<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: JUNE 30, 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

<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION

      ITEM 1:     FINANCIAL STATEMENTS                                                          PAGE

<S>                                                                                             <C>
                  Unaudited Consolidated Statements of Operations................................4
                  Unaudited Consolidated Statements of Comprehensive Income......................5
                  Unaudited Consolidated Balance Sheets..........................................6
                  Unaudited Consolidated Statements of Cash Flows................................7
                  Notes to Unaudited Consolidated Financial Statements...........................9

      ITEM 2:     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS............................................16

      ITEM 3:     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                  MARKET RISK....................................................................21


PART II: OTHER INFORMATION

       ITEM 1:    Legal Proceedings..............................................................22
       ITEM 6:    Exhibits and Reports on Form 8-K...............................................25
</TABLE>


                                       3
<PAGE>   4


                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

             FRESENIUS MEDICAL CARE HOLDINGS, INC. AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                                    JUNE 30,                      JUNE 30,
                                                                           -------------------------     -------------------------
                                                                              2000           1999           2000           1999
                                                                           ----------     ----------     ----------     ----------
<S>                                                                        <C>            <C>            <C>            <C>
NET REVENUES
   Health care services ..............................................     $  644,593     $  573,280     $1,270,670     $1,126,737
   Medical supplies ..................................................        116,131        125,186        235,169        243,869
                                                                           ----------     ----------     ----------     ----------
                                                                              760,724        698,466      1,505,839      1,370,606
                                                                           ----------     ----------     ----------     ----------
EXPENSES
   Cost of health care services ......................................        428,246        384,372        848,649        753,180
   Cost of medical supplies ..........................................         84,248         87,176        170,703        168,800
   General and administrative expenses ...............................         69,850         69,565        141,437        133,552
   Provision for doubtful accounts ...................................         14,928          4,671         27,307         19,729
   Depreciation and amortization .....................................         55,420         54,154        110,156        108,088
   Research and development ..........................................          1,001          1,013          2,198          2,037
   Interest expense, net and related financing costs including $28,821
      and $20,967 for the three months and $53,985 and $41,545 for
      the six months ended, respectively, of interest with affiliates          49,269         52,504         96,387        102,630
   Interest expense on settlement of investigation, net ..............          7,666             --         13,851             --
                                                                           ----------     ----------     ----------     ----------
                                                                              710,628        653,455      1,410,688      1,288,016
                                                                           ----------     ----------     ----------     ----------

INCOME BEFORE INCOME TAXES ...........................................         50,096         45,011         95,151         82,590
PROVISION FOR INCOME TAXES ...........................................         24,927         23,607         46,888         43,559
                                                                           ----------     ----------     ----------     ----------

NET INCOME ...........................................................     $   25,169     $   21,404     $   48,263     $   39,031
                                                                           ==========     ==========     ==========     ==========

Basic and fully dilutive earnings per share
   Net Income ........................................................     $     0.28     $     0.24     $     0.53     $     0.43
</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                    SIX MONTHS ENDED
                                                                       JUNE 30,                              JUNE 30,
                                                              --------------------------           --------------------------
                                                                2000              1999               2000              1999
                                                              --------          --------           --------          --------

<S>                                                           <C>               <C>                <C>               <C>
         NET INCOME ................................          $ 25,169          $ 21,404           $ 48,263          $ 39,031

         Other comprehensive income
            Foreign currency translation adjustments                21               (81)               141              (473)
                                                              --------          --------           --------          --------
            Total other comprehensive income .......                21               (81)               141              (473)
                                                              --------          --------           --------          --------
         COMPREHENSIVE INCOME ......................          $ 25,190          $ 21,323           $ 48,404          $ 38,558
                                                              --------          --------           --------          --------
</TABLE>


     See accompanying Notes to Unaudited, Consolidated Financial Statements.


                                       5
<PAGE>   6


       FRESENIUS MEDICAL CARE HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                      JUNE 30,            DECEMBER 31,
                                                                        2000                  1999
                                                                    -----------           ------------
ASSETS                                                              (UNAUDITED)
------

<S>                                                                 <C>                   <C>
Current Assets:
   Cash and cash equivalents .............................          $    15,562           $    12,563
   Accounts receivable, less allowances of $70,581 and
    $63,012 ..............................................              344,536               295,235
   Inventories ...........................................              188,100               183,112
   Deferred income taxes .................................              179,903               219,454
   Other current assets ..................................              140,823               130,771
   IDPN accounts receivable ..............................               15,567                53,962
                                                                    -----------           -----------
      Total Current Assets ...............................              884,491               895,097
                                                                    -----------           -----------

Properties and equipment, net ............................              439,805               428,793
                                                                    -----------           -----------

Other Assets:
   Excess of cost over the fair value of net assets
      acquired and other intangible assets, net of
      accumulated amortization of $493,514 and $424,704 ..            3,258,235
                                                                                            3,265,491
   Other assets and deferred charges .....................               56,395                49,998
   Non-current IDPN accounts receivable ..................                   --                 5,189
                                                                    -----------           -----------
      Total Other Assets .................................            3,314,630             3,320,678
                                                                    -----------           -----------
Total Assets .............................................          $ 4,638,926           $ 4,644,568
                                                                    ===========           ===========

LIABILITIES AND EQUITY
----------------------

Current Liabilities:
   Note payable for settlement of investigation ..........              127,889                    --
   Current portion of long-term debt and capitalized lease
      obligations ........................................              147,892               142,110
   Current portion of borrowing from affiliates ..........              521,318               372,949
   Accounts payable ......................................              110,314               133,337
   Accrued settlement ....................................                   --               386,815
   Accrued liabilities ...................................              251,286               291,358
   Accounts payable to affiliates, net ...................               14,041                12,361
   Accrued income taxes ..................................               21,419                12,433
                                                                    -----------           -----------
      Total Current Liabilities ..........................            1,194,159             1,351,363

Non-current note payable for settlement of investigation .               25,593                    --
Long-term debt ...........................................              784,466               615,065
Non-current borrowings from affiliates ...................              786,864               788,506
Capitalized lease obligations ............................                1,016                 1,190
Deferred income taxes ....................................              126,465               134,310
Accrued settlement .......................................                   --                85,920
Other liabilities ........................................               50,158                46,153
                                                                    -----------           -----------
   Total Liabilities .....................................            2,968,721             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 .........................................             (379,700)             (427,703)
Accumulated comprehensive income .........................                  553                   412
                                                                    -----------           -----------
   Total Equity ..........................................            1,670,205             1,622,061
                                                                    -----------           -----------
Total Liabilities and Equity .............................          $ 4,638,926           $ 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>
                                                                                               SIX MONTHS ENDED
                                                                                                    JUNE 30,
                                                                                         -----------------------------
                                                                                           2000                 1999
                                                                                         ---------           ---------
<S>                                                                                      <C>                 <C>
Cash Flows from Operating Activities:
   Net Income .................................................................          $  48,263           $  39,031
   Adjustments to reconcile net earnings to net cash from operating activities:
      Depreciation and amortization ...........................................            110,156             108,088
      Provision for doubtful accounts .........................................             27,307              19,729
      Deferred income taxes ...................................................             31,706              15,882
      Loss on disposal of properties and equipment ............................                135                 189

Changes in operating assets and liabilities, net of effects of
purchase acquisitions and foreign exchange:
   Increase in accounts receivable ............................................            (94,092)            (65,786)
   (Increase) decrease in inventories .........................................             (4,166)              3,902
   Increase in other current assets ...........................................             (8,047)            (11,958)
   Decease in IDPN accounts receivable ........................................             43,584                  --
   Decrease in other assets and deferred charges ..............................              4,215               1,351
   (Decrease) increase in accounts payable ....................................            (23,024)              2,552
   Increase in accrued income taxes ...........................................              8,986              21,516
   Decrease in accrued liabilities ............................................            (40,072)            (30,866)
   Increase in other long-term liabilities ....................................              4,005              11,592
   Net changes due to/from affiliates .........................................              1,680                (354)
   Other, net .................................................................                 29              (7,422)
                                                                                         ---------           ---------
Net cash provided by operating activities .....................................            110,665             107,446
                                                                                         ---------           ---------

Cash Flows from Investing Activities:
   Capital expenditures .......................................................            (45,421)            (30,856)
   Payments for acquisitions, net of cash acquired ............................            (82,405)            (38,701)
                                                                                         ---------           ---------
Net cash used in investing activities .........................................           (127,826)            (69,557)
                                                                                         ---------           ---------

Cash flows from Financing Activities:
   Payments on settlement of investigation ....................................           (319,253)                 --
   Net increase in borrowings from affiliates .................................            146,727             105,451
   Cash dividends paid ........................................................               (260)               (260)
   Proceeds on issuance of debt ...............................................                 --                  37
   Proceeds from receivable financing facility ................................             17,800              19,400
   Net increase (decrease) on debt and capitalized leases .....................            175,009            (150,898)
   Other net ..................................................................                 --                 (94)
                                                                                         ---------           ---------
Net cash provided by (used in) financing activities ...........................             20,023             (26,364)
                                                                                         ---------           ---------

Effects of changes in foreign exchange rates ..................................                137                (409)
                                                                                         ---------           ---------
Change in cash and cash equivalents ...........................................              2,999              11,116
                                                                                         ---------           ---------
Cash and cash equivalents at beginning of period ..............................             12,563               6,579
                                                                                         ---------           ---------
Cash and cash equivalents at end of period ....................................          $  15,562           $  17,695
                                                                                         =========           =========
</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>
                                                                 SIX MONTHS ENDED
                                                                     JUNE 30,
                                                            --------------------------
                                                              2000              1999
                                                            --------          --------
<S>                                                         <C>               <C>
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
      Interest ...................................          $106,400          $102,467
      Income taxes paid, net .....................             6,736             7,128

Details for Acquisitions:
   Assets acquired ...............................            82,405            38,722
   Liabilities assumed ...........................                --                21
                                                            --------          --------
   Net cash paid for acquisitions ................          $ 82,405          $ 38,701
                                                            ========          ========
</TABLE>


     See accompanying Notes to Unaudited, 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 June 30, 2000 and
1999 and for the three and six month 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 and six month periods ended
June 30, 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.

EARNINGS PER SHARE

        The Company adopted the provisions of SFAS No. 128, Earnings per Share,
effective for fiscal 1997.  This statement requires the presentation of basic
earnings per share and diluted earnings per share.  Basic earnings per share are
computed by dividing net income available to common shareholders by the
weighted-average number of common shares outstanding during the year.  Diluted
earnings per share includes the effect of all dilutive potential common shares
that were outstanding during the year.  The number of shares used to compute
basic and diluted earnings per share was 90,000 in all periods as there were no
potential common shares and no adjustments to income to be considered for
purposes of the diluted earnings per shares calculation.


                                      THREE MONTHS ENDED     SIX MONTHS ENDED
                                           JUNE 30,              JUNE 30,
                                      --------------------   ------------------
                                        2000        1999       2000      1999


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

Income used in the computation of earnings per share were as follows:


                                      THREE MONTHS ENDED     SIX MONTHS ENDED
                                          JUNE 30,               JUNE 30,
                                      --------------------   ------------------
                                        2000        1999      2000       1999
CONSOLIDATED

Net earnings......................  $25,169      $21,404     $48,263   $39,031

Dividends paid on preferred
 stocks...........................     (130)        (130)       (260)     (260)
                                     -------     -------     -------   -------
Income used in per share
 computation of earnings..........   $25,039     $21,274     $48,003   $38,771
                                     =======     =======     =======   =======

Basic and fully dilutive
 earnings per share...............   $  0.28     $  0.24     $  0.53   $  0.43
                                     =======     =======     =======   =======

     NEW PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as "derivatives") and for
hedging activities. This statement requires that an entity recognizes all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. The statement also sets forth the criteria for
determining whether a derivative may be specifically designated as a hedge of a
particular exposure with the intent of measuring the effectiveness of that hedge
in the statement of operations.

     In June 1999, the Financial Accounting Standards Board issued SFAS No. 137,
Accounting for Derivative Instruments and Hedging Activities, which amended the
effective date of SFAS No. 133. The amended SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000.

     In December 1999, the United States Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin 101, Revenue Recognition in Financial
Statements ("SAB 101"). SAB 101 provides the staff's views in applying generally
accepted accounting principles to selected revenue recognition issues, as well
as examples of how the staff applies revenue recognition guidance to specific
circumstances. SAB 101 should be implemented in the first quarter of the fiscal
year beginning after December 15, 1999. In March 2000, SAB 101A was issued by
the SEC delaying the implementation date of SAB 101 for the second quarter of


                                       9
<PAGE>   10


the fiscal year beginning after December 15, 1999. In June 2000, SAB 101B was
issued by the SEC further delaying the date of SAB 101 until the fourth quarter
of the fiscal year beginning after December 15, 1999. The Company believes that
SAB 101 will not have a material impact on the Company's financial position and
results of operations.

     In May 2000, the Emerging Issues Task Force ("EITF") issued EITF 00-014,
Accounting for Certain Sales Incentives, which establishes accounting for point
of sales coupons, rebates, and free merchandise. This EITF requires that an
entity report these sales incentives that reduce the price paid to be netted
directly against revenues. EITF 00-014 is effective no later than the fourth
quarter of fiscal year beginning after December 15, 1999. The Company is
currently reviewing the impact of EITF on its results of operations.

NOTE 2. INVENTORIES

<TABLE>
<CAPTION>
                                                                           JUNE 30,        DECEMBER 31,
                                                                             2000              1999
                                                                           --------        ------------
<S>                                                                        <C>               <C>
   Inventories:
     Raw materials ..............................................          $ 41,371          $ 41,045
     Manufactured goods in process ..............................             9,887             8,748
     Manufactured and purchased inventory available for sale.....            91,521            90,748
                                                                           --------          --------
                                                                            142,779           140,541
      Health care supplies ......................................            45,321            42,571
                                                                           --------          --------
          Total .................................................          $188,100          $183,112
                                                                           ========          ========
</TABLE>


NOTE 3. DEBT

<TABLE>
<CAPTION>
                                                                              JUNE 30,          DECEMBER 31,
                                                                                2000                1999
                                                                             ----------         ------------
<S>                                                                          <C>                 <C>
   Notes payable and Long-term debt to outside parties consists of:

   NMC Credit Facility ............................................          $  917,450          $  738,150
   Note payable for settlement of investigation ...................             153,482                  --
   Third-party debt, primarily bank borrowings at
      various interest rates with various maturities ..............              14,478              17,454
                                                                             ----------          ----------
                                                                              1,085,410             755,604
   Less amounts classified as current .............................             275,351             140,539
                                                                             ----------          ----------
                                                                             $  810,059          $  615,065
                                                                             ==========          ==========
</TABLE>

     Non current borrowings from affiliates consists of:
<TABLE>
<CAPTION>
                                                                                 JUNE 30,          DECEMBER 31,
                                                                                   2000                1999
                                                                                ----------         ------------

<S>                                                                             <C>                 <C>
   Fresenius Medical Care AG non-current borrowings
       primarily at interest rates approximating  7.42 - 7.75%........          $   30,431          $   42,949
   Fresenius AG non-current borrowing at interest rates
       approximating  7.42 - 7.46% ...................................             280,000             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
       6.89 - 6.91% ..................................................             210,214                  --
   Other .............................................................               1,013               1,982
                                                                                ----------          ----------
                                                                                 1,308,182           1,161,455
   Less amounts classified as current                                              521,318             372,949
                                                                                ----------          ----------
   Total .............................................................          $  786,864          $  788,506
                                                                                ==========          ==========
</TABLE>


                                       10
<PAGE>   11


     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. The balance due at June 30,
2000 is $210.2 million and bears interest at rates approximating 6.89% to 6.91%.


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 which began in April 2000 and will end in July 2001. The first four
quarterly installments will be made in the amount of $35.4 million including
interest at 7.5%. The first of these four payments was made in April 2000 to the
Government totaling $35.4 million including interest. 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 which began in May 2000 and will end February 2001. The
quarterly receipts from the Government will be for principal of $5.2 million
plus interest at 7.5%. The first quarterly receipt from the Government was
received in May 2000 totaling $5.2 million plus interest.


NOTE 5. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

     DISTRICT OF MASSACHUSETTS

     The remaining portion of a qui tam proceeding filed in the United States
District Court for the Middle District of Tennessee on December 15, 1994,
transferred to the United States District Court for the District of
Massachusetts in 1995, and disclosed to the Company in September 1999 was
dismissed in May 2000. As a result, each of the qui tam or "whistleblower"
actions which served as the basis for the recently settled federal government
investigation has been dismissed.


                                       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.

     The Company has filed counterclaims against the plaintiffs in these matters
based on inappropriate claim denials and delays in claim payments.

     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 judgment on the grounds that April 1995 rule was


                                       12
<PAGE>   13


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 has cooperated with the Florida AG's investigation by providing
documents and other information to them. The Florida AG has indicated that no
further information is required at this time.

     OTHER LITIGATION AND POTENTIAL EXPOSURES

     From time to time, the Company is a party to or may be threatened with
other litigation arising in the ordinary course of its business. Management
regularly analyzes current information including, as applicable, the Company's
defenses and insurance coverage and, as necessary, provides accruals for
probable liabilities for the eventual disposition of these matters. The ultimate
outcome of these matters is not expected to  materially affect the Company's
financial position, results of operations or cash flows.

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

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


                                       13
<PAGE>   14


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

     The Company has also had claims asserted against it and has had lawsuits
filed against it relating to businesses that it has acquired or divested. These
claims and suits relate both to operation of the businesses and to the
acquisition and divestiture transactions. The Company has asserted its own
claims, and claims for indemnification. Although the ultimate outcome on the
Company cannot be predicted at this time, an adverse result could have a
material adverse effect upon the Company's business, financial condition, and
results of operations.

     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 and six months ended June 30,
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          6/30/00          $  648,325          $  178,415          $   66,016          $  760,724
         Three Months Ended          6/30/99             576,947             176,699              55,180             698,466

         Six Months Ended            6/30/00          $1,278,327          $  353,357          $  125,845          $1,505,839
         Six Months Ended            6/30/99           1,133,972             345,841             109,207           1,370,606


         OPERATING EARNINGS
         Three Months Ended          6/30/00          $  103,595          $   30,093                  --          $  133,688
         Three Months Ended          6/30/99              95,663              30,618                  --             126,281

         Six Months Ended            6/30/00          $  202,696          $   56,345                  --          $  259,041
         Six Months Ended            6/30/99             183,465              59,674                  --             243,139

         TOTAL ASSETS                6/30/00          $2,055,146             653,314                  --          $2,708,460
                                    12/31/99           1,918,612             645,263                  --           2,563,875
</TABLE>


     Total assets of $4,638,926 is comprised of total assets for reportable
segments, $2,708,460; intangible assets not allocated to segments, $1,972,927;
financing agreement ($352,800); IDPN accounts receivable $15,567; and other
corporate assets $294,772.

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

<TABLE>
<CAPTION>
                                                                      THREE MONTHS ENDED             SIX MONTHS ENDED
                   SEGMENT RECONCILIATION                                   JUNE 30,                     JUNE 30,
                   ----------------------                          ------------------------      ------------------------
                                                                      2000           1999           2000           1999
                                                                   ---------      ---------      ---------      ---------
<S>                                                                <C>            <C>            <C>            <C>
INCOME BEFORE INCOME TAXES:

     Total operating earnings for reportable segments.........     $ 133,688      $ 126,281      $ 259,041      $ 243,139
     Corporate G&A ...........................................       (25,656)       (27,753)       (51,454)       (55,882)
     Research and development expense ........................        (1,001)        (1,013)        (2,198)        (2,037)
     Net interest expense ....................................       (56,935)       (52,504)      (110,238)      (102,630)
                                                                   ---------      ---------      ---------      ---------

     Income Before Income Taxes ..............................     $  50,096      $  45,011      $  95,151      $  82,590
                                                                   =========      =========      =========      =========
</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                   SIX MONTHS ENDED
                                                                           JUNE 30,                            JUNE 30,
                                                                   ----------------------              ----------------------
                                                                   2000              1999              2000              1999
                                                                   ----              ----              ----              ----

<S>                                                               <C>               <C>               <C>               <C>
       NET REVENUES
          Dialysis Services ............................          $   648           $   577           $ 1,278           $ 1,134
          Dialysis Products ............................              178               177               353               346
          Intercompany Eliminations ....................              (65)              (55)             (125)             (109)
                                                                  -------           -------           -------           -------
       Total Net Revenues ..............................          $   761           $   699           $ 1,506           $ 1,371
                                                                  =======           =======           =======           =======

       Operating Earnings:
          Dialysis Services ............................          $   104           $    96           $   203           $   184
          Dialysis Products ............................               30                31                56                60
                                                                  -------           -------           -------           -------
       Total Operating Earnings ........................              134               127               259               244
                                                                  -------           -------           -------           -------

       Other Expenses:
          General Corporate ............................          $    26           $    28           $    52           $    56
          Research & Development .......................                1                 1                 2                 2
          Interest Expense, Net ........................               49                53                96               103
          Interest Expense on Settlement, Net...........                8                --                14                --
                                                                  -------           -------           -------           -------
       Total Other Expenses ............................               84                82               164               161
                                                                  -------           -------           -------           -------

       Earnings Before Income Taxes ....................               50                45                95                83
       Provision for Income Taxes ......................               25                24                47                44
                                                                  -------           -------           -------           -------

       Net Income ......................................          $    25           $    21           $    48           $    39
                                                                  =======           =======           =======           =======
</TABLE>


                                       16
<PAGE>   17


THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999

     Net revenues from operations for the second quarter of 2000 increased by 9%
($62 million) over the comparable period in 1999. Net income from operations
for the second quarter of 2000 increased by 19% ($4 million) over the comparable
period in 1999 as a result of increased operating earnings, reduced corporate
expenses partially offset by increased interest expense.

     DIALYSIS SERVICES

     Dialysis Services net revenues for the second quarter of 2000 increased by
12% ($71 million) over the comparable period in 1999, primarily as a result of a
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, higher revenues in
other ancillary services, 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 second quarter of 2000
increased by 8% ($8 million) over the comparable period of 1999 primarily due to
increases in treatment volume, the impact of increased Medicare reimbursement
rates, higher earnings in other ancillary services, and increased earnings from
laboratory testing. These increases were partially offset by higher personnel
costs, increased provisions for doubtful accounts, and higher equipment lease
expenses.

     DIALYSIS PRODUCTS

     Dialysis Products net revenues for the second quarter of 2000 increased by
1% ($1 million) over the comparable period of 1999. This is due to increased
sales of dialyzers ($4 million), bloodlines ($1 million), concentrates ($2
million) and other products ($3 million), partially offset by decreased sales of
machines ($7 million) and peritoneal products ($2 million).

     Dialysis Products operating earnings for the second quarter of 2000
decreased by 3% ($1 million) over the comparable period of 1999. This is a
result of new product costs as well as higher sales and marketing costs offset
by improvements in gross margin.

     OTHER EXPENSES

     The Company's other expenses for the second quarter of 2000 increased by 2%
(2 million) over the comparable period of 1999. General corporate expenses
decreased by $2 million and operating interest expense decreased by $5 million
primarily due to the change in the mix of debt instruments at June 30, 2000
versus June 30, 1999. The decreases in general corporate and operating interest
expenses for the second quarter of 2000 were offset by the $8 million of
interest expense related to the settlement of the OIG investigation in February
2000.

     INCOME TAX RATE

     The effective tax rate for the second quarter of 2000 (49.8%) is lower than
the rate for the comparable period of 1999 (52.5%) due to higher earnings in
relation to the constant amount of non-deductible merger goodwill.


SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

     Net revenues from operations for the first six months of 2000 increased by
10% ($135 million) over the comparable period in 1999. Net income from
operations for the first six months of 2000 increased by 23% ($9 million) over
the comparable period in 1999 as a result of increased operating earnings,
reduced corporate expenses partially offset by increased interest expense.

     DIALYSIS SERVICES

     Dialysis Services net revenues for the first six months of 2000 increased
by 13% ($144 million) over the comparable period in 1999, primarily as a result
of a 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, higher revenues in


                                       17
<PAGE>   18


other ancillary services, 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 six months of 2000
increased by 10% ($19 million) over the comparable period of 1999 primarily due
to the increase in treatment volume, the impact of increased Medicare
reimbursement rates, higher earnings in other ancillary services, and increased
earnings from laboratory testing offset by higher personnel costs, provision for
doubtful accounts, and rent expense.

     DIALYSIS PRODUCTS

     Dialysis Products net revenues for the first six months of 2000 increased
by 2% ($7 million) over the comparable period of 1999. This is due to increased
sales of dialyzers ($3 million), bloodlines ($2 million), concentrates ($4
million) and other products ($5 million), partially offset by decreased sales of
machines ($2 million) and peritoneal products ($5 million).

     Dialysis Products operating earnings for the first six months of 2000
decreased by 7% ($4 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 partially offset by improvements in gross margin.

     OTHER EXPENSES

     The Company's other expenses for the first six months of 2000 increased by
2% ($3 million) over the comparable period of 1999. General corporate expenses
decreased by $4 million and operating interest expense decreased by $8 million
primarily due to the change in the mix of debt instruments at June 30, 2000
versus June 30, 1999. The decreases in general corporate and operating interest
expenses for the first six months of 2000 were offset by the $14 million of
interest expense related to the settlement of the OIG investigation in February
2000.

     INCOME TAX RATE

     The effective tax rate for the first six months of 2000 (49.3%) is lower
than the rate for the comparable period of 1999 (52.7%) due to higher earnings
in relation to the constant amount of non-deductible merger goodwill.


                                       18
<PAGE>   19


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 during the first six months
of 2000 totaled $110 million compared to $107 million in the first six months of
1999. This increase is due primarily to a $9 million increase in earnings, $25
million add back of non-cash items, and the collection of $44 million for the
IDPN accounts receivable. These increases in cash from net income adjusted for
non-cash items and the collection of IDPN receivable were offset by a $76
million change in other working capital primarily related to increases in
accounts receivable and inventory; and decreases in accounts payable, accrued
income taxes, and 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, specifically from managed care
plans as well as the impact of new acquisitions. The decrease in accounts
payable is primarily due to timing of disbursements and the decrease in accrued
liabilities is primarily due to timing of payments for physician compensation,
unreconciled payments, and compliance and legal reserve costs. Cash on hand was
$16 million at June 30, 2000 compared to $18 million at June 30, 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 six months of 2000, the Company has made initial payments to the
Government totaling $319 million and has received $43 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 which began April 2000 and will end July 2001. The
first quarterly installment of $35.4 million including interest of 7.5% was made
in April 2000. The next three quarterly installments will also 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%. The first quarterly receipt from the Government
was received in May 2000 totaling $5.2 million plus interest.

     Net cash flows used in investing activities of operations during the first
six months of 2000 totaled $128 million compared to $70 million in the first six
months of 1999. The Company funded its acquisitions and capital expenditures
primarily through cash flows from operations and intercompany borrowings.
Acquisitions totaled $82 million and $39 million in 2000 and 1999, respectively,
net of cash acquired. Capital expenditures of $45 million and $31 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 provided by financing activities of operations during the
first six months of 2000 totaled $20 million compared to net cash flows used of
$26 million in the first six months of 1999. During the first six months of
2000, the Company made payments to the government totaling $319 million for the
Settlement. Additionally, the net increase in borrowings from affiliates of $147
million is due primarily to an intercompany note payable entered into with
Franconia Acquisition, LLC ($210 million), a wholly-owned subsidiary of FMC,
offset by payments on other intercompany borrowings. The net increase in notes
payable to outside parties of $175 million is primarily a result of the increase
in the Company's credit facility of $179 million. 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


                                       19
<PAGE>   20


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.


                                       20
<PAGE>   21


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. As part of its market risk management strategy, the
Company enters into transactions involving derivative financial instruments with
investment grade financial institutions as authorized by the management board.
These instruments, primarily interest rate swaps and foreign exchange contracts,
are used as a means of hedging exposure to interest rate and foreign currency
fluctuations in connection with debt obligations and purchase commitments. The
execution of these transactions is coordinated with the Company's parent
company, Fresenius Medical Care AG, which has established guidelines for risk
assessment procedures and controls. 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 product 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.

     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.

     At June 30, 2000, the fair value of the Company's interest rate agreements,
which consisted of three swaps and one collar, is approximately $14.5 million.
The agreements are for a total notional amount of $750 million, with maturity
dates ranging from December 2003 through January 2005.

     At June 30, 2000, the fair value of the Company's foreign exchange
contracts, which consisted entirely of forward agreements, is approximately
($3.9 million). The Company had outstanding contracts covering the purchase of
approximately 30.4 million Euros ("EUR") at an average contract price of $1.0953
per EUR, for delivery between July 2000 and May 2001. In addition, the Company's
Canadian subsidiary, whose functional currency is the Canadian Dollar ("CAD"),
had outstanding contracts covering the purchase of 5.0 million United States
Dollars ("USD") at an average contract price of 1.4624 CAD per USD, for delivery
between July 2000 and November 2000.


                                       21
<PAGE>   22


                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     DISTRICT OF MASSACHUSETTS

     The remaining portion of a qui tam proceeding filed in the United States
District Court for the Middle District of Tennessee on December 15, 1994,
transferred to the United States District Court for the District of
Massachusetts in 1995, and disclosed to the Company in September 1999 was
dismissed in May 2000. As a result each of the qui tam or "whistleblower"
actions which served as the basis for the recently settled federal government
investigation has been dismissed.


     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.

     The Company has filed counterclaims against the plaintiffs in these matters
based on inappropriate claim denials and delays in claim payments.

     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


                                       22
<PAGE>   23


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 has cooperated with the Florida AG's investigation by providing
documents and other information to them. The Florida AG has indicated that no
further information is required at this time.

     OTHER LITIGATION AND POTENTIAL EXPOSURES

     From time to time, the Company is a party to or may be threatened with
other litigation arising in the ordinary course of its business. Management
regularly analyzes current information including, as applicable, the Company's
defenses and insurance coverage and, as necessary, provides accruals for
probable liabilities for the eventual disposition of these matters. The ultimate
outcome of these matters is not expected to materially affect the Company's
financial position, results of operations or cash flows.

     The Company, like other health care providers, conducts its operations
under intense government regulation and scrutiny. The Company must comply with
regulations which relate to or govern the safety and efficacy of medical
products and supplies, the operation of manufacturing facilities, laboratories
and dialysis clinics, and environmental and occupational health and safety. The
Company must also comply with the U.S. anti-kickback statute, the False Claims
Act, the Stark Law, and other federal and state fraud and abuse laws. Applicable
laws or regulations may be amended, or enforcement agencies or courts may make
interpretations that differ from the Company's or the manner in which the
Company conduct its business. In the U.S., enforcement has become a high
priority for the federal government and some states. In addition, the provisions
of the False Claims Act authorizing payment of a portion of any recovery to the
party bringing the suit encourage private plaintiffs to commence "whistle
blower" actions. By virtue of this regulatory environment, as well as our
corporate integrity agreement with the government, the Company expects that its
business activities and practices will continue to be subject to extensive
review by


                                       23
<PAGE>   24


regulatory authorities, and continuing inquiries, claims and litigation relating
to its compliance with applicable laws and regulations. The Company may not
always be aware that an inquiry or action has begun, particularly in the case of
"whistle blower" actions, which are initially filed under court seal.

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

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

     The Company has also had claims asserted against it and has had lawsuits
filed against it relating to businesses that it has acquired or divested. These
claims and suits relate both to operation of the businesses and to the
acquisition and divestiture transactions. The Company has asserted its own
claims, and claims for indemnification. Although the ultimate outcome on the
Company cannot be predicted at this time, an adverse result could have a
material adverse effect upon the Company's business, financial condition, and
results of operations.




                                       24
<PAGE>   25


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

<TABLE>
<CAPTION>
<S>            <C>
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 Bank of
               America, N.A. (formerly known as NationsBank, N.A.), as Managing Agents (incorporated herein by reference to the
               Form 6-K of Fresenius Medical Care AG filed with the Commission on October 15, 1996).
</TABLE>


                                       25
<PAGE>   26


<TABLE>
<CAPTION>
<S>            <C>
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 Bank of America, N.A. (formerly known as NationsBank, N.A.), as
               Managing Agents, as previously amended (incorporated herein by reference to the Form 10-Q of the Registrant filed
               with the Commission on November 14, 1997).

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

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

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

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

Exhibit 4.9     Amendment No. 7 dated as of December 31, 1998 to the Credit Agreement dated as of September 27, 1996 among
               National Medical Care, Inc. and Certain Subsidiaries and Affiliates, as Borrowers, Certain Subsidiaries and
               Affiliates Guarantors, the Lenders named therein, Nations Bank, N.A. as paying agent and The Bank of Nova Scotia,
               The Chase Manhattan Bank, Dresdner Bank A. G. and Bank of America, N.A. (formerly known as NationsBank, N.A.). as
               Managing 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 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,
</TABLE>


                                       26
<PAGE>   27

<TABLE>
<CAPTION>
<S>            <C>
               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 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*    Product Purchase Agreement effective January 1, 2000 between Amgen, Inc. and National Medical Care, Inc.
               (incorporated herein by reference to the Form 10-Q of Registrant filed with Commission on May 12, 2000).

Exhibit 10.4*     Amendment to Product Purchase Agreement between Amgen, Inc. and National Medical Care, Inc. (amending Appendix A),
               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
</TABLE>


                                       27
<PAGE>   28


<TABLE>
<CAPTION>
<S>            <C>
               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 Commission on March 30, 2000).

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

Exhibit 10.15   Employment Agreement dated March 15, 2000 by and between Ronald J. Kuerbitz and National Medical Care, Inc.
               (incorporated herein by reference to the Form 10-Q of Registrant filed with Commission on May 12, 2000).

Exhibit 10.16   Employment Agreement dated March 15, 2000 by and between J. Michael Lazarus and National Medical Care, Inc.
               (incorporated herein by reference to the Form 10-Q of Registrant filed with Commission on May 12, 2000).

Exhibit 10.17   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
</TABLE>

(b)  Reports on Form 8-K

     The Company filed no current reports on 8-K during the quarter for which
     this report is filed.

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


                                       28
<PAGE>   29


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: August 9, 2000                  /s/ Ben J. Lipps
      --------------                  ------------------------------------------
                                      NAME: Ben J. Lipps
                                      TITLE: President (Chief Executive Officer)




DATE: August 9, 2000                  /s/ Jerry A. Schneider
      --------------                  ------------------------------------------
                                      NAME: Jerry Schneider
                                      TITLE: Chief Financial Officer


                                       29