<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2000
                                                --------------

                                       OR

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

FOR THE TRANSITION PERIOD FROM ____________________TO__________________

                         COMMISSION FILE NUMBER: 1-3720

                      FRESENIUS MEDICAL CARE HOLDINGS, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

         95 Hayden Avenue, Lexington, MA                         02420
      ---------------------------------------                  ----------
      (Address of Principal Executive Office)                  (Zip Code)


        Registrant's Telephone Number, Including Area Code: 781-402-9000


--------------------------------------------------------------------------------

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

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



                                       1
<PAGE>   2


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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



                                       2
<PAGE>   3


       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                                TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION

    ITEM 1: FINANCIAL STATEMENTS PAGE

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

    ITEM2:  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION
            AND RESULTS OF OPERATIONS.......................................  16

    ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
            MARKET RISK.....................................................  19

PART II: OTHER INFORMATION

    ITEM 1: Legal Proceedings...............................................  20

    ITEM 6: Exhibits and Reports on Form 8-K................................  23



                                       3
<PAGE>   4



                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                     MARCH 31,
                                                              ---------------------
                                                                2000         1999
                                                              --------     --------
<S>                                                           <C>          <C>
NET REVENUES
     Health care services ...............................     $626,077     $553,457
     Medical supplies ...................................      119,038      118,683
                                                              --------     --------
                                                               745,115      672,140
                                                              --------     --------
EXPENSES
     Cost of health care services .......................      420,403      368,808
     Cost of medical supplies ...........................       86,455       81,624
     General and administrative expenses ................       71,587       63,987
     Provision for doubtful accounts ....................       12,379       15,058
     Depreciation and amortization ......................       54,736       53,934
     Research and development ...........................        1,197        1,024
     Interest expense, net, and related financing costs
      including $25,164 and $20,578, of interest with
      affiliates ........................................       47,118       50,126
     Interest expense on settlement of investigation,
      net ...............................................        6,185           --
                                                              --------     --------
                                                               700,060      634,561
                                                              --------     --------
INCOME BEFORE  INCOME TAXES .............................       45,055       37,579
PROVISION FOR INCOME TAXES ..............................       21,961       19,952
                                                              --------     --------
NET INCOME ..............................................     $ 23,094     $ 17,627
                                                              ========     ========
Basic and fully dilutive earnings per share
     Net Income .........................................     $   0.26     $   0.19

</TABLE>

     See accompanying Notes to Unaudited, Consolidated Financial Statements



                                       4
<PAGE>   5



       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED
                                                          MARCH 31,
                                                    --------------------
                                                     2000         1999
                                                    -------      -------
<S>                                                 <C>          <C>
NET INCOME ...................................      $23,094      $17,627
 Other comprehensive income ..................
    Foreign currency translation adjustments..          120         (392)
                                                    -------      -------
    Total other comprehensive income .........          120         (392)
                                                    -------      -------
 COMPREHENSIVE INCOME ........................      $23,214      $17,235
                                                    =======      =======
</TABLE>



                                       5
<PAGE>   6


       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  MARCH 31,     DECEMBER 31,
                                                                    2000           1999
                                                                 -----------    ------------
                                                                 (UNAUDITED)
<S>                                                              <C>             <C>
ASSETS
------
Current Assets:
     Cash and cash equivalents .............................     $   15,941      $   12,563
     Accounts receivable, less allowances of $66,058 and
      $63,012...............................................        336,928         295,235
     Inventories ...........................................        177,158         183,112
     Deferred income taxes .................................        203,032         219,454
     Other current assets ..................................        123,790         130,771
     IDPN accounts receivable ..............................         20,756          53,962
                                                                 ----------      ----------
          Total Current Assets .............................        877,605         895,097
                                                                 ----------      ----------

Properties and equipment, net ..............................        429,267         428,793
                                                                 ----------      ----------
Other Assets:
     Excess of cost over the fair value of net
        acquired and other intangible assets, net of
        accumulated amortization of $459,317 and $424,704 ..      3,261,961       3,265,491
     Other assets and deferred charges .....................         49,920          49,998
     Non-current IDPN accounts receivable ..................             --           5,189
                                                                 ----------      ----------
          Total Other Assets ...............................      3,311,881       3,320,678
                                                                 ----------      ----------
Total Assets ...............................................     $4,618,753      $4,644,568
                                                                 ==========      ==========
LIABILITIES AND EQUITY
----------------------
Current Liabilities:
     Note payable settlement ...............................     $  135,147      $       --
     Current portion of long-term debt and capitalized lease
        oblibations ........................................        144,479         142,110
     Current portion of borrowing from affiliates ..........        670,104         372,949
     Accounts payable ......................................        131,100         133,337
     Accrued settlement ....................................             --         386,815
     Accrued liabilities ...................................        254,119         291,358
     Net accounts payable to affiliates ....................          6,942          12,361
     Accrued income taxes ..................................         20,070          12,433
                                                                 ----------      ----------
          Total Current Liabilities ........................      1,361,961       1,351,363

Non-current note payable settlement ........................         51,186              --
Long-term debt .............................................        592,088         615,065
Non-current borrowings from affiliates .....................        788,674         788,506
Capitalized lease obligations ..............................          1,133           1,190
Deferred income taxes ......................................        130,403         134,310
Accrued settlement .........................................             --          85,920
Other liabilities ..........................................         48,163          46,153
                                                                 ----------      ----------
          Total Liabilities ................................      2,973,608       3,022,507
                                                                 ----------      ----------

Equity:
   Preferred stock, $100 par value .........................          7,412           7,412
   Preferred stock, $.10 par value .........................          8,906           8,906
   Common stock, $1 par value; 300,000,000 shares
   authorized; outstanding 90,000,000 ......................         90,000          90,000
   Paid in capital .........................................      1,943,034       1,943,034
   Retained deficit ........................................       (404,739)       (427,703)
   Accumulated comprehensive income ........................            532             412
                                                                 ----------      ----------
        Total Equity .......................................      1,645,145       1,622,061
                                                                 ----------      ----------
Total Liabilities and Equity ...............................     $4,618,753      $4,644,568
                                                                 ==========      ==========
</TABLE>

     See accompanying Notes to Unaudited, Consolidated Financial Statements.



                                       6
<PAGE>   7



       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                UNAUDITED, CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                                           MARCH 31,
                                                                  -----------------------
                                                                     2000          1999
                                                                  ---------      --------
<S>                                                               <C>            <C>
Cash Flows from Operating Activities:
     Net income .............................................     $  23,094      $ 17,627
     Adjustments to reconcile net income to net cash from
       Operating activities:
          Depreciation and amortization .....................        54,736        53,934
          Provision for doubtful accounts ...................        12,379        15,058
          Deferred income taxes .............................        12,515         4,914
          (Gain) loss on disposal of properties and equipment          (137)          187

Changes in operating assets and liabilities, net of effects
          of acquisitions and foreign exchange:
          Increase  in accounts receivable ..................       (61,101)      (20,869)
          Decrease (increase) in inventories ................         6,432        (6,388)
          Decrease (increase) in other current assets .......         8,958       (10,001)
          Decrease in IDPN accounts receivable ..............        38,395            --
          (Increase) decrease in other assets and deferred
            charges .........................................            76        (4,991)
          (Decrease) increase in accounts payable ...........        (2,238)        6,331
          Increase in accrued income taxes ..................         7,637        14,341
          Decrease in accrued liabilities ...................       (37,238)       (9,025)
          Increase in other long-term liabilities ...........         2,010         8,481
          Net changes due to/from affiliates ................        (5,419)          (25)
          Other, net ........................................         1,078         2,758
                                                                  ---------      --------
     Net cash provided by operating activities ..............        61,177        72,332
                                                                  ---------      --------

Cash Flows from Investing Activities:
          Capital expenditures ..............................       (20,261)      (17,457)
          Payments for acquisitions, net of cash acquired ...       (35,545)       (4,926)
                                                                  ---------      --------
     Net cash used in investing activities ..................       (55,806)      (22,383)
                                                                  ---------      --------

Cash Flows from Financing Activities:
          Payments on settlement ............................      (286,402)           --
          Net increase (decrease) in borrowings from
            affiliates ......................................       297,323       (11,912)
          Cash dividends paid ...............................          (130)         (130)
          Proceeds from issuance of debt ....................            --            37
          Proceeds from receivable financing facility .......         7,800         3,500
          Payments on debt and capitalized leases ...........       (20,665)      (33,181)
          Other, net ........................................            --           (94)
                                                                  ---------      --------
    Net cash used in financing activities ...................        (2,074)      (41,780)
                                                                  ---------      --------
Effects of changes in foreign exchange rates ................            81          (289)
                                                                  ---------      --------
Change in cash and cash equivalents .........................         3,378         7,880
Cash and cash equivalents at beginning of period ............        12,563         6,579
                                                                  ---------      --------
Cash and cash equivalents at end of period ..................     $  15,941      $ 14,459
                                                                  =========      ========
</TABLE>

     See accompanying Notes to Unaudited, Consolidated Financial Statements


                                       7
<PAGE>   8


             FRESENIUS MEDICAL CARE HOLDINGS, INC. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED
                                                             MARCH 31,
                                                       -------------------
                                                         2000        1999
                                                       -------     -------
<S>                                                    <C>         <C>
Supplemental disclosures of cash flow information:
    Cash paid during the period for:
          Interest, net ..........................     $53,947     $51,773
          Income taxes paid, net .................       2,241         924

Details for Acquisitions:
     Assets acquired .............................      35,545       4,926
     Liabilities assumed .........................          --          --
                                                       -------     -------
     Net cash paid for acquisitions ..............     $35,545     $ 4,926
                                                       =======     =======
</TABLE>


           See accompanying Notes to Consolidated Financial Statements


                                       8
<PAGE>   9



       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

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

NOTE 1. THE COMPANY

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

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

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

BASIS OF PRESENTATION

        BASIS OF CONSOLIDATION

        The consolidated financial statements in this report at March 31, 2000
and 1999 and for the three month interim periods then ended are unaudited and
should be read in conjunction with the consolidated financial statements in the
Company's 1999 report on Form 10-K. Such interim financial statements reflect
all adjustments that, in the opinion of management, are necessary for a fair
presentation of the results of the interim periods presented. Certain amounts in
the prior periods' consolidated financial statements have been reclassified to
conform to the current periods' basis of presentation.

        The results of operations for the three month period ended March 31,
2000 are not necessarily indicative of the results of operations for the fiscal
year ending December 31, 2000.

        All intercompany transactions and balances have been eliminated in
consolidation.

NOTE 2. INVENTORIES
<TABLE>
<CAPTION>
                                                              MARCH 31,   DECEMBER 31,
                                                                2000          1999
                                                              ---------   ------------
<S>                                                           <C>          <C>
Inventories:
  Raw materials .........................................     $ 38,748     $ 41,045
  Manufactured goods in process .........................       11,429        8,748
  Manufactured and purchased inventory available for sale       90,422       90,748
                                                              --------     --------
                                                               140,599      140,541
  Health care supplies ..................................       36,559       42,571
                                                              --------     --------
     Total ..............................................     $177,158     $183,112
                                                              ========     ========
</TABLE>



                                       9
<PAGE>   10



NOTE 3. DEBT

<TABLE>
<CAPTION>
                                                                     MARCH 31,  DECEMBER 31,
                                                                       2000        1999
                                                                     ---------  ------------
<S>                                                                  <C>          <C>
Notes payable and Long-term debt to outside parties consists of:

NMC Credit Facility ............................................     $720,300     $738,150
Note payable settlement ........................................      186,333           --
Third-party debt, primarily bank borrowings at
   various interest with various maturities
                                                                       15,529       17,454
                                                                     --------     --------
                                                                      922,162      755,604
Less amounts classified as current .............................      278,888      140,539
                                                                     --------     --------
                                                                     $643,274     $615,065
                                                                     ========     ========

</TABLE>


    Non current borrowings from affiliates consists of:

<TABLE>
<CAPTION>
                                                                 MARCH 31,     DECEMBER 31,
                                                                   2000            1999
                                                                ----------     ------------
<S>                                                             <C>            <C>
Fresenius Medical Care AG non-current borrowings
    primarily at interest rates approximating  7.06 - 7.75%     $   54,160     $   42,949

Fresenius AG non-current borrowing at interest rates
    approximating  6.86 - 7.06% ...........................        270,700        330,000

Fresenius Medical Care Trust Finance S.a.r.l. at interest
    rates of 8.43% and 9.25% ..............................        786,524        786,524

Franconia Acquisition, LLC at interest rates approximating
    6.19% to 6.21% ........................................        344,185             --
Other .....................................................          3,209          1,982
                                                                ----------     ----------
                                                                 1,458,778      1,161,455
Less amounts classified as current ........................        670,104        372,949
                                                                ----------     ----------
Total .....................................................     $  788,674        788,506
                                                                ==========     ==========

</TABLE>


        Franconia Acquisition, LLC is a wholly owned subsidiary of Fresenius
Medical Care AG. In March 2000, the Company entered into demand notes payable to
Franconia Acquisition, LLC totaling $344.2 million at interest rates
approximating 6.19% to 6.21%.



                                       10
<PAGE>   11


NOTE 4.  SPECIAL CHARGE FOR SETTLEMENT OF INVESTIGATION AND RELATED COSTS

        Since 1995, NMC and certain subsidiaries had been the subject of an
investigation (the "OIG Investigation") by the Office of Inspector General
("OIG") of the United States Department of Health and Human Services, the United
States Attorney for the District of Massachusetts (the "U.S. Attorney's Office")
and other authorities concerning possible violations of federal laws, including
the anti-kickback statute and the False Claims Act.

        On January 18, 2000, the Company, NMC and certain affiliated companies
executed definitive agreements (the "Settlement Agreements") with the United
States Government (the "Government") to settle (i) the matters covered in the
OIG Investigation and (ii) NMC's claims with respect to approximately $153.5
million of outstanding Medicare receivables for nutrition therapy rendered on or
before December 31, 1999 (collectively, the "Settlement"). The Settlement was
approved by the United States District Court for the District of Massachusetts
on February 2, 2000.

        In anticipation of the Settlement, the Company recorded a special
pre-tax charge against its consolidated earnings in 1999 totaling $601 million
($419 million after tax). This special pre-tax charge included (i) a charge of
$486.3 million for settlement payment obligations to the Government, (ii) a
$94.3 million write-off of the remaining receivables described above, and (iii)
a reserve for other related costs of $20.4 million. The settlement payment
obligations to the Government and the amounts due to the Company for the
outstanding Medicare receivables have been classified in the balance sheet at
their expected settlement dates.

        Under the definitive agreements with the Government, the Company entered
into a note payable for the settlement payment obligations to the Government.
Interest on installment payments to the Government will accrue at 6.3% on $51.2
million of the obligation and at 7.5% annually on the balance, until paid in
full.

        In February 2000, the Company made initial payments to the Government
totaling $286.4 million. The remaining obligations will be paid in six quarterly
installments beginning April 2000 and ending July 2001. The first four quarterly
installments will be made in the amount of $35.4 million including interest at
7.5%. The remaining two installments of $27.8 million including interest at 6.3%
will be made in April and July 2001, respectively.

        In addition, the Company will receive approximately $59.2 million from
the Government related to the Company's claims for outstanding Medicare
receivables. In March 2000, the Company received an initial payment from the
Government of $38.4 million. The remaining balance will be received by the
Company in four quarterly payments beginning in May 2000 and ending February
2001. The quarterly receipts from the Government will be for principal of $5.2
million plus interest at 7.5%.

NOTE 5. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

        DISTRICT OF MASSACHUSETTS

        With one exception, each of the qui tam or "whistleblower" actions which
served as the basis for the recently settled federal government investigation
were dismissed as a result of the Settlement. The exception is a portion of a
qui tam proceeding filed in the United States District Court for the Middle
District of Tennessee on December 15, 1994. That action was transferred to the
United States District Court for the District of Massachusetts in 1995, and
disclosed to the Company in September 1999. The portion of this qui tam action
that was not dismissed as a result of the settlement alleges, among other
things, that the Company violated the Medicare and Medicaid Anti-kickback
Statute by providing discounted hemodialysis products to induce the purchase of
laboratory services. In the Settlement Agreements, the U. S. government has
declined to continue to pursue further the investigation or prosecution of these
allegations. The government and the current and former employees who filed this
qui tam action, called "relators," offered to dismiss this portion of this qui
tam action in connection with the settlement. However, this offer required that
the Company grant a full release of all of the Company's claims against the
relators, and the Company was unwilling to do so. While there can be no
assurance, the Company believes that the resolution of these remaining
allegations will not have a material adverse impact on the Company's business,
financial condition or results of operations.



                                       11
<PAGE>   12


        COMMERCIAL INSURER LITIGATION

        In 1997, the Company, NMC, and certain named NMC subsidiaries, were
served with civil complaint filed by Aetna Life Insurance Company in the U.S.
District Court for the Southern District of New York. Based in large part on
information contained in prior reports filed by the Company with the Securities
and Exchange Commission, the lawsuit alleges inappropriate billing practices for
nutritional therapy, diagnostic and clinical laboratory tests and
misrepresentations. In April 1999, Aetna amended its complaint to include its
affiliate, Aetna U.S. Healthcare, Inc., as an additional plaintiff, and to make
certain other limited changes in its pleading. The amended complaint seeks
unspecified damages and costs. In February 2000, the Company was served with a
similar complaint filed by Connecticut General Life Insurance Company, Equitable
Life Assurance Society for the United States, Cigna Employee Benefits Services,
Inc. and Guardian Life Insurance Company of America, Inc. (Connecticut General
Life Insurance Company et al v. National Medical Care et al, 00-Civ-0932)
seeking unspecified damages and costs. However, the Company, NMC and its
subsidiaries believe that there are substantial defenses to the claims asserted,
and intend to vigorously defend both lawsuits. Other private payors have
contacted the Company and may assert that NMC received excess payment and,
similarly, may join either lawsuit or file their own lawsuit seeking
reimbursement and other damages.

        In May 1999, the Company filed counterclaims against Aetna Life
Insurance Company and Aetna U.S. Healthcare, Inc. based on inappropriate claim
denials and delays in claim payments. The Company is investigating similar
counterclaims against other private payors that have filed a complaint or
contacted them. An adverse result of these litigations could have a material
adverse effect on the Company's business, financial position and result of
operations.

        Although the ultimate outcome on the Company of these proceedings cannot
be predicted at this time, an adverse result could have a material adverse
effect on the Company's business, financial condition and result of operations.

        OBRA 93

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

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

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

        On May 5, 1995, NMC filed a complaint in the U.S. District Court for the
District of Columbia (National Medical Care, Inc. and Bio-Medical Applications
of Colorado, Inc. d/b/a Northern Colorado Kidney Center v. Shalala, C.A.
No.95-0860 (WBB) seeking to preclude the Health Care Financing Administration
from retroactively enforcing its April 24, 1995 implementation of the Omnibus
Budget Reconciliation Act of 1993 provision relating to the coordination of
benefits for dual eligible ESRD patients. On May 9, 1995, NMC moved for a
preliminary injunction to preclude the Health Care Financing Administration from
enforcing its new policy retroactively, that is, to billing for services
provided between August 10, 1993 and April 23, 1995. On June 6, 1995, the court
granted NMC's request for a preliminary injunction and in December of 1996, NMC
moved for partial summary judgment seeking a declaration from the Court that the
Health Care Financing Administration's retroactive application of the April 1995
rule was legally invalid. The Health Care Financing Administration cross-moved
for summary judgement on the grounds that April 1995 rule was validly applied
prospectively. In January 1998, the court granted NMC's motion for partial
summary judgment and entered a declaratory judgement in favor of NMC, holding
the Health Care Financing Administration's retroactive application of the April
1995


                                       12
<PAGE>   13



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

        STATE OF FLORIDA

        In October 1999, NMC received an Antitrust Civil Investigative Demand
("CID") from the Attorney General of the State of Florida ("Florida AG"). The
CID was issued by the Florida AG in the course of an investigation to determine
whether there is, has been, or may be a violation of federal and Florida laws
resulting from the possible monopolization of, or the entering into agreement in
restraint of, trade relating to the provision of dialysis products and services
in Florida.

        The Company is cooperating with the Florida AG's investigation by
providing documents and other information to them. The impact of this
investigation on the business and financial condition, if any, cannot be
determined at this time.

         OTHER LITIGATION AND POTENTIAL EXPOSURES

         The Company, like other health care providers, conducts its operations
under intense government regulation and scrutiny. The Company must comply with
regulations which relate to or govern the safety and efficacy of medical
products and supplies, the operation of manufacturing facilities, laboratories
and dialysis clinics, and environmental and occupational health and safety. The
Company must also comply with the U.S. anti-kickback statute, the False Claims
Act, the Stark Law, and other federal and state fraud and abuse laws. Applicable
laws or regulations may be amended, or enforcement agencies or courts may make
interpretations that differ from the Company's or the manner in which the
Company conduct its business. In the U.S., enforcement has become a high
priority for the federal government and some states, due in part to budgetary
constraints on the government reimbursement programs and the high level of
visibility accorded to government efforts to deal with alleged fraud and abuse.
In addition, the provisions of the False Claims Act authorizing payment of a
portion of any recovery to the party bringing the suit encourage private
plaintiffs commence "whistle blower" actions. By virtue of this regulatory
environment, as well as our corporate integrity agreement with the government,
the Company expects that its business activities and practices will continue to
be subject to expensive review by regulatory authorities, and the Company cannot
exclude the possibility of additional inquiries, claims and litigation relating
to its compliance with applicable laws and regulations. The Company may not
always be aware that an inquiry or action has begun, particularly in the case of
"whistle blower" actions, which are initially filed under court seal.

         The Company operates a large number and wide variety of facilities
throughout the U.S. In such a decentralized system, it is often difficult to
maintain the desired level of oversight and control over the thousands of
individuals employed by many affiliate companies. The Company relies upon its
management structure, regulatory and legal resources, and the effective
operation of its compliance program to direct, manage and monitor the activities
of these employees. However, on occasion, the Company has identified instances
where employees, deliberately or inadvertently, have submitted inadequate or
false billings. The illegal actions of such persons may subject the Company and
its subsidiaries to liability under the False Claims Act, among other laws, and
the Company cannot predict whether law enforcement authorities may use such
information to initiate further investigations of the business practices
disclosed or any of its other business activities.

         Physicians, hospitals and other participants in the health care
industry are also subject to a large number of lawsuits alleging professional
negligence, malpractice, product liability, worker's compensation or related
claims, many of which involve large claims and significant defense costs. The
Company has been subject to these suits due to the nature of its business and
the Company expects that those types of lawsuits may continue. Although the
Company maintains insurance at a level which it believes to be prudent, the


                                       13
<PAGE>   14


Company cannot assure that the coverage limits will be adequate or that
insurance will cover all asserted claims. A successful claim against the Company
or any of its subsidiaries in excess of insurance coverage could have a material
adverse effect upon the Company and the results of its operations. Any claims,
regardless of their merit or eventual outcome, also may have a material adverse
effect on the Company's reputation and business.

         CONTINGENT NON-NMC LIABILITIES OF W.R. GRACE & CO. (NOW KNOWN AS
FRESENIUS MEDICAL CARE HOLDINGS, INC.)

         The Company was formed as a result of a series of transactions pursuant
to the Agreement and Plan of Reorganization (the "Merger") dated as of February
4, 1996 by and between W.R. Grace & Co.-Conn. ("Grace Chemicals"). In connection
with the Merger, Grace Chemicals agreed to indemnify the Company and NMC against
all liabilities of the Company and its successors, whether relating to events
occurring before or after the Merger, other than liabilities arising from or
relating to NMC operations. The Company remains contingently liable for certain
liabilities with respect to pre-Merger matters that are not related to NMC
operations. The Company believes that in view of the nature of the non-NMC
liabilities and Grace Chemicals' current financial position, the risk of
significant loss from non-NMC liabilities is remote.

         Were events to violate the tax-free nature of the Merger, the resulting
tax liability would be the obligation of the Company. Subject to representations
by Grace Chemicals, the Company and Fresenius AG, Grace Chemicals has agreed to
indemnify the Company for such a tax liability. If the Company was not able to
collect on the indemnity, the tax liability would have a material adverse effect
on the Company's business, the financial condition of the Company and the
results of operations.

                                       14

<PAGE>   15

NOTE 6. INDUSTRY SEGMENTS INFORMATION

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

The table below provides information for the three months ended March 31, 2000
and 1999 pertaining to the Company's two industry segments.

<TABLE>
<CAPTION>
                                                                                                      LESS
                                                                 DIALYSIS          DIALYSIS        INTERSEGMENT
                                                                 SERVICES          PRODUCTS          SALES            TOTAL
                                                                ----------         --------        ------------    -----------
<S>                                              <C>            <C>                <C>             <C>             <C>
NET REVENUES
Three Months Ended                                  3/31/00     $  630,002         $174,942        $59,829         $  745,115
Three Months Ended                                  3/31/99        557,025          169,142         54,027            672,140

OPERATING EARNINGS
Three Months Ended                                  3/31/00         99,101           26,252             --            125,353
Three Months Ended                                  3/31/99         87,802           29,056             --            116,858

ASSETS                                            3/31/2000      1,952,864          652,074             --          2,604,938
                                                 12/31/1999      1,918,612          645,263             --          2,563,875

</TABLE>

     Total assets of $4,618,753 is comprised of total assets for reportable
segments, $2,604,938; intangible assets not allocated to segments, $1,990,997;
financing agreement ($342,800); IDPN accounts receivable, $20,756; and other
corporate assets, $344,862.


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

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                  SEGMENT RECONCILIATION                         MARCH 31,
                  ----------------------                  ----------------------
                                                            2000          1999
                                                          --------      --------
<S>                                                       <C>           <C>
INCOME BEFORE  INCOME TAXES:
     Total operating earnings for reportable segments     $125,353      $116,858
     Corporate G&A ..................................      (25,798)      (28,129)
     Research and development expense ...............       (1,197)       (1,024)
     Net interest expense ...........................      (53,303)      (50,126
                                                          --------      --------
Income Before Income Taxes ..........................     $ 45,055      $ 37,579
                                                          ========      ========
</TABLE>



                                       15
<PAGE>   16


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

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

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

RESULTS OF OPERATIONS

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


<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED
                                                       MARCH 31,
                                                 ---------------------
                                                 (DOLLARS IN MILLIONS)
                                                     2000      1999
                                                     ----      ----
<S>                                                  <C>       <C>
         NET REVENUES
             Dialysis Services .................     $630      $557
             Dialysis Products .................      175       169
             Intercompany Eliminations .........      (60)      (54)
                                                     ----      ----
         Total Net Revenues ....................     $745      $672
                                                     ====      ====

         Operating Earnings:
             Dialysis Services .................     $ 99      $ 88
             Dialysis Products .................       26        29
                                                     ----      ----
         Total Operating Earnings ..............      125       117
                                                     ----      ----

         Other Expenses:
             General Corporate .................     $ 26      $ 28
             Research & Development ............        1         1
             Interest Expense, Net .............       47        50
             Interest Expense on Settlement, Net        6        --
                                                     ----      ----

         Total Other Expenses ..................       80        79
                                                     ----      ----

         Earnings Before Income Taxes ..........       45        38
         Provision for Income Taxes ............       22        20
                                                     ----      ----
         Net Income ............................     $ 23      $ 18
                                                     ====      ====
</TABLE>



                                       16
<PAGE>   17


THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

         Net revenues for the first three months of 2000 increased by 11% ($73
million) over the comparable period in 1999. Net earnings for the first three
months of 2000 increased by 31% ($5 million) over the comparable period in 1999
as a result of increased operating earnings and decreased general corporate
expenses, partially offset by higher interest expenses.

         DIALYSIS SERVICES

         Dialysis Services net revenues for the first three months of 2000
increased by 13% ($73 million) over the comparable period in 1999, primarily as
a result of an 8% increase in the number of treatments provided, the impact of
increased Medicare reimbursement rates, improved anemia management (higher EPO
utilization), consolidation of previously managed locations, and increased
laboratory testing revenues. The treatment increase was a result of base
business growth and the impact of 1999 and 2000 acquisitions. The laboratory
testing revenues increased as a result of higher patient volume.

         Dialysis Services operating earnings for the first three months of 2000
increased by 13% ($11 million) over the comparable period of 1999 primarily due
to the increase in treatment volume, improved anemia management (higher EPO
utilization), increased earnings from laboratory testing, and a decrease in the
provision for doubtful accounts. The reduction in the provision for doubtful
accounts as compared to 1999 is due to an increase in estimated bad debt
recovery from cost reports.

         DIALYSIS PRODUCTS

         Dialysis Products net revenues for the first three months of 2000
increased by 4% ($6 million) over the comparable period of 1999. This is due to
increased sales of machines ($5 million), concentrates ($2 million), bloodlines
($1 million), and other products ($2 million), partially offset by decreased
sales of peritoneal products ($3 million) and dialyzers ($1 million). Revenue
growth over the comparable period was primarily volume driven.

         Dialysis Products operating earnings for the first three months of 2000
decreased by 10% ($3 million) over the comparable period of 1999. This is a
result of higher freight and distribution expenses as well as higher sales and
marketing costs.

         OTHER EXPENSES

         The Company's other expenses for the first three months of 2000
increased by 1% ($1 million) over the comparable period of 1999. General
corporate expenses decreased by $2 million and operating interest expense
decreased by $3 million primarily due to the change in the mix of debt
instruments at March 31, 2000 versus March 31, 1999. The decreases in general
corporate and operating interest expenses in 2000 were offset by the $6 million
of interest expense related to the settlement of the OIG investigation in
February 2000.

         INCOME TAX RATE

         The effective tax rate from operations for the first three months of
2000 (48.7%) is lower than the rate for the comparable period of 1999 (53.1%),
due to higher earnings in relation to the amount of non-deductible merger
goodwill.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash requirements, including acquisitions, have
historically been funded by cash generated from operations.

         Net cash flows provided by operating activities totaled $61 million in
2000 compared to $72 million in 1999. This decrease is due primarily to a $5
million increase in earnings, $5 million add back of non-cash items, and the
collection of $38 million for the IDPN accounts receivable. These increases in
cash from net income adjusted for non-cash items and the collection of IDPN
receivables were offset by a $59 million change in other working capital
primarily related to an increase in accounts receivable and a decrease in
accrued liabilities. The increase in accounts receivable balances is primarily
due to the increase in days sales outstanding resulting from slower payment
patterns from third parties,



                                       17
<PAGE>   18


specifically from managed care plans. The decrease in accrued liabilities is
primarily due to timing of payments for accrued salaries and benefits and
unreconciled payments. Cash on hand was $16 million at March 31, 2000 compared
to $14 million at March 31, 1999.

         Under the final settlement with the government, the Company is required
to make net settlement payments totaling approximately $427 million, of which
$14 million had previously been paid prior to 2000. This net amount includes
approximately $59.2 million for Medicare receivables from the Government. During
the first quarter of 2000, the Company made initial payments to the Government
of $286 million and received $38 million from the Government for the Company's
outstanding Medicare receivables for the intradialytic parenteral nutrition
therapy relating to the Settlement.

         Under the definitive agreements with the Government, the Company
entered into a note payable for the settlement payment obligations to the
Government. Interest on installment payments to the Government will accrue at
6.3% on $51.2 million of the obligation and at 7.5% annually on the balance,
until paid in full.

         Under the terms of the note payable, the remaining obligations will be
paid in six quarterly installments beginning April 2000 and ending July 2001.
The first four quarterly installments will be made in the amount of $35.4
million including interest at 7.5%. The remaining two installments of $27.8
million including interest at 6.3% will be made in April and July 2001,
respectively. The Government will remit the balance of the Company's outstanding
Medicare receivables in four quarterly payments of $5.2 million plus interest at
7.5%.

         Net cash flows used in investing activities of operations totaled $56
million in 2000 compared to $22 million in 1999. The Company funded its
acquisitions and capital expenditures primarily through cash flows from
operations and intercompany borrowings. Acquisitions totaled $35 million and $5
million in 2000 and 1999, respectively, net of cash acquired. Capital
expenditures of $20 million and $17 million were made for internal expansion,
improvements, new furnishings and equipment in 2000 and 1999, respectively. The
Company intends to continue to enhance its presence in the U.S. by focusing its
expansion on the acquisition of clinics, expansion of existing clinics, and
opening of new clinics.

         Net cash flows used in financing activities of operations totaled $2
million in 2000 compared to $42 million in 1999. During the first three months
of 2000, the Company made payments to the government totaling $286 million for
the Settlement. Additionally, the increase in borrowings of $297 million is due
primarily to an intercompany note payable entered into with Franconia
Acquisition, LLC ($344 million), a wholly-owned subsidiary of FMC, offset by
payments on intercompany borrowings. The Company expects to use a portion of
these borrowings to finance future acquisitions.

CONTINGENCIES

         The Company is a plaintiff in litigation against the federal government
with respect to the implementation of OBRA 93 is seeking to change a proposed
revision to IDPN coverage policies, and is a defendant in significant commercial
insurance litigation. An adverse outcome in any of these matters, could have a
material adverse effect on the Company's business, financial condition and
results of operations. Because of the significant complexities and uncertainties
associated with these proceedings, neither an estimate of the possible loss or
range of loss the Company may incur in respect of such matters nor a reserve
based on any such estimate can be reasonably made. See - Note 5, "Commitments
and Contingencies".

         The Company believes that its existing credit facilities, cash
generated from operations and other current sources of financing are sufficient
to meet its foreseeable needs. If cash flows from operations or availability
under existing banking arrangements fall below expectations, the Company may be
required to consider other alternatives to maintain sufficient liquidity. There
can be no assurance that the Company will be able to do so on satisfactory
terms, if at all. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources."

IMPACT OF INFLATION

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



                                       18
<PAGE>   19


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

         Gains and losses on foreign exchange contracts accounted for as hedges
are deferred in other current assets or liabilities. The deferred gains and
losses are recognized as adjustments to the underlying hedged transaction when
the future sales or purchases are recognized. Interest rate swap payments and
receipts are recorded as part of interest expense. The fair value of the swap
contracts is not recognized in the financial statements. Cash flows from
derivatives are recognized in the consolidated statement of cash flows in the
same category as the item being hedged.

         If a derivative instrument ceases to meet the criteria for deferral,
any subsequent gains or losses are recognized in operations. If a firm
commitment does not occur, the foreign exchange contract is terminated and any
gain or loss is recognized in operations. If a hedging instrument is sold or
terminated prior to maturity, gains or losses continue to be deferred until the
hedged item is recognized. Should a swap be terminated while the underlying
obligation remains outstanding, the gain or loss is capitalized as part of the
underlying obligation and amortized into interest expense over the remaining
term of the obligation.



                                       19
<PAGE>   20

                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         DISTRICT OF MASSACHUSETTS

         With one exception, each of the qui tam or whistleblower actions which
served as the basis for the recently settled federal government investigation
were dismissed as a result of the Settlement. The exception is a portion of a
qui tam proceeding filed in the United States District Court for the Middle
District of Tennessee on December 15, 1994. That action was transferred to the
United States District Court for the District of Massachusetts in 1995, and
disclosed to the Company in September 1999. The portion of this qui tam action
that was not dismissed as a result of the settlement alleges, among other
things, that the Company violated the Medicare and Medicaid Anti-kickback
Statute by providing discounted hemodialysis products to induce the purchase of
laboratory services. In the Settlement Agreements, the U. S. government has
declined to continue to pursue further the investigation or prosecution of these
allegations. The government and the current and former employees who filed this
qui tam action, called "relators," offered to dismiss this portion of this qui
tam action in connection with the settlement. However, this offer required that
the Company grant a full release of all of the Company's claims against the
relators, and the Company is unwilling to do so. While there can be no
assurance, the Company believe that the resolution of these remaining
allegations will not have a material adverse impact on the Company's business,
financial condition or results of operations.

         COMMERCIAL INSURER LITIGATION

         In 1997, the Company, NMC, and certain named NMC subsidiaries, were
served with a civil complaint filed by Aetna Life Insurance Company in the U.S.
District Court for the Southern District of New York. Based in large part on
information contained in prior reports filed by the Company with the Securities
and Exchange Commission, the lawsuit alleges inappropriate billing practices for
nutritional therapy, diagnostic and clinical laboratory tests and
misrepresentations. In April 1999, Aetna amended its complaint to include its
affiliate, Aetna U.S. Healthcare, Inc., as an additional plaintiff, and to make
certain other limited changes in its pleading. The amended complaint seeks
unspecified damages and costs. In February 2000, the Company was served with a
similar complaint filed by Connecticut General Life Insurance Company, Equitable
Life Assurance Society of the United States, Cigna Employee Benefits Services,
Inc. and Guardian Life Insurance Company of America, Inc. (Connecticut General
Life Insurance Company et al v. National Medical Care et al, 00-Civ-0932)
seeking unspecified damages and costs. However, the Company, NMC and its
subsidiaries believe that there are substantial defenses to the claims asserted,
and intend to vigorously defend both lawsuits. Other private payors have
contacted the Company and may assert that NMC received excess payment and,
similarly, may join either lawsuit or file their own lawsuit seeking
reimbursement and other damages.

         In May 1999, the Company filed counterclaims against Aetna Life
Insurance Company and Aetna U.S. Healthcare, Inc. based on inappropriate claim
denials and delays in claim payments. The Company is investigating similar
counterclaims against other private payors that have filed a complaint or
contacted them. An adverse result of these litigations could have a material
adverse effect on the Company's business, financial position and result of
operations.

         Although the ultimate outcome on the Company of these proceedings
cannot be predicted at this time, an adverse result could have a material
adverse effect on the Company's business, financial condition and result of
operations.

         OBRA 93

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

         In April 1995, the Health Care Financing Administration issued a new
instruction, reversing its original instruction in a



                                       20
<PAGE>   21


manner that would substantially diminish the positive effect of the original
instruction on NMC's dialysis business. The Health Care Financing Administration
further proposed that its new instruction be effective retroactive to August
1993, the effective date of the Omnibus Budget Reconciliation Act of 1993.

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

         On May 5, 1995, NMC filed a complaint in the U.S. District Court for
the District of Columbia (National Medical Care, Inc. and Bio-Medical
Applications of Colorado, Inc. d/b/a Northern Colorado Kidney Center v. Shalala,
C.A. No.95-0860 (WBB) seeking to preclude the Health Care Financing
Administration from retroactively enforcing its April 24, 1995 implementation of
the Omnibus Budget Reconciliation Act of 1993 provision relating to the
coordination of benefits for dual eligible ESRD patients. On May 9, 1995, NMC
moved for a preliminary injunction to preclude the Health Care Financing
Administration from enforcing its new policy retroactively, that is, to billing
for services provided between August 10, 1993 and April 23, 1995. On June 6,
1995, the court granted NMC's request for a preliminary injunction and in
December of 1996, NMC moved for partial summary judgment seeking a declaration
from the Court that the Health Care Financing Administration's retroactive
application of the April 1995 rule was legally invalid. The Health Care
Financing Administration cross-moved for summary judgment on the grounds that
April 1995 rule was validly applied prospectively. In January 1998, the court
granted NMC's motion for partial summary judgment and entered a declaratory
judgment in favor of NMC, holding the Health Care Financing Administration's
retroactive application of the April 1995 rule legally invalid. Based on its
finding, the Court also permanently enjoined the Health Care Financing
Administration from enforcing and applying the April 1995 rule retroactively
against NMC. The Court took no action on the Health Care Financing
Administration's motion for summary judgment pending completion of the
outstanding discovery. On October 5, 1998, NMC filed its own motion for summary
judgment requesting that the Court declare the Health Care Financing
Administration's prospective application of the April 1995 rule invalid and
permanently enjoin Health Care Financing Administration from prospectively
enforcing and applying the April 1995 rule. The Court has not yet ruled on the
parties' motions. The Health Care Financing Administration elected not to appeal
the Court's June 1995 and January 1998 orders. The Health Care Financing
Administration may, however, appeal all rulings at the conclusion of the
litigation. If the Health Care Financing Administration should successfully
appeal so that the revised interpretation would be applied retroactively, NMC
may be required to refund the payment received from employer health plans for
services provided after August 10, 1993 under the Health Care Financing
Administration's original implementation, and to re-bill Medicare for the same
services, which would result in a loss to NMC of approximately $120 million
attributable to all periods prior to December 31, 1995. Also, in this event, the
Company's business, financial condition and results of operations would be
materially adversely affected.

         STATE OF FLORIDA

         In October 1999, NMC received an Antitrust Civil Investigative Demand
("CID") from the Attorney General of the State of Florida ("Florida AG") . The
CID was issued by the Florida AG in the course of an investigation to determine
whether there is, has been, or may be a violation of federal and Florida laws
resulting from the possible monopolization of, or the entering into agreement in
restraint of, trade relating to the provision of dialysis products and services
in Florida.

         The Company is cooperating with the Florida AG's investigation by
providing documents and other information to them. The impact of this
investigation on the business and financial condition, if any, cannot be
determined at this time.

         OTHER LITIGATION AND POTENTIAL EXPOSURES

         The Company, like other health care providers, conducts its operations
under intense government regulation and scrutiny. The Company must comply with
regulations which relate to or govern the safety and efficacy of medical
products and supplies, the operation of manufacturing facilities, laboratories
and dialysis clinics, and environmental and occupational health and safety. The
Company must also comply with the U.S. anti-kickback statute, the False Claims
Act, the Stark Law, and other federal and state fraud and abuse laws. Applicable
laws or regulations may be amended, or enforcement agencies or courts may make
interpretations that differ from the Company's or the manner in which the
Company conduct its business. In the U.S., enforcement has become a high
priority for the federal government and some states, due in part to budgetary
constraints on the government reimbursement programs



                                       21
<PAGE>   22

and the high level of visibility accorded to government efforts to deal with
alleged fraud and abuse. In addition, the provisions of the False Claims Act
authorizing payment of a portion of any recovery to the party bringing the suit
encourage private plaintiffs commence "whistle blower" actions. By virtue of
this regulatory environment, as well as our corporate integrity agreement with
the government, the Company expects that its business activities and practices
will continue to be subject to expensive review by regulatory authorities, and
the Company cannot exclude the possibility of additional inquiries, claims and
litigation relating to its compliance with applicable laws and regulations. The
Company may not always be aware that an inquiry or action has begun,
particularly in the case of "whistle blower" actions, which are initially filed
under court seal.

         The Company operates a large number and wide variety of facilities
throughout the U.S. In such a decentralized system, it is often difficult to
maintain the desired level of oversight and control over the thousands of
individuals employed by many affiliate companies. The Company relies upon its
management structure, regulatory and legal resources, and the effective
operation of its compliance program to direct, manage and monitor the activities
of these employees. However, on occasion, the Company has identified instances
where employees, deliberately or inadvertently, have submitted inadequate or
false billings. The illegal actions of such persons may subject the Company and
its subsidiaries to liability under the False Claims Act, among other laws, and
the Company cannot predict whether law enforcement authorities may use such
information to initiate further investigations of the business practices
disclosed or any of its other business activities.

         Physicians, hospitals and other participants in the health care
industry are also subject to a large number of lawsuits alleging professional
negligence, malpractice, product liability, worker's compensation or related
claims, many of which involve large claims and significant defense costs. The
Company has been subject to these suits due to the nature of its business and
the Company expects that those types of lawsuits may continue. Although the
Company maintains insurance at a level which it believes to be prudent, the
Company cannot assure that the coverage limits will be adequate or that
insurance will cover all asserted claims. A successful claim against the Company
or any of its subsidiaries in excess of insurance coverage could have a material
adverse effect upon the Company and the results of its operations. Any claims,
regardless of their merit or eventual outcome, also may have a material adverse
effect on the Company's reputation and business.



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<PAGE>   23


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)    Exhibits

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

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

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

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

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

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

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

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

Exhibit 3.6    Amended and Restated By-laws of Fresenius Medical Care Holdings,
               Inc. (incorporated herein by reference to the Form 10-Q of the
               Company filed with the Commission on August 14, 1997).

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



                                       23
<PAGE>   24


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

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

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

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

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

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

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

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

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

Exhibit 4.11   Amendment No. 9 dated as of December 15, 1999 to the Credit
               Agreement dated as of September 27, 1996 among National Medical
               Care, Inc. and Certain Subsidiaries and Affiliates, as Borrowers,
               Certain Subsidiaries and Affiliates Guarantors, the Lenders named
               therein, NationsBank, N.A. as paying agent and The Bank of Nova
               Scotia, The Chase



                                       24
<PAGE>   25


               Manhattan Bank, Dresdner Bank A.G. and Bank of America, N.A.
               (formerly known as) NationsBank, N.A., as Managing Agent
               (incorporated herein by reference to the Form 10-K of registrant
               filed with Commission on March 30, 2000).


Exhibit 4.12   Fresenius Medical Care AG 1998 Stock Incentive Plan as amended
               effective as of August 3, 1998 (incorporated herein by reference
               to the Form 10-Q of Registrant filed with Commission on May 14,
               1998).

Exhibit 4.13   Senior Subordinated Indenture dated November 27, 1996, among
               Fresenius Medical Care AG, State Street Bank and Trust Company,
               as successor to Fleet National Bank, as Trustee and the
               Subsidiary Guarantors named therein (incorporated herein by
               reference to the Form 10-K of Registrant filed with the
               Commission on March 31, 1997).

Exhibit 4.14   Senior Subordinated Indenture dated as of February 19, 1998,
               among Fresenius Medical Care AG, State Street Bank and Trust
               Company as Trustee and Fresenius Medical Care Holdings, Inc., and
               Fresenius Medical Care AG, as Guarantors with respect to the
               issuance of 7 7/8% Senior Subordinated Notes due 2008
               (incorporated herein by reference to the Form 10-K of Registrant
               filed with Commission on March 23, 1998).

Exhibit 4.15   Senior Subordinated Indenture dated as of February 19, 1998 among
               FMC Trust Finance S.a.r.l. Luxemborg, as Insurer, State Street
               Bank and Trust Company as Trustee and Fresenius Medical Care
               Holdings, Inc., and Fresenius Medical Care AG, as Guarantors with
               respect to the issuance of 7 3/8% Senior Subordinated Notes due
               2008 (incorporated herein by reference to the Form 10-K of
               Registrant filed with Commission on March 23, 1998).

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

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

Exhibit 10.3   Agreement, dated November 25, 1992 between Bergen Brunswig Drug
               Company and National Medical Care, Inc., including the addendum
               thereto (incorporated by reference to the Form SE of Fresenius
               Medical Care dated July 29, 1996 and the exhibits thereto).

Exhibit 10.4   Product Purchase Agreement effective January 1, 2000 between
               Amgen, Inc. and National Medical Care, Inc. (filed herewith).

Exhibit 10.5   Primary Guarantee dated July 31, 1996 (incorporated by reference
               to the Registrant's Registration Statement on Form S-4
               (Registration No. 333-09497) dated August 2, 1996 and the
               exhibits thereto).

Exhibit 10.6   Secondary Guarantee dated July 31, 1996 (incorporated by
               reference to the Registrant's Registration Statement on Form S-4
               (Registration No. 333-09497) dated August 2, 1996 and the
               exhibits thereto).

Exhibit 10.7   Receivables Purchase Agreement dated August 28, 1997 between
               National Medical Care, Inc. and NMC Funding Corporation
               (incorporated herein by reference to the Form 10-Q of the
               Registrant filed with the Commission on November 14, 1997).

Exhibit 10.8   Amendment dated as of September 28, 1998 to the Receivables
               Purchase Agreement dated as of August 28, 1997, by and between
               NMC Funding Corporation, as Purchaser and National Medical Care,
               Inc., as Seller (incorporated herein by reference to the Form
               10-Q of Registrant filed with Commission on November 12, 1998).

Exhibit 10.9   Amended and Restated Transfer and Administration Agreement dated
               as September 27, 1999 among Compass US Acquisition, LLC, NMC
               Funding Corporation, National Medical Care, Inc., Enterprise
               Funding Corporation, the Bank Investors listed therein,
               Westdeutsche Landesbank Girozentrale, New York Branch, as an
               administrative agent and Bank of America, N.A., as an
               administrative agent (incorporated herein by reference to the
               Form 10-K of registrant filed with the Commission on March
               20, 2000).



                                       25
<PAGE>   26

Exhibit 10.10  Employment agreement dated January 1, 1992 by and between Ben J.
               Lipps and Fresenius USA, Inc. (incorporated herein by reference
               to the Annual Report on Form 10-K of Fresenius USA, Inc., for the
               year ended December 31, 1992).

Exhibit 10.11  Modification to FUSA Employment Agreement effective as of January
               1, 1998 by and between Ben J. Lipps and Fresenius Medical Care AG
               (incorporated herein by reference to the Form 10-Q of Registrant
               filed with Commission on May 14, 1998).

Exhibit 10.12  Employment Agreement dated October 23, 1998 by and between Roger
               G. Stoll and National Medical Care, Inc. (incorporated herein by
               reference to the Form 10-K of Registrant filed with Commission on
               March 9, 1999).

Exhibit 10.13  Employment Agreement dated November 11, 1998 by and between
               William F. Grieco and National Medical Care, Inc., (incorporated
               herein by reference to the Form 10-K of Registrant filed with
               Commission on March 9, 1999).

Exhibit 10.14  Separation Agreement dated as of September 30, 1999 by and among
               William F. Grieco and Fresenius Medical Care Holdings, Inc. and
               Fresenius Medical Care AG (incorporated herein by reference to
               the Form 10-K of Registrant filed with Commission on August 3,
               1999).

Exhibit 10.15  Employment Agreement dated March 15, 2000 by and between Jerry A.
               Schneider and National Medical Care, Inc. (a copy of which is
               filed herewith).

Exhibit 10.16  Employment Agreement dated March 15, 2000 by and between Ronald
               J. Kuerbitz and National Medical Care, Inc. (a copy of which is
               filed herewith).

Exhibit 10.17  Employment Agreement dated March 15, 2000 by and between J.
               Michael Lazarus and National Medical Care, Inc. (a copy of which
               is filed herewith).

Exhibit 10.18  Subordinated Loan Note dated as of May 18, 1999, among National
               Medical Care, Inc. and certain Subsidiaries with Fresenius AG as
               lender (incorporated herein by reference to the Form 10-Q of
               Registrant filed with Commission on November 22, 1999).

Exhibit 11     Statement re: Computation of Per Share Earnings.

Exhibit 27     Financial Data Schedule

(b)      Reports on Form 8-K

       On January 21, 2000, the Company filed a report on Form 8-K with respect
to the Company's settlement of the OIG Investigation with the United States
Government.

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



                                       26
<PAGE>   27


                                   SIGNATURES

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

                                      Fresenius Medical Care Holdings, Inc.



DATE: MAY 12, 2000                    /s/ Ben J. Lipps
                                      ----------------------------------
                                      NAME: Ben J. Lipps
                                      TITLE: President (Chief Executive Officer)




DATE: MAY 12, 2000                    /s/ Jerry A. Schneider
                                      -----------------------------------
                                      NAME:  Jerry Schneider
                                      TITLE: Chief Financial Officer

                                       27