial Payors                              |  |      | 24%  |  |      |  | 21%  | 
|U.S. Hospitals                                      |  |      | 3%   |  |      |  | 7%   | 
|Self-Pay of U.S. patients                           |  |      | 1%   |  |      |  | 1%   | 
|Other U.S.                                          |  |      | 4%   |  |      |  | 1%   | 
|International product customers and dialysis payors |  |      | 46%  |  |      |  | 48%  | 
|                                                    |  |      |      |  |      | 
|Total                                               |  |      | 100% |  |      |  | 100% | 
|                                                    |  |      |      |  |      | 

Self-Insurance Programs




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Financial Condition and Results of Operations


Overview






both -based


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A.  Results of Operations




|                              |               |               |      |       |       |   |      |       |       |   |      |       |       | 
|----------------------------- | ------------- | ------------- | ---- | ----- | ----- | - | ---- | ----- | ----- | - | ---- | ----- | ----- | 
|                              |               | 2005          |      |       | 2004  |   |      | 2003  |      
|                              |               |               |      |       |       |   |      |       |      
|                              |               | (in millions) |     
|Total revenue                 |               |               |      |       |       |   |      |       |       |   |      |      
|                              | North America |               | $    | 4,578 |       |   | $    | 4,250 |       |   | $    | 3,880 |      
|                              | International |               |      | 2,250 |       |   |      | 2,019 |       |   |      | 1,686 |      
|                              |               |               |      |       |       |   |      |       |      
|                              |               | Totals        |      |       | 6,828 |   |      |       | 6,269 |   |      |       | 5,566 | 
|                              |               |               |      |       |       |   |      |       |      
|Inter-segment revenue         |               |               |      |       |       |   |      |       |       |   |      |      
|                              | North America |               |      | 1     |       |   |      | 2     |       |   |      | 2     |      
|                              | International |               |      | 55    |       |   |      | 39    |       |   |      | 36    |      
|                              |               |               |      |       |       |   |      |       |      
|                              |               | Totals        |      |       | 56    |   |      |       | 41    |   |      |       | 38    | 
|                              |               |               |      |       |       |   |      |       |      
|Total net revenue             |               |               |      |       |       |   |      |       |       |   |      |      
|                              | North America |               |      | 4,577 |       |   |      | 4,248 |       |   |      | 3,878 |      
|                              | International |               |      | 2,195 |       |   |      | 1,980 |       |   |      | 1,650 |      
|                              |               |               |      |       |       |   |      |       |      
|                              |               | Totals        |      |       | 6,772 |   |      |       | 6,228 |   |      |       | 5,528 | 
|                              |               |               |      |       |       |   |      |       |      
|Amortization and depreciation |               |               |      |       |       |   |      |       |       |   |      |      
|                              | North America |               |      | 140   |       |   |      | 129   |       |   |      | 122   |      
|                              | International |               |      | 109   |       |   |      | 102   |       |   |      | 93    |      
|                              | Corporate     |               |      | 2     |       |   |      | 2     |       |   |      | 2     |      
|                              |               |               |      |       |       |   |      |       |      
|                              |               | Totals        |      |       | 251   |   |      |       | 233   |   |      |       | 217   | 
|                              |               |               |      |       |       |   |      |       |      
|Operating Income              |               |               |      |       |       |   |      |       |       |   |      |      
|                              | North America |               |      | 644   |       |   |      | 587   |       |   |      | 528   |      
|                              | International |               |      | 362   |       |   |      | 300   |       |   |      | 258   |      
|                              | Corporate     |               |      | (67   | )     |   |      | (35   | )     |   |      | (29   | )    
|                              |               |               |      |       |       |   |      |       |      
|                              |               | Totals        |      |       | 939   |   |      |       | 852   |   |      |       | 757   | 
|                              |               |               |      |       |       |   |      |       |      
|Interest income               |               |               | 18   |       |       |   | 14   |       |       |   | 19   |      
|Interest expense              |               |               | (191 | )     |       |   | (197 | )     |       |   | (230 | )    
|Income tax expense            |               |               | (309 | )     |       |   | (266 | )     |       |   | (213 | )    
|Minority interest             |               |               | (2   | )     |       |   | (1   | )     |       |   | (2   | )    
|                              |               |               |      |       |       |   |      |       |      
|Net income                    |               | $             | 455  |       |       | $ | 402  |       |       | $ | 331  |      
|                              |               |               |      |       |       |   |      |       |      

Year ended December 31, 2005 compared to year ended
December 31, 2004


Highlights






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Consolidated Financials


Key Indicators for Consolidated Financials


|                                                          |  |      |            |   |      |             |            |          |             |  |                |   |  |  |   |  
|--------------------------------------------------------- |  | ---- | ---------- | - | ---- | ----------- | ---------- | -------- | ----------- |  | -------------- | - |  |  | - | -
|                                                          |  |      |            |   |      | Change in % |           
|                                                          |  |      |            |   |      |             |           
|                                                          |  |      |            |   |      | as          |            |          | at constant | 
|                                                          |  | 2005 |            |   | 2004 |             |            | reported |             |  | exchange rates |  
|                                                          |  |      |            |   |      |             |            |          |             |  |                |  
|Number of treatments                                      |  |      | 19,732,753 |   |      |             | 18,794,109 |          |             |  | 5              | % |  |  |   |  
|Same store treatment growth in %                          |  |      | 4.6        | % |      |             | 3.6        | %        |             |  |                |   |  |  |   |  
|Revenue in $ million                                      |  |      | 6,772      |   |      |             | 6,228      |          |             |  | 9              | % |  |  | 8 | %
|Gross profit in % of revenue                              |  |      | 34.4       | % |      |             | 33.5       | %        |             |  |                |   |  |  |   |  
|Selling, general and administrative costs in % of revenue |  |      | 19.8       | % |      |             | 19.0       | %        |             |  |                |   |  |  |   |  
|Net income in $ million                                   |  |      | 455        |   |      |             | 402        |          |             |  | 13             | % |  |  |   |  















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The following discussions pertain to our business segments
and the measures we use to manage these segments.


North America Segment


Key Indicators for North America Segment


|                                           |  |      |            |   |      |  |            |             |  |  |    |  
|------------------------------------------ |  | ---- | ---------- | - | ---- |  | ---------- | ----------- |  |  | -- | -
|                                           |  | 2005 |            |   | 2004 |  |            | Change in % | 
|                                           |  |      |            |   |      |  |            |             | 
|Number of treatments                       |  |      | 13,471,158 |   |      |  | 12,998,661 |             |  |  | 4  | %
|Same store treatment growth in %           |  |      | 3.3        | % |      |  | 3.2        | %           |  |  |    |  
|Revenue in $ million                       |  |      | 4,577      |   |      |  | 4,248      |             |  |  | 8  | %
|Depreciation and amortization in $ million |  |      | 140        |   |      |  | 129        |             |  |  | 9  | %
|Operating income in $ million              |  |      | 644        |   |      |  | 587        |             |  |  | 10 | %
|Operating income margin in %               |  |      | 14.1       | % |      |  | 13.8       | %           |  |  |    |  

Revenue














Operating income




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International Segment


Key Indicators for International Segment


|                                           |  |      |           |   |      |             |           |          |             |  |                |   |  |  |   |  
|------------------------------------------ |  | ---- | --------- | - | ---- | ----------- | --------- | -------- | ----------- |  | -------------- | - |  |  | - | -
|                                           |  |      |           |   |      | Change in % |          
|                                           |  |      |           |   |      |             |          
|                                           |  |      |           |   |      | as          |           |          | at constant | 
|                                           |  | 2005 |           |   | 2004 |             |           | reported |             |  | exchange rates |  
|                                           |  |      |           |   |      |             |           |          |             |  |                |  
|Number of treatments                       |  |      | 6,261,595 |   |      |             | 5,795,448 |          |             |  | 8              | % |  |  |   |  
|Same store treatment growth in %           |  |      | 7.6       | % |      |             | 4.1       | %        |             |  |                |   |  |  |   |  
|Revenue in $ million                       |  |      | 2,195     |   |      |             | 1,980     |          |             |  | 11             | % |  |  | 9 | %
|Depreciation and amortization in $ million |  |      | 109       |   |      |             | 102       |          |             |  | 8              | % |  |  |   |  
|Operating income in $ million              |  |      | 362       |   |      |             | 300       |          |             |  | 21             | % |  |  |   |  
|Operating income margin in %               |  |      | 16.5      | % |      |             | 15.2      | %        |             |  |                |   |  |  |   |  

Revenue












Operating income




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Corporate






Interest




Income Taxes




Year ended December 31, 2004 compared to year ended
December 31, 2003




Consolidated Financials


Key Indicators for Consolidated Financials


|                                                          |  |      |            |   |      |             |            |          |             |  |                |   |  |  |    |  
|--------------------------------------------------------- |  | ---- | ---------- | - | ---- | ----------- | ---------- | -------- | ----------- |  | -------------- | - |  |  | -- | -
|                                                          |  |      |            |   |      | Change in % |           
|                                                          |  |      |            |   |      |             |           
|                                                          |  |      |            |   |      | as          |            |          | at constant | 
|                                                          |  | 2004 |            |   | 2003 |             |            | reported |             |  | exchange rates |  
|                                                          |  |      |            |   |      |             |            |          |             |  |                |  
|Number of treatments                                      |  |      | 18,794,109 |   |      |             | 17,821,185 |          |             |  | 5              | % |  |  |    |  
|Same store treatment growth in %                          |  |      | 3.6        | % |      |             | 4.9        | %        |             |  |                |   |  |  |    |  
|Revenue in $ million                                      |  |      | 6,228      |   |      |             | 5,528      |          |             |  | 13             | % |  |  | 10 | %
|Gross profit in % of revenue                              |  |      | 33.5       | % |      |             | 33.1       | %        |             |  |                |   |  |  |    |  
|Selling, general and administrative costs in % of revenue |  |      | 19.0       | % |      |             | 18.5       | %        |             |  |                |   |  |  |    |  
|Net income in $ million                                   |  |      | 402        |   |      |             | 331        |          |             |  | 21             | % |  |  |    |  





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The following discussions pertain to our business segments
and the measures we use to manage these segments


North America Segment


Key Indicators for North America Segment


|                                           |  |      |            |   |      |  |            |             |  |  |    |  
|------------------------------------------ |  | ---- | ---------- | - | ---- |  | ---------- | ----------- |  |  | -- | -
|                                           |  | 2004 |            |   | 2003 |  |            | Change in % | 
|                                           |  |      |            |   |      |  |            |             | 
|Number of treatments                       |  |      | 12,998,661 |   |      |  | 12,440,258 |             |  |  | 4  | %
|Same store treatment growth in %           |  |      | 3.2        | % |      |  | 3.8        | %           |  |  |    |  
|Revenue in $ million                       |  |      | 4,248      |   |      |  | 3,878      |             |  |  | 10 | %
|Depreciation and amortization in $ million |  |      | 129        |   |      |  | 122        |             |  |  | 6  | %
|Operating income in $ million              |  |      | 587        |   |      |  | 528        |             |  |  | 11 | %
|Operating income margin in %               |  |      | 13.8       | % |      |  | 13.6       | %           |  |  |    |  

Revenue








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|                                           |                                                                                                                          |                   |     |     |                   |   |     |     |  
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------ | ----------------- | --- | --- | ----------------- | - | --- | --- | -
|                                           |                                                                                                                          | Year ended        |     |     | Year ended        |  
|                                           |                                                                                                                          | December 31, 2004 |     |     | December 31, 2003 |  
|                                           |                                                                                                                          |                   |     |     |                   |  
|                                           |                                                                                                                          | in millions       |    
|Dialysis product sales                     |                                                                                                                          | $                 | 446 |     |                   | $ | 443 |    
|                                           | less sales to other vertically integrated dialysis companies and
    to leasing company of dialysis machines leased back |                   |     | (28 | )                 |   |     | (34 | )
|                                           | less sales related to adsorber business                                                                                  |                   |     | (5  | )                 |   |     | (3  | )
|                                           | less Mexico business                                                                                                     |                   |     | (25 | )                 |   |     | (17 | )
|                                           |                                                                                                                          |                   |     |     |                   |  
|Product sales to available external market |                                                                                                                          | $                 | 388 |     |                   | $ | 389 |    
|                                           |                                                                                                                          |                   |     |     |                   |  

Operating income




International Segment


Key Indicators for International Segment


|                                           |  |      |           |   |      |             |           |          |             |  |                |   |  |  |    |  
|------------------------------------------ |  | ---- | --------- | - | ---- | ----------- | --------- | -------- | ----------- |  | -------------- | - |  |  | -- | -
|                                           |  |      |           |   |      | Change in % |          
|                                           |  |      |           |   |      |             |          
|                                           |  |      |           |   |      | as          |           |          | at constant | 
|                                           |  | 2004 |           |   | 2003 |             |           | reported |             |  | exchange rates |  
|                                           |  |      |           |   |      |             |           |          |             |  |                |  
|Number of treatments                       |  |      | 5,795,448 |   |      |             | 5,380,927 |          |             |  | 8              | % |  |  |    |  
|Same store treatment growth in %           |  |      | 4.1       | % |      |             | 7.5       | %        |             |  |                |   |  |  |    |  
|Revenue in $ million                       |  |      | 1,980     |   |      |             | 1,650     |          |             |  | 20             | % |  |  | 11 | %
|Depreciation and amortization in $ million |  |      | 102       |   |      |             | 93        |          |             |  | 10             | % |  |  |    |  
|Operating income in $ million              |  |      | 300       |   |      |             | 258       |          |             |  | 16             | % |  |  |    |  
|Operating income margin in %               |  |      | 15.2      | % |      |             | 15.7      | %        |             |  |                |   |  |  |    |  

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Revenue












Operating income




Latin America






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Corporate








Interest




Income Taxes




B.  Liquidity and Capital Resources


Liquidity






Development of Days Sales Outstanding


|              |  |              |     |  |              |  |     | 
|------------- |  | ------------ | --- |  | ------------ |  | --- | 
|              |  | December 31, |     |  | December 31, | 
|              |  | 2005         |     |  | 2004         | 
|              |  |              |     |  |              | 
|North America |  |              | 63  |  |              |  | 67  | 
|International |  |              | 120 |  |              |  | 119 | 
|              |  |              |     |  |              | 
|Total         |  |              | 82  |  |              |  | 84  | 
|              |  |              |     |  |              | 



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 8-year


   




5-year 5-year


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Dividends


     


Analysis of Cash Flow


Year ended December 31, 2005 compared to year ended
December 31, 2004


Operations




Investing






Financing




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year-end.


Year ended December 31, 2004 compared to year ended
December 31, 2003


Operations




Investing






Financing






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Obligations




|                                   |  |       |       |                           |        |   |     |           |  |   |              |  |  |   |       | 
|---------------------------------- |  | ----- | ----- | ------------------------- | ------ | - | --- | --------- |  | - | ------------ |  |  | - | ----- | 
|                                   |  |       |       | Payments due by period of |       
|                                   |  |       |       |                           |       
|Contractual Cash Obligations       |  | Total |       |                           | 1 Year |   |     | 2-5 Years |  |   | Over 5 Years | 
|                                   |  |       |       |                           |        |   |     |           |  |   |              | 
|in millions                        |  |       |       |                           |        |   |     |          
|Trust Preferred Securities         |  | $     | 1,188 |                           |        | $ |    |           |  | $ | 613          |  |  | $ | 575   | 
|Long Term Debt                     |  |       | 829   |                           |        |   | 125 |           |  |   | 646          |  |  |   | 58    | 
|Capital Lease Obligations          |  |       | 5     |                           |        |   | 2   |           |  |   | 2            |  |  |   | 1     | 
|Operating Leases                   |  |       | 1,195 |                           |        |   | 252 |           |  |   | 602          |  |  |   | 341   | 
|Unconditional Purchase Obligations |  |       | 274   |                           |        |   | 149 |           |  |   | 86           |  |  |   | 39    | 
|Other Long-term Obligations        |  |       | 14    |                           |        |   | 14  |           |  |   |             |  |  |   |      | 
|Letters of Credit                  |  |       | 80    |                           |        |   | 80  |           |  |   |             |  |  |   |      | 
|                                   |  |       |       |                           |        |   |     |           |  |   |              | 
|                                   |  | $     | 3,585 |                           |        | $ | 622 |           |  | $ | 1,949        |  |  | $ | 1,014 | 
|                                   |  |       |       |                           |        |   |     |           |  |   |              | 

|                                    |  |       |       |                          |        |   |     |           |  |   |              |  |  |   |   | 
|----------------------------------- |  | ----- | ----- | ------------------------ | ------ | - | --- | --------- |  | - | ------------ |  |  | - | - | 
|                                    |  |       |       | Expiration per period of
|                                    |  |       |       |                         
|Available Sources of Liquidity      |  | Total |       |                          | 1 Year |   |     | 2-5 Years |  |   | Over 5 Years
|                                    |  |       |       |                          |        |   |     |           |  |   |             
|in millions                         |  |       |       |                          |        |   |     |          
|Accounts receivable
    facility(a) |  | $     | 366   |                          |        | $ | 366 |           |  | $ |             |  |  | $ |  | 
|Unused Senior Credit Lines          |  |       | 624   |                          |        |   |    |           |  |   | 624          |  |  |   |  | 
|Other Unused Lines of Credit        |  |       | 66    |                          |        |   | 66  |           |  |   |             |  |  |   |  | 
|                                    |  |       |       |                          |        |   |     |           |  |   |              | 
|                                    |  | $     | 1,056 |                          |        | $ | 432 |           |  | $ | 624          |  |  | $ |  | 
|                                    |  |       |       |                          |        |   |     |           |  |   |              | 






|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(a) | Subject to availability of sufficient accounts receivable
    meeting funding criteria.



Borrowings








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    


Debt covenant disclosure  EBITDA




Reconciliation of measures for consolidated totals.


|                                            |  |                                  |           |   |      |   |           |      |  |   |          |  
|------------------------------------------- |  | -------------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | -------- | -
|                                            |  | For the years ended December 31, |          
|                                            |  |                                  |          
|                                            |  | 2005                             |           |   | 2004 |   |           | 2003 | 
|in thousands                                |  |                                  |           |   |      |   |           |      | 
|Total EBITDA                                |  | $                                | 1,190,370 |   |      | $ | 1,084,931 |      |  | $ | 973,813  |  
|Settlement of shareholder proceedings       |  |                                  | 7,335     |   |      |   |          |      |  |   |         |  
|Interest expense (net of interest income)   |  |                                  | (173,192  | ) |      |   | (183,746  | )    |  |   | (211,759 | )
|Income tax expense                          |  |                                  | (308,748  | ) |      |   | (265,415  | )    |  |   | (212,714 | )
|Change in deferred taxes, net               |  |                                  | (3,675    | ) |      |   | 34,281    |      |  |   | 91,312   |  
|Changes in operating assets and liabilities |  |                                  | (45,088   | ) |      |   | 141,979   |      |  |   | (17,910  | )
|Cash inflow from Hedging                    |  |                                  |          |   |      |   | 14,514    |      |  |   | 131,654  |  
|Other items, net                            |  |                                  | 3,302     |   |      |   | 1,299     |      |  |   | (377     | )
|                                            |  |                                  |           |   |      |   |           |      | 
|Net cash provided by operating activities   |  | $                                | 670,304   |   |      | $ | 827,843   |      |  | $ | 754,019  |  
|                                            |  |                                  |           |   |      |   |           |      | 

Outlook


Proposed Acquisition




66



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##### Table of Contents





5-year 7-year






67



---



##### Table of Contents







Accounting Treatment for the Conversion of our Preference
Shares into Ordinary Shares


       


Investing




Net Income




68



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##### Table of Contents



Recently Issued Accounting Standards






05-5.


C.  Research and development




69



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| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | pharmaceutical products utilized in treating our renal patient
    base                                                       
|
| |  | innovative products to improve vascular access outcomes for our
    renal patients                                            
|
| |  | products and technologies which leverage our core competencies
    to provide extracorporeal therapies to treat other diseases









D.             Trend
information




70



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|        |                                           
|------- | ------------------------------------------
|Item 6. | Directors, Senior Management and Employees

A.  Directors and senior management


General








The General Partners Supervisory Board








71



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|                                   |  |              |    | 
|---------------------------------- |  | ------------ | -- | 
|                                   |  | Age as of    |   
|                                   |  | December 31, |   
|Name                               |  | 2005         |   
|                                   |  |              |   
|Dr. Gerd Krick                     |  |              | 67 | 
|Dr. Dieter Schenk, Deputy Chairman |  |              | 53 | 
|Dr. Ulf M. Schneider, Chairman     |  |              | 40 | 
|Prof. Dr. Bernd Fahrholz           |  |              | 58 | 
|Walter L.
    Weisman(1)(2)        |  |              | 70 | 
|John Gerhard
    Kringel(1)(2)     |  |              | 66 | 

| | 
| | 
| | 



| |     |                                                           
| | --- | ----------------------------------------------------------
| | (1) | Members of the Audit Committee                            
|
| | (2) | Independent director for purposes of our pooling agreement

FMC-AG FMC-AG FMC-AG.


FMC-AG FMC-AG FMC-AG


FMC-AG FMC-AG


FMC-AG FMC-AG FMC-AG


72



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FMC-AG FMC-AG


FMC-AG FMC-AG


The General Partners Management Board






|                   |  |           |    |  |          |                                                                                                                             |         |  |      | 
|------------------ |  | --------- | -- |  | -------- | --------------------------------------------------------------------------------------------------------------------------- | ------- |  | ---- | 
|                   |  | Age as of |    |  |          |                                                                                                                             | Year    | 
|                   |  | Dec. 31,  |    |  |          |                                                                                                                             | Term    | 
|Name               |  | 2005      |    |  | Position |                                                                                                                             | Expires | 
|                   |  |           |    |  |          |                                                                                                                             |         | 
|Dr. Ben J. Lipps   |  |           | 65 |  |          | Chairman of the Management Board, Chief Executive Officer of
    FMC-AG & Co. KGaA                                          |         |  | 2008 | 
|Roberto Fusté      |  |           | 53 |  |          | Chief Executive Officer for Asia Pacific                                                                                    |         |  | 2006 | 
|Dr. Emanuele Gatti |  |           | 50 |  |          | Chief Executive Officer for Europe, Middle East, Africa and
    Latin America                                               |         |  | 2010 | 
|Lawrence Rosen     |  |           | 48 |  |          | Chief Financial Officer                                                                                                     |         |  | 2006 | 
|Dr. Rainer Runte   |  |           | 46 |  |          | General Counsel and Chief Compliance Officer                                                                                |         |  | 2010 | 
|Rice Powell        |  |           | 50 |  |          | Co-Chief Executive Officer, Fresenius Medical Care North America
    and President Products & Hospital Group                |         |  | 2006 | 
|Mats Wahlstrom     |  |           | 51 |  |          | Co-Chief Executive Officer, Fresenius Medical Care North America
    and President Fresenius Medical Services North America |         |  | 2006 | 

FMC-AG


73



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FMC-AG


FMC-AG FMC-AG


FMC-AG


FMC-AG


FMC-AG


FMC-AG


74



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The Supervisory Board of FMC-AG & Co. KGaA










B.  Compensation


Compensation of Our Management Board and our Supervisory
Board




75



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  




C.  Board Practices






| |   |                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | overseeing managements conduct or our financial reporting
    process and the internal accounting and financial control
    systems and auditing of our financial statements;                                           
|
| |  | monitoring our internal controls risk program;                                                                                                                                                                           
|
| |  | monitoring the independence and performance of our outside
    auditors;                                                                                                                                                 
|
| |  | providing an avenue of communication among the outside auditors,
    management and the Supervisory Board;                                                                                                               
|
| |  | retaining the services of our independent auditors (subject to
    the approval by our shareholders at our Annual General Meeting)
    and approval of their fees; and                                                   
|
| |  | pre-approval of all audit and non-audit services performed by
    KPMG Deutsche Treuhand-Gesellschaft AG
    Wirtschaftsprüfungsgesellschaft, the accounting firm which
    audits our consolidated financial statements.



76



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| |   |                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A joint committee (the Joint Committee) (gemeinsamer
    Ausschuss) of the supervisory boards of Management AG and
    FMC-AG& Co.
    KGaA consisting of two members designated by each supervisory
    board to advise and decide on certain extraordinary management
    measures, including



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | transactions between us and Fresenius AG with a value in excess
    of 0.25% of our consolidated revenue, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | acquisitions and sales of significant participations and parts
    of our business, the spin-off of significant parts of our
    business, initial public offerings of significant subsidiaries
    and similar matters. A matter is significant for
    purposes of this approval requirement if 40% of our consolidated
    revenues, our consolidated balance sheet total assets or
    consolidated profits, determined by reference to the arithmetic
    average of the said amounts shown in our audited consolidated
    accounts for the previous three fiscal years, are affected by
    the matter.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An Audit and Corporate Governance Committee within the
    Supervisory Board of FMC-AG & Co. KGaA consisting of
    three members, at least two of whom shall be persons with no
    significant business, professional or personal connection with
    FMC-AG & Co. KGaA or any of our affiliates, apart from
    membership on our supervisory board or the supervisory board of
    Management AG or Fresenius AG. The Audit and Corporate
    Governance Committee will be responsible for reviewing the
    report of our general partner on relations with related parties
    and for reporting to the overall supervisory board thereon.

Governance Matters




The Legal Structure of FMC-AG & Co. KGaA






77



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FMC-AG


Management and Oversight







General Partner




78



---



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


FMC-AG FMC-AG  FMC-AG








| |   |                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The acquisition, disposal and encumbrance of real property if
    the value or the amount to be secured exceeds a specified
    threshold
    (5 million);                                
|
| |  | The acquisition, formation, disposal or encumbrance of an equity
    participation in other enterprises if the value of the
    transaction exceeds a specified threshold
    (5 million);
|
| |  | The adoption of new or the abandonment of existing lines of
    business or establishments;                                                                                                
|
| |  | Conclusion, amendment and termination of affiliation agreements;
    and                                                                                                                   
|
| |  | Certain inter-company legal transactions.                                                                                                                                                  



79



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Supervisory Board




FMC-AG






General Meeting






80



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FMC-AG




The Articles of Association of FMC-AG & Co.
KGaA


FMC-AG FMC-AG. FMC-AG


Organization of the Company


FMC-AG FMC-AG


FMC-AG FMC-AG FMC-AG


81



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Einheits-KGaA FMC-AG






Annual Financial Statement and Allocation of
Profits


FMC-AG




Articles of Association of Management AG





82



---



##### Table of Contents



D.  Employees




|              |                   |      |        |        |      |  |        |        |  |  |        |        | 
|------------- | ----------------- | ---- | ------ | ------ | ---- |  | ------ | ------ |  |  | ------ | ------ | 
|              |                   | 2005 |        |        | 2004 |  |        | 2003   | 
|              |                   |      |        |        |      |  |        |        | 
|North America |                   |      |        |        |      |  |        |        |  |  |        |       
|              | Dialysis Care     |      |        | 24,737 |      |  |        | 23,389 |  |  |        | 22,096 | 
|              | Dialysis Products |      |        | 5,392  |      |  |        | 5,229  |  |  |        | 5,209  | 
|              |                   |      |        |        |      |  |        |        | 
|              |                   |      | 30,129 |        |      |  | 28,618 |        |  |  | 27,305 |       
|International |                   |      |        |        |      |  |        |        |  |  |        |       
|              | Dialysis Care     |      |        | 10,626 |      |  |        | 9,608  |  |  |        | 7,678  | 
|              | Dialysis Products |      |        | 6,766  |      |  |        | 6,300  |  |  |        | 6,114  | 
|              |                   |      |        |        |      |  |        |        | 
|              |                   |      | 17,392 |        |      |  | 15,908 |        |  |  | 13,792 |       



E.  Share ownership





Options to Purchase Our Securities


Stock Option Plans


 




83



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





Item 7.     Major
Shareholders and Related Party Transactions


A.  Major Shareholders


Security Ownership of Certain Beneficial Owners of
Fresenius Medical Care


(Wertpapierhandelsgesetz) (amtlicher Handel)




Security Ownership of Certain Beneficial Owners of
Fresenius AG




84



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(amtlicher Handel)




B.  Related party transactions










| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the term we (or us) and our affiliates refers
    only to Fresenius Medical Care AG & Co. KGaA and its
    subsidiaries; and                                          
|
| |  | the term Fresenius AG and its affiliates refers
    only to Fresenius AG and affiliates of Fresenius AG
    other than Fresenius Medical Care AG and its subsidiaries.

Real Property Lease





85



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##### Table of Contents



Covenants Not to Compete




Trademarks






| |   |                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to use the Fresenius Medical Care mark in the then
    current National Medical Care non-renal business if it is used
    as part of Fresenius Medical Care together with one
    or more descriptive words, such as Fresenius Medical Care
    Home Care or Fresenius Medical Care
    Diagnostics;
|
| |  | to use the F logo mark in the National Medical Care
    non-renal business, with the consent of Fresenius AG. That
    consent will not be unreasonably withheld if the mark using the
    logo includes one or more additional descriptive words or
    symbols; and                                     
|
| |  | to use Fresenius Medical Care as a trade name in
    both the renal business and the National Medical Care non-renal
    business.                                                                                                                                                                        



Other Intellectual Property




86



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Supply Agreements










Services Agreement






Financing




87



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Other Interests


FMC-AG




Products









|        |                      
|------- | ---------------------
|Item 8. | Financial information





|       |                  
|------ | -----------------
|8.A.7. | Legal Proceedings



Commercial Litigation


Co.-Conn. Co.-Conn.




88



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03-1431,


Other Litigation and Potential Exposures




89



---



##### Table of Contents



 






gemeinsamer
Ausschuss








90



---



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Accrued Special Charge for Legal Matters






|       |                
|------ | ---------------
|8.A.8. | Dividend Policy



91



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Handelsgesetzbuch HGB  


Depotbank






|                 |  |      |       |  |      |  |       |      |  |  |       |  |  |  |       | 
|---------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|Per Share Amount |  | 2005 |       |  | 2004 |  |       | 2003 |  |  | 2002  | 
|                 |  |      |       |  |      |  |       |      |  |  |       | 
|Preference share |  |      | 1.18 |  |      |  | 1.08 |      |  |  | 1.00 |  |  |  | 0.91 | 
|Ordinary share   |  |      | 1.12 |  |      |  | 1.02 |      |  |  | 0.94 |  |  |  | 0.85 | 

 




B.  Significant Changes


 Aktiengesellschaft AG Kommanditgesellschaft auf Aktien KGaA





Item 9.The Offer and
Listing Details




|            |                                                                             
|----------- | ----------------------------------------------------------------------------
|A.4. and C. | Information regarding the trading markets for price history
    of our stock

Trading Markets




92



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Amtlicher
Markt


FMS-p.


Trading on the Frankfurt Stock Exchange








| |   |                                                    
| | - | ---------------------------------------------------
| |  | permanent quotation during trading hours           
|
| |  | best price execution (in terms of spread and speed)
|
| |  | full execution.                                    



93



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Bundesanstalt
für Finanzdienstleistungsaufsicht Wertpapierhandelsgesetz




|     |  |                |  |                    |       |  |     |  |       | 
|---- |  | -------------- |  | ------------------ | ----- |  | --- |  | ----- | 
|     |  |                |  | Price per          |      
|     |  |                |  | ordinary share () |      
|     |  |                |  |                    |      
|     |  |                |  | High               |       |  | Low | 
|     |  |                |  |                    |       |  |     | 
|2006 |  | February       |  |                    | 94.75 |  |     |  | 87.03 | 
|     |  | January        |  |                    | 90.97 |  |     |  | 85.80 | 
|2005 |  | December       |  |                    | 89.45 |  |     |  | 80.81 | 
|     |  | November       |  |                    | 80.61 |  |     |  | 74.80 | 
|     |  | October        |  |                    | 80.13 |  |     |  | 74.25 | 
|     |  | September      |  |                    | 76.41 |  |     |  | 73.75 | 
|2005 |  | Fourth Quarter |  |                    | 89.45 |  |     |  | 74.25 | 
|     |  | Third Quarter  |  |                    | 76.41 |  |     |  | 69.54 | 
|     |  | Second Quarter |  |                    | 70.67 |  |     |  | 60.53 | 
|     |  | First Quarter  |  |                    | 68.23 |  |     |  | 57.37 | 
|2004 |  | Fourth Quarter |  |                    | 63.63 |  |     |  | 55.72 | 
|     |  | Third Quarter  |  |                    | 62.60 |  |     |  | 58.55 | 
|     |  | Second Quarter |  |                    | 63.33 |  |     |  | 53.55 | 
|     |  | First Quarter  |  |                    | 57.42 |  |     |  | 49.46 | 
|2005 |  | Annual         |  |                    | 89.45 |  |     |  | 57.37 | 
|2004 |  | Annual         |  |                    | 63.63 |  |     |  | 49.46 | 
|2003 |  | Annual         |  |                    | 57.00 |  |     |  | 38.00 | 
|2002 |  | Annual         |  |                    | 73.00 |  |     |  | 19.98 | 
|2001 |  | Annual         |  |                    | 92.90 |  |     |  | 66.77 | 




94



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|     |  |                |  |                      |       |  |     |  |       | 
|---- |  | -------------- |  | -------------------- | ----- |  | --- |  | ----- | 
|     |  |                |  | Price per            |      
|     |  |                |  | preference share () |      
|     |  |                |  |                      |      
|     |  |                |  | High                 |       |  | Low | 
|     |  |                |  |                      |       |  |     | 
|2006 |  | February       |  |                      | 90.76 |  |     |  | 76.18 | 
|     |  | January        |  |                      | 81.09 |  |     |  | 75.86 | 
|2005 |  | December       |  |                      | 79.31 |  |     |  | 69.97 | 
|     |  | November       |  |                      | 69.80 |  |     |  | 63.84 | 
|     |  | October        |  |                      | 69.50 |  |     |  | 63.50 | 
|     |  | September      |  |                      | 65.70 |  |     |  | 63.04 | 
|2005 |  | Fourth Quarter |  |                      | 79.31 |  |     |  | 63.50 | 
|     |  | Third Quarter  |  |                      | 65.70 |  |     |  | 56.39 | 
|     |  | Second Quarter |  |                      | 57.60 |  |     |  | 43.90 | 
|     |  | First Quarter  |  |                      | 48.95 |  |     |  | 41.60 | 
|2004 |  | Fourth Quarter |  |                      | 44.92 |  |     |  | 39.35 | 
|     |  | Third Quarter  |  |                      | 44.81 |  |     |  | 41.98 | 
|     |  | Second Quarter |  |                      | 45.45 |  |     |  | 36.64 | 
|     |  | First Quarter  |  |                      | 40.95 |  |     |  | 33.73 | 
|2003 |  | Fourth Quarter |  |                      | 41.00 |  |     |  | 35.01 | 
|     |  | Third Quarter  |  |                      | 40.50 |  |     |  | 30.09 | 
|     |  | Second Quarter |  |                      | 36.00 |  |     |  | 28.50 | 
|     |  | First Quarter  |  |                      | 35.60 |  |     |  | 27.36 | 
|2005 |  | Annual         |  |                      | 48.95 |  |     |  | 41.60 | 
|2004 |  | Annual         |  |                      | 45.45 |  |     |  | 33.73 | 
|2003 |  | Annual         |  |                      | 41.00 |  |     |  | 28.50 | 
|2002 |  | Annual         |  |                      | 53.90 |  |     |  | 15.17 | 
|2001 |  | Annual         |  |                      | 65.25 |  |     |  | 46.01 | 




95



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Trading on the New York Stock Exchange




|     |  |                |  |                  |       |  |     |  |       | 
|---- |  | -------------- |  | ---------------- | ----- |  | --- |  | ----- | 
|     |  |                |  | Price per        |      
|     |  |                |  | ordinary ADS ($) |      
|     |  |                |  |                  |      
|     |  |                |  | High             |       |  | Low | 
|     |  |                |  |                  |       |  |     | 
|2006 |  | February       |  |                  | 37.26 |  |     |  | 35.11 | 
|     |  | January        |  |                  | 36.79 |  |     |  | 34.89 | 
|2005 |  | December       |  |                  | 35.22 |  |     |  | 31.69 | 
|     |  | November       |  |                  | 31.65 |  |     |  | 30.28 | 
|     |  | October        |  |                  | 32.34 |  |     |  | 29.71 | 
|     |  | September      |  |                  | 31.49 |  |     |  | 30.30 | 
|2005 |  | Fourth Quarter |  |                  | 35.22 |  |     |  | 29.71 | 
|     |  | Third Quarter  |  |                  | 31.49 |  |     |  | 27.90 | 
|     |  | Second Quarter |  |                  | 28.45 |  |     |  | 26.05 | 
|     |  | First Quarter  |  |                  | 29.94 |  |     |  | 25.09 | 
|2004 |  | Fourth Quarter |  |                  | 27.23 |  |     |  | 24.74 | 
|     |  | Third Quarter  |  |                  | 25.75 |  |     |  | 24.13 | 
|     |  | Second Quarter |  |                  | 25.79 |  |     |  | 21.82 | 
|     |  | First Quarter  |  |                  | 24.59 |  |     |  | 20.41 | 
|2005 |  | Annual         |  |                  | 35.22 |  |     |  | 25.09 | 
|2004 |  | Annual         |  |                  | 27.23 |  |     |  | 20.41 | 
|2003 |  | Annual         |  |                  | 23.54 |  |     |  | 13.20 | 
|2002 |  | Annual         |  |                  | 21.60 |  |     |  | 6.70  | 
|2001 |  | Annual         |  |                  | 28.30 |  |     |  | 19.80 | 



96



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|     |  |                |  |                    |       |  |     |  |       | 
|---- |  | -------------- |  | ------------------ | ----- |  | --- |  | ----- | 
|     |  |                |  | Price per          |      
|     |  |                |  | preference ADS ($) |      
|     |  |                |  |                    |      
|     |  |                |  | High               |       |  | Low | 
|     |  |                |  |                    |       |  |     | 
|2005 |  | February       |  |                    | 34.25 |  |     |  | 31.00 | 
|     |  | January        |  |                    | 32.25 |  |     |  | 31.30 | 
|2005 |  | December       |  |                    | 31.20 |  |     |  | 28.50 | 
|     |  | November       |  |                    | 27.50 |  |     |  | 25.88 | 
|     |  | October        |  |                    | 27.80 |  |     |  | 25.30 | 
|     |  | September      |  |                    | 26.75 |  |     |  | 25.90 | 
|2005 |  | Fourth Quarter |  |                    | 31.20 |  |     |  | 25.30 | 
|     |  | Third Quarter  |  |                    | 26.75 |  |     |  | 22.90 | 
|     |  | Second Quarter |  |                    | 22.80 |  |     |  | 19.50 | 
|     |  | First Quarter  |  |                    | 21.40 |  |     |  | 18.16 | 
|2004 |  | Fourth Quarter |  |                    | 19.15 |  |     |  | 17.50 | 
|     |  | Third Quarter  |  |                    | 18.24 |  |     |  | 17.09 | 
|     |  | Second Quarter |  |                    | 18.40 |  |     |  | 14.91 | 
|     |  | First Quarter  |  |                    | 17.10 |  |     |  | 13.86 | 
|2005 |  | Annual         |  |                    | 31.20 |  |     |  | 18.16 | 
|2004 |  | Annual         |  |                    | 19.15 |  |     |  | 13.86 | 
|2003 |  | Annual         |  |                    | 16.68 |  |     |  | 9.85  | 
|2002 |  | Annual         |  |                    | 15.70 |  |     |  | 4.90  | 
|2001 |  | Annual         |  |                    | 19.64 |  |     |  | 14.00 | 








|         |                       
|-------- | ----------------------
|Item 10. | Additional information



|   |                        
|-- | -----------------------
|B. | Articles of Association

Kommanditgesellschaft auf Aktien (Amtsgericht) (Sitz) +49-6172-609-0.


Corporate Purposes






| |   |                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the development, production and distribution of as well as the
    trading in health care products, systems and procedures,
    including dialysis;                                                                                                
|
| |  | the projecting, planning, establishment, acquisition and
    operation of health care businesses, including, dialysis
    centers, also in separate enterprises or through third parties
    as well as the participation in such dialysis centers;
|
| |  | the development, production and distribution of other
    pharmaceutical products and the provision of services in this
    field;                                                                                                                 
|
| |  | the provision of advice in the medical and pharmaceutical areas
    as well as scientific information and documentation;                                                                                                                           
|
| |  | the provision of laboratory services for dialysis and
    non-dialysis patients and homecare medical services.                                                                                                                                     

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##### Table of Contents





General Information Regarding Our Share Capital


 Stückaktien Stückaktien


Sammelurkunden


General provisions on Increasing the Capital of Stock
Corporations and Partnerships Limited by Shares










Voting Rights






98



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Dividend Rights




Bilanzgewinn Handelsgesetzbuch HGB elektronischer Bundesanzeiger   




Liquidation Rights


Aktiengesetz


Pre-emption Rights


Aktiengesetz


99



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| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | we increase our share capital against contributions in cash;                                                              
|
| |  | the amount of the capital increase does not exceed 10% of our
    existing share capital; and                             
|
| |  | the issue price of the new shares is not significantly lower
    than the price for the shares quoted on a stock exchange.

Exclusion of Minority Shareholders


Ertragswertmethode




General Meeting




Amendments to the Articles of Association




Description of American Depositary Receipts


General




100



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Share Dividends and Other Distributions








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Cash. The depositary shall convert cash distributions
    from foreign currency to U.S. dollars if this is
    permissible and can be done on a reasonable basis. The
    depositary will endeavor to distribute cash in a practicable
    manner, and may deduct any taxes or other governmental charges
    required to be withheld, any expenses of converting foreign
    currency and transferring funds to the United States, and
    certain other expenses and adjustments. In addition, before
    making a distribution the depositary will deduct any taxes
    withheld. If exchange rates fluctuate during a time when the
    depositary cannot convert a foreign currency, investors may lose
    some or all of the value of the distribution.
|
| |  | Shares. If we make a distribution in shares, the
    depositary will issue additional ADRs to evidence the number of
    ADSs representing the distributed shares. Only whole ADSs will
    be issued. Any shares which                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | would result in fractional ADSs will be sold and the net
    proceeds will be distributed to the ADR holders otherwise
    entitled to receive fractional ADSs.                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Rights to receive additional shares. In the case of a
    distribution of pre-emption rights to subscribe for ordinary
    shares or preference shares, or other subscription rights, if we
    provide satisfactory evidence that the depositary may lawfully
    distribute the rights, the depositary may arrange for ADR
    holders to instruct the depositary as to the exercise of the
    rights. However, if we do not furnish the required evidence or
    if the depositary determines it is not practical to distribute
    the rights, the depositary may:



| |   |                                                                               
| | - | ------------------------------------------------------------------------------
| |  | sell the rights if practicable and distribute the net proceeds
    as cash, or
|
| |  | allow the rights to lapse, in which case ADR holders will
    receive nothing.





| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | Other Distributions. If we make a distribution of
    securities or property other than those described above, the
    depositary may either:



| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | distribute the securities or property in any manner it deems
    fair and equitable;                                                                      
|
| |  | after consultation with us if practicable, sell the securities
    or property and distribute any net proceeds in the same way it
    distributes cash; or
|
| |  | hold the distributed property in which case the ADSs will also
    represent the distributed property.                                                    









Deposit, Withdrawal and Cancellation










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| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | temporary delays caused by closing our transfer books or those
    of the depositary, or the deposit of shares in connection with
    voting at a shareholders meeting, or the payment of
    dividends,
|
| |  | the payment of fees, taxes and similar charges, or                                                                                                                                                       
|
| |  | compliance with any U.S. or foreign laws or governmental
    regulations relating to the ADRs.                                                                                                           



Voting Rights


Aktiengesetz




103



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Fees and Expenses








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to the extent not prohibited by the rules of any stock exchange
    or interdealer quotation system upon which the ADSs are traded,
    a fee of $1.50 per ADR or ADRs for transfers of certificated or
    direct registration ADRs;                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | a fee of $0.02 or less per ADS (or portion thereof) for any cash
    distribution made pursuant to the deposit agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | a fee of $0.02 per ADS (or portion thereof) per year for
    services performed, by the depositary in administering our ADR
    program (which fee shall be assessed against holders of ADRs as
    of the record date set by the depositary not more than once each
    calendar year and shall be payable in the manner described in
    the next succeeding provision);                                                                                                                                                                                                                                       
|
| |  | any other charge payable by any of the depositary, any of the
    depositarys agents, including, without limitation, the
    custodian, or the agents of the depositarys agents in
    connection with the servicing of our shares or other deposited
    securities (which charge shall be assessed against registered
    holders of our ADRs as of the record date or dates set by the
    depositary and shall be payable at the sole discretion of the
    depositary by billing such registered holders or by deducting
    such charge from one or more cash dividends or other cash
    distributions);
|
| |  | a fee for the distribution of securities (or the sale of
    securities in connection with a distribution), such fee being in
    an amount equal to the fee for the execution and delivery of
    ADSs which would have been charged as a result of the deposit of
    such securities (treating all such securities as if they were
    shares) but which securities or the net cash proceeds from the
    sale thereof are instead distributed by the depositary to those
    holders entitled thereto;                                                                                                       
|
| |  | stock transfer or other taxes and other governmental charges;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | cable, telex and facsimile transmission and delivery charges
    incurred at your request;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | transfer or registration fees for the registration of transfer
    of deposited securities on any applicable register in connection
    with the deposit or withdrawal of deposited securities;                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | expenses of the depositary in connection with the conversion of
    foreign currency into U.S. dollars; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | such fees and expenses as are incurred by the depositary
    (including without limitation expenses incurred in connection
    with compliance with foreign exchange control regulations or any
    law or regulation relating to foreign investment) in delivery of
    deposited securities or otherwise in connection with the
    depositarys or its custodians compliance with
    applicable law, rule or regulation.                                                                                                                                                                                    

104



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Payment of Taxes






Description of The Pooling Arrangements




General




Independent Directors


FMC-AG


105



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Extraordinary Transactions




Interested Transactions


   


Listing of American Depositary Shares; SEC Filings






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | maintain the effectiveness of (i) the deposit agreement for
    the ordinary shares, or a similar agreement, and to assure that
    the ADSs evidencing the ordinary shares are listed on either the
    New York Stock Exchange or the Nasdaq Stock Market and (ii),
    while the preference ADSs are eligible for listing on the New
    York Exchange or the Nasdaq Stock Market, the deposit agreement
    for the preference shares, or a similar agreement, and to assure
    that, if eligible for such listing, the ADSs evidencing the
    preference shares are listed on either the New York Stock
    Exchange or the Nasdaq Stock Market;
|
| |  | file all reports, required by the New York Stock Exchange or the
    Nasdaq Stock Market, as applicable, the Securities Act, the
    Securities Exchange Act of 1934, as amended, and all other
    applicable laws;                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | prepare all financial statements required for any filing in
    accordance with generally accepted accounting principles of the
    U.S. (U.S. GAAP);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | on an annual basis, prepare audited consolidated financial
    statements including, without limitation, a balance sheet, a
    statement of income and retained earnings, and a statement of
    changes in financial position, and all appropriate notes, all in
    accordance U.S. GAAP, and, on a quarterly basis, prepare
    and furnish consolidated financial statements prepared in
    accordance with U.S. GAAP;                                                                                                                                                                                                                           
|
| |  | furnish materials with the SEC with respect to annual and
    special shareholder meetings under cover of Form 6-K and
    make the materials available to the depositary for distribution
    to holders of ordinary share ADSs and, if we maintain a
    preference share ADS facility, to holders of preference share
    ADSs at any time that holders of preference shares are entitled
    to voting rights; and                                                                                                                                                                                                                                 
|
| |  | make available to the depositary for distribution to holders of
    ADSs representing our ordinary shares and, if we maintain a
    preference share ADS facility, ADSs representing our preference
    shares on an annual basis, a copy of any report prepared by the
    supervisory board or the supervisory board of the                                                                                                                                                                                                                                                                                                                          

106



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| |  |                                                                                                                                                                                                                                                                                                                                
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | general partner and provided to our shareholders generally
    pursuant to Section 314(2) of the German Stock Corporation
    Act, or any successor provision. These reports concern the
    results of the supervisory boards examination of the
    managing boards report on our relation with affiliated
    enterprises.

Term






| |   |                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fresenius AG or its affiliates acquire all our voting capital
    stock;                                                                                                                                                                                                                                                                          
|
| |  | Fresenius AGs beneficial ownership of our outstanding
    share capital is reduced to less than 25%;                                                                                                                                                                                                                                             
|
| |  | Fresenius AG or an affiliate of Fresenius AG ceases to own the
    general partner interest in FMC-AG & Co. KGaA; or                                                                                                                                                                                                                              
|
| |  | we no longer meet the minimum threshold for obligatory
    registration of the ordinary shares or ADSs representing our
    ordinary shares and the preference shares or ADSs representing
    our preference shares, as applicable, under
    Section 12(g)(1) of the Securities Exchange Act of 1934, as
    amended, and Rule 12g-1 thereunder.

Amendment




Enforcement; Governing Law




Directors and Officers Insurance




C.  Material contracts






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D.  Exchange controls


Exchange Controls and Other Limitations Affecting Security
Holders.


Deutsche
Bundesbank  


Satzung


E.  Taxation


U.S. and German Tax Consequences of Holding ADSs


Investors should consult their own tax
advisors with respect to the particular United States federal
and German tax consequences applicable to holding ADSs of FMC-AG
& Co.KGaA.


Tax Treatment of Dividends








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Refund Procedures












109



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##### Table of Contents







Gift and Inheritance Taxes






Other German Taxes




United States Information Reporting and Backup Withholding






H.  Documents on display


http://www.sec.gov.




110



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http://www.fmc-ag.com











|         |                                                               
|-------- | --------------------------------------------------------------
|Item 11. | Quantitative and Qualitative Disclosures About Market
    Risk

Market Risk






| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | changes in reimbursement rates;                                                                                        
|
| |  | intense competition;                                                                                                   
|
| |  | foreign exchange rate fluctuations;                                                                                    
|
| |  | varying degrees of acceptance of new product introductions;                                                            
|
| |  | technological developments in our industry;                                                                            
|
| |  | uncertainties in litigation or investigative proceedings and
    regulatory developments in the health care sector; and
|
| |  | the availability of financing.                                                                                         



Reimbursement Rates




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Inflation




Management of Foreign Exchange and Interest Rate Risks






Foreign Exchange Risk










112



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##### Table of Contents





Foreign Currency Risk Management


December 31, 2005


(in thousands)


|                               |  |                |           |  |      |   |        |        |  |   |           |  |  |      |        |   |  |   |        | 
|------------------------------ |  | -------------- | --------- |  | ---- | - | ------ | ------ |  | - | --------- |  |  | ---- | ------ | - |  | - | ------ | 
|                               |  | Nominal Amount |           |  |      |   |       
|                               |  |                |           |  | Fair |   |        | Credit | 
|                               |  | 2006           |           |  | 2007 |   |        | Total  |  |   | Value     |  |  | Risk |       
|                               |  |                |           |  |      |   |        |        |  |   |           |  |  |      |       
|Purchase of EUR against USD    |  | $              | 580,217   |  |      | $ | 11,207 |        |  | $ | 591,424   |  |  | $    | (3,056 | ) |  | $ | 1,978  | 
|Sale of EUR against USD        |  |                | 347,213   |  |      |   |       |        |  |   | 347,213   |  |  |      | 8,554  |   |  |   | 8,554  | 
|Purchase of EUR against others |  |                | 232,790   |  |      |   | 22,098 |        |  |   | 254,888   |  |  |      | (7,072 | ) |  |   | 481    | 
|Sale of EUR against others     |  |                | 31,548    |  |      |   |       |        |  |   | 31,548    |  |  |      | 134    |   |  |   | 143    | 
|Others                         |  |                | 55,170    |  |      |   | 16,982 |        |  |   | 72,152    |  |  |      | (1,500 | ) |  |   | 2,452  | 
|                               |  |                |           |  |      |   |        |        |  |   |           |  |  |      |       
|Total                          |  | $              | 1,246,938 |  |      | $ | 50,287 |        |  | $ | 1,297,225 |  |  | $    | (2,940 | ) |  | $ | 13,608 | 
|                               |  |                |           |  |      |   |        |        |  |   |           |  |  |      |       



|                         |  |        |        |  |        |  |        |         |  |  |        |  |  |  |        | 
|------------------------ |  | ------ | ------ |  | ------ |  | ------ | ------- |  |  | ------ |  |  |  | ------ | 
|                         |  | Years |        |  | Years |  |        | Years  |  |  | Years | 
|Year ending December 31, |  | High   |        |  | Low    |  |        | Average |  |  | Close  | 
|                         |  |        |        |  |        |  |        |         |  |  |        | 
|2001 $ per              |  |        | 0.9545 |  |        |  | 0.8384 |         |  |  | 0.8956 |  |  |  | 0.8813 | 
|2002 $ per              |  |        | 1.0487 |  |        |  | 0.8578 |         |  |  | 0.9454 |  |  |  | 1.0487 | 
|2003 $ per              |  |        | 1.2630 |  |        |  | 1.0377 |         |  |  | 1.1312 |  |  |  | 1.2630 | 
|2004 $ per              |  |        | 1.3633 |  |        |  | 1.1802 |         |  |  | 1.2439 |  |  |  | 1.3621 | 
|2005 $ per              |  |        | 1.3507 |  |        |  | 1.1667 |         |  |  | 1.2442 |  |  |  | 1.1797 | 

Interest Rate Risk












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Dollar Interest Rate Exposure


December 31, 2005


(in millions)


|                                                                                                                        |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |     |  
|----------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ---- | --- | ---- | ---- |  | --- | ---- | - |  | ---- | ---- | - | ---- | --- | ---------- | ---------- |  | -- | ------ | - |  | ---- | ----- | - | - | --- | ----- | - | - | --- | --- | -
|                                                                                                                        |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     | Fair Value |           
|                                                                                                                        |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     | Dec. 31,   |           
|                                                                                                                        |                                                                       | 2006 |     |      | 2007 |  |     | 2008 |   |  | 2009 |      |   | 2010 |     |            | Thereafter |  |    | Totals |   |  | 2005 |      
|                                                                                                                        |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |      
|Principal payments on Senior Credit Agreement                                                                           |                                                                       | $    | 100 |      |      |  | 100 |      |   |  | 100  |      |   |      | 100 |            |            |  | 71 |        |   |  |      |       |   | $ | 471 |       |   | $ | 471 |    
|                                                                                                                        | Variable interest rate = 5.32%                                        |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |     |  
|Accounts receivable securitization programs                                                                             |                                                                       |      | 94  |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   | 94  |       |   |   | 94  |    
|                                                                                                                        | Variable interest rate = 4.30%                                        |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |     |  
|Interest rate swaps                                                                                                     |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |    
|                                                                                                                        | Notional amount                                                       |      |     | 250  |      |  |     | 200  |   |  |      | 615  |   |      |     | 450        |            |  |    | 250    |   |  |      | 1,500 |   |   |     | 3,265 |   |   |     | 40  |  
|                                                                                                                        | Average fixed pay rate = 4.55%                                        |      |     | 4.60 | %    |  |     | 6.61 | % |  |      | 4.69 | % |      |     | 4.84       | %          |  |    | 4.28   | % |  |      | 4.17  | % |   |     | 4.55  | % |   |     |     |  
|                                                                                                                        | Receive rate = 3-month $LIBOR                                         |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |     |  
|Company obligated mandatorily redeemable preferred securities
    of subsidiaries Fresenius Medical Care Capital Trusts |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |    
|                                                                                                                        | Fixed interest rate = 7.875%/issued in 1998                           |      |     |      |      |  |     |      |   |  |      | 432  |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     | 432   |   |   |     | 479 |  
|                                                                                                                        | Fixed interest rate = 7.375%/issued in 1998
    (denominated in DM)   |      |     |      |      |  |     |      |   |  |      | 181  |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     | 181   |   |   |     | 192 |  
|                                                                                                                        | Fixed interest rate = 7.875%/issued in 2001                           |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      | 223   |   |   |     | 223   |   |   |     | 239 |  
|                                                                                                                        | Fixed interest rate = 7.375%/issued in 2001
    (denominated in euro) |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      | 352   |   |   |     | 352   |   |   |     | 393 |  
|Interest rate swaps                                                                                                     |                                                                       |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |    
|                                                                                                                        | Notional amount                                                       |      |     |      |      |  |     |      |   |  |      | 450  |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     | 450   |   |   |     | (18 | )
|                                                                                                                        | Average fixed pay rate = 3.50%                                        |      |     |      |      |  |     |      |   |  |      | 3.50 | % |      |     |            |            |  |    |        |   |  |      |       |   |   |     | 3.50  | % |   |     |     |  
|                                                                                                                        | Pay rate = 6-month $LIBOR                                             |      |     |      |      |  |     |      |   |  |      |      |   |      |     |            |            |  |    |        |   |  |      |       |   |   |     |       |   |   |     |     |  




Item 12.Description of
Securities other than Equity Securities







PART II





Item 13.Defaults,
Dividend Arrearages and Delinquencies









|         |                                                                                 
|-------- | --------------------------------------------------------------------------------
|Item 14. | Material Modifications to the Rights of Security Holders
    and Use of Proceeds



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A. | Former holders of our preference shares who elected to convert
    their preference shares into ordinary shares pursuant to the
    conversion offer made to preference share holders now hold
    ordinary shares of FMC-AG & Co KGaA. Preference shares
    converted into ordinary shares pursuant to the conversion offer
    no longer hold their preferential dividend rights. See
    Item 10.B., Additional Information 

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | Articles of Association  Dividend Rights. In
    addition, as a result of the Companys transformation of
    legal form into a partnership limited by shares, the Company is
    now managed by a general partner. The supervisory board of the
    general partner, which appoints the management board of the
    general partner, is elected solely by Fresenius AG. While
    our ordinary shareholders vote for election of the supervisory
    board of
    FMC-AG& Co.
    KGaA, the supervisory board of a KGaA has less power than the
    supervisory board of a stock corporation. This may be deemed to
    constitute a modification of the rights of our ordinary
    shareholders. See Item 6.C., Directors, Senior
    Management and Employees  Board Practices 
    The Legal Structure of FMC-AG & Co. KGaA.
|
| | B-E. | Not applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        




Item 15A.Disclosure
Controls and Procedures









|          |                                                                            
|--------- | ---------------------------------------------------------------------------
|Item 15B. | Managements annual report on internal control over
    financial reporting











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|          |                                                                
|--------- | ---------------------------------------------------------------
|Item 15C. | Attestation report of the registered public accounting
    firm

F-3.







|          |                                                         
|--------- | --------------------------------------------------------
|Item 15D. | Changes in Internal Control over Financial
    Reporting






Item 16A.Audit
Committee Financial Expert







Item 16B.Code of
Ethics


Code of
Business Conduct





Item 16C.Principal
Accountant Fees and Services




|                   |  |      |       |  |      |   |       | 
|------------------ |  | ---- | ----- |  | ---- | - | ----- | 
|                   |  | 2005 |       |  | 2004 |  
|                   |  |      |       |  |      |  
|Audit fees         |  | $    | 7,203 |  |      | $ | 4,435 | 
|Audit related fees |  |      | 485   |  |      |   | 1,572 | 
|Tax fees           |  |      | 649   |  |      |   | 685   | 
|                   |  |      |       |  |      |  
|Total              |  | $    | 8,337 |  |      | $ | 6,692 | 
|                   |  |      |       |  |      |  



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Audit Committees pre-approval policies and
procedures














|          |                                                               
|--------- | --------------------------------------------------------------
|Item 16D. | Exemptions from the Listing Standards for Audit
    Committees








|          |                                                                          
|--------- | -------------------------------------------------------------------------
|Item 16E. | Purchase of Equity Securities by the Issuer and Affiliated
    Purchasers







PART III







|         |                     
|-------- | --------------------
|Item 17. | Financial Statements








|         |                     
|-------- | --------------------
|Item 18. | Financial Statements








|         |         
|-------- | --------
|Item 19. | Exhibits



Satzung) 20-F




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20-F








FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


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FMC-AGs


FMC-AG


FMC-AG


FMC-AG


FMC-AG


FMC-AG


FMC-AG


FMC-AG, FMC-AG


FMC-AG FMC-AG


FMC-AG FMC-AG


FMC-AG FMC-AG


FMC-AG FMC-AG


FMC-AG, FMC-AG


FMC-AG,


119



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FMC-AG


10-Q,




FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AG FMC-AG


120



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FMC-AG FMC-AG


FMC-AG, FMC-AGs


FMC-AG, FMC-AG


FMC-AG,


FMC-AG,


FMC-AG,


FMC-AG. FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AGs


FMC-AG. FMC-AGs


121



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FMC-AG. FMC-AGs


FMC-AG. FMC-AGs


FMC-AG. FMC-AGs


FMC-AGs


FMC-AG FMC-AGs


FMC-AG FMC-AGs


FMC-AG FMC-AGs


F-4 FMC-AG


20-F




FMC-AG,




FMC-AGs


FMC-AGs


FMC-AG, FMC-AGs


122



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FMC-AG, FMC-AGs








20-F







|    |                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Confidential treatment has been requested as to certain portions
    of this document in accordance with the applicable rules of the
    Securities and Exchange Commission.

123



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SIGNATURES








| |                                                 
| | ------------------------------------------------
| | Fresenius Medical Care AG
    & Co. KGaA,       
| | a partnership limited by shares, represented by:
|
| | fresenius medical care
    management ag,       
| | its general partner                             



| |     |                  
| | --- | -----------------
| | By: | /s/ Dr. Ben Lipps

| |                    
| | -------------------
| |                    
| | Name: Dr. Ben Lipps

| |        |                            
| | ------ | ---------------------------
| | Title: | Chief Executive Officer and

| |                                 
| | --------------------------------
| | Chairman of the Management Board



| |     |                   
| | --- | ------------------
| | By: | /s/ Lawrence Rosen

| |                                
| | -------------------------------
| |                                
| | Name: Lawrence Rosen           
| | Title:  Chief Financial Officer

124



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##### 










INDEX OF FINANCIAL STATEMENTS


|                                                                                                                |  |      |      | 
|--------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                |  | Page |     
|                                                                                                                |  |      |     
|Audited Consolidated Financial Statements                                                                       |  |      |      | 
|Managements Annual Report on Internal
    Control over Financial Reporting                                     |  |      | F-2  | 
|Report of Independent Registered Public
    Accounting Firm                                                     |  |      | F-3  | 
|Report of Independent Registered Public
    Accounting Firm                                                     |  |      | F-5  | 
|Consolidated Statements of Income for the
    years ended December 31, 2005, 2004 and 2003                      |  |      | F-6  | 
|Consolidated Balance Sheets as of
    December 31, 2005 and 2004                                                |  |      | F-7  | 
|Consolidated Statements of Cash Flows for
    the years ended December 31, 2005, 2004 and 2003                  |  |      | F-8  | 
|Consolidated Statement of
    Shareholders Equity for the years ended December 31,
    2005,
    2004 and 2003 |  |      | F-9  | 
|Notes to Consolidated Financial
    Statements                                                                  |  |      | F-10 | 
|Financial Statement Schedule                                                                                    |  |      | S-1  | 



F-1



---



##### Table of Contents






MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING


13a-15(f).














| |                                                 
| | ------------------------------------------------
| | Fresenius Medical Care AG
    & Co. KGaA,       
| | a partnership limited by shares, represented by:
|
| | fresenius medical care
    management ag, its   
| | general partner                                 
|
| | By: /s/ DR. BEN LIPPS                           
| |                                                 

| |        |                                                                   
| | ------ | ------------------------------------------------------------------
| | Name:  | Dr. Ben Lipps                                                     
| | Title: | Chief Executive Officer and 
     Chairman of the Management Board



| |                       
| | ----------------------
| | By: /s/ LAWRENCE ROSEN
| |                       

| |        |                        
| | ------ | -----------------------
| | Name:  | Lawrence Rosen         
| | Title: | Chief Financial Officer

F-2



---



##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















F-3



---



##### Table of Contents

















F-4



---



##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


























F-5



---



##### Table of Contents






FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


Consolidated Statements of Income


For the years ended December 31, 2005, 2004 and 2003


(in thousands, except share data)


|                                                 |                                     |      |           |           |      |   |           |           |   |   |           |           |  
|------------------------------------------------ | ----------------------------------- | ---- | --------- | --------- | ---- | - | --------- | --------- | - | - | --------- | --------- | -
|                                                 |                                     | 2005 |           |           | 2004 |   |           | 2003      |  
|                                                 |                                     |      |           |           |      |   |           |           |  
|Net revenue:                                     |                                     |      |           |           |      |   |           |           |   |   |           |          
|                                                 | Dialysis Care                       |      | $         | 4,866,833 |      |   | $         | 4,501,197 |   |   | $         | 3,978,344 |  
|                                                 | Dialysis Products                   |      |           | 1,904,986 |      |   |           | 1,726,805 |   |   |           | 1,549,165 |  
|                                                 |                                     |      |           |           |      |   |           |           |  
|                                                 |                                     |      | 6,771,819 |           |      |   | 6,228,002 |           |   |   | 5,527,509 |          
|Costs of revenue:                                |                                     |      |           |           |      |   |           |           |   |   |           |          
|                                                 | Dialysis Care                       |      |           | 3,459,254 |      |   |           | 3,232,185 |   |   |           | 2,871,592 |  
|                                                 | Dialysis Products                   |      |           | 979,900   |      |   |           | 909,932   |   |   |           | 827,014   |  
|                                                 |                                     |      |           |           |      |   |           |           |  
|                                                 |                                     |      | 4,439,154 |           |      |   | 4,142,117 |           |   |   | 3,698,606 |          
|                                                
|Gross profit                                     |                                     |      | 2,332,665 |           |      |   | 2,085,885 |           |   |   | 1,828,903 |          
|Operating expenses:                              |                                     |      |           |           |      |   |           |           |   |   |           |          
|                                                 | Selling, general and administrative |      |           | 1,342,792 |      |   |           | 1,182,176 |   |   |           | 1,021,781 |  
|                                                 | Research and development            |      |           | 50,955    |      |   |           | 51,364    |   |   |           | 49,687    |  
|                                                 |                                     |      |           |           |      |   |           |           |  
|Operating income                                 |                                     |      | 938,918   |           |      |   | 852,345   |           |   |   | 757,435   |          
|Other (income) expense:                          |                                     |      |           |           |      |   |           |           |   |   |           |          
|                                                 | Interest income                     |      |           | (18,187   | )    |   |           | (13,418   | ) |   |           | (19,089   | )
|                                                 | Interest expense                    |      |           | 191,379   |      |   |           | 197,164   |   |   |           | 230,848   |  
|                                                 |                                     |      |           |           |      |   |           |           |  
|                                                
|Income before income taxes and minority interest |                                     |      | 765,726   |           |      |   | 668,599   |           |   |   | 545,676   |          
|Income tax expense                               |                                     |      | 308,748   |           |      |   | 265,415   |           |   |   | 212,714   |          
|Minority interest                                |                                     |      | 2,026     |           |      |   | 1,186     |           |   |   | 1,782     |          
|                                                 |                                     |      |           |           |      |   |           |           |  
|Net income                                       |                                     | $    | 454,952   |           |      | $ | 401,998   |           |   | $ | 331,180   |          
|                                                 |                                     |      |           |           |      |   |           |           |  
|                                                
|Basic earnings per Ordinary share                |                                     | $    | 4.68      |           |      | $ | 4.16      |           |   | $ | 3.42      |          
|                                                 |                                     |      |           |           |      |   |           |           |  
|Fully diluted earnings per Ordinary share        |                                     | $    | 4.64      |           |      | $ | 4.14      |           |   | $ | 3.42      |          
|                                                 |                                     |      |           |           |      |   |           |           |  
|                                                
|Basic earnings per Preference share              |                                     | $    | 4.75      |           |      | $ | 4.23      |           |   | $ | 3.49      |          
|                                                 |                                     |      |           |           |      |   |           |           |  
|Fully diluted earnings per Preference share      |                                     | $    | 4.72      |           |      | $ | 4.21      |           |   | $ | 3.49      |          
|                                                 |                                     |      |           |           |      |   |           |           |  



F-6



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##### Table of Contents






FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


Consolidated Balance Sheets


At December 31, 2005 and 2004


(in thousands, except share data)


|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |   |           |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ---- | --------- | --------- | ---- | - | --------- | --------- | 
|                                                                                                                                                                                       |                                                                                                              | 2005 |           |           | 2004 |  
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|Assets                                                                                                                                                                                 |                                                                                                              |      |           |           |      |   |           |          
|Current assets:                                                                                                                                                                        |                                                                                                              |      |           |           |      |   |           |          
|                                                                                                                                                                                       | Cash and cash equivalents                                                                                    |      | $         | 85,077    |      |   | $         | 58,966    | 
|                                                                                                                                                                                       | Trade accounts receivable, less allowance for doubtful accounts
    of $176,568 in 2005 and $179,917 in 2004 |      |           | 1,469,933 |      |   |           | 1,462,847 | 
|                                                                                                                                                                                       | Accounts receivable from related parties                                                                     |      |           | 33,884    |      |   |           | 51,760    | 
|                                                                                                                                                                                       | Inventories                                                                                                  |      |           | 430,893   |      |   |           | 442,919   | 
|                                                                                                                                                                                       | Prepaid expenses and other current assets                                                                    |      |           | 261,590   |      |   |           | 244,093   | 
|                                                                                                                                                                                       | Deferred taxes                                                                                               |      |           | 179,561   |      |   |           | 185,385   | 
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|                                                                                                                                                                                       | Total current assets                                                                                         |      |           | 2,460,938 |      |   |           | 2,445,970 | 
|                                                                                                                                                                                      
|Property, plant and equipment, net                                                                                                                                                     |                                                                                                              |      | 1,215,758 |           |      |   | 1,181,927 |          
|Intangible assets                                                                                                                                                                      |                                                                                                              |      | 585,689   |           |      |   | 602,048   |          
|Goodwill                                                                                                                                                                               |                                                                                                              |      | 3,456,877 |           |      |   | 3,445,152 |          
|Deferred taxes                                                                                                                                                                         |                                                                                                              |      | 35,649    |           |      |   | 58,123    |          
|Other assets                                                                                                                                                                           |                                                                                                              |      | 228,189   |           |      |   | 228,321   |          
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|                                                                                                                                                                                       | Total assets                                                                                                 |      | $         | 7,983,100 |      |   | $         | 7,961,541 | 
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|                                                                                                                                                                                      
|Liabilities and shareholders equity                                                                                                                                                   |                                                                                                              |      |           |           |      |   |           |          
|Current liabilities:                                                                                                                                                                   |                                                                                                              |      |           |           |      |   |           |          
|                                                                                                                                                                                       | Accounts payable                                                                                             |      | $         | 201,317   |      |   | $         | 192,552   | 
|                                                                                                                                                                                       | Accounts payable to related parties                                                                          |      |           | 107,938   |      |   |           | 113,444   | 
|                                                                                                                                                                                       | Accrued expenses and other current liabilities                                                               |      |           | 838,768   |      |   |           | 741,075   | 
|                                                                                                                                                                                       | Short-term borrowings                                                                                        |      |           | 151,113   |      |   |           | 419,148   | 
|                                                                                                                                                                                       | Short-term borrowings from related parties                                                                   |      |           | 18,757    |      |   |           | 5,766     | 
|                                                                                                                                                                                       | Current portion of long-term debt and capital lease obligations                                              |      |           | 126,269   |      |   |           | 230,179   | 
|                                                                                                                                                                                       | Income tax payable                                                                                           |      |           | 120,138   |      |   |           | 230,530   | 
|                                                                                                                                                                                       | Deferred taxes                                                                                               |      |           | 13,940    |      |   |           | 5,159     | 
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|                                                                                                                                                                                       | Total current liabilities                                                                                    |      |           | 1,578,240 |      |   |           | 1,937,853 | 
|                                                                                                                                                                                      
|Long-term debt and capital lease obligations, less current
    portion                                                                                                                 |                                                                                                              |      | 707,100   |           |      |   | 545,570   |          
|Other liabilities                                                                                                                                                                      |                                                                                                              |      | 112,418   |           |      |   | 156,122   |          
|Pension liabilities                                                                                                                                                                    |                                                                                                              |      | 108,702   |           |      |   | 108,125   |          
|Deferred taxes                                                                                                                                                                         |                                                                                                              |      | 300,665   |           |      |   | 282,261   |          
|Company-obligated mandatorily redeemable preferred securities of
    subsidiary Fresenius Medical Care Capital Trusts holding solely
    Company-guaranteed debentures of subsidiaries |                                                                                                              |      | 1,187,864 |           |      |   | 1,278,760 |          
|Minority interest                                                                                                                                                                      |                                                                                                              |      | 14,405    |           |      |   | 18,034    |          
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|                                                                                                                                                                                       | Total liabilities                                                                                            |      |           | 4,009,394 |      |   |           | 4,326,725 | 
|Shareholders equity:                                                                                                                                                                  |                                                                                                              |      |           |           |      |   |           |          
|Preference shares, no par value,
    2.56 nominal
    value, 53,597,700 shares authorized, 27,762,179 issued and
    outstanding                                                      |                                                                                                              |      | 74,476    |           |      |   | 69,878    |          
|Ordinary shares, no par value,
    2.56 nominal
    value, 70,000,000 shares authorized, issued and outstanding                                                                       |                                                                                                              |      | 229,494   |           |      |   | 229,494   |          
|Additional paid-in capital                                                                                                                                                             |                                                                                                              |      | 2,837,144 |           |      |   | 2,746,473 |          
|Retained earnings                                                                                                                                                                      |                                                                                                              |      | 975,371   |           |      |   | 657,906   |          
|Accumulated other comprehensive loss                                                                                                                                                   |                                                                                                              |      | (142,779  | )         |      |   | (68,935   | )        
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|Total shareholders equity                                                                                                                                                             |                                                                                                              |      | 3,973,706 |           |      |   | 3,634,816 |          
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  
|Total liabilities and shareholders equity                                                                                                                                             |                                                                                                              | $    | 7,983,100 |           |      | $ | 7,961,541 |          
|                                                                                                                                                                                       |                                                                                                              |      |           |           |      |  



F-7



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##### Table of Contents






FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


Consolidated Statements of Cash Flows


For the years ended December 31, 2005, 2004 and 2003


(in thousands)


|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |          |   |        |          |          |  
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ------ | -------- | -------- | - | ---- | -------- | -------- | - | ------ | -------- | -------- | -
|                                                             |                                                                                                                  | 2005                                                                                 |        |          | 2004     |   |      | 2003     |         
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|Operating Activities:                                        |                                                                                                                  |                                                                                      |        |          |          |   |      |          |          |   |        |         
|                                                             | Net income                                                                                                       |                                                                                      | $      | 454,952  |          |   | $    | 401,998  |          |   | $      | 331,180  |         
|                                                             | Adjustments to reconcile net income to cash and cash equivalents
    provided by (used in) operating activities: |                                                                                      |        |          |          |   |      |          |          |   |        |          |         
|                                                             |                                                                                                                  | Settlement of shareholder proceedings                                                |        |          | 7,335    |   |      |          |         |   |        |          |         |  
|                                                             |                                                                                                                  | Depreciation and amortization                                                        |        |          | 251,452  |   |      |          | 232,585  |   |        |          | 216,377  |  
|                                                             |                                                                                                                  | Change in deferred taxes, net                                                        |        |          | (3,675   | ) |      |          | 34,281   |   |        |          | 91,312   |  
|                                                             |                                                                                                                  | Loss (gain) on sale of fixed assets                                                  |        |          | 3,965    |   |      |          | 735      |   |        |          | (50      | )
|                                                             |                                                                                                                  | Compensation expense related to stock options                                        |        |          | 1,363    |   |      |          | 1,751    |   |        |          | 1,456    |  
|                                                             |                                                                                                                  | Cash inflow from Hedging                                                             |        |          |         |   |      |          | 14,514   |   |        |          | 131,654  |  
|                                                             | Changes in assets and liabilities, net of amounts from
    businesses acquired:                                  |                                                                                      |        |          |          |   |      |          |          |   |        |          |         
|                                                             |                                                                                                                  | Trade accounts receivable, net                                                       |        |          | (63,574  | ) |      |          | (7,886   | ) |        |          | 53,563   |  
|                                                             |                                                                                                                  | Inventories                                                                          |        |          | (9,811   | ) |      |          | 27,245   |   |        |          | (22,993  | )
|                                                             |                                                                                                                  | Prepaid expenses, other current and non-current assets                               |        |          | (41,036  | ) |      |          | 70,033   |   |        |          | 60,155   |  
|                                                             |                                                                                                                  | Accounts receivable from/ payable to related parties                                 |        |          | 9,596    |   |      |          | (22,686  | ) |        |          | 7,199    |  
|                                                             |                                                                                                                  | Accounts payable, accrued expenses and other current and
    non-current liabilities |        |          | 148,735  |   |      |          | 36,157   |   |        |          | (92,316  | )
|                                                             |                                                                                                                  | Income tax payable                                                                   |        |          | (88,998  | ) |      |          | 39,116   |   |        |          | (23,518  | )
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|                                                             |                                                                                                                  | Net cash provided by operating activities                                            |        |          | 670,304  |   |      |          | 827,843  |   |        |          | 754,019  |  
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|Investing Activities:                                        |                                                                                                                  |                                                                                      |        |          |          |   |      |          |          |   |        |         
|                                                             | Purchases of property, plant and equipment                                                                       |                                                                                      |        | (314,769 | )        |   |      | (278,732 | )        |   |        | (291,260 | )       
|                                                             | Proceeds from sale of property, plant and equipment                                                              |                                                                                      |        | 17,427   |          |   |      | 18,358   |          |   |        | 14,826   |         
|                                                             | Acquisitions and investments, net of cash acquired                                                               |                                                                                      |        | (125,153 | )        |   |      | (104,493 | )        |   |        | (92,190  | )       
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|                                                             |                                                                                                                  | Net cash used in investing activities                                                |        |          | (422,495 | ) |      |          | (364,867 | ) |        |          | (368,624 | )
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|Financing Activities:                                        |                                                                                                                  |                                                                                      |        |          |          |   |      |          |          |   |        |         
|                                                             | Proceeds from short-term borrowings                                                                              |                                                                                      |        | 44,655   |          |   |      | 70,484   |          |   |        | 102,678  |         
|                                                             | Repayments of short-term borrowings                                                                              |                                                                                      |        | (75,493  | )        |   |      | (86,850  | )        |   |        | (153,911 | )       
|                                                             | Proceeds from short-term borrowings from related parties                                                         |                                                                                      |        | 56,381   |          |   |      | 55,539   |          |   |        | 94,787   |         
|                                                             | Repayments of short-term borrowings from related parties                                                         |                                                                                      |        | (42,632  | )        |   |      | (80,000  | )        |   |        | (70,787  | )       
|                                                             | Proceeds from long-term debt                                                                                     |                                                                                      |        | 426,531  |          |   |      | 369,369  |          |   |        | 982,825  |         
|                                                             | Principal payments of long-term debt and capital lease
    obligations                                           |                                                                                      |        | (331,407 | )        |   |      | (840,131 | )        |   |        | (968,888 | )       
|                                                             | (Decrease) increase of accounts receivable securitization program                                                |                                                                                      |        | (241,765 | )        |   |      | 177,767  |          |   |        | (287,251 | )       
|                                                             | Proceeds from exercise of stock options                                                                          |                                                                                      |        | 79,944   |          |   |      | 3,622    |          |   |        | 1,600    |         
|                                                             | Dividends paid                                                                                                   |                                                                                      |        | (137,487 | )        |   |      | (122,106 | )        |   |        | (107,761 | )       
|                                                             | Redemption of Series D Preferred Stock of subsidiary                                                             |                                                                                      |        |         |          |   |      |         |          |   |        | (8,906   | )       
|                                                             | Change in minority interest                                                                                      |                                                                                      |        | 1,506    |          |   |      | 389      |          |   |        | (266     | )       
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|                                                             |                                                                                                                  | Net cash used in financing activities                                                |        |          | (219,767 | ) |      |          | (451,917 | ) |        |          | (415,880 | )
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                                  |                                                                                      | (1,931 | )        |          |   | (520 | )        |          |   | 14,119 |         
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|Cash and Cash Equivalents:                                   |                                                                                                                  |                                                                                      |        |          |          |   |      |          |          |   |        |         
|                                                             | Net increase (decrease) in cash and cash equivalents                                                             |                                                                                      |        | 26,111   |          |   |      | 10,539   |          |   |        | (16,366  | )       
|                                                             | Cash and cash equivalents at beginning of period                                                                 |                                                                                      |        | 58,966   |          |   |      | 48,427   |          |   |        | 64,793   |         
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         
|                                                             | Cash and cash equivalents at end of period                                                                       |                                                                                      | $      | 85,077   |          |   | $    | 58,966   |          |   | $      | 48,427   |         
|                                                             |                                                                                                                  |                                                                                      |        |          |          |   |      |          |         



F-8



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##### Table of Contents






FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


Consolidated Statements of Shareholders Equity


For the years ended December 31, 2005, 2004 and 2003


(in thousands, except share data)


|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |         |          |  
|--------------------------------------------------------- | --------------------------------------------- | ----------------------------------------------------- | ---------- |  | --------------- | - | ------ | ---------- |  | --------------------------- | ---------- |  |  | ----------------- | ------- |  | --------- | - | --------- | ----------- |  | - | --------- | ------- |  | --------- | -------- | - | -------- | - | ------- | - | ------- | - | ------- | - | ------- | - | --------- | ------- | -------- | -
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  | Accumulated Other |         |  |          
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  | Comprehensive Income (Loss) |            |  | 
|                                                          |                                               | Preference Shares                                     |            |  | Ordinary Shares |   |        |            |  |                             |            |  |  |                   |        
|                                                          |                                               |                                                       |            |  |                 |   |        | Additional |  |                             | Retained   |  |  | Foreign           |         |  |           |   | Minimum   |             |  |  
|                                                          |                                               | Number of                                             |            |  | No Par          |   |        | Number of  |  |                             | No Par     |  |  | Paid in           |         |  | Earnings  |   |           | Currency    |  |   | Cash Flow |         |  | Pension   |          |   |         
|                                                          |                                               | Shares                                                |            |  | Value           |   |        | Shares     |  |                             | Value      |  |  | Capital           |         |  | (Deficit) |   |           | Translation |  |   | Hedges    |         |  | Liability |          |   | Total    |  
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Balance at December 31, 2002                              |                                               |                                                       | 26,188,575 |  |                 | $ | 69,540 |            |  |                             | 70,000,000 |  |  | $                 | 229,494 |  |           | $ | 2,736,913 |             |  | $ | 154,595   |         |  | $         | (346,824 | ) |          | $ | (17,182 | ) |         | $ | (19,357 | ) |         | $ | 2,807,179 |        
|Proceeds from exercise of options and related tax effects |                                               |                                                       | 25,404     |  |                 |   | 76     |            |  |                             |            |  |  |                   |         |  |           |   | 1,524     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 1,600     |        
|Compensation expense related to stock options             |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   | 1,456     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 1,456     |        
|Dividends paid                                            |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   | (107,761  | )       |  |           |          |   |          |   |         |   |         |   |         |   |         |   | (107,761  | )      
|Transaction under common control with Fresenius AG        |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   | 1,469     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 1,469     |        
|Comprehensive income (loss)                               |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |        
|                                                          | Net income                                    |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           | 331,180 |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           | 331,180 |         
|                                                          | Other comprehensive income (loss) related to: |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |         |         
|                                                          |                                               | Cash flow hedges, net of related tax effects          |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   | 22,029  |   |         |   |         |   |           |         | 22,029   |  
|                                                          |                                               | Foreign currency translation adjustment               |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   | 200,578  |   |         |   |         |   |         |   |         |   |           |         | 200,578  |  
|                                                          |                                               | Minimum pension liability, net of related tax effects |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   | (14,050 | ) |           |         | (14,050  | )
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Comprehensive income                                      |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 539,737   |        
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Balance at December 31, 2003                              |                                               |                                                       | 26,213,979 |  |                 | $ | 69,616 |            |  |                             | 70,000,000 |  |  | $                 | 229,494 |  |           | $ | 2,741,362 |             |  | $ | 378,014   |         |  | $         | (146,246 | ) |          | $ | 4,847   |   |         | $ | (33,407 | ) |         | $ | 3,243,680 |        
|Proceeds from exercise of options and related tax effects |                                               |                                                       | 82,107     |  |                 |   | 262    |            |  |                             |            |  |  |                   |         |  |           |   | 3,360     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 3,622     |        
|Compensation expense related to stock options             |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   | 1,751     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 1,751     |        
|Dividends paid                                            |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   | (122,106  | )       |  |           |          |   |          |   |         |   |         |   |         |   |         |   | (122,106  | )      
|Comprehensive income (loss)                               |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |        
|                                                          | Net income                                    |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           | 401,998 |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           | 401,998 |         
|                                                          | Other comprehensive income (loss) related to: |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |         |         
|                                                          |                                               | Cash flow hedges, net of related tax effects          |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   | (29,011 | ) |         |   |         |   |           |         | (29,011  | )
|                                                          |                                               | Foreign currency translation adjustment               |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   | 144,784  |   |         |   |         |   |         |   |         |   |           |         | 144,784  |  
|                                                          |                                               | Minimum pension liability, net of related tax effects |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   | (9,902  | ) |           |         | (9,902   | )
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Comprehensive income                                      |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 507,869   |        
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Balance at December 31, 2004                              |                                               |                                                       | 26,296,086 |  |                 | $ | 69,878 |            |  |                             | 70,000,000 |  |  | $                 | 229,494 |  |           | $ | 2,746,473 |             |  | $ | 657,906   |         |  | $         | (1,462   | ) |          | $ | (24,164 | ) |         | $ | (43,309 | ) |         | $ | 3,634,816 |        
|Proceeds from exercise of options and related tax effects |                                               |                                                       | 1,466,093  |  |                 |   | 4,598  |            |  |                             |            |  |  |                   |         |  |           |   | 81,973    |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 86,571    |        
|Compensation expense related to stock options             |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   | 1,363     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 1,363     |        
|Dividends paid                                            |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   | (137,487  | )       |  |           |          |   |          |   |         |   |         |   |         |   |         |   | (137,487  | )      
|Settlement of shareholder proceedings                     |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   | 7,335     |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 7,335     |        
|Comprehensive income (loss)                               |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |        
|                                                          | Net income                                    |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           | 454,952 |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           | 454,952 |         
|                                                          | Other comprehensive income (loss) related to: |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   |           |         |         
|                                                          |                                               | Cash flow hedges, net of related tax effects          |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   | 43,128  |   |         |   |         |   |           |         | 43,128   |  
|                                                          |                                               | Foreign currency translation adjustment               |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   | (104,723 | ) |         |   |         |   |         |   |         |   |           |         | (104,723 | )
|                                                          |                                               | Minimum pension liability, net of related tax effects |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   | (12,249 | ) |           |         | (12,249  | )
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Comprehensive income                                      |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |   |         |   |         |   |         |   |         |   | 381,108   |        
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  
|Balance at December 31, 2005                              |                                               |                                                       | 27,762,179 |  |                 | $ | 74,476 |            |  |                             | 70,000,000 |  |  | $                 | 229,494 |  |           | $ | 2,837,144 |             |  | $ | 975,371   |         |  | $         | (106,185 | ) |          | $ | 18,964  |   |         | $ | (55,558 | ) |         | $ | 3,973,706 |        
|                                                          |                                               |                                                       |            |  |                 |   |        |            |  |                             |            |  |  |                   |         |  |           |   |           |             |  |   |           |         |  |           |          |   |          |  



F-9



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(in thousands, except share data)


1.   The Company and Summary of Significant
Accounting Policies


The Company


(FMC-AG Kommanditgesellschaft auf Aktien (FMC-AG),


Basis of Presentation




Summary of Significant Accounting Policies


a)  Principles of Consolidation








b)  Classifications




c)  Cash and Cash Equivalents




d)  Allowance for Doubtful Accounts




F-10



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




e)   Inventories




f)   Property, Plant and Equipment




g)  Other Intangible Assets and Goodwill










F-11



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


h)  Derivative Financial Instruments


Accounting for
Derivative Instruments and Hedging Activities,


i)   Foreign Currency Translation




j)   Revenue Recognition Policy






FMC-AG


k)  Research and Development expenses




l)   Income Taxes


Accounting for
Income Taxes,


F-12



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




m)  Impairment


Accounting for the or Disposal of
Long-Lived Assets




n)  Debt Issuance Costs




o)  Self-Insurance Programs




p)  Use of Estimates




q)  Concentration of Risk








F-13



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


r)   Earnings per Ordinary share and
Preference share








s)   Stock Option Plans


Accounting for Stock Issued to Employees


Fair Value of Stock Options






|                              |                          |      |  |            |      |  |  |            |  |  |  |            | 
|----------------------------- | ------------------------ | ---- |  | ---------- | ---- |  |  | ---------- |  |  |  | ---------- | 
|                              |                          | 2005 |  |            | 2004 |  |  | 2003       | 
|                              |                          |      |  |            |      |  |  |            | 
|Weighted-average assumptions: |                          |      |  |            |      |  |  |            |  |  |  |           
|                              | Expected dividend yield  |      |  | 2.88%      |      |  |  | 2.87%      |  |  |  | 2.60%      | 
|                              | Risk-free interest rate  |      |  | 2.76%      |      |  |  | 3.50%      |  |  |  | 3.80%      | 
|                              | Expected volatility      |      |  | 40.00%     |      |  |  | 40.00%     |  |  |  | 40.00%     | 
|                              | Expected life of options |      |  | 5.3  years |      |  |  | 5.3  years |  |  |  | 5.3  years | 

F-14



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




|                            |                                                                                                                                               |             |   |         |      |  |   |         |      |  |   |         |      | 
|--------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | - | ------- | ---- |  | - | ------- | ---- |  | - | ------- | ---- | 
|                            |                                                                                                                                               | 2005        |   |         | 2004 |  |   | 2003    |     
|                            |                                                                                                                                               |             |   |         |      |  |   |         |     
|Net income:                 |                                                                                                                                               |             |   |         |      |  |   |         |      |  |   |        
|                            | As reported                                                                                                                                   |             | $ | 454,952 |      |  | $ | 401,998 |      |  | $ | 331,180 |     
|                            | Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effects                                |             |   | 1,090   |      |  |   | 1,751   |      |  |   | 1,456   |     
|                            | Deduct: Total stock-based employee compensation expense
    determined under fair value method for all awards, net of
    related tax effects |             |   | (8,302  | )    |  |   | (7,559  | )    |  |   | (7,420  | )   
|                            |                                                                                                                                               |             |   |         |      |  |   |         |     
|                            | Pro forma                                                                                                                                     |             | $ | 447,740 |      |  | $ | 396,190 |      |  | $ | 325,216 |     
|                            |                                                                                                                                               |             |   |         |      |  |   |         |     
|Basic earnings per:         |                                                                                                                                               |             |   |         |      |  |   |         |      |  |   |        
|                            | Ordinary share                                                                                                                                |             |   |         |      |  |   |         |      |  |   |         |     
|                            |                                                                                                                                               | As reported |   | $       | 4.68 |  |   | $       | 4.16 |  |   | $       | 3.42 | 
|                            |                                                                                                                                               | Pro forma   |   | $       | 4.61 |  |   | $       | 4.10 |  |   | $       | 3.36 | 
|                            | Preference share                                                                                                                              |             |   |         |      |  |   |         |      |  |   |         |     
|                            |                                                                                                                                               | As reported |   | $       | 4.75 |  |   | $       | 4.23 |  |   | $       | 3.49 | 
|                            |                                                                                                                                               | Pro forma   |   | $       | 4.68 |  |   | $       | 4.17 |  |   | $       | 3.43 | 
|Fully diluted earnings per: |                                                                                                                                               |             |   |         |      |  |   |         |      |  |   |        
|                            | Ordinary share                                                                                                                                |             |   |         |      |  |   |         |      |  |   |         |     
|                            |                                                                                                                                               | As reported |   | $       | 4.64 |  |   | $       | 4.14 |  |   | $       | 3.42 | 
|                            |                                                                                                                                               | Pro forma   |   | $       | 4.57 |  |   | $       | 4.08 |  |   | $       | 3.36 | 
|                            | Preference share                                                                                                                              |             |   |         |      |  |   |         |      |  |   |         |     
|                            |                                                                                                                                               | As reported |   | $       | 4.72 |  |   | $       | 4.21 |  |   | $       | 3.49 | 
|                            |                                                                                                                                               | Pro forma   |   | $       | 4.64 |  |   | $       | 4.15 |  |   | $       | 3.43 | 

t)   Recent Pronouncements and Accounting
Changes






F-15



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




05-5, 05-5 05-5, 05-5 05-5.




|   |                                                                     
|-- | --------------------------------------------------------------------
|2. | Transformation of Legal Form and Conversion of Preference
    Shares

Aktiengesellschaft Kommanditgesellschaft auf Aktien (FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG


 FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG FMC-AG


F-16



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


FMC-AG FMC-AG







ex gratia  






(gemeinsamer
Ausschuss)


F-17



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




3.   Proposed acquisition










F-18



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)










4.   Related Party Transactions


a)  Service Agreements






F-19



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


b)  Financing Provided by Fresenius AG




c)   Products




d)  Other








5.   Inventories




|                                       |             |      |         |         |      |   |         |         | 
|-------------------------------------- | ----------- | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                       |             | 2005 |         |         | 2004 |  
|                                       |             |      |         |         |      |  
|Raw materials and purchased components |             | $    | 93,889  |         |      | $ | 90,268  |        
|Work in process                        |             |      | 33,073  |         |      |   | 36,586  |        
|Finished goods                         |             |      | 223,356 |         |      |   | 240,296 |        
|Health care supplies                   |             |      | 80,575  |         |      |   | 75,769  |        
|                                       |             |      |         |         |      |  
|                                       | Inventories |      | $       | 430,893 |      |   | $       | 442,919 | 
|                                       |             |      |         |         |      |  

F-20



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




6.   Property, Plant and Equipment




|                                                                       |  |      |            |   |      |   |            |  
|---------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                       |  | 2005 |            |   | 2004 |  
|                                                                       |  |      |            |   |      |  
|Land and improvements                                                  |  | $    | 26,564     |   |      | $ | 29,258     |  
|Buildings and improvements                                             |  |      | 812,841    |   |      |   | 770,103    |  
|Machinery and equipment                                                |  |      | 1,338,831  |   |      |   | 1,349,373  |  
|Machinery, equipment and rental equipment under capitalized
    leases |  |      | 56,064     |   |      |   | 59,183     |  
|Construction in progress                                               |  |      | 117,331    |   |      |   | 91,227     |  
|                                                                       |  |      |            |   |      |  
|                                                                       |  |      | 2,351,631  |   |      |   | 2,299,144  |  
|Accumulated depreciation                                               |  |      | (1,135,873 | ) |      |   | (1,117,217 | )
|                                                                       |  |      |            |   |      |  
|Property, plant and equipment, net                                     |  | $    | 1,215,758  |   |      | $ | 1,181,927  |  
|                                                                       |  |      |            |   |      |  





7.   Other Intangible Assets and Goodwill




|                              |  |                   |         |  |                   |   |          |          |  |   |              |  |  |   |          |  
|----------------------------- |  | ----------------- | ------- |  | ----------------- | - | -------- | -------- |  | - | ------------ |  |  | - | -------- | -
|                              |  | December 31, 2005 |         |  | December 31, 2004 |  
|                              |  |                   |         |  |                   |  
|                              |  | Gross             |         |  |                   |   | Gross    |          |  |  
|                              |  | Carrying          |         |  | Accumulated       |   |          | Carrying |  |   | Accumulated  | 
|                              |  | Amount            |         |  | Amortization      |   |          | Amount   |  |   | Amortization | 
|                              |  |                   |         |  |                   |   |          |          |  |   |              | 
|Amortizable Intangible Assets |  |                   |         |  |                   |   |          |          |  |   |              |  |  |   |          |  
|Patient relationships         |  | $                 | 164,188 |  |                   | $ | (114,192 | )        |  | $ | 157,673      |  |  | $ | (106,545 | )
|Patents                       |  |                   | 28,535  |  |                   |   | (16,599  | )        |  |   | 28,508       |  |  |   | (16,239  | )
|Distribution rights           |  |                   | 25,231  |  |                   |   | (14,391  | )        |  |   | 25,306       |  |  |   | (10,390  | )
|Other                         |  |                   | 151,640 |  |                   |   | (77,527  | )        |  |   | 183,076      |  |  |   | (100,129 | )
|                              |  |                   |         |  |                   |   |          |          |  |   |              | 
|                              |  | $                 | 369,594 |  |                   | $ | (222,709 | )        |  | $ | 394,563      |  |  | $ | (233,303 | )
|                              |  |                   |         |  |                   |   |          |          |  |   |              | 

F-21



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                  |  |          |         |  |  |  |          |  |  |   |         |  |  |  |  | 
|--------------------------------- |  | -------- | ------- |  |  |  | -------- |  |  | - | ------- |  |  |  |  | 
|                                  |  | Carrying |         |  |  |  | Carrying |  |  |  
|                                  |  | Amount   |         |  |  |  | Amount   |  |  |  
|                                  |  |          |         |  |  |  |          |  |  |  
|Non-amortizable Intangible Assets |  |          |         |  |  |  |          |  |  |   |         |  |  |  |  | 
|Tradename                         |  | $        | 220,935 |  |  |  |          |  |  | $ | 222,289 |  |  |  |  | 
|Management contracts              |  |          | 217,869 |  |  |  |          |  |  |   | 218,499 |  |  |  |  | 
|                                  |  |          |         |  |  |  |          |  |  |   |         | 
|                                  |  | $        | 438,804 |  |  |  |          |  |  | $ | 440,788 |  |  |  |  | 
|                                  |  |          |         |  |  |  |          |  |  |   |         | 
|Total Intangible Assets           |  | $        | 585,689 |  |  |  |          |  |  | $ | 602,048 |  |  |  |  | 
|                                  |  |          |         |  |  |  |          |  |  |   |         | 



Amortization Expense


|                                     |  |   |        | 
|------------------------------------ |  | - | ------ | 
|For the year ended December 31, 2003 |  | $ | 34,217 | 
|                                     |  |   |       
|For the year ended December 31, 2004 |  | $ | 32,853 | 
|                                     |  |   |       
|For the year ended December 31, 2005 |  | $ | 40,349 | 
|                                     |  |   |       

Estimated Amortization Expense


|                                     |  |   |        | 
|------------------------------------ |  | - | ------ | 
|For the year ended December 31, 2006 |  | $ | 33,405 | 
|                                     |  |   |       
|For the year ended December 31, 2007 |  | $ | 26,643 | 
|                                     |  |   |       
|For the year ended December 31, 2008 |  | $ | 18,912 | 
|                                     |  |   |       
|For the year ended December 31, 2009 |  | $ | 14,529 | 
|                                     |  |   |       
|For the year ended December 31, 2010 |  | $ | 12,246 | 
|                                     |  |   |       

Goodwill




|                                |                      |         |           |        |               |   |         |         |   |   |           |         |  
|------------------------------- | -------------------- | ------- | --------- | ------ | ------------- | - | ------- | ------- | - | - | --------- | ------- | -
|                                |                      | North   |           |        |               |   |        
|                                |                      | America |           |        | International |   |         | Total   |  
|                                |                      |         |           |        |               |   |         |         |  
|Balance as of January 1, 2004   |                      |         | 2,966,024 |        |               | $ | 322,324 |         |   | $ | 3,288,348 |        
|                                | Goodwill acquired    |         |           | 69,172 |               |   |         | 53,782  |   |   |           | 122,954 |  
|                                | Reclassifications    |         |           | 501    |               |   |         | 2,879   |   |   |           | 3,380   |  
|                                | Currency Translation |         |           |       |               |   |         | 30,470  |   |   |           | 30,470  |  
|                                |                      |         |           |        |               |   |         |         |  
|Balance as of December 31, 2004 |                      | $       | 3,035,697 |        |               | $ | 409,455 |         |   | $ | 3,445,152 |        
|                                |                      |         |           |        |               |   |         |         |  
|                                | Goodwill acquired    |         |           | 49,410 |               |   |         | 22,715  |   |   |           | 72,125  |  
|                                | Reclassifications    |         |           | (8,882 | )             |   |         | (390    | ) |   |           | (9,272  | )
|                                | Currency Translation |         |           | 108    |               |   |         | (51,236 | ) |   |           | (51,128 | )
|                                |                      |         |           |        |               |   |         |         |  
|Balance as of December 31, 2005 |                      | $       | 3,076,333 |        |               | $ | 380,544 |         |   | $ | 3,456,877 |        
|                                |                      |         |           |        |               |   |         |         |  



F-22



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


8.   Accrued Expenses and Other Current
Liabilities




|                                                     |  |      |         |  |      |   |         | 
|---------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                     |  | 2005 |         |  | 2004 |  
|                                                     |  |      |         |  |      |  
|Accrued salaries and wages                           |  | $    | 214,873 |  |      | $ | 193,469 | 
|Special charge for legal matters                     |  |      | 117,541 |  |      |   | 122,085 | 
|Accrued insurance                                    |  |      | 75,545  |  |      |   | 56,584  | 
|Unapplied cash and receivable credits                |  |      | 73,897  |  |      |   | 66,591  | 
|Other                                                |  |      | 356,912 |  |      |   | 302,346 | 
|                                                     |  |      |         |  |      |  
|Total accrued expenses and other current liabilities |  | $    | 838,768 |  |      | $ | 741,075 | 
|                                                     |  |      |         |  |      |  















F-23



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


9.   Short-term Borrowings, Long-term Debt and
Capital Lease Obligations




|                                 |  |      |         |  |      |   |         | 
|-------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                 |  | 2005 |         |  | 2004 |  
|                                 |  |      |         |  |      |  
|Borrowings under lines of credit |  | $    | 57,113  |  |      | $ | 83,383  | 
|Accounts receivable facility     |  |      | 94,000  |  |      |   | 335,765 | 
|                                 |  |      |         |  |      |  
|                                 |  | $    | 151,113 |  |      | $ | 419,148 | 
|                                 |  |      |         |  |      |  



|                          |  |      |          |   |      |   |          |  
|------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                          |  | 2005 |          |   | 2004 |  
|                          |  |      |          |   |      |  
|Senior Credit Agreement   |  | $    | 470,700  |   |      | $ | 484,500  |  
|Capital lease obligations |  |      | 4,596    |   |      |   | 6,987    |  
|EIB Agreement             |  |      | 48,806   |   |      |   |         |  
|EuroNotes                 |  |      | 235,940  |   |      |   | 175,030  |  
|Other                     |  |      | 73,327   |   |      |   | 109,232  |  
|                          |  |      |          |   |      |  
|                          |  |      | 833,369  |   |      |   | 775,749  |  
|Less current maturities   |  |      | (126,269 | ) |      |   | (230,179 | )
|                          |  |      |          |   |      |  
|                          |  | $    | 707,100  |   |      | $ | 545,570  |  
|                          |  |      |          |   |      |  

Short-term borrowings




Lines of Credit






Accounts Receivable Facility




F-24



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




Long-term debt


European Investment Bank Agreement





Euro Notes


Schuldscheindarlehen    


2003 Senior Credit Agreement






F-25



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)






|                 |  |                          |           |  |                     |   |           |      |  |   |         |  |  |   |         | 
|---------------- |  | ------------------------ | --------- |  | ------------------- | - | --------- | ---- |  | - | ------- |  |  | - | ------- | 
|                 |  | Maximum Amount Available |           |  | Balance Outstanding |  
|                 |  | December 31,             |           |  | December 31,        |  
|                 |  |                          |           |  |                     |  
|                 |  | 2005                     |           |  | 2004                |   |           | 2005 |  |   | 2004    | 
|                 |  |                          |           |  |                     |   |           |      |  |   |         | 
|Revolving Credit |  | $                        | 750,000   |  |                     | $ | 750,000   |      |  | $ | 45,700  |  |  | $ | 34,500  | 
|Term Loan A-1    |  |                          | 425,000   |  |                     |   | 450,000   |      |  |   | 425,000 |  |  |   | 450,000 | 
|                 |  |                          |           |  |                     |   |           |      |  |   |         | 
|                 |  | $                        | 1,175,000 |  |                     | $ | 1,200,000 |      |  | $ | 470,700 |  |  | $ | 484,500 | 
|                 |  |                          |           |  |                     |   |           |      |  |   |         | 







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a revolving credit facility of up to $750,000 (of which up to
    $250,000 is available for letters of credit, up to $300,000 is
    available for borrowings in certain non-U.S. currencies, up
    to $75,000 is available as swing line in U.S. dollars, up
    to $250,000 is available as a competitive loan facility and up
    to $50,000 is available as swing line in certain
    non-U.S. currencies, the total of which cannot exceed
    $750,000) which will be due and payable on February 28,
    2010.
|
| |  | a term loan facility
    (Loan A-1)
    of $450,000, also maturing on February 28, 2010. The terms
    of the 2003 Senior Credit Agreement require payments that
    permanently reduce the term loan facility. The repayment began
    in the fourth quarter of 2005 and amounts to $25,000 per
    quarter. The remaining amount outstanding is due on
    February 28, 2010.                                                                                                                                     







F-26



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


Annual Payments




|           |  |   |         | 
|---------- |  | - | ------- | 
|2006       |  | $ | 126,269 | 
|2007       |  |   | 116,843 | 
|2008       |  |   | 112,720 | 
|2009       |  |   | 343,083 | 
|2010       |  |   | 74,977  | 
|Thereafter |  |   | 59,477  | 
|           |  |   |        
|           |  | $ | 833,369 | 
|           |  |   |        

10. Employee Benefit Plans


Defined Benefit Pension Plans




|                                        |  |      |         |   |      |   |         |      |  |   |         |  
|--------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                        |  | 2005 |         |   | 2004 |   |         | 2003 | 
|                                        |  |      |         |   |      |   |         |      | 
|Change in benefit obligation:           |  |      |         |   |      |   |         |      |  |   |         |  
|Benefit obligation at beginning of year |  | $    | 288,862 |   |      | $ | 241,240 |      |  | $ | 184,468 |  
|Translation (gain) loss                 |  |      | (11,233 | ) |      |   | 4,939   |      |  |   | 8,870   |  
|Service cost                            |  |      | 5,103   |   |      |   | 4,269   |      |  |   | 3,486   |  
|Interest cost                           |  |      | 15,927  |   |      |   | 14,816  |      |  |   | 13,419  |  
|Transfer of plan participants           |  |      | (36     | ) |      |   | (261    | )    |  |   | 1,356   |  
|Actuarial loss                          |  |      | 27,170  |   |      |   | 28,165  |      |  |   | 33,563  |  
|Benefits paid                           |  |      | (4,818  | ) |      |   | (4,306  | )    |  |   | (3,922  | )
|                                        |  |      |         |   |      |   |         |      | 
|Benefit obligation at end of year       |  | $    | 320,975 |   |      | $ | 288,862 |      |  | $ | 241,240 |  
|                                        |  |      |         |   |      |   |         |      | 

F-27



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                                             |                                                |      |          |         |      |   |         |         |   |   |         |         |  
|---------------------------------------------------------------------------- | ---------------------------------------------- | ---- | -------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                                                                             |                                                | 2005 |          |         | 2004 |   |         | 2003    |  
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Change on plan assets:                                                       |                                                |      |          |         |      |   |         |         |   |   |         |        
|Fair value of plan assets at beginning of year                               |                                                | $    | 166,952  |         |      | $ | 135,247 |         |   | $ | 83,191  |        
|Actual return on plan assets                                                 |                                                |      | 7,481    |         |      |   | 9,642   |         |   |   | 13,898  |        
|Employer contributions                                                       |                                                |      | 25,627   |         |      |   | 25,633  |         |   |   | 41,481  |        
|Benefits paid                                                                |                                                |      | (4,047   | )       |      |   | (3,570  | )       |   |   | (3,323  | )      
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Fair value of plan assets at end of year                                     |                                                | $    | 196,013  |         |      | $ | 166,952 |         |   | $ | 135,247 |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Funded status:                                                               |                                                | $    | 124,962  |         |      | $ | 121,910 |         |   | $ | 105,994 |        
|Unrecognized net loss                                                        |                                                |      | (108,440 | )       |      |   | (85,945 | )       |   |   | (61,595 | )      
|Unrecognized prior service cost                                              |                                                |      | (795     | )       |      |   |        |         |   |   |        |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Net amount recognized                                                        |                                                | $    | 15,727   |         |      | $ | 35,965  |         |   | $ | 44,399  |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Amounts recognized in statement of financial position consist of:            |                                                |      |          |         |      |   |         |         |   |   |         |        
|Accrued benefit costs                                                        |                                                | $    | 108,702  |         |      | $ | 108,125 |         |   | $ | 100,052 |        
|Accumulated other comprehensive income                                       |                                                |      | (92,180  | )       |      |   | (72,160 | )       |   |   | (55,653 | )      
|Intangible assets                                                            |                                                |      | (795     | )       |      |   |        |         |   |   |        |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Net amount recognized                                                        |                                                | $    | 15,727   |         |      | $ | 35,965  |         |   | $ | 44,399  |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Calculation of Additional Minimum Liability*                                 |                                                |      |          |         |      |   |         |         |   |   |         |        
|                                                                             | Fair Value of plan assets                      |      | $        | 196,013 |      |   | $       | 166,952 |   |   | $       | 135,247 |  
|                                                                             | Accumulated benefit obligation (ABO)           |      |          | 304,715 |      |   |         | 213,995 |   |   |         | 184,489 |  
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Minimum Liability                                                            |                                                | $    | 108,702  |         |      | $ | 47,043  |         |   | $ | 49,242  |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|                                                                             | Accrued/(prepaid) benefit costs                |      | $        | 15,727  |      |   | $       | (25,117 | ) |   | $       | (6,411  | )
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Additional Minimum Liability                                                 |                                                | $    | 92,975   |         |      | $ | 72,160  |         |   | $ | 55,653  |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|                                                                             | Thereof intangible assets                      |      |          | 795     |      |   |         |        |   |   |         |        |  
|                                                                             | Thereof accumulated other comprehensive income |      | $        | 92,180  |      |   | $       | 72,160  |   |   | $       | 55,653  |  
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Total pension liability (at December 31)                                     |                                                | $    | 108,702  |         |      | $ | 108,125 |         |   | $ | 100,052 |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Weighted  average assumptions for benefit obligation
    as of December 31: |                                                |      |          |         |      |   |         |         |   |   |         |        
|Discount rate                                                                |                                                |      | 5.22%    |         |      |   | 5.62%   |         |   |   | 6.14%   |        
|Rate of compensation increase                                                |                                                |      | 4.22%    |         |      |   | 4.25%   |         |   |   | 4.27%   |        
|Components of net period benefit cost:                                       |                                                |      |          |         |      |   |         |         |   |   |         |        
|Service cost                                                                 |                                                | $    | 5,103    |         |      | $ | 4,269   |         |   | $ | 3,486   |        
|Interest cost                                                                |                                                |      | 15,927   |         |      |   | 14,816  |         |   |   | 13,419  |        
|Expected return on plan assets                                               |                                                |      | (13,163  | )       |      |   | (10,219 | )       |   |   | (7,688  | )      
|Amortization of transition obligation                                        |                                                |      |         |         |      |   |        |         |   |   | 92      |        
|Amortization unrealized losses                                               |                                                |      | 6,753    |         |      |   | 4,712   |         |   |   | 3,971   |        
|Amortization of prior service cost                                           |                                                |      | 210      |         |      |   |        |         |   |   |        |        
|                                                                             |                                                |      |          |         |      |   |         |         |  
|Net periodic benefit costs                                                   |                                                | $    | 14,830   |         |      | $ | 13,578  |         |   | $ | 13,280  |        
|                                                                             |                                                |      |          |         |      |   |         |         |  

F-28



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                                                                |  |      |       |  |      |  |       |      |  |  |       | 
|----------------------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                                                |  | 2005 |       |  | 2004 |  |       | 2003 | 
|                                                                                                |  |      |       |  |      |  |       |      | 
|Weighted  average assumptions for net periodic
    benefit cost for the year ended December 31 |  |      |       |  |      |  |       |      |  |  |       | 
|Discount rate                                                                                   |  |      | 5.61% |  |      |  | 6.00% |      |  |  | 6.52% | 
|Expected return of plan assets                                                                  |  |      | 7.50% |  |      |  | 7.50% |      |  |  | 8.50% | 
|Rate of compensation increase                                                                   |  |      | 4.22% |  |      |  | 4.25% |      |  |  | 4.27% | 






|  |                                                                                
|- | -------------------------------------------------------------------------------
|* | this calculation refers only to companies with ABO in excess of
    plan assets

Plan Investment Policy and Strategy






|                          |                   |                 |     |    |                 |  |     |                   |   |  |     |    |  
|------------------------- | ----------------- | --------------- | --- | -- | --------------- |  | --- | ----------------- | - |  | --- | -- | -
|                          |                   | Allocation 2005 |     |    | Allocation 2004 |  |     | Target allocation |  
|                          |                   | in %            |     |    | in %            |  |     | in %              |  
|                          |                   |                 |     |    |                 |  |     |                   |  
|Categories of plan assets |                   |                 |     |    |                 |  |     |                   |   |  |     |   
|                          | Equity securities |                 |     | 44 | %               |  |     | 52                | % |  |     | 36 | %
|                          | Debt securities   |                 |     | 56 | %               |  |     | 48                | % |  |     | 64 | %
|                          |                   |                 |     |    |                 |  |     |                   |  
|Total                     |                   |                 | 100 | %  |                 |  | 100 | %                 |   |  | 100 | % 
|                          |                   |                 |     |    |                 |  |     |                   |  

|                                                     |  |  |  |  |  |   |        |   |  |  |  | 
|---------------------------------------------------- |  |  |  |  |  | - | ------ | - |  |  |  | 
|Overall expected long-term return rate               |  |  |  |  |  |   | 7.5    | % |  |  |  | 
|                                                     |  |  |  |  |  |   |        |   | 
|Expected total contributions to plan assets for 2006 |  |  |  |  |  | $ | 20,750 |   |  |  |  | 
|                                                     |  |  |  |  |  |   |        |   | 



|                  |  |   |        | 
|----------------- |  | - | ------ | 
|2006              |  | $ | 5,767  | 
|2007              |  |   | 6,371  | 
|2008              |  |   | 7,416  | 
|2009              |  |   | 8,757  | 
|2010              |  |   | 9,200  | 
|2011 through 2015 |  |   | 62,712 | 



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


Defined Contribution Plans




11. Mandatorily Redeemable Trust Preferred
Securities


FMC-AG FMC-AG FMC-AG (D-GmbH) (D-GmbH










|                                         |  |        |      |  |        |  |           |           |  |  |            |  |  |      |                  |  |      |   |           |  |  |   |           | 
|---------------------------------------- |  | ------ | ---- |  | ------ |  | --------- | --------- |  |  | ---------- |  |  | ---- | ---------------- |  | ---- | - | --------- |  |  | - | --------- | 
|                                         |  |        |      |  |        |  |           | Mandatory |  |  |            |  | 
|                                         |  | Year   |      |  | Stated |  |           | Interest  |  |  | Redemption |  |  |      |                  | 
|                                         |  | Issued |      |  | Amount |  |           | Rate      |  |  | Date       |  |  | 2005 |                  |  | 2004 |  
|                                         |  |        |      |  |        |  |           |           |  |  |            |  |  |      |                  |  |      |  
|Fresenius Medical Care Capital Trust II  |  |        | 1998 |  |        |  | $450,000  |           |  |  | 77/8%      |  |  |      | February 1, 2008 |  |      |   | 431,762   |  |  |   | 440,965   | 
|Fresenius Medical Care Capital Trust III |  |        | 1998 |  |        |  | DM300,000 |           |  |  | 73/8%      |  |  |      | February 1, 2008 |  |      |   | 180,951   |  |  |   | 208,929   | 
|Fresenius Medical Care Capital Trust IV  |  |        | 2001 |  |        |  | $225,000  |           |  |  | 77/8%      |  |  |      | June 15, 2011    |  |      |   | 222,917   |  |  |   | 222,533   | 
|Fresenius Medical Care Capital Trust V   |  |        | 2001 |  |        |  | 300,000  |           |  |  | 73/8%      |  |  |      | June 15, 2011    |  |      |   | 352,234   |  |  |   | 406,333   | 
|                                         |  |        |      |  |        |  |           |           |  |  |            |  |  |      |                  |  |      |  
|                                         |  |        |      |  |        |  |           |           |  |  |            |  |  |      |                  |  |      | $ | 1,187,864 |  |  | $ | 1,278,760 | 
|                                         |  |        |      |  |        |  |           |           |  |  |            |  |  |      |                  |  |      |  

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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


12. Minority Interest




|                                                                                        |  |      |        |  |      |   |        | 
|--------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                                                                        |  | 2005 |        |  | 2004 |  
|                                                                                        |  |      |        |  |      |  
|FMCH Preferred Stock:                                                                   |  |      |        |  |      |   |        | 
|Preferred Stock, $100 par value                                                         |  |      |        |  |      |   |        | 
| 6% Cumulative; 40,000 shares authorized; 36,460 issued
    and outstanding            |  | $    | 3,646  |  |      | $ | 3,646  | 
| 8% Cumulative Class A; 50,000 shares authorized;
    16,176 issued and outstanding    |  |      | 1,618  |  |      |   | 1,618  | 
| 8% Noncumulative Class B; 40,000 shares authorized;
    21,483 issued and outstanding |  |      | 2,148  |  |      |   | 2,148  | 
|                                                                                        |  |      |        |  |      |  
|Sub-total FMCH minority interest                                                        |  |      | 7,412  |  |      |   | 7,412  | 
|Other minority interest                                                                 |  |      | 6,993  |  |      |   | 10,622 | 
|                                                                                        |  |      |        |  |      |  
|Total minority interest                                                                 |  | $    | 14,405 |  |      | $ | 18,034 | 
|                                                                                        |  |      |        |  |      |  



13. Shareholders Equity


Capital Stock


Grundkapital  


 





Aktiengesetz


genehmigtes Kapital


bedingtes Kapital


F-31



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)






Authorized Capital












Conditional Capital


(Bezugsrechte)


F-32



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


 







Dividends


Handelsgesetzbuch


FMC-AG


 


 


 


F-33



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




|    |                   
|--- | ------------------
|14. | Earnings Per Share



|                                                       |                                                                            |      |         |            |      |   |         |            |  |   |         |            | 
|------------------------------------------------------ | -------------------------------------------------------------------------- | ---- | ------- | ---------- | ---- | - | ------- | ---------- |  | - | ------- | ---------- | 
|                                                       |                                                                            | 2005 |         |            | 2004 |   |         | 2003       | 
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|Numerators:                                            |                                                                            |      |         |            |      |   |         |            |  |   |         |           
|Net income                                             |                                                                            | $    | 454,952 |            |      | $ | 401,998 |            |  | $ | 331,180 |           
|less:                                                  |                                                                            |      |         |            |      |   |         |            |  |   |         |           
|                                                       | Preference on Preference shares                                            |      |         | 2,000      |      |   |         | 1,959      |  |   |         | 1,778      | 
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|Income available to all class of shares                |                                                                            | $    | 452,952 |            |      | $ | 400,039 |            |  | $ | 329,402 |           
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|Denominators:                                          |                                                                            |      |         |            |      |   |         |            |  |   |         |           
|Weighted average number of:                            |                                                                            |      |         |            |      |   |         |            |  |   |         |           
|                                                       | Ordinary shares outstanding                                                |      |         | 70,000,000 |      |   |         | 70,000,000 |  |   |         | 70,000,000 | 
|                                                       | Preference shares outstanding                                              |      |         | 26,789,816 |      |   |         | 26,243,059 |  |   |         | 26,191,011 | 
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|                                                       | Total weighted average shares outstanding                                  |      |         | 96,789,816 |      |   |         | 96,243,059 |  |   |         | 96,191,011 | 
|                                                       | Potentially dilutive Preference shares                                     |      |         | 779,330    |      |   |         | 421,908    |  |   |         | 145,861    | 
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|                                                       | Total weighted average shares outstanding assuming dilution                |      |         | 97,569,146 |      |   |         | 96,664,967 |  |   |         | 96,336,872 | 
|                                                       | Total weighted average Preference shares outstanding assuming
    dilution |      |         | 27,569,146 |      |   |         | 26,664,967 |  |   |         | 26,336,872 | 
|Basic earnings per Ordinary share                      |                                                                            | $    | 4.68    |            |      | $ | 4.16    |            |  | $ | 3.42    |           
|Plus preference per Preference share                   |                                                                            |      | 0.07    |            |      |   | 0.07    |            |  |   | 0.07    |           
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|Basic earnings per Preference Share                    |                                                                            | $    | 4.75    |            |      | $ | 4.23    |            |  | $ | 3.49    |           
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|Fully diluted earnings per Ordinary share              |                                                                            | $    | 4.64    |            |      | $ | 4.14    |            |  | $ | 3.42    |           
|Plus preference per Preference share assuming dilution |                                                                            |      | 0.08    |            |      |   | 0.07    |            |  |   | 0.07    |           
|                                                       |                                                                            |      |         |            |      |   |         |            | 
|Fully diluted earnings per Preference share            |                                                                            | $    | 4.72    |            |      | $ | 4.21    |            |  | $ | 3.49    |           
|                                                       |                                                                            |      |         |            |      |   |         |            | 

15. Stock Options


 


F-34



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)








|                             |           |                |       |          |           |   |          |        |  |         |                |       |  |  |       |  | 
|---------------------------- | --------- | -------------- | ----- | -------- | --------- | - | -------- | ------ |  | ------- | -------------- | ----- |  |  | ----- |  | 
|                             |           |                |       | Weighted |           |   | Weighted |        |  |        
|                             |           |                |       | Average  |           |   | Average  |        |  |        
|                             |           |                |       | Exercise |           |   | Exercise |        |  | Options |               
|                             |           | Options        |       |          | Price     |   |          | Price  |  |         | Exercisable    |      
|                             |           | (In thousands) |       |          | (In Euro) |   |          | (In $) |  |         | (In thousands) |      
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|Balance at December 31, 2002 |           |                | 3,615 |          |           |  | 45.51    |        |  | $       | 47.72          |       |  |  | 1,769 | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|                             | Granted   |                |       | 622      |           |   |          | 33.16  |  |         |                | 41.88 |  |  |       |  | 
|                             | Exercised |                |       | 25       |           |   |          | 32.58  |  |         |                | 41.14 |  |  |       |  | 
|                             | Forfeited |                |       | 223      |           |   |          | 48.91  |  |         |                | 61.77 |  |  |       |  | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|Balance at December 31, 2003 |           |                | 3,989 |          |           |   | 43.34    |        |  |         | 54.74          |       |  |  | 2,147 | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|                             | Granted   |                |       | 1,021    |           |   |          | 44.81  |  |         |                | 61.03 |  |  |       |  | 
|                             | Exercised |                |       | 83       |           |   |          | 33.92  |  |         |                | 46.20 |  |  |       |  | 
|                             | Forfeited |                |       | 266      |           |   |          | 46.74  |  |         |                | 63.66 |  |  |       |  | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|Balance at December 31, 2004 |           |                | 4,661 |          |           |   | 43.60    |        |  |         | 59.39          |       |  |  | 2,393 | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|                             | Granted   |                |       | 1,044    |           |   |          | 62.36  |  |         |                | 73.57 |  |  |       |  | 
|                             | Exercised |                |       | 1,466    |           |   |          | 44.51  |  |         |                | 52.50 |  |  |       |  | 
|                             | Forfeited |                |       | 136      |           |   |          | 44.94  |  |         |                | 53.02 |  |  |       |  | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      
|Balance at December 31, 2005 |           |                | 4,103 |          |           |  | 47.88    |        |  | $       | 56.48          |       |  |  | 1,537 | 
|                             |           |                |       |          |           |   |          |        |  |         |                |      

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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




|            |  |                 |              |             |           |          |             |             |          |          |       |          |          |       |       |  |           |          |       |          |          |  |           |  |  |   |       |  |  |   |       | 
|----------- |  | --------------- | ------------ | ----------- | --------- | -------- | ----------- | ----------- | -------- | -------- | ----- | -------- | -------- | ----- | ----- |  | --------- | -------- | ----- | -------- | -------- |  | --------- |  |  | - | ----- |  |  | - | ----- | 
|            |  |                 |              | Outstanding |           |          | Exercisable |            
|            |  |                 |              |             |           |          |             |            
|            |  |                 |              |             |           | Weighted |             |             | Weighted |          |       | Weighted |          |       |       |  | Weighted  |          |       | Weighted |         
|Range of    |  |                 |              |             |           | Average  |             |             | Average  |          |       | Average  |          |       |       |  | Average   |          |       | Average  |         
|Exercise    |  | Range of        |              |             |           |          | Remaining   |             |          | Exercise |       |          | Exercise |       |       |  |           | Exercise |       |          | Exercise | 
|Prices      |  | Exercise Prices |              |             | Number of |          |             | Contractual |          |          | Price |          |          | Price |       |  | Number of |          |       | Price    |          |  | Price     | 
|in         |  | in $            |              |             | Options   |          |             | Life        |          |          | Euro  |          |          | USD   |       |  | Options   |          |       | Euro     |          |  | USD       | 
|            |  |                 |              |             |           |          |             |             |          |          |       |          |          |       |       |  |           |          |       |          |          |  |           | 
|25.01-35.00 |  |                 | 29.50-41.29  |             |           |          | 1,154,792   |             |          |          | 6.42  |          |          |      | 31.16 |  |           | $        | 36.76 |          |          |  | 572,967   |  |  |  | 31.23 |  |  | $ | 36.85 | 
|35.01-45.00 |  |                 | 41.30-53.09  |             |           |          | 1,035,044   |             |          |          | 7.75  |          |          |       | 43.40 |  |           |          | 51.20 |          |          |  | 186,221   |  |  |   | 42.51 |  |  |   | 50.14 | 
|45.01-55.00 |  |                 | 53.10-64.88  |             |           |          | 162,365     |             |          |          | 4.79  |          |          |       | 49.60 |  |           |          | 58.52 |          |          |  | 162,365   |  |  |   | 49.60 |  |  |   | 58.52 | 
|55.01-85.00 |  |                 | 64.90-76.68  |             |           |          | 1,176,695   |             |          |          | 7.19  |          |          |       | 56.97 |  |           |          | 67.20 |          |          |  | 501,859   |  |  |   | 57.81 |  |  |   | 68.20 | 
|65.01-90.00 |  |                 | 76.69-106.17 |             |           |          | 573,643     |             |          |          | 8.98  |          |          |       | 70.76 |  |           |          | 83.48 |          |          |  | 113,505   |  |  |   | 73.38 |  |  |   | 86.56 | 
|            |  |                 |              |             |           |          |             |             |          |          |       |          |          |       |       |  |           |          |       |          |          |  |           | 
|            |  |                 |              |             |           |          | 4,102,539   |             |          |          | 7.27  |          |          |      | 47.92 |  |           | $        | 56.53 |          |          |  | 1,536,917 |  |  |  | 46.33 |  |  | $ | 54.66 | 
|            |  |                 |              |             |           |          |             |             |          |          |       |          |          |       |       |  |           |          |       |          |          |  |           | 







|                                                                                |  |  |           | 
|------------------------------------------------------------------------------- |  |  | --------- | 
|Balance at December 31, 2005                                                    |  |  | 4,102,539 | 
|Forfeited prior to conversion                                                   |  |  | 4,758     | 
|                                                                                |  |  |          
|Eligible for conversion                                                         |  |  | 4,097,781 | 
|Options not converted and still available to exercise for
    preference shares |  |  | 234,311   | 
|                                                                                |  |  |          
|Options converted                                                               |  |  | 3,863,470 | 
|Reduction due to impact of conversion ratios                                    |  |  | 1,014,152 | 
|                                                                                |  |  |          
|Options outstanding for ordinary shares after conversion                        |  |  | 2,849,318 | 
|                                                                                |  |  |          

F-36



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


16. Income Taxes




|              |  |      |         |  |      |   |         |      |  |   |         | 
|------------- |  | ---- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|              |  | 2005 |         |  | 2004 |   |         | 2003 | 
|              |  |      |         |  |      |   |         |      | 
|Germany       |  | $    | 109,407 |  |      | $ | 86,702  |      |  | $ | 78,124  | 
|United States |  |      | 512,697 |  |      |   | 447,197 |      |  |   | 368,382 | 
|Other         |  |      | 143,622 |  |      |   | 134,700 |      |  |   | 99,170  | 
|              |  |      |         |  |      |   |         |      | 
|              |  | $    | 765,726 |  |      | $ | 668,599 |      |  | $ | 545,676 | 
|              |  |      |         |  |      |   |         |      | 



|          |               |      |         |         |      |   |         |         |  |   |         |         |  
|--------- | ------------- | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | -
|          |               | 2005 |         |         | 2004 |   |         | 2003    | 
|          |               |      |         |         |      |   |         |         | 
|Current:  |               |      |         |         |      |   |         |         |  |   |         |        
|          | Germany       |      | $       | 40,386  |      |   | $       | 55,034  |  |   | $       | 51,849  |  
|          | United States |      |         | 206,551 |      |   |         | 129,445 |  |   |         | 22,346  |  
|          | Other         |      |         | 48,133  |      |   |         | 40,316  |  |   |         | 35,505  |  
|          |               |      |         |         |      |   |         |         | 
|          |               |      | 295,070 |         |      |   | 224,796 |         |  |   | 109,700 |        
|          |               |      |         |         |      |   |         |         | 
|Deferred: |               |      |         |         |      |   |         |         |  |   |         |        
|          | Germany       |      |         | (12,990 | )    |   |         | 5,147   |  |   |         | (1,280  | )
|          | United States |      |         | 27,391  |      |   |         | 34,958  |  |   |         | 102,142 |  
|          | Other         |      |         | (723    | )    |   |         | 513     |  |   |         | 2,152   |  
|          |               |      |         |         |      |   |         |         | 
|          |               |      | 13,678  |         |      |   | 40,619  |         |  |   | 103,014 |        
|          |               |      |         |         |      |   |         |         | 
|          |               | $    | 308,748 |         |      | $ | 265,415 |         |  | $ | 212,714 |        
|          |               |      |         |         |      |   |         |         | 





F-37



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




|                                      |  |      |         |   |      |   |         |      |  |   |         |  
|------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                      |  | 2005 |         |   | 2004 |   |         | 2003 | 
|                                      |  |      |         |   |      |   |         |      | 
|Expected corporate income tax expense |  | $    | 294,345 |   |      | $ | 255,271 |      |  | $ | 215,706 |  
|Tax free income                       |  |      | (18,442 | ) |      |   | (15,570 | )    |  |   | (16,527 | )
|Foreign tax rate differential         |  |      | (8,431  | ) |      |   | 15,734  |      |  |   | (2,045  | )
|Non-deductible expenses               |  |      | 27,757  |   |      |   | 9,426   |      |  |   | 7,149   |  
|Taxes for prior years                 |  |      | 20,509  |   |      |   | 10,267  |      |  |   | 13,103  |  
|Other                                 |  |      | (6,990  | ) |      |   | (9,713  | )    |  |   | (4,672  | )
|                                      |  |      |         |   |      |   |         |      | 
|Actual income tax expense             |  | $    | 308,748 |   |      | $ | 265,415 |      |  | $ | 212,714 |  
|                                      |  |      |         |   |      |   |         |      | 
|Effective tax rate                    |  |      | 40.3    | % |      |   | 39.7    | %    |  |   | 39.0    | %
|                                      |  |      |         |   |      |   |         |      | 



|                                                                                                              |  |      |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                                              |  | 2005 |         |   | 2004 |  
|                                                                                                              |  |      |         |   |      |  
|Deferred tax assets:                                                                                          |  |      |         |   |      |   |         |  
|Accounts receivable, primarily due to allowance for doubtful
    accounts                                     |  | $    | 26,018  |   |      | $ | 26,289  |  
|Inventory, primarily due to additional costs capitalized for tax
    purposes, and inventory reserve accounts |  |      | 29,628  |   |      |   | 30,547  |  
|Accrued expenses and other liabilities for financial accounting
    purposes, not currently tax deductible    |  |      | 197,244 |   |      |   | 181,080 |  
|Net operating loss carryforwards                                                                              |  |      | 44,249  |   |      |   | 48,170  |  
|Derivatives                                                                                                   |  |      | 3,735   |   |      |   | 53,521  |  
|Other                                                                                                         |  |      | 5,266   |   |      |   | 1,378   |  
|                                                                                                              |  |      |         |   |      |  
|Total deferred tax assets                                                                                     |  | $    | 306,140 |   |      | $ | 340,985 |  
|Less: valuation allowance                                                                                     |  |      | (46,146 | ) |      |   | (44,564 | )
|                                                                                                              |  |      |         |   |      |  
|Total deferred tax assets, net of valuation allowance                                                         |  | $    | 259,994 |   |      | $ | 296,421 |  
|                                                                                                              |  |      |         |   |      |  

F-38



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                                                                        |  |      |         |  |      |   |         | 
|------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                        |  | 2005 |         |  | 2004 |  
|                                                                                                        |  |      |         |  |      |  
|Deferred tax liabilities:                                                                               |  |      |         |  |      |   |         | 
|Accounts receivable, primarily due to allowance for doubtful
    accounts                               |  | $    | 9,266   |  |      | $ | 10,872  | 
|Inventory, primarily due to inventory reserve accounts for tax
    purposes                             |  |      | 6,040   |  |      |   | 8,148   | 
|Accrued expenses and other liabilities deductible for tax prior
    to financial accounting recognition |  |      | 15,945  |  |      |   | 38,009  | 
|Plant and equipment, principally due to differences in
    depreciation                                 |  |      | 256,663 |  |      |   | 250,035 | 
|Derivatives                                                                                             |  |      | 21,582  |  |      |   | 18,696  | 
|Other                                                                                                   |  |      | 49,893  |  |      |   | 14,574  | 
|                                                                                                        |  |      |         |  |      |  
|Total deferred tax liabilities                                                                          |  |      | 359,389 |  |      |   | 340,334 | 
|                                                                                                        |  |      |         |  |      |  
|Net deferred tax liabilities                                                                            |  | $    | 99,395  |  |      | $ | 43,913  | 
|                                                                                                        |  |      |         |  |      |  





|                        |  |   |         | 
|----------------------- |  | - | ------- | 
|2006                    |  | $ | 6,334   | 
|2007                    |  |   | 14,415  | 
|2008                    |  |   | 10,276  | 
|2009                    |  |   | 18,618  | 
|2010                    |  |   | 12,355  | 
|2011                    |  |   | 4,885   | 
|2012                    |  |   | 4,296   | 
|2013                    |  |   |        | 
|2014                    |  |   | 2,323   | 
|2015 and thereafter     |  |   | 7,232   | 
|Without expiration date |  |   | 47,551  | 
|                        |  |   |        
|Total                   |  | $ | 128,285 | 
|                        |  |   |        





F-39



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)






17. Operating Leases










|           |  |   |           | 
|---------- |  | - | --------- | 
|2006       |  | $ | 251,627   | 
|2007       |  |   | 199,121   | 
|2008       |  |   | 164,067   | 
|2009       |  |   | 134,455   | 
|2010       |  |   | 103,972   | 
|Thereafter |  |   | 341,520   | 
|           |  |   |          
|           |  | $ | 1,194,762 | 
|           |  |   |          

18. Legal Proceedings


Commercial Litigation


Co.-Conn. Co.-Conn.


F-40



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)








Co.-




F-41



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


Fresenius USA,
Inc., et al., v. Baxter International Inc., et al.




Other Litigation and Potential Exposures










F-42



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)










Accrued Special Charge for Legal Matters




19. Financial Instruments


Market Risk




F-43



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)






Foreign Exchange Risk Management














F-44



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


Interest Rate Risk Management




Cash Flow Hedges of Variable Rate Debt






Fair Value Hedges of Fixed Rate Debt






F-45



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


Fair Value of Financial Instruments




|                |                                      |                |   |           |       |  |   |           |   |  |       |           |   |  |   |           |  
|--------------- | ------------------------------------ | -------------- | - | --------- | ----- |  | - | --------- | - |  | ----- | --------- | - |  | - | --------- | -
|                |                                      | 2005           |   |           | 2004  | 
|                |                                      |                |   |           |       | 
|                |                                      | Carrying       |   |           | Fair  |  |   | Carrying  |   |  | Fair  |          
|                |                                      | Amount         |   |           | Value |  |   | Amount    |   |  | Value |          
|                |                                      |                |   |           |       |  |   |           |   |  |       |          
|                |                                      | (in thousands) |  
|Non-derivatives |                                      |                |   |           |       |  |   |           |   |  |       |           |   |  |   |          
|Assets          |                                      |                |   |           |       |  |   |           |   |  |       |           |   |  |   |          
|                | Cash and cash equivalents            |                | $ | 85,077    |       |  | $ | 85,077    |   |  | $     | 58,966    |   |  | $ | 58,966    |  
|                | Receivables                          |                |   | 1,469,933 |       |  |   | 1,469,933 |   |  |       | 1,462,847 |   |  |   | 1,462,847 |  
|               
|Liabilities     |                                      |                |   |           |       |  |   |           |   |  |       |           |   |  |   |          
|                | Accounts payable                     |                |   | 309,255   |       |  |   | 309,255   |   |  |       | 305,996   |   |  |   | 305,996   |  
|                | Long term debt, excluding Euro-notes |                |   | 597,429   |       |  |   | 597,429   |   |  |       | 600,719   |   |  |   | 600,719   |  
|                | Trust Preferred Securities           |                |   | 1,187,864 |       |  |   | 1,285,319 |   |  |       | 1,278,760 |   |  |   | 1,436,306 |  
|                | Notes                                |                |   | 235,940   |       |  |   | 236,326   |   |  |       | 175,030   |   |  |   | 176,090   |  
|               
|Derivatives     |                                      |                |   |           |       |  |   |           |   |  |       |           |   |  |   |          
|                | Foreign exchange contracts           |                |   | (2,939    | )     |  |   | (2,939    | ) |  |       | 16,980    |   |  |   | 16,980    |  
|                | Dollar interest rate hedges          |                |   | 21,830    |       |  |   | 21,830    |   |  |       | (48,093   | ) |  |   | (48,093   | )
|                | Yen interest rate hedges             |                |   | (201      | )     |  |   | (201      | ) |  |       | (381      | ) |  |   | (381      | )



Estimation of Fair Values












F-46



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


20. Other Comprehensive Income (Loss)




|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |         |        |  |   |         |         |   |   |         |        | 
|------------------------------------------------------------------------- | ----------------------------------------------------------- | ----------------------- | -------- | ------ | ----------------------- | - | ------- | ----------------------- | - | - | -------- | ------ | - | ------ | ------- | ------- | --- | --- | ------ | ------ |  | - | ------- | ------- | - | --- | ------- | ------ |  | - | ------- | ------- | - | - | ------- | ------ | 
|                                                                          |                                                             | Year Ended December 31, |          |        | Year Ended December 31, |   |         | Year Ended December 31, |  
|                                                                          |                                                             | 2005                    |          |        | 2004                    |   |         | 2003                    |  
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |  
|                                                                          |                                                             |                         |          | Tax    |                         |   |         |                         |   |   | Tax      |        |   |        |         |         |     | Tax |        |        | 
|                                                                          |                                                             | Pretax                  |          |        | Effect                  |   |         | Net                     |   |   | Pretax   |        |   | Effect |         |         | Net |     |        | Pretax |  |   | Effect  |         |   | Net |        
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |        
|Other comprehensive (loss) income relating to cash flow hedges:           |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |         |        |  |   |         |         |   |   |         |       
|                                                                          | Changes in fair value of cash flow hedges during the period |                         | $        | 72,440 |                         |   | $       | (28,653                 | ) |   | $        | 43,787 |   |        | $       | (36,192 | )   |     | $      | 13,638 |  |   | $       | (22,554 | ) |     | $       | 28,237 |  |   | $       | (11,114 | ) |   | $       | 17,123 | 
|                                                                          | Reclassification adjustments                                |                         |          | (1,243 | )                       |   |         | 584                     |   |   |          | (659   | ) |        |         | (9,906  | )   |     |        | 3,449  |  |   |         | (6,457  | ) |     |         | 8,091  |  |   |         | (3,185  | ) |   |         | 4,906  | 
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |        
|Total other comprehensive (loss) income relating to cash flow
    hedges: |                                                             |                         | 71,197   |        |                         |   | (28,069 | )                       |   |   | 43,128   |        |   |        | (46,098 | )       |     |     | 17,087 |        |  |   | (29,011 | )       |   |     | 36,328  |        |  |   | (14,299 | )       |   |   | 22,029  |       
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |        
|Foreign-currency translation adjustment                                   |                                                             |                         | (104,723 | )      |                         |   |        |                         |   |   | (104,723 | )      |   |        | 144,784 |         |     |     |       |        |  |   | 144,784 |         |   |     | 200,578 |        |  |   |        |         |   |   | 200,578 |       
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |        
|Minimum pension liability                                                 |                                                             |                         | (19,996  | )      |                         |   | 7,747   |                         |   |   | (12,249  | )      |   |        | (16,507 | )       |     |     | 6,605  |        |  |   | (9,902  | )       |   |     | (23,391 | )      |  |   | 9,341   |         |   |   | (14,050 | )     
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |        
|Other comprehensive income (loss)                                         |                                                             | $                       | (53,522  | )      |                         | $ | (20,322 | )                       |   | $ | (73,844  | )      |   | $      | 82,179  |         |     | $   | 23,692 |        |  | $ | 105,871 |         |   | $   | 213,515 |        |  | $ | (4,958  | )       |   | $ | 208,557 |       
|                                                                          |                                                             |                         |          |        |                         |   |         |                         |   |   |          |        |   |        |         |         |     |     |        |        |  |   |         |         |   |     |        

21. Business Segment Information






F-47



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |   |         |   |  |   |           |  
|---- | -------------------------------------------- | ------- | - | --------- | ------------- |  | ------- | --------- | - |  | --------- | --------- | - | ----- | - | ------- | - |  | - | --------- | -
|     |                                              | North   |   |           |               |  | Segment |           |   |  |           |          
|     |                                              | America |   |           | International |  |         | Total     |   |  | Corporate |           |   | Total |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|2005 |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |   |         |   |  |   |          
|     | Net revenue external customers               |         | $ | 4,577,379 |               |  | $       | 2,194,440 |   |  | $         | 6,771,819 |   |       | $ |        |   |  | $ | 6,771,819 |  
|     | Inter  segment revenue                      |         |   | 1,327     |               |  |         | 54,449    |   |  |           | 55,776    |   |       |   | (55,776 | ) |  |   |          |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Total net revenue                            |         |   | 4,578,706 |               |  |         | 2,248,889 |   |  |           | 6,827,595 |   |       |   | (55,776 | ) |  |   | 6,771,819 |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Depreciation and amortization                |         |   | (139,747  | )             |  |         | (109,812  | ) |  |           | (249,559  | ) |       |   | (1,893  | ) |  |   | (251,452  | )
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Operating Income                             |         |   | 643,917   |               |  |         | 362,134   |   |  |           | 1,006,051 |   |       |   | (67,133 | ) |  |   | 938,918   |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Segment assets                               |         |   | 5,634,985 |               |  |         | 2,216,630 |   |  |           | 7,851,615 |   |       |   | 131,485 |   |  |   | 7,983,100 |  
|     | Capital expenditures and
    acquisitions(1) |         |   | 252,822   |               |  |         | 187,030   |   |  |           | 439,852   |   |       |   | 70      |   |  |   | 439,922   |  
|2004 |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |   |         |   |  |   |          
|     | Net revenue external customers               |         | $ | 4,248,216 |               |  | $       | 1,979,786 |   |  | $         | 6,228,002 |   |       | $ |        |   |  | $ | 6,228,002 |  
|     | Inter  segment revenue                      |         |   | 1,602     |               |  |         | 39,004    |   |  |           | 40,606    |   |       |   | (40,606 | ) |  |   |          |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Total net revenue                            |         |   | 4,249,818 |               |  |         | 2,018,790 |   |  |           | 6,268,608 |   |       |   | (40,606 | ) |  |   | 6,228,002 |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Depreciation and amortization                |         |   | (128,532  | )             |  |         | (102,137  | ) |  |           | (230,669  | ) |       |   | (1,917  | ) |  |   | (232,586  | )
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Operating Income                             |         |   | 587,400   |               |  |         | 300,291   |   |  |           | 887,691   |   |       |   | (35,346 | ) |  |   | 852,345   |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Segment assets                               |         |   | 5,539,631 |               |  |         | 2,366,277 |   |  |           | 7,905,908 |   |       |   | 55,633  |   |  |   | 7,961,541 |  
|     | Capital expenditures and
    acquisitions(2) |         |   | 230,150   |               |  |         | 152,820   |   |  |           | 382,970   |   |       |   | 255     |   |  |   | 383,225   |  
|2003 |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |   |         |   |  |   |          
|     | Net revenue external customers               |         | $ | 3,877,807 |               |  | $       | 1,649,702 |   |  | $         | 5,527,509 |   |       | $ |        |   |  | $ | 5,527,509 |  
|     | Inter  segment revenue                      |         |   | 1,520     |               |  |         | 36,357    |   |  |           | 37,877    |   |       |   | (37,877 | ) |  |   |          |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Total net revenue                            |         |   | 3,879,327 |               |  |         | 1,686,059 |   |  |           | 5,565,386 |   |       |   | (37,877 | ) |  |   | 5,527,509 |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Depreciation and amortization                |         |   | (122,201  | )             |  |         | (92,188   | ) |  |           | (214,389  | ) |       |   | (1,989  | ) |  |   | (216,378  | )
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Operating Income                             |         |   | 527,523   |               |  |         | 258,529   |   |  |           | 786,052   |   |       |   | (28,617 | ) |  |   | 757,435   |  
|     |                                              |         |   |           |               |  |         |           |   |  |           |           |   |       |  
|     | Segment assets                               |         |   | 5,349,521 |               |  |         | 2,108,951 |   |  |           | 7,458,472 |   |       |   | 44,848  |   |  |   | 7,503,320 |  
|     | Capital expenditures and
    acquisitions(3) |         |   | 222,024   |               |  |         | 161,410   |   |  |           | 383,434   |   |       |   | 16      |   |  |   | 383,450   |  






|    |                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------
|(1) | North America and International acquisitions exclude $260 and
    $9,031, respectively, of non-cash acquisitions for 2005.  
|   
|(2) | International acquisitions exclude $15,479 of non-cash
    acquisitions for 2004.                                           
|   
|(3) | North America and International acquisitions exclude $3,995 and
    $5,065, respectively, of non-cash acquisitions for 2003.

|                                                       |  |      |           |   |      |   |          |      |  |   |          |  
|------------------------------------------------------ |  | ---- | --------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                       |  | 2005 |           |   | 2004 |   |          | 2003 | 
|                                                       |  |      |           |   |      |   |          |      | 
|Reconciliation of measures to consolidated totals      |  |      |           |   |      |   |          |      |  |   |          |  
|Total operating income of reporting segments           |  |      | 1,006,051 |   |      |   | 887,691  |      |  |   | 786,052  |  
|Corporate expenses                                     |  |      | (67,133   | ) |      |   | (35,346  | )    |  |   | (28,617  | )
|Interest income                                        |  |      | 18,187    |   |      |   | 13,418   |      |  |   | 19,089   |  
|Interest expense                                       |  |      | (191,379  | ) |      |   | (197,164 | )    |  |   | (230,848 | )
|                                                       |  |      |           |   |      |   |          |      | 
|Total income before income taxes and minority interest |  | $    | 765,726   |   |      | $ | 668,599  |      |  | $ | 545,676  |  
|                                                       |  |      |           |   |      |   |          |      | 

F-48



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)




|                               |  |         |         |        |        |   |             |       |  |   |           |  |  |   |           | 
|------------------------------ |  | ------- | ------- | ------ | ------ | - | ----------- | ----- |  | - | --------- |  |  | - | --------- | 
|                               |  |         |         | United |        |   | Rest of the |       |  |  
|                               |  | Germany |         |        | States |   |             | World |  |   | Total     | 
|                               |  |         |         |        |        |   |             |       |  |   |           | 
|2005                           |  |         |         |        |        |   |             |       |  |   |           |  |  |   |           | 
|Net revenue external customers |  | $       | 288,923 |        |        | $ | 4,577,379   |       |  | $ | 1,905,517 |  |  | $ | 6,771,819 | 
|Long-lived assets              |  |         | 157,362 |        |        |   | 4,372,453   |       |  |   | 906,220   |  |  |   | 5,436,035 | 
|2004                           |  |         |         |        |        |   |             |       |  |   |           |  |  |   |           | 
|Net revenue external customers |  | $       | 288,526 |        |        | $ | 4,248,216   |       |  | $ | 1,691,260 |  |  | $ | 6,228,002 | 
|Long-lived assets              |  |         | 169,981 |        |        |   | 4,277,319   |       |  |   | 956,860   |  |  |   | 5,404,160 | 
|2003                           |  |         |         |        |        |   |             |       |  |   |           |  |  |   |           | 
|Net revenue external customers |  | $       | 245,983 |        |        | $ | 3,877,807   |       |  | $ | 1,403,719 |  |  | $ | 5,527,509 | 
|Long-lived assets              |  |         | 148,375 |        |        |   | 4,166,660   |       |  |   | 862,545   |  |  |   | 5,177,580 | 

22. Supplementary Cash Flow Information




|                                                   |                                                    |      |   |         |      |  |   |         |  |  |   |         | 
|-------------------------------------------------- | -------------------------------------------------- | ---- | - | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                                   |                                                    | 2005 |   |         | 2004 |  |   | 2003    | 
|                                                   |                                                    |      |   |         |      |  |   |         | 
|Supplementary cash flow information:               |                                                    |      |   |         |      |  |   |         |  |  |   |        
|                                                   | Cash paid for interest                             |      | $ | 180,853 |      |  | $ | 201,380 |  |  | $ | 208,429 | 
|                                                   |                                                    |      |   |         |      |  |   |         | 
|                                                   | Cash paid for income taxes                         |      | $ | 380,764 |      |  | $ | 198,983 |  |  | $ | 141,278 | 
|                                                   |                                                    |      |   |         |      |  |   |         | 
|Supplemental disclosures of cash flow information: |                                                    |      |   |         |      |  |   |         |  |  |   |        
|                                                   | Details for acquisitions:                          |      |   |         |      |  |   |         |  |  |   |         | 
|                                                   | Assets acquired                                    |      | $ | 149,189 |      |  | $ | 148,324 |  |  | $ | 152,570 | 
|                                                   | Liabilities assumed                                |      |   | 18,161  |      |  |   | 12,957  |  |  |   | 46,685  | 
|                                                   | Minorities                                         |      |   | (5,017  | )    |  |   |        |  |  |   |        | 
|                                                   | Transaction under common control with Fresenius AG |      |   |        |      |  |   |        |  |  |   | 1,469   | 
|                                                   | Notes assumed in connection with acquisition       |      |   | 9,291   |      |  |   | 15,479  |  |  |   | 9,060   | 
|                                                   |                                                    |      |   |         |      |  |   |         | 
|                                                   | Cash paid                                          |      |   | 126,754 |      |  |   | 119,888 |  |  |   | 95,356  | 
|                                                   | Less cash acquired                                 |      |   | 1,601   |      |  |   | 15,395  |  |  |   | 3,166   | 
|                                                   |                                                    |      |   |         |      |  |   |         | 
|                                                   | Net cash paid for acquisitions                     |      | $ | 125,153 |      |  | $ | 104,493 |  |  | $ | 92,190  | 
|                                                   |                                                    |      |   |         |      |  |   |         | 

23. Supplemental Condensed Combining Information


Luxembourg-III, FMC-AG FMC-AG (D-GmbH), FMC-AG FMC-AG (D-GmbH


F-49



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


D-GmbH,


|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |   |            |         |   |   |           |           | 
|------------------------------------------------ | ----------------------------------- | ------------------------------------ | ------- | ---------------------- | ------ | - | --------- | ------------- |  | - | ------------ | -------- | - | ---------- | --------- | --------- | ----- | - | ---------- | ------- | - | - | --------- | --------- | 
|                                                 |                                     | For the Year Ended December 31, 2005 |        
|                                                 |                                     |                                      |        
|                                                 |                                     |                                      |         | Guarantor Subsidiaries |        |   |          
|                                                 |                                     | FMC-AG &                             |         |                        |        |   |           | Non-Guarantor |  |   | Combining    |          |   | Combined   |          
|                                                 |                                     | Co. KGaA                             |         |                        | D-GmbH |   |           | FMCH          |  |   | Subsidiaries |          |   | Adjustment |           |           | Total |  
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Net revenue                                      |                                     | $                                    |        |                        |        | $ | 1,059,401 |               |  | $ |             |          |   | $          | 7,010,734 |           |       | $ | (1,298,316 | )       |   | $ | 6,771,819 |          
|Cost of revenue                                  |                                     |                                      |        |                        |        |   | 664,871   |               |  |   |             |          |   |            | 5,058,548 |           |       |   | (1,284,265 | )       |   |   | 4,439,154 |          
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|                                                 | Gross profit                        |                                      |         |                       |        |   |           | 394,530       |  |   |              |         |   |            |           | 1,952,186 |       |   |            | (14,051 | ) |   |           | 2,332,665 | 
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Operating (income) expenses:                     |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |   |            |         |   |   |           |          
|                                                 | Selling, general and administrative |                                      |         | (14,805                | )      |   |           | 135,899       |  |   |              |         |   |            |           | 1,075,777 |       |   |            | 145,921 |   |   |           | 1,342,792 | 
|                                                 | Research and development            |                                      |         | 3,271                  |        |   |           | 32,702        |  |   |              |         |   |            |           | 14,982    |       |   |            |         |   |   |           | 50,955    | 
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Operating income (loss)                          |                                     |                                      | 11,534  |                        |        |   | 225,929   |               |  |   |             |          |   |            | 861,427   |           |       |   | (159,972   | )       |   |   | 938,918   |          
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Other (income) expense:                          |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |   |            |         |   |   |           |          
|                                                 | Interest, net                       |                                      |         | 35,391                 |        |   |           | 11,750        |  |   |              | 51,981   |   |            |           | 112,199   |       |   |            | (38,129 | ) |   |           | 173,192   | 
|                                                 | Other, net                          |                                      |         | (525,497               | )      |   |           | 131,392       |  |   |              | (294,649 | ) |            |           |          |       |   |            | 688,754 |   |   |           |          | 
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Income before income taxes and minority interest |                                     |                                      | 501,640 |                        |        |   | 82,787    |               |  |   | 242,668      |          |   |            | 749,228   |           |       |   | (810,597   | )       |   |   | 765,726   |          
|                                                 | Income tax expense (benefit)        |                                      |         | 46,688                 |        |   |           | 79,606        |  |   |              | (20,792  | ) |            |           | 286,629   |       |   |            | (83,383 | ) |   |           | 308,748   | 
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Income (loss) before minority interest           |                                     |                                      | 454,952 |                        |        |   | 3,181     |               |  |   | 263,460      |          |   |            | 462,599   |           |       |   | (727,214   | )       |   |   | 456,978   |          
|Minority interest                                |                                     |                                      |        |                        |        |   |          |               |  |   |             |          |   |            |          |           |       |   | 2,026      |         |   |   | 2,026     |          
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  
|Net income (loss)                                |                                     | $                                    | 454,952 |                        |        | $ | 3,181     |               |  | $ | 263,460      |          |   | $          | 462,599   |           |       | $ | (729,240   | )       |   | $ | 454,952   |          
|                                                 |                                     |                                      |         |                        |        |   |           |               |  |   |              |          |   |            |           |           |       |  

F-50



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |   |            |          |   |   |           |           | 
|------------------------------------------------ | ----------------------------------- | ------------------------------------ | -------- | ------------ | ------ | - | ------- | ------------- |  | - | ------------ | -------- | - | ---------- | --------- | --------- | ----- | - | ---------- | -------- | - | - | --------- | --------- | 
|                                                 |                                     | For the Year Ended December 31, 2004 |         
|                                                 |                                     |                                      |         
|                                                 |                                     |                                      |          | Guarantor    |        |   |        
|                                                 |                                     |                                      |          | Subsidiaries |        |   |        
|                                                 |                                     | FMC-AG &                             |          |              |        |   |         | Non-Guarantor |  |   | Combining    |          |   | Combined   |          
|                                                 |                                     | Co. KGaA                             |          |              | D-GmbH |   |         | FMCH          |  |   | Subsidiaries |          |   | Adjustment |           |           | Total |  
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Net revenue                                      |                                     | $                                    |         |              |        | $ | 967,981 |               |  | $ |             |          |   | $          | 7,086,578 |           |       | $ | (1,826,557 | )        |   | $ | 6,228,002 |          
|Cost of revenue                                  |                                     |                                      |         |              |        |   | 618,147 |               |  |   |             |          |   |            | 5,344,614 |           |       |   | (1,820,644 | )        |   |   | 4,142,117 |          
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|                                                 | Gross profit                        |                                      |          |             |        |   |         | 349,834       |  |   |              |         |   |            |           | 1,741,964 |       |   |            | (5,913   | ) |   |           | 2,085,885 | 
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Operating expenses:                              |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |   |            |          |   |   |           |          
|                                                 | Selling, general and administrative |                                      |          | 98,025       |        |   |         | 144,952       |  |   |              |         |   |            |           | 1,068,900 |       |   |            | (129,701 | ) |   |           | 1,182,176 | 
|                                                 | Research and development            |                                      |          | 2,455        |        |   |         | 33,610        |  |   |              |         |   |            |           | 15,299    |       |   |            |          |   |   |           | 51,364    | 
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Operating (loss) income                          |                                     |                                      | (100,479 | )            |        |   | 171,272 |               |  |   |             |          |   |            | 657,764   |           |       |   | 123,788    |          |   |   | 852,345   |          
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Other (income) expense:                          |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |   |            |          |   |   |           |          
|                                                 | Interest, net                       |                                      |          | 36,777       |        |   |         | 13,367        |  |   |              | 62,189   |   |            |           | 104,768   |       |   |            | (33,355  | ) |   |           | 183,746   | 
|                                                 | Other, net                          |                                      |          | (592,166     | )      |   |         | 101,430       |  |   |              | (286,567 | ) |            |           |          |       |   |            | 777,303  |   |   |           |          | 
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Income before income taxes and minority interest |                                     |                                      | 454,909  |              |        |   | 56,475  |               |  |   | 224,378      |          |   |            | 552,997   |           |       |   | (620,160   | )        |   |   | 668,599   |          
|                                                 | Income tax expense (benefit)        |                                      |          | 52,912       |        |   |         | 58,815        |  |   |              | (24,876  | ) |            |           | 237,413   |       |   |            | (58,849  | ) |   |           | 265,415   | 
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Income (loss) before minority interest           |                                     |                                      | 401,998  |              |        |   | (2,340  | )             |  |   | 249,254      |          |   |            | 315,584   |           |       |   | (561,311   | )        |   |   | 403,184   |          
|Minority interest                                |                                     |                                      |         |              |        |   |        |               |  |   |             |          |   |            |          |           |       |   | 1,186      |          |   |   | 1,186     |          
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Net income (loss)                                |                                     | $                                    | 401,998  |              |        | $ | (2,340  | )             |  | $ | 249,254      |          |   | $          | 315,584   |           |       | $ | (562,497   | )        |   | $ | 401,998   |          
|                                                 |                                     |                                      |          |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  

|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |   |          |         |   |   |           |           | 
|------------------------------------------------ | ----------------------------------- | ------------------------------------ | ------- | ------------ | ------ | - | ------- | ------------- |  | - | ------------ | -------- | - | ---------- | --------- | --------- | ----- | - | -------- | ------- | - | - | --------- | --------- | 
|                                                 |                                     | For the Year Ended December 31, 2003 |        
|                                                 |                                     |                                      |        
|                                                 |                                     |                                      |         | Guarantor    |        |   |        
|                                                 |                                     |                                      |         | Subsidiaries |        |   |        
|                                                 |                                     | FMC-AG &                             |         |              |        |   |         | Non-Guarantor |  |   | Combining    |          |   | Combined   |          
|                                                 |                                     | Co. KGaA                             |         |              | D-GmbH |   |         | FMCH          |  |   | Subsidiaries |          |   | Adjustment |           |           | Total |  
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Net revenue                                      |                                     | $                                    |        |              |        | $ | 823,632 |               |  | $ |             |          |   | $          | 5,630,923 |           |       | $ | (927,046 | )       |   | $ | 5,527,509 |          
|Cost of revenue                                  |                                     |                                      |        |              |        |   | 520,605 |               |  |   |             |          |   |            | 4,098,272 |           |       |   | (920,271 | )       |   |   | 3,698,606 |          
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|                                                 | Gross profit                        |                                      |         |             |        |   |         | 303,027       |  |   |              |         |   |            |           | 1,532,651 |       |   |          | (6,775  | ) |   |           | 1,828,903 | 
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Operating expenses:                              |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |   |          |         |   |   |           |          
|                                                 | Selling, general and administrative |                                      |         | (645,049     | )      |   |         | 114,074       |  |   |              |         |   |            |           | 883,745   |       |   |          | 669,011 |   |   |           | 1,021,781 | 
|                                                 | Research and development            |                                      |         | 1,857        |        |   |         | 34,527        |  |   |              |         |   |            |           | 13,303    |       |   |          |        |   |   |           | 49,687    | 
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Operating income (loss)                          |                                     |                                      | 643,192 |              |        |   | 154,426 |               |  |   |             |          |   |            | 635,603   |           |       |   | (675,786 | )       |   |   | 757,435   |          
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Other (income) expense:                          |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |   |          |         |   |   |           |          
|                                                 | Interest, net                       |                                      |         | 35,157       |        |   |         | 11,918        |  |   |              | 63,512   |   |            |           | 138,110   |       |   |          | (36,938 | ) |   |           | 211,759   | 
|                                                 | Other, net                          |                                      |         | 229,988      |        |   |         | 83,283        |  |   |              | (251,564 | ) |            |           |          |       |   |          | (61,707 | ) |   |           |          | 
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Income before income taxes and minority interest |                                     |                                      | 378,047 |              |        |   | 59,225  |               |  |   | 188,052      |          |   |            | 497,493   |           |       |   | (577,141 | )       |   |   | 545,676   |          
|                                                 | Income tax expense (benefit)        |                                      |         | 46,867       |        |   |         | 58,320        |  |   |              | (25,405  | ) |            |           | 193,596   |       |   |          | (60,664 | ) |   |           | 212,714   | 
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Income (loss) before minority interest           |                                     |                                      | 331,180 |              |        |   | 905     |               |  |   | 213,457      |          |   |            | 303,898   |           |       |   | (516,477 | )       |   |   | 332,962   |          
|Minority interest                                |                                     |                                      |        |              |        |   |        |               |  |   |             |          |   |            |          |           |       |   | 1,782    |         |   |   | 1,782     |          
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  
|Net income (loss)                                |                                     | $                                    | 331,180 |              |        | $ | 905     |               |  | $ | 213,457      |          |   | $          | 303,898   |           |       | $ | (518,259 | )       |   | $ | 331,180   |          
|                                                 |                                     |                                      |         |              |        |   |         |               |  |   |              |          |   |            |           |           |       |  

F-51



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           |  |            |             |            |   |           |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------- | ------------------------- | --------- | ------------ | --------- |  | ------- | ------------- | ------- |  | ------------ | --------- | --------- | ---------- | --------- | --------- | --------- |  | ---------- | ----------- | ---------- | - | --------- | --------- | --------- | 
|                                                                                                                                                                                     |                                                                 | At December 31, 2005      |          
|                                                                                                                                                                                     |                                                                 |                           |          
|                                                                                                                                                                                     |                                                                 |                           |           | Guarantor    |           |  |        
|                                                                                                                                                                                     |                                                                 |                           |           | Subsidiaries |           |  |        
|                                                                                                                                                                                     |                                                                 | FMC - AG &                |           |              |           |  |         | Non-Guarantor |         |  | Combining    |           |           | Combined   |          
|                                                                                                                                                                                     |                                                                 | Co. KGaA                  |           |              | D-GmbH    |  |         | FMCH          |         |  | Subsidiaries |           |           | Adjustment |           |           | Total     | 
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|Current assets:                                                                                                                                                                      |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           |  |            |             |            |   |           |          
|                                                                                                                                                                                     | Cash and cash equivalents                                       |                           | $         | 1            |           |  | $       | 26            |         |  | $            |          |           |            | $         | 82,558    |           |  | $          | 2,492       |            |   | $         | 85,077    |          
|                                                                                                                                                                                     | Trade accounts receivable, less allowance for doubtful accounts |                           |           |             |           |  |         | 108,426       |         |  |              |          |           |            |           | 1,361,507 |           |  |            |            |            |   |           | 1,469,933 |          
|                                                                                                                                                                                     | Accounts receivable from related parties                        |                           |           | 852,926      |           |  |         | 338,097       |         |  |              | 216,337   |           |            |           | 1,248,942 |           |  |            | (2,622,418  | )          |   |           | 33,884    |          
|                                                                                                                                                                                     | Inventories                                                     |                           |           |             |           |  |         | 113,359       |         |  |              |          |           |            |           | 371,638   |           |  |            | (54,104     | )          |   |           | 430,893   |          
|                                                                                                                                                                                     | Prepaid expenses and other current assets                       |                           |           | 17,399       |           |  |         | 12,329        |         |  |              | 13        |           |            |           | 231,734   |           |  |            | 115         |            |   |           | 261,590   |          
|                                                                                                                                                                                     | Deferred taxes                                                  |                           |           |             |           |  |         |               |         |  |              |          |           |            |           | 163,975   |           |  |            | 15,586      |            |   |           | 179,561   |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     |                                                                 | Total current assets      |           |              | 870,326   |  |         |               | 572,237 |  |              |           | 216,350   |            |           |           | 3,460,354 |  |            |             | (2,658,329 | ) |           |           | 2,460,938 | 
|Property, plant and equipment, net                                                                                                                                                   |                                                                 |                           | 157       |              |           |  | 86,386  |               |         |  |             |           |           |            | 1,174,252 |           |           |  | (45,037    | )           |            |   | 1,215,758 |          
|Intangible assets                                                                                                                                                                    |                                                                 |                           | 970       |              |           |  | 12,220  |               |         |  |             |           |           |            | 572,499   |           |           |  |           |             |            |   | 585,689   |          
|Goodwill                                                                                                                                                                             |                                                                 |                           |          |              |           |  | 3,227   |               |         |  |             |           |           |            | 3,453,650 |           |           |  |           |             |            |   | 3,456,877 |          
|Deferred taxes                                                                                                                                                                       |                                                                 |                           |          |              |           |  | 4,562   |               |         |  |             |           |           |            | 27,994    |           |           |  | 3,093      |             |            |   | 35,649    |          
|Other assets                                                                                                                                                                         |                                                                 |                           | 4,552,128 |              |           |  | 811,728 |               |         |  | 3,812,542    |           |           |            | (829,742  | )         |           |  | (8,118,467 | )           |            |   | 228,189   |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     | Total assets                                                    |                           | $         | 5,423,581    |           |  | $       | 1,490,360     |         |  | $            | 4,028,892 |           |            | $         | 7,859,007 |           |  | $          | (10,818,740 | )          |   | $         | 7,983,100 |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|Current liabilities:                                                                                                                                                                 |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           |  |            |             |            |   |           |          
|                                                                                                                                                                                     | Accounts payable                                                |                           | $         | 19           |           |  | $       | 13,401        |         |  | $            |          |           |            | $         | 187,897   |           |  | $          |            |            |   | $         | 201,317   |          
|                                                                                                                                                                                     | Accounts payable to related parties                             |                           |           | 1,059,718    |           |  |         | 160,884       |         |  |              | 882,439   |           |            |           | 1,397,213 |           |  |            | (3,392,316  | )          |   |           | 107,938   |          
|                                                                                                                                                                                     | Accrued expenses and other current liabilities                  |                           |           | 22,205       |           |  |         | 92,545        |         |  |              | 775       |           |            |           | 731,208   |           |  |            | (7,965      | )          |   |           | 838,768   |          
|                                                                                                                                                                                     | Short-term borrowings                                           |                           |           | 33           |           |  |         |              |         |  |              |          |           |            |           | 151,080   |           |  |            |            |            |   |           | 151,113   |          
|                                                                                                                                                                                     | Short-term borrowings from related parties                      |                           |           | 18,757       |           |  |         | 1,752         |         |  |              |          |           |            |           |          |           |  |            | (1,752      | )          |   |           | 18,757    |          
|                                                                                                                                                                                     | Current portion of long-term debt and capital lease obligations |                           |           | 968          |           |  |         | 826           |         |  |              | 100,000   |           |            |           | 24,475    |           |  |            |            |            |   |           | 126,269   |          
|                                                                                                                                                                                     | Income tax payable                                              |                           |           | 15,106       |           |  |         |              |         |  |              |          |           |            |           | 81,593    |           |  |            | 23,439      |            |   |           | 120,138   |          
|                                                                                                                                                                                     | Deferred taxes                                                  |                           |           | 2,489        |           |  |         | 3,735         |         |  |              |          |           |            |           | 34,266    |           |  |            | (26,550     | )          |   |           | 13,940    |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     |                                                                 | Total current liabilities |           |              | 1,119,295 |  |         |               | 273,143 |  |              |           | 983,214   |            |           |           | 2,607,732 |  |            |             | (3,405,144 | ) |           |           | 1,578,240 | 
|Long term debt and capital lease obligations, less current
    portion                                                                                                               |                                                                 |                           | 294,131   |              |           |  | 590     |               |         |  | 561,229      |           |           |            | 651,297   |           |           |  | (800,147   | )           |            |   | 707,100   |          
|Long term borrowings from related parties                                                                                                                                            |                                                                 |                           | 3,720     |              |           |  | 180,951 |               |         |  |             |           |           |            |          |           |           |  | (184,671   | )           |            |   |          |          
|Other liabilities                                                                                                                                                                    |                                                                 |                           | 419       |              |           |  | 5,013   |               |         |  |             |           |           |            | 89,112    |           |           |  | 17,874     |             |            |   | 112,418   |          
|Pension liabilities                                                                                                                                                                  |                                                                 |                           | 2,578     |              |           |  | 75,880  |               |         |  |             |           |           |            | 42,680    |           |           |  | (12,436    | )           |            |   | 108,702   |          
|Deferred taxes                                                                                                                                                                       |                                                                 |                           | 29,732    |              |           |  |         |               |         |  |             |           |           |            | 235,538   |           |           |  | 35,395     |             |            |   | 300,665   |          
|Company obligated mandatorily redeemable preferred securities of
    subsidiary Fresenius Medical Care Capital Trusts holding solely
    Company-guaranteed debentures of subsidiary |                                                                 |                           |          |              |           |  |        |               |         |  |             |           |           |            | 1,187,864 |           |           |  |           |             |            |   | 1,187,864 |          
|Minority interest                                                                                                                                                                    |                                                                 |                           |          |              |           |  |        |               |         |  | 7,412        |           |           |            |          |           |           |  | 6,993      |             |            |   | 14,405    |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     |                                                                 | Total liabilities         |           |              | 1,449,875 |  |         |               | 535,577 |  |              |           | 1,551,855 |            |           |           | 4,814,223 |  |            |             | (4,342,136 | ) |           |           | 4,009,394 | 
|Shareholders equity:                                                                                                                                                                |                                                                 |                           | 3,973,706 |              |           |  | 954,783 |               |         |  | 2,477,037    |           |           |            | 3,044,784 |           |           |  | (6,476,604 | )           |            |   | 3,973,706 |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     | Total liabilities and shareholders equity                      |                           | $         | 5,423,581    |           |  | $       | 1,490,360     |         |  | $            | 4,028,892 |           |            | $         | 7,859,007 |           |  | $          | (10,818,740 | )          |   | $         | 7,983,100 |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |         |               |         |  |              |           |           |            |           |           |           | 

F-52



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           |  |            |             |            |   |           |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------- | ------------------------- | --------- | ------------ | --------- |  | ------------- | --------- | ------- | --------- | ------------ | --------- | --------- | ---------- | --------- | --------- | --------- |  | ---------- | ----------- | ---------- | - | --------- | --------- | --------- | 
|                                                                                                                                                                                     |                                                                 | At December 31, 2004      |          
|                                                                                                                                                                                     |                                                                 |                           |          
|                                                                                                                                                                                     |                                                                 |                           |           | Guarantor    |           |  |              
|                                                                                                                                                                                     |                                                                 |                           |           | Subsidiaries |           |  |              
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  | Non-Guarantor |           |         | Combining |              |           | Combined  |           
|                                                                                                                                                                                     |                                                                 | FMS AG                    |           |              | D-GmbH    |  |               | FMCH      |         |           | Subsidiaries |           |           | Adjustment |           |           | Total     | 
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|Current assets:                                                                                                                                                                      |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           |  |            |             |            |   |           |          
|                                                                                                                                                                                     | Cash and cash equivalents                                       |                           | $         | 2,152        |           |  | $             | 35        |         |           | $            |          |           |            | $         | 56,779    |           |  | $          |            |            |   | $         | 58,966    |          
|                                                                                                                                                                                     | Trade accounts receivable, less allowance for doubtful accounts |                           |           |             |           |  |               | 110,204   |         |           |              |          |           |            |           | 1,353,422 |           |  |            | (779        | )          |   |           | 1,462,847 |          
|                                                                                                                                                                                     | Accounts receivable from related parties                        |                           |           | 763,089      |           |  |               | 325,731   |         |           |              | 213,337   |           |            |           | 1,792,810 |           |  |            | (3,043,207  | )          |   |           | 51,760    |          
|                                                                                                                                                                                     | Inventories                                                     |                           |           |             |           |  |               | 125,952   |         |           |              |          |           |            |           | 374,560   |           |  |            | (57,593     | )          |   |           | 442,919   |          
|                                                                                                                                                                                     | Prepaid expenses and other current assets                       |                           |           | 7,347        |           |  |               | 12,254    |         |           |              | 22        |           |            |           | 224,071   |           |  |            | 399         |            |   |           | 244,093   |          
|                                                                                                                                                                                     | Deferred taxes                                                  |                           |           |             |           |  |               |           |         |           |              |          |           |            |           | 166,970   |           |  |            | 18,415      |            |   |           | 185,385   |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     |                                                                 | Total current assets      |           |              | 772,588   |  |               |           | 574,176 |           |              |           | 213,359   |            |           |           | 3,968,612 |  |            |             | (3,082,765 | ) |           |           | 2,445,970 | 
|Property, plant and equipment, net                                                                                                                                                   |                                                                 |                           | 227       |              |           |  | 100,496       |           |         |           |             |           |           |            | 1,121,290 |           |           |  | (40,086    | )           |            |   | 1,181,927 |          
|Intangible assets                                                                                                                                                                    |                                                                 |                           | 333       |              |           |  | 16,384        |           |         |           |             |           |           |            | 585,331   |           |           |  |           |             |            |   | 602,048   |          
|Goodwill                                                                                                                                                                             |                                                                 |                           |          |              |           |  | 3,726         |           |         |           |             |           |           |            | 3,441,426 |           |           |  |           |             |            |   | 3,445,152 |          
|Deferred taxes                                                                                                                                                                       |                                                                 |                           |          |              |           |  |               |           |         |           |             |           |           |            | 32,613    |           |           |  | 25,510     |             |            |   | 58,123    |          
|Other assets                                                                                                                                                                         |                                                                 |                           | 4,990,303 |              |           |  | 925,105       |           |         |           | 3,520,453    |           |           |            | 522,915   |           |           |  | (9,730,455 | )           |            |   | 228,321   |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     | Total assets                                                    |                           | $         | 5,763,451    |           |  | $             | 1,619,887 |         |           | $            | 3,733,812 |           |            | $         | 9,672,187 |           |  | $          | (12,827,796 | )          |   | $         | 7,961,541 |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|Current liabilities:                                                                                                                                                                 |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           |  |            |             |            |   |           |          
|                                                                                                                                                                                     | Accounts payable                                                |                           | $         | 205          |           |  | $             | 16,374    |         |           | $            |          |           |            | $         | 175,973   |           |  | $          |            |            |   | $         | 192,552   |          
|                                                                                                                                                                                     | Accounts payable to related parties                             |                           |           | 1,682,729    |           |  |               | 359,869   |         |           |              | 842,204   |           |            |           | 1,290,323 |           |  |            | (4,061,681  | )          |   |           | 113,444   |          
|                                                                                                                                                                                     | Accrued expenses and other current liabilities                  |                           |           | 15,800       |           |  |               | 79,530    |         |           |              | 541       |           |            |           | 652,379   |           |  |            | (7,175      | )          |   |           | 741,075   |          
|                                                                                                                                                                                     | Short-term borrowings                                           |                           |           | 38           |           |  |               |          |         |           |              |          |           |            |           | 419,110   |           |  |            |            |            |   |           | 419,148   |          
|                                                                                                                                                                                     | Short-term borrowings from related parties                      |                           |           |             |           |  |               |          |         |           |              |          |           |            |           | 5,766     |           |  |            |            |            |   |           | 5,766     |          
|                                                                                                                                                                                     | Current portion of long-term debt and capital lease obligations |                           |           | 770          |           |  |               | 1,145     |         |           |              | 25,000    |           |            |           | 203,264   |           |  |            |            |            |   |           | 230,179   |          
|                                                                                                                                                                                     | Income tax payable                                              |                           |           | 127,331      |           |  |               |          |         |           |              |          |           |            |           | 102,551   |           |  |            | 648         |            |   |           | 230,530   |          
|                                                                                                                                                                                     | Deferred taxes                                                  |                           |           | 990          |           |  |               | 4,178     |         |           |              |          |           |            |           | 35,962    |           |  |            | (35,971     | )          |   |           | 5,159     |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     |                                                                 | Total current liabilities |           |              | 1,827,863 |  |               |           | 461,096 |           |              |           | 867,745   |            |           |           | 2,885,328 |  |            |             | (4,104,179 | ) |           |           | 1,937,853 | 
|Long term debt and capital lease obligations, less current
    portion                                                                                                               |                                                                 |                           | 248,427   |              |           |  |              |           |         |           | 650,029      |           |           |            | 507,847   |           |           |  | (860,733   | )           |            |   | 545,570   |          
|Long term borrowings from related parties                                                                                                                                            |                                                                 |                           | 4,295     |              |           |  |              |           |         |           |             |           |           |            |          |           |           |  | (4,295     | )           |            |   |          |          
|Other liabilities                                                                                                                                                                    |                                                                 |                           | 41,111    |              |           |  | 5,834         |           |         |           |             |           |           |            | 93,839    |           |           |  | 15,338     |             |            |   | 156,122   |          
|Pension liabilities                                                                                                                                                                  |                                                                 |                           | 1,049     |              |           |  | 60,084        |           |         |           |             |           |           |            | 58,333    |           |           |  | (11,341    | )           |            |   | 108,125   |          
|Deferred taxes                                                                                                                                                                       |                                                                 |                           | 5,890     |              |           |  | 2,376         |           |         |           |             |           |           |            | 239,162   |           |           |  | 34,833     |             |            |   | 282,261   |          
|Company obligated mandatorily redeemable preferred securities of
    subsidiary Fresenius Medical Care Capital Trusts holding solely
    Company-guaranteed debentures of subsidiary |                                                                 |                           |          |              |           |  |              |           |         |           |             |           |           |            | 1,278,760 |           |           |  |           |             |            |   | 1,278,760 |          
|Minority interest                                                                                                                                                                    |                                                                 |                           |          |              |           |  |              |           |         |           | 7,412        |           |           |            |          |           |           |  | 10,622     |             |            |   | 18,034    |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     |                                                                 | Total liabilities         |           |              | 2,128,635 |  |               |           | 529,390 |           |              |           | 1,525,186 |            |           |           | 5,063,269 |  |            |             | (4,919,755 | ) |           |           | 4,326,725 | 
|Shareholders equity:                                                                                                                                                                |                                                                 |                           | 3,634,816 |              |           |  | 1,090,497     |           |         |           | 2,208,626    |           |           |            | 4,608,918 |           |           |  | (7,908,041 | )           |            |   | 3,634,816 |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 
|                                                                                                                                                                                     | Total liabilities and shareholders equity                      |                           | $         | 5,763,451    |           |  | $             | 1,619,887 |         |           | $            | 3,733,812 |           |            | $         | 9,672,187 |           |  | $          | (12,827,796 | )          |   | $         | 7,961,541 |          
|                                                                                                                                                                                     |                                                                 |                           |           |              |           |  |               |           |         |           |              |           |           |            |           |           |           | 

F-53



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##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |          |         |         |   |          |         |          |  
|--------------------- | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------- | ------------ | -------- | -------- | - | ------------- | ------- | ------- | ------------ | -------- | ------- | ---------- | - | -------- | -------- | -------- | - | -------- | ------- | ------- | - | -------- | ------- | -------- | -
|                      |                                                                                                                  | For the Year Ended December 31, 2005                                                 |                                                    
|                      |                                                                                                                  |                                                                                      |                                                    
|                      |                                                                                                                  |                                                                                      |                                                     | Guarantor    |          |          |  
|                      |                                                                                                                  |                                                                                      |                                                     | Subsidiaries |          |          |  
|                      |                                                                                                                  | FMC - AG &                                                                           |                                                     |              |          |          |   | Non-Guarantor |         |         | Combining    |          |         | Combined   |  
|                      |                                                                                                                  | Co. KGaA                                                                             |                                                     |              | D-GmbH   |          |   | FMCH          |         |         | Subsidiaries |          |         | Adjustment |   |          | Total    |         
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|Operating Activities: |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |          |         |         |   |         
|                      | Net income (loss)                                                                                                |                                                                                      | $                                                   | 454,952      |          |          | $ | 3,181         |         |         | $            | 263,460  |         |            | $ | 462,599  |          |          | $ | (729,240 | )       |         | $ | 454,952  |        
|                      | Adjustments to reconcile net income to cash and cash equivalents
    provided by (used in) operating activities: |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |          |         |         |   |          |        
|                      | Equity affiliate income                                                                                          |                                                                                      |                                                     | (228,488     | )        |          |   |              |         |         |              | (294,649 | )       |            |   |         |          |          |   | 523,137  |         |         |   |         |        
|                      |                                                                                                                  | Settlement of shareholder proceedings                                                |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |         |          |   |          | 7,335   |         |   |          | 7,335   |         
|                      |                                                                                                                  | Depreciation and amortization                                                        |                                                     |              | 1,893    |          |   |               | 31,967  |         |              |          |        |            |   |          | 232,749  |          |   |          | (15,157 | )       |   |          | 251,452 |         
|                      |                                                                                                                  | Change in deferred taxes, net                                                        |                                                     |              | 7,836    |          |   |               | (528    | )       |              |          |        |            |   |          | (5,138   | )        |   |          | (5,845  | )       |   |          | (3,675  | )       
|                      |                                                                                                                  | (Gain) loss on investments                                                           |                                                     |              | (48,373  | )        |   |               |        |         |              |          |        |            |   |          |         |          |   |          | 48,373  |         |   |          |        |         
|                      |                                                                                                                  | Write-up of loans from related parties                                               |                                                     |              | (17,276  | )        |   |               |        |         |              |          |        |            |   |          |         |          |   |          | 17,276  |         |   |          |        |         
|                      |                                                                                                                  | Loss on sale of fixed assets                                                         |                                                     |              |         |          |   |               | 284     |         |              |          |        |            |   |          | 3,681    |          |   |          |        |         |   |          | 3,965   |         
|                      |                                                                                                                  | Compensation expense related to stock options                                        |                                                     |              | 1,363    |          |   |               |        |         |              |          |        |            |   |          |         |          |   |          |        |         |   |          | 1,363   |         
|                      |                                                                                                                  | Cash inflow from hedging                                                             |                                                     |              |         |          |   |               | (1,339  | )       |              |          |        |            |   |          | 1,339    |          |   |          |        |         |   |          |        |         
|                      | Changes in assets and liabilities, net of amounts from
    businesses acquired:                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |         |         |         |   |          |        
|                      |                                                                                                                  | Trade accounts receivable, net                                                       |                                                     |              |         |          |   |               | (14,645 | )       |              |          |        |            |   |          | (48,929  | )        |   |          |         |         |   |          | (63,574 | )       
|                      |                                                                                                                  | Inventories                                                                          |                                                     |              |         |          |   |               | (4,507  | )       |              |          |        |            |   |          | (7,069   | )        |   |          | 1,765   |         |   |          | (9,811  | )       
|                      |                                                                                                                  | Prepaid expenses and other current and non-current assets                            |                                                     |              | 4,738    |          |   |               | 4,490   |         |              |          | 3,320   |            |   |          | (119,397 | )        |   |          | 65,813  |         |   |          | (41,036 | )       
|                      |                                                                                                                  | Accounts receivable from/ payable to related parties                                 |                                                     |              | (72,755  | )        |   |               | (26,544 | )       |              |          | 37,235  |            |   |          | 16,225   |          |   |          | 55,435  |         |   |          | 9,596   |         
|                      |                                                                                                                  | Accounts payable, accrued expenses and other current and
    non-current liabilities |                                                     |              | 8,749    |          |   |               | 33,639  |         |              |          | 234     |            |   |          | 104,596  |          |   |          | 1,517   |         |   |          | 148,735 |         
|                      |                                                                                                                  | Income tax payable                                                                   |                                                     |              | (100,380 | )        |   |               |        |         |              |          | (20,792 | )          |   |          | 31,883   |          |   |          | 291     |         |   |          | (88,998 | )       
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|                      |                                                                                                                  |                                                                                      | Net cash provided by (used in) operating activities |              |          | 12,259   |   |               |         | 25,998  |              |          |         | (11,192    | ) |          |          | 672,539  |   |          |         | (29,300 | ) |          |         | 670,304  |  
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|Investing Activities: |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |          |         |         |   |         
|                      | Purchases of property, plant and equipment                                                                       |                                                                                      |                                                     | (90          | )        |          |   | (27,649       | )       |         |              |         |         |            |   | (311,157 | )        |          |   | 24,127   |         |         |   | (314,769 | )      
|                      | Proceeds from sale of property, plant and equipment                                                              |                                                                                      |                                                     |             |          |          |   | 1,417         |         |         |              |         |         |            |   | 16,010   |          |          |   |         |         |         |   | 17,427   |        
|                      | Disbursement of loans to related parties                                                                         |                                                                                      |                                                     | (64,349      | )        |          |   | 125           |         |         |              | 25,512   |         |            |   |         |          |          |   | 38,712   |         |         |   |         |        
|                      | Acquisitions and investments, net of cash acquired                                                               |                                                                                      |                                                     | (49,087      | )        |          |   |              |         |         |              |         |         |            |   | (99,938  | )        |          |   | 23,872   |         |         |   | (125,153 | )      
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|                      |                                                                                                                  |                                                                                      | Net cash (used in) provided by investing activities |              |          | (113,526 | ) |               |         | (26,107 | )            |          |         | 25,512     |   |          |          | (395,085 | ) |          |         | 86,711  |   |          |         | (422,495 | )
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|Financing Activities: |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |          |         |         |   |         
|                      | Short-term borrowings, net                                                                                       |                                                                                      |                                                     | 17,298       |          |          |   | 1,151         |         |         |              |         |         |            |   | (35,538  | )        |          |   |         |         |         |   | (17,089  | )      
|                      | Long-term debt and capital lease obligations, net                                                                |                                                                                      |                                                     | 137,766      |          |          |   |              |         |         |              | (13,800  | )       |            |   | 9,870    |          |          |   | (38,712  | )       |         |   | 95,124   |        
|                      | Increase of accounts receivable securitization program                                                           |                                                                                      |                                                     |             |          |          |   | (1,045        | )       |         |              |         |         |            |   | (240,720 | )        |          |   |         |         |         |   | (241,765 | )      
|                      | Proceeds from exercise of stock options                                                                          |                                                                                      |                                                     | 80,366       |          |          |   |              |         |         |              |         |         |            |   | (422     | )        |          |   |         |         |         |   | 79,944   |        
|                      | Dividends paid                                                                                                   |                                                                                      |                                                     | (137,487     | )        |          |   |              |         |         |              |         |         |            |   | (5,320   | )        |          |   | 5,320    |         |         |   | (137,487 | )      
|                      | Capital increase (decrease) of Non-Guarantor-Subsidiaries                                                        |                                                                                      |                                                     |             |          |          |   |              |         |         |              |         |         |            |   | 23,872   |          |          |   | (23,872  | )       |         |   |         |        
|                      | Change in minority interest                                                                                      |                                                                                      |                                                     |             |          |          |   |              |         |         |              | (520     | )       |            |   |         |          |          |   | 2,026    |         |         |   | 1,506    |        
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|                      |                                                                                                                  |                                                                                      | Net cash provided by (used in) financing activities |              |          | 97,943   |   |               |         | 106     |              |          |         | (14,320    | ) |          |          | (248,258 | ) |          |         | (55,238 | ) |          |         | (219,767 | )
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|                      | Effect of exchange rate changes on cash and cash equivalents                                                     |                                                                                      |                                                     | 1,173        |          |          |   | (3            | )       |         |              |         |         |            |   | (3,420   | )        |          |   | 319      |         |         |   | (1,931   | )      
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|                      | Cash and Cash Equivalents:                                                                                       |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |          |   |          |         |         |   |          |        
|                      | Net (decrease) increase in cash and cash equivalents                                                             |                                                                                      |                                                     | (2,151       | )        |          |   | (6            | )       |         |              |         |         |            |   | 25,776   |          |          |   | 2,492    |         |         |   | 26,111   |        
|                      | Cash and cash equivalents at beginning of period                                                                 |                                                                                      |                                                     | 2,152        |          |          |   | 32            |         |         |              |         |         |            |   | 56,782   |          |          |   |         |         |         |   | 58,966   |        
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         
|                      | Cash and cash equivalents at end of period                                                                       |                                                                                      | $                                                   | 1            |          |          | $ | 26            |         |         | $            |         |         |            | $ | 82,558   |          |          | $ | 2,492    |         |         | $ | 85,077   |        
|                      |                                                                                                                  |                                                                                      |                                                     |              |          |          |   |               |         |         |              |          |         |            |   |          |          |         

F-54



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |          |         |          |  
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------- | ------------ | -------- | -------- | ------------- | ------- | ------ | --------- | ------------ | -------- | -------- | ---------- | ------ | -------- | ------- | -------- | ----- | -------- | ------- | -------- | ------ | -------- | ------- | -------- | -
|                                                             |                                                                                                                  | For the Year Ended December 31, 2004                                                 |                                                    
|                                                             |                                                                                                                  |                                                                                      |                                                    
|                                                             |                                                                                                                  |                                                                                      |                                                     | Guarantor    |          |          |              
|                                                             |                                                                                                                  |                                                                                      |                                                     | Subsidiaries |          |          |              
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          | Non-Guarantor |         |        | Combining |              |          | Combined |           
|                                                             |                                                                                                                  | FMS AG                                                                               |                                                     |              | D-GmbH   |          |               | FMCH    |        |           | Subsidiaries |          |          | Adjustment |        |          | Total   |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|Operating Activities:                                        |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |         
|                                                             | Net income (loss)                                                                                                |                                                                                      | $                                                   | 401,998      |          |          | $             | (2,340  | )      |           | $            | 249,254  |          |            | $      | 315,583  |         |          | $     | (562,497 | )       |          | $      | 401,998  |        
|                                                             | Adjustments to reconcile net income to cash and cash equivalents
    provided by (used in) operating activities: |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |          |        
|                                                             |                                                                                                                  | Equity affiliate income                                                              |                                                     |              | (400,655 | )        |               |         |       |           |              |          | (286,567 | )          |        |          |        |          |       |          | 687,222 |          |        |          |        |         
|                                                             |                                                                                                                  | Depreciation and amortization                                                        |                                                     |              | 1,917    |          |               |         | 28,034 |           |              |          |         |            |        |          | 214,661 |          |       |          | (12,027 | )        |        |          | 232,585 |         
|                                                             |                                                                                                                  | Change in deferred taxes, net                                                        |                                                     |              | 636      |          |               |         | (4,241 | )         |              |          |         |            |        |          | 34,379  |          |       |          | 3,507   |          |        |          | 34,281  |         
|                                                             |                                                                                                                  | Loss (gain) on investments                                                           |                                                     |              | 72,100   |          |               |         |       |           |              |          |         |            |        |          | 9,287   |          |       |          | (81,387 | )        |        |          |        |         
|                                                             |                                                                                                                  | (Gain) loss on sale of fixed assets                                                  |                                                     |              |         |          |               |         | (301   | )         |              |          |         |            |        |          | 1,036   |          |       |          |        |          |        |          | 735     |         
|                                                             |                                                                                                                  | Compensation expense related to stock options                                        |                                                     |              | 1,751    |          |               |         |       |           |              |          |         |            |        |          |        |          |       |          |        |          |        |          | 1,751   |         
|                                                             |                                                                                                                  | Cash inflow from hedging                                                             |                                                     |              | 2,928    |          |               |         | 116    |           |              |          |         |            |        |          | 11,470  |          |       |          |        |          |        |          | 14,514  |         
|                                                             | Changes in assets and liabilities, net of amounts from
    businesses acquired:                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |          |        
|                                                             |                                                                                                                  | Trade accounts receivable, net                                                       |                                                     |              |         |          |               |         | (2,142 | )         |              |          |         |            |        |          | (5,744  | )        |       |          |        |          |        |          | (7,886  | )       
|                                                             |                                                                                                                  | Inventories                                                                          |                                                     |              |         |          |               |         | 9,870  |           |              |          |         |            |        |          | 16,214  |          |       |          | 1,161   |          |        |          | 27,245  |         
|                                                             |                                                                                                                  | Prepaid expenses and other current and non-current assets                            |                                                     |              | (3,039   | )        |               |         | 5,870  |           |              |          | 658      |            |        |          | 119,533 |          |       |          | (52,989 | )        |        |          | 70,033  |         
|                                                             |                                                                                                                  | Accounts receivable from/ payable to related parties                                 |                                                     |              | (4,471   | )        |               |         | 4,882  |           |              |          | 37,235   |            |        |          | (39,766 | )        |       |          | (20,566 | )        |        |          | (22,686 | )       
|                                                             |                                                                                                                  | Accounts payable, accrued expenses and other current and
    non-current liabilities |                                                     |              | 1,680    |          |               |         | (3,935 | )         |              |          | (1,788   | )          |        |          | 38,838  |          |       |          | 1,362   |          |        |          | 36,157  |         
|                                                             |                                                                                                                  | Income tax payable                                                                   |                                                     |              | 24,353   |          |               |         |       |           |              |          | (24,876  | )          |        |          | 39,639  |          |       |          |        |          |        |          | 39,116  |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|                                                             |                                                                                                                  |                                                                                      | Net cash provided by (used in) operating activities |              |          | 99,198   |               |         |        | 35,813    |              |          |          | (26,084    | )      |          |         | 755,130  |       |          |         | (36,214  | )      |          |         | 827,843  |  
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|Investing Activities:                                        |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |         
|                                                             | Purchases of property, plant and equipment                                                                       |                                                                                      |                                                     | (251         | )        |          |               | (36,332 | )      |           |              |         |          |            |        | (259,097 | )       |          |       | 16,948   |         |          |        | (278,732 | )      
|                                                             | Proceeds from sale of property, plant and equipment                                                              |                                                                                      |                                                     |             |          |          |               | 1,617   |        |           |              |         |          |            |        | 16,741   |         |          |       |         |         |          |        | 18,358   |        
|                                                             | Disbursement of loans to related parties                                                                         |                                                                                      |                                                     | 29,666       |          |          |               | 108     |        |           |              | 454,404  |          |            |        |         |         |          |       | (484,178 | )       |          |        |         |        
|                                                             | Acquisitions and investments, net of cash acquired                                                               |                                                                                      |                                                     | (4,146       | )        |          |               |        |        |           |              |         |          |            |        | (103,863 | )       |          |       | 3,516    |         |          |        | (104,493 | )      
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|                                                             |                                                                                                                  |                                                                                      | Net cash provided by (used in) investing activities |              |          | 25,269   |               |         |        | (34,607   | )            |          |          | 454,404    |        |          |         | (346,219 | )     |          |         | (463,714 | )      |          |         | (364,867 | )
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|Financing activities:                                        |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |         
|                                                             | Short-term borrowings, net                                                                                       |                                                                                      |                                                     | (25          | )        |          |               |        |        |           |              |         |          |            |        | (40,802  | )       |          |       |         |         |          |        | (40,827  | )      
|                                                             | Long-term debt and capital lease obligations, net                                                                |                                                                                      |                                                     | (2,073       | )        |          |               | (1,471  | )      |           |              | (427,800 | )        |            |        | (523,596 | )       |          |       | 484,178  |         |          |        | (470,762 | )      
|                                                             | Increase of accounts receivable securitization program                                                           |                                                                                      |                                                     |             |          |          |               |        |        |           |              |         |          |            |        | 177,767  |         |          |       |         |         |          |        | 177,767  |        
|                                                             | Proceeds from exercise of stock options                                                                          |                                                                                      |                                                     | 3,622        |          |          |               |        |        |           |              |         |          |            |        |         |         |          |       |         |         |          |        | 3,622    |        
|                                                             | Dividends paid                                                                                                   |                                                                                      |                                                     | (122,106     | )        |          |               |        |        |           |              |         |          |            |        | (16,870  | )       |          |       | 16,870   |         |          |        | (122,106 | )      
|                                                             | Capital Increase (decrease) of Non-Guarantor-Subsidiaries                                                        |                                                                                      |                                                     |             |          |          |               |        |        |           |              |         |          |            |        | 3,480    |         |          |       | (3,480   | )       |          |        |         |        
|                                                             | Change in minority interest                                                                                      |                                                                                      |                                                     |             |          |          |               |        |        |           |              | (520     | )        |            |        | (276     | )       |          |       | 1,185    |         |          |        | 389      |        
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|                                                             |                                                                                                                  |                                                                                      | Net cash (used in) provided by financing activities |              |          | (120,582 | )             |         |        | (1,471    | )            |          |          | (428,320   | )      |          |         | (400,297 | )     |          |         | 498,753  |        |          |         | (451,917 | )
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                                  |                                                                                      | (1,736                                              | )            |          |          |              |         |        |           |             |          |          |            | 41     |          |         |          | 1,175 |          |         |          | (520   | )       
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|Cash and Cash Equivalents:                                   |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |          |       |          |         |          |        |         
|Net increase (decrease) in cash and cash equivalents         |                                                                                                                  |                                                                                      | 2,149                                               |              |          |          | (265          | )       |        |           |             |          |          |            | 8,655  |          |         |          |      |          |         |          | 10,539 |         
|Cash and cash equivalents at beginning of period             |                                                                                                                  |                                                                                      | 3                                                   |              |          |          | 300           |         |        |           |             |          |          |            | 48,124 |          |         |          |      |          |         |          | 48,427 |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         
|Cash and cash equivalents at end of period                   |                                                                                                                  | $                                                                                    | 2,152                                               |              |          | $        | 35            |         |        | $         |             |          |          | $          | 56,779 |          |         | $        |      |          |         | $        | 58,966 |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |        |           |              |          |          |            |        |          |         |         

F-55



---



##### Table of Contents



FRESENIUS MEDICAL CARE AG & CO. KGaA


(Formerly Fresenius Medical Care AG)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


(in thousands, except share data)


|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |          |         |          |  
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | --------------------------------------------------- | ------------ | -------- | -------- | ------------- | ------- | ------- | --------- | ------------ | -------- | -------- | ---------- | ------- | -------- | -------- | -------- | ----- | -------- | -------- | -------- | ------- | -------- | ------- | -------- | -
|                                                             |                                                                                                                  | For the Year Ended December 31, 2003                                                 |                                                    
|                                                             |                                                                                                                  |                                                                                      |                                                    
|                                                             |                                                                                                                  |                                                                                      |                                                     | Guarantor    |          |          |              
|                                                             |                                                                                                                  |                                                                                      |                                                     | Subsidiaries |          |          |              
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          | Non-Guarantor |         |         | Combining |              |          | Combined |           
|                                                             |                                                                                                                  | FMS AG                                                                               |                                                     |              | D-GmbH   |          |               | FMCH    |         |           | Subsidiaries |          |          | Adjustment |         |          | Total    |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|Operating Activities:                                        |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |         
|                                                             | Net income (loss)                                                                                                |                                                                                      | $                                                   | 331,180      |          |          | $             | 905     |         |           | $            | 213,457  |          |            | $       | 303,897  |          |          | $     | (518,259 | )        |          | $       | 331,180  |        
|                                                             | Adjustments to reconcile net income to cash and cash equivalents
    provided by (used in) operating activities: |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |          |        
|                                                             |                                                                                                                  | Equity affiliate income                                                              |                                                     |              | 386,166  |          |               |         |        |           |              |          | (251,564 | )          |         |          |         |          |       |          | (134,602 | )        |         |          |        |         
|                                                             |                                                                                                                  | Depreciation and amortization                                                        |                                                     |              | 1,989    |          |               |         | 26,995  |           |              |          |         |            |         |          | 196,831  |          |       |          | (9,438   | )        |         |          | 216,377 |         
|                                                             |                                                                                                                  | Change in deferred taxes, net                                                        |                                                     |              | 1,898    |          |               |         | (356    | )         |              |          |         |            |         |          | 96,630   |          |       |          | (6,860   | )        |         |          | 91,312  |         
|                                                             |                                                                                                                  | Gain on sale of investments                                                          |                                                     |              | (666,779 | )        |               |         | (97     | )         |              |          |         |            |         |          |         |          |       |          | 666,876  |          |         |          |        |         
|                                                             |                                                                                                                  | Loss (gain) on sale of fixed assets                                                  |                                                     |              |         |          |               |         | 312     |           |              |          |         |            |         |          | (362     | )        |       |          |         |          |         |          | (50     | )       
|                                                             |                                                                                                                  | Compensation expense related to stock options                                        |                                                     |              | 1,456    |          |               |         |        |           |              |          |         |            |         |          |         |          |       |          |         |          |         |          | 1,456   |         
|                                                             |                                                                                                                  | Cash Inflow from Hedging                                                             |                                                     |              | 109,108  |          |               |         |        |           |              |          |         |            |         |          | 22,546   |          |       |          |         |          |         |          | 131,654 |         
|                                                             | Changes in assets and liabilities, net of amounts from
    businesses acquired:                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |          |        
|                                                             |                                                                                                                  | Trade accounts receivable, net                                                       |                                                     |              |         |          |               |         | 19,688  |           |              |          |         |            |         |          | 33,875   |          |       |          |         |          |         |          | 53,563  |         
|                                                             |                                                                                                                  | Inventories                                                                          |                                                     |              |         |          |               |         | (12,252 | )         |              |          |         |            |         |          | (19,892  | )        |       |          | 9,151    |          |         |          | (22,993 | )       
|                                                             |                                                                                                                  | Prepaid expenses and other current and non-current assets                            |                                                     |              | 2,659    |          |               |         | 3,691   |           |              |          | 3,524    |            |         |          | 51,061   |          |       |          | (780     | )        |         |          | 60,155  |         
|                                                             |                                                                                                                  | Accounts receivable from/ payable to related parties                                 |                                                     |              | 37,089   |          |               |         | (12,005 | )         |              |          | 37,235   |            |         |          | 178      |          |       |          | (55,298  | )        |         |          | 7,199   |         
|                                                             |                                                                                                                  | Accounts payable, accrued expenses and other current and
    non-current liabilities |                                                     |              | 1,198    |          |               |         | 7,473   |           |              |          | 2,328    |            |         |          | (104,212 | )        |       |          | 897      |          |         |          | (92,316 | )       
|                                                             |                                                                                                                  | Income tax payable                                                                   |                                                     |              | (16,571  | )        |               |         |        |           |              |          | (25,405  | )          |         |          | 18,458   |          |       |          |         |          |         |          | (23,518 | )       
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|                                                             |                                                                                                                  |                                                                                      | Net cash provided by (used in) operating activities |              |          | 189,393  |               |         |         | 34,354    |              |          |          | (20,425    | )       |          |          | 599,010  |       |          |          | (48,313  | )       |          |         | 754,019  |  
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|Investing Activities:                                        |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |         
|                                                             | Purchases of property, plant and equipment                                                                       |                                                                                      |                                                     | (16          | )        |          |               | (28,781 | )       |           |              |         |          |            |         | (272,004 | )        |          |       | 9,541    |          |          |         | (291,260 | )      
|                                                             | Proceeds from sale of property, plant and equipment                                                              |                                                                                      |                                                     | 1            |          |          |               | 2,655   |         |           |              |         |          |            |         | 12,170   |          |          |       |         |          |          |         | 14,826   |        
|                                                             | Disbursement of loans to related parties                                                                         |                                                                                      |                                                     | (18,631      | )        |          |               |        |         |           |              | (623,756 | )        |            |         |         |          |          |       | 642,387  |          |          |         |         |        
|                                                             | Acquisitions and investments, net of cash acquired                                                               |                                                                                      |                                                     | (62,829      | )        |          |               | (6,232  | )       |           |              |         |          |            |         | (76,712  | )        |          |       | 53,583   |          |          |         | (92,190  | )      
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|                                                             |                                                                                                                  |                                                                                      | Net cash (used in) provided by investing activities |              |          | (81,475  | )             |         |         | (32,358   | )            |          |          | (623,756   | )       |          |          | (336,546 | )     |          |          | 705,511  |         |          |         | (368,624 | )
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|Financing activities:                                        |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |         
|                                                             | Short-term borrowings, net                                                                                       |                                                                                      |                                                     | 41           |          |          |               |        |         |           |              |         |          |            |         | (27,274  | )        |          |       |         |          |          |         | (27,233  | )      
|                                                             | Long-term debt and capital lease obligations, net                                                                |                                                                                      |                                                     | (6,077       | )        |          |               | (1,889  | )       |           |              | 653,607  |          |            |         | 10,683   |          |          |       | (642,387 | )        |          |         | 13,937   |        
|                                                             | Decrease of accounts receivable securitization program                                                           |                                                                                      |                                                     |             |          |          |               |        |         |           |              |         |          |            |         | (287,251 | )        |          |       |         |          |          |         | (287,251 | )      
|                                                             | Proceeds from exercise of stock options                                                                          |                                                                                      |                                                     | 1,600        |          |          |               |        |         |           |              |         |          |            |         |         |          |          |       |         |          |          |         | 1,600    |        
|                                                             | Dividends paid                                                                                                   |                                                                                      |                                                     | (107,761     | )        |          |               |        |         |           |              |         |          |            |         | (39,202  | )        |          |       | 39,202   |          |          |         | (107,761 | )      
|                                                             | Redemption of Series D Trust Preferred Stock of
    subsidiary                                                   |                                                                                      |                                                     |             |          |          |               |        |         |           |              | (8,906   | )        |            |         |         |          |          |       |         |          |          |         | (8,906   | )      
|                                                             | Capital Increase of Non-Guarantor-Subsidiaries                                                                   |                                                                                      |                                                     |             |          |          |               |        |         |           |              |         |          |            |         | 60,342   |          |          |       | (60,342  | )        |          |         |         |        
|                                                             | Change in minority interest                                                                                      |                                                                                      |                                                     |             |          |          |               |        |         |           |              | (520     | )        |            |         | (1,528   | )        |          |       | 1,782    |          |          |         | (266     | )      
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|                                                             |                                                                                                                  |                                                                                      | Net cash (used in) provided by financing activities |              |          | (112,197 | )             |         |         | (1,889    | )            |          |          | 644,181    |         |          |          | (284,231 | )     |          |          | (661,745 | )       |          |         | (415,880 | )
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                                  |                                                                                      | 3,794                                               |              |          |          | 42            |         |         |           |             |          |          |            | 5,736   |          |          |          | 4,547 |          |          |          | 14,119  |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|Cash and Cash Equivalents:                                   |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |          |       |          |          |          |         |         
|Net (decrease) increase in cash and cash equivalents         |                                                                                                                  |                                                                                      | (485                                                | )            |          |          | 149           |         |         |           |             |          |          |            | (16,031 | )        |          |          |      |          |          |          | (16,366 | )       
|Cash and cash equivalents at beginning of period             |                                                                                                                  |                                                                                      | 488                                                 |              |          |          | 151           |         |         |           |             |          |          |            | 64,154  |          |          |          |      |          |          |          | 64,793  |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         
|Cash and cash equivalents at end of period                   |                                                                                                                  | $                                                                                    | 4                                                   |              |          | $        | 300           |         |         | $         |             |          |          | $          | 48,124  |          |          | $        |      |          |          | $        | 48,427  |         
|                                                             |                                                                                                                  |                                                                                      |                                                     |              |          |          |               |         |         |           |              |          |          |            |         |          |          |         

F-56



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##### Table of Contents



Schedule II


FRESENIUS MEDICAL CARE AG & Co. KGaA


(Formerly Fresenius Medical Care AG)





Financial Statement Schedule


(in thousands, except share data)


|                                 |                              |            |   |            |           |  |             |             |  |  |            |         |  |  |   |         | 
|-------------------------------- | ---------------------------- | ---------- | - | ---------- | --------- |  | ----------- | ----------- |  |  | ---------- | ------- |  |  | - | ------- | 
|                                 |                              |            |   | (Addition) |           |  | (Reduction) |             |  | 
|                                 |                              | Balance at |   |            | Charge to |  |             | Deductions/ |  |  | Balance at |        
|                                 |                              | Beginning  |   |            | Costs and |  |             | Write-offs/ |  |  | End of     |        
|                                 |                              | of Period  |   |            | Expenses  |  |             | Recoveries  |  |  | Period     |        
|                                 |                              |            |   |            |           |  |             |             |  |  |            |        
|Allowance for doubtful accounts: |                              |            |   |            |           |  |             |             |  |  |            |         |  |  |   |        
|                                 | Year ended December 31, 2005 |            | $ | 179,917    |           |  | $           | 140,799     |  |  | $          | 144,148 |  |  | $ | 176,568 | 
|                                 | Year ended December 31, 2004 |            | $ | 166,385    |           |  | $           | 131,257     |  |  | $          | 117,725 |  |  | $ | 179,917 | 
|                                 | Year ended December 31, 2003 |            | $ | 159,763    |           |  | $           | 115,238     |  |  | $          | 108,616 |  |  | $ | 166,385 | 

S-1